Chinese premier explains China's reforms, foreign policy

Deutsche Presse Agentur
Published: Tuesday September 5, 2006

Beijing- Chinese Premier Wen Jiabao gave a rare interview on Tuesday, discussing controversial issues such as the status of democratic reform, currency exchange and the protection of intellectual property, as well as Iran, North Korea, and Chinese economic growth. The hour-long interview took place in the heavily guarded Zhongnanhai compound used by top leaders of China's ruling Communist Party close to Beijing's Tiananmen Square.

It precedes Wen's trip later this week to Germany, Britain and the EU presidency in Finland.

A select group of five journalists from these countries, including Deutsche Presse-Agentur dpa correspondent Andreas Landwehr, was invited to meet Wen.

- Democratic reform

"Democracy is a value pursued by all mankind and a fruit of civilization created by mankind. However, in different historical stages and different countries, democracy is achieved through different forms and in different ways. There is not a single model.

"The power of a government comes from the people, and the government must hold itself accountable to the people and subject itself to people's supervision."

"There is no denying that many problems that have occurred in China have to do with the performance of the government and the system of selection of officials. For instance, the industrial accidents and environmental incidents which have occurred in some places in China were caused by human faults, particularly by dereliction of duty and corruption committed by officials.

"The poor handling of land requisition, housing demolition and enterprise restructuring in some localities hurt the interests of local people and undermined social stability. A major cause of these problems is that the relevant management systems and supervision mechanisms are not well developed.

"Multi-candidacy elections are practised in China and the number of candidates standing for election will increase. However, China is a large country with a vast population, weak economic foundation and unbalanced development in different regions. The conditions are not yet ripe for conducting direct election at higher level of government.

"Democracy and direct election in particular, should develop in an orderly way in keeping with the particular condition of a country. We are confident that when the people are capable of running a village through direct election, they will later be able to run a township, then a county and a province, true to the principle that our country is run by the people."

- The Chinese economy

"China's economy has been growing at an average annual rate of over 9 per cent during the past three decades. In the last three years, its annual growth rate has exceeded 10 per cent.

"Many people are asking whether China can maintain sustained and long-term development. My answer is in the affirmative.

"The key is we have pursued the right domestic and foreign policies and we are well prepared to respond to new developments. This is because there are a number of favourable factors for sustaining China's economic development.

"China will still face constraints in energy, resources and environmental terms. But guided by a scientific outlook on development, we are accelerating economic restructuring and changing the pattern of economic growth to build a resources conservation and environmentally friendly society."

- Currency policy

"China's foreign exchange reserve has increased considerably in recent years. This is attributed to many factors, especially the 'twin surplus' in both the current and capital accounts in international payment.

"It is true that the rapid and continued increase in China's foreign exchange reserve has caused the excessive buildup of foreign exchange reserves in the central bank and oversupply of basic currency.

"In recent years, we have expanded the use of foreign exchange reserves, by proactively increasing import of products and advanced technology that China needs, using part of the foreign exchange reserve to support monetary reform and enterprise reform, reorganization and restructuring, relaxing restriction on the use of foreign exchange by Chinese enterprises and citizens and increasing assets purchase.

"In July last year, we reformed the renminbi exchange rate setting mechanism and properly adjusted its exchange rate. You may have noted that renminbi has risen by close to 4 per cent against the dollar.

"We will continue to deepen the reform of the Renminbi exchange rate setting mechanism. This means that the floating of the Renminbi exchange rate will be mainly determined by market supply and demand, and the floating band will be gradually expanded. So there will be no more 'surprise' adjustment in the renminbi exchange rate."

- Six-nation talks with North Korea

"The Chinese government consistently calls for making the Korean Peninsula nuclear-free through dialogue and negotiation and maintaining peace and stability on the peninsula.

"This is also the consensus reached by the parties concerned and what the international community hopes to see. We hope all parties will work towards this objective.

"Given the sensitivity of the situation on the Korean Peninsula, all the parties concerned should be cool-headed and exercise restraint, refrain from making statements or moves that will escalate tension, and work to create conditions for resuming the six-party talks (between North Korea, the United States, China, South Korea, Japan and Russia) at an early date."

- Diplomacy in Europe

"The EU (European Union) is active about reaching a peaceful resolution of the nuclear issue on the Korean Peninsula and is playing a key role in working for a peaceful solution to the Iranian nuclear issue. China will maintain close consultation and coordination with the EU and other parties concerned for the peaceful settlement of the two nuclear issues.

"I will soon leave for Europe to attend the ASEM (Asia-Europe) meeting, the China-EU summit and visit Finland, the United Kingdom and Germany. This will be my third visit to Europe as Chinese premier.

"China-EU relations now enjoy agood momentum of growth. This summit will focus on the early conclusion of a new China-EU framework agreement on the basis of enhancing the comprehensive strategic partnership between China and the EU. This framework agreement aims to deepen, as a matter of strategy, China-EU cooperation in the political, economic, science and technology, cultural and educational areas.

"Finland is renowned as a country of innovation. During my visit, China and Finland will sign cooperation agreements on economic, science and technology, educational and cultural exchanges.

"China and the UK maintain close coordination and cooperation on major international issues, and the two countries will sign cooperation agreements on climate change and energy security.

"China and Germany have strong trade ties and the two countries will sign a series of agreements including cooperation in the petrochemical sector and environmental protection. I am confident that my forthcoming visit to Europe will take cooperation between China and the EU and particularly between China and these three countries to a higher level.

"ASEM provides an important platform for countries in Asia and Europe to broaden mutual understanding and strengthen cooperation. Countries in both Asia and Europe are now in a crucial stage of development, and it is important that we make full use of this platform to boost our cooperation.

"At the (ASEM) meeting, I will put forward a number of policy proposals for advancing Asia-Europe political, economic and security cooperation.

"The last message that I have for you is this: China's development is a long-term and daunting task. To achieve development, we need peace, we need friends and we need time."

© 2006 DPA - Deutsche Presse-Agenteur