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Wen Gives Interview to European Media Ahead of Visit
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Chinese Premier Wen Jiabao on Tuesday gave an interview to journalists from five European news organizations, briefing them on China's political, economic, social issues and China-Europe relations.

Wen also answered questions on important international and regional issues.

The five news organizations are Helsingin Sanomat, Reuters, The Times, Deutsche Presse-Agentur and Frankfurter Allgemeine Zeitung (FAZ).

The interview took place in Zhongnanhai in downtown Beijing where China's top leaders work and live.

The interview came ahead of Wen's trip to Finland, the United Kingdom, Germany and Tajikistan from September 9 to 16.

Wen will make the visit at the invitation of Finnish Prime Minister Matti Vanhanen, British Prime Minister Tony Blair, German Chancellor Angela Merkel and Tajikistan Prime Minister Akil Akilov.

Following is the full text of the interview:

Wen Jiabao: "The path of fallen petals I have not swept until today, when I open my thatched door, just for you." I have quoted these lines from famous Tang Dynasty poet Du Fu's poem by way of welcome, and I am pleased to give you this interview.

I will soon leave for Europe to attend the ASEM 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 good 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 and grow the bilateral ties to ensure this cooperative relationship will not be affected by any particular issue or any change in the leadership.

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 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 the 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 meeting, I will put forward a number of policy proposals for advancing Asia-Europe political, economic and security cooperation. And I will announce, on behalf of the Chinese Government, that China will host the 7th ASEM summit.

Now I am happy to answer your questions.

Helsingin Sanomat: My question is on China's relations with Iran and North Korea. Will China oppose sanctions against those countries even if they fail to accept Security Council demands? And also, will China use it's economic ties to persuade the North Korea to return to the six party talks?

Wen Jiabao: 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 statement or taking moves that will escalate tension, and work to create conditions for resuming the Six-Party Talks at an early date.

To peacefully resolve the Iranian nuclear issue is in the interests of global peace and stability and easing tension in the Middle East. It is the best choice that meets the interest of all the parties concerned. Iran has responded to the package proposal, and the IAEA has also made its report. We hope the parties concerned will be patient, show flexibility and work for the early resumption of negotiations. We also hope Iran will heed the concerns of the international community and take constructive steps.

Resolving the two nuclear issues requires committed diplomatic efforts. Our goal is to bring about eventual peaceful resolution of these issues. But imposing sanctions will not necessarily get us there, and may even prove counterproductive. The parties involved should be cautious about moving towards sanctions.

The EU 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.

Reuters: Premier Wen, the second question is on the economy. The Chinese economy is extremely strong, but some economists worry about disruptions in the future. Can you guarantee there will be a soft landing of the Chinese economy and that you will keep your promise that there would be no surprise on the currency?

Wen Jiabao: China's economy has been growing at an average annual rate of over 9% during the past three decades. In the last three years, its annual growth rate has exceeded 10%. 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 policy and we are well prepared to respond to new developments. This is because there are a number of favorable factors for sustaining China's economic development. First, the reform and opening up program launched by China has created the material and technological basis to sustain its economic development. Secondly, China has the world's largest population and growing market demand. To expand domestic demand is a basic policy guiding China's economic development. Thirdly, China has an abundant supply of workforce whose quality is steadily improving. It has vast land and fairly rich natural resources and a high domestic savings rate. Fourthly, as China's reform and opening up drive deepens, the institutional barriers standing in the way of economic development will be removed. 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 environmental-friendly society. And this will put China on a path of achieving people-oriented, comprehensive, coordinated and sustainable development. So we are in a position to ensure continued and fairly fast growth of China's economy for a considerable period of time to come, and we have full confidence in our ability to do so.

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. Increase in foreign exchange reserve has improved China's overall national strength as well as its international payment capability and its ability to fend off risks. 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 view of this, we have given due consideration to the appropriate use of foreign exchange. In recent years, we have expanded the use of foreign exchange reserve, 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. Over the past year and more since then, the managed floating exchange rate regime has been improved and the development of foreign exchange market has quickened. The Renminbi exchange rate has seen both rise and drop, with greater flexibility in scope of floating. Overall, the value of Renminbi has appreciated by a small margin. You may have noted that Renminbi has risen by close to 4% against the dollar. We will continue to deepen the reform of the Renminbi exchange rate setting mechanism. This means that the floating of 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 Renminbi exchange rate.

Times: What book do you most like to read before you go to sleep at night and when you put the book down which of China's problems most often keeps you awake?

Wen Jiabao: You are actually asking about my reading and thinking. Let me quote you some lines from the poems of famous literary figures, both Chinese and foreign. They will tell you something about me, what is on my mind and what I read. They are as follows: "While I have little possession at hand, I care deeply about my people across the land. Having devoured ten thousand books and drawing inspiration from ancient thinkers, I have the whole world in my mind". "To ordain conscience for Heaven and Earth, to secure life and fortune for the people, to continue lost teachings for past sages and to establish peace for all future generations". "Long did I sigh to hold back tears; saddened I am by the grief of my people". "Lying in bed in my official residence, I heard the rustling of bamboo outside, and it just sounded like the moaning of the needy"; "There are two things that fill my mind with ever increasing admiration and awe: the starry sky above me and the moral law within me". "You ask why my eyes are always filled with tears. It is because I love my land dearly".

DPA: In May you promised German Chancellor Merkel that China will better protect intellectual property, and Merkel intends to make the issue a priority in dealings with China during Germany's presidency of the European Union. Is China's failure to act decisively against piracy damaging its international credibility? Could this damage Sino-German relations and could this overshadow other issues you will discuss with Britain and Finland? What steps will you take to ensure that the world can be confident in China's promises on IPR after so many years with little change?

Wen Jiabao: Frankly, it is only in recent years that we have given priority to the protection of intellectual property rights (IPR) as a matter of strategic policy. This has something to do with the level of development China has achieved, and China should be given some more time. But what I wish to stress is that no one should fail to see the Chinese Government's commitment to protecting IPR and the steps it has taken. First, the IPR protection strategy is being pursued with the same importance given to the national innovation strategy. Second, a national leading group for IPR protection has been set up to exercise overall leadership and coordination over IPR protection efforts in China. Third, we have adopted and revised a number of laws and regulations on IPR protection. Of them, the most important three laws are: the Patent Law, the Copyright Law and the Trademark Law. We will continue to improve the relevant laws and regulations and lower the threshold for prosecuting IPR-related offences. Fourth, law enforcement is being strengthened. Both administrative and judicial protection are provided, which complement each other. We have launched special national operations against IPR infringement activities, and 50 centers have been set up across China for handling IPR violation complaints to step up fight against copyright infringement and piracy. Fifth, we are working to raise public awareness of the importance of IPR protection to encourage consumers, businesses and social groups to play their part in protecting IPR. Sixth, we have taken an active part in international cooperation and have ongoing dialogue with the EU on IPR protection.

In short, China's IPR protection effort will carry the full force of steel, and it will definitely not be something that is soft as bean curd, so to speak.

Frankfurter Allgemeine: Do you believe that allowing citizens to choose government leaders in competitive elections with multiple candidates would help overcome China 's social problems? What holds you back from introducing democratic elections to township level government and above as you said when Prime Minister Tony Blair visited Beijing?

Wen Jiabao: 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. To resolve these problems, we are working to reform government administration and the system for selecting officials, improve institutional supervision and oversight and fight corruption. I am confident that as we make continued progress in institutional reform and the fight against corruption, these problems will eventually be curbed and resolved. An effective system will prevent bad people from running wild while a dysfunctional system will keep good people from performing good deeds and even make them commit wrongdoing. In this sense, the system is of fundamental importance. Therefore, when we are pressing ahead with economic reform, we should also advance political reform including official selection and the election system.

According to China's Constitution and relevant laws, the system of people's congress is practiced in China, and leaders of the national and local governments are elected by the people's congresses at the same level. Self-governance and direct election are practiced in about 680,000 villages in China. People's deputies are popularly elected in counties, townships and cities with no sub-districts. Indirect elections take place at national and provincial levels and in cities with sub-districts. Multi-candidacy elections are practiced 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.

Since time is running out, I am afraid we have to stop here. 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.

(Xinhua News Agency, fmprc.gov.cn September 6, 2006)


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