Identifier
Created
Classification
Origin
06BEIJING4764
2006-03-14 11:25:00
UNCLASSIFIED
Embassy Beijing
Cable title:  

PREMIER WEN DISCUSSES NEW SOCIALIST COUNTRYSIDE,

Tags:  PGOV PHUM PARM ECON CH TW JP 
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O 141125Z MAR 06
FM AMEMBASSY BEIJING
TO SECSTATE WASHDC IMMEDIATE 0227
INFO CHINA POSTS COLLECTIVE IMMEDIATE
CDR USPACOM HONOLULU HI IMMEDIATE
UNCLAS BEIJING 004764 


SIPDIS

E.O. 12958: N/A
TAGS: PGOV PHUM PARM ECON CH TW JP
SUBJECT: PREMIER WEN DISCUSSES NEW SOCIALIST COUNTRYSIDE,
INTERNET FREEDOMS, TAIWAN, HONG KONG, JAPAN AND CURRENCY
FLUCTUATION

Summary
-------

UNCLAS BEIJING 004764


SIPDIS

E.O. 12958: N/A
TAGS: PGOV PHUM PARM ECON CH TW JP
SUBJECT: PREMIER WEN DISCUSSES NEW SOCIALIST COUNTRYSIDE,
INTERNET FREEDOMS, TAIWAN, HONG KONG, JAPAN AND CURRENCY
FLUCTUATION

Summary
--------------


1. China must recognize that the reform process is
long and arduous, Premier Wen Jiabao remarked at a
press conference following the conclusion of the NPC
and CPPCC annual sessions. The New Socialist
Countryside policy will help safeguard farmers' land
rights and raise their living standards. Social
problems resulting from the seizure of land and other
conflicts of interest must be properly handled by
adopting strong measures to protect the public's
rights. While each citizen has the right to access
the Internet and enjoys the freedoms of speech and
publication, they must abide by the law in order to
safeguard national and societal interests. Remarking
that the Taiwan authorities' decision to cease
operation of the NUC and application of the NUG has
severely undermined cross-Strait peace and stability,
Premier Wen asserted that Beijing is willing to hold
"equal-footed" dialogue with any person, including an
individual from the DPP, who is committed to the one-
China principle. Hong Kong's development will promote
Hong Kong's democratic system in an orderly manner and
in accordance with the principles of the Basic Law.
The Premier remarked that it is not necessary to
employ administrative measures to shape the
fluctuation of the RMB exchange rate. China has
already become a responsible international player and
its military spending is solely for self-defense
purposes. If the Yasukuni Shrine issue is not
properly resolved, Sino-Japanese relations will not
develop smoothly. China-India relations have entered
a new historical stage. The government will focus on
improving the compulsory and vocational education
systems and step up environmental protection efforts.
End Summary.

China Will Stick to Reform Despite Difficulties Ahead
-------------- --------------


2. Premier Wen Jiabao commenced the March 14
televised press conference that followed the
conclusion of the NPC and CPPCC annual sessions by
stating that he had read many of the hundreds of
thousands of comments and suggestions posted by
Chinese citizens on Internet portals, including ones

run by the People's Daily, Xinhua, Sohu.com and
Sina.com. Noting that some of the comments were
directed to him, Premier Wen remarked that they
underscored public expectations, confidence and
encouragement. China must recognize that the road
ahead is long and arduous, promote reform and continue
to develop socialism with Chinese characteristics.
Backpedaling is not an option, and China must prepare
for future difficulties and risks, including those
that can and cannot be predicted. The nation has
continued to improve itself due to its resilient,
unyielding and industrious spirit.

Agricultural Development Key to National Modernization
-------------- --------------


3. Responding to a question from the Farmers' Daily
reporter on the construction of the New Socialist
Countryside, Premier Wen asserted that the development
of agriculture, rural areas and the rural population
has become an integral feature of the nation's
modernization drive. The New Socialist Countryside
policy will focus on three areas. First, utilizing
industry to enhance agriculture, thereby building a
society of moderate prosperity (xiao kang she hui) in
rural areas and modernizing the agricultural sector.
This will also boost demand and consumption and help
build China's society and put its economy on more
solid ground. Second, enhancing infrastructure and
social programs to improve agricultural capacities,
which will raise farmers' living standards. Third,
respecting farmers' democratic rights, especially the
right to independently farm contracted land, and
refraining from taking coercive measures against them.
In addition, improvements to the material and culture
existence of rural residents will serve as a yardstick
to measure the practical results of China's rural
development.

Farmers' Rights
--------------


4. The Financial Times correspondent asked about
government measures to protect rural residents from
illegal land seizures. Remarking that the core issue
for China's farmers is land, Premier Wen stressed the
importance of the household contract responsibility
system. While land is collectively owned, the right
to production and cultivation belongs to the farmers.
This right will be explicitly guaranteed and will
remain unchanged. Premier Wen highlighted the need to
safeguard farmers' ability to work independently on
contracted land and to compensate appropriately those
whose land is expropriated. Revenue from land
transfers should be given primarily to the farmers,
and harsh punishments should be meted out to those who
illegally seize farmers' land.


5. Asked by the AFP correspondent about the
increasing use of violence to deal with rural
protests, the Premier remarked that China's current
stage of rapid economic development has generated many
acute social problems. Some local officials violate
regulations and the public's rights, particularly with
regard to land seizures, housing demolition and
resettlement and corporate restructuring. These
social problems must be properly handled by adopting
strong measures to protect people's personal interests
and rights. It is also important to teach the public
to voice their legitimate concerns through lawful
channels. Asked whether China would consider the
establishment of independent trade unions to protect
workers' welfare, the Premier said he was saddened by
a number of major workplace accidents that have
occurred and noted that the government work report
highlighted the need to improve work safety conditions
and awareness. Trade unions at all levels should play
a greater role in safety supervision, he remarked,
adding that trade unions are the "people's
organizations" and are not established by individual
firms.

Internet Freedoms
--------------


6. Western media correspondents asked about
international concerns over Internet control and other
areas of censorship and the arrests of journalists.
Noting that over 100 million Chinese citizens have
Internet access, Premier Wen expressed the
government's support for the development of the
Internet. The Chinese Government should accept public
supervision and solicit views of the government from
Internet users. All citizens have the
constitutionally guaranteed right to access the
Internet and enjoy the freedoms of speech and
publication, but they must abide by the law and public
order to safeguard national, social and collective
interests. China manages the Internet according to
international standards and would like to learn mre
from other countries' experiences. Premie Wen
remarked, nonetheless, that websites should carry
accurate information and not mislead the public or
undermine public order. Weboperators should abide by
a code of conduct and certain ethical standards.

Taiwan
--------------


7. The TVBS reporter asked about Chen Shui-bian's
decision to cease operation of the National
Unification Council (NUC) and application of the
National Unification Guidelines (NUG) and whether the
Mainland is willing to engage the DPP. Premier Wen
asserted that the leader of the Taiwan authorities has
blocked the development of the "three links" and
restricted cross-Strait economic and trade exchanges.
These steps have not benefited Taiwan's economic
development and have undermined the interests of the
Taiwan people. The leader of the Taiwan authorities
continues to create trouble, which has led to disputes
within Taiwan and cross-Strait tensions. Forgetting
his own roots, he has attempted to sever the Chinese
people's "blood ties."


8. The actions of the Taiwan authorities' leader have
run contrary to cross-Strait peace and stability and
the aspirations of the Chinese people, including the
people of Taiwan, Premier Wen continued. The decision
to cease operation of the NUC and application of the
NUG has severely undermined cross-Strait peace and
stability and is very dangerous. The Premier stressed
the need to remain vigilant against an intensification
of secessionist activities and the promotion of de
jure Taiwan independence through constitutional
engineering. China is closely following these
developments and is fully prepared for all
eventualities.


9. Premier Wen reiterated China's consistent and
explicit commitment to the one-China principle. On
the basis of this principle, China supports cross-
Strait consultations conducted on an "equal footing,"
remarking that this is not an issue of one side
"swallowing up" the other. We are willing to engage
in dialogue with any person, regardless of his Party
affiliation or past words or actions, as long as he is
committed to the one-China principle, Premier Wen
stated, adding that this includes individuals from the
DPP. China is prepared to respond to and make contact
with a DPP person as long as he abandons a Taiwan
independence platform. Beijing will never abandon its
efforts to peacefully resolve the Taiwan issue but
will not waiver in opposition to Taiwan secessionist
action and will never permit Taiwan to split from
China.

Hong Kong
--------------


10. In response to the Wen Wei Po's question on the
focus of the 11th Five-Year Plan on Hong Kong and Hong
Kong's impact on the Mainland's economic development,
Premier Wen maintained that since its return to China,
Hong Kong's capitalist system has not changed. The
laws and regulations are basically unchanged and the
rights of freedoms of the Hong Kong people have been
protected. Hong Kong is the world's freest economic
system, maintains a developed legal system and a
favorable business environment and offers efficient
market access to the global economy. Hong Kong has
played a major role in the Mainland's development,
currently serving as the Mainland's fourth largest
trading partner and biggest source of overseas direct
investment. This role will take on greater importance
with the implementation of the 11th Five-Year plan.


11. With the establishment of the Closer Economic
Partnership Agreement (CEPA),Hong Kong imports to the
Mainland enjoy tariff-free treatment and Hong Kong
firms are allowed special access to Mainland trade and
services sectors, Premier Wen noted. China has opened
travel to Hong Kong from 38 cities and will add five
more during the May Day holiday. The 11th Five-Year
Plan will help the Mainland and Hong Kong achieve
joint prosperity. The development of Hong Kong and
the improvement of its people's lives will also
promote Hong Kong's democratic system in an orderly
manner and in accordance with the principles of the
Basic Law, he asserted.

Currency Revaluation
--------------


12. Questioned by the CCTV correspondent about
continuing U.S. pressure to revalue the RMB, Premier
Wen responded that since last July's adjustment of the
exchange rate mechanism the RMB has risen three
percent against the USD and by a higher amount against
the Euro and Yen. China will continue to improve the
RMB exchange rate regime, expand the foreign exchange
market and allow for greater flexibility in RMB
fluctuation. The current exchange rate regime allows
the RMB to fluctuate based on market changes. It is
not necessary to employ administrative measures to
shape the fluctuation of the RMB, the Premier said,
adding that there will be "no surprises."

China Already a Responsible International Player
-------------- ---


13. Questioned by the China National Radio
correspondent about international concerns over the
threat posed by China's development, Premier Wen
stressed that China has already become a responsible
country and listed ten examples. He stated that 1)
China's biggest contribution to global peace and
stability has been successfully feeding 1.3 billion
people and lifting 200 million out of poverty. 2)
China has explored scientific development and will
continue to focus on environmental protection. 3)
Beijing does not employ ideology as a criterion for
defining its friends or enemies nor will it enter into
alliances with individual countries or country
groupings. 4) China pursues friendly relations with
neighboring countries. 5) China is an active
participant in and upholder of the international
system, having joined over 100 international
organizations and signed nearly 300 international
treaties. 6) The country is a staunch force for
international peace and stability and has played a
role in major issues such as the DPRK and Iranian
nuclear issues, for which it has been working toward
peaceful resolutions. Beijing has also helped relieve
non-traditional security threats and natural
disasters, such as the South Asian tsunami. 7) China
resolutely opposes terrorism and nuclear
proliferation. 8) Beijing has honored its WTO
commitments. 9) Helping other countries meet the UN
Millennium Development Goals, China has cancelled 20
billion RMB (USD 2.5 billion) of debt in 44
underdeveloped nations and in the coming years will
offer USD 10 billion in loans to developing countries,
without any strings attached. 10) Beijing maintains a
defensive military policy, and its limited increases
in military spending are aimed at improving the
welfare of its servicemen and its self-defense
capabilities. Chinese troops have never occupied a
foreign country and China will never interfere in
other countries' internal affairs.

Japan
--------------


14. Asked by the Kyodo correspondent how China will
react if PM Koizumi's successor continues to visit the
Yasukuni Shrine, Premier Wen asserted that the current
difficulties in Sino-Japanese relations are due to the
actions of the Japanese leaders, not China or the
Japanese people. The visits to the Yasukuni Shrine
have offended the Chinese and other Asian peoples. If
this issue is not properly resolved, bilateral
relations will not develop smoothly. Highlighting
China's dedication to enhancing Sino-Japanese
relations, the Premier said the development of ties
must follow the three bilateral political documents
and the principle of using history as a mirror. China
wishes to promote the bilateral strategic dialogue to
remove political obstacles to the relationship;
strengthen people-to-people exchanges; and expand
mutually beneficial economic and trade cooperation.

India
--------------


15. Questioned about the state of China-India
relations, Premier Wen noted that he presided over the
signing of the bilateral strategic partnership
agreement during a visit to India in 2005. The two
countries have agreed on principles to resolve the
boundary dispute and established a five-year plan for
economic and trade cooperation. As 2006 marks the
Year of India-China Friendship, both countries should
increase cultural exchanges. Bilateral relations have
entered a new historical stage and the strengthening
of the two nations will eventually usher in the "true
Asian century."

Foreign Shares in State-Owned Banks
--------------


16. Asked by the Wall Street Journal correspondent
about reported domestic criticism of Beijing's
decision to allow foreign parties to own shares in
Chinese state-owned banks, Premier Wen remarked that
the reformation of the state-owned commercial banking
system will involve exploring multiple formats of
public ownership. The shareholding system is
effective, but the objective is to improve corporate
governance and learn from others' expertise to improve
the management of state-owned commercial banks. He
highlighted that the state must maintain controlling
shares in state-owned banks to decrease risk, as well
as enhance supervision to prevent the stripping of
state-owned assets.

Education
--------------


17. Asked by the Xinhua reporter about rural
education reform, Premier Wen asserted that a nation's
development depends largely on the competence of its
people. The government will focus on improving the
(nine year) compulsory and vocational education
systems, which will have the greatest effect on
educating the public, particularly the 900 million
rural residents.

Environmental Protection
--------------


18. Responding to a question on pollution from a
self-proclaimed Taiwan Human Rights News Agency
reporter who drew the moderator's attention by waiving
his cane in the air, Premier Wen acknowledged that
pollution is a major problem and that targets in the
10th Five-Year Plan to reduce pollution were not fully
met. The 11th Five-Year Plan calls for the reduction
of energy use per unit of GDP to 20 percent and the
decrease of pollutants to 10 percent, he noted.
Permission should not be granted for projects that
waste resources or pollute the environment and
comprehensive measures must be taken to conserve
resources and safeguard the environment. While
enforcement of the law will be the most difficult
task, enterprises and individuals responsible for
accidents that pollute the environment will be held
accountable.

Premier's Accomplishments
--------------


19. Asked to describe his accomplishments and most
emotional moments over the past three years, Premier
Wen remarked that he was personally moved by the
public's encouragement and criticism of the
government. He was saddened, however, that pressing
issues, including overpriced and inadequate
healthcare, education, housing and security had not
been handled in a better manner.


RANDT