NPC CLOSES MARCH 18; PREMIER HOLDS PRESS

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 001024

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/18/2033
TAGS: PGOV PREL PHUM ECON CH TW
SUBJECT: NPC CLOSES MARCH 18; PREMIER HOLDS PRESS
CONFERENCE ON TIBET, TAIWAN, "EMANCIPATING THE MIND"

REF: A. BEIJING 1002


B. BEIJING 984

C. BEIJING 809

Classified By: Political Section Internal Unit Chief Dan Kritenbrink.
Reasons 1.4 (b) and (d).

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


1. (C) In the March 18 final session of the National People's
Congress (NPC),President Hu Jintao called for continued
reforms, effective and clean government, a spirit of
pragmatism and innovation and the raising of China's
international stature. Premier Wen Jiabao, in an extended
press conference following the session's close, underscored
the leadership's current line on Tibet, took a low-key
approach to Taiwan, acknowledged the challenge of continuing
economic growth while curbing inflation and promoting social
equity and justice, said China was making progress in
reforming its judicial system and, like Hu, called for
pragmatism and innovation. Wen also introduced his four new
Vice Premiers. At the closing session, NPC deputies adopted
all draft reports up for approval, as is the case every year,
and also as in past years, expressed apparent dissatisfaction
over continuing corruption by giving the Supreme Court and
Procuratorate reports (relatively) low marks. End Summary.

Hu Jintao on Stability, National Pride, Reform
-------------- -


2. (SBU) At the end of this year's final NPC session on
March 18, President Hu Jintao delivered a rousing closing
speech. Speaking without notes or a script, Hu called for
democracy, rule of law, social stability and the continuation
of robust reforms. Interrupted repeatedly by what appeared
to be spontaneous applause, and speaking with patriotic
fervor, Hu urged the deputies to make China into a country of
which they could all be proud. Hu called for popular
"supervision" of the Government and for clean and efficient
administration. Setting the tone for Premier Wen Jiabao's
remarks at a press conference afterward, he underscored the
"profound" changes occurring in China and said that only by
"emancipating the mind," continuing with robust reform and
holding to a pragmatic and innovative course, would China
succeed to take its rightful place in the international
community.

Wen Holds Court in the Great Hall of the People
-------------- --


3. (SBU) A well-prepared, articulate and confident Premier
Wen Jiabao answered questions from Chinese and foreign
reporters for two-and-a-half hours at a live press conference
following the NPC session. Wen fielded a broad range of
questions, including sharp queries on the unrest in Tibet,
the Taiwan election and the detention of dissidents in
advance of the Olympics, but he focused primarily on the
Government's policies for maintaining growth while curbing
inflation and promoting social equity and justice. Wen
extended the closing of the conference several times,
quipping that "If you don't mind missing your lunch, I am
willing to stay."

Tibet
--------------


4. (SBU) Speaking in measured tones, Wen repeated the
leadership's current line that emphasizes the violence,
property damage and loss of life in Lhasa, including
"extremely cruel" acts, claiming that China wants to resolve
the crisis on the basis of "rule of law." He repeated
Beijing's allegation that the unrest is being orchestrated by
the "Dalai Lama clique" and acknowledged that the unrest had
spread to other areas of China and to its diplomatic posts
abroad. When asked why China didn't talk with the Dalai Lama
directly ala South Africa or Ireland, Wen said that despite
the current unrest, China had not backed away from its policy
of maintaining an "open door" to talks with the Dalai Lama.
When asked why, if China was so confident of the facts on the
ground in Tibet, it did not allow media to see for
themselves, Wen said Lhasa was returning to normal and
reporters could soon travel there, offering to arrange an
inspection tour for them.

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


5. (SBU) Premier Wen did not take the bait from Western and
Taiwan reporters who raised hypothetical questions about
possible Chinese reactions if Taiwan's referendum on joining

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the UN were to pass. Although he reiterated China's mantra
that efforts at Taiwan independence were "doomed to fail," he
adopted a low-key response that stressed the soft side of
China's standard line. He said the reason China opposed the
referendum is that it "denied the reality of one China" and
would be a serious blow to cross-Strait relations. Chinese
on both sides of the Strait should determine the status of
Taiwan, and China hoped to resume talks with Taiwan as soon
as possible "on any issue," including peace talks to end the
state of hostility. In response to a Taiwan reporter's
question, he put great emphasis on economic relations and
trade, hoping for a quick establishment of the three links
following the election. He said China would continue to give
preferential treatment to Taiwan businesses and investors
even though Taiwan continues to impose restrictions on trade
and investment.

Hu Jia case, Human Rights, Legal Reform
--------------


6. (SBU) Asked about today's opening of the trial of human
rights activist Hu Jia on charges of subverting state power,
Wen said he would not comment on individual cases, which
would be handled "in accordance with the law." He
categorically denied that China was engaging in a crackdown
on dissidents in advance of the Olympics. In answer to a
question of whether China will sign the UN Convention on
Civil and Political Rights, he said China was working to make
its domestic laws consistent with international norms and
would eventually sign the Convention. He also said China was
making great progress in reforming its judicial system.
Justice, he said, is the objective of judicial reform.

Economic Problems, Plans
--------------


7. (SBU) Wen was extremely candid regarding the leadership's
concerns about the economy. He noted that he was "closely
watching" international economic fluctuations and
developments in the U.S. economy, including the "rapid
depreciation" of the U.S. dollar, and he was "very worried."
He said this year will be "the most difficult" year for
China's economy.

-- Wen asserted that to date international economic problems
had made a minimal impact on China's economy, claiming that
China was insulated to some extent because of its huge
potential for continued development, especially in rural
areas.

-- The Premier returned repeatedly to the question of
inflation in response to reporters' questions, stating that
the challenge was to maintain a "balance" between promoting
continued growth and guarding against overheating, and that
the targets announced in his NPC Government Work Report of an
8 percent annual growth rate and a 4.3 percent rise in the
CPI were designed to accomplish this. However, Wen averred,
"to be honest," it will not be easy to achiev these goals,
especially because of the added economic impact of the severe
snowtorms earlier this year.

-- Wen said the storms brought added pressure to curb price
rises but the Government had not changed its two-pronged
policy for two reasons. First, it demonstrates the
Government's resolve to make inflation control the top
priority for the year; second, it serves to dampen citizens'
inflationary expectations, which "can become more dangerous
than the price increases themselves." He said targets were
"realistic" because the current stock of grain reserves is
between 150 and 200 million tons and there remains an
oversupply of industrial goods.

-- Hinting at leadership concern over stability, Wen said
China must maintain growth at a certain pace to address
employment pressures and needs to create 10 million new jobs
a year.

"Emancipating the Mind": Strong Push for Pragmatism
-------------- --------------


8. (SBU) Wen issued a forceful, if implicit, call for
elevating pragmatism over ideology. He said China's progress
for 5000 years was a result of reform, pragmatism and
innovation, stating that Deng Xiaoping's call when he
launched the era of reform 30 years ago to "emancipate the
mind" would last as long as it took to make China a modern
country. Wen said that leaders in particular should
"liberate their thinking" and cultivate a "critical and
innovative" mentality. He said the "emancipation" slogan
means to "say no to blind faith" and engage in "bold
experiments."

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9. ((SBU) He summarized the leadership's biggest challenges
in four points:

-- economic growth to promote stability.

-- breakthroughs in both economic and political reform in
order to keep moving forward, liberating one's thinking,
reform and innovation.

-- social equity and justice along with economic growth,
which he called "the first virtue of socialism." He said
that developing the economy and improving people's lives is
the "duty" of the Government while promoting equity and
social justice is its "conscience."

-- national moral strength through cultivating ethical
standards, credibility and integrity, which he called a
"precious" commodity.


10. (SBU) Wen said his personal motto and challenge to
leaders is to take no personal gain but take personal
responsibility; do not fear change; do not blindly follow
conventional ways; and do not be deterred by complaints. He
said he spends a lot of time on the Internet reading people's
concerns, suggestions and criticisms so he can better
implement his leadership code of conduct.

New Vice Premiers Attend
--------------


11. (SBU) Wen brought his four newly "elected" Vice Premiers
with him and introduced them to the assembled journalists.
However, none of them spoke during the event. When a Western
reporter asked a question of Li Keqiang, NPC spokesperson
Jiang Enzhu promptly intervened to declare that "this is
Premier Wen's press conference, not Li Keqiang's. You will
have opportunities in the future to question Vice Premier
Li."

Vote Tally on NPC Resolutions, Reports
--------------


12. (SBU) At the closing session, NPC deputies adopted all
draft reports up for approval as is the case every year, and
also, as in past years, expressed apparent dissatisfaction
over continuing corruption by giving the Supreme Court and
Procuratorate reports (relatively) low marks.

Title of Report For Against Abstain No Vote

Government Work 2885 32 12 3
Social, Economic Dev 2747 125 55 5
Nat'l, Local Budget 2462 362 102 6
NPC Standing Cmttee 2846 57 23 6
Supreme People's 2287 521 120 4
Court
Supreme People's 2270 514 142 6
Procuratorate
RANDT