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 
------- 
 
¶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