China: Highlights From Premier Wen Jiabao’s Last Press Conference

23 Mar

The Editor

Speaking at his last press conference on March 14, 2012 at the close of the National People’s Congress, China’s parliament, Chinese Premier Wen Jiabao Wen discussed several important topics.

Anyone interested in getting some understanding of what is happening in that huge country, internally and in its relations with the outside world, would benefit reviewing the premier’s last remarks, as compiled by Caixin Online.

(Beijing) — Chinese Premier Wen Jiabao gave a nationally-televised press conference in closing the National People’s Congress, the last of his five-year term.

During the conference, Wen discussed China’s macroeconomic growth, U.S.-China trade links and cross-strait relations. Wen called upon party members to revisit the lessons of history and stressed the need to encourage reforms that promote economic development.

Wen also commented on the Chongqing police chief incident and the Wu Ying private financing case.

Premier Wen Jiabao at the March 14 press conference at the end of session of the National People’s Congress (Courtesy of Caixine Online)

Here are some highlights from Wen’s remarks:

“I’ve served as premier for the past nine years. These years have not been easy or ordinary. But I’ve always felt that there’s still so much work to be done, I have more than a few regrets.

“Due to limited capabilities, coupled with the current system and a host of other factors, there are many deficiencies in my work…as for the problems that have arisen in the economy and society during my term, I bear complete responsibility.”

Sino-U.S. Relation

“I have provided several proposals to promote Sino-U.S. cooperation, the most paramount of which is the enhancement of bilateral trade. China will expand imports and the U.S. should open the export market to China. Secondly, bilateral investment can be improved with the provision of better policies and protections. Third, we must increase cooperation in new energy, materials, environmental protection and high-tech sectors. Fourth, the two countries can strengthen cooperation in the infrastructure construction sector.”

Yuan Reform

“Since the exchange rate reforms in 2005, the Chinese currency has appreciated 30 percent. What one should take note of is that starting from last September, a two-way movement of the yuan’s non-deliverable forwards in Hong Kong has emerged, which indicates that the yuan is approaching fair value.”

Cross-Strait Relations

“This makes the tenth consecutive year that I’ve conveyed my thoughts on the Taiwan issue during these meetings, and in every instance, I’ve always felt restless about the matter.”

“To promote peace and development across the Straits, and in particular with an eye to promote business ties, we need to advance follow-up negotiations on the Economic Cooperation Framework Agreement.”

“Financial cooperation between the two sides of the Strait will continue to develop, including further cooperation on a banking settlement system and the encouragement of banks on both sides to take stakes in each other, in supporting the role of finance in trade and economic cooperation.”

Political Reform

“We have entered a critical point in the need for reforms. Without successful political reform, vital economic reforms cannot be carried out. The results of what we have achieved may be lost. A historical tragedy like the Cultural Revolution could be repeated. Each party member and cadre should feel a sense of urgency.”

Property Market

“The property market is closely related to fiscal revenues, finance, land supply, enterprises and involves central and local government interests. Reforms are facing great resistance.”

“What I can make clear is that the housing prices are far from a reasonable level, so market controls must not be relaxed.”

Democracy

“I believe China’s democratic system will, in accordance with China’s national conditions, develop in a gradual manner. There is no force that can stop this.”

Private Financing

“(The Wu Ying case) reflected a grassroots financing system which isn’t built to meet the demands of our economic growth. The problem is that companies, especially the smaller ones, need huge amounts of capital but, banks can’t satisfy them. Meanwhile, the market is awash with private capital seeking opportunities.”

“We should guide private capital into the financial system by making them more standardized and transparent. We should encourage the development (of private financing) while strengthening supervision.

“I want to tell you that the central bank and the China Banking Regulatory Commission are actively planning to launch pilot reforms on private financing in Wenzhou.”

Tibet

“It should be clear that Tibet and the Tibetan areas of Sichuan are integral parts of Chinese territory. The so-called Tibetan government-in-exile in India’s Dharamsala, regardless of whether (it) is under the direct or indirect control of the Dalai Lama, is a theocracy. Its purpose is to separate Tibet and other Tibetan areas from the motherland. On this issue, our position and principles are firm.”

Local Debt

“I want to clarify several points: First, the Chinese government’s debt ratio and deficit ratio are currently at low levels, lower than many developed and emerging economies.”

“Secondly, government debts are under control and safe.”

“Third, we will properly handle local government debt, and put a cap on its growth. We will properly handle outstanding local government debt in a step-by-step manner by classifying it into different categories and managing it accordingly. And the newly-added debt must be included into the fiscal budget and receive supervision from the NPC.”

“Fourth, the majority of local government debt is actually in the form of high-quality assets with stable cash flows and promising returns. The debt of some projects can be repaid by the returns on those projects. For some public projects, the central government and local governments will take responsibility for repayment.

“We will also let the market play a role in handling local government debt, through such ways as asset disposal, the transfer of projects and the selling of equity.

Wan Lijun Incident

“Over the years, the successive governments of Chongqing and the people in Chongqing have made tremendous efforts to promote reform and development. And they have achieved remarkable progress in that regard. The present Chongqing municipal Party committee and the municipal government must reflect seriously and learn from the Wang Lijun incident.

“History instructs us that serving the people’s interests depends upon learning from experience and reflecting on the past. The practice that we take must be able to stand the test of history and I believe the people fully recognize this point and I have full confidence in our future.”

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