Bloomberg: A lot of social problems have cropped up in the course of rapid economic development in China, and one of them is the wealth gap. To address problems facing agriculture, rural areas and farmers is top on your agenda. But some people are saying unless farmers are granted the right to use land or they are transferred the ownership of the land, it is impossible to solve the problems. Do you think it is possible to grant farmers land use rights or give them the ownership of the land?
Wen: China's reform started in the countryside. China's rural reform started with the right to manage land by farmers. In the countryside, land is under collective ownership. In the early days of the reform and opening up, the first step we adopted in the countryside was to set up the family contract responsibility system. Farmers were given the right to manage their land, and such rights of the farmer have been extended time and again. Now I can say directly that farmers' autonomy to manage their land won't change for a long time. Actually it will never change.
ERA News from Taiwan: The just-concluded session of National People's Congress adopted the Anti-Secession Law by an overwhelming majority. The passage of the new law has been a subject of great interest to many people. People are especially interested in a section of the law which provides for continued exchanges between the two sides of the Taiwan Straits.
My questions are: Under the framework of the new law, what specific measures will the State Council adopt to promote the continued exchanges?
Moreover, there are many business people from Taiwan living in cities on the mainland, either doing business or they have already settled down. Will this law affect their interests? If not, will the law actually turn out to be promoting and protecting their interests?
Wen: Let me first ask you a question: "Have you read the law?"
ERA News: I have some knowledge of the law and I've read the explanatory notes related to the law.
Wen: I must thank this journalist from Taiwan for raising this question.
First of all, let me send my greeting to the 23 million compatriots in Taiwan.
Your question actually gets to the essence of this law. This law is meant to strengthen and promote cross-Straits relations. This is the law for the peaceful reunification, and it is not targeted against the people in Taiwan, nor is it a war bill.
The law has clearly provided for promoting personnel exchanges, encouraging and facilitating economic co-operation, including "three direct links" between the two sides, encouraging and facilitating exchanges between the two sides in educational, scientific, technological and cultural fields.
The law has also provided for protection of the legitimate rights and interests of Taiwan business people.
The law is matched to check and oppose Taiwan Independence forces.
Only by checking and opposing Taiwan independence forces, will peace emerge in the Taiwan Straits.
Peace and stability in the Taiwan Straits will create favourable conditions for Taiwan business people to invest in the mainland and also for foreign investors to come to the mainland.
You ask for specific measures, that is, according to the recent important remarks made by Party Secretary-General Hu Jintao on the question of Taiwan, we will protect the legitimate rights and interests of Taiwan business people in the mainland; for anything that is conducive to the people of Taiwan, we will do it.
First, we should promptly make cross-Straits charter passenger flights available not only on traditional festivals, but also on a more permanent basis.
Second, we should adopt measures to address the issues related to sales of agricultural products from Taiwan, especially, southern Taiwan to the mainland.
Third, we should promptly solve problems so that fishermen from the mainland can continue their contract labour services in Taiwan. There are other favourable policies and convenient measures we will adopt for this purpose.
Reuters: The renminbi question has been the focus of world attention, with many foreign trading partners urging China to adopt a more flexible exchange rate. China has said it could be a long term process, but what reform plans do you favour now? And, when will the first change occur?
Wen: China's exchange rate reform actually started in 1994 and it has not stopped even today. Our objective for the reform is to create a market-based, managed and floating exchange rate.
When we consider reform plans, our purpose is to make the exchange rate more responsive to supply and demand in the market. What we have been doing is to lay a solid foundation for such reform. A number of necessary conditions would include first, macroeconomic stability and growth, and second, a healthy financial situation.
In the meantime, we have already eased many of the controls on foreign exchange.
When we talk about change in the exchange rate regime, or revaluation of the renminbi, we have to ask questions like what impacts these measures will have on China's economy and Chinese enterprises, and what impacts they will have on our neighbouring countries and other countries in the world. On these issues, no agreement has been reached.
Frankly speaking, many of the people who have been strongly urging the revaluation of the renminbi haven't given much thought to the problems that would arrive from doing so.
China is a responsible country. When we decide upon the revaluation of our currency, or reforming our exchange rate regime, we must take into consideration not only our domestic interests, but also possible impacts on neighbouring countries and the world.
Finally, let me say that work related to exchange rate reform is in progress. Regarding the timing of the reforms and measures to be adopted, maybe they will come around unexpectedly.
China Central Television: You have spoken on many occasions that the economic priority for 2005 is to further promote reform and you have called this year "a year of reform." In your report on the government's work, you emphasize that the task for this year is to deepen reform unswervingly, and to remove the structural integument to economic growth. Then in your view, what are the most urgent issues to be addressed this year?
Wen: Right, I have said on many occasions that this year is "a year of reform."
I said so for three reasons: First, to eliminate the destabilizing and unhealthy factors in the economy and to solidify the achievements of macro regulations will have to rely on reform.
Second, to address the deeply rooted problems in the economy and achieve a restructured transformation of the economic growth pattern will rely on reform.
Third, to realize social fairness and justice and build a harmonious society will also have to rely on reform.
Reform is not a task for any single year. It is going to be a long-term task. And, in many cases with regard to reform, "sooner is better than later." Otherwise the problems will become too entrenched to unravel.
For this year, there are five priorities in our reform.
First, to restructure government bodies and to transform the functions of the government.
Second, to promote State-owned enterprise reform, focusing on corporate governance and share-holding systems.
Third, to promote financial reform, which is a critical and often problematic aspect of our economy and requires great efforts from us.
Fourth, rural reform. Centring on reform of the rural taxes and administrative fees, the purpose is to change those elements in the superstructure in the rural area that are no longer consistent with the economic phase.
And fifth, social security reform. We must step up the development of a social security system that is suitable for China's reality. This is a year of reform, but it is not only so. It is a year we are going to fight the toughest battle in the reform process.
