Chinese Premier Wen Jiabao gestures while answering a reporter's question at a press conference in the Great Hall of the People March 14, 2005. Wen talked about the Anti-Secession Law, macro economy, renminbi and Hong Kong issues at the press conference. [Xinhua]

"The top priority for the government is to further strengthen and improve macro-regulative policy and measures in order to maintain a steady and fairly rapid economic growth," said Wen at a press conference held on the sidelines of the annual full session of the top Chinese legislature, which just concluded here Monday morning.

"We mustn't stop and we must not waste our previous efforts," Wen stressed.

Citing problems such as greater difficulties in raising grain output and farmers' income and a serious strain of energy supply and transportation capacity, Wen conceded that China is now faced with "many dilemmas" in its "overstretched" economy.

He pointed out that these problems were actually problems with the economic growth mode and institutional problems, and therefore would "take time to be addressed".

He also promised that his government would "give different treatment to different situations" in its macro-control efforts, adding that "we must take both administrative and economic means to achieve macro-regulative objectives".

Premier Wen Jiabao waves to reporters upon his arrival for the press conference in the Great Hall of the People on March 14, 2005. [Xinhua]

Anti-Secession Law

Answering the question on the Anti-Secession, Premier Wen told more than 700 journalists from home and abroad that the Anti-Secession law has been made to strengthen and advance ties across the Taiwan Straits, instead of being a war mobilization order.

It does not target the Taiwan compatriots, nor is it a law of war against Taiwan, he said, adding that the law states clearly it aims to promote exchanges between the people on both sides of the Taiwan Straits, encourage and facilitate economic cooperation, the three "direct links", as well as exchanges in various fields including education, science and technology and culture, Wen said.

The Anti-Secession Law stipulates that the rights and interests of Taiwan business people on the mainland shall be protected, said Wen.

"The law aims at checking and opposing 'Taiwan Independence' secessionist forces," he said. "Only when the 'Taiwan independence' secessionist forces are checked and opposed, can we maintain peace in the cross-Straits region."

Peace and stability in the cross-Straits region, he said, will facilitate business people from Taiwan and abroad to invest in the mainland.

"The important speech delivered recently by Chinese President Hu Jintao on the Taiwan question has stated clearly that we will protect the legitimate rights and interests of Taiwan business people on the mainland," said the Premier. "We will do whatever benefits the Taiwan people."

He said China will develop into a regular practice as early as possible the cross-Straits direct passenger charter flights that are conducted on festivals and holidays and will take measures to boost sales of farm produce from Taiwan, particularly from southern Taiwan, to the mainland.

On the other hand, the premier said China will seek to resume and solve the export of labor forces for fishermen from the mainland to work in Taiwan.

"We're also ready to take a series of preferential policies and convenient measures," he said. 

Farmers' autonomy to manage land never changes

Chinese farmers' rights to manageand use their land will not change in the long run, or "forever", said Wen.

Photojournalists zoom in the press conference by Chinese Premier Wen Jiabao in the Great Hall of the People on March 14, 2005. [Xinhua]

According to him, China's reform started in rural areas, to be more specific, from readjusting the right to "manage and use land",and a household contract responsibility system for farm production was established in the late 1970s, allowing farmers to utilize their land in due course.

"Their rights have been continuously extended," said Wen, reaffirming that rural land is under collective ownership in China.

Plan for more flexible exchange rate

On the question concerning yuan's rate, Premier Wen said that China is working on a plan for a more flexible exchange rate of its currency, but the specific measures might come around unexpected.

China started to reform its exchange rate in 1994 and the work has never stopped. The purpose is to establish a market-based, managed and floating exchange rate, Wen said.

China is doing now is to lay a solid foundation for such a reform. The necessary prerequisites for the reform include, first, macroeconomic stability and growth and second, a healthy financial situation, Wen added.

Meanwhile, said Wen, China has already taken a series of measures to ease foreign exchange regulation.

Wen said there has been no agreement on what impacts the change of China's exchange rate, or the appreciation of Renminbi, will have on the Chinese economy, Chinese enterprises and neighboring countries and other countries in the world.

Frankly speaking, although some people strongly ask for the appreciation of Renminbi, they don't fully understand the problemsarising from the appreciation, Wen said.

China is a responsible country. On the issue of the appreciation of Renminbi and the exchange rate system, China not only considers the domestic interests, but also its possible impacts on neighboring countries and the world, he said.

Tung's contribution to Hong Kong to be remembered

Answering question concerning Mr. Tung Chee Hwa's resignation, Premier Wen Jiabao said that Tung's resignation has been "out of his own sincere will", and his contributions to Hong Kong will be remembered by the Hong Kong people and treated fairly by history.

Tung's proposal to resign from the post would win understanding from the Hong Kong people and would be respected by the Central Government.

Journalists covering the NPC session raise their hands for a chance to ask a question at the press conference given by Premier Wen Jiabao in the Great Hall of the People on March 14, 2005. [Xinhua]

Wen said that he believes that the Hong Kong people are fully capable of running Hong Kong well and the central government will unswervingly stick to the principle of "one country, two systems" and "the Hong Kong people governing Hong Kong" and "a high degree of autonomy".

The election of a new chief executive of the Hong Kong Special Administrative Region (HKSAR) will be done fully in accordance with the Basic Law and other laws, he said.

"The central government will always strictly follow the Basic Law," Wen added.

Despite the Asian financial crisis, Hong Kong's economy has picked up and living standard of its people has further been improved, Wen said.

"Over the seven and more years," he said, "Mr. Tung has done a tremendous and creative job", "He was hardworking with few complaints and showed his strong sense of responsibility."

Efforts for high-level visits between China, Japan

Commenting on the issue of bilateral ties between China and Japan, the Premier said China and Japan should make joint efforts to create conditions for high-level exchange of visits in a bid to improve bilateral relations.

He also suggested the foreign affairs departments of the two countries should begin strategic study and research on strengthening and improving China-Japan relations. And problems left over from history should be properly handled.

Wen said since the normalization of bilateral relationship, the China-Japan relations have made great progress. Last year, bilateral trade approached to 170 billion US dollars and the number of bilateral personnel visits exceeded four million.

However, there are obstacles to China-Japan relations. They are particularly in the political sector and the fundamental issueis how the Japanese side views correctly the issues left over from history.

He said the development of China-Japan relations should comply with the following three principles:

First, taking history as a mirror and looking forward into the future. The year of 2005 marked the 60th anniversary of the victory on the War of Resistance Against Japanese Aggression won by the Chinese people. It reminded us untold sufferings of the Chinese people, Asian people and even Japanese people at that time. Therefore, "We hope that the Japanese government could take opportunities to promote friendship between the two countries."

Chinese Premier Wen Jiabao gestures while answering a reporter's question at a press conference in the Great Hall of the People March 14, 2005. [newsphoto]

Second, the Japanese government should stick to the "one China" principle. The Japan-America security alliance is a bilateral arrangement. The Chinese people are concerned with the alliance, because it is related to the Taiwan issue, which is China's internal affair and never allows any direct or indirect interference by any other countries.

Third, strengthening cooperation and pursuing common development. There are tremendous potentials in China-Japan friendly cooperation, especially in the economy and trade sectors,Wen said.

No foreign interference allowed

China will never allow any foreign interference with the Taiwan issue, a "purely internal affair" of China, and that China doesn't want to see, yet is also not afraid of any such interference, the Premier stressed.

"Fight nut-cracking battle" in 2005 reform

The year 2005 is not only a year of reform, but a year of "fight a nut-cracking battle" in reform, Premier Wen Jiabao said.

To remove the unhealthy and destabilizing factors in the economy and strengthen the achievements of macroregulation hinges on reform, he said.

To solve the deeply-rooted "contradictions and problems" in the economic development, adjust the industrial structure and change the patterns of economic growth relies on reform, the premier said.

Wen said that to realize social fairness and justice and build a harmonious society also needs reform.

China's reform cannot be done in just one year, but is a long-term target. It would be better to solve some problems at an earlier date, or they will be accumulated to a level hard to solve,Wen warned.

The premier set five tasks for reform this year:

-- To restructure government bodies and change government functions;

-- To promote the reform of state-owned enterprises, focusing on building corporate governance and joint-stock reform;

-- To push forward financial reform. We need to exert great efforts for the reform since the finance is an "very important and problematic" part in the economy;

-- To push forward rural reform focusing on the reform of tax and fees administration; and,

-- To advance social security reform.

Premier to visit India

Premier Wen Jiabao announced that he will pay a visit to India soon at the invitation of his Indian counterpart.

When commenting bilateral relations between China and India, he said, as the two most populous nations in the world, China and India are not rivals but friends, and that both countries shall work together to tap the potential of bilateral cooperation and find a "fair, reasonable and mutually acceptable plan" to solve their border disputes.

"I hope you can send my message back to the great Indian people,that we're not competitors, we are friends," said Wen.

Acknowledging that China and India will celebrate next month the 55th anniversary of the establishment of their diplomatic ties, Wen expressed the hope that the anniversary would "become a new starting point for Sino-Indian friendly cooperation".

Stating that the development of Sino-Indian relations has "entered a new stage" in recent years, Wen said that during his planned visit, he would seek consensus mainly on three issues with his Indian hosts.

"Both China and India should fully recognize the great significance of Sino-Indian friendship, not only to Asia, but alsoto the entire world," said Wen.

Though the annual trade volume between the two countries has now reached 13.6 billion US dollars, there remains great potentials for the two sides to expand cooperation and seek common development, he added.

On the sensitive boundary issue, the premier suggested that the two countries first establish the principle for the resolution of the issue, which was left over by history, on the basis of equal consultation and mutual understanding and accommodation with both respect for history and accommodation for reality.

The premier gave an emotional ending to his comments by quotingfrom an ancient Indian poem: "May we not hate anyone. Let there be peace, let there be peace, let there be peace!"

Trade, economic ties with Russia

On the issue concerning China's economic ties with Russia, the Premier said that he would discuss with his Russian counterpart Mikhail Fradkov about trade and economic cooperation, particularly that in oil and gas exploration, when they met in the second half of the year.

China and Russia have reached a consensus on energy cooperation, Wen said, citing Russia's promise to enlarge oil export to China to 10 million tons for 2005 and 15 million tons for 2006, based onlast year's 9 million tons.

Russian President Vladimir Putin has made it clear that Russia would give first consideration to China in building an oil-gas pipeline in Siberia, he said, adding that the two countries would also strengthen cooperation in oil and gas exploration and development.

China-Russia energy cooperation is an important part of the bilateral cooperative friendship and is based on equality and mutual benefit, Wen said.

Describing the China-Russia relationship over the last few years as being in "the best period" since the settlement of the border issues left over from history, Wen said the two countries had set a goal to expand their trade to 60-80 million US dollars by 2010.

Death penalty not to be abolished

On the question of death penalty, the Premier confirmed that measures are being taken to reform the country's judicial system including the possible callback of the power to approve death penalty to the Supreme People's Court.

However, based on China's "national conditions", it is impossible for China to rescind the sentence term, said Wen, citing the fact that half of the nations worldwide still adopt the death penalty to support his comment.

The Premier also vowed to improve judicial mechanism to ensure "death penalty to be given carefully and fairly".

Rural reform, development

As for China's rural reform and development, the Premier said that it has entered its second phase, with industry expected to nurture agriculture and cities to support rural areas.

"We should give more, take less and further liberalize the rural productivity," Wen said while meeting Chinese and foreign journalists who covered the just-ended third annual session of the10th National People's Congress.

He listed four jobs as the central tasks for the second phase. Firstly, efforts should be made to promote rural reforms with focus on rural tax and administrative fee reform.

Secondly, productivity in the rural areas should be improved by building more water conservation projects and promoting wider application of agriculture-related science and technologies.

Thirdly, "we should also further develop education, science and technology, culture as well as other social undertakings in the rural areas," Wen said.

And finally, grass-roots democracy should be promoted by enhancing the ability of self-governance among villagers, implementing direct election at the village level and giving greater transparency in administration affairs at the village and county level, he added.

In the first phase for rural reform and development, China has introduced to the rural areas the family contract responsibility system, which has granted farmers greater autonomy in land use, production and management. "As a result, it has greatly liberalized productivity in the rural areas," Wen said.

Boosting capital market

Answering the question on China's measures to develop its stock market, Premier Wen said China will continue its policy of developing the capital market and expand direct financing.

He listed some specific measures to achieve that goal, including enhancing efforts to improve the quality of listed firms,which he said is "fundamental" to the country's endeavors in developing the securities market.

The country will also build an open, fair and transparent securities market, intensify supervision and crack down on any behaviors in violation of laws and regulations, he added.