Premier Zhu Rongji met the press, sponsored by the just-concluded Fourth Session of the Ninth National People's Congress, at the Great Hall of the People Thursday afternoon. The premier answered questions on domestic and international issues.

Proactive Financial Policy Successful

Premier Zhu said China's proactive financial policy and prudent monetary policy have been proven successful over the past three years.

The Premier said that the government's pro-active fiscal policy and stable monetary policy will continue.

He said the policy has proved successful in curing the problems which the 1997 Asian Financial Crisis has inflicted on China. As a result of the crisis, China's export in 1998 suffered setback, growing at nil at that year. Also, in 1998, up to 10 million workers were laid off by State enterprises, and many of the firms halted production because of shortage of market demands.

At that time, various suggestions propped up, including devaluing the Renminbi yuan in order to increase exports, or selling state assets to support jobless workers, but the government decided to take the pro-active fiscal policy.

Zhu said that in the past three years, China issued a total of 360 billion yuan of treasury bonds, the bulk of which was used on infrastructure projects, including highway and railway build-up, water conservation projects as well as other sectors.

Zhu said that his government is confident that the increasing issuance of T-bonds will not lead to financial crisis, and China's current fiscal debt level remains with the internationally recognized safe haven.

No Risk for Pro-active Fiscal Policy

Premier Zhu ruled out the possibility of any risks for China to continue the pro- active fiscal policy in the next two years.

"I don't see any risk in pursuing the pro-active fiscal policy, " he said, in response to a question raised by a Xinhua correspondent.

Zhu said that since all the money raised by issuing additional treasury bonds has been used to support the construction of infrastructures, the Chinese government expects double returns from the debt.

He recalled that when he asked visiting former U.S. treasury secretary Robert Rubin about his opinion on the risk of China's pro-active fiscal policy last year, Rubin said that there was no risk at all because the accumulative amount of public debt accounted for only 14 percent of China's GDP, far below the warning line of 20 percent.

The Premier said that China's pro-active policy has been proved to be correct and successful over the past three years.

The massive investment in infrastructure projects has been effective to jump-start and vitalize economic growth, which led to a marked increase in profits for state-owned enterprises and in the fiscal revenue of the government, Zhu said.

Noting that 2000's financial receipts grew by 196 billion yuan over 1999 to 1.388 trillion yuan, Zhu said that the government is fully "confident" of paying back the debts because it has "real money in the pocket."

Zhu said that the NPC has approved the government to continue to issue 150 billion yuan worth of treasury bonds for infrastructure projects this year and that the country may issue another 150 billion yuan next year.

However, he expressed the belief that there might be no need to issue T-bonds after two years when all the projects in process are completed, the development of the western part of China assumes an initial scale, the operations of state-owned enterprises are brought into a benign cycle, the fiscal receipts increase and channels for social funds are smoothed out.

Premier on Stock market

Premier Zhu said Thursday that it would take a long time for the A and B shares markets to merge.

Zhu said that the China Securities Regulatory Commission (CSRC) did not mention the merger of A share and B share markets. "I had not rule out the possibility, but I think that will take a long time."

He noted that the opening of the B share market to Chinese citizens is part of the reform of the stock market, aimed to open up more channels of investments for domestic investors who have nearly 80 billion US dollars equivalent of foreign currencies in hand. "It also aims at attracting more foreign investment to the B share market," said Zhu.

Zhu emphasized that the central task at present is to strengthen the management of stock market and make companies abide by regulations and discipline. He said that the CSRC has taken a series of measures to strengthen management, including the delisting of companies with poor performances.

Government Institutional Reform Successful

Premier Zhu said that the government institutional reform, which started in 1998, has been successful and that China will not copy the Western-style political system.

According to the reform program, the State Council, China's central government, has reduced the number of its functionaries from the original 33,000 to the present 16,000, and hasn't caused any chaos thereafter. And all the provinces, autonomous regions and centrally-administered municipalities have reduced the size of their civil service by the same proportion, Zhu said.

He added that the government institutional reform is now in full swing at the county level, which aims to reduce the number of government employees by 20 percent.

Through the reform, government efficiency has been considerably improved at all levels, he said. "However, I'm not fully satisfied with the reform, as government functions have not shifted completely. Officials accustomed to central planning have done things that are incompatible with a socialist market economy. I call this a dislocation of roles."

Last year, the central government removed nine ministerial- level bureaus and reformed one. As a result, great changes have taken place. Meanwhile, the government will upgrade market- oriented vice-ministerial departments to the ministerial level, such as the State Administration for Industry and Commerce, State Bureau for Quality and Technical Supervision, and State Administration for Entry-Exit Inspection and Quarantine, Zhu said.

The premier promised to continue the reform. However, it takes time, he said.

China not to Copy Western Political System

Premier Zhu said that China has been reforming its political system all the time, but will not copy western practices like the rotation of parties and the two-chamber congressional system.

The premier made the comment in response to a question raised by a German journalist at a press conference sponsored by the just-concluded Fourth Session of the Ninth National People's Congress ( NPC).

Zhu said that the organizational and personnel systems of the Communist Party need to be improved and government agencies need to be reformed, and that the issue on whether reform should start from the Party or the Constitution simply does not exist.

Sino-US Ties

Chinese Premier Zhu Rongji said that the channel for communication between Chinese President Jiang Zemin and US President George W. Bush has been kept open and that the two presidents have maintained close contacts.

Zhu also said President Bush has attached importance to US- China relations.

He said that US President George W. Bush will visit Beijing in October this year after he attends the APEC meeting in Shanghai.

Anti-corruption Drive

The Premier said that China will carry on the anti-corruption drive even better in coming years.

"We should work even harder to strengthen our work in the judicial field and carry on the anti-corruption campaign even better," Zhu said, in response to a question raised by a CNN correspondent on the NPC deputies' vote on work reports of the Supreme People's Court and the Supreme People's Procuratorate.

Zhu said that he felt heavy-hearted after seeing the voting result. However, he said, it was a big improvement on last year's situation because the work reports were approved with more than a two-thirds majority.

"I don't think this represents the general public's loss of confidence in the ability of the government to wipe off corruption, " Zhu said.

Although the people are not very satisfied with the work of the government, Zhu said, "the general public does trust the government."

Japan's Textbook Issue

Premier Zhu Rongji said that the textbook issue will not affect exchanges between China and Japan and that he welcomes Japanese Prime Minister Yoshiro Mori to visit China.

The Sino-Japanese relations have improved significantly since Chinese President Jiang Zemin made a state visit to Japan in 1998, Zhu said at a press conference held at the end of the annual session of the 9th National People's Congress.

He said that during his visit to Japan last year, he discussed issues with the Japanese leaders in a friendly atmosphere based on the principle of taking the history as a mirror and looking into the future, and he has won the trust of the Japanese people from various circles.

The overall Sino-Japanese relationship is good, the Premier said.

He said that the textbook issue concerns not only the relations between China and Japan, but also the relations between Japan and other Asian countries. If the past war of aggression staged by Japanese militarism is denied and that history is distorted, that will hurt the feelings of not only the Chinese people but also the people of other Asian countries.

Zhu said that the Japanese government and the ministry of education of Japan have the unshakable responsibility in revising the textbook. They can not shirk the responsibility under the pretext of freedom of speech.

He said that he heard that Japan has made some changes in the textbook, but the changes are not enough, he added.

It is not a problem that any country wants to interfere in Japan's internal affairs, the premier said. Rather, it is an issue of whether or not the Japanese people can develop good relationship with the Chinese people and the people of other Asian countries.

"I do not think that the textbook issue would affect the exchanges, including high-level exchanges, between China and Japan, " Premier Zhu said. He reaffirmed his invitation to Japanese prime minister Yoshiro Mori to visit China.

Key Sectors for Recruiting Overseas Talent

Premier Zhu Rongji said that overseas talent to be recruited by China will work mainly in the banking, securities and insurance sectors and for the management of large state-owned enterprises.

The banking, securities and insurance sectors will become more and more open to the outside world and will be exposed to more competition, he explained.

Zhu made the remarks at a press conference organized by the just-concluded Fourth Session of the Ninth National People's Congress.

He said competition in the world is mainly a competition of people with expertise. That is why, he said, China's central government has decided to recruit talent from among returned students having studied abroad, and from Hong Kong, Macao and Taiwan and from other parts of the world.

He said China will fully attract and make use of overseas talent to strengthen its competitive edge in the world.

He said the appointment of Shih May-Lung, deputy chairman and executive director of the Hong Kong Securities and Futures Commission, as vice-chairperson of the China Securities Regulatory Commission (CSRC), is just the beginning of China's move to attract overseas talent.

China to Rectify Listed Companies, Investment Funds

Chinese Premier Zhu Rongji said that the government will strengthen its regulatory role for China's fledgling securities market, and that the focus for this year will be on listed companies and investment funds.

"China Securities Regulatory Commission will in this year strengthen its supervision over the securities market to ensure fair, equitable and open market operations," he said.

"China will achieve outstanding results in the rectification of listed companies and investment funds this year," he stressed.

Lightening Farmers' Burden

Premier Zhu Rongji said that China will carry out reform of the taxation and fee collection system in the countryside while improving rural education.

He said that the reform of the taxation and fee collection system in the countryside is a revolution whose importance, complexity and difficulty have never been underestimated by the Chinese government.

He said that the country collects 30 billion yuan of agricultural taxation, 60 billion yuan of contributions and other fees from farmers each year, totaling some 120 billion yuan.

He said that China will increase the agricultural taxation from 30 billion yuan to 50 billion yuan and scrap all other fees to reduce farmers' burden, and the central government will allocate 20 to 30 billion as subsides.

Zhu noted that many of the fees are used in the educational sector in the countryside, and if the educational system is not reformed, there will be a shortfall of funds.

However, he said, the government is determined to reduce farmers' burden on the one hand and ensures that there is enough fund for the compulsory education on the other.

He said that the reform is being tried out in Anhui province and the experience will be spread throughout the country.

If the reform succeeds, the foundation role of agriculture in the national economy will be consolidated, and farmers will feel happy, the premier said.

One-China Principle Remains Precondition for Settling Taiwan Issue

Premier Zhu Rongji urged the Taiwan authorities to come back to the one-China principle in order to solve the Taiwan issue.

The one-China principle is the precondition for resolving the Taiwan issue, Zhu said at the press conference at the Great Hall of the People in Beijing.

He said that with regard to the settlement of the Taiwan issue, all statements made by Chinese leaders are clear-cut and consistent: the issue should be resolved by implementing the principle of peaceful reunification and "one country, two systems, " and the eight-point proposal put forward by President Jiang Zemin.

The premier noted that the key point is whether or not the principle of one China is recognized. If recognized, any subject can be touched upon, and nothing can be discussed without the precondition of the one-China principle, he said.

On the issue of "three direct links" across the Taiwan Straits, Zhu said that "We have made utmost efforts since 1979 in order to achieve the three direct links. The principles for this are clear. They are `one country, two systems,' and direct, two-way, and reciprocal."

"We hope the Taiwan authorities will come back to the one-China principle," he said, adding that if they do not recognize the principle, or even worse, do not admit they are Chinese, then how can such talks start?

Protecting Consumer Rights

China will step up efforts to protect the rights of consumers by strengthening related legislation and the role of relevant government departments exercising supervision over markets, Premier Zhu Rongji said.

March 15 is China's " Consumers' Rights Protection Day".

Along with the development of a socialist market economy in the country, there have appeared many fraudulent activities, Zhu said. "Whenever I saw reports on such fraudulent activities, I got very angry and couldn't sleep well," he told about 700 domestic and overseas reporters present at the press conference.

The government has to change its functions, in order to check and supervise such fraudulent activities and protect consumer rights, on behalf of the state, the premier said.

Government departments responsible for the administration of industry and commerce and for the inspection and quarantine of imported commodities will be promoted to the ministerial level, from their current vice-ministerial level, He noted.

Zhu revealed that this year a national conference will be held on cracking down on shoddy goods and fake products. "But we don't want to make it a crusade or movement," he explained.

China Working to Narrow Growing Income Gaps

Chinese Premier Zhu Rongji said Thursday that his government is working hard to narrow growing income gaps in the country.

The premier admitted that the income gaps are enlarging in China, a fact that merits full attention, but he insisted that the gaps "have not reached a very serious dimension yet."

He quoted a 1999 survey as saying that the country's Gini coefficient is 0.39, below the internationally recognized warning line of 0.4.

To tackle the growing income gaps between urban and rural residents, the premier said the government has decided to give " top priority" to increasing farmers' income and is already taking measures toward that end.

The falling grain prices due to oversupply is largely responsible for the stagnant or even declining income of farmers, especially those in the major grain producing areas, Zhu said.

To close the increasingly large income gaps between the employed and the unemployed in urban areas, the premier said, the government will strive to improve the social security network and the re-employment program.

He attributed the growing income gaps partly to the excessively high salaries in monopolized sectors, such as banking, securities, insurance, power supply, telecommunications, tobacco, petroleum and petrochemicals, and pledged the restructuring of these sectors to break their monopoly.

The premier also promised a tougher enforcement of the personal income tax law.

Premier Reiterates Safeguarding Life of Children

Premier Zhu Rongji promised that the State Council will honor its commitments to guaranteeing the safety of Chinese children.

In response to a question on an explosion at a primary school in east China's Jiangxi Province, that killed 42 pupils, Zhu said that the government would draw a lesson from the incident and emphasized, "We will never allow any student in our nation to engage in activities and work that will pose a danger to his or her life."

The premier also promised to improve and reaffirm relevant existing laws and regulations.

Zhu said that China is sure to enact a law under which the head of a city, a county and a village will be sacked immediately should such an incident happen. As for provincial governors, they will also be disciplined, he said.

Zhu once again conveyed his condolences to the victims of the incident and their families.

Zhu said that following the occurrence of the incident, the governor of Jiangxi rushed back from Beijing immediately and the Ministry of Public Security also sent a group of experts to conduct investigations at the scene.

He said the result was the same as what he had announced several days ago.

As for the fact that the overseas media did not agree with the explanation of the cause of the incident, Premier Zhu said that he himself had required that Jia Chunwang, minister of public security, send a 6-member expert team to conduct an investigation on its own.

Premier Zhu said that the expert team reported that they found some clues, one of which is that that school did in 1999 ask some students to do some work for making fireworks. But that had been stopped last year following a fireworks explosion in Pingxiang, Jiangxi Province, Zhu said, citing a report by the expert team.

Premier Zhu also quoted the expert team as saying that no evidence pointing to production of fireworks was found at the scene.

Zhu emphasized that investigations into the case will continue.

Premier Zhu Determined to Serve People till Last Minute of Life

"I will devote all I have to, and place myself completely at, the service of the people and the country," Chinese Premier Zhu Rongji said Thursday.

In response to a question about when he will retire at a press conference held immediately after the conclusion of the annual session of the National People's Congress (NPC), Zhu said that it's too early for him to say who will be the next premier because his term of office lasts till 2003.

"One thing is certain that I will still be here to deliver a report on government work next year and deliver a report the year after next year," he said.

"I will be here again next year to host a press conference and will meet you here next year. So, if some of the reporters feel that they have not asked enough questions this time, you may save it till next year. I hope to see you next year," he said.

He said that he had already given a clear answer to the questions of when he will retire and what he will do after retirement at the press conference sponsored by the NPC in 1998.

"I will continue to press ahead without any hesitation and devote all I have to the people and the country till the last minute of my life," he said. "This is what I have done and am going to do."

With a touch of good humor, he added: "You should not take me wrong. I don't mean that I will keep occupying the post of the premier till the last minute of my life."

"What I mean is that as long as I am still alive, I will devote all I have to, and place myself completely at, the service of the people and the country," he said.