16 Mar, 2015

The Future of China: Full Transcript of Premier Li Keqiang’s Broad-ranging Press Conference

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Beijing, Mar 15,2015, english.gov.cn —

Fu Ying:

Ladies and gentlemen, good morning. Today we are delighted to invite Premier Li Keqiang to meet Chinese and foreign journalists and take your questions. We have a full house today. There are about eight to nine hundred journalists present at today’s press conference. But our time is limited – so I would like to ask journalists who have the opportunity to ask questions to ask only one – so that more journalists will have the opportunity to ask questions.

First, some opening remarks from the Premier.

Premier:

Friends from the press, ladies and gentlemen, during the NPC and CPPCC sessions you made tremendous efforts in your coverage, and the two sessions have concluded but you are still working. Today is Sunday, and you cannot even take the day off. So I would first like to take this opportunity to express my appreciation to you all.

Now I will be happy to answer your questions.

Financial Times:

Last year, China’s real estate market was on the decline. This prompted a large number of Chinese nationals to start buying homes overseas. Chinese customers have become the largest group of homebuyers in New York, Sydney and London and this has significantly driven up local home prices. Hence some people have called into question the legitimacy of the money spent on buying these homes overseas. Are you concerned about the possible backlash to such massive home buying by Chinese overseas? And will the Chinese government introduce new policy measures to boost the domestic real estate market this year?

Premier:

China is advancing the renminbi’s full convertibility under the capital account. This shows that China is taking further steps to open up the capital market. You talked about the phenomenon of large numbers of Chinese buying homes overseas and said that they have become the largest home buyers in a number of key international metropolises. I suppose that more evaluations need to be done here as to whether that is true. As far as I’m concerned, I am not in possession of solid information about this. But what I know is that China is still the largest destination of the inflow of foreign direct investment, which now stands at $120 billion. At the same time, the Chinese government will also encourage Chinese companies and Chinese nationals to go overseas to invest and do business. In doing so, these Chinese companies and Chinese nationals need to abide by China’s relevant laws and regulations and also observe the local laws.

You have a Westerner’s face but you speak Chinese so well. I wonder if you have bought a home in China – you are welcome to do so.

China is still a large developing country. Housing is not just an economic issue but also one that concerns people’s livelihood. The Chinese government needs to meet the basic housing needs of low-income people around the country. And the government will take more steps this year to rebuild rundown urban areas and dilapidated homes in urban and rural areas. The plan for such efforts this year is to increase building and rebuilding rundown areas and dilapidated homes – by 1 million units respectively. The Chinese government is responsible for providing everyday necessities in terms of housing for our people.

The real estate market is governed by its own laws. China is such a large country with vast land.

In this country, there are mega cities and medium and small-size cities as well as small townships. And the conditions of these different cities and townships vary significantly from one to another. Hence the central government has requested the local governments to exercise their responsibilities concerning regulating local real estate markets. And differentiated policies need to be adopted in the light of local conditions. At the same time, urbanization continues to pick up speed in China which means that housing demand in China is here to stay. We also encourage Chinese people to buy homes for their personal use or as their second home. We hope to see a steady and sound growth of China’s real estate markets in the long term.

Beijing News:

Mr Premier, on many occasions, you have expressed strong support for new types of business, like e-commerce and delivery service, so I am very curious: Have you ever shopped online, and what did you buy? Some people are worried that online shopping will adversely affect physical stores – what’s your opinion about this?

Premier:

I suppose each and every one of you here has had experience with online shopping – and I am no exception. Yes, I’ve bought things on the Internet. Actually I bought a few books not so long ago, but as for which books, I don’t think it would be a good idea for me to spell that out here – no advertising! But I have indeed previously said that I am happy to “advertise” new types of business, like express delivery service and e-commerce – because such businesses offer a strong boost for employment and consumption in this big country, and people are always quite enthusiastic about buying something online.

I’ve heard about this concern that online shopping will adversely affect brick-and-mortar stores. At the beginning, such worries were only natural, but I recall an inspection tour of a Chinese village with 800 households – and the local people had opened a total of about 2,000 online stores. One can imagine that the scope for entrepreneurship is vast. And I also visited a city – not far from that village – where there were a large number of physical stores. I asked one of the shop owners if he is concerned that the physical stores will be adversely affected by online shopping, but the owner showed me that he also opened an online store. And he even uploaded a video of the physical store to show that his business is very competitive – so such online and offline interaction has only boosted the vitality of the market.

To borrow a popular idea – on the Internet everyone stands a chance to fly if there is a favorable wind blowing from behind. I believe that the tailwind generated by our Internet Plus strategy will allow us to take the Chinese economy to a higher growth path.

I cannot help but remember that today, March 15th, is World Consumer Rights Day, so I believe all the stores – online and offline – need to conduct business in an honest and ethical manner and put the quality of products before everything else, so as to protect the rights and interests of our consumers. Thank you.

Bloomberg:

You once said that the government needs to show utmost determination in reforming itself – and that this process could be a quite painful one. As the Chinese economy comes under increased downward pressure, do you still have as firm a determination as before? And will the Chinese economy continue to slide? What will the future of the Chinese economy look like?

Premier:

You asked about the pain caused by the government self-imposed reform. Let me tell you that the pain is still there. Actually, the pain is becoming more acute, and it is being felt in more places. This is a reform the government has taken on itself. During the course of the reform, vested interests will be upset, as the government will shatter its own powers. It’s not like nail-clipping. Instead, it’s like taking a knife to one’s own flesh. So pain is only natural but, however painful it may be, we are determined to keep going until our job is done.

The reform of streamlining administration and delegating government powers helps us to get the relationship right between the government and the market. It helps to boost vitality of the market, and put us in a stronger position to cope with downward pressures on economic growth. Last year, in spite of economic slowdown, we managed to add more urban jobs and this reform on government itself has played a very important role. We have completed the five-year task of cutting State Council review items by one third within just two years. With the reform of the business system, a daily average of up to 10,000 new businesses are now registered, an increase of 50 percent over the previous year. This shows that our people represent the largest source of vitality for economic activity. And this reform by reducing the powers held in the hands of governments has actually helped us to tackle downward pressures on economic growth.

At the same time, we recognized that some measures have yet to be fully implemented, and some new problems have surfaced. A couple of days ago, I came across a proposal during the Two Sessions which said that it is true that government review items have been slashed. In the past, to get one project approved, one needed to collect over 100 stamps from different governmental departments, but the number has been brought down to about 50 or 60. But still – all those long procedures have driven up the cost of starting a business and dampened people’s enthusiasm for innovating. That’s why the government is resolved to step up its efforts to streamline its administration and delegate more powers.

New steps will be taken this year in this reform, and our focus is on the following three areas. First, all non-governmental review items will be canceled. We must ensure that governmental power will not be exercised when it is not stipulated by the law. There are currently over 1,200 review items by the local governments as mandated by central governmental departments. Our goal is to cut this number by over 200 in 2015. The government must not secretly hold onto powers that should be delegated – as if just releasing the hand brake but still keeping the foot brake on. Second, all provincial-level governments will be required to release their list of powers and list of responsibilities this year. And this task will be assigned to governments in cities and city-level counties next year. We must keep our people well informed of what powers their governments hold and put government power under public oversight to prevent the abuse of office. Third, we will explore new models for exercising better ongoing and exposed regulation. We will expand the trials for integrated law enforcement, and we will also ensure that there will be effective models for exercising regulation – over such acts as cheating and swindling of market place, violating intellectual property rights, making and selling of fake or sub-standard goods, or cases involving food safety. Just as shoes must suit the feet, our administration must meet people’s needs and deliver benefits. Thank you.

China National Radio:

China’s anti-corruption campaign in 2014 brought down many “big tigers”, or high-ranking officials who have committed corruption. I would like to know what more steps will be taken to enhance institution-building in fighting corruption. You also once said that it is also corruption if government officials are indolent or sloppy in performing their duties, so what steps should we take to solve the problem involving these “do nothing” officials?

Premier:

The Communist Party of China and the Chinese government are committed to combating corruption and upholding integrity. Since the 18th National Party Congress, the central committee of the CPC with comrade Xi Jinping as General Secretary has been making a great effort to ensure that all types of corruption will be brought to account – and in this process a number of high-ranking corrupt officials have been investigated and dealt with, and our efforts have yielded good results and won people’s support.

By enhancing institution-building in fighting corruption we will have better resources to address both the symptoms and root cause of corruption. First, we need to ensure that we run the country according to the law – everyone is equal before the law, and no one is above the law. Second, we need to press ahead with the reform of the administrative system. Just now I mentioned the reform of government to streamline administration and delegate powers. This is to limit the breeding ground for corruption – including rent-seeking, which is actually a common feature of various kinds of corruption. Third, supervision and trainingwill also be strengthened. We must make sure that government power is exercised in a transparent way and subject to public oversight. All civil servants must enhance their self-discipline, and government power can only be used for public good, not personal gain. There must be no irresponsible actions or inaction on the part of government officials. And there is no room for incompetence, or indolence on the part of government officials. We also need to step up the accountability system.

The Straits Times:

Premier Li, my question is about China’s economy. China has set an overall GDP growth target this year of around 7 percent. Some say this signals China is committing what it calls the new normal of slow but better quality of growth.

Can you tell us how this new normal will affect China and the world? How should we view this and should we have confidence that China can stay committed to this normal and manage it well? Thanks.

Premier:

China’s economic development has entered a new normal and this year we set the anticipated GDP growth target at approximately 7 percent. It is true that we have adjusted downward somewhat our GDP growth target, but it will by no means be easy for us to meet this target. As China’s economic aggregate keeps expanding – and now the size of China’s economy is valued at about US$10 trillion – a 7 percent increase in the Chinese economy is equivalent to the total size of the economy of a medium-sized country. We want to further upgrade China’s economy to a medium high level of development and maintain China’s economic growth at a medium high speed. We want to pursue growth with improved quality and performance. This will help lay a more solid foundation for us to achieve modernization and it will also be China’s contribution to global economic growth.

I sensed some element of concern in your question about China’s economic growth and, when the journalist from Bloomberg asked a question, there was also similar concern about the slowing economic growth in China. I have said on many occasions that under this new normal, we need to ensure that China’s economy operates within a proper range. And, if our growth speed comes close to the lower limit of our proper range of economic operation, affects employment and people’s income, we are prepared to step up our targeted macroeconomic regulation to boost the current market confidence – while at the same time maintaining continuity of our macroeconomic policies to anchor long-term market expectations. The good news is that, in the past couple of years, we did not resort to massive stimulus measures for economic growth, and that has made it possible for us to have fairly ample room to exercise macroeconomic regulation – and will still have a host of policy instruments at our disposal.

The latter part of my remarks just now dealt with just a hypothetical situation. At the same time, I recognize that there is considerable downward pressure on China’s growth and it will still face multiple challenges.

This requires that the government must strike a proper balance between maintaining steady growth and making structural adjustments. In “Weiqi”, a kind of chessboard game invented by the Chinese, one needs to both plan with a wide view and get the key moves right. When it comes to China’s economy, we must maintain steady growth and also make structural adjustments – this way we will be able to handle the complex situation. This requires that we have a vision, perseverance and courage. I have confidence that, with joint efforts, we will be able to maintain the long-term positive fundamentals of the overall Chinese economy. Thank you.

China Business News:

Mr Premier, you stressed on many occasions the importance of mass entrepreneurship and innovation and you regard them as a new engine fueling China’s economic growth. But there are also people who say that it is a personal decision to start a business and it is a market behavior to do. So why should the government spend so much time and energy on this?

Premier:

I appreciate your intention of saving the government much time and energy. This is something that the government must do – because mass entrepreneurship and innovation are major endeavors of reform and this reform is also inspired by the experience we have gained from our own past.

About 30 years ago, the introduction of the household contract responsibility system brought into full play the initiative of the vast number of Chinese farmers. It is because people could move freely across provinces and cities that hundreds of millions of Chinese farmers migrated into cities, and that has created the miracle of China’s economic development.

Last year, when the government pursued the reform of the business systems to streamline its administration, I recall that I paid a visit to one of the local venues for business registration, and I came across a woman who was already retired. As you may know, the government has replaced the paid-in capital registration requirement, so this led to an increase in the enthusiasm of those who were thinking of starting their own business – and this woman was one of them. She told me that she wanted to register a wedding service company because she was well versed with the traditional ways of holding such wedding ceremonies, and she believed that she had a competitive edge in providing these services. So she wanted to register a company under her name. I also paid several visits to venture cafes and maker spaces, where I met young people there – they had brilliant ideas, and when their ideas are put into practice and produce actual products, they actually boost market demand. I believe there are a lot of people with brilliant talent among the people, and we must lift all the restrictions so that they can put their talent to good use.

To boost market vitality, the government must eliminate roadblocks and pave the way for people to tap their entrepreneurship. The government plans to do more in this regard in 2015. Market access will be further relaxed, the required business license and all necessary certificates will be integrated into one single certificate, and people shouldn’t have to go to so much trouble to get a business registered in some areas of the services sector. The government also needs to foster more favorable conditions – especially for micro and small businesses. Low-rent spaces should be available – to add wings to the entrepreneurial spirit of our people. The government will also fully leverage the national guidance funds to encourage pitching in of seed capital, and taxes and fees will also be further reduced to ensure that small businesses will be able to forge ahead without a heavy burden.

A country can achieve prosperity when its people’s initiative is brought into full play. There will be much vitality in economic activity when there are ample business opportunities and choices for consumers. So, to encourage mass entrepreneurship and innovation, we want to help more people become better off and help more people achieve full potential in their life. This will also help us adjust the income distribution structure and promote social fairness. In particular, we want to ensure that young people, especially children from poor families, will have equal access to opportunities for upward mobility. Thank you.

The Huffington Post:

In Under the Dome, a documentary made by Chai Jing, she complained that big oil companies like Sinopec and PetroChina have blocked the introduction of policies on environmental protection and law enforcement in this field. For example, in the setting of the quality standards of gasoline consumed as well as introduction of the wider use of natural gas. My question is, is it true that these companies are posing an obstacle to enforcing environmental protection laws and policies, and if so, what steps will the Chinese government take to remove such an obstacle?

Premier:

I understand the focus of all your questions is about tackling environmental pollution, especially smog. This is a concern uppermost on all people’s minds. I want to tell you that the Chinese government is determined to tackle smog and environmental pollution as a whole, and tremendous efforts have already been made in this regard. But the progress we have made still falls far short of the expectation of our people. Last year I said that the Chinese government would declare war against environmental pollution. We are determined to carry forward our efforts until we achieve our goal.

This year our focus will be to ensure the full implementation of the newly-revised environmental protection law. All acts of illegal production and emissions will be brought to justice and held accountable. We need to make the cost for doing so too high to bear. More support will be given to environmental law enforcement departments, including capacity building, and no one is allowed to use his power to meddle with law enforcement in this regard. The law enforcement departments should also have the courage to take charge and fulfill their due responsibilities. Laxity in law enforcement will be dealt with and dereliction of duty or abuse of office will be handled in accordance with the law. We must ensure that the law will work as a powerful and effective tool in fighting pollution instead of being soft as cotton candy.

Tackling environmental pollution is a systemic project that involves a lot of effort in various areas. A few days ago I came across a media report which said that in this year’s government work report, the paragraph addressing environmental treatment came at the back. But I want to draw attention to one big difference in this year’s government work report. That is our targets for energy conservation and emission reduction are put together with all the major targets of economic and social development, which all come very much earlier in the government work report. We also need to see that many parts of the report, be it adjusting the economic structure or improving the quality of fuel used, have something to do with the environment. This is going to require the joint efforts of the whole of society. It may be difficult for one to change the natural environment he lives in anytime soon, but one can always change the way he behaves. Thank you.

China Central Television:

As China’s economic development enters a new normal phase, people are also thinking about how we can make our demographic scale and the growth trend compatible with such a new normal. Last year, married couples were given the right to have a second child if one parent is an only child. Thus, during this year’s two sessions, many people have been calling on the government to completely lift the restrictions on a second child. I wonder if this is one of the goals on the agenda of the government in reforming its family planning policy and, if so, is there a timetable for that to happen?

Premier:

About China’s population policy – as you said, China last year allowed married couples to have two children when one parent is an only child.

We are currently conducting a comprehensive review of how this policy has been implemented.

Based on the outcome of this review, we will take into account China’s economic and social development – and changes in our demographic structure – and we will weigh the pros and cons, and will only make improvements and adjustments to our policy in accordance with legal procedures. Thank you.

Asahi Shimbun:

This year marks the 70th anniversary of the end of World War II. I would like to ask for your outlook on history Mr Premier. We have also seen that more Chinese tourists have traveled to Japan and bought a lot of things there. But at the same time the number of Japanese tourists visiting China as well as Japanese investments in China have both been on the decline. How do you see such a situation and how do you view the possible impact of China’s planned commemoration activities including the military parade on the sentiments of the Japanese people?

Premier:

This year marks the 70th anniversary of the victory of the Chinese People’s War of Resistance against Japanese Aggression and the World Anti-fascist War. Not only China but also many countries in the world have plans to hold diverse forms of commemoration activities. The purpose of these activities is to firmly bear in mind the hard lessons gained from the past and ensure that that kind of history will never repeat itself. The purpose is to uphold the outcomes of World War II and the postwar international order and international laws to maintain enduring peace of mankind.

It is true that the current China-Japan relationship is in difficulty. The crux about the issue is how that war and that part of history are viewed. One needs to hold a right outlook on history and that means one needs to take history as a mirror and at the same time look to the future. For leaders of a country, they – while inheriting the historical achievements made by their forefathers – also need to shoulder the historical responsibilities for crimes committed in the past. Well, the war of aggression imposed on the Chinese people by the Japanese militarists brought untold suffering and the average people in Japan were also victims of that war. At such a critical moment this year, there is both a test and an opportunity for China-Japan relationship. If leaders of Japan can face history squarely and maintain consistency in how they view that part of history, there will be a new opportunity for improvement and further growth of China-Japan relations. It will also create favorable conditions for the growth of our business relationship between the two countries. Thank you.

Xinhua News Agency

Since the beginning of last year, the banks’ NPL (nonperforming loan) ratio has been increasing, and cases of financial risks of shadow banking have occurred from time to time, and many local governments need to have a lot of debt being paid. As the downward pressure on China’s economy grows, how do you see the building up financial risks?

Premier:

I think our financial risks are at the center of all these questions you just raised. It is true that there have been individual cases of financial risks in China, but at the same time we are fully capable of forestalling systemic and regional financial risks.

China’s economy continues to operate within the proper range and there is a fairly high savings rate in China. Moreover, 70 percent of local government debts are in the form of investments, which boast quite good prospects for yielding returns. We are also regulating local government financing vehicles to ensure that we will keep the front door open while at the same time block those back doors. At the same time, Chinese banks have fairly high capital adequacy ratio and ample provisions. It is true that there are nonperforming loans and the NPL ratio has picked up somewhat, but still the level of NPL in China is quite low internationally.

Individual cases of financial risk will be allowed. We encourage the practice of balancing one’s books in a market-based way, and we need to guard against moral hazards and raise people’s awareness of these financial risks. This year we are going to introduce the deposit insurance system, continue to develop multitiered capital markets and lower companies’ leverage ratio. All these efforts will help ensure that financial services can better serve the real economy.

Television Broadcasts Satellite:

There were developments in Taiwan last year which affected business cooperation between the two sides of the Taiwan Straits. As the mainland adjusts its economic structure and as the economy slows down, the business people from Taiwan operating on the mainland also run into difficulties. So my question is, what steps will the mainland take to boost cross-Straits business cooperation and to ensure businesses and people from Taiwan can continue to have priority access to the mainland’s development opportunities?

Premier:

People on both sides of the Taiwan Straits are members of one big family as long as we continue to adhere to the One-China Principle and 1992 Consensus, oppose ‘Taiwan Independence’, and uphold peaceful development of cross-Straits relations. We will be able to lay a more solid foundation for cross-Straits business cooperation and expand room for such business times. To boost the economic cooperation between the two sides, we need to get both wheels in motion. One wheel is to enhance institution building, for example, to continue to pursue the follow-up consultations on ECFA (Economic Cooperation Framework Agreement). The other is about further mutual opening-up, as far as the mainland is concerned, closer attention will be paid to the investment made by Taiwan business people on the mainland.

Here I would like to ask you to convey a message to all these people, which I believe will prove to be quite reassuring to them, that is the mainland will continue to protect lawful rights and interests of Taiwan business people on the mainland, and continue to pursue preferential policies toward them as appropriate. In terms of opening-up, we will give priority to Taiwan in terms of both the depth and intensity of such opening-up steps. We welcome people from Taiwan businesses, including these young people from Taiwan, to come to the mainland to pursue their own careers and business opportunities. We also want to further enhance personal interflow between the two sides so as to bring the hearts and minds of the two sides of people even closer to each other.

Korean Broadcasting System:

China’s CPI rise was at just about 1.5 percent in the past few months – and in January the figure was near 0.8 percent. So are we to conclude that China entered deflation? Some people also argue that China is exporting deflation to other parts of the world and that it has also affected the Republic of Korea, what is your response?

Premier:

About deflation, there are multiple criteria in evaluating deflation in the world. A major criterion is the consecutive negative growth of overall consumer prices in the country. Regarding CPI, last January we had positive growth. And the figure of February further increased. So I don’t think we are facing deflation in China.

Recently, consumer prices in China have been quite low, but China is not exporting deflation to other parts of the world. The truth is, China is at the receiving end of deflation. Let me give you an example: Last year, China imported 310 million metric tons of crude oil and about 930 million tons of iron ore from the international market.

The physical volume increased but the price declined because of the tumble in international commodity prices – and we are prepared to cope with such a situation. At the same time, we hope to see a quicker global economic recovery – and the global economy will regain momentum for robust growth.

China Daily:

Some have come to the conclusion that China has become the number one economy in the world and is posing a challenge to the leadership status of the United States. But at the same time they argue that China is still free riding in some international affairs. What is your response to such a view and what are your considerations for the advancement of China-US ties?

Premier:

The first part of your question is about whether China has become the largest economy in the world. Actually I heard such a view when I traveled abroad. But I always feel that there are some elements of misleading exaggeration in this conclusion. Because according to those authoritative standards, China is still the second largest economy in the world, and more importantly, our GDP is still behind about 80 countries in the world. For this year’s Spring Festival I paid visits to places in China’s western region. I visited two rural homes, (and for) one (of them), there is a mother and a son living in a very shabby place where the wind can be felt even when you are in the home. And because the family is so poor, the son has yet to get married. The other home has produced a college student, and there are a boy and a girl in that family. For the tuition fees to go to college for the boy, his younger sister has to work in cities to support the fees and she couldn’t even come home for family reunion during Spring Festival. It truly pains me to see our people living in such distress and I’m sure that there are many more such families in the vast land of China. By the standard of the World Bank, we still have 200 million Chinese living in poverty, so I can say that China is still a developing country in every sense of this term.

China needs to run its own affairs well and maintain its development at a reasonable speed and I believe that in itself is China’s major contribution to the world. Actually, at the same time, China is assuming greater due international obligations and responsibilities. Talking about China’s “free riding”, for such a big country as ours, how could it be easy for it to get a free ride on anybody’s train. I think what China is doing is working with other countries in pursuit of common progress.

So development will remain the top priority for China and we need a peaceful international environment for us to focus on our domestic development. When it comes to the China-US relationship, this is the relationship between the largest developing country and the largest developed country in the world. We have proposed that China and the United States work together to build a new model of major country relationship featuring mutual respect, no conflicts and no confrontations. This year, President Xi Jinping will pay a state visit to the United States at the invitation of his US counterpart. I believe this will give a strong boost to China-US ties.

Admittedly, there are differences between China and the United States. But what’s more important is that the two countries share extensive common interests. When differences are properly held, the two sides can have extra energy to further expand the convergence of their interests. One highlight in the China-US relationship is that the two sides are advancing negotiations of the bilateral investment treaty. And this BIT is built around previous establishment of national treatment and a negative list. This itself is to break the ceiling over China-US business cooperation and will open new dimensions for the further growth of China-US ties. Naturally, the negotiation will take some time. But it has already sent a very clear message to the international community that China-US business ties will get even closer and it will put the overall China-US relationship on a more solid footing.

Hong Kong Economic Times:

My question is about constitutional reform in Hong Kong which is of key interest to the people of Hong Kong. We are getting closer to the date for voting on the plan for constitutional reform in Hong Kong, but recently, there have been some tough statements made by the central leadership on this topic, and many people are not so optimistic about the prospects for the Constitutional Reform Bill to be adopted. I want to know if we need to strictly comply with the constitution and basic law at the same time. Does this mean that the central government is tightening its policy towards Hong Kong and will that affect the relationship between the central government and the Hong Kong SAR, and will that add new uncertainties to the cultural and business interactions between the two sides?

Premier:

It is the basic State policy of China’s government to adhere to the principle of one country, two systems: the people of Hong Kong governing Hong Kong, the people of Macao governing Macao, and both regions enjoying a high degree of autonomy. Some people are worried whether the central government is tightening its policy towards Hong Kong. I believe such a worry is not necessary.

It’s true that in this year’s government work report, it is said that one needs to strictly comply with the constitution and the basic law. This in itself shows our commitment to ensuring the consistent and full implementation of the one country, two systems principle. This principle has been reaching into the constitution and the basic law of the Hong Kong SAR. They form the constitutional basis of the Hong Kong SAR, it is also stipulated in the basic law of Hong Kong what system should be practiced in Hong Kong.

The one country, two systems principle reflects the will of the country and the people, and cannot be changed at will. You may feel that I have been very careful in choosing my words in answering your question, this is because you asked a question that relates to the law, so I need to answer it with utmost seriousness.

The central government will continue to firmly support the government of the Hong Kong SAR and the chief executive of Hong Kong SAR in governing the region in accordance with the law, and the central government will give stronger support to Hong Kong for it to play its unique role in the nation’s reform, opening-up and modernization.

We hope that there will be closer exchanges between Hong Kong and the mainland, and both sides get to benefit from such closer exchanges in the business, cultural and other fields. And all people involved in such exchanges will feel satisfied and have their well-being being boosted. Thank you.

Austrian Radio and Television:

I have a question on foreign policy that is very burning for Europeans. The continuing presence of Russian troops on the territory of Ukraine. What is the position of China? Does China think that this conforms to international law? A couple of days ago, Russian President Putin mentioned on Russian television how he planned the invasion of Crimea. Does China consider Crimea a part of Russia now – or still a part of Ukraine?

Premier:

China follows an independent foreign policy of peace. On the issue of Ukraine, China has adopted an objective and just position. We respect Ukraine’s independence, sovereignty and territorial integrity. Some time ago, in my meeting with the president of Ukraine when I visited Europe, these are the words that I also said to him. He then asked me if he could make them public. I said no problem, use my words and let them be published in newspapers.

At the same time, the issue of Ukraine has added to the complexity of the geopolitical situation, and also exerted an impact on the process of economic recovery. We hope that there will be a negotiated settlement of this issue through dialogue. As for Crimea, there are complex causes behind this issue, and we also hope to see a political settlement through dialogue. We hope that there will be harmonious co-existence between neighbors, and pursuit of common development and win-win outcomes between European countries – and between all countries around the world. I believe that this in the interests of all sides, China included. Thank you.

People’s Daily:

You mentioned that you bought books on the Internet. My question is about books. We know that the government work report needs to cover a lot of ground, and each year there are some slight changes. But for two years running, to encourage people to read has been written into the government work report. I would like to know why do you care so deeply about this, and can you share with us your experience about reading?

Premier:

Last year in drafting the government work report, I solicited views from representatives from various circles, and I have found that not only people from the cultural and publishing sectors but also those from economic and business circles have suggested that the government needs to give further support to encourage a love of reading among all people, and the government needs to write this part into its work report. They also said that they are concerned that the average per capita amount of reading in China is only about one-tenth of that of other countries in the world. What they said has given me a lot of food for thought, and it also made me feel that it shows our people not only want to pursue an increase in material wealth, but also long for better nourishment of the mind.

Books and reading have been essential in carrying forward human civilizations. Reading is what I enjoy most in my spare time. It makes me feel wealthy and reading has been the most rewarding experience in my life. I hope that all of our people can foster a love of reading and as our people’s reading grows, I believe it is also a very important symbol for further social and cultural progress in China. I hope that more people can make reading a way of life, and also find it is very useful in one’s own work. Reading can further unlock the potential for innovation in our development, and boost and enhance civic morality. That is why I have, for two years running, written this into the government work report and I believe that will also be the case for next year’s government work report.

Reporter:

How would you respond to developments in the border areas between China and Myanmar?

Premier:

What happened was deeply distressing. The life and property of some Chinese residents around China-Myanmar border areas have been damaged and I want to, first, use this occasion to express my deep sympathies to those bereaved families. I also want to say that the Chinese Foreign Ministry and China’s military have both made stern representations with Myanmar, and we have the responsibility and capacity to firmly safeguard stability in the border areas between the two countries, and protect the life and property of our people.