Cosponsored by the National Committee on U.S.-China Relations, the U.S.-China Business Council, the Council on Foreign Relations, the America-China Forum, the Asia Society, the Center for Strategic and International Studies, the Committee of 100, the U.S. Chamber of Commerce, and the U.S.-China Policy Foundation

Ritz-Carlton Hotel
Washington, D.C.

(Note: The premier’s remarks are provided through interpreter.)

PREMIER WEN: This evening I will just read out the text of my speech. I’m sure I won’t impress you very much, although this text is the result of much thinking on my part, and it was subject to more than 10 revisions.

But still, I would like to put the text aside for a little bit and share with you how I felt about my U.S. visit and probably introduce myself more to all of you.

As premier of China, I’m now in the United States on an official visit, at the invitation of President Bush. Up until now, my visit has been going on for more than 50 hours. In all these 50 hours’ time, today probably this event is my 25th event. (Laughter, applause.)

I almost had no sleep, and I tried my best to reach out more to the American people. I brought with me the sincere friendship of the Chinese people towards the American people. At the same time, I also felt that the American people also have the sincere desire to further develop relations with China.

This morning President Bush hosted a very grand welcoming ceremony. Following that, we had bilateral talks with each other. The talks proceeded in a friendly, sincere, candid and cooperative and constructive atmosphere. We talked about China-U.S. relations and international and regional issues of mutual interest. We exchanged our views and reached broad common understanding. These results have been shown in our joint press conference and in the media coverage of these events to its full extent.

Up to now I can say that my visit has been successful, so I need to thank President Bush. (Applause.) And apart from that, apart from thanking President Bush and the U.S. government, I also would like to thank the American people and all of you here and those who may not have made it to this event, and all those who have contributed to the development of China-U.S. relations.

As for myself, I should say that I am a very ordinary person. Yesterday at the White House, I made some impromptu remarks, and they told me that they felt quite moved by what I said. Because when I was very young, my mother told me that I should be sincere with people, and kind and earnest, she said that for every person, if he or she could reach these words, then this person is a person of a very refined state, so it is in this spirit that I would like to have this dialogue with you this evening.

My childhood was spent in hardships of war. Even today I still could remember that because even a child had to face the bandits of fascist aggressors, and he huddled against his mother. So I still remember what it felt, and I personally experienced that. And my family and my house was all burned up in a war. And even the school, the modest school that my grandfather built with his own hands, was all destroyed.

And most of the time, I worked in areas in China far away and with harsh conditions. That impressed on me more the fact that I must know my own people, and I got to know more about my country’s past, present. And naturally, I cherish very beautiful dreams for the future of my country because for a person who went through all these hardships and difficulties, he understands that he needs to safeguard his own dignity, but he also understands that he should respect the dignity of others. Therefore, for a country, for a people, it should treat those nations, those countries who treat us as equals, as equals. This is a very important principle.

And shortly after my arrival in New York, I went to Ground Zero because those towers—about more than 10 years ago, I ascended those towers, and yesterday when I was there, I felt a lot of emotions. I said to my American friends, American escorts, that I felt very much moved by the strength, calmness and major help demonstrated by the American people following the September 11th incident. I felt that spirit was very admirable.

At the same time, I believed that the September 11th incident not just inflicted disasters on the American people, it had also affected the whole world. Today when we commemorate the September 11th incident, we are both remembering the deceased and also we are trying to send this message to the living.

On this visit, sometimes I felt quite downcast, but in other times I also felt very happy. For example, yesterday I was at the New York Stock Exchange. They asked me to open the stock exchange. So I rang the bell. Actually, that was something very easy to do, but I felt very nervous. I said privately to the chairman that I felt nervous, not because whether the bells would ring loudly enough or not, but rather at whether the stocks would fall or rise today. (Laughter, applause.)

But I was very fortunate yesterday, because the Dow Jones Industrial Average rose—(applause)—and today it fell. So it had nothing to do with me. (Laughter.)

Next I will start reading the text of my speech, but before I do that, I remembered something else. Today President Bush took me on the tour of the White House. He knew that I have a great deal of respect for President Lincoln, so he specially took me to the office which used to be the office of President Lincoln, and he showed me the Gettysburg Address—actually, the personal handwriting of the fifth—the fifth manuscript of the Gettysburg Address, which was really a wonderful speech, because without the principle that the Union is perpetual, established by President Lincoln, probably America would not develop to the country of today. I think you know this history very well.

In fact, the Gettysburg Address is very short. So I feel that in comparison, my speech is very long. (Laughter.)

But I still want to share with you something that I have written for myself, and you can comment on that as you will. And I need to change my glasses. (Pause.)

Firstly, I would like to thank Mr. Galvin for his warm introduction. Ambassador Hills, Secretary Veneman, Dr. Kissinger, Dr. Brzezinski, ladies and gentlemen friends, it gives me great pleasure to attend tonight’s dinner. I wish to thank the National Committee on U.S.-China Relations, the U.S.-China Business Council, the America-China Forum, the Asia Society, the Center for Strategic and International Studies, the Committee of 100, the Council on Foreign Relations, the U.S. Chamber of Commerce, and the U.S.-China Policy Foundation for their gracious hospitality. It is delightful to be among friends both old and new.

In three weeks time, we shall be celebrating the 25th anniversary of the establishment of diplomatic relations between China and the United States. I was in Hangzhou not too long ago. I’m not sure whether you have been to this place. I took a stroll along the West Lake and passed by the Octagonal Pavilion, which was actually the site for the negotiation of the Shanghai Communique. I’m sure Dr. Kissinger could recognize this place.

Gazing at the shimmering ripples of the West Lake, all sorts of emotions surged within me. For the last century, China-U.S. relations have experienced ups and downs. Our two countries fought together against fascism at one time and stood deadly opposed to each other at another. And in 1972, the leaders of the two countries, with their outstanding vision and remarkable courage, opened the door of China- U.S. relations that had been closed for many years.

I have boundless respect and admiration for what they did back then. In the past 25 years since we established the diplomatic ties, our bilateral relations have weathered storms and moved forward. Devoted as you are to Sino-U.S. friendship, you have contributed a great deal to its promotion. Let me take this opportunity to express, on behalf of the Chinese government and people, our deep appreciation to all who have contributed to the friendly relations between our two countries. (Applause.)

Where are Sino-American relations headed for? This perhaps is the subject of greatest interest to you. In fact, when President Jiang Zemin visited your country last year, and when President Hu Jintao twice met with President Bush this year, they both stated clearly that the Chinese side wished to continue to improve and develop relations with the United States. A review of the history of China-U.S. relations over the past half century or more, since the founding of the People’s Republic, leads us to three important conclusions.

Conclusion one: China and the United States both gain from peaceful co-existence and lose from conflicts. Both China and the United States paid a heavy price for the mutual hostility which lasted 23 years, from 1949 to 1971. In contrast, in the 32 years since China and the U.S. renewed contacts, despite twists and turns, both sides have benefited tremendously from their cooperation from 1972 to now. At the time the Shanghai Communique was issued in 1972, trade between China and the United States was virtually zero. As a token of friendship toward China, the U.S. government gave special permission to each traveling American citizen to China to bring back 100 U.S. dollars worth of goods made in China at the visit to China by Dr. Henry Kissinger. In fact, yesterday in New York, Dr. Kissinger mentioned about this episode, that he still clearly remembers. But now, our two-way trade has exceeded 100 billion U.S. dollars.

Conclusion two: China and the United States have the basis for cooperation and have shared interests. This is seen first and foremost in the win-win and mutually beneficial cooperation and trade between our two countries. American companies bring to China their capital, advanced technology and managerial expertise. In return, China’s abundant labor and huge market provide American companies with enormous opportunities. Furthermore, Chinese enterprises supply large quantities of inexpensive and quality goods to American consumers. Today, the U.S. has become China’s second-largest trading partner and the biggest foreign investor, whereas China is now the first-largest trading partner and the fastest-growing export market for the U.S.

Such a significant change is attributable, to a large extent, to China’s reform and opening up. The reform and opening up that was set in motion in 1978 has brought fundamental changes to China. We have, by and large, established a socialist market economy. Our GDP has sustained an average annual growth rate of 9.4 percent over the past 25 years, and our people are living a modestly comfortable life, on the whole.

China’s WTO accession is the landmark that ushered in an all- round opening up. More than 400 of the world’s top 500 multinationals have opened businesses in China.

Accelerated economic growth in China will provide new opportunities and give further impetus to the growth of China-U.S. relations. For instance, the surge of private car sales in China and the growth of the aviation industry, prompted by expanding tourism, have brought considerable benefits to American companies.

Yesterday I said that nowadays, out of the 10 rolls of films the Chinese people use, seven are made by Eastman Kodak.

China’s imports of American agricultural products, such as soybeans—actually, American soybeans account for 40 percent of our total imports, and wheat and cotton, et cetera, provides a huge market for American farmers.

I believe that in the coming 20 years and beyond, it is entirely possible for China to maintain steady and rapid economic growth. Our GDP will quadruple its 2000 size, exceeding 4 trillion U.S. dollars by 2020. Just imagine the vast vistas that would be opened for American investors and companies.

To be sure, there are many other areas of major interest, and there are many other foundations of our relations and cooperation. In short, opening up is so much better than closing up. A nation or a country can advance and develop only when it opens up to the outside world. This is the truth that the Chinese people have learned from past experience.

However, opening up is a two-way street. China will open its door even wider to the U.S., and hopefully and I trust that the U.S. will do the same by opening more sectors to China, including high-tech industries.

Conclusion three: China-U.S. cooperation is conducive to stability in the Asia Pacific region and to peace and development in the world. China-U.S. cooperation has played and will continue to play a positive and irreplaceable role in safeguarding stability in the Asia Pacific region and the world at large.

Terrorism is a common menace to all of humankind. China and the U.S. have established a mechanism of mid- and long-term exchange and cooperation against terrorism, based on the principle of equality, cooperation, reciprocity and mutual benefit.

Recently, working together with other parties concerned, China and the U.S. have conducted fruitful cooperation for a peaceful solution to the nuclear issue on the Korean peninsula.

Modern world history tells us that it is the economy and national interests, rather than ideologies, that underpin the cooperation between major countries. Cooperation between China and the U.S., two major countries, shows that countries with different social systems and cultural traditions can coexist in peace and enjoy common development when they set store by the fundamental interests of the world’s people and respect and tolerate each other. This will be an example of global significance, showing the world how big countries can transcend their ideological differences and develop cooperation on the basis of the five principles of peaceful coexistence. It is possible, in the final analysis, due to the prevailing trend of the times and the important and profound changes in the international situation.

First, thanks to the advancement of the new global revolution of science and technology, as well as economic globalization, there are more interchanges and greater interdependence among economies. Their cooperation becomes more mutually beneficial as mutual complementarity grows. The distribution of industries, the flow of investments and capital, and mobility of human resources, according to comparative advantage, know no boundaries. No country can develop economically solely on its own.

Second, along with accelerated industrialization and organization in various countries, environmental pollution, the depletion of resources, the polarization of wealth and the spread of diseases and narcotics, et cetera, have become increasingly serious, posing a grave threat to human survival and sustainable development. The solution of these global problems calls for closer international consultations and cooperation in addition to the efforts of individual countries.

Third, as the world moves into the 21st century, the international political situation has undergone the most profound change since the end of the Cold War. Ethnic, religious, territorial and resource disputes, as well as regional conflicts, keep cropping up. Non-traditional security concerns, such as terrorism, are more pronounced. The September 11th incident not only shocked the United States but also exerted a profound impact on the world. Security interests of countries are increasingly interconnected. Hardly can any country achieve its security objectives on its own. Only by strengthening international cooperation, seeking security through mutual respect and mutual trust, and promoting cooperation through equality and mutual benefit can we fundamentally cut back on factors of insecurity.

Fourth, the rapid growth of a globalized economy and information technology has had a great and profound impact on cultural development around the world. Increased exchanges and understanding between different cultures to promote peace and avoid conflicts caused by cultural estrangements and discrimination, this will bear significantly on mankind’s fate in the 21st century. In particular, wider access to the television and Internet allows spiritual and cultural products, healthy or harmful, positive or negative, to spread globally at an unprecedented pace, directly or indirectly affecting people’s minds, values and ways of life, and requires more than ever before close intergovernmental and nongovernmental cooperation to promote the best culture of every nation and defuse moral crises in the world.

The above-mentioned important changes in international economic, political and cultural arenas are bound to lead to shifting state-to- state relations, particularly those between major countries. China is the largest developing country, while the U.S. the largest developed country. To strengthen China-U.S. cooperation is not only a mutual need, but also a responsibility for our two countries to shoulder in the interest of world peace and development.

With this understanding of our overall interests, and with strategic courage, let us push China-U.S. cooperation forward. Due to various reasons, there exist estrangements, misunderstandings and even frictions of one sort of another between our two countries. In the case of differences and the contradictions, both sides should keep cool and be sensible. We should try to increase communications, reduce mistrust and seek common ground while shelving differences, with a view to properly handling our differences and contradictions. For issues we cannot settle for the time being, let us put them aside and consider them later. The last thing we want to see is the breaking of the bond of friendship and cooperation between China and the U.S. We are friends, not adversaries. (Applause.)

In order to develop China-U.S. constructive and cooperative relations, the Chinese side proposes that first, we continue high- level visits and strategic dialogue between our two countries. Second, we facilitate mutually beneficial trade and economic cooperation, and establish a sound mechanism to address bilateral issues. Third, we intensify coordination on major international and regional issues. And fourth, we expand people-to-people exchanges.

The Chinese nation has always cherished peace and harmony. The rise of China is peaceful; it relies on itself for its progress. In foreign relations, we are always in favor of friendship, partnership and cooperation with our neighbors and all other countries.

China is a developing country and will remain so for many years to come. Secretary Evans had a discussion with me back in Beijing, and he actually took with him two pictures that he shot in his visit to poor rural villages in western China. These two pictures epitomize the poverty and backwardness of the vast western interior of China. I said to the secretary that now that you really know China, our discussion today would be very easy, even for all the difficult issues.

China has a population of 1.3 billion, which is the primary factor of our national conditions. China’s GDP ranks the sixth in the world, however, its per capita GDP ranks 111th. China is still faced with such problems as unemployment. President Bush talked to me about the jobless rate in the United States. I said to him that I have to work with much heavier burdens than you; we have so many unemployed and laid off workers. Probably in the cities the figure is 24 million. For those farm workers who have rushed to the cities in the number of 100 million, they have to find jobs. And every year we have 10 million new additions to our labor force. So President Bush showed understanding to my point.

So we have to deal with the problem of poverty. We still have 30 million people who still live in poverty, mostly farmers. And we have more than 20 million people who have to live on subsistence allowance. And we have 16 million people who are handicapped, disabled and who need social relief. And we face the problem of uneven development. We cannot afford to ignore these problems, and these problems are enough to keep us busy. It will call for the arduous endeavor of many generations for China to catch up with developed countries.

China will never seek hegemony and expansion, even when it becomes stronger and more fully developed. I’m sure that the ladies and gentlemen here will trust me in this.

To ensure a healthy and smooth development of China-U.S. relations, we must properly handle the sensitive core issue in our bilateral relations—the question of Taiwan, that is. I’m very happy that in my talks with President Bush this morning, he sent a very clear and loud signal to the whole world. I think for the consolidation and development of China-U.S. relations, and for the maintenance of peace and stability in the Taiwan straits, and for peace and development of the whole world, that signal is very significant. For any country, safeguarding national sovereignty and territorial integrity is the paramount national interest and an unshakable principle.

And to come back to President Lincoln, he quoted from the Bible. He said that a house divided against itself cannot stand. Our fundamental policy on settlement of the Taiwan question is peaceful reunification and one country, two systems. We have all along been doing our utmost to achieve the ultimate reunification in a peaceful manner.

Recent years have witnessed more frequent people-to-people exchanges and closer economic and trade links between the two sides of the Taiwan Straits. According to statistics, last year cross-straits trade reached 44.6 billion U.S. dollars, and cumulative Taiwanese investment in the mainland amounted to 35.7 billion U.S. dollars. Over 3 million people traveled back and forth across the Taiwan Straits each year. In Shanghai alone, 300,000 Taiwan compatriots have settled down engaging in business or other professions. Before the traditional Chinese New Year, we have to use chartered planes to take them to Hong Kong for transfer back to Taiwan for family reunions. People on both sides of the Taiwan Straits aspire for a peaceful reunification of the motherland as early as possible.

We sincerely hope to see peaceful settlement of the Taiwan question. So long as there is the slightest hope, we will not give up our endeavor for peace. However, our endeavor for peace has time and again been challenged by the separatist forces in Taiwan. We respect the legitimate democratic right exercised by our Taiwan compatriots, but we will absolutely not tolerate the attempt by the Taiwan independence forces to separate Taiwan from the rest of China under the signboard of democracy.

In this regard, American history offers us valuable experience and lessons. When defending the principle that the union is perpetual, America was willing to pay a heavy price. It is my belief that the American people should not find it hard to understand our position of resolutely safeguarding the one-China principle and working to achieve national unity.

As you all know, the three China-U.N. joint communiques constitute the basis for China-U.S. relations. The essence of those communiques is the one-China principle. The separatist activities aimed at Taiwan independence carried out by the Taiwan authorities are seriously undermining the political basis of China-U.S. cooperation and our common interests and putting peace and stability in the Asia- Pacific region in jeopardy. We hope that the U.S. government will handle the Taiwan question appropriately and support China’s peaceful reunification.

Ladies and gentlemen, time flies. Twenty-five years is only a short span in the long river of human history. Twenty-five years ago, we could hardly imagine the magnitude and depth of China-U.S. cooperation as we see it today. Now the Chinese people have come to know the United States better and better. About 120 million young Chinese are learning English. Just now, in my introduction, it is not mentioned that I have two little grandchildren. My grandson likes Walt Disney’s Mickey Mouse and Donald Duck. I’m told that American kids enjoy the cartoon “Mulan.”

Young people are the future of a country and the world. I have no doubt that the coming 25 years will add more radiance to the blossom of China-U.S. friendship, which will be passed on from generation to generation.

Ladies and gentlemen, President Thomas Jefferson once said, “I like the dreams of the future better than the history of the past.” Let our two countries and two peoples join hands and work closely together to build a better future for China-U.S. relations.

Thank you for your attention. (Applause.)

Next I would like to take up your questions. This afternoon I met with about 10 senators in the U.S. Senate. Actually, I answered more than 10 questions from them in about two hours’ time, and they felt very happy about my response. And we took a group photo together. So actually, I had thought that we should not be limited by time, and you can ask all the questions that you want to.

CARLA HILLS: Your Excellency, we are very grateful for your warm, and I would say earnest and thoughtful remarks. And time is running on, as you say. (Laughter.) Perhaps we have time for just two of the many, many questions that were posed.

At the White House you spoke about respecting Taiwan’s democracy. What does that mean?

PREMIER WEN: I said we respect the aspiration of the people of Taiwan for democracy. This means what we are opposed to are the referendum that are aimed at Taiwan independence. The defensive referendum is one such example. This uses democracy only as a cover to attempt at Taiwan independence, to split Taiwan away from China.

HILLS: Your Excellency, please discuss the financial reforms underway relating to the need for capital by China’s small- and medium-size enterprises.

PREMIER WEN: (In Chinese.)

HILLS: Mr. Premier, I’m afraid this will have to be the last question --

INTERPRETER: I’ll have to do the translation first. (Laughter.)

HILLS: Excuse me.

INTERPRETER: Sorry.

The financial reform in China is the most difficult part of our overall reform. At present, they suffer from such problems as a high proportion of non-performing loans and bad debts, capital inadequacy, and limited profits.

We have made up our mind to proceed with the reform of the banking sectors. And the fundamental solution lies in the introduction and reform of their corporate governance. So the preparation is tremendous. We have to do a lot of preparatory work. To start with, we have to bring down the proportion of non-performing loans. And secondly, we have to increase their capital, to ensure capital adequacy. And thirdly, we have to make sure that they will make profits.

So when these three conditions are met, we can start to introduce the shareholding system, and eventually they can be listed.

The objective has already been set. You may ask when you can see real action taken. I can give you a clear-cut answer. Action will be taken within six months.

Secondly, on the question about support to small and medium-sized enterprises, indeed, China’s banks are plagued by many problems, and it is the small and medium-sized enterprises that create most of the job opportunities. So really we need to improve the management of our banking sector and reform the system so as to deliver better service to the small and medium-sized enterprises.

HILLS: Your Excellency, we hate to see this evening come to an end. Several people in the audience have planes and trains to catch. So this will be the last question. And this inquiry is about the emphasis your administration is putting on improving China’s legal system. And the question is, what will you do and what do you believe needs to be done to ensure that individual rights are better protected by the police and the courts?

PREMIER WEN: I think the fundamental solution lies in the reform of the judicial system. So the legal system would serve its purpose to protect the people and to punish the evil.

HILLS: Your Excellency, thank you so much for your gracious remarks, for your very candid response to the questions. And your presence here has pleased us so very much. We feel indeed privileged. (Applause.)

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