Capital Hilton Hotel
VICE PRES. HU: (Applause.) I would like to thank the old friend of the Chinese people, Dr. Kissinger, for his wonderful introduction. Ambassador Hills, ladies and gentlemen, at the invitation of Vice President Cheney, I am very delighted to come across the Pacific Ocean to the United States of America for an official visit. I wish to express my heartfelt thanks to the National Committee on U.S.-China Relations, America-China Forum, Asia Society, the Committee of the 100, Council on Foreign Relations, U.S. Chamber of Commerce, U.S.-China Business Council, and the U.S.-China Policy Foundation, for hosting this dinner, and giving me an opportunity to meet with old and new friends present here.
Over the years you have worked tirelessly to enhance the mutual understanding between the Chinese and American peoples, and promote the development of China-U.S. relations. I salute all of you for your commendable efforts.
For the past few days, I have visited Hawaii, New York and Washington, D.C. I have had candid and constructive dialogues with President Bush, Vice President Cheney, and others, on bilateral relations and issues of mutual interest, and also met with people from various circles. I have been deeply impressed by what I have seen and heard. I have a strong feeling that although China and the U.S. differ in historical background and cultural traditions, the two peoples are eager to see the relationship grow.
China needs to deepen its understanding of the U.S., and so does the U.S. of China. Enhanced mutual understanding and trust between the two sides will help boost a healthy growth of bilateral relations. I would like to take this opportunity to share with you some information about China’s reform opening up and the modernization program.
In the late 1970s, the late Mr. Deng Xiaoping made the strategic decision to focus on economic development and adopt a reform and opening up policy. That’s turning over a new page in China’s modernization program. But after two decades and more have witnessed that the same rapid and sound approach of the national economy of China and a marked improvement of its overall national strength, with the average annual growth rate standing at 9.4 percent. China’s GDP reached 1.16 trillion U.S. dollars in the year 2001, leaping to the sixth place in the world. Economic restructuring has continued to deepen. The socialist market economy has been initially put in place, and a world oriented open economy has taken shape by and large.
The total volume of imports and exports exceeded 500 billion U.S. dollars in 2001. China comes first among developing countries in terms of attracting foreign direct investment for nine years in a run. The Chinese people are living much better nowadays. Areas of urban and rural residents have increased by three and four times respectively. The number of rural poor has gone down from 250 million to 30 million.
While pressing ahead with economic development, the Chinese government has spared no effort to strengthen the practice of democracy while safeguarding and developing the rights of its citizens. Over the past 20 years people’s right to democratic election decision-making, management and supervision have been further expanded. The grass-roots direct elections in rural areas have produced good results. A new type of ethnic relations of equality, solidarity and mutual assistance has kept developing. The languages, cultures and customs of all ethnic groups are fully respected. The citizen’s freedom of religious belief and normal religious activities are protected by law. At present China has more than 100 million believers in different religions. There are nearly 90,000 religious sites and over 3,000 religious groups across the country. Indeed, one must say it has been no easy job for a big developing country like China, with a population of nearly 1.3 billion, to have so considerably improved the human rights situation in such a short span of time. We in China are working hard to build up a strong prosperous democratic and a culturally advanced modern socialist country. We need an international environment of lasting peace, and we long for living harmoniously with all countries in the world.
The aim of China’s foreign policy is to safeguard world peace, and spur common development. China adheres to the independent foreign policy of peace, and actively develops friendly relations and cooperation with all countries on a basis of such basic principles as mutual respect for sovereignty and territorial integrity, mutual non-inference in each other’s internal affairs, equality and mutual benefits. China is playing a positive and constructive role in international and regional affairs. China pursues a defensive national defense policy, and has never taken part in an arms race. Its defense expenditure is the lowest among all the big nations. It has downsized its armed forces by 1.5 million of its own accord. As a nuclear state, it has always stood for the complete prohibition and thorough destruction of the nuclear weapons. As early as in the 1960s China made a unilateral commitment not to be the first to use nuclear weapons and not to use or threaten to use nuclear weapons against non-nuclear weapon states and the nuclear free zones. China’s development and progress have brought happiness to the Chinese people, and also lend a powerful push to the cause of peace and development in the Asia-Pacific region, and indeed the world at large.
Ladies and gentlemen, this year marks the 30th anniversary of President Nixon’s visit to China, and the release of the final U.S. Shanghai communique. China-U.S. relations have not developed all the way smoothly in the past 30 years.
But the general trend is one of moving forward, and one that has seen historical achievements in extensive areas of the relationship. Thirty years ago there was almost no official contact between China and the U.S. Today there are frequent high-level exchanges, and the two sides have reached more than 30 official agreements on cooperation in the political, economic, cultural, educational and other fields. Thirty years ago, there were few exchanges between the two peoples. Today there are more than 60,000 Chinese students studying in the U.S., and more than 5,000 American students studying in China.
So now exchanges are increasing day by day. Almost one million American tourists traveled to China in the last year alone. Thirty years ago there was very little trade between China and the U.S. Today China is the fourth largest trading partner of the U.S., and the U.S. the second largest trading partner of China, and the largest source country of foreign direct investment.
The bilateral trade volume exceeded 80 billion U.S. dollars in 2001. The paid-in value of U.S. investment in China has exceeded 35 billion U.S. dollars.
History and reality tell us that cooperation between China and the U.S. will benefit both, while confrontation will leave neither unharmed. A steady, sound and growing China-U.S. relationship serves the fundamental interests of the two peoples and the people of the world. And it is also in line with the historical trend of human progress. In today’s world, peace and development are the main themes of the times. It is the common aspiration of the people of all countries to seek peace, cooperation and development. However, the factors compromising world peace and stability are still very prominent, and the world is far from being tranquil.
As permanent members of the U.N. Security Council, China and the U.S. showed their major responsibilities for the future of mankind. The two countries have extensive common interests, and are in immediate need of cooperation in maintaining peace and stability, and promoting regional and global development.
During their two summits in October of last year and in February this year, President Jiang Zemin and President Bush reached an important agreement on developing a constructive and cooperative relationship between China and the U.S., that has reflected the strategic farsightedness of the two leaders, and clearly indicated the direction in which China-U.S. relations would move forward in the new century. The two sides should implement that important agreement in good faith, and effectively promote a sounder development of the bilateral relationship. First, the two sides should step up their high level strategic dialogues as well as their exchanges at the various levels, and between various agencies. Such dialogues and exchanges are playing an irreplaceable role in enhancing mutual understanding and trust, and develop constructive and cooperative bilateral relations.
President Jiang Zemin’s visit in the U.S. in the coming October will be another major event in the history of our relations, and it is bound to give a strong impetus to closer relations. We hope that American leaders and people from various communities will go to China, see for themselves—get to know how things stand in China, for instance its society, economy and people’s lives, and get the feel of the good will of the Chinese people.
Second, the two sides should intensify exchanges and cooperation in all fields. The Chinese and the U.S. economies are highly complementary, promising a huge cooperation potential in commerce, energy, environment, science, technology and other endeavors. As a member of the WTO, China will honor all its commitments in real earnest.
A further opening up and the grand blueprint for economic development will present vaster dimensions for business communities in the U.S. and other countries in developing economic cooperation and trade with China. In the coming five years alone, China will import 1.5 trillion U.S. dollars worth of goods. We hope that the U.S. business community will seize the opportunity and vigorously expand business in China. Meanwhile, we hope that the U.S. side will remove the artificial obstacles and create conditions for increased bilateral economic cooperation and trade.
Third, our two sides should address our differences on a basis of mutual respect and seeking common ground while reserving differences. The question of Taiwan has always been the most important and the most sensitive issue at the heart of China-U.S. relations. Properly handling this question is the key to promoting our constructive and cooperative relations. If any trouble occurs on the Taiwan question, it would be difficult for China-U.S. relations to move forward, and retrogression may even occur. The question of Taiwan is China’s internal matter, and should be resolved by the Chinese people on both sides of the Taiwan Straits. Since Nixon took office as president, the success of U.S. administrations, both Republican and Democratic, have been committed to the one-China policy, and to the three Sino-U.S. joint communiques that serve the interests of both China and the U.S., and is an act of wisdom and political vision. Selling sophisticating weaponry to Taiwan or upgrading U.S.-Taiwan relations is inconsistent with the forgoing commitments, serving neither peace and stability in the Taiwan Straits nor China-U.S. relationships and the common interests of the two countries. It is our hope that the U.S. side will strictly honor its commitments to the Chinese side and play a constructive role in China’s peaceful reunification.
For various reasons, China and the U.S. do not see eye to eye on some issues. Yet we can through dialogue on an equal footing increase our understanding, expand areas of agreement and gradually reduce our differences.
Fourth, the two sides should increase dialogue and cooperation on major issues concerning world peace and security. Terrorism is a public enemy of mankind.
China has always opposed terrorism of all forms. Since the September 11th incident, China and the U.S. have had very good cooperation in the field of counterterrorism. We stand ready to maintain consultation and cooperation with the U.S. side on a reciprocal and mutually-beneficial basis. To prevent the proliferation of weapons of mass destruction is of great importance to the maintenance of world peace. China is firm and unambiguous to its approach to non-proliferation, which is also consistent with U.S. objectives on this issue.
We are ready to step up cooperation with the U.S. side in this field. It is in the common interests of China and the U.S. to maintain peace and stability in the Korean Peninsula, South Asia and the Middle East.
In the recent years the two countries have conducted effective dialogue and cooperation in these fields. The two sides should stay in contact and strengthen cooperation.
Ladies and gentlemen, it is after going through many twists and turns that the China-U.S. relationship has achieved what we see today. So we should cherish it all the more. It may encounter ups and downs again, but I am convinced that the Chinese and American peoples will overcome interruptions and difficulties on the strength of their sincerity and wisdom, thus writing a new chapter in the development of our bilateral relations. Thank you. (Applause.)
MS. HILLS: I know we are all grateful to the vice president for his thoughtful and comprehensive survey of China’s policy and his recommendations of means to enhance the bilateral relationship. And he has graciously consented to take a few questions. I have received a few. I am going to step back and read them, and then we will have consecutive translation.
Mr. Vice President, this questioner asks: There are two of the biggest challenges China faces—are job creation and improving the efficiency of capital allocation. What measures do you recommend that China take to address these two important issues?
VICE PRESIDENT HU: First, I would like to say here I am more than happy to take up your questions. I think the first part of this question concerns the job creation in China. It is true that if China further deepens its reforms of the enterprises and presses ahead with the economic restructuring, some of the Chinese enterprises need to downsize their work force in order to further improve their efficiencies. As a result, some of the workers must be laid off.
So those workers, laid-off workers, will be faced with the problem of reemployment. And each year China’s population also increases by 10 million. And when these newly increased population grow up, they are also going to be faced with the problem of employment. So China is under tremendous pressure of employment.
As things stand now in China, there are very different features to the rural economy and the urban economy in our country. So, in order to resolve the problem of a redundant labor force in rural and urban areas, we have also resorted to two different approaches. In rural areas we have mainly taken the following measures, and we have resorted to the economic restructuring in the agricultural sector. We try to guide our peasants to transform their original production of grain and cotton into new areas where their products have a larger market demand, and they may also have better economic returns. For example, we have persuaded more peasants to grow vegetables, flowers and fruits, and also the plantation of such kinds of cash crops are also very labor intensive industries.
Secondly, while going in for economic restructuring of the agricultural sector, we also try to expand the areas of agricultural production. For example, we encourage the Chinese farmers and peasants to develop the husbandry industry, the aquaculture industry and the processing industry for the agricultural products. And at the same time we also vigorously developed the service sector in rural areas.
Thirdly, in light of the economic and social needs in rural areas, we have also steadily carried out the policy of urbanization in rural areas. And in this regard we have encouraged the development of small-sized accounts. From our years of practice in this regard, we can see that our endeavor in the past few years has already paid off markedly, and so far there are altogether 800 million people living in rural areas of China, and among the 800 million about 400 million are the labor force in the rural areas. Out of this 400 million, more than 130 million rural people, residents, have already been employed by village and township enterprises.
According to our estimate, in the next few years, if we will be able to create more than 100 new jobs for people in rural areas, we will be able to basically resolve the problem of redundant labor forces in China’s rural areas.
As far as the urban area is concerned, we have taken the following measures.
First, we support and also encourage the development of the non-public ownership economic sectors, so that more jobs will be created. At the same time, we also encourage the development of the medium and small sized enterprises, as well as the tertiary industry, and more jobs can be created in this regard also. At the same time, we have also taken measures to increase the training programs for those jobless people, so that the quality of the jobless can be further improved. And we also worked vigorously to develop and put in place China’s labor market, so the labor market can play a primary role in creating jobs and guiding the employment orientation for those people. Besides, we are also making efforts to further improve China’s social security system. And so those jobless people can get some allowances for their basic livelihood.
Once they lose their jobs they will be provided for by the social unemployment insurance for a certain period of time. If after that certain period of time they still cannot land any job, then they will be covered by a minimum subsistence allow for urban citizens.
We believe that when the country is going from the original planned economy to a market economy, and in a transitional period, and when the country is going through an economic restructuring, it is inevitable that it will encounter the problem of unemployment. However, as far as the government is concerned, we do have the responsibility and obligation to respect and also safeguard the right of those jobless people to a minimal livelihood, and also their right to find a job. We will try our utmost to do an even better job in this regard. Thank you.
MS. HILLS: The second question, Mr. Vice President. Chinese leaders have spoken for many years of the importance of political reform. Do you think that conditions now are favorable for increased political reform?
VICE PRESIDENT HU: As a matter of fact, I already mentioned this point in my address just now. And at the very beginning of China’s reform and opening up, late Mr. Deng Xiaoping already raised the issue of political restructuring. And while China has been pressing ahead with its economic restructuring, it has also been promoting the political restructuring all along. For example, we have consistently adhered to the principle of running the country according to law.
And we have initially put in place a socialist legal system in China. In rural areas in our country we have applied a system of autonomy for those villagers; and in urban areas a system of autonomy for the urban residents. And we have also taken various measures to further enhance and strengthen the right of our people in the democratic decision-making, management and supervision process.
We have also reformed China’s election system, and we have further extended the scope of direct elections from the original township and the village level to the county level. And now there is in China the election from township and village level to the election of national deputies—we have all applied this system of multiple candidates election. We have also reformed the personnel system of our country, and abolished a system whereby a person may holdup a public office for his lifetime. And also we have taken some new measures in the appointment, selection and examination of our public servants.
And for some posts we even offer examinations to the general public, and everybody can have a chance to try and sitting for the examinations.
We have also sped up the process of institutional reform, and made efforts to separate the government functions from the functions from our companies. In the future we will continue to press ahead with China’s political restructuring; and in this process of China’s political restructuring, we are ready to learn and also to apply all the positive results that reflect the human political civilizations in all countries. And in this process China will not simply copy the political system of any other country. Thank you.
MS. HILLS: Mr. Vice President, the third and the final question. Current polls show that public opinion in Taiwan overwhelming favors the status quo in cross-strait relations. In your opinion, how will the people of Taiwan become convinced that unification is in their best interests?
VICE PRESIDENT HU: Just now Ambassador Hills told us that according to the latest polls an overwhelming majority of the Taiwan people prefer to maintain the status quo in cross-strait relations. And besides, I also know that according to the polls in Taiwan that actually an increasing number of people in Taiwan advocate the reunification with the mainland.
As to the question of how can we convince our Taiwan compatriots that peaceful reunification under the one-country-two- systems policy serves their best interests, I think the key first and foremost depends on whether the peaceful reunification and the one-country-two-systems proposition conforms to the will of the Taiwan people.
I believe after the peaceful reunification of China the application of one-country-two-systems to Taiwan will serve Taiwan’s prosperity and stability. It will also help build a harmonious relationship between the people across the Taiwan Straits. It will also serve the peace and tranquility in the Asia Pacific.
Firstly, actually the peaceful reunification would help us realize the long-cherished wish of the Taiwan compatriots for peace and stability, because after the peaceful reunification of China we will be able to have a secure and also stable environment so that our compatriots in Taiwan no longer need to be worried about any tension or the use of force that may be caused by the separatist activities, and who support Taiwan independence. So people—the entire Chinese people can enjoy the tranquil world together.
Secondly, China’s peaceful reunification will also fulfill the aspiration of
the Taiwan people for development, because the mainland boasts a huge market and rich resources. After the reunification of China, the areas of economic cooperation between the two sides across the Taiwan Straits will be further expanded, and we are going to have even closer economic ties, and through various modalities of development. And also Taiwan’s economic growth will have the strong backing of the mainland, and the mainland’s economic development will also offer very broad room for the further economic growth of Taiwan. And Taiwan will find it easier to restructure its economy and optimize this economic mix. And it will be easier for Taiwan to seek long-term prosperity, and Taiwan will be the direct beneficiary of China’s reunification.
Thirdly, China’s reunification will also help fulfill the aspiration of the Taiwan people to become masters of their own, because after China’s reunification the one-country-two-systems formula will be applied to Taiwan.
And also the Taiwan people will enjoy a high degree of autonomy. Under this formula, the party, the political system and the military of Taiwan will be under the administration of the Taiwan people themselves, and the Taiwan people will really be able to fulfill their long-cherished wish of becoming masters of their own.
At the same time, after reunification our compatriots in Taiwan can more extensively participate in those state affairs of China together with their compatriots in the mainland. And we also hope that compatriots on both sides of the Taiwan Straits will be able to work together after reunification for China’s peaceful environment and further development.
Fourthly, China’s reunification will also help fulfill the wish of the Taiwan people to carry out external exchanges. After China’s reunification, the overall national strength of China will be greatly enhanced, and so will China’s international standing. And after China’s reunification there will be even broader and bigger room for Taiwan to participate in external exchanges, and our compatriots in Taiwan will be able to share with their compatriots in the mainland the pride and the dignity and the glory of China.
Of course as China’s reunification will bear on the vital interests of our compatriots in Taiwan, the Chinese government will certainly listen to very seriously the opinions of our Taiwan compatriots, and respect and also accommodate their will and interests. As long as their wills and their opinions and requests are reasonable, and under the framework of the one-China principle, they may raise all kinds of issues. And we may compare notes with them on all issues. We believe that the one-country-two-systems policy not only benefits the country but also benefits the peoples, and that this policy of ours will go down in the annals of our country and the world. And actually the benefits of this policy has already been seen and witnessed by the practice in Hong Kong and the Macau. The policy has been worked out very successfully in Hong Kong and Macau. And if the policy can work out in Hong Kong and Macau, we believe that the same policy will also work out in Taiwan after reunification. And after reunification we will even apply more tolerating accommodating policy towards Taiwan.
That’s why I am fully convinced that an overwhelming majority of our compatriots in Taiwan will ultimately accept, acknowledge and support our proposition of resolving the Taiwan question on the basis of one-country-two-systems. Thank you very much. (Applause.)
MS. HILLS: Thank you very much. (Applause.)