|Premier Wen Jiabao Meets the Press|
On the morning of 14 March, the Fifth Session of the Eleventh National People's Congress held a press conference in the Great Hall of the People. At the invitation of Mr. Li Zhaoxing, spokesman of the NPC Session, Premier Wen Jiabao of the State Council met Chinese and foreign journalists and answered their questions.
Premier Wen Jiabao: This is the last time for me to meet friends of the press after the NPC and CPPCC sessions. I want to first take this opportunity to express my appreciation for your long-standing interest in China's reform and development. This year may be the most difficult year, but it may also be the most promising one. The people need their government to be calm, resolute and trustworthy, and the government needs the people's trust, support and help. In the face of the deepening international financial crisis and European debt crisis, what is most important is that we run our own affairs well. In my last year in office, I will not waiver in carrying out my duties and will remain true to my conviction. I will always be with the people. Now I'm ready to take your questions.
Xinhua News Agency: Mr. Premier, this year is the last year of the term of this government. How do you evaluate your work?
Premier Wen Jiabao: I have served as the premier for nine years. They have been nine difficult but momentous years. I often feel that much work remains to be finished, many things have yet to be properly addressed, and there are many regrets. I know full well that all power of the government comes from the people and every piece of the work that I have done for the people is only a fulfilment of my due responsibilities. I feel encouraged and happy that I have this opportunity to do some concrete things for the people as a public servant. I sincerely hope that the people will forget me and all the concrete things I have done for them, and let these things fall into oblivion as one day I shall go to my eternal rest.
Due to incompetent abilities and institutional and other factors, there is still much room for improvement in my work. Although I have never committed any error in my work because of dereliction of duty, as head of the top executive body of the country, I should assume responsibility for the problems that have occurred in China's economy and society during my term of office, for which I feel truly sorry.
In my last year in office, I will be as committed as ever like an old steed. I will continue to work hard, to make up for the shortfall in my work with new achievements and to win people's understanding and forgiveness. "When one is in office, he should discharge his duty conscientiously. When leaving office, he should conduct himself with humility and exercise self-reflection." I will adhere to this principle in conducting myself, and I place hope on the next generation. I have confidence that they will do better than me.
I have devoted 45 years of my life to the service of my country, remaining committed to the conviction that I shall dedicate myself to the country in life and death irrespective of personal weal and woe. I have done my utmost with strong passion and energy to serve the country and the people and have never pursued personal gains. I have the courage to face the people and to face history. "There are people who will appreciate what I have done, but there are also people who will criticize me. Ultimately, history will have the final say."
NBC: Overall, the past ten years have seen China's fastest economic growth thanks in part to a benign international environment and trading system. With due respect, Premier Wen, in your last year in office, if you would have one thing that you can be allowed to do to re-balance the US-China economic relationship that can create American jobs for example, in keeping with the award bestowed to you recently in Boston by the International Longshoremen's Association, then what is the thing that you would like to do? Would you consider, for example, reforming China's trade regime that some American critics say distorts global competition in China's favor? Thank you.
Premier Wen Jiabao: Not long ago, the International Longshoremen's Association in the United States game me the award of "Best Friend of American Worker". I am the recipient of this award, but I would rather see this award as a strong example showing that the business relationship between China and the United States is of mutual benefit.
You asked me if there is one thing that I can do to ease the trade imbalance between China and the United States, what would it be. As a matter of fact, I have been thinking about this issue for a long time. In 2009 and 2011, I had thorough exchanges of views with President Barack Obama of the United States. I believe to ease the trade imbalance between the two countries and resolve the difficulties and frictions in our business ties, we still need to rely on cooperation. For that purpose, I have set out to the US side a package proposal that suggests the two countries embrace stronger business, financial and investment cooperation. The main contents of my proposal are as follows: First, we need to further enhance two-way trade between China and the United States. China is ready to buy more from the United States, and the United States needs to ease its restrictions on export of certain goods to China. Second, the two countries should work together to increase mutual investment. Both sides need to create favorable conditions for mutual investment and protect such investment. Third, we need to enhance cooperation in high-tech fields covering new materials, new energy sources, energy conservation, environmental protection, aviation and space so that we can open up new dimensions for China-US cooperation. Fourth, we need to enhance our cooperation in infrastructural development, and bring it in line with our financial cooperation. That means China is ready to make investment in the infrastructural construction in the United States, and that will help generate local jobs. I believe this is of mutual benefit.
President Obama has attached high importance to my proposal, and competent authorities of the two sides are studying it. I believe that cooperation is better than confrontation. As long as we continue to move in this right direction, the business ties between China and the United States will enjoy sustained and sound growth.
With respect to your question concerning possible reform of China's trading system, I would like to make three points: First, on the basic balance between imports and exports, I would like to tell you that in 2011, the current account surplus of China as a share of the GDP came down to 2.8%, which is below the 3% level that is internationally recognized as appropriate. This shows that China has achieved basic equilibrium in its international balance of payments and trade in goods. Second, on the RMB exchange rate which is of high interest to the US side. Since we launched the reform of the RMB exchange rate formation mechanism in 2005, the real effective exchange rate of the Chinese currency has appreciated by about 30%. I want to draw your attention to such a phenomenon, that is, since last September, the RMB exchange rate has experienced two-way flotation on the Hong Kong NDF market. This shows that the RMB exchange rate may have approached an equilibrium level. We will press ahead with the reform of the RMB exchange rate formation mechanism, in particular, we welcome greater elasticity of the RMB exchange rate. Third, we will adhere to the purpose of the Doha round negotiations, support free trade and oppose protectionism.
China Times: Over the past four years, the two sides of the Taiwan Straits have achieved three direct links and direct flights. Business exchanges and people-to-people contacts across the Taiwan Straits have reached an unprecedented level. Some people in Taiwan say that the past four years have probably been the most stable and peaceful period in the development of cross-Straits relations over the past more than 60 years. And we expect this good momentum to continue in the following four years. In your last year in office, what do you hope to see in the cross-Straits cultural exchanges? Last June, the painting of the Fuchun Mountain that you once referred to was put on display in Taiwan. How did you feel then? We are very interested in learning if you plan to visit Taiwan as a tourist after you retire in March next year.
Premier Wen Jiabao: This is the tenth consecutive time for me to address the Taiwan question on this occasion, and each time I do so, strong emotions well up inside me. I am happy to see that over the past year compatriots on both sides of the Taiwan Straits have enhanced their exchanges and become closer to each other. The political, economic and cultural and social foundation for the "1992 Consensu" and the cross-Straits relations has become stronger. You asked me in the last year of its term of office, what concrete steps will this government take to promote peaceful development of cross-Straits relations and in particular to enhance the business ties between the two sides. The first thing that comes to my mind is that we will accelerate the follow-up negotiations of ECFA. In expanding the business ties between the two sides, we will pay particular attention to accommodating the interests of small and medium enterprises, vulnerable industries, and ordinary people in Taiwan, particularly those in central and southern Taiwan. At the same time, we will promote cross-Straits financial cooperation. We will promote cooperation on the bank clearing system, and encourage banks of the two sides to acquire stake in each other so that banks will be able to play their due roles in boosting economic cooperation and trade between the two sides. We will pay particular attention to the development of Taiwan-invested enterprises on the mainland. We will create conditions to help them achieve upgrading and expand the local market.
In 2010, I told the story about the painting of the Fuchun Mountain here. I believe that with utmost sincerity no difficulty is insurmountable. I'm encouraged to learn that the two pieces of this painting, which had been apart from each other for so long, were finally put together on display in Taipei. This shows that the Chinese culture has strong cohesiveness and inspiration. I wish I could have been able to go and see the painting for myself. I cannot help but ask why can't the nourishment of our common cultural bond that has stretched several thousand years resolve our political grudges that have lasted just several decades. It is my sincere hope that the two sides will work together to promote people-to-people and cultural contacts.
You asked me if I would like to take a tour of Taiwan after retirement. Honestly, I would love to go if conditions permit. Please convey my greetings to the compatriots in Taiwan. At this moment, I recall a poem written by a poet from central Taiwan by the name Lin Chaosong. He wrote the poem shortly after Taiwan was ceded. The poem reads, "There is no way to heal the wound in my heart, but there will be a day when the half moon becomes full again." I believe that with joint efforts of all compatriots of the Chinese nation, we will achieve the reunification and revitalization of the country. And that is something that all Chinese can take pride in.
Lianhe Zaobao: In recent years, you have addressed political structural reform on several occassions and that has attracted wide attention. Why have you done so and what is the difficulty that confronts China's political structural reform?
Premier Wen Jiabao: I have talked about political structural reform in China on many occasions in these years. And I have set out my views on this topic in full and in detail. Why have I taken such a keen interest in this matter? It is because I have been seized by a strong sense of responsibility. After the crackdown of the Gang of Four, our Party adopted the resolution on certain questions in the history of the Party since the founding of the People's Republic of China and took the important decision of conducting reform and opening-up in China. However, the vestige of the mistake of the Cultural Revolution and the impact of feudalism have yet to be fully eliminated. And as our economy continues to develop, such new problems as income disparities, lack of credibility and corruption have occurred. I am fully aware that to resolve these problems we must press ahead with both economic structural reform and political structural reform, in particular reform in the leadership system of the Party and the state.
The reform in China has come to a critical stage. Without the success of political structural reform, it is impossible for us to fully institute economic structural reform. The gains we have made in reform and development may be lost, new problems that have cropped up in China's society cannot be fundamentally resolved and such historical tragedy as the Cultural Revolution may happen again. I believe all responsible Party members and government officials should have a sense of urgency.
I am fully aware of the difficulty of the reform. For any reform to succeed, it needs the consciousness, support, enthusiasm and creativity of the people. To conduct such reform in our big country with 1.3 billion people, we must always bear in mind China's national circumstances and develop our socialist democracy in a step by step manner. This is not an easy thing, but the reform can only go forward. The reform must not stand still, still less go backward, because that offers no way out.
I know that the people take an interest not only in what I have to say and what my ideals are, but also, and more importantly, in what results my efforts can bring. I want to tell you that as long as I have a single breath, I will dedicate myself to advancing China's reform and opening-up cause.
People's Daily: People have paid much attention to the recent round of housing market regulation. We have seen a strong resolve and tough measures taken by the central authorities. Home prices in some Chinese cities have started to level off. How much does the home price need to drop for it to be considered as meeting the regulation target? In the face of economic slowdown and pressure of local finances, will this round of regulation measures be abandoned halfway?
Premier Wen Jiabao: Out of a sense of responsibility, I have carefully reviewed the regulation measures we have taken for the housing market since 2003. As a matter of fact, in 2003, we already introduced six measures to regulate the housing market. In 2005, the State Council issued eight measures. In 2006, another six measures were adopted. But why haven't these measures made a difference? People have complained that the more regulation measures, the higher the home price and that the regulation policy cannot make its way out of Zhongnanhai. I feel deeply distressed by such complaints from the people. I have recognized that the housing market concerns our fiscal, financial, and land policies. It involves the relationship between central and local governments. It also concerns the interests of financial enterprises and real estate developers. Our regulation efforts have encountered massive resistance. But why have we seen a glimmer of hope admist all the difficulties in the past couple of years and why have our measures in the recent couple of years paid off? It is because, first, we have a very firm resolve. Second, we have put our finger on the crux of the problem, that is, to curb speculative and investment-driven demand, and we have taken targeted measures to address this problem.
My basic view on the housing market is that China is a big country with 1.3 billion people and it is at a stage of rapid industrialization and urbanization. The Chinese people's housing demand is inelastic and this kind of demand is here to stay. To provide adequate housing for all people does not mean that each and every one owns his home. We need to encourage more people to rent houses.
With respect to the development of the housing market in China, I would like to make three observations. First, we must ensure the long-term, steady and sound growth of the housing sector. If we develop the housing sector blindly, a bubble will emerge and when it gets burst, it will not only adversely affect the housing market, but also weigh on the entire Chinese economy. Second, what do we mean by bringing home prices back to a reasonable level? What we mean is that a reasonable housing price should match people's income and the construction cost, and the profits should be reasonable too. At present, the home price in some places is far from coming back to a reasonable level. Therefore, we must not slacken the regulation efforts. Otherwise, past gains will be lost and there will be chaos in China's housing market. That is not in the interest of long-term, steady and sound growth of the housing sector in our country. Third, in developing the housing market, we must give play to the fundamental role of the market in allocating resources. That is to say, we will make most of the "hand" of the market, but at the same time, the "hand" of the government is indispensable too, because that can help ensure stability and promote fairness.
TVB of Hong Kong: Mr. Premier, you visited Hong Kong in 2003 and much has changed in the past nine years since then and we expect to see more changes in Hong Kong. How do you see the election of the new Chief Executive in the Hong Kong SAR? In addition to the challenges brought by a change of government and the European debt crisis, what underlying problems do you think Hong Kong faces and how do you see the future development of Hong Kong?
Premier Wen Jiabao: I have deep love for Hong Kong. During my visit to Hong Kong back in 2003, I quoted a line from a poem written by Mr. Huang Zunxian to express how I feel about Hong Kong. He wrote "Every inch of the rivers and mountains is as precious as gold." Fifteen years have passed since Hong Kong returned to the embrace of the motherland. What has happened in Hong Kong over the past 15 years has shown that the principle of "One Country, Two Systems", "Hong Kong people administering Hong Kong", and a high degree of autonomy has strong vitality.
In the past 15 years, Hong Kong has travelled a momentous course. It encountered two financial crises. But under the leadership of the SAR government and with joint efforts of the Hong Kong compatriots, Hong Kong has successfully weathered the financial crises and sustained its status as an international financial center, and it still enjoys a sophisticated free market economy. In 2011, the per capita GDP of Hong Kong reached a record high of US$34,200. And the employment situation there is positive too. Hong Kong now faces both difficulties and opportunities. The impact and pressure of the international financial crisis and the European debt crisis are still there. Moreover, Hong Kong is under the dual pressure of economic downturn and inflation. Under such circumstances, Hong Kong must continue to work hard to develop the economy, improve people's lives, advance democracy and maintain social harmony. In particular, efforts should be made to address such major issues as social equity, price stability, people's housing needs, education and medical care on a priority basis.
The election of the fourth Chief Executive of the Hong Kong SAR is currently under way. I believe that as long as the principle of openness, justice and fairness is observed and relevant legal procedures are fully complied with, Hong Kong will elect a Chief Executive who enjoys the support of the vast majority of the people in Hong Kong.
It is true that Hong Kong now faces some difficulties, but I cannot help but recall a remark made by Mr. Deng Xiaoping. He said that there should be confidence that Hong Kong people can run Hong Kong well.
I truly hope that I will have another opportunity to visit Hong Kong to see the residents in the Amoy Garden and talk to the students of the University of Hong Kong. I would like to ask this journalist to convey my best regards to the Hong Kong compatriots.
Washington Post: Thank you Prime Minister for coming here and answering our questions for one last time. One year ago here, you were asked by one of my colleagues about the possibility of elections in Hong Kong, and you said it had to come gradually, step by step, that the Chinese had to first show that they can run a village and then a township. This year, people all over the world are electing their leaders in direct elections. That has had many people wondering and asking the question exactly when will Chinese citizens enjoy these same rights to elect their leaders in a competitive direct election?
Premier Wen Jiabao: I have said on several occasions that we must adhere to the practice of self-governance by villagers in China, and the villagers' lawful right to directly elect the village committees must be protected. What has happened shows that this has been a successful practice. The Chinese villagers have shown strong enthusiasm in participating in this process and strict methods of election have been formulated on the basis of the Organic Law of the Villagers Committee.
I still believe that if the people are able to run the affairs of a village well, gradually they will be able to run the affairs of a township and then a county. We must continue to encourage the people to take bold steps to experiment and enhance their ability in this regard in the course of practices. I believe that democracy in China will continue to develop step by step in keeping with China's national conditions, and no force is able to hold this process back.
Caijing: The GDP growth target for this year has been set at 7.5%. I would like to ask if it is just a temporary cut in the growth speed or a permanent one. Does it mean the end of China's high economic growth period? The international community has, to some extent, placed the hope of tiding over the economic crisis on China's strong economic growth. How will the downward adjustment of China's growth target affect global economic recovery?
Premier Wen Jiabao: After I delivered the government work report, the highest attention from media organizations across the world has been paid to China's growth target. I believe they have focused their attention on a very important issue. For years, we have set the annual growth target of the Chinese economy at 8%, but this year, we have set the target at 7.5%. This is because we want to shift China's economic growth towards one that relies on advances in science and technology and higher educational level of the labor force. We hope that China's economy will achieve high-quality growth, and our economic development will serve the primary goals of making economic structural adjustment and shifting China's growth model. We hope that China's economic growth will no longer come at the cost of resources consumption and environmental pollution. We want to put China's economic growth on a path that is conducive to energy conservation and protection of the eco-environment. We hope that our economic development will bring greater benefits to the people.
We already made up our mind to do so during the formulation of the 12th Five-Year Plan. We have set the average annual GDP growth speed during the 12th Five-Year Plan period at 7%, and by setting this year's growth target at 7.5%, we want to make it fit the requirement set out in the 12th Five-Year Plan. At the same time, I should point out that the economic slowdown is the result of our proactive macro control. Admittedly, China's economy is under downward pressure due to the European debt crisis and contraction of the external market. We have adjusted China's GDP growth target, mainly because we want to press ahead with economic structural adjustment.
With respect to the target of GDP growth this year, it is the consensus among economists, experts, scholars and media organizations from many countries around the world that this is, in the final analysis, good news for the world. Because if we in China can truly overcome the problem of lack of adequate balance, coordination and sustainability in our economic growth and get the Chinese economy on a path of quality development, this, in a fundamental way, is conducive to the development of the global economy.
We must continue to strike a balance among maintaining steady and robust economic development, making economic structural adjustments, and managing inflation expectations. China's economic aggregates now total around 47 trillion RMB yuan. And with that base figure, a 7.5% growth target is not a low one. And this is even more so if we can sustain this speed as the size of the economy continues to expand. Moreover, we must work even harder to raise our growth efficiency so that more benefits will be extended to the people. We have confidence that we will be able to do that. This is our goal.
CCTV: You have said on many occasions that social equity and fairness should be promoted. Yet lack of fairness is still the focus of public attention. I would like to ask you what steps you will take during the remainder of your term of office to promote social fairness and justice. We know that you often log onto the Internet. There have been a lot of comments on the Internet on the work of the government and you yourself. There are both positive and critical comments. How do you see the criticism?
Premier Wen Jiabao: I have said before that equity and justice shine more brightly than the sun. Equity and justice are the defining features of socialism. As a matter of fact, over the past nine years, the government has put a large amount of effort in promoting social equity and justice and these efforts should be fully recognized. On the legal front, we have amended the Chinese Constitution and that the State respects and protects human rights has been incorporated into the Constitution. We have formulated the property law to protect lawful private assets. We have amended the election law to ensure equal rights of rural and urban voters. We have abolished the regulations on internment and repatriation, giving farmers freedom of movement to work in cities. In a short span of several years, the urbanization rate in China has exceeded 50%. Second, in the rural areas, we have abolished the agricultural tax to ease the burden on farmers. Third, as far as education is concerned, we have made the free nine-year compulsory education universally available. We have exempted tuition fees for rural students engaged in vocational education. We have provided scholarships and financial aid for college education and senior middle school education in rural areas. We have provided subsidies for students of rural boarding schools in poor areas. Fourth, we have established and improved the social security system that covers old-age support, unemployment insurance, medical insurance and subsistence allowance. The programs of medical insurance for both working and non-working urban residents and the new rural cooperative medical care scheme now cover all the 1.3 billion people in China. These are institutional arrangements we have made to promote social equity and justice. I am fully aware that the people are still complaining about income disparities, judicial injustice and other problems. We must continue to do a conscientious job in promoting social equity and justice.
In my last year in office, the government plans to take on some tough tasks. We are determined to accomplish these tasks rather than pass the problems to the next government. First, we will formulate an overall plan for the reform of the income distribution system. Second, we will formulate and introduce regulations on the expropriation and compensation of collectively owned rural land so as to ensure farmers' property right conferred by the law. Third, we will extend the coverage of old-age insurance to the entire Chinese population. Fourth, on the basis of the newly set poverty standard, we will press ahead with the work of poverty alleviation in contiguous areas with particular difficulties. And fifth, the government has arranged its budget to meet the target of raising the share of government expenditure on education to 4% of the GDP. We must make every effort to meet this target and ensure that the money is wisely spent.
All the power of the government comes from the people. The government should create conditions for the people to make their views and criticism about the government heard. I don't feel surprised that there have been critical comments on the Internet about the performance of the government and I think it is only natural for that to happen. The government must seriously reflect on the critical views that the people have made. As a matter of fact, the government has gained much food for thought from those critical comments of the public on the Internet while taking decisions on major issues. I have thought about inviting representatives of people who on a regular basis make critical comments about the government to the Zhongnanhai so that we can hear their views face to face. If you have followed the news coverage about my soliciting views from the public on the government work report this year, you may have found out that such arrangement has been made. But I think it is far from enough.
During my term of office as the premier, there have been some slanders about me. I have not allowed myself to be disturbed by those slanders. But still they have caused some pain. Not the pain because a man of integrity and loyalty has been questioned and wronged, but because my independent character has not won people's understanding and that has made me feel a bit worried about the society. I will continue to press ahead with my work without hesitation and misgivings and with the courage that one should not fear the rumors and slanders from others.
Al Jazeera: The friendly relations between China and Arab countries and the entire Middle East region have had a long history. China has been committed to working with the rest of international community to find solutions to related problems. But on the issue of Middle East, in particular the issue of Syria, it seems that there is a wide gap between China's position and the position of many other countries in the world. I want to ask what exactly is China's position on the issue of Syria and what is China's consideration behind its efforts surrounding the Syria issue. How does China see the Arab people's demand for democracy? Is China concerned that its relations with the people of Arab countries will be affected?
Premier Wen Jiabao: On the issue of Syria, China has no selfish interests and does not seek to protect any party, including the government of Syria. We make our own right judgment and determine our own position on this issue on the basis of facts. The position of the Chinese government on the Syria issue is four-fold. First, life of civilians must be protected. The killing of innocent civilians must be immediately stopped by all parties in Syria. Second, China respects the Syrian people's demand for change and legitimate aspiration for their own interests. Third, China supports the special enjoy jointly appointed by the UN and the Arab League in his political mediation. Fourth, China has deep sympathies for the humanitarian plight of the Syrian people. We have participated in the relevant international humanitarian aid and we will continue to do so. At the same time, China has, through its own ways, worked intensively on all parties in Syria for the early launch of political dialogue. We believe that the demand for democracy of the Arab people must be respected and truly responded to. And I believe this trend towards democracy cannot be held back by any force.
There have been friendly exchanges stretching up to 1,000 years between China and the Arab countries. It has been China's consistent position to respect the Islam civilization and support the just cause of the Arab people. The two sides have been engaged in productive cooperation in a wide range of areas. Not long ago, I visited Saudi Arabia, the UAE and Qatar. I feel that there is consensus between China and Arab countries, including the Gulf countries, that cooperation has been the mainstay of relationship between the two sides. As the Arab world undergoes changes, I believe the position of the Chinese side will win the understanding and trust of the Arab countries. And eventually, relations and exchanges between China and Arab world will strengthen.
China National Radio: The public have paid very close attention to the Wu Ying case in Zhejiang. Mr. Premier, do you think Wu Ying should be sentenced to death or not? And how do you see the difficulty of private capital in investment and financing?
Premier Wen Jiabao: I have noted that much public attention has been paid to the Wu Ying case. On this matter, I want to make the following points: First, a thorough study must be conducted concerning the legal aspects of private lending and the principles that should be observed in handling such issues so that there will be clearly-defined legal reference for private lending. Second, the Wu Ying case must be handled on the basis of facts and in strict accordance with the law. I have noted that the Supreme People's Court has issued a circular, requiring that all cases concerning disputes over private lending must be properly handled in accordance with the law, and the Supreme People's Court has taken a very cautious attitude towards the Wu Ying case. Third, the case shows that the development of private finance cannot yet meet the requirement of economic and social development in China. The Chinese companies, small and micro enterprises in particular, need massive funds, yet the banks are not able to meet their capital needs, and there is a large amount of idle private capital. We should guide and allow non-govenmental capital into the financial sector, and we need to bring private lending into the open and make it standardized. We need to encourage its development and, at the same time, put it under strict supervision. I can tell you here that the People's Bank of China and the China Banking Regulatory Commission are actively considering launching a comprehensive reform of private finance on a trial basis, with Wen Zhou being one of the places for this reform.
AFP: Thank you very much for accepting this question by AFP. Over the last year, there has been a spate of self-immolation in the Tibetan areas of China. Is it a matter of concern to you personally and what do you think your government can do? What's the best way for your government to address this situation? Thank you very much.
Premier Wen Jiabao: In the past weeks and months, there have been several instances of self-immolation by monks in the Tibetan-inhabited areas of China. We are against taking such radical moves to disturb and undermine social harmony. The young manks are innocent, and we feel deeply distressed by their behaviour. At the same time, I must point out that all should recognize that Tibet and the Tibetan-inhabited areas of the four provinces are inseparable parts of China's territory. The so-called Tibetan government in exile in Dharamsala of India is theocratic either under the direct control of the Dalai Lama or under his indirect influence. Its purpose is to separate Tibet and the Tibetan-inhabited areas from the motherland. We have a firm position and principle on this matter.
Tibet practices the regional ethnic autonomy system. Over the past years, Tibet has made significant progress in economic and social development. But we also recognize that Tibet is still relatively backward compared with the central and eastern parts of China. The central government has taken strong measures to accelerate the economic and social development in Tibet, including the formulation of a new plan to raise the living standards of the farmers and herdsmen. Tibet needs to develop its economy. At the same time, we must pay close attention to eco-environment conservation and preservation of Tibet's cultural heritage. We respect the freedom of religious belief of Tibetan compatriots, and their religious belief is protected by the law. We must treat all our Tibetan compatriots as equals and with respect, and make continuous improvement in our work in this area.
Premier Wen Jiabao: If you are not tired, I can answer two more questions.
China News Service: The Chinese economy has sustained a robust growth over recent years, but at the same time, the problem of a wealth gap has become more acute. In your government work reports in recent years, you have said several times that the government needs to reverse the trend of widening income gap. What steps will the government take to resolve this problem so that more Chinese people can truly share the fruits of China's reform and development?
Premier Wen Jiabao: To address the problem of income disparities, I believe it is important that we take steps in the following four areas. First, we will continue to increase the income of urban and rural residents and raise the level of minimum wage so that people's income will rise in tandem with economic growth and increase in productivity. Second, we will adjustment income distribution. We will further restrict the income of high-income groups, including the income of senior management of state-owned enterprises and state-owned financial enterprises. We will raise the proportion of middle-income groups. Third, we will further improve the social security system. And fourth, we will protect lawful income and resolutely ban illegal income.
I believe the following three points are very important with respect to income distribtion. First, the government must create equal opportunities and conditions for all in terms of education, employment and business start-up so that all people will able to proceed from the same starting line. Second, we must pay closer attention to the life of people in difficulties. I believe if the living conditions of those people can be improved, the life of all people in the society will improve. Third, we must continue to reform the fiscal system and income distribution system so as to put in place the institutional arrangements to achieve the goal of common prosperity.
Reuters: I have two questions. You referred to the problem of local government debt in your government work report. I would like to get your personal perspective on this matter. How big exactly is the local government debt at the moment? What are your thoughts about addressing this problem? How much debt will be reorganized? Will there be payment extension? Do you plan to introduce new policies in handling this issue? Secondly, a question about the Wang Lijun incident of Chongqing. I have noticed that the relevant governmental departments of China have conducted investigation into this matter after Wang Lijun entered the US consulate. How do you see this matter? Will this matter affect the trust or confidence of the central government in the leadership of the Chongqing municipality government and party committee?
Premier Wen Jiabao: On local government debt, I would like to make the following points. First, the government debt to GDP and budget deficit to GDP ratios in China are at fairly low levels. They are both lower than those of many developed countries and emerging economies. Second, government debt in China is at a controllable and safe level. In 2010, we audited local government debts. The volume stood at 10.7 trillion RMB yuan. And by the end of 2011, this figure only increased by 300 million RMB yuan. A total of 2153.6 billion RMB yuan of new loans were made and a total of 2153.3 billion RMB yuan of debt was repaid. Third, in handling local government debt, we will properly handle the debt stock and strictly control the increase. We will handle the outstanding debt in a step by step manner by classifying the debt into different categories and managing them accordingly. For any increase in local government debt, the revenues and expenditures must be incorporated into the local governments' budgets and final accounts and be subject to the supervision of people's congresses at the same level. Fourth, the majority of local government debt is actually in the form of high-quality assets with cash flows and returns. The debts of some projects can be repaid by the returns made on those projects. And for projects of public welfare, both the central and local governments will find ways to pay the debt off. I can tell you in a responsible way that, last year, we paid off all the debts of the schools providing compulsory education. At the same time, we will let the market play a role in handling the local government debt through such ways as asset disposal, transfer of projects, and selling of equity. In a word, we will take the matter of local government debt very seriously and we will not allow it to adversely affect China's development.
The Wang Lijun incident has received high attention from people in China and the international community. I would like to tell you that the central authorities take this matter very seriously. Shortly after this incident took place, the central authorities gave the instruction that the relevant authorities start an investigation into this matter, and so far progress has been made in the investigation. We will handle this issue in strict accordance with law on the basis of facts. As far as the result of the investigation and how this matter will be handled are concerned, an answer must be given to the people and the result of the investigation should be able to stand the test of the law and history.
Over the years, the successive governments of Chongqing and the people in Chongqing have made tremendous efforts to promote reform and development and they have achieved remarkable progress in this regard. The current party committee and government of Chongqing must reflect on the Wang Lijun incident and learn lessons from this incident.
Since the founding of the People's Republic of China, under the leadership of our Party and the government, remarkable achievements have been made in advancing China's modernization drive. Yet at the same time, we have taken some detours and learned lessons. Since the third Plenum of the 11th CPC Central Committee, in particular since the central authorities adopted the resolution on certain questions in the history of our Party since the founding of the People's Republic of China, we have established the line of thinking that we should free our minds and seek truth from facts, and we have formulated the basic guideline of our Party. In particular, we have taken the major decision of conducting reform and opening-up in China, a decision that is crucial for China's future and destiny. What has happened shows that any practice that we take must be based the experience and lessons we have gained from history and it must serve the people's interests. The practice that we take must be able to stand the test of history and the reality. I believe the people fully recognize this point, and I have confidence in our future.
I have given serious answers to all the questions from journalists and none of my answers is a perfunctory one. It's been three hours. So I suppose we can call it the end of the press conference. Thank you. Goodbye.
The press conference was held at the Central Hall on the third floor of the Great Hall of the People and lasted three hours. After the end of the press conference, Premier Wen Jiabao went to the journalists and shook hands with them. Nearly 1,000 Chinese and foreign journalists attended the press conference.