Excerpts from Hu Jintao interview

01/16/11

Following are excerpts from written answers by President Hu Jintao of China to questions submitted by The Washington Post and The Wall Street Journal, as translated by the Chinese government. A full transcript is posted at washingtonpost.com.

1. How do you view the current state of China-U.S. relationship? What do you see as the most promising areas of mutually beneficial cooperation? . . . What do you see as the major challenges? 

HU: . . . The strategic significance and global impact of China-US relations have been on the rise.

China and the United States have major influence in international affairs and shoulder important responsibilities in upholding world peace and promoting common development. Under the new circumstances, the common interests of our two countries have been growing and areas of cooperation expanding. There is great potential for our mutually beneficial cooperation both in advancing Asia-Pacific regional cooperation and in improving global economic governance and promoting sustainable growth of the world economy; both in expanding cooperation in economy and trade and in strengthening cooperation in new areas like new energy sources, clean energy, infrastructure development and aviation and space; and both in fighting terrorism and preventing the proliferation of weapons of mass destruction and in meeting challenges like natural disasters, food security and major communicable diseases.

We both stand to gain from a sound China-U.S. relationship, and lose from confrontation. We should act in the fundamental interests of our two peoples and uphold the overall interests of world peace and development. We should rise up to challenges, remove disturbances, work for shared goals and promote continuous growth of our relations. I wish to stress the following four points. First, we should increase dialogue and contact and enhance strategic mutual trust. Second, we should abandon the zero-sum Cold War mentality, view each other's development in an objective and sensible way, respect each other's choice of development path, and pursue common development through win-win cooperation. Third, we should respect each other's sovereignty, territorial integrity and development interests and properly address each other's major concerns. And fourth, we should make constant efforts to expand our converging interests so that China and the United States will be partners for cooperation in broader areas.

There is no denying that there are some differences and sensitive issues between us. Both sides should keep to the right direction in the development of our relations, increase exchanges, enhance mutual trust, seek common ground while reserving differences, properly manage differences and sensitive issues and jointly promote the long-term, sound and steady development of China-U.S. relations.

2. Despite the continuous growth of foreign investment in China, some American companies have complained about China's business climate. What steps is China taking to ensure a level playing field for U.S. and other foreign companies in China? 

HU: . . . China will stay firmly committed to the basic state policy of opening-up. We will actively and effectively use foreign investment, improve its structure, diversify its form and open up more channels and sectors so as to facilitate investment. China will continue to improve laws and regulations concerning foreign investment, strengthen IPR [intellectual property rights] protection, promptly address the legitimate concerns of foreign companies and facilitate the growth of enterprises of all kinds in China by offering them a stable and transparent legal and policy environment, a consistent and open market environment as well as a standardized and efficient administrative environment.

3. What lessons do you think can be drawn from the 2008 international financial crisis? What effective measures did China adopt to counter the impact of the crisis? 

HU: This international financial crisis has reflected the absence of regulation in financial innovation. Its root cause lies in the serious defects of the existing financial system. . . .

The international financial crisis has inflicted on China unprecedented difficulties and challenges. To address its impact and maintain the steady and relatively fast growth of the economy, China quickly adjusted its macroeconomic policies, resolutely adopted the proactive fiscal policy and moderately easy monetary policy, put in place a package plan to boost domestic demand and stimulate economic growth, significantly increased government investment, implemented industrial readjustment and reinvigoration plans on a large scale, energetically promoted scientific innovation and technological upgrading, raised social welfare benefits by a substantial margin and introduced a more active employment policy. As a result, our economy in 2009 and 2010 maintained steady and relatively fast growth and contributed to the economic recovery of the region and the world. Looking ahead, China will take scientific development as the main theme and focus on transforming the economic development pattern at a faster pace. We will implement a proactive fiscal policy and a prudent monetary policy, speed up economic restructuring, vigorously strengthen indigenous innovation, make good progress in energy conservation and pollution reduction, continue to deepen reform and opening-up, work hard to ensure and improve people's livelihood, build on the achievements in addressing the international financial crisis, maintain steady and relatively fast economic growth and promote social stability and harmony. China will pursue the win-win strategy of opening-up and stands ready to work with the United States and the international community as a whole to intensify practical cooperation, properly handle various risks and challenges, and make greater contribution to the overall recovery of the world economy.

4. What do you think will be the U.S. dollar's future role in the world? How do you see the issue of making the RMB an international currency? Some think that RMB appreciation may curb China's inflation. What's your view on that? 

HU: The current international currency system is the product of the past. As a major reserve currency, the U.S. dollar is used in considerable amount of global trade in commodities as well as in most of the investment and financial transactions. The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept at a reasonable and stable level.

It takes a long time for a country's currency to be widely accepted in the world. China has made important contribution to the world economy in terms of total economic output and trade, and the RMB has played a role in the world economic development. But making the RMB an international currency will be a fairly long process. . . .

China has adopted a package plan to curb inflation, including interest rate adjustment. We have adopted a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. Changes in exchange rate are a result of multiple factors, including the balance of international payment and market supply and demand. In this sense, inflation can hardly be the main factor in determining the exchange rate policy.

5. . . . Is China's political reform keeping up with the steps of its economic reform? 

HU: . . . In the past five years, China's GDP is expected to have grown at an average annual rate of 11 percent and per capita GDP is expected to have reached US$4,000. Agricultural development accelerated and grain output increased on a continuous basis. Important progress was made in economic restructuring. Development of different regions became more balanced. Urbanization and development of the new countryside was steadily advanced. Good progress was achieved in energy conservation and pollution reduction. And foreign trade enjoyed stable and relatively fast growth. While developing the economy, we continued to put people's interests first and paid more attention to developing social programs and improving people's livelihood. . . . At the same time, we are keenly aware that China is still the largest developing country in the world and we need to make long and hard efforts if we are to build a moderately prosperous society in all respects and basically achieve modernization.

. . . We have always maintained that people's democracy is the life of socialism. Without democracy, there can be no socialist modernization. To develop socialist democracy is a goal we have always been committed to. China's reform is a comprehensive one, covering economic restructuring, political restructuring, cultural restructuring and social restructuring. In the past 30-plus years since reform and opening-up, notable progress has been made in China's political restructuring. The fact that China has enjoyed sustained, rapid economic growth and social stability and harmony proves that China's political system fits China's national conditions and meets the requirement of overall economic and social development.

Political restructuring must deepen in the course of economic and social development and meet people's growing enthusiasm for participating in political affairs. . . . We will continue to expand people's democracy and build a socialist country under the rule of law in keeping with China's national conditions. . . . We will define the institutions, standards and procedures for socialist democracy, expand people's orderly participation in political affairs at each level and in every field, mobilize and organize the people as extensively as possible to manage state and social affairs as well as economic and cultural programs in accordance with the law, and strive for continued progress in building socialist political civilization.

6. China stated it is committed to peaceful development. But in the past year, China has become more assertive. Do you think this will affect China's relations with the United States and neighbors in Asia? 

HU: To follow the path of peaceful development is a solemn commitment of the Chinese government and people to the international community. It is a policy that we will always adhere to . . .

. . . We stand for equality and mutual respect between countries. Like other countries in the world, China must uphold its own sovereignty, territorial integrity and development interests. At the same time, we are willing to properly handle differences and disagreements in state-to-state relations. . . .

. . . Mutual trust between China and other countries in this region has deepened in our common response to tough challenges, and our cooperation has continuously expanded in our pursuit of mutual benefit and win-win outcomes. At present, relations between China and other Asia-Pacific countries face unprecedented opportunities. China is ready to work with other countries to seize opportunities, meet challenges and promote peace and development in the region and beyond.

7. What is China's view on the tension on the Korean peninsula? Does China believe that reunification of the Korean peninsula will bring more stability than maintaining the status quo? How do you view North Korea's goal of building nuclear weapons? 

HU: There was high tension on the Korean peninsula a few weeks ago. China maintained close contact and coordination with other parties and made relentless efforts to help ease the tension and maintain peace and stability on the peninsula. . . . Thanks to joint efforts by China and other parties, there have been signs of relaxation. We hope that the relevant parties will seize the opportunity to engage in active interactions, resume the process of dialogue and consultation as soon as possible, and ensure that the situation on the peninsula will move forward in a positive direction.

As a close neighbor and friend of both the DPRK [North Korea] and the ROK [South Korea], China hopes that the North and the South will improve relations and achieve reconciliation and cooperation through dialogue and consultation and eventually realize independent and peaceful reunification, and we support their efforts in this regard. This is in the fundamental interests of both the North and the South and conducive to peace and stability on the peninsula.

China pays a great deal of attention to the Korean nuclear issue. We stand for achieving denuclearization of the peninsula in a peaceful way through dialogue and consultation to maintain peace and stability of the peninsula and Northeast Asia. For this purpose, China actively advocates and promotes the Six-Party Talks process. . . . I am convinced that as long as the parties respect each other, engage in consultation on an equal footing, and implement the September 19 Joint Statement in a comprehensive and balanced way through the Six-Party Talks, they will arrive at an appropriate solution to the Korean nuclear issue and contribute to lasting peace and stability on the peninsula and in Northeast Asia.

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/16/AR2011011603532.html?sid=ST2011011404809

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