Last updated at: (Beijing Time) Monday, June 30, 2003

Major Points of Premier Wen's Speech

The Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA) is a special arrangement under the "one country, two systems" principle and the World Trade Organization (WTO) framework, said Chinese Premier Wen Jiabao in Hong Kong Sunday.


Premier Wen Delivers Speech
The Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA) is a special arrangement under the "one country, two systems" principle and the World Trade Organization (WTO) framework, said Chinese Premier Wen Jiabao in Hong Kong Sunday.

Delivering a speech when meeting with people from various communities in Hong Kong after the signing ceremony of CEPA Sunday afternoon, the premier said the arrangement embodies a closer economic relationship between China as a sovereign state and Hong Kong as a separate customs territory, and demonstrates the care and support for Hong Kong from the Central Government and the fellow folks of the motherland.

"I hope that this arrangement will bring more opportunities to Hong Kong's business communities and provide some practical help to Hong Kong's economic recovery and growth," he said.

Wen also said CEPA represents only the first step towards a closer economic partnership between the Mainland and Hong Kong, adding that "In future, we should not only implement this arrangement in earnest but keep up our study in light of the new developments and update our policies and measures."

"In the meantime, we should step up efforts to promote economic cooperation between Hong Kong and the Pearl River Delta in particular," Wen added.

The premier reiterated that the Central Government will unswervingly commit itself to the policies of "one country, two systems," "Hong Kong people administering Hong Kong" and a high degree of autonomy and the Basic Law of Hong Kong.

"This is the message I have come to convey," he said, adding that "these set policies of the Central Government towards Hong Kong will not change."

In the first half of the year, China's economy withstood the challenging test from the Severe Acute Respiratory Syndrome (SARS), said Premier Wen.

Wen said the economy was off to a good start in the first quarter, characterized by a 9.9 percent GDP growth, continued expansion of agriculture and industries, rapid increases in fixed asset investment, import and export trade and utilization of overseas capital, and steady rises in consumption.

In the two months of April and May, however, SARS quickly spread in some regions and the country's economic life was severely affected, with Guangdong, Beijing and Northern China especially hard hit, Wen noted.

The premier said the most direct problems were disrupted logistics, reduced consumption and impeded exchanges with the outside world.

"Insofar as we can tell, part of SARS economic aftermath has already appeared, yet we may still experience more as time goes by," he said.

However, the premier stressed, "While SARS may have slowed down our economic growth in the second quarter, it did not, given its fleeting and parochial impact, hurt our economic fundamentals overall, nor has it altered the trend of relatively high economic growth in our country."

He said the economic indicators of the hard-hit sectors began to show a rebound.

"According to our preliminary estimate, China's GDP in the first half of the year will grow by over 8 percent, and this year's target of 7 percent growth rate is attainable," he said.

The premier said that the Party Central Committee and the State Council adopted a two-pronged approach in face of SARS.

"On the one hand, we focused our attention and energy on fighting SARS, while on the other, we continued to unswervingly pursue economic development," he said.

Wen said the economy and people's life in the Mainland are coming back to normal and the disease control work is shifting to the law-based, scientific, standardized and orderly track after the World Health Organization lifted the travel advisory on Beijing and the removal of Beijing from the list of areas with recent local transmissions on June 24.

In terms of promoting economic growth, a series of targeted steps has been taken in a timely manner, Wen said.

For those hard-hit sectors, short-term support measures were introduced, such as tax breaks, reduced administrative fees, loan subsidies, etc., he said, adding that efforts have also been made to increase investment volume and optimize investment structure, guide and stimulate consumption, and cultivate new growth points.

"We also endeavored to improve our performance in export trade and attracting overseas investment, promote employment in export trade and attracting overseas investment, promote employment and social security and show greater care to the life and work of people in difficulty," Wen said.

"These measures have achieved marked results," said the premier.

China will plan carefully, taking into consideration both current tasks and longer term needs, in order to roll back the aftermath of SARS and maintain a rapid, sustained and sound economic development, said Premier Wen.

Wen said that China will focus on the following four aspects for the near term.

First, to expand domestic demand and readjust the economic structure.

"Be it to overcome immediate difficulties or to achieve long-term development, expanding domestic demand should always be the fundamental guideline we must follow," said Wen.

At present, such a task requires China's redoubled efforts to readjust the economic structure. China needs to do a better job in a number of key engineering projects that have a major bearing on the overall development of the nation, step up technological innovation of enterprises and give support and guidance to those industries and sectors that can significantly contribute to economic growth, said Wen.

"We must invest more in the development of the public health system and rural infrastructure, and follow through on the preferential measures for the hard-hit sectors and enterprises with action plans to hasten their reinvigoration," he said, adding centers of disease control (CDCs) will be established at both central and local levels.

Second, to take an overall and coordinated approach for balanced development. The most important lesson China has learned from fighting SARS is that throughout the entire process of modernization, it is imperative to follow an overall and coordinated approach, striving to achieve a harmonious development between the economy and society, between the urban areas and rural areas, and between the different regions and localities, and to achieve a harmonious coexistence between mankind and Mother Nature, Wen said.

The premier said China should redouble the efforts to accelerate the development of education, health care, culture and other social undertakings. Right now, China is working on plans to quicken the building of the public health system, increase support for agriculture and rural development, continue the implementation of the western development strategy, speed up the readjustment, innovation and rejuvenation of the old industrial bases and move ahead needed interactions between the country's eastern and western regions.

China should also strengthen the protection of environment and ecosystem and achieve sustainable development, he added.

Third, to deepen reform and open still wider to the outside world. Through careful study and summing up of past experience, China is in the process of formulating new measures of deeper and more comprehensive reforms in keeping with the requirement for a more mature socialist market economy, Wen said.

These include implementing multiple effective methods of realizing public ownership, faster development of individual, private and other non-public sectors, better modern market system allowing greater exercise of the fundamental role of the market in allocation of resources, deepened reforms of state-owned enterprises, the financial system, taxation and the investment and banking system, faster transformation of government functions, better macro economic control and regulatory system and improved government performance in social management and public services, he said.

The premier said that China will deepen reforms in foreign-related economic systems, putting in place a stable, transparent and unified system of management and a regime of laws and regulations in this regard and fully honoring China's WTO commitments. China will continue to implement the opening-up strategy featuring both "bringing in" and " going global" programs.

Fourth, to promote employment and improve people's living standards. Shortage of jobs has always been a big problem in China's economic and social development, and SARS has made the situation even worse, Wen said.

As the issue bears so critically on the vital interest of the people, China has taken and will continue to take forceful policy measures to generate jobs mainly by developing labor-intensive industries that have a promising market prospect, supporting small and medium-sized enterprises, helping the individual, private and other non-public enterprises to grow and cultivating a sound environment and mechanism for employment, said the premier.

China will strive to increase the income of urban and rural dwellers, farmers' income in particular, improve the social security system, show greater care for the needy and improve the material and cultural life and the health standards of all the people, he said.

China has entered a new development stage of building a well-off society in an all-round way and accelerating its socialist modernization drive. "We must adapt to the larger trend of economic globalization and scientific and technological advancement, grasp firmly the strategic opportunities of great promises and build China into a better country with our dedicated work," said Wen.

The key to fundamentally solving Hong Kong's economic problems lies in faster development, said Premier Wen.

"I should have come to Hong Kong earlier when Hong Kong was experiencing the hardest time in fighting against SARS," said Wen.

He said that in the six years since returning to the motherland, Hong Kong has gone through one challenge after another. The Government of Hong Kong Special Administrative Region headed by Tung Chee Hwa has united the people in Hong Kong and succeeded in maintaining economic, financial and social stability by steering clear of the brunt of the Asian financial crisis and overcoming the woes of the world economic slowdown.

"This is no easy job," said Wen, adding that "this year, Hong Kong, like the Mainland, was under severe attack from SARS. In the face of new difficulties, the SAR Government responded with calm confidence and resolute measures and our Hong Kong compatriots showed an unprecedented solidarity. They won their tough battle against SARS with flying colors. Thanks to the SAR Government's economic stimulus and relief package, Hong Kong's economy is beginning to show signs of recovery."

Needless to say, the Hong Kong economy still has its problems and difficulties, which are well understood by the SAR Government and personages of various communities. The main problem in Hong Kong's economy is one of structure, which has come to its present magnitude after long years of accumulation, said Wen.

The high unemployment rate and rising fiscal deficit, for example, are all symptoms of an unhealthy economic structure. "We should not overlook our difficulties, but we must not lose sight of the favorable conditions, including the advantages and potentials of Hong Kong's development," Wen said.

Wen stressed that Hong Kong should give fuller play to her advantages and maintain her special characteristics.

Hong Kong is the world's most open free port, a center of international finance, trade and shipping, a hub with extensive economic links with the rest of the world and a city with highly developed infrastructure, advanced market system and fairly sound system of law, he said.

More importantly, Hong Kong can look to the Mainland for backup. Under the "one country, two systems," Hong Kong not only maintains her various systems and advantages, but also benefits from inexhaustible opportunities, greater development space and stronger support from a growing and more prosperous Mainland, Wen said

Hong Kong's economy will surely regain its vigor and splendor if it can give fuller play to its inherent advantages, retain its characteristics as a free economy, invigorate its vitality, enhance its attractiveness to international investors and upgrade its global competitiveness, said Wen.

He said that Hong Kong should readjust structure and optimize the industries. The existing industries in Hong Kong played an important part in shaping Hong Kong's economic prosperity. However, with the dazzling changes in world economy and the development of science and technology, Hong Kong needs to readjust her industrial structure in light of the new circumstances.

People from various Hong Kong communities have worked hard on this in recent years. The service sector should be further readjusted, developed and upgraded, so that it can better play its role as a leader in Hong Kong's economic revitalization. In the meantime, adequate attention should be given to diversifying industrial development, optimizing industrial structure, developing high value-added new industries, nurturing new economic growth points, opening new sources of government revenues, creating more jobs and improving people's welfare, said Wen.

He added that Hong Kong should work hard and be enterprising. Hong Kong's prosperity is a result of generations of hard and creative work under tough conditions. The Hong Kong people should count on this character of theirs to overcome the present difficulties and achieve economic revitalization.

"As an old saying goes, 'difficulties and hardships are what it takes to make a man great.' Our Hong Kong compatriots had a history of rising to challenges. And Hong Kong is now faced with anew opportunity of accelerated development. As long as people in Hong Kong reaffirm their confidence, seize the opportunities and put up a concerted fight, they will overcome the difficulties and put the Hong Kong economy back on its feet," said Wen.

"I am convinced that nothing can stop Hong Kong's march towards greater prosperity and progress. Hong Kong, the proud pearl of the motherland, will shine even more brilliantly in the future," Wen concluded.

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