3:57 P.M. EDT

THE PRESIDENT: Good afternoon. Please be seated.Premier Zhu and members of the Chinese delegation, I want to thankyou again for coming to the United States. It is important for theleaders of America and China to meet regularly.

Today we were able to make progress in areas thatbenefit both the American and Chinese people. We had the chance tospeak directly and openly on matters where we have disagreements. Wereviewed our ongoing efforts to enhance the security of both ournations, and to build world peace and stability -- in our efforts toseek peace on the Korean Peninsula, to work with India and Pakistanto curb their nuclear competition, to join in adherence tointernational agreements limiting the spread of weapons of massdestruction.

In that regard, let me say I hope that both our nationssoon will ratify the Comprehensive Test Ban Treaty to end all nucleartesting.

We also discussed our common efforts to increaseprosperity for both our nations. Economic is Premier Zhu's primaryportfolio. With his leadership, China's economy has withstood Asia'sfinancial turmoil and helped to mitigate its impact on other nationsin the region. Now, with Asia's recovery underway, but regionalgrowth still fragile, Premier Zhu has been squarely addressingChina's toughest economic challenges -- reforming state-ownedindustries and financial institutions, rooting out corruption,bringing China into the Information Age, and expanding internationaltrade. These efforts will benefit China and its trading partners,including America's businesses, workers and farmers.

Our nations also will benefit from new cooperativeinitiatives we have agreed upon in recent days -- to develop aprivate housing market in China; to create a U.S.-China dialogue onjob training and labor rights; to support clean energy projects inChina. Today we will sign a civil aviation agreement that willdouble passenger and cargo flights between our countries, bringingjobs and economic activity to both.

And after extensive efforts by our negotiators, Chinahas agreed to direct all its government agencies to use only licensedcomputer software, which will greatly assist our software industry inChina, now the world's fifth-largest personal computer market.Additionally, we have reached an important agreement that will openChina's markets for U.S. exports of citrus, meat products, andPacific Northwest wheat, all highly important for our farmers.

I am also pleased we have made significant progresstoward bringing China into the World Trade Organization on faircommercial terms, although we are not quite there yet. A fairWTO agreement will go far toward leveling the playing field for ourcompanies and our workers in China's markets; will commit China toplay by the rules of the international trading system, and bringChina fully into that system in a way that will bring greateropportunity for its citizens and its industries as well.

Today, we are issuing a joint statement recording thesignificant progress we have made on WTO and committing to work toresolve all remaining issues this year.

Ultimately, to succeed in the market-based,information-driven world economy, China must continue its effortstoward reform. Premier Zhu has worked very hard on them. There isstill work to be done, and we want to support China in its efforts tostrengthen its legal system, impose stronger labor and environmentalprotections, improve accountability, give citizens greater freedomand increase their access to information.

We disagree, of course, on the meaning and reach ofhuman rights, because I am convinced that greater freedom, debate andopenness are vital to improving China's citizens' lives as well asChina's economy over the long run. It is troubling that in the pastyear, China has taken some steps backwards on human rights andarresting people basically for seeking to express their politicalviews. I also regret that more progress has not been made to open adialogue with the Dalai Lama.

We honor China's remarkable achievements, its greaterprosperity and the greater range of personal choices available to itscitizens, as well as the movement toward local democracy. Weappreciate the magnitude of its struggles, far greater than thosefaced by any other country in the world. But the American peopleand, indeed, people all around the world, believe that all personsare entitled to fundamental freedoms that include freedom of speech,religion and association.

I hope that China's leaders will conclude that in theseareas, too, benefits of change outweigh the risks. I hope andbelieve we can make the kind of progress together that will enableboth of us to have the kind of strong partnership that would be verymuch in the world's interest in the 21st century -- a partnershipagainst war and terrorism, against dangerous weapons and crime, farbetter health care and education, for a cleaner environment,achievements in the arts and the sciences, a deepening of democraticvalues and prosperity for all our citizens and indeed, for all theworld.

I have no illusions that cooperation with China canresolve all of our differences. Our countries are too large, ourbackgrounds are too different. Where our interests diverge, we willcontinue to stand for our values and to protect our nationalsecurity. But a policy of confrontation for confrontation's sake, asI said yesterday, will accomplish nothing but the fulfillment of thebleakest prophesies held by people in both the United States andChina.

Yesterday I said we should not see this relationshipthrough rose-colored glasses, nor should we see it through a glassdarkly. We should see it with clear eyes. It is in the interest ofthe American people and the Chinese people that whenever we cancooperate, we should. This relationship, complex though it may be,is profoundly important to the future of every American and everyChinese citizens, and indeed, to all the world.

Premier Zhu.

PREMIER ZHU: Thank you. Ladies and gentlemen, I'd liketo thank President Clinton for his invitation, and now the delegationof the People's Republic of China is visiting theUnited States. And today I'm very honored to join President Clinton,to meet all the friends coming from the press. And I am ready toconvey through the friends from the media my most sincere greetingsand best regards to the American people.

From the moment since I set foot on the American soil,which started from Los Angeles -- when maybe God did not welcome mevery much, for it rained very hard -- but it appears to me that theAmerican people like me. And today, we received a very grand welcomefrom the President and we had a very good talk with the President andhis colleagues. And at noon, I also attended a very grand luncheonhosted by Secretary Albright, which was an opportunity for me to meetmany old friends.

I believe that our talks were frank and candid, and theywere constructive and fruitful. Naturally, the result has not beenmeasured by how many agreements we may have reached -- I believewe've already reached quite a number of agreements. What is the keythat the PRC delegation is able to have the opportunity of meetingpeople from different walks of life in the United States and that wecan have an opportunity to talk directly to the American people toexplain to them what is our views.

As I said in the morning, it is not that only friendswho say yes to you are good friends; we believe that maybe thefriends who are able to say no to you are the best friends for you.

And from Washington, I will also travel to Denver, toChicago, to New York and to Boston where I will meet quite a lot offriends from the United States. I'm ready to talk to them, and I'malso prepared to argue, to debate with them. I believe by doing so,we will be able to promote the communication and mutual understandingbetween our two peoples, thus promoting the relationship between us-- or, rather, the objectives of working to build a constructivestrategic partnership between the two sides as opened up by the twoPresidents, and also to continue to develop the friendship betweenus.

As the President said earlier this morning, we alsoreached certain agreements on the WTO question, and we shall issue ajoint statement. On this question and also on these areas we'vealready agreed upon, such as on the agricultural questions, we willsign certain agreements. In my view, all these will further promotethe development of friendship and cooperation between China and theUnited States.

And today I am ready to answer your questions in a verycandid manner. But as the Premier of China, I took my office only onthe 17th of March last year, and today is my first time to experiencesuch press conference -- so my heart is now beating. (Laughter.)I'm not as experienced as the President, because the President isvery experienced in dealing with you. (Laughter.) I'm not thatexperienced, so should I say something which is not appropriate verymuch, I do hope that you will exercise certain leniency and try topromote what is good and try as much as you can to cover what may notbe that appropriate. Thank you. (Laughter.)

Q Thank you, Mr. Premier. As a matter of fact,before your visit to the United States, and also since you set yourfoot on the American soil, many of our leaders have such a question-- that is, given such difficulties that the China-U.S. relationsencountered, why did you still decide to visit the United States asscheduled? What are your real thoughts? And how do you thinkChina-U.S. relations should develop at the turnof the century?

PREMIER ZHU: Are you asking me to tell you the truth?To tell you the truth, I was really reluctant to come. (Laughter.)Two days before my departure from China to the United States, Ireceived two congressional delegations from the United States, oneheaded by Mr. Thomas, the other by Mr. Roth. All together, more than20 senators and congressmen were at the meetings. I said to them, asthe current political atmosphere in the United States is soanti-China, I really lack the guts to pay the visit to the UnitedStates at present. And they told me that you should go; we welcomeyou, because we Americans like your new face.

I said, my old friend, Ambassador Sasser told me he wasgoing to go back to the United States before me and he was going toeach and every place that I was going to visit to introduce me to thelocal people and also to promote my trip. And he also told me thathe was fully prepared to be even beaten black and blue, and maybewith a bandage wrapped around his face when he saw me in the UnitedStates. Then I said, even your Ambassador Sasser, an American, hadsuch a risk of being beaten black and blue, then what would my fatebe as a Chinese? Will my new face be turned into a bloody face?(Laughter.)

The senators and the congressmen didn't give me anyguarantee. But President Jiang Zemin decided that I should comeaccording to a schedule, and he is number one in China so I had toobey him. Now, I can tell you that I am now in a much better moodthan when I was just about to make the trip, because since I came tothe United States I've seen so many friendly faces and I've beenaccorded very warm welcome and reception.

I believe that through my current visit to the UnitedStates I will be able to contribute some of my part to the continuedgrowth of the friendly relations and the cooperation between Chinaand the United States. And more than that, I will also be able toget more understanding from the American people and maybe developmore consensus with the American side on the issues over which westill argue.

And we'll also be able to conclude several agreements inthe economic field -- for instance, on SPS. And, actually, ournegotiations in the field of WTO have been going on for 13 years.And on the part of the Chinese side, we have already made a lot ofconcessions. For instance, in the are of TCK wheat, now we havealready agreed to lift the ban on the exports of wheat from sevenAmerican U.S. states to China. And now we have also decided to liftthe restriction on the export of citrus from four states of theUnited States, including California, to China.

On the question of China's accession into the WTO, in myview, the gap between the two sides is really not very significant.Maybe Mr. President does not quite agree with me on that; their sidestill believes that the gap is significant. So that's why at presentwe are only in a position to sign a joint statement instead of a fullpackage agreement.

If you want to hear some honest words, then I should saythat now the problem does not lie with this big difference or biggap, but lies with the political atmosphere. But we are veryoptimistic about the prospect of the development of friendlyrelations and the cooperation between China and the United States.

As I said this morning, I don't think there's anyproblem or question between our two countries that cannot be resolvedsatisfactorily through friendly consultations.

As for some other issues, such as human rights and theDalai Lama, President Clinton mentioned all these issues in hisopening remarks. I think we have enough time to argue over thesequestions, so I don't want to dwell on these questions long here.

Q Mr. President, I have a three-part question on --(laughter) --

THE PRESIDENT: You learned from her, right?

Q -- on Kosovo. Solana says that there are ongoingdiscussions on ground troops. Has the U.S. position changed?Question two: Has the Cypriot intervention helped to pave the wayfor the release of the American servicemen? And, three: IsMilosevic a war criminal by Nuremburg standards?

THE PRESIDENT: The answer to the first question is,no, I believe our present strategy will work if we can keep theallies with it. The answer to the second question is, I don't know.I hope so. We would like to see the servicemen released because theynever should have been detained in the first place. They were inMacedonia; they had nothing to do with the operations against Serbia.And I would be for anything honorable that would secure theirrelease, obviously.

The answer to the third question is that that is,strictly speaking, a legal decision that has to be made, but Icertainly think it should be looked into.

Q Why are nine commanders named by the StateDepartment to be possibly indicted, and you don't mention Milosevic?

THE PRESIDENT: The answer to that is, I'm not sure.The question I want to emphasize to you is, when you start talkingabout indicting people there are laws, there are standards of proof,there are coverages, there are all those issues. We have asked thatthis be looked at.

What we do know is this. Let's look at what we know.What we know is that by a deliberate policy he has caused hundreds ofthousands of people to be refugees. We know that thousands ofinnocent people have been killed -- defenseless, completelydefenseless people. We know that people were herded up and pushed tothe borders and pushed over the borders. And today you all havestories saying that the same borders that people were herded up andpushed over or pushed up next to are now being mined, so if they tryto get across them to save their lives they can be blown up.

We know that he supported, strongly, the Serbian actionsin the Bosnian War, which led to the deaths of over a quarter millionpeople and over 2.5 million people being made refugees.

Now, the important thing to me is to stop the killing,to stop the exodus, to see the refugees return, to see them safe, tosee a political solution that gives them the autonomy that they werepromised, to have an international peacekeeping force that willprevent this from happening again.

But I have been very clear, Helen -- I think quiteunambiguous that, on the war crimes issue, that is something -- wehave a tribunal set up for that. We have people whose job it is isto make that determination. They should examine it and make thatdetermination.

And I think that's all that is appropriate for me tosay, because it's not my job and I'm not a legal expert on thatquestion. But I do think that the facts are clear. The humanitariansuffering and loss here is staggering, and it is a repeat of what wesaw in Bosnia. And it is his direct political strategy for firstgetting, and then maintaining, power. And the human loss has beenbreathtaking.

Q Seven hours before you landed in Andrews Air ForceBase yesterday, President Clinton made a foreign policy speech inwhich he mentioned the sending of carriers to the waters in theTaiwan Straits in March 1996. And he said that that move had helpedmaintain the security in the Taiwan Straits. So, in your view, howdo you see the effect of the military capabilities of the UnitedStates on the situation across the Taiwan Straits? And do you thinkthere should be a timetable for the reunification of the mainland andTaiwan of China? And do you wish to pay a visit to Taiwan?

PREMIER ZHU: The policy of China and the reunificationof the mainland and Taiwan of China is a very clear-cut one and thePresident Jiang Zemin has already expounded on China's policy in thisregard. So I don't see the need for me to reiterate here.

Since the return of Hong Kong to the motherland, thepolicy of one country, two systems, Hong Kong people administeringHong Kong, Hong Kong enduring a high degree of autonomy, have beenfully implemented, which is a fact there for the people in the entireworld to see. And our policy for the reunification of China withTaiwan is more generous than our policy towards Hong Kong. That isto say, Taiwan will be allowed to maintain its army, and we're alsoprepared to let the head of Taiwan come to the central government toserve as the deputy head.

But as for whether he or she is able to be the head,then I'm not sure. But I'm afraid it would not get enough votes.Nobody would vote for him.

On the question of the reunification, the Chinesegovernment has repeatedly stated that we strive for a peacefulreunification of the motherland, but we have never undertaken torenounce the use of force in this regard. Because if we were to makesuch a pledge, make such an undertaking, then I'm afraid that Taiwanwould be in the perpetual state of separation from the motherland.

Just now, in the Oval Office of President Clinton, I sawthe portrait of President Abraham Lincoln. Abraham Lincoln, in orderto maintain the unity of the United States and oppose independence ofthe southern part, he had resorted to the use of force and fought awar for that, for maintaining the unity of the United States. So Ithink Abraham Lincoln, President, is a model, is an example.

As for whether I'm going to visit Taiwan, since none ofthem have issued an invitation to me, so how can I go there and inwhat capacity should I go there? I hope you will also help me tothink of this. (Laughter.) Thank you.

THE PRESIDENT: I think I have to say just one thing, ifI might -- since I got zapped by Abraham Lincoln. (Laughter.)First of all, the United States has a one-China policy and I havereaffirmed that at every opportunity. I do so again today.

Secondly, we believe that this matter should be resolvedpeacefully. The facts of the relationship between Taiwan and Chinaover the last 50 years are somewhat different than the facts leadingup to the American Civil War, as I'm sure that you would all agree.

It does seem to me that China and Taiwan, apart from theblood ties of being Chinese -- even the native Taiwanese -- that youhave a lot to offer each other, including economic power, but beyondthat as well.

And so I hope that we will see a resolution of this.And I think if the Premier is as humorous and clever in Taiwan as heis here, I think it would be a good thing for him to go. (Laughter.)

PREMIER ZHU: President Clinton's black and blue.(Laughter.)

Q A question to the Premier. Sir, how do you respondto charges that China stole nuclear warhead designs and perhapsneutron bomb technology from the United States, and also funneledhundreds of thousands of dollars to President Clinton's reelectioncampaign? (Laughter.)

And, Mr. Clinton, do you find any of these chargescredible? And what do you say to criticism that your policy ofengaging China has benefited China, and not penalized them at all forhuman rights abuses, trade problems, and espionage?

PREMIER ZHU: In the capacity of the Premier of theState Council of the People's Republic of China, I'd like to make avery solemn statement here that I have no knowledge whatsoever of anyallegation of espionage or the theft of nuclear technology. And Idon't believe such a story.

I've also asked President Jiang, and he does not haveany knowledge of that at all. It is not the policy of China to stealso-called "military secrets" from the United States. And I don'tthink there can be such a problem, given the tight security measuresin the United States and advanced technology. Although, it seemsthat to the technology, with regard to this microphone, is not thatadvanced. (Laughter.)

I think it's entirely impossible for China to have anyeffective -- or to steal any nuclear technology or military secretsfrom the United States effectively under such conditions, such tightsecurity measures.

In the scientific exchanges between scholars of our twocountries, they may have some exchanges concerning defensetechnologies. But I don't believe that such exchanges will involveany substantive or key technologies.

As a senior engineer, I've been in charge of theindustry in China for more than 40 years, and I have never known anyof our most advanced technology came from the United States. But thetechnology development, or technologies, are the common heritage orcommon property of mankind. And in scientific inventions, actually,all roads lead to Rome. And in terms of the missile and the nucleartechnologies, indeed, we have learned that from foreign countries.

While in the area of missile technology, the pioneer inChina is Mr. Tienjasen (phonetic), who returned from the UnitedStates. And in terms of the nuclear technology the pioneer in Chinais Chenseng Chung (phonetic), who returned from the lab of MadamCurie of France. But I can assure you that when they returned back,they didn't bring back even a piece of paper; they just brought backwith them their brains.

That's why I said at the press conference last Marchthat I hope you don't underestimate your own ability, your ownsecurity ability, or your own ability to keep secrets, and don'tunderestimate the capability of the Chinese people to develop theirown technology.

At a luncheon hosted by the mayor of Los Angeles, thewife of the mayor asked me, how are you going to celebrate the 50thanniversary of the founding of the People's Republic? I told herthat we planned to hold a very grand military review and also thelatest weaponry will be on display. And I also told her that all theweaponry are developed by China itself, not stolen from the UnitedStates. The wife of the mayor gave me advice, and she said, maybeyou should put a sign on the weaponry, the missiles, that say, "Madein China, not from the United States." I appreciated her sense ofhumor very much, and I said, that's a good idea. (Laughter.)

Mr. Clinton stated in the speech that the United Stateshas more than 6,000 nuclear missiles, while China only has less thantwo dozen. I think he knows better than I do. I, to tell you thetruth, don't know the exact number of missiles that we have.(Laughter.) Although I do not know the exact number of our missiles,I agree with you in your conclusion -- that is, we have a very smallnumber of missiles, and you have a very large number. So China doesnot constitute a threat whatsoever to the United States.

On the allegation of political contributions or campaignfinancing, I can also state in a very responsible manner here thatneither I, nor President Jiang Zemin, know anything about that. Andwe, too, also once asked the senior military leaders in China, andthey told us they didn't have any knowledge of that.

I think this shows that some Americans really hadunderestimated us. If the political contribution were to be reallythat effective, then now I have $146 billion U.S. of foreign exchangereserved, so I should have put out at least $10 billion U.S. for thatpurpose -- why just $300,000? That would be too foolish.(Laughter.) I've learned that some people have spent a lot inlobbying here, but I never believed such rumors.

I think through such mutual discussions and evendebates, we can develop consensus and reach agreement on many issues.That will serve the interests of both the Chinese and Americanpeoples. And we also trust the American people and we, actually, wehave never and we would not do such kind of thing.

THE PRESIDENT: Let me respond to the question you askedme. First of all, with regard to the two issues, the campaignfinance issue and the espionage allegations, I raised both theseissues with Premier Zhu last night. He gave me the same answer hejust gave you today. And my response was that I hope that he and hisgovernment would cooperate with these two investigations. You know, China is a big country with a big government.And I can only say that America is a big country with a biggovernment, and occasionally, things happen in this government that Idon't know about. And so I think it's important that we continue theinvestigation and do our best to find out what happened, and I askedfor his cooperation.

Now, as to the second part of your question, which is,what do we get out of this -- the sort of anti-China crowd in Americasays. First of all, the implication is that if someone wants to havea relationship with us, they should agree with us about everything --that's just not going to happen.

But I would like to point out the following things.Because of our cooperation with China, we have lessened the tensionson the Korean Peninsula for several years, China has participatedwith us in any number of arms controlinitiatives, including an agreement to restrain its transfers ofdangerous weapons and technology to other countries. China is asignatory to the Comprehensive Test Ban Treaty, and China has workedvery hard, as I already said, to stabilize the Asian economy at atime when it was not only hurting people in Asia, but it wasbeginning to affect the American economy. So we get quite a lot outof our cooperation with China.

Last point. When you say, what do we get out of it? Hecould have people asking him that in China. They could say, it isthe United States, not the European Union, that sponsors the humanrights resolution. The United States has stricter controls ontechnology transfer to China than any other country with which itdeals -- both of which are true.

But let me just give you one final example -- take theWTO. How could it possibly serve America's interests not to openmore Chinese markets to America's workers and businesses and farmers?They have a much bigger share of our market, in terms of exports,than we have of theirs. How could it possibly be against ourinterest to bring more Chinese into contact with more Americans, andto give more opportunities for America to honestly compete in theChinese market?

I think it is clear that the more we work together andtalk together, and the more China is involved with the rest of theworld, the more likely we are to reach positive outcomes. That isthe logic of the policy, and the logic of what we are doing inparticular on WTO.

PREMIER ZHU: I agree to cooperate with your side ininvestigation, so long as you can provide some clues. And no matterwho it may involve, we will investigate it.

I'd like here to respond to what President Clinton saidon WTO. He said that to allow China in the WTO will be in the bestinterest of the American people. And I want to say that althoughChina has made the biggest concessions, that will also be in theinterest of the Chinese people. Many Hong Kong newspapers say thatI've come to the United States to present a very big gift. I don'tthink such a suggestion is right. I'm sorry, I'm afraid I'veoffended the press. (Laughter.)

Because if China wants to join the WTO, wants to beintegrated in the international community, then China must play bythe rules of the game. China cannot do that without makingconcessions. Of course, such concessions might bring about a veryhuge impact on China's national impact on some state-ownedenterprises, and also on China's market.

But I have every assurance to say here, thanks to theachievements made in our reform and opening up process, we will beable to stand such impact. And the competition arising from suchimpact will also promote a more rapid and more healthy development ofChina's national economy.

Here I'd like to call the attention of the Hong Kongpress people. In your future reports, don't ever write things like"present a big gift," because that would be interpreted -- equivalentto a political contribution or campaign financing. That would bevery much detrimental to President Clinton. (Laughter.)

Q I'm a correspondent with CCTV China. Recently,there has been much talk within and out of China about China'seconomic development, reform and opening up policy. So, Mr. Premier,would you please make some observations on the current state ofChina's economy and the prospect of economic development in China.

And what impact do you think China's economic development will haveon the stability and the development of the economy in Asia and theworld at large?

PREMIER ZHU: Last year, China's economy experiencedextreme difficulties due to the Asian financial crisis and thedevastating floods hitting some areas in China. But we have tidedover these difficulties and managed to achieve a 7.8 percent growthof our GDP. And we have maintained a policy of not to devaluate theR&B currency. And the prices in China have been maintained basicallystable and some have somewhat declined or have dropped.

As for the economic development in China this year, manyforeigners are predicting that China will be the next to be hit by aneconomic crisis. But I don't think that will be the case. This yearthe projected GDP growth is 7 percent; but in the first quarter ofthe year the growth rate was 8.3 percent. So I expect China'seconomic development this year to be better than that of last year --not in terms of the speed, simply in terms of speed, but in terms ofthe economic efficiency, economic results.

Secondly, some foreigners are saying that China'seconomic reform has come to a stop. I wish to state here in veryexplicit terms that last year, instead of coming to a standstill,China's reforms made greater progress than originally planned.

Firstly, in terms of the reform of the governmentinstitutions, last year we set the objective of cutting the size ofthe central government by half in three years time -- that is, from33,000 people to 16,000 people. And this objective had been realizedlast year, just in one year. Apart from 4,000 governmentfunctionaries who have now gone to universities or colleges forfurther study, all the rest have been re-employed by other sectors,by enterprises. And so I think that represents a very majorachievement.

And this year, we plan to press forward the reform ofthe local governments. We also plan to cut the size of the localgovernments by half in three years time -- that is, to cut from 5million people to 2.5.

Certainly, some foreigners are saying that there is avery serious problem of unemployment in China, a lot of people havebeen laid off from state-owned enterprises and this has caused asocial instability in China. I think anybody who has been to Chinawill know that this is not true.

In the beginning of last year, indeed, there were 10million laid-off workers or unemployed workers. Thanks to ourefforts over the past year we have put in place a social securitysystem. Now all those laid-off workers or unemployed workers can getbasic living allowances. And many of them have been re-employed.Now there are 6 million unemployed or laid-off workers who are inthose re-employment service centers waiting for being re-employed.

While the establishment of such a social security systemis very helpful to our efforts to revitalize, rejuvenate thestate-owned enterprises by introducing shareholding system into thelarge state-owned enterprises, and also to reform the small and themedium-sized enterprises in various ways, including to privatize someof the small ones.

Lastly, China now is introducing an unprecedented reformin its banking system. We are drawing on the experience of the RTCin the United States to form the Assets Management Companies in Chinato handle the non-performing loans of the state-owned banks. Ibelieve that such reform is conducive to turning the state-ownedcommercial banks into genuine commercial banks, and is also conduciveto helping enhance the ability of the central bank to supervise andto regulate according to international practice.

So here, I'd like to say that China's RMB will not bedepreciated and it will remain stable. So here, I'd like to call onthe American business people to go to China for investment. You willnot face the risk of devaluation of RMB. If you don't believe me,then I would take the advice from Professor Milton Miller of ChicagoUniversity. He advised me to offer a put option to those who don'tbelieve me.

Thank you very much.

THE PRESIDENT: Larry?

Q That was tough.

THE PRESIDENT: That was real statesmanship.(Laughter.)

Q I think it was more of a ham, but -- I havequestions for both you gentlemen. Mr. Premier, as you know the U.S.State Department issued a rather scathing report on human rightsabuses in your country, and the United States is in the process ofsponsoring a resolution before a U.N. group to criticize human rightsin your country. Do you consider these assessments totally unfair,or do you think it's possible that there are problems within yourcountry that need to be corrected?

And, President Clinton, at your last formal newsconference, you spoke about the problems, or at least allegations, ofChinese spying, and you said that it mainly dealt in the 1980s, thatthere were no indications that it involved your presidency. In thewake of today's New York Times report, can you still make thatstatement? Or are you concerned that perhaps you were misled, or hadinformation withheld from you about the extent of the allegations?

PREMIER ZHU: Me first? (Laughter.)

THE PRESIDENT: You're the guest. (Laughter.) PREMIER ZHU: Thank you. Firstly, I wish to say I'mfirmly opposed to the U.S. tabling of a draft resolution directed atChina at the Human Rights Commission session. I not only regard thatas unfair, but also take it as an interference in China's internalaffairs.

I wish to make three points here. Firstly, China hasmade very big progress in the human rights area over the past severaldecades since the founding of new China. And the Chinese peopletoday enjoy unprecedented extensive democratic and political rights.

Through certain legal procedures, through certainprocedures, the Chinese people can voice their criticisms of thegovernment and they can also exercise supervision over thegovernment. And they can express fully their opinions. And in myview, in terms of the freedom of speech and freedom of press, Chinaindeed has made very great progress.

Secondly, I also think that we should put the questionof human rights in a historical perspective. And I think differentcountries may have a different understanding of this question. Interms of the human rights concept, Mencius, who lived in a periodmore than 2,000 years ago in China, he stated that people are themost important and the most precious, while the state is next tothat, and the emperor or the kings are the least important. So thatkind of thought was much earlier than Rousseau of France, and thenthe Human Rights Declaration of France.

And also, different countries have different conditions,and human rights, actually, is also a concept that has evolved inhistory. In terms of per capita income, the per capita income of theUnited States is 20 times that of China. And also, in terms ofeducation, the ratio of university graduates in the United States, inits total population, is higher than the ratio of the illiteratepeople, plus the primary school graduates to the total population inChina. So given such different levels of education and also income,it's natural that people may have different concepts of human rights.

For instance, if you want to talk about human rights toa very poor person, maybe what he is more interested in is -- if youwant to just talk to him about direct election. But maybe that's notwhat he is most interested in. What he is interested in most is theother aspects of human rights, such as the right to education, theright to subsistence, the right to development, the right to acultural life, and the right to medical care, health care. So Ithink human rights actually include so many aspects.

So I think every country has its own approach inimproving its human rights. One should not be too impatient, but totell the truth, I'm more impatient than you are in how to further,constantly improve the human rights in China.

Thirdly, I concede that there is room for improvement inhuman rights conditions in China. As you may know, China has ahistory of several thousands years of a feudal system, feudal society-- so people have very deep-rooted concepts influenced by thishistorical background. It's quite difficult to change such mentalityor concept overnight.

And also in China, the legal workers, the people workingin the legal and the judicial field, some of them are not thatqualified, are not that competent -- so sometimes in dealing withcertain cases they need to improve their work. So under suchconditions it's really not realistic to demand a very perfectpractice in the human rights field.

So we are willing to listen to you and we are willing tohave channels of dialogue on human rights question. We don't want tostage a confrontation in this regard.

Actually, in China, when I received some foreignvisitors, they tend to put forward a list of so-called dissidents andask me to release these people. Well, actually, we took this mattervery seriously and we have looked into all these cases, and if wefound that the person on the list has not committed any criminaloffenses, then we will just release him.

Well, before I came to the United States, many of myfriends mailed me a lot of materials in which they contained a lot ofinformation about the problems of human rights in the United States.And they urged me to bring such materials to President Clinton, but Ihaven't brought them with me. I don't want to hand that over toPresident Clinton because I trust you are able to resolve your ownproblems.

THE PRESIDENT: Actually, sometimes we could use alittle outside help, too. (Laughter.)

Let me say, first of all, in response to the questionyou raise, I read The New York Times article today, and while I can'tcomment on specific intelligence reports as a matter of policy, Inoted that even the article acknowledged that the alleged espionagemight not have been connected to the national labs, which is thequestion I was asked in the press conference.

But let me say, I've looked into it and we're doing ourbest to resolve all outstanding questions. And I've asked the lawenforcement agencies to try to accelerate their inquiries insofar asthey can.

The real issue is, and one that we made perfectly clearlast week, is that for quite a long while, from the '80s coming rightup through the time I became President, the security at the labs wasinadequate. And I think it grew out of, partly, the kind of dualculture of the labs -- part of their great centers of science andlearning, and they've done a lot of path-breaking work in energy, andalternative sources of energy, and computer processing, and the useof software for all kinds of very important non-defense matters --while maintaining their responsibilities in the nuclear area.

And to me, the most important thing of all now --besides finishing the investigations in an appropriate way -- ismaking sure we get the security right. You know that I signed thatexecutive order in early 1998. You know what Secretary Richardsonhas done recently. And I have also asked the President's ForeignIntelligence Advisory Board Chairman, Senator Rudman, to head abipartisan panel to look into what we have done, and to tell us if wehaven't done enough and what else we ought to do.

So I think the most important thing now is to recognizethat for quite a long while, the security at the labs was notadequate, that we have been moving to do a lot of things in the lastyear-plus, that we have much more to do -- perhaps -- and we askedsomebody to look into it, and then to do these investigations and dothem right, and do them as quickly as possible.

THE PRESS: Thank you.

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