China’s Wen Urges Political Reforms as Parliament Closes

Posted March 14th, 2012 at 3:30 am (UTC-5)
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China's premier has stressed the need for political reform to secure economic progress and head off the threat of social instability in what was likely his last major news conference before retiring next year.

Mr. Wen spoke to reporters Wednesday after the close of the annual meeting of the National People's Congress in Beijing. He said that without political reform, China risks the sort of disruption that occurred during the violent Cultural Revolution from 1966 to 1976.

“Without a successful political structural reform, it is not possible for us to fully carry out economic structural reform, and the gains we have made in this area may get lost. New problems that have come up in China's society will not be fundamentally resolved.”

Mr. Wen warned that economic gains of the last three decades may also be lost without political reform.

The outgoing premier has long been the most outspoken of China's top leaders on the need for reform, though on Wednesday as previously he was vague about what those reforms should entail.

During the three-hour news conference, Mr. Wen also called for economic reforms that would spread prosperity more widely among China's people and to allow the Chinese currency to float more freely on international markets.

But he said that after being allowed to rise gradually over the past year, the yuan, also known as the renminbi, may already be close to its fair market value.

“China's Renminbi exchange rate might have reached an equilibrium, we'll continue to push forward the reforms on the exchange rate, especially we will promote greater elasticity of the Renminbi exchange rate.”

That runs counter to the view of many U.S. and European economists, who believe the currency is still being held far below its fair market value, giving a trading advantage to Chinese exporters.