Kong: Good afternoon everybody. I don’t have any announcement to make. I’ve seen quite a presence here today. I bet you must have prepared many questions. Who would like to start?

Q: When the regular press conference of the Foreign Ministry breaks for the summer vocation, how is China going to update the press both at home and abroad the latest development of the Korean nuclear issue? Is the Foreign Ministry going to conduct the “quiet” diplomacy during that period?

A: It’s our last press conference today before summer vocation, during when you can ask questions through our hotline. I can assure you that your phone calls will be answered anytime. You can call us to ask questions that you have an interest anytime. And we will respond as soon as possible.

Follow-up: Can we get answers? And how long?

A: We will try to respond as soon as we can. If you have any questions right now, I can answer them right away.

Q: As a ROK citizen, I’m very appreciative of the efforts of the Chinese Government in seeking a peaceful settlement to the Korean nuclear issue through dialogue. My question is, do you believe it possible to resume the Beijing talks? Does China put forward any new proposals? Should it be three-way or multilateral talks including ROK, Japan and Russia? What’s the key factor for the early resumption of the talks?

A: Seems that you didn’t show up last conference and you missed my briefing on that. To give you a full account, I shall start with Vice Foreign Minister Dai Bingguo’s visit to DPRK through July 12th to 15th. He went there as the special envoy of the Chinese Government to exchange views with DPRK on the Korean nuclear situation. There’s willingness of both to solve the question peacefully through dialogue. The discussions on the nuclear issue were in-depth. Our purpose is to seek a peaceful settlement and get parties concerned back to dialogue, namely, promoting peace and encouraging talks. Besides, the overall position of China on the question also includes addressing the rational security concerns of DPRK. Under the current circumstances, various parties should make concerted efforts to press ahead with the process of Beijing talks, which was held in April. It was a sound start down on the path of a peaceful solution, to which the international community gave credit. Therefore, we hope the process can be continued.

Before the trip to Pyongyong, Vice Foreign Minister Dai visited Russia and Vice Foreign Minister Wang Yi visited the US. Vice Foreign Minister will also go to the US this afternoon. All these trips are important part of China’s endeavour to press ahead with a peaceful solution to the nuclear issue.

You just asked about whether Vice Foreign Minister Dai proposed to DPRK to hold multiparty talks during his visit. As a matter of fact, the tripartite talks held in April are of importance. The results are good and have opened way for a peaceful settlement. Both DPRK and the US are willing to communicate with China on that. At the moment, parties concerned hope to keep the dialogue going. But major parties do not see eye to eye on how to proceed with the talks. The current stalemate doesn’t serve anyone’s interest. It’s the common aspiration of the international community to continue the process of Beijing talks. From what we’ve learnt from various parties through exchange of views, there’s certain consensus on that. We hope every party to adopt a flexible attitude, paying more attention to the actual results. The key is to get the parties back to the negotiating table.

Q: Under the current circumstances, how does China read the conflicts near the DMZ of DPRK and ROK? The US former Defense Secretary Peri worried about a possible war in the Korean Peninsula, what’s your comment on that?

A: DPRK and ROK exchanged fires in the DMZ this morning. We have taken note of reports suggesting that both sides are investigating on it. We hope that parties concerned stay calm and refrain from taking actions that will lead to escalation. It serves the common interests of both sides to work together to maintain stability and peace of the Peninsula.

It’s a critical and sensitive moment for the Peninsula. We hope various parties and the international community can exercise calmness and restraint, make concerted efforts and stick to the direction of seeking a peaceful solution to the nuclear issue.

Q: Please brief us on the specific schedule of Vice Foreign Minister Dai when he is in the States.

A: He will stay there in the US for about two days, having talks with Secretary Powell and other US officials.

Q: China has stated to bring the parties back to talks, either bilateral or multilateral. Then does China have any specific idea of the contents of the talks? Like, discuss a new treaty, or supervise DPRK’s nuclear programs?

A: The Korean nuclear issue dates back to 1992. An Agreed Framework was reached between DPRK and the US afterwards. Since the question resurfaced last year, both sides have made their views known. China has been playing a positive and constructive role, calling on the two sides to solve the question by peaceful means. The question you raised should be a subject of their discussions. As for the role of China, we have been promoting peace and encouraging talks and we will continue to do so.

Follow-up: How does China expect the outcome of the talks? Should they go back to the 1994 Agreed Framework between DPRK and the US? Or should they sign a provisional, one-year non-aggression treaty as proposed by a US congressman?

A: The ultimate goal of us is to keep the Korean Peninsula peaceful, stable and nuclear weapons free. The current question should be solved peacefully. In the meantime, the rational security concerns of DPRK should be addressed. It’s up to the parties concerned to discuss in detail how to solve the problem. The key is to solve their disputes peacefully through dialogue.

Follow-up: Does China view it as a bilateral issue under the 1994 Agreed Framework?

A: It’s fair to say that the Agreed Framework had helped for quite amount of time. We need to find a way out of the new problem through negotiation and dialogue.

Follow-up: The Agreed Framework is obviously a bilateral agreement. Is that the position of the Chinese Government?

A: The Agreed Framework was reached between DPRK and the US. It had played certain positive role for some time, a kind of solution for a decade. The agreement didn’t come by easily, which was reached after rounds of talks. We hope the agreement will still work. As about the new questions, parties concerned should seek a proper solution through dialogue and negotiation. We insist that various parties should commit themselves to a peaceful solution as they noted. Only by so doing, can the Peninsula be peaceful and stable, which the Peninsula, neighbouring countries and the whole of Asia will benefit.

Q: Reports say that there are some new proposals in addressing the security concerns of DPRK, including a security guarantee provided by China and Russia. Will that be brought up when Vice Foreign Minister Dai visits the US?

A: I can’t be very specific at the moment in providing you all the specific proposals Vice Foreign Minister Dai will discuss with the US. But I’d like to reiterate, the discussions will focus on the nuclear question.

Q: Prime Minister Blair will arrive here in Beijing Sunday. Can you brief us on his schedule? Will he discuss Hong Kong question with the Chinese leadership? Besides, a coup d’etat took place last night in San Tome and Principe, former Portuguese colony. I understand that China doesn’t have any diplomatic relations with it, but I still want to know China’s reaction towards it.

A: Prime Minister Blair will visit China through July 20th to 24th. He will be in the mainland, Beijing and Shanghai from 20th to 22nd; in Hong Kong from 22nd to 24th. Premier Wen Jiabao will have talks with him when he stays in Beijing. The main subjects of their discussions are bilateral issues, regional and international situation. President Hu Jintao and Chairman Jiang Zemin of the Military Committee of the Central Committee of CPC will also meet with him. He will go to Tsinghua University, having conversations with students there, hosting the opening ceremony for the Clean Energy Research Centre of the Tsinghua University. He will attend the China-UK Entrepreneurs’ Forum and deliver a speech in Shanghai. Chief Executive Tung Chee-hwa will meet with him in Hong Kong.

With respect to the subjects of the talks, I shall remind you that Hong Kong question is totally an internal affair of China.

On the coup in San Tome and Principe, China doesn’t have diplomatic ties with it. But as a member of the international community, China is very much concerned over the developments there, hoping for a quick restoration of social stability and economic growth.

Q: Mr. Dai has just come back from DPRK and is about to visit the US. Fire was exchanged in the DMZ this morning. It seems that tensions are going to reach the climax. Will Mr. Dai convey any new message to the US? When will the next round of talks be held following the Beijing talks three months before?

A: I am not that pessimistic as you. There are a lot of complicated questions around the globe, which need to be solved through concerted efforts.

Talking about cross-fires this morning, we hope that the two sides can exercise restraint so as to avoid the escalation of the situation.

Everybody is concerned over the Korean nuclear issue. What China has been doing is to promote peace, encourage talks and lower temperature. China will continue to play an active role to get parties concerned back to negotiations, continuing the process of Beijing talks, which are a good start and have achieved good results. We will encourage various parties to stick to the direction of a peaceful settlement so that the issue can be finally solved peacefully.

Q: July 27th marks the 50th anniversary of the Korean Armistice Agreement reached among China, the US and DPRK. Does China plan to hold some events?

A: It’s our sincere hope that wars never break out again in the Peninsula, a goal that various parties should make earnest efforts to achieve. I have no idea of any plans of events.

Q: Reports say that DPRK reprocessed its nuclear fuel rods. Was China informed?

A: I am unaware of it. We have reiterated on many occasions that denuclearization of the Peninsula must be ensured.

Q: Yesterday Mr. Li Zhaoxing had phone conversation with Secretary Powell. Did they discuss Vice President Cheney’s visit to China?

A: Foreign Minister Li Zhaoxing had phone conversation with Secretary Powell this morning. Their discussions focused on the Korean nuclear issue.

Q: Which regional issues will be discussed between Prime Minister Blair and the Chinese leadership during his visit to China? Will they discuss the Iraqi question and anti-terrorism issues? Some areas of China have suffered heavy flood. Will China appeal to the international community for assistance?

A: The Chinese leadership will exchange views with the visiting Prime Minister on international issues and regional situation. Iraq’s post-war arrangement and anti-terrorism issues might come up in their discussions.

The heaviest flood ever since 1991 swept through region of the Huai River. It’s an acute test. But we’ve taken new methods in our fight against flood, not to have millions of troops protecting the banks day and night but to dredge it by way of blocking and diverting. I’d like to take this opportunity to express our gratitude to the sympathy, comfort and support rendered by the international community. The day before yesterday, ICRC and IFRC have sent teams to inspect there. After that, ICRC will draw a preliminary conclusion on whether to provide assistance to China or not.

Q: Vice Foreign Minister Dai will be going to the US. Will China sent people to other countries? Besides, can you tell us the schedule of Chairman Wu Bangguo’s visit to Japan?

A: Vice Foreign Minister Dai’s trip only limits to the US. He doesn’t have plans to visit other countries. With respect to the visit of Chairman Wu Bangguo to Japan, I have no confirmed news yet.

Q: The US appeals to freeze funding the UNFPA, because it assists countries like China that carries out coerced family policy. Does China believe it appropriate for the US to do so? My second question is that Chairman Greenspan of the US Fed noted that China would have to float its yuan currency, what’s your comment on that?

A: The family planning policy is a fundamental state policy of China, which contributes to the overall development of the Chinese people. The international community has given full credit to it. We have very good cooperation with UNFPA. We are opposed to some countries’ attempt to obstruct the cooperation.

There are some discussions on the RMB exchange rate. Most of them are based on the trade surplus and increasing foreign exchange reserve of China. As a matter of fact, we are having a balanced foreign trade beginning this year. As I’ve said before, we suffered a trade deficit through January to March, only gaining a modest surplus of 100 million dollars in April. The main reason of some increase of the foreign exchange reserve is the net inflow of capital. We believe that the current RMB exchange rate and its mechanism conform to the economic situation of China. RMB should continue to be stable, which not only benefits China, but also Asia and the world. Facing the new situation, China is going to improve the RMB exchange rate mechanism.

Q: The US and British forces still have not found weapons of mass destruction now that the Iraqi war was over. Many people questioned it and the excuse for launching the war was no longer there. What is your comment? Will it be touched upon during Prime Minister Tony Blair’s visit?

A: The Chinese Government has made clear its position on 20 March concerning the war against Iraq. Resolution 1483 adopted by the UN Security Council at the end of May has clear explanations of the questions relating to the post-war reconstruction in Iraq. We think that the Iraqi question should be solved within the UN framework. We have always maintained that the UN should play an important role and relevant resolution adopted by the Security Council should continue to be implemented.

I have said just now that the Chinese leaders will exchange views with Prime Minister Blair during his visit on international situation, and the Iraqi question is likely to be included.

Q: Vice Minister Dai Bingguo will soon visit the US. Was this decided during the phone conversation between Mr. Li Zhaoxin and Mr. Powell or afterwards? Has Vice Minister Dai Bingguo long had the plan to visit the US?

A: It was confirmed during the phone conversation between Foreign Minister Li Zhaoxin and Secretary Powell that Vice Foreign Minister Dai Bingguo would visit the US and exchange views with the US side on the DPRK nuclear question.

Q: The Israeli cabinet adopted a resolution saying that the west bank and Gaza were not occupied land. What is your comment? Does this conform to relevant resolution of the UN? Israeli Prime Minister Sharon failed to persuade the UK and Norway to isolate Arafat. What is your comment on the isolation of Arafat?

A: The Middle East situation has witnessed positive signs recently and both the Israeli and Palestinian sides have taken some positive measures. We hope that both sides can continue to take positive and pragmatic measures to maintain the momentum of relaxation and dialog and to push for constant progress in the peace talks. This is the hope of the international community including China and we hope that the Middle East can regain peace at an early date.

On your second question, Arafat is the legitimate leader of Palestine and his personal security and freedom of movement should be effectively safeguarded.

Q: Is Vice Minister Dai’s visit to the US the last leg of a series of efforts made by the Chinese side? Will he go to Russia, the DPRK, Japan and the ROK?

A: I cannot agree to describe it as the “last leg”. The Chinese side has made positive, responsible and unremitting efforts to the peaceful settlement of the DPRK nuclear question and will continue to play such a role in the future. Our fundamental goal is to promote various parties to stick to the direction of peaceful settlement of the DPRK nuclear question and continue the process of Beijing talks.