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The Third Plenary Session of the 18th Central Committee of the Communist Party of China: A New Opportunity to Develop China-Russia Relations
Ambassador to Russia Li Hui Gives Exclusive Interview to Russian Nezavisimaya Gazeta

Question 1: The international community believes that the long-term planning of political and economic decisions has been adopted at the third Plenary Session of the 18th Central Committee of the Communist Party of China (CPC). How do we understand the proposed concept of "comprehensively deepening reforms"? What are its key points? What kind of specific measures will be taken? What is the specific time limit to accomplish these plans?

Answer: The third Plenary Session of the 18th Central Committee of the CPC was successfully convened from November 9 to 12, 2013, and adopted the "Decision of the CPC Central Committee on Major Issues Concerning Comprehensively Deepening Reforms". The Decision implements the spirit of reform and innovation into all respects and procedures of national governance, and makes top-level design and major strategic deployment for comprehensively deepening reforms in terms of overall requirements, basic principles, major measures and others. It is a guiding document for the CPC at a new historical starting point and in new conditions to comprehensively deepen reforms. The third Plenary Session of the 11th CPC Central Committee 35 years ago opened the historical prelude of reforms in China, and now, the third Plenary Session of the 18th CPC Central Committee, with epoch-making significance, will surely continue to compose a new glorious chapter for China's reform.

This Session boasts several distinctive features. First, the goals are specific, namely, to improve and develop the socialist system with Chinese characteristics and promote the modernization of national governance system and ability. Second, the scope is extensive, with the reform covering 15 aspects such as economy, politics, culture, society, ecological civilization, national defense, the armed forces and the Party's building system. Third, the mainlines are clear. The mainlines of the reform include economy, politics, culture, society, ecological civilization, and Party building. Fourth, the key point is explicit. The reform of the economic system is the key point and its "locomotive" tractive role should be given play to reforms in other fields. These features fully reflect the spirits of the new central leadership to seek truth from facts, advance with the times and be realistic and pragmatic. In other words, the reform complies with people's aspiration, respects people's will and epitomizes people's wisdom. It is a response to the key and difficult points of comprehensively deepening reforms at the primary stage of socialism, and to the interests and demands of the Chinese people.

To implement the decision of comprehensively deepening reform, the Central Committee has decided to establish a leading team for comprehensively deepening reform, which is responsible for the overall design, planning and coordination, integral advancement, and supervision and implementation of the reform. The leading team can be regarded as the chief leader for China to advance the comprehensive deepening of the reform in the new era, and fully reflects the Central Committee's great attention and determination on reform. Meanwhile, in order to help the local governments and people have a further in-depth and thorough understanding of the spirit and content of the Decision, the Central Committee has established presentation groups to interpret them for the local governments and people. Henceforth, other methods including training and handing out guidance materials will be adopted to better explicate relevant policies for the local governments and people. The Session clearly put forward that the reform task proposed in the Decision will be completed by 2020, making the reform process examinable and measurable.

I believe that the target of comprehensively deepening reform proposed at the Session will definitely bring historic changes to China's development, make the socialist cause with Chinese characteristics enjoy a broader prospect, and will undoubtedly further promote the in-depth development of comprehensive strategic partnership of coordination between China and Russia.

Q 2: How do you understand the mixed-ownership economy proposed in the Decision? Does it indicate that in the future private companies or foreign companies can merge or hold state-owned companies?

A: The mixed-ownership economy follows the idea of common development of economies of all types of ownership put forward before, yet it has made some innovations and breakthroughs.

The idea of common development of economies of all types of ownership emphasizes the self-development of the economy of each type of ownership, whereas the mixed-ownership economy emphasizes more on the direct combination, cross-shareholding and integrative development of the economies of different types of ownership. The mixed-ownership economy smooths the way for state-owned capital to carry out more functions, keep value or appreciate and increase its competitiveness, for private capital to enter areas including infrastructure, basic industries and public service, for capital of all types of ownership to draw on each other's merits or offset their shortcomings, help each other and promote common development, for enterprises to improve their property right structure and establish a modern enterprise system that truly meets the requirements of market economy, and for capital of various types to optimize and restructure and to increase capital efficiency.

The "three permissions and three encouragements" proposed in the Decision gives an answer to the last question of your concern. That is, to permit more state-owned economies and economies of other types of ownership to develop into mixed-ownership economy, to permit non-state-owned capital's participation in projects invested by state-owned capital, and to permit employees of mixed-ownership economy to hold shares in order to form a shared profit community of capital owners and employees; to encourage non-public enterprises to participate in the reform of the state owned enterprises, to encourage the development of mixed ownership enterprises with non-public capital holding, and to encourage qualified private enterprises to establish a modern enterprise system.

Q 3: It is said that the reform of China's state-owned enterprises is faced with obstructions from various interest groups. What comment do you have on this? How to overcome these difficulties?

A: Since the reform and opening-up of China, the reform of state-owned enterprises has moved forward deeply and gained great achievements, with the degree of marketization continuously rising, the scale and strength constantly improving, and the vitality, control and influence remarkably strengthening.

The Session made important deployment for the reform of state-owned enterprises, taking both the state-owned sector and the non-public sector as important constituents of China's market economy and important foundations for China's economic and social development. At present, the state-owned enterprises are already integrated with the market economy on the whole and have become independent market entities. In order to adapt to the marketization and globalization, we will put priorities on formalizing management decision making, maintaining and increasing the value of assets, equitably participating in competition, improving enterprise efficiency, strengthening enterprise vigor, as well as assuming social responsibilities, and further deepen the reform of state-owned enterprises. We will actively develop the mixed ownership economy with state-owned capital, collective capital, non-public capital and other capitals cross-holding shares and mutually integrating, and encourage the capital of all forms of ownership to learn from each other, facilitate advancement of each other, and achieve common development.

Q 4: What is the significance of the proposal put forward at the Session to switch the role of the market in resource allocation from "basic" to "decisive"? Will it weaken or even deny the role of the government?

A: The change from "basic" to "decisive" is a qualitative elevation of the essence of China's socialist market economy. It will greatly liberate and develop productive forces and push China to smoothly cross the middle-income gap. "Decisive" means that other forces can influence and guide resource allocation, but the decider is no other than the market.

In modern economy, the roles played by the market and the government are equally important. Without the role of either the market or the government, economic development will be difficult to achieve. The function of the market and that of the government are essentially different. In terms of resource allocation, the government is to guide and influence resource allocation rather than directly allocate resources. The Decision clearly defines the functions and roles of the government to be macro-control, public service, market supervision, social administration and environmental protection.

Q 5: At present, China's reform mainly focuses on the economic sector and lacks specific measures in the reform of the political system. What comment do you have on this?

A: We have always regarded the political system reform as an essential part of the comprehensive deepening of reforms and always pushed it forward with economic and social development. We ensure people's exercising of state power through the People's Congress, perfect the system of socialist consultative democracy and community-level democracy, comprehensively promote law-based governance and improve the operation and supervision system of the power.

In terms of reform of political restructuring, the Session proposed that China will deepen reform of political restructuring by closely centering on the organic unity of adhering to the leadership of the Party, people being the master of their own affairs and law-based governance, so as to achieve the following goals: accelerating the promotion of institutionalization, standardization and proceduralization of the socialist democratic politics to contribute to construction of a socialist country under the rule of law; deepening reform of the judicial system and safeguarding authority of the Constitution and laws; deepening reform of the administrative law enforcement system to ensure the lawful, independent and just exercise of judicial authority and procuratorial power; perfecting the judicial guarantee system of human rights to develop wider and sounder people's democracy. With the constant deepening of the reform, China's socialist democratic politics is bound to display more vigorous vitality.

Q 6: China has recently held the conference on the diplomatic work with neighboring countries. What influence and promotive effects will the conference have on the Russia-China relations?

A: The conference on the diplomatic work with neighboring countries was held from October 24 to 25, 2013. It identified the strategic goals, fundamental policies and overall arrangements of China's diplomatic work with neighboring countries in the coming 5 to 10 years, and clarified the working thought and implementation plans for solving major issues facing China's neighboring diplomacy. It aimed to help create a sound surrounding environment for China's own development, enable neighboring countries to benefit more from China's development, and realize common development.

A good neighbor is better than a brother far off. The neighboring countries are of great strategic significance to China's future development, either in terms of the geographic location, natural environment or mutual relations. China and Russia are each other's biggest neighboring country and the most important and primary strategic coordination partner. China and Russia have witnessed frequent high-level mutual visits, close economic and trade cooperation, active people-to-people and cultural exchanges and close international cooperation. All these determine Russia's priority role and irreplaceable position in China's overall diplomacy and neighboring diplomacy. This is fully embodied in President Xi Jinping's choice of Russia as the first country to visit after he took office as China's supreme leader.

China and Russia are congenial in the philosophy of national governance. Both sides take the improvement of people's living standard and realization of national rejuvenation as their duties, develop economy actively and promote pragmatic cooperation. President Xi Jinping put forward the concept of "Chinese Dream", and President Vladimir Putin proposed the plan for Russia's gross domestic product (GDP) to rank among world's top 5 with per capita GDP to reach or approach the level of developed countries by 2020. Both countries are speeding along their way to making the country stronger and the people well-off. Their dreams and plans are so akin and specific, and bring the two peoples more expectations for the future development of their respective country.

I believe that the specific objectives set at the conference on the diplomatic work with neighboring countries--"deepening strategic convergence of mutually beneficial cooperation with neighboring countries, actively participating in regional economic cooperation, speeding up the infrastructure interconnection with neighboring countries, well building the Silk Road Economic Belt and the 21st century Maritime Silk Road, accelerating the implementation of free trade zone strategy on the basis of neighborhood, expanding room for trade, investment and cooperation, and constructing a new pattern of regional economic integration"-will surely bring great opportunities to the development of the China-Russia relations and their pragmatic cooperation, and will further close the high level interactions between China and Russia, secure economic relations, deepen financial cooperation and tighten the people-to-people and cultural relations between the two countries. Russia needs a prosperous and stable China, and China also needs a strong and developed Russia. We hope that China and Russia, both of whom have ambitious dreams, can work together for national renaissance, people's happiness and world peace, and jointly write a new chapter in the human history.

Q 7: What is the current situation of Russia-China economic cooperation? What are the main problems in it and how can they be solved?

A: At present, the overall international trade shows a downward trend and the economic growth of both China and Russia is slowing down due to the staggering global economic recovery and insufficient international demand. According to the statistics from the General Administration of Customs of China, the China-Russia two-way trade volume reached 73.61 billion USD from January to October, 2013, which is basically flat from a year earlier. This is a fairly good result against the backdrop of the current international situation. China remains Russia's largest trading partner and Russia is China's ninth largest trading partner. We are confident that we can reach the goals put forward by the leaders of the two countries ahead of schedule - achieve a two-way trade volume of 100 billion USD by 2015 and 200 billion USD by 2020.

Currently, the main problems in bilateral economic cooperation are as follows: first, the commodity mix should be diversified; second, cooperation channels are relatively limited; third, there is need for large investment projects and economic and technical cooperation projects. To this end, we suggest both sides continue doing the following works well:

First, further optimize the bilateral trade structure and foster new growth points. Both sides should intensify the implementation of the memorandum on economic modernization signed by the two countries and the list containing 40 cooperation projects, and expand the bilateral cooperation in high-tech, aviation, shipbuilding, mechanical and electrical products, and other fields.

Second, promote the cooperation in major fields and major projects. Both countries should give full play to the mechanism of bilateral cooperation in forestry, step up to draw up a master plan for forestry cooperation, and push forward the implementation of major projects. Both countries should step up to start the bilateral agricultural cooperation sub-committee work, promote the settlement of problems such as the inspection and quarantine of agricultural products, agricultural planting, breeding and processing, and create conditions for bilateral agricultural cooperation. Both sides should accelerate the implementation of the major projects in the joint development of long-range wide-body passenger aircraft, heavy-lift helicopter and other major projects, and focus on promoting the Tongjiang-Nizhneleninskoye Cross-Border Railway Bridge and Heihe-Blagoveshchensk highway bridge construction projects.

Third, deepen border and local economic and trade cooperation between the two countries. Implement the Outline of Regional Cooperation between Northeast China and the Russian Far East Area and Eastern Siberia (2009-2018), make a list of the first priority cooperation projects, and focus on implementing them. Upgrade International China Harbin Fair for Trade and Economic Cooperation to China-Russia Expo, make good use of this platform, and enhance China-Russia border and local cooperation.

Fourth, give further play to the platforms of exchanges and cooperation among enterprises of the two countries. Make good use of mechanisms such as China-Russia Chamber of Commerce of Machinery and Electronic Products, China-Russia Entrepreneurs' Council and China General Chamber of Commerce in Russia, encourage mutual visits between enterprise groups, and provide better information and consultation services for trade and investment cooperation between the enterprises.

Q 8: Will China sign the agreement on laying pipeline with Russia? Is China satisfied with the progression of its participation in the field of oil and gas in Russia?

A: I am very much looking forward to this project. Currently, relevant departments from both sides are making close contacts and holding talks. Whether an agreement can be signed depends on the results of the talks.

In recent years, China and Russia have witnessed increasing close cooperation in energy cooperation. A package of cooperation in the construction of crude oil pipes, long-term crude oil trade and large and long-term loans has been successfully implemented, and the natural gas cooperation has been actively promoted. Particularly in this year, under the vigorous promotion by leaders of both countries, a series of significant progresses have been made in the field of oil and natural gas cooperation. During President Xi Jinping's visit to Russia in March, both sides signed a cooperation agreement between the two governments on expanding crude oil trade. During Vice Premier Zhang Gaoli's attendance at the St. Petersburg International Economic Forum in June, Chinese and Russian energy enterprises signed an agreement on long-term increasing supply of crude oil. During the G20 Summit in September, witnessed by both heads of state, the China National Petroleum Corporation (CNPC) signed a purchase-sale contract for natural gas from OJSC Yamal LNG with Russia's Novatek and a framework agreement on natural gas supply with Russia's Gazprom. During Prime Minister Dmitri Medvedev's visit to China in October, the CNPC and Sinopec Group signed a basic condition agreement on buying and selling liquefied gas and an oil exports memorandum on advance payment respectively with the Novatek and Rosneft Oil. So far, China has been satisfied with the progression of its participation in the oil and natural gas plan with Russia, and hopes that both sides could actively implement the consensus reached in such fields as expanding crude oil supply, building natural gas pipes, exporting liquefied natural gas from Russia to China, and establishing a joint-venture oil refinery, continue to deepen bilateral cooperation in the field of oil and natural gas, and meanwhile further step up the cooperation in other energy fields such as nuclear power, electric power and coal, constantly enrich the connotation, elevate the level and make efforts to bring tangible benefits to each other.

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