Transcript of Premier Li's interview with Financial Times

Barber: Let me turn to the Chinese economy where you are engaged in a historic transformation. If I ask you for your own report card, how many marks out of ten would you give yourself so far? Eight or nine?

Li Keqiang: It seems to be against the general rule for me to pass a score on how I have performed. I believe that it is up to the people to pass a judgment. As far as I am concerned, I will continue to do my best.

Barber: Are you concerned about inflation, particularly in the real estate market?

Li Keqiang: Inflation has been quite low in the past several months in China. The figure for January and February this year was no more than two percent. In January, it was just zero point something percent. Some even think there is deflation in China. I have already addressed such a question before. China is not in deflation, because over one third of China's CPI composition is food price, and we had a bumper harvest last year. But the tumble of international commodity prices did put our PPI under much pressure. So, in a certain sense, we are on the receiving end of deflation, but this does not mean there is deflation in China.

For the real estate market, we will continue to take a multi-pronged approach to meet the diverse needs in light of the different conditions of different localities. We will continue to build more government-subsidized housing units. We want to have steady and sound growth of the real estate market. The government will continue to encourage the home-buying for self use or improved living conditions, and guard against property bubble. Honestly, there may be certain conflict of interests among these goals, and we need to strike a proper balance among multiple goals and exercise proper regulation. This is not going to be easy, but we will do our best and we believe we can do it.

Barber: Premier Li, the Chinese government has been engaged in a very intense anti-corruption campaign. And you have caught many flies and quite a few tigers recently. Will this campaign ever end?

Li Keqiang: Anti-corruption is a long-term task for any country. It is hard to say when the fight against corruption should start and when it should be brought to an end. It's true that we are intensifying efforts in fighting corruption. In particular, we are very serious about institution building. The government is streamlining administration and delegating powers. We want to ensure that government power will be exercised with restraint, and the government will fully live up to its due responsibilities to boost market vitality, eliminate the space for rent seeking behaviors and uproot corruption. This will be a long-term struggle. If one is to translate “campaign” into Chinese, it should be “行動” instead of “運動”.

Barber: But it is a very powerful campaign, because I spoke to a very prominent Western businessman who went to see one of the Chinese oil companies, and he said he didn't recognize anybody in the room, because the 30 people who were there last year had all disappeared.

Li Keqiang: Most Chinese companies are still functioning normally. We hope foreign companies won't cut off their ties with Chinese companies.

Barber: It's just the foreign companies are very impressed by the Chinese government's magic act, and they disappear. But seriously, Mr. Premier, there has been some talk of hostile western forces in the media. As a visitor who comes from the West, who counts himself as a friend of China, I just worry about that. Can you just give me some reassurances that this is just talk?

Li Keqiang: Since China started the reform and opening-up, an increasing number of foreign journalists have come to China. And now, over 60 countries have resident journalists in China and those journalists are welcome to work in China and favorable conditions will be provided for their work. I believe that there will only be more foreign correspondents coming to China. We hope that they will report to the world a China as it is. At the same time, foreign journalists need to abide by the laws and regulations in their host countries. Some foreigners may not have been to China and it's natural that they may not know China that well or even have some misunderstanding about this country. Truthful reports by the media can help dispel their doubts. I believe more and more foreigners will come to China and see that China is an open and inclusive country which hopes for mutual respect and mutual learning between people of different countries. As for hostile activities, there are violent, separatist and terrorist crimes committed in China, and they should be handled in accordance with law. There may be different punishments for drug-related offences in other countries, but the Chinese people have a painful memory about the harm of opium, hence we resolutely combat all drug-related crimes. And I hope we will have your understanding about this.