Mr. Chairman，
Ladies and Gentlemen，
　I am very glad to be back in Washington， and to be among friends old and new.The US-China Business Council has worked so hard over the years to promote China-US trade and commerce and move forward bilateral relations.Many of you present have also done much useful work in this respect.I wish to express my appreciation and gratitude for this.
　More than three decades have gone by since our two countries reopened doors of contacts in the initial thaw， negotiated the establishment of diplomatic relations and worked together for a constructive and cooperative relationship.
　As things stand now， over 30 bilateral agreements on cooperation have been signed， 35 pairs of provinces and states twined as sisters， over one million visits exchanged by personnel from two sides every year and over 180，000 Chinese mainland students and scholars studied or worked in the US.These exchanges and cooperation have benefited the two peoples and contributed to world peace and prosperity.
　At present， the international situation is undergoing a profound transformation presenting new opportunities and new challenges to China-US relations.Viewed as a whole， the foundation for China-US cooperation is getting stronger and the scope wider.
　My terms of duty allowed me to stay in this country for nearly 7 years， having traveled to all its 50 states and witnessed many ups and downs in the relationship.It is my guts feeling that the common interests between us far outweigh our differences and Chinaand the UScan and should become the world's greatest partners.
　In his speech at the GeorgeWashingtonUniversitya few days ago， Secretary of State Powell denied future of China-US relations as a “zero-sum” game.I can't agree with him more.
　With economic globalization acquiring such a depth today， the characteristic mutual complementarity and mutual benefit of China-US trade and commerce have become ever more pronounced.Economically， we have already had a little bit of each other and neither will be exactly comfortable without the other.Chinais now your fourth largest trading partner and is likely to become the third by the end of the year.Last year， our two-way trade topped US$ 97.18 billion.The first half of this year saw the figure rising 34.4%， reaching 56.4 billion， in which USexports to Chinaalone went up by 36.1%.
　With China's market economy developing more mature， the huge magnetic pull of the Chinese market has come into the open.According to one estimate， in the 3 years ahead， Chinawill import up to US$ one trillion worth of goods， and Chinawill grow into the world's second largest market by 2020.It is truly exciting to see the prospects of Chinaand the USbecoming each other's largest trading partner in the new century.
　With respect to trade deficit， first we need to put it in historical perspective.For 21 straight years beginning in 1972， the UShad a trade surplus with China.And Chinaonly started to have surplus in 1993.Secondly， most Chinese exports to the USare labor-intensive goods the UShas long since stopped producing.They are affordable and in good quality， not only benefiting the average American consumers but also helping US industrial restructuring and upgrading.Thirdly， more than half of the Chinese exports to the USare produced by foreign-funded enterprises in China， mostly US companies.And fourthly， Chinasurely hopes to buy more from the US， but that needs US help.For example， the USshould lift its restrictions on exports to China.
　With respect to the exchange rate of the Yuan， I want to make three points here： First， Chinaadopts a regulated， singular， floating exchange rate regime based on market supply and demand， which is consistent with China's realities.We will go on improving our exchange rate formation mechanism while deepening our financial reform in the light of our development level， our economic performance and our international payment.Second， we must maintain basic stability of the RMB exchange rate which serves economic stability in Asia-Pacific and the world at large， and the stability of the financial environment for the flow of China-US trade and commerce.Third， since the volume of China-US trade accounts for only 1% of US GDP， exchange rate fluctuations of the Yuan will not have a significant impact on USeconomy.
　With respect to regional and international concerns， there are greater rather than fewer common interests and common responsibilities for Chinaand the US.At present， though peace and development remain the main trend of the times and enjoy popular support throughout the world， many destabilizing factors still exist.While traditional threats with territorial， religious and racial clashes as the mainstay still rampant， non-traditional threats represented by terrorism are notably on the increase.Tensions persist in some hotspots around the world.As both are Permanent Members of the UN Security Council， our close cooperation is increasingly indispensable for the solution to the above-mentioned issues.
　In recent years， Chinaand the UShave maintained close consultation and coordination on counter-terrorism， the DPRK nuclear crisis， Iraq， the Middle Eastand other important issues.Our cooperation against terrorism has become a key component of the China-US strategic cooperation.After the September 11th， Chinaand the USput in place the medium- and long-term mechanisms of exchange and cooperation against terrorism.Not long ago， we signed the declaration of principles on cooperation in the field of container shipment security.We are ready to keep up our anti-terrorism cooperation with the USon the basis of reciprocity and mutual benefit.
　Let me take a moment to say something about the DPRK nuclear issue.Since last year， top leaders and foreign ministers of our two countries have communicated on telephone or correspondence more than twenty times.We have also made effective contacts with the DPRK， ROK， Japanand Russiaand moved all sides towards important consensus.The three-party Beijingtalks broke the deadlock while the six-party talks made a significant step forward towards a peaceful resolution.We all hope that this process will continue.
　Chairman of the Central Military Commission and Defense Minister， will visit the United Stateslater this year.Bilateral exchanges and cooperation in wide ranging areas of law enforcement， culture， education， science， technology and health care are also on the increase.Recently， the two countries launched cooperations in public health taking the advantage of our nationwide campaign against SARS.
　Chinaand the USare quite different in historical tradition， social system and cultural background.It is only natural that we have certain divergent views.The key is how to approach them appropriately.Past experience shows that the correct approach is mutual respect， consultation on an equal footing， increasing consensus and seeking common ground while shelving differences.What is especially important at the moment is to prevent US domestic politics from ensnarling China-US relations， avoid politicizing the trade issues and carefully handle the sensitive Taiwanquestion.
　The Taiwanquestion touches the sentimental chord of 1.3 billion patriotic Chinese and bears on China's sovereignty， territorial integrity and national unity.Completing China's reunification is the cherished common aspiration of all the Chinese including our Taiwancompatriots.I trust the American people， who went through their own Civil War， can understand us full well.We have the utmost sincerity to bring about a reunited Chinaon the basis of “peaceful reunification and one country， two systems”。
　Twenty-three million Taiwancompatriots are our brothers and sisters.No one in the world is more eager than us to have the question resolved through peaceful means.Unfortunately， the Taiwanauthorities have obstinately turned their back on the one Chinaprinciple and tried every possible way to dismember the country， plotting the so-called “referendum” and demanding even more “stopovers” in the US.Their true objective is to provoke cross-Straits confrontation and conflicts， destabilize the Taiwan Straits area and sabotage China-US relations.That is the fundamental reason why better cross-Straits relations remained elusive and why they represent the biggest threat to peace and stability in the Straits and to China-US common interests.
　The US Government has stated time and again that it is committed to the one Chinapolicy， the three joint communiqués and opposition to “Taiwanindependence”。We appreciate that.We hope that the USside will honor its words with deeds， see the true color of the Taiwanauthorities of splitting Chinaand undermining China-US relations under the disguise of “democracy”， and give its unequivocal support to China's cause of peaceful reunification.This will be welcomed by the Chinese people and will contribute to stable China-US relations and serve the long-term interests of the United States. 　　
　Thank you all.
　Now I am ready to take your questions.