It’s very important that we use multilateral meetings like the EAS to discuss shared regional and global challenges, and I’m committed to working with China and I’m committed to working with Asia.  It’s important that our two countries cooperate to build a more secure and prosperous future for the Asia Pacific region and for the world.

Premier Wen and I have also worked very closely together on our bilateral and global economic problems.  And as the two largest economies in the world, we have a special responsibility to lead the way in ensuring sustained and balanced growth, not only here in Asia but globally.

I very much believe that the cooperative and constructive approach that we’ve taken to our bilateral relations is good for both our countries and the world.  And it is very important that as two of the largest economies in the world, that we work to establish clear rules of the road internationally for trade and investment, which can increase prosperity and global growth.

So I very much appreciate Premier Wen’s engagement with the United States on these issues.  I’m sure this will be another honest and constructive conversation and will help to continue the process of strengthening the relationship between China and the United States.

PREMIER WEN:  (As interpreted.)  Mr. President, it is a great pleasure to see you again.  This is our fifth meeting.

Let me use this opportunity to first, once again, extend my congratulations to you, Mr. President, on your reelection, and I also wish to convey the best regards from President Hu Jintao and the newly-elected General Secretary Xi Jinping to you.

Mr. President, you have set out your vision on many occasions that you want to lead the United States to address various challenges more effectively, in particular to revitalize the economy, to create more jobs, and to enhance international security and cooperation.  I wish you all the best.

You and I share the view, Mr. President, that the China-U.S. relationship is one of the most important bilateral relationships in the world.  The long-term sound and steady growth of China-U.S. relations serves the fundamental interests of both countries.  It is also important for peace, stability, and prosperity in the Asia Pacific and the world.

I hope our meeting today will send out such a positive message to the world — a positive message that both countries will remain committed to pursuing a cooperative partnership between the two sides based on mutual respect and mutual benefit.  Our two sides will continue to work together to strengthen and enhance our dialogue mechanisms, including the strategic and economic dialogues, the strategic security dialogue, and the high-level consultation on people-to-people exchange.

We will enhance our business cooperation and engage in large-scale cooperation in economy and finance to use it as a means to tackle the difficulties we have and resolve the differences and disagreements between us.  Our two countries will enhance exchange and consultation on regional and international affairs, in particular to enhance our cooperation in the Asia Pacific region.

Well, I believe we have a common will on all those important issues.  I look forward to an honest discussion with you today, Mr. President.

END

On Scientific Outlook on Development

– The most important achievement in our endeavors in the past ten years is that we have formed the Scientific Outlook on Development and put it into practice.

– This theory provides new scientific answers to the major questions of what kind of development China should achieve in a new environment and how the country should achieve it.

– Together with Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of Three Represents, the Scientific Outlook on Development is the theoretical guidance the Party must adhere to for a long time.

On socialism with Chinese characteristics

– We must unswervingly follow the path of socialism with Chinese characteristics.

– Our overall approach is to promote economic, political, cultural, social, and ecological progress, and our general task is to achieve socialist modernization and the great renewal of the Chinese nation.

On building moderately prosperous society

– We need to have a correct understanding of the changing nature and conditions of this period, seize all opportunities, respond with cool-headedness to challenges, and gain initiative and advantages to win the future and attain the goal of completing the building of a moderately prosperous society in all respects by 2020.

– An examination of both the current international and domestic environments shows that China remains in an important period of strategic opportunities for its development, a period in which much can be achieved.

– On the basis of making China's development much more balanced, coordinated and sustainable, we should double its 2010 GDP and per capita income for both urban and rural residents.

– To complete the building of a moderately prosperous society in all respects, we must, with greater political courage and vision, lose no time in deepening reform in key sectors and resolutely discard all notions and systems that hinder efforts to pursue development in a scientific way.

On economy

– Taking economic development as the central task is vital to national renewal, and development still holds the key to addressing all the problems we have in China.

– The underlying issue we face in economic structural reform is how to strike a balance between the role of the government and that of the market, and we should follow more closely the rules of the market and better play the role of the government.

– We should firmly maintain the strategic focus of boosting domestic demand, speed up the establishment of a long-term mechanism for increasing consumer demand, unleash the potential of individual consumption, increase investment at a proper pace, and expand the domestic market.

– We should give high priority to rural areas in developing infrastructure and social programs in the country.

On political structure reform

– We must continue to make both active and prudent efforts to carry out the reform of the political structure, and make people's democracy more extensive, fuller in scope and sounder in practice.

– We should place high importance on systemic building, give full play to the strength of the socialist political system and draw on the political achievements of other societies. However, we will never copy a Western political system.

On improving people's wellbeing

– We should keep making progress in ensuring that all the people enjoy their rights to education, employment, medical and old-age care, and housing so that they will lead a better life.

On ecological progress

– We must give high priority to making ecological progress and incorporate it into all aspects and the whole process of advancing economic, political, cultural, and social progress, work hard to build a beautiful country, and achieve lasting and sustainable development of the Chinese nation.

On military modernization

– Building strong national defense and powerful armed forces that are commensurate with China's international standing and meet the needs of its security and development interests is a strategic task of China's modernization drive.

– We should attach great importance to maritime, space and cyberspace security. We should make active planning for the use of military forces in peacetime, expand and intensify military preparedness, and enhance the capability to accomplish a wide range of military tasks, the most important of which is to win local war in an information age.

On Taiwan

– We are ready to conduct exchanges, dialogue and cooperation with any political party in Taiwan as long as it does not seek Taiwan independence and recognizes the one-China principle.

– We hope that the two sides will jointly explore cross-Straits political relations and make reasonable arrangements for them under the special condition that the country is yet to be reunified.

– We hope the two sides will discuss the establishment of a cross-Straits military security confidence-building mechanism to maintain stability in their relations and reach a peace agreement through consultation so as to open a new horizon in advancing the peaceful growth of these relations.

On foreign affairs

– China will unswervingly follow the path of peaceful development and firmly pursue an independent foreign policy of peace.

– We are firm in our resolve to uphold China's sovereignty, security and development interests and will never yield to any outside pressure.

– We will decide our position and policy on an issue on its own merits and work to uphold fairness and justice.

– China is committed to peaceful settlement of international disputes and hotspot issues, opposes the wanton use of force or threat to use it, opposes any foreign attempt to subvert the legitimate government of any other countries, and opposes terrorism in all its manifestations.

– China opposes hegemonism and power politics in all their forms and will never seek hegemony or engage in expansion.

On Party building

– Combating corruption and promoting political integrity, which is a major political issue of great concern to the people, is a clear-cut and long-term political commitment of the Party. If we fail to handle this issue well, it could prove fatal to the Party, and even cause the collapse of the Party and the fall of the state.

– Leading officials at all levels, especially high-ranking officials, must readily observe the code of conduct on clean governance and report all important matters. They should both exercise strict self-discipline and strengthen education and supervision over their families and their staff; and they should never seek any privilege.

The judicial system is a major component of the political system, while judicial impartiality is a significant guarantee of social justice.

Since the founding of New China in 1949, and especially since the reform and opening-up policies were introduced some three decades ago, China, proceeding from its national conditions, carrying on the achievements of Chinese traditional legal culture and learning from other civilizations regarding their rule of law, has been building and improving its socialist judicial system with Chinese characteristics, safeguarding social justice and making significant contributions to the rule of law of the mankind.

China's judicial system is generally consistent with its basic national conditions at the primary stage of socialism, its state system of people's democratic dictatorship, and its government system of the National People's Congress. With the further development of China's reform and opening up, particularly due to the development of the socialist market economy, the comprehensive implementation of the fundamental principle of rule of law, and the increasing demands of the public for justice, China's judicial system urgently needs to be reformed, improved and developed.

In recent years, China has been promoting the reform of the judicial system and its work mechanism vigorously, steadily and pragmatically. Aiming to safeguard judicial justice and focusing on optimizing the allocation of judicial functions and power, enhancing protection of human rights, improving judicial capacity, and practicing the principle of "judicature for the people," China has been striving to improve its judicial system with Chinese characteristics, expand judicial democracy, promote judicial openness and ensure judicial impartiality. This provides a solid judicial guarantee for China's economic development, social harmony and national stability.

I. Judicial System and Reform Process

The founding of the People's Republic of China in 1949 ushered in a new era for the building of China's judicial system. The Common Program of the Chinese People's Political Consultative Conference, which functioned as a provisional Constitution, and the Organic Law of the Central People's Government of the People's Republic of China, both promulgated in September 1949, laid the cornerstone for legal construction in New China. The Constitution of the People's Republic of China promulgated in 1954, the Organic Law of the People's Courts of the People's Republic of China, the Organic Law of the People's Procuratorates of the People's Republic of China among other laws and regulations, defined the organic system and basic functions of the people's courts and procuratorates, established the systems of collegiate panels, defense, public trial, people's jurors, legal supervision, civil mediation, putting into place the basic framework of China's judicial system.

Toward the end of 1950s, especially during the ten-year tumultuous "cultural revolution" (1966-1976), China's judicial system suffered severe damage. Since the reform and opening-up policies were introduced in 1978, China, after summing up its historical experience, established the fundamental policy of promoting socialist democracy and improving socialist legal construction, restored and rebuilt the judicial system, and formulated and amended a range of fundamental laws. In the 1990s, China established the fundamental principle of governing the country in accordance with the law, and quickened the step to build China into a socialist country under the rule of law. During the process of promoting social progress, democracy and the rule of law, China's judicial system is continuously improving and developing.

1. Basic Characteristics of China's Judicial System

China is a socialist country with a people's democratic dictatorship led by the working class and based on the alliance of workers and peasants. The people's congress system is the organic form of its state power. China's state system and system of government decide that its judicial power comes from the people, belongs to the people and serves the people. The people's courts and the people's procuratorates are created by the people's congresses at various levels, to which they are responsible and by which they are supervised.

The people's court is the basic judicial organ in China. The state has set up the Supreme People's Court, local people's courts at different levels and special people's courts such as military courts. They adjudicate civil, criminal and administrative cases in accordance with the law, and carry out law enforcement activities including the execution of civil and administrative cases and state compensation. The Supreme People's Court supervises the judicial work of all local people's courts and special people's courts. The people's court at a higher level supervises the judicial work of the people's court at the next lower level. In litigious activities, China adopts the systems of public trial, collegiate panels, challenge, people's jurors, defense, and judgment of the second instance as final, among others.

The people's procuratorate is the procuratorial organ in China. The state has set up the Supreme People's Procuratorate, local people's procuratorates at different levels and special people's procuratorates such as military procuratorates. The Supreme People's Procuratorate directs the work of local people's procuratorates at different levels and special people's procuratorates. A people's procuratorate at a higher level directs the work of a people's procuratorate at the next level below it. The people's procuratorate exercises legal supervision over criminal, civil and administrative litigations in accordance with the law.

The people's court and the people's procuratorate exercise their adjudicative power and procuratorial power independently and impartially in accordance with the law. Their exercise of power is subject to the supervision of the National People's Congress, the Chinese People' s Political Consultative Conference and the general public.

The people's courts, the people's procuratorates and the organs of public security handle criminal cases according to their respective functions, and collaborate with and check each other, so as to ensure the accurate and efficient implementation of law. The organs of public security take charge of the investigation, detention, arrest and pretrial in criminal cases; the people's procuratorates conduct procuratorial work, approve proposals for arrest, investigate cases directly accepted by them, and initiate public prosecution; and the people's courts are responsible for conducting trials.

2. Objectives, Principles and Process of China's Judicial Reform

Since the introduction of the reform and opening-up policies, China has witnessed rapid economic and social development, and the public's awareness of the importance of the rule of law has been remarkably enhanced. Due to the profound changes in the judicial environment, judicial work in China is facing new situations and problems. The defects and rigidity in China's current judicial system and its work mechanism are becoming increasingly prominent, and they need to be improved gradually through reform.

The fundamental objectives of China's judicial reform are to ensure that the people's courts and people's procuratorates exercise adjudicative power and procuratorial power fairly and independently; to establish an impartial, efficient and authoritative socialist judicial system; and to provide solid and reliable judicial guarantee for safeguarding the legitimate rights and interests of the people, social equity and justice, and lasting national stability.

China carries out judicial reform based on its national conditions. It draws on the sound practices of other countries but does not blindly copy them; it keeps pace with the times but does not advance rashly and blindly. It sticks to the line of relying on the people, strives to meet their expectations, tackles problems of particular concern to the people, and subjects itself to their supervision and examination, so as to ensure the reform is for the people, relies on the people and benefits the people. It pushes forward the reform in accordance with the law, abiding by the Constitution and other laws and regulations, while those measures that contravene the laws in force should only be implemented after the laws are revised. It adheres to the principle of overall planning and coordination, comprehensive designing, and proceeding in an orderly and gradual way.

As early as in the 1980s, China started reforms in court trials and ensuring professionalism in judicature, focusing on enhancing the function of court trials, expanding the openness of trials, improving attorney defense functions, and training professional judges and procurators.

In 2004, China launched large-scale judicial reforms based on overall planning, deployment and implementation. Starting with issues that caused complaints from the public and the key links that hamper judicial justice, according to the demands of promoting judicial impartiality and strict enforcement of the law, and proceeding from the regular pattern and characteristics of judicial practice, China improved the structure of its judicial organs, division of judicial functions and system of judicial management, to establish a judicial system featuring clearly defined power and responsibilities, mutual collaboration and restraint, and highly efficient operation. Thereby, China's judicial reform entered a phase of overall planning and advancing in an orderly way.

Since 2008, China has initiated a new round of judicial reform, and entered a stage of deepening in key areas and overall advancement. The reform proceeds from the demands of the public for justice, with safeguarding the people's common interests as its fundamental task, promoting social harmony as the main principle and strengthening supervision and restraint of power as priority. China aims to tackle problems in the key links that hamper judicial justice and restrain judicial capability, remove existing barriers in the institutional setup and operational mechanism as well as provision of legal guarantee, and put forward the specific tasks for judicial reform in four aspects – optimizing the allocation of judicial functions and power, implementing the policy of balancing leniency and severity, building up the ranks of judicial workers, and ensuring judicial funding. Currently, the tasks of this round of judicial reform have been basically completed, as relevant laws have been amended and improved. As China is making continuous progress in economic and social development, its judicial reform is bound to advance further.

II. Maintaining Social Fairness and Justice

Maintaining social fairness and justice is the value to be enforced in China's judicial reform. China aims its judicial reform at strengthening its judicial organs' capability in maintaining social justice by optimizing the structure of the judicial organs and allocation of their functions and power, standardizing judicial acts, improving judicial proceedings, and enhancing judicial democracy and legal supervision.

1. Optimizing the Allocation of Judicial Functions and Power

The rationalization and optimization of judicial functions and power has a direct bearing on the materialization of justice. China, starting from removing the institutional barriers that affect judicial impartiality, has enhanced internal checks in judicial organs, clarified the work relationship between the people's courts and the people's procuratorates at different levels, standardized and improved retrial procedures, and established consistent law-enforcement system and judicial authentication management system. These reforms have improved judicial organs' capacity for maintaining fairness, helped to safeguard social equity and justice, and fulfilled the public's new expectations and demands for the judicial system in maintaining justice.

Separation of filing, trial and execution of cases. The people's courts at all levels have established case-filing tribunals, execution bureaus and other departments in addition to the original criminal, civil and administrative adjudication tribunals. Case-filing, trial and execution are handled separately by different offices, which act independently and exercise a mutual-check function to ensure the fair exercise of adjudicative and execution power.

Standardizing the retrial of remanded cases and designated cases. To correct the irregular practices in the procedures regarding retrial of remanded cases and designated cases, the Civil Procedure Law amended in 2012 revised and improved the procedure for the retrial of remanded cases. The new provisions clearly state that after the original people's court makes its ruling in the retrial of a remanded case, if the litigant makes an appeal, the people's court of second instance shall not send the case back for a retrial. The Criminal Procedure Law, amended in 2012, articulates that a criminal case designated for retrial by a lower-level people's court shall be tried by one other than the original court in principle.

Regularizing and improving a unified execution mechanism for civil and administrative cases. Full and effective execution of a judgment or verdict given by the court bears on effective protection of the lawful rights of all parties involved and the expression of judicial authority. In recent years, local people's courts have established a mechanism of execution that works closely with departments in charge of public security, procuratorial work, finance, land resources, construction, business and commerce, as well as exit-entry administration. The people's courts exercise separation of jurisdiction from execution. The higher and intermediate people's courts have established execution command centers for unified management and coordination of execution, and, when necessary, can have their power elevated or allow them to carry out the execution beyond the prescribed region. The reform of the execution system has further strengthened the internal checks on the exercise of execution power, promoted impartial and standardized execution, and effectively protected the legitimate rights of the parties concerned.

Reforming the procedures for examining and approving arrests in power-abuse cases. To prevent arrests by mistake, China has reformed the procedure for examining and approving arrests in power-abuse cases. For power-abuse cases filed with and investigated by a people's procuratorate below the provincial level, the approval for an arrest shall be examined and determined by the people's procuratorate at the next higher level. This reform has strengthened the supervision of a people's procuratorate at a higher level over one at a lower level on law enforcement.

Improving the system of judicial authentication management. Judicial authentication refers to the activity of an authenticator applying scientific technology or specialized knowledge to identify and determine the specialized issues involved in a lawsuit and giving authentication opinions. Before the judicial reform, the judicial authentication system in China had problems as legislation was incomplete, management was not standardized and standards were not consistent. To solve these problems, China's legislative organ promulgated the Decision on the Management of Judicial Authentication in 2005, thereby establishing a uniform management and registration system for judicial authentication. The judicial administrative departments of the State Council take charge of the registration and management of judicial authenticators and judicial authentication institutions in China, while the judicial administrative departments of the people's governments at the provincial level are responsible for the registration upon examination, roster formulation and roster announcement of judicial authenticators and judicial authentication institutions. The people's courts and judicial administrative departments do not have judicial authentication institutions any longer; judicial authentication institutions already set up by investigation organs to meet the needs of their work will not provide judicial authentication services to the public. The state promotes a mechanism that combines administrative management with trade associations' self-disciplinary management, and adopts the system of judicial authenticators' independent practice in accordance with the law, which ensures that judicial authentication is standardized and neutral. By the end of 2011, there were 5,014 judicial authentication institutions and 52,812 judicial authenticators approved and registered in China.

2. Standardizing Judicial Acts

Social fairness and justice shall be ensured in the trial of every case and in each judicial act. Due to the country's unbalanced economic and social development, different law-enforcement capabilities of judicial personnel and remnants of local protectionism, there are still problems like non-transparent exercise of judicial discretion and non-standardized judicial acts. In recent years, China's judicial organs have vigorously pushed forward the standardization of penalties, established the case guidance system, and enhanced case management, all of which have promoted standardization of judicial acts.

Standardizing penalties. To regulate acts in giving out a sentence, the Supreme People's Court, by summarizing pilot experiences, has formulated the Guiding Opinions on Sentencing by the People's Courts (Trial Implementation) and Opinions on Several Issues Concerning the Regulation of Sentencing Procedures (Trial Implementation). Both documents clarify the sentencing processes, subdivide the range of statutory sentencing and clarify the quantification standards for different circumstances when giving out a sentence. For cases of public prosecution, the people's procuratorate provides suggestions on sentencing in accordance with the law, while the litigant, the defender and the procurator may give opinions on the penalty. Comparatively independent sentencing procedures have been established for court trials, so as to facilitate investigations and debates over the facts and evidence concerning conviction and sentencing in a case. The people's courts should explain the reasons for sentencing in their documents of criminal judgment. These reforms have further standardized sentencing jurisdiction, and maintained transparency and impartiality of sentencing.

Establishing the case guidance system. In 2010, China's judicial organs issued regulations on building a case guidance system, marking the establishment of a case guidance system with Chinese characteristics. Different from the system of case judgment in the common law, China's case guidance system – under the statutory law – uses cases to give directions for the accurate understanding and appropriate application of the provisions of laws. In recent years, judicial organs have made public cases that are typical in the application of laws as guiding cases and references for judicial personnel at all levels to settle similar cases. The case guidance system has improved the standardized exercise of judicial discretion, and enhanced uniformity in the application of the law.

Enhancing case management. The people's courts and people's procuratorates have set up special case management institutions to improve the management of case-handling procedures and quality. By the end of May, 2012, nearly 1,400 people's courts had set up special trial management institutions, and nearly 1,600 people's procuratorates had set up special case management institutions. Public security organs have arranged for full-time/part-time legal personnel at the basic-level law enforcement organs to supervise and examine the process of case handling. Judicial organs have widely established information platforms for case management, which have realized online case handling, supervision and appraisal, and improved the level of standardized case handling.

3. Expanding Judicial Openness

In view of multiple social conflicts, large numbers of cases, and newly emerging problems and situations, China's judicial organs, while building up their judicial capacity, are comprehensively promoting judicial openness, so as to ensure that judicial power is exercised openly, fairly and impartially under the supervision of all the people.

Expanding the items and content of judicial openness. People's courts extend judicial openness in court trial to all other processes such as case-filing, execution, hearing, issue of documents, and jurisdiction affairs. The people's procuratorates make fully public case-handling procedures, case review procedures, litigation participators' rights, interests and obligations, and results of legal supervision in accordance with the law. Public security and judicial administration organs make known to the public their main functions and responsibilities, the basis, procedures and results of law enforcement, and discipline in the case of police affairs.

Diversifying the forms and carriers of judicial information disclosure. The form of judicial openness has been changed from separate information release by each judicial department to unified information disclosure through a designated information service platform. The carriers of judicial information disclosure have been extended from the traditional public notice boards, newspapers, periodicals and pamphlets, to websites, blogs, microblogs, instant communication tools, and other newly emerging online media. A press spokesman news briefing mechanism has been established and improved for timely judicial information release.

Enhancing the effectiveness of and guarantee for judicial openness. The reasoning and argumentation of all documents in relation to judgments, procuratorial work and public security affairs will be strengthened. Ordinary people and experts are invited to attend hearings and arguments. Email boxes are opened as a means of communication with the people and hotlines of the same number across the country are created for people to report offences. There are designated days when heads of judicial departments meet with visitors. The state has strengthened the manpower and material guarantees for judicial openness. All these measures have ensured that judicial openness advances in an orderly way and achieves positive results.

4. Enhancing Judicial Democracy

The people's courts as the judicial organs and the people's procuratorates as the legal supervisory organs also need to promote democracy to ensure judicial impartiality. China is striving to establish and improve the systems of people's jurors and people's supervisors. This provides a significant guarantee for developing socialist democratic politics, and realizing the people's participation in the administration of state affairs in accordance with the law.

Improving the system of people's jurors. The system of people's jurors is a major way for the public to directly participate in and supervise judicial work. In 2004, China's legislative organ promulgated the Decision on Improving the System of People's Jurors. The state has expanded the sources of people's jurors to all walks of life, and determine the people's jurors for cases by random selection from the rosters. In a collegiate panel, people's jurors have the same power as the judges, except that they cannot serve as chief judges, and exercise the right to vote independently for the findings of fact and the application of law. The people's courts at all levels have held training sessions for people's jurors, mainly focusing on judicial procedure, professional skills and awareness of the rule of law, so as to improve their capability to perform their duties.

The graphics shows cases with the Participation of People's Jurors from 2006 to 2011, according to China's white paper on judicial reform published by the Information Office of the State Council on Oct. 9, 2012. (Xinhua)

(Table 1. Cases with the Participation of People's Jurors 2006-2011)

Attempt to establish the system of people's supervisors. In 2003, the Supreme People's Procuratorate launched a pilot program to establish the system of people's supervisors. In October 2010, this system is comprehensively implemented in procuratorial organs throughout the country. People's supervisors are selected from all walks of life who supervise and assess, according to supervisory procedures, the following situations in power-abuse cases handled by the people's procuratorates: failure in putting a case on file for investigation, wrongfully putting a case on file for investigation, and withdrawing a case or stopping prosecution. From October 2003 to the end of 2011, people's supervisors in China supervised 35,514 cases, and gave opinions different from the original ones of the people's procuratorates in 1,653 cases. People's supervisors' votes in 908 cases were adopted by the people's procuratorates, accounting for 54.93% of the total.

5. Strengthening Legal Supervision by Procuratorial Organs

The people's procuratorates exercise legal supervision over judicial activities, such as investigation, trial and execution. China sets enhancing supervision over judicial power as the focus of its judicial reform, and has taken a range of measures to strengthen legal supervision.

Strengthening legal supervision over case-filing and activities of the investigation organs. The people's procuratorates and organs of public security have established a briefing system and information-sharing platform for criminal cases. By means of examining and approving for arrest, handling people's petitions and visits, complaints of litigants, public opinion and media reports, the people's procuratorates and organs of public security can promptly find clues to failures in putting a case on file for investigation, or wrongfully putting a case on file for investigation, so that they can review and deal with such situations in accordance with the law. When accepting a case, a charge or a reported offence, or discovering that investigation personnel have collected evidence illegally, the people's procuratorates give suggestions for correction based on investigation and affirmation, and in the meantime, enhance supervision over the examination and approval of an arrest, the extension or recalculation of an investigation or detention. In 2011, the procuratorial organs in China supervised the filing of 19,786 cases. They urged the correction of unlawful procedures during the investigation of 39,432 cases.

Strengthening legal supervision over the judicial activities of the people's courts. For criminal, civil and administrative judgments, rulings and mediation decisions that have come into effect, if mistakes are found in them or which might damage the national or public interest, or contravene legal procedures and affect judicial justice, the procuratorial organs are entitled to lodge a protest or give procuratorial suggestions and take other supervisory measures. The people's courts shall deal with the matter and give a written reply within a month after receiving the procuratorial suggestion.

Strengthening legal supervision over penalty execution and surveillance and control process. In view of the exposure of some pernicious incidents in detention houses and prisons in recent years, the procuratorial organs, along with related departments, have launched a campaign to review law-enforcement work in detention houses and to "remove hidden dangers of accidents and promote safe custody" in prisons, in order to ensure the implementation of surveillance and control according to law. The procuratorial organs have intensified supervision over prison and other places of surveillance by regulating and strengthening the work on resident procurator's offices established at these places, building up a network to share information on law enforcement and monitoring in these places, and improving and implementing mechanisms for supervision over detention procedures and for on-site inspections. In addition, the procuratorial organs have intensified supervision over commutation of punishment, parole and temporary execution of sentences outside prison, worked to establish a supervision mechanism for the punctual implementation of penalty changes, and conducted special checks on the implementation of medical parole and the use of enforcement tools and punishing confinement at detention houses. The newly amended Criminal Procedure Law promulgated in 2012 stipulates that prisons, detention houses and other surveillance agencies, when giving suggestions or written proposals to the people's courts for commutation of punishment, release on parole or execution of sentence outside prison, should send the written proposals or copies of them to the people's procuratorates, which can submit their opinions to the people's courts in writing.

Strengthening supervision over judicial functionaries' acts of dereliction of duty. The Supreme People's Procuratorate, together with the Supreme People's Court and other relevant organs, have formulated Some Regulations on Intensifying Legal Supervision over Judicial Functionaries' Dereliction of Duty in Litigation Activities. It makes clear that procuratorial organs can exercise their supervision over 12 acts of dereliction of duty (including bending the law for personal gains) on the part of judicial functionaries by investigating and confirming the alleged violations, giving rectification opinions, and suggesting that the judicial functionaries in question be replaced, in order to punish dereliction of duty, to curb judicial corruption and safeguard justice.

III. Strengthening Human Rights Protection

To strengthen the protection of human rights is an important goal of China's judicial reform. China's legislative body promulgated its 2004 amendments to the Constitution, adding "the state respects and protects human rights" to it. The Criminal Procedure Law amended in 2012 included "respecting and protecting human rights" in the general provisions. China's judicial organs are taking effective measures in accordance with the law to deter and prohibit extorting confessions by torture, protect the rights to defense of criminal suspects and defendants, protect attorneys' rights to exercising their duties, limit the applicable measures of detention to protect the lawful rights of detainees, strengthen the protection of the legal rights and interests of detainees, strengthen the protection of juvenile suspects and defendants, strictly control and prudently apply the death penalty, improve the systems of community rehabilitation for inmates and assistance for persons released after serving their terms, and improve the state compensation system and establish systems including the criminal victim relief system, in an attempt to materialize efforts in human rights protection in the sphere of criminal justice.

1. Prohibiting and Deterring Extortion of Confessions by Torture

To improve the investigation and questioning system is a prerequisite for building the rule of law, and it is also an important method for strengthening judicial supervision and protecting the legal rights and interests of criminal suspects in accordance with the law. China is constantly improving its laws to prohibit the exacting of evidence through torture or other illegal means by judicial officials.

Banning self-incrimination. The Criminal Procedure Law amended in 2012 clearly stipulates that no person may be forced to prove his or her own guilt, and no criminal suspects or defendants may be forced to confess.

Excluding illegally obtained evidence. The Criminal Procedure Law amended in 2012 makes it clear that confessions by a suspect or a defendant obtained through extortion or other illegal means and witness's testimony and victim's statements obtained through the use of violence, threats or other illegal means should be excluded from evidence. If physical or documentary evidence is collected in ways violating legal procedures and severely affecting judicial justice, such evidence should be excluded if no correction or justification is provided. It also stipulates the specific procedure for exclusion of such evidence. Once evidence that should be excluded is found by public security organs, people's procuratorates or people's courts during the course of investigation, prosecution review or trial, such evidence should be excluded in accordance with the law.

Improving the system of detention, taking a person into custody after arrest, and interrogation. A person who has been detained must be sent to a house of detention within 24 hours. When a person is arrested, he/she must be taken into custody immediately in a house of detention, where the interrogation shall be conducted. With advances in the IT-based law enforcement by judicial organs, interrogation, detention, court trials and activities happening in places of custody are recorded and video taped. The practice of recording and videotaping investigation and questioning processes is widely adopted. The law explicitly states that for crimes punishable by life imprisonment or death and other serious crimes, audio or video recording of the interrogation process is mandatory. The audio or video recording should cover the entire process of the questioning and should be complete.

2. Protecting the Right to Defense of Suspects and Defendants

The system of advocacy set up for implementing the right to defense as stipulated in China's Constitution is a basic system in China's criminal litigation. It demonstrates the respect of the state for human rights such as those to life and freedom. In recent years, China has been reforming and improving its system of advocacy, aiming to change the old conception of "stressing fighting crimes, but ignoring human rights protection" in judicial practice, and make the system of advocacy play its due role in human rights protection.

Ensuring timely defense. The Criminal Procedure Law of 1979 stated that a defendant is not entitled to appoint a defender until he/she is undergoing court trial. The amended version in 1996 stipulated that a criminal suspect is entitled to hire an attorney for legal assistance during the investigation period, and appoint a defender when the case is handed over to a prosecution organ when the investigation is concluded. And the newly amended Criminal Procedure Law of 2012 went further to specify that a criminal suspect has the right to appoint a defender at any time as of the date when he/she is interrogated for the first time or from the day on which compulsory measures are adopted against him/her. A defendant is entitled to hire a defender any time he/she wants. If a criminal suspect or defendant in custody requests the appointment of a defender, the people's court, the people's procuratorate or the public security organ should convey the message promptly, and a defender may also be appointed by his/her guardian or a close relative on his/her behalf.

Expanding the scope of legal assistance. In order to further protect the rights to defense and other relevant rights of criminal suspects and defendants, the Criminal Procedure Law amended in 2012 expanded the scope of legal assistance in criminal litigation, to make it cover the investigation and prosecution review processes as well as trials, and expanded the scope of people entitled to receive such assistance. If the criminal suspect is blind, deaf or mute, or is a minor or is a mentally ill person who has not completely lost his/her capacity to comprehend or to control his/her behavior, or if a criminal suspect may be sentenced to life imprisonment or death, but he/she has not appointed a defender, the relevant people's court, people's procuratorate or public security organ should inform the legal assistance agency to assign a defense attorney.

Stressing witness's duty to testify in court. Witness testimony in court is crucial to improving the quality of a court trial. In order to have more witnesses testify in court, the Criminal Procedure Law amended in 2012 defines the scope of witness appearance at a court and sets up an assistance mechanism for their appearance at court. It stipulates that if the prosecutor and the defender disagree upon the testimony of a witness that bear significantly on sentencing, the witness should attend the court. A witness should be compensated for transportation, accommodation and meal expenses related to his/her court duties by the government. The employer of the witness may not reduce or reduce in disguise the witness's remuneration, bonuses or other social benefits in the period he/she is absent from work providing testimony.

Improving protection for witnesses. In cases involving serious crimes, if the personal safety of a witness, expert witness, or victim or a close relative of the same is at risk because of court testimony, the relevant people's court, people's procuratorate and public security organ should withhold the personal information, and disguise the appearance and voice of such persons during testimony, prohibit certain persons to be in contact with the witnesses, or their close relatives, and take special measures for personal and residential protection.

3. Protecting Lawyers' Rights to Practice

The protection of lawyers' rights to practice in the course of criminal litigation is essential to protecting the lawful rights and interests of the criminal suspect or defendant and ensuring that such cases are dealt with impartially. China is revising related laws to provide a legal guarantee for lawyers to overcome difficulties in meeting with the suspect or defendant, accessing to materials concerning the case and obtaining evidence through investigation.

The Law of the People's Republic of China on Lawyers, amended in 2007, supplemented and stressed lawyers' rights in the course of litigation, particularly criminal litigation. It stipulates that the representation or defense opinions presented in court by a lawyer shall not be subject to legal prosecution so long as they do not compromise national security, maliciously defame others or seriously disrupt court order. These measures have effectively promoted the exercise of the defense function of lawyers. From 2006 to 2011, lawyers throughout the country provided defense for a total of 2,454,222 cases, an increase of 54.16% over the period 2001-2005.

A timely meeting with a client in custody, access to case materials and obtaining evidence through investigation bear directly on the practice of the defense attorney in criminal litigation. The Criminal Procedure Law amended in 2012 specifies that, except for few cases, a defense attorney who holds a license for practicing law, a certificate of his law firm and a letter of attorney or an official legal assistance letter may meet a detained suspect or defendant. Such a meeting is not to be monitored. Starting from the date of the review by the people's procuratorate, a defense attorney may have access to, extract and copy filed materials concerning the case. A defender may apply to the relevant people's procuratorate or people's court for evidence of the innocence of the defendant or the insignificance of the alleged crime collected by the public security organ or the people's procuratorate. It also specifies that if a defender thinks the public security organ, the people's procuratorate, the people's court or their staff hinders him/her from exercising his/her litigation right, he/she has the right to make a petition/accusation to a people's procuratorate at the same level or at the next higher level. The people's procuratorate must review the petition/accusation in a timely fashion. If the petition/accusation is true, the people's procuratorate will notify the relevant department to make corrections to its acts.

4. Restrictions on Application of Custody

In order to safeguard public safety and guarantee the smooth conduct of criminal case investigation, Chinese law specifies both custodial and non-custodial measures to be imposed on a criminal suspect or defendant as well as the strict conditions of their application. To further regulate the application of these compulsory measures and strengthen the protection of civil rights, the Criminal Procedure Law amended in 2012 further improves the compulsory custodial measures.

Refining conditions and approval procedures for arrest. The newly revised Criminal Procedure Law clearly defines social risk criteria of offences, stipulating that when a people's procuratorate reviews and approves an arrest application it may question the suspect. It must question the suspect when it doubts whether the conditions for arrest are met, or the suspect requests to give a statement to the prosecutor face to face, or the investigation may have been in serious violation of the law. If the defense attorney asks to express his opinion, this request should be granted. These provisions help investigators and the investigating authorities get a thorough understanding of the case, and an accurate grasp of the conditions for arrest, thus avoid putting someone in custody by mistake.

Establishing a system of review over the necessity of detention. After a criminal suspect or defendant is arrested, the people's procuratorate should still check the necessity for detention. If the detention is found to be not necessary, the judicial authorities concerned should be advised to release the detainee or alter the compulsory measures.

Improving the procedures for terminating and altering compulsory measures imposed on detained suspects or defendants. The people's court, people's procuratorate or public security organ shall cancel or alter the compulsory measures promptly or release the detained person upon expiration of the statutory period for custody or as soon as they find that the custody measures imposed on a suspect or a defendant are not appropriate. The criminal suspect, defendant, his statutory representative, close relative or defender are entitled to request an alteration of the compulsory measures imposed, and the relevant authority shall respond within three days.

Expanding application of residential surveillance and reducing application of detention. The Criminal Procedure Law revised in 2012 defined residential surveillance as an alternative to detention. It puts under residential surveillance those who meet the conditions for arrest but are seriously ill and unable to take care of themselves, or pregnant women or women currently breastfeeding their own babies, or someone who is the only caregiver of a person who cannot take care of himself/herself.

5. Protecting the Legal Rights and Interests of Detainees

A house of detention is a criminal custody institution for detaining persons who have been arrested and taken into custody in accordance with the law. Protecting detainees' legal rights and interests not only demonstrates the level of civilized and standardized legal enforcement of the house of detention but is also the need for human rights protection.

China attaches great importance to improving the surveillance level of houses of detention, prohibits extorting confessions by torture and overdue custody, improves the conditions for detention and surveillance, improves the living conditions of detainees and protects their lawful rights and interests. A body surface examination will be conducted on a detainee daily within seven days after he/she is sent to a house of detention, and this examination system is also strictly implemented before and after a round of interrogation, as well as before and after a detainee is sent away from or back to a house of detention. The system of one bed for each inmate will be gradually adopted, and medical care for prison inmates will be socialized, so as to ensure that an inmate gets timely treatment in case of illness. The system of investigation and handling of complaints by detainees will be improved, so will the system of detainees' meeting with the police, officials of detention houses or resident procurators upon their requests, so as to receive and investigate complaints and accusations by detainees on time. When the term of detention for a detainee is to expire, the house of detention should submit a written report to the resident procurator's office, which in turn will supervise whether the release of the detainee or alteration of the compulsory measures by the investigation authorities are carried out promptly. From 2008 to 2011, procuratorial organs conducted supervision and examination of houses of detention throughout the country, and corrected 5,473 cases of illegal detention. Efforts are being made to crack down on bullying rogues in prisons, and alarm devices are installed in each cell so that the detainees can call the police on time in case of abuse. The practice is adopted whereby officials talk to detainees upon their release from the house of detention, with follow-up observations and meetings with them for better monitoring over bullying rogues in houses of detention. A responsible system is implemented for chief and assistant policemen in management of prison cells, and those concerned shall be held accountable if there are serious injuries or deaths of detainees inflicted by bullies because of lax management. The system of inviting special supervisors to inspect detention facilities will be established whereby invited special supervisors may come and inspect the performance of duties and law enforcement by the police in the houses of detention during working hours without notification in advance. In 2010, the number of accidents in houses of detention fell by 31.6% compared with 2009. Video meetings with detainees is being introduced in houses of detention across the country to facilitate family visits. The systems of security risk assessment and separate management of detainees have been established, and psychological intervention has been strengthened for detainees. The working principle of "education, persuasion and rehabilitation," which integrates educational measures with management and care for detainees, is upheld in order to help them foster again a positive attitude towards life and healthy lifestyle.

6. Protecting the Legal Rights and Interests of Juvenile Suspects and Offenders

China adopts the measure of combined punishment and protection to help juvenile offenders and does the utmost to rehabilitate them and get them reintegrated into society. China specifies the principle of "education, persuasion and rehabilitation" for juvenile offenders, sticking to the principle of applying primarily educational measures, and taking punitive sanctions as ancillary means. The judicial organs assign officials who have a good knowledge of the physical and psychological characteristics of minors to handle juvenile cases. If a minor defendant has not appointed a defender, the judicial organs should notify a legal assistance agency to assign an attorney to defend him/her. There are strict rules regarding the arrest of a juvenile suspect or defendant. When a people's prosecutor's office reviews and approves an arrest and a people's court decides on the arrest of a minor, the minor shall be questioned and the defense attorney's opinion shall be heeded. Minors held in custody, arrested or are under criminal punishment shall be detained, administered and educated separately from adults. During the interrogation and trial of juvenile criminal cases, the legal representative of the minor should be present. The court may also inform the minor's other adult relatives or representatives of his/her school, work unit, place of residence or juvenile protection organizations of the trial so that they shall be present. If the legal representative or any other relevant person present believes that the legitimate rights and interests of the minor have been infringed upon during the interrogation or trial, he/she may express his/her opinion thereon. The interrogation or court records shall be made available on the spot to the legal representative or other relevant person present to read or be read out to them. When female juvenile suspects are interrogated, a female officer shall be present. For a minor whose offence is not serious, therefore may be sentenced to less than one year in prison but who has shown remorse, the people's procuratorate may decide not to proceed with prosecution, with conditions attached. The judicial organs may take into consideration the family and school background, cause of crime, guardianship and education of a juvenile offender and use them as reference when handling the case. Trial of cases in which the offenders are under the age of 18 shall not be open to the public. If the offender is under 18 at the time of the crime and sentenced to less than five years of imprisonment, the records of the crime shall be sealed. These records shall not be disclosed to any institution or individual unless they are required by judicial authorities for handling cases or by relevant institutions for inquiry in accordance with state regulations. Amendment Eight to the Criminal Law promulgated in 2011 makes clear the conditions under which probation is applicable to a minor. It also stipulates that juvenile offenders do not constitute recidivists. By July 2011, a total of 2,331 juvenile courts had been set up across the country. From 2002 to 2011, thanks to efforts from all sectors of society, the rate of recidivism of China's juveniles remained at 1% to 2%. In recent years, cases of juvenile delinquency have been falling, and the proportion of juvenile offenders among the criminal population is gradually decreasing.

The graphics shows punishments meted out by people's courts on juvenile criminals from 2009 to 2011, according to China's white paper on judicial reform published by the Information Office of the State Council on Oct. 9, 2012. (Xinhua)

(Table 2. Punishments Meted Out by People's Courts on Juvenile Criminals, 2009-2011)

7. Strict Control over and Prudent Application of the Death Penalty

China retains the death penalty, but strictly controls and prudently applies it. China's Criminal Law stipulates that the death penalty shall only be applied to criminals who have committed extremely serious crimes, and has very strict stipulations on its application. Amendment Eight to the Criminal Law promulgated in 2011 eliminated the death penalty for 13 economy-related non-violent offences, accounting for 19.1% of the total death penalty charges. It stipulates that death penalty shall generally not be used for people who are already 75 years old at the time of trial. It also established the system of death penalty with a suspension of execution and put restrictions on reduction of sentences. These are attempts to create conditions in legislation and system to gradually reduce the use of the death penalty.

The death penalty bears directly on the citizen's right to life, so it must be applied in a very prudent manner. Starting in 2007, only the Supreme People's Court has the right to approve death penalty. In China, court trials of all death penalty cases of the second instance are open to the public. The state has improved the death penalty review procedure and strengthened supervision over the death penalty review. When the Supreme People's Court reviews a death sentence, it shall question the defendant, and hear the opinion of the defense attorney if the attorney makes the request. During the review of a death sentence, the Supreme People's Procuratorate may advise the Supreme People's Court of its opinions. The reform of the death penalty review procedure guarantees fairness in handling death penalty cases. Since 2007, when the Supreme People's Court began to exercise the right to review death sentences, the standard for the application of the death penalty has been more uniform and the number of death sentences in China has dropped gradually.

8. Improving Community Correction System for Persons Serving Sentences and Assistance System for Persons Released from Prison

Improving law-enforcement conditions of prisons and results of education and reform. China is striving to build a just, clean, civilized and efficient prison system, realizing its reform objective of "full-sum guarantee, separation of administrative and business functions, separation of revenues and expenditures, and standardized operation" of prisons. The expenses for jail administration, criminal reformation, prisoners' cost of living, and jail facilities are all guaranteed by the government budget. Inmates are required to work in prison and get paid. Every week, they work for five days, receive classroom education for one day and rest for one day. Attempts are made to strengthen moral, cultural, and technical education to inmates and give them vocational training so as to enhance their ability to make a living after being released. Since 2008, a total of 1.26 million inmates have completed literacy and other compulsory education courses while serving their sentences, and over 5,800 people have acquired college diplomas recognized by the state. Over 30,000 skill-training courses of various kinds have so far been conducted by prisons across the country, and over 75% of inmate trainees have received related certificates, made about 14,000 technological innovations and obtained over 500 invention patents.

Carrying out community correction. In recent years, China has committed itself to reforming and improving the punishment system. It launched this effort in 2003 to introduce community correction experiments first, and then spread it across the country in 2009, putting criminals who have been under surveillance, received a suspended sentence, been released on parole or temporarily served a sentence outside prison into community correction organizations. The aim of this is to correct their crime-prone mentality and harmful behavior with the assistance of social forces and help them reintegrate into society. Community correction has been established as a legal system by China's Criminal Law and Criminal Procedure Law. By June 2012, a total of 1.054 million people had received community correction, and 587,000 people had been released from such correction. The recidivism rate of those undergoing community correction is around 0.2%.

Improving the system of assistance to people released from prison. The Chinese government pays great attention to helping solve difficulties encountered by people released from prison in life and employment. Those who are eligible for the minimum subsistence allowance are covered by this system. Others who face economic difficulties but ineligible for the minimum subsistence allowance are given temporary assistance. People released from prison who are starting their own businesses and enterprises providing jobs for them can enjoy tax breaks and reduction of administrative fees. According to available statistics, people who are released from prison and receive social assistance across the country increased 2.7-fold from 2008 to 2011. The recidivism rate of such people remains low.

9. Improving the State Compensation System

China has established a state compensation system to compensate citizens, legal persons or other organizations if their lawful rights and interests are damaged by state organs or their functionaries in the course of enforcing their power in accordance with the law. The State Compensation Law of the People's Republic of China amended in 2010 sets up necessary offices responsible for state compensation, opens up the channels for claiming compensation, expands the compensation scope, specifies the burden of proof, adds compensation for psychological injury, increases the compensation standards, and guarantees the timely payment of compensation. This has further improved the system of administrative compensation, criminal compensation, and non-criminal judicial compensation. In recent years, the standard of state criminal compensation has been rising along with social and economic development. The daily payment for infringement upon a citizen's right to freedom was increased from 17.16 yuan in 1995 to 162.65 yuan in 2012. In 2011, a total of 6,786 cases concerning administrative compensation (first instance), criminal compensation and non-criminal judicial compensation were concluded by people's courts at all levels. Among them, 868 were criminal compensation cases, with the aggregate amount of compensation standing at 30.67 million yuan, representing increases of 16.04% and 42.9% respectively as compared with 2009.

10. Establishment of Assistance System for Crime Victims

In recent years, China has been actively exploring ways to establish an assistance system for crime victims. The government will provide appropriate financial support to crime victims who are not able to get effective and timely compensation, live in poverty and particularly to those violent crime victims who are severely injured, disabled or dead or to their immediate family members. The assistance standard and scope for crime victims shall be set in the light of the local economic and social conditions. The crime victim assistance work should be done in combination with related measures, such as legal assistance, judicial assistance and social security, improving the guarantee system for the rights and interests of crime victims. From 2009 to 2011, the judicial authorities issued assistance funds worth a total of 350 million yuan to 25,996 crime victims, and provided legal assistance in 11,593 cases.

IV. Enhancing Judicial Capabilities

Improving judicial capabilities is an important goal of China's judicial reform. In recent years, China has continuously improved its qualification system for the legal profession, strengthened occupational and ethical training, and improved its funding guarantee, thus effectively improving judicial capabilities and laying a solid foundation for enhancing the public credibility of the judiciary.

Implementing a unified national judicial examination system. China has established and constantly improved its national judicial examination system by incorporating qualification examinations for junior judges, junior prosecutors, lawyers and notaries. The national judicial examination system for access to the legal profession plays an important role in regulating qualifications for legal personnel, improving the overall quality of judicial staff and promoting the professionalism of legal personnel. Since 2002, the national judicial examination has been held annually. Organized and implemented nationwide, it has evolved into a unified system for access to the legal profession. By the end of 2011, nearly 500,000 people had passed the national judicial examination and were qualified to work in the field of law.

Establishing a tiered law-enforcement qualification examination system for the police. To enhance the capabilities of its police officers, China requires all on-the-roster police officers in public security organs to take a qualification examination on law enforcement. Those who fail shall not be entitled to enforce the law. In 2011, the examination was taken by a total of 1.73 million police officers, of whom over 1.69 million passed.

Strengthening occupational training for judicial staff. To keep up with the times and meet the public's increasing demands on the judiciary, China pays increasing attention to improving the occupational training system for judicial staff and elevating their capabilities. The central and provincial-level judicial organs have now established training agencies, formulated training plans, and extended training for all judicial staff, while setting up various specific training systems, including required training for junior officials and officials prior to promotion. The training programs have changed the traditional mode that focused on higher academic degrees and theoretical knowledge, but selected judges, prosecutors and police officers who have rich practical experience and a relatively high level of theoretical knowledge to serve as teachers. This educational training is designed to tackle the key, difficult points and newly emerging conditions and problems, and constantly improve practicability. Over the past five years, China has trained some 1.5 million judges, 750,000 prosecutors and 6 million police officers.

Intensifying professional ethical training for judicial staff. In light of different features of their work, judicial organs have formulated basic work ethics, setting forth specific requirements for judicial staff in such aspects as moral values, conduct in performing duties, discipline, style and etiquette in work, and conduct off duty. In 2011, a campaign for spreading core values was launched among China's judicial staff, taking "loyalty, for the people, justice and incorruptibility" as the common values to be held by them.

Strengthening professional ethics training for lawyers. This training, which highlights "always following the law, observing good faith, working diligently, and ensuring justice," is being carried out to build up the professional ethics of lawyers. Attempts are made to consolidate the self-discipline of the lawyers association, to establish a credibility system for practicing lawyers, and to improve the mechanism for evaluating and supervising the credibility of practicing lawyers and for punishing dishonest practicing lawyers so as to spur lawyers to increase their sense of responsibility in safeguarding the lawful rights and interests of the recipients of their services, to guarantee proper enforcement of the law, and to uphold equity and justice and ultimately to improve the moral standards and credibility of lawyers.

The graphics shows composition of lawyers in China in 2011, according to China's white paper on judicial reform published by the Information Office of the State Council on Oct. 9, 2012.

(Chart 1. Composition of Lawyers in China, 2011)

Expanding space in which lawyers play their role. China has borrowed international experience in establishing the systems of public defenders and corporate lawyers. Since 2002, the country has trial-established the systems to provide legal counsel for government decision-making and major corporate operations, thus improving the structure of the law business that is composed of public defenders, corporate lawyers as well as lawyers in the common sense (including full-time and part-time ones). The Lawyers Law, revised in 2007, improves the organizational form of law firms, allowing individuals to open law firms. Thus, a setup of state-funded, partnership and individually owned law firms has been established. By the end of 2011, China had had 18,200 law firms, an increase of 31.6% compared with 2008. Among them, 13,500 were partnerships, 1,325 state-funded ones and 3,369 individually owned ones. There had been more than 210,000 lawyers, of whom full-time lawyers accounted for 89.6%, part-time ones made up 4.5%, while the rest were corporate lawyers, public defenders, legal-assistance lawyers and military lawyers. In 2011, China's lawyers acted as legal counselors for 392,000 clients, an increase of 24.6% compared with 2008; they handled 2.315 million litigation cases, 625,000 non-litigation cases and 845,000 legal-assistance cases, up by 17.7%, 17% and 54.5% respectively as compared with 2008.

The graphics shows cases undertaken by lawyers from 2008 to 2011, according to China's white paper on judicial reform published by the Information Office of the State Council on Oct. 9, 2012.
(Chart 2. Cases Undertaken by Lawyers from 2008 to 2011)
 

Reforming the funding guarantee system for judicial organs. China initiated a new round of judicial reform in 2008, clearly proposing that a funding guarantee system for judicial organs will be established, featuring "funding by category, separate management of income and expenditure, and full-sum coverage." The central and provincial governments have increased their funding for judicial organs, ensuring full-sum coverage for the expenses of judicial organs at all levels, resulting in great improvement in the performance capacity of grassroots judicial organs. Litigation fees collected by judicial organs in accordance with the law and revenues from fines and confiscations are all turned over to the national treasury to ensure the separation between income and expenditure as well as between penalty decisions and penalty payments, so as to halt wanton collection of fees and fines that are driven by the hunger for economic gains. The state has also formulated standards for the construction of basic facilities and equipment for judicial organs to improve their working conditions and information and technological levels, providing concrete guarantees for enhancing judicial capabilities.

V. Judicial Power Serving the People

Putting the people first and exercising judicial power for the people are the fundamental starting point and ultimate objective of judicial work in China. In recent years, in light of new situations and requirements coming along with the rapid socioeconomic development, China has made continuous efforts in promoting the development of the grassroots judicial organs by intensifying service consciousness in judicial work, extending work platforms and improving work procedures, so as to provide more convenience for people to exercise their rights.

1. Strengthening the Development of Grassroots Judicial Organs

Most of the cases handled by the judicial bodies take place at grassroots level, and grassroots judicial institutions are the frontline platforms providing judicial services to the public. The local grassroots courts, procuratorates, public security organs and judicial administrative bodies are strengthening such agencies as people's tribunals, procuratorial offices, police stations and judicial offices to make judicial services close to the people and provide better service to them.

Strengthening the construction of grassroots people's courts. Every year grassroots people's tribunals try an average of 2.4 million cases, accounting for one-third of all cases tried by the people's courts of first instance across the country. In recent years, to facilitate litigation, local grassroots people's courts have resumed, built or improved the people's tribunals, and promoted a mechanism for people's tribunals to directly place cases on file for investigation by simplifying this procedure. Currently, China has nearly 10,000 people's tribunals, covering almost all towns or townships and urban neighborhoods. Convenient litigation offices and liaison points have been set up in remote villages and litigation liaisons are appointed. Circuit tribunals have been set up in places where there is relative concentration of population, and they are encouraged to receive and hear cases as they go the rounds so as to serve the people as best they can.

Strengthening the construction of grassroots procuratorial offices. Local grassroots people's procuratorates have established sub-offices in some major townships or towns to receive reports from the masses about offences, their complaints and petitions, to find clues to crimes involving government functionaries, to exercise legal supervision over illegal practices in litigation, to do publicity work on crime prevention and the rule of law, to participate in social security comprehensive management and safety building, and to supervise and coordinate with community correction work. So far, China's procuratorates have set up 2,758 such offices, and 9,622 other procuratorial agencies like liaison stations and work stations.

Strengthening the construction of grassroots police stations. Public security organs are promoting a community policing strategy in urban and rural areas. Now China has more than 50,000 police stations and over 170,000 sub-stations, covering all the townships, towns and neighborhoods, making police services and distribution of police forces closer to the grassroots and the public. Public security organs have remarkably improved their capabilities to prevent and crack down on crimes, control security situation and serve the people. Since 2006, cases of serious violent crimes in eight categories handled by public security organs nationwide, including murder, robbery, rape, kidnapping and personal injury, have kept going down, by 9% in 2010 from 2009, and by 10% in 2011 from 2010.

Strengthening the construction of grassroots judicial offices. In recent years, in addition to the functions of legal publicity, legal assistance, mediation guidance and grassroots legal services, the grassroots judicial offices have taken upon themselves such new functions as community correction, and settling down and rehabilitating those committing minor offences. Currently, China has more than 40,000 such offices, covering most of the country's townships or towns and urban districts. In the 2004-2011 period, the judicial offices solved 2.84 million disputes, assisted in the mediation and settlement of 46.77 million difficult and complex disputes, participated in resettlement of 2.69 million ex-convicts, and guided the handling of 1.12 million legal-assistance cases.

2. Simplifying Case-Handling Procedures

Recent years have seen a sharp rise in litigation cases. On the basis of giving comprehensive consideration to the nature and complexity of the cases, the people's courts classified the cases into complex ones and simple ones and adopted different hearing procedures for different cases, thus applying different hearing procedures to cases of different natures to optimize judicial resources and enhance litigation efficiency.

Extending the scope of application of the summary procedures for criminal cases. The Criminal Procedure Law amended in 2012 extends the scope of application of the summary procedures from cases punishable by no more than three years in jail to all criminal cases under the jurisdiction of grassroots people's courts.

Promoting the reform of small-claim litigation. To safeguard the legitimate rights and interests of the parties concerned promptly and fairly, small-claim litigations are heard using simple procedures on a trial basis in some grassroots people's courts. If both parties involved agree to use simple procedures, when the people's court hears a civil case in which the facts, rights and obligations are clear, and involves a small sum of money, the trial of first instance will be final. Based on the previous experiences, the Civil Procedure Law amended in 2012 stipulates that among the simple civil cases heard by the grassroots people's courts, if the sum of money involved is less than 30% of the annual average wage of employees in the previous year in the province (autonomous region or municipality directly under the central government) in question, then the trial of first instance will be final. This legislation affirms the reform of small-claim litigation.

Summary procedure for administrative cases. For an administrative case of first instance in which the basic facts are evident and the dispute is trivial in character, involving a small amount of property, the people's court may, on the premise of mutual agreement between the parties concerned, have a single judge try the case, simplify the litigation procedures, and conclude the case within 45 days after it is placed on the docket.

3. Establishing Multiple Dispute Resolution Mechanisms

In response to the frequently occurring conflicts and disputes in a period of rapid social development, in 2010 the legislative organ of China promulgated the Law of the People's Republic of China on Mediation, and relevant department issued Several Opinions on Establishing and Improving Conflict and Dispute Resolution Mechanisms by Linking Litigation and Non-litigation Cases and Guidelines on Encouraging the Use of Mediation to Solve Conflicts and Disputes. They encourage the development and improvement of non-litigation dispute resolution mechanisms, thus establishing multiple dispute resolution mechanisms suited to the national conditions. Provisions such as mediation should be used first and mediation agreements shall be accepted by judicial organs are added to the Civil Procedure Law amended in 2012, reaffirming the achievements in judicial reforms.

Giving play to people's mediation. People's mediation is a Chinese way for resolving non-litigation disputes. China has established people's mediation committees in village (neighborhood) committees, townships or towns (urban districts), enterprises and public institutions, as well as industries and sectors with a high frequency of occurrence of disputes. By the end of 2011, China had 811,000 people's mediation organizations and 4.336 million mediators. In 2011, a total of 8.935 million conflicts were resolved through mediation, with a 96.9% resolution rate.

Giving play to administrative mediation. Out of the volition of the parties involved, an administrative organ may mediate administrative disputes under its jurisdiction and civil disputes relating to its functions and powers, enabling the parties concerned to reach agreement through consultation on an equal footing. Such mediation is conducive to the timely and reasonable settlement of disputes.

Giving play to judicial mediation. A people's court shall, according to its functions and powers or at the request of the involved parties, mediate civil cases lodged to it and resolve disputes under the presiding of a judge. In 2011, the people's courts in China mediated 2.665 million civil cases and had 1.746 million cases withdrawn by the parties after mediation. The people's procuratorates have established and improved a mechanism to link prosecution with mediation. With respect to a minor criminal case or a civil appeal that meets certain requirements, a people's procuratorate will ask a people's mediation organization to mediate first before it makes a decision in accordance with the law on the basis of the mediation result to jointly resolve the conflict or dispute.

Strengthening conflict or dispute resolution mechanisms by linking litigation and non-litigation cases. Highlighting the role of people's mediation organizations, social groups, lawyers, experts and arbitration agencies, China endeavors to establish a "large mediation" work system that integrates people's, administrative and judicial mediation, and improves coordination among the three in terms of procedure linkage, validity confirmation and legal guidance. As for non-litigation dispute resolution mechanisms like arbitration, the people's courts respect their own rules and provide support in such aspects as evidence and property preservation, and compulsory execution.

Improving litigation procedures for cases of public prosecution involving conciliation between the parties. For some minor crimes arising from civil disputes and for negligent crimes (excluding dereliction of duty) that may be given sentences of less than seven years, when criminal suspects or defendants repent of their crimes and obtain the forgiveness of the victims through such means as compensation for losses or apologies, and the victims wish to be reconciled with the perpetrators on a voluntary basis, both parties may be reconciled. For cases in which the parties concerned reach conciliation agreements, the people's procuratorate may recommend lenient penalties to the people's courts; and for minor crimes that do not entail criminal punishment, the people's procuratorate may issue non-litigation decisions. The people's courts may give a lenient penalty to defendants in accordance with the law.

4. Reducing Litigation Costs for Parties Concerned

China has expedited the reform and improvement of its litigation fee collection system. In 2006, China promulgated the Rules on Litigation Fee Payment, and the Methods for Management of Collection of Lawyer Service Fees. These measures markedly lowered the cost of litigants, thus mitigating the difficulty of lodging a lawsuit and hiring a lawyer, while guaranteeing normal judicial work and preventing abuse of litigation rights.

Lowering litigation charges. China has clarified the payment scope concerning litigation fees, with people's courts collecting only fees for case registration and application. China has sharply adjusted the threshold, percentage and standard of fees for cases involving property, divorce and labor disputes whose occurrence is fairly frequent, resulting in a great reduction in actual charges. Case registration fees are exempted for such cases as administrative compensation. For administrative cases, whether involving property or not, a fixed fee is collected.

Reducing and exempting litigation fees. When a party has difficulty paying a litigation fee it may apply to a people's court for judicial assistance. The state makes clear the circumstances, procedures and percentages for exemption, reduction and deferment of litigation fees, ensuring that parties with economic difficulties are able to fully exercise their litigation rights in accordance with the law.

Regulating lawyers' charges. While expanding the scope of lawyers' charges to market-adjusted prices, China continues to implement government-guided prices for service fees collected by lawyers when they act as representatives in state compensation cases and other law-suits, and rigorously standardizes the links and procedures for lawyers' charges. This effectively guarantees litigants' lawful rights and interests, as well as the state's interests while promoting the healthy development of the law profession.

Facilitating litigation. Judicial organs have generally established litigation service centers, and case registration and reception centers, and initiated and improved such systems as first inquiry responsibility, service commitment, open work and polite reception. They have improved such services as litigation guidance, search and inquiry, mediation prior to litigation, and meeting with people who report offences. They provide a suitable litigation environment for the public by opening hotlines and making use of information technology to provide online services such as case registration, serving a document, court sessions and inquiries.

5. Providing Legal Assistance

China attaches great importance to legal assistance. Since the implementation of the Regulations on Legal Assistance promulgated in 2003, China has gradually extended its coverage of legal assistance, and established and improved its funding guarantee system, providing free legal services for citizens with economic difficulties and parties to special cases of lawsuits, making it possible for more and more impoverished people to protect their legitimate rights and interests through legal assistance. In recent years, legal assistance has extended from criminal defence to areas involving people's livelihood, such as seeing a doctor, seeking employment and obtaining education; the standards of economic difficulty have been established in reference to local subsistence allowance standards; the subsidies for handling cases have been improved; and specific funding guarantee systems have been established for five special groups: migrant workers, the disabled, the elderly, minors and women. By the end of 2011, China had more than 3,600 legal-assistance agencies, 14,000 full-time legal-assistance personnel, 215,000 lawyers and 73,000 grassroots legal service personnel. A total of 28 provinces (autonomous regions and municipalities directly under the central government) have formulated local statutory regulations on legal assistance. Since 2009, funding for legal assistance has increased at an annual rate of 26.8%, reaching 1.28 billion yuan in 2011. The work of legal assistance has constantly improved along with socioeconomic advances.

The graphics shows the number of legal assistance cases, consultation and total funding in recent years, according to China's white paper on judicial reform published by the Information Office of the State Council on Oct. 9, 2012.

(Table 3. Number of Legal Assistance Cases, Consultation and Total Funding in Recent Years)

6. Facilitating Channels of Communication between Judicial Organs and the Public

Judicial organs in China attach great importance to listening to the public's opinions, and make proactive efforts to guarantee the people's rights to know, participate in, be heard and supervise in terms of judicial affairs. They have established special departments to strengthen communication with members of the people's congresses and members of the Chinese People's Political Consultative Conference, and handle proposals and recommendations related to judicial work. They invite members of the democratic parties, personages without party affiliation and representatives from among the general public to act as special supervisors and procurators, people's supervisors, and specially-invited consultants to oversee their work and provide comments and advice. They have built websites and microblogs to establish mechanisms for the online expression of public opinion and opinion polls, so as to facilitate communication with the general public. They also approach the public through such activities as receiving visitors, handling petitions and hosting open days.

Conclusion

Through judicial reform, China has constantly improved the socialist judicial system with Chinese characteristics, enhancing rigorous, just, polite and incorruptible law enforcement by the country's judicial organs, promoting the country's scientific development of judicial work and personnel, and winning the public's approval and support.

As circumstances keep changing, there is no end to innovation. Judicial reform is regarded as an important part of China's political system reform; it is the self-improvement and development of a socialist judicial system with Chinese characteristics. It remains a long and arduous task, and we will deepen the reform along with economic and social development. Establishing a just, effective and authoritative socialist judicial system with Chinese characteristics is the goal of our reform, and China will make continuous efforts to achieve this goal.

Diaoyu Dao and its affiliated islands are an inseparable part of the Chinese territory. Diaoyu Dao is China's inherent territory in all historical, geographical and legal terms, and China enjoys indisputable sovereignty over Diaoyu Dao.

Japan's occupation of Diaoyu Dao during the Sino-Japanese War in 1895 is illegal and invalid. After World War II, Diaoyu Dao was returned to China in accordance with such international legal documents as the Cairo Declaration and the Potsdam Proclamation. No matter what unilateral step Japan takes over Diaoyu Dao, it will not change the fact that Diaoyu Dao belongs to China. For quite some time, Japan has repeatedly stirred up troubles on the issue of Diaoyu Dao. On September 10, 2012, the Japanese government announced the "purchase" of Diaoyu Dao and its affiliated Nanxiao Dao and Beixiao Dao and the implementation of the so-called "nationalization". This is a move that grossly violates China's territorial sovereignty and seriously tramples on historical facts and international jurisprudence.

China is firmly opposed to Japan's violation of China's sovereignty over Diaoyu Dao in whatever form and has taken resolute measures to curb any such act. China's position on the issue of Diaoyu Dao is clear-cut and consistent. China's will to defend national sovereignty and territorial integrity is firm and its resolve to uphold the outcomes of the World Anti-Fascist War will not be shaken by any force.

I. Diaoyu Dao is China's Inherent Territory

Diaoyu Dao and its affiliated islands, which consist of Diaoyu Dao, Huangwei Yu, Chiwei Yu, Nanxiao Dao, Beixiao Dao, Nan Yu, Bei Yu, Fei Yu and other islands and reefs, are located to the northeast of China's Taiwan Island, in the waters between 123o20'-124o40'E (East Longitude) and 25o40'-26o00'N (North Latitude), and are affiliated to the Taiwan Island. The total landmass of these islands is approximately 5.69 square kilometers. Diaoyu Dao, situated in the western tip of the area, covers a landmass of about 3.91 square kilometers and is the largest island in the area. The highest peak on the island stands 362 meters above the sea level. Huangwei Yu, which is located about 27 kilometers to the northeast of Diaoyu Dao, is the second largest island in the area, with a total landmass of about 0.91 square kilometers and a highest elevation of 117 meters. Chiwei Yu, situated about 110 kilometers to the northeast of Diaoyu Dao, is the easternmost island in the area. It covers a landmass of approximately 0.065 square kilometers and stands 75 meters above the sea level at its peak.

1. Diaoyu Dao was first discovered, named and exploited by China

Ancient ancestors in China first discovered and named Diaoyu Dao through their production and fishery activities on the sea. In China's historical literatures, Diaoyu Dao is also called Diaoyu Yu or Diaoyu Tai. The earliest historical record of the names of Diaoyu Dao, Chiwei Yu and other places can be found in the book Voyage with a Tail Wind (Shun Feng Xiang Song) published in 1403 (the first year of the reign of Emperor Yongle of the Ming Dynasty). It shows that China had already discovered and named Diaoyu Dao by the 14th and 15th centuries.P In 1372 (the fifth year of the reign of Emperor Hongwu of the Ming Dynasty), the King of Ryukyu started paying tribute to the imperial court of the Ming Dynasty. In return, Emperor Hongwu (the first emperor of the Ming Dynasty) sent imperial envoys to Ryukyu. In the following five centuries until 1866 (the fifth year of the reign of Emperor Tongzhi of the Qing Dynasty), the imperial courts of the Ming and Qing Dynasties sent imperial envoys to Ryukyu 24 times to confer titles on the Ryukyu King, and Diaoyu Dao was exactly located on their route to Ryukyu. Ample volume of records about Diaoyu Dao could be found in the reports written by Chinese imperial envoys at the time. For example, the Records of the Imperial Title-conferring Envoys to Ryukyu (Shi Liu Qiu Lu) written in 1534 by Chen Kan, an imperial title-conferring envoy from the Ming court, clearly stated that "the ship has passed Diaoyu Dao, Huangmao Yu, Chi Yu… Then Gumi Mountain comes into sight, that is where the land of Ryukyu begins." The Shi Liu Qiu Lu of another imperial envoy of the Ming Dynasty, Guo Rulin, in 1562 also stated that "Chi Yu is the mountain that marks the boundary of Ryukyu". In 1719, Xu Baoguang, a deputy title-conferring envoy to Ryukyu in the Qing Dynasty, clearly recorded in his book Records of Messages from Chong-shan (Zhong Shan Chuan Xin Lu) that the voyage from Fujian to Ryukyu passed Huaping Yu, Pengjia Yu, Diaoyu Dao, Huangwei Yu, Chiwei Yu and reached Naba (Naha) port of Ryukyu via Gumi Mountain (the mountain guarding the southwest border of Ryukyu) and Machi Island.

In 1650, the Annals of Chong-shan (Zhong Shan Shi Jian), the first official historical record of the Ryukyu Kingdom drafted under the supervision of Ryukyu's prime minister Xiang Xiangxian (Kozoken), confirmed that Gumi Mountain (also called Gumi Mountain, known as Kume Island today) is part of Ryukyu's territory, while Chi Yu (known as Chiwei Yu today) and the areas to its west are not Ryukyu's territory. In 1708, Cheng Shunze (Tei Junsoku), a noted scholar and the Grand Master with the Purple-Golden Ribbon (Zi Jin Da Fu) of Ryukyu, recorded in his book A General Guide (Zhi Nan Guang Yi) that "Gumi Mountain is the mountain guarding the southwest border of Ryukyu".

These historical accounts clearly demonstrate that Diaoyu Dao and Chiwei Yu belong to China and Kume Island belongs to Ryukyu, and that the separating line lies in Hei Shui Gou (today's Okinawa Trough) between Chiwei Yu and Kume Island. In 1579, Xie Jie, a deputy imperial title-conferring envoy of the Ming Dynasty, recorded in his book, Addendum to Summarized Record of Ryukyu (Liu Qiu Lu Cuo Yao Bu Yi) that he entered Ryukyu from Cang Shui to Hei Shui, and returned to China from Hei Shui to Cang Shui. Xia Ziyang, another imperial envoy of the Ming court, wrote in 1606 that "when the water flows from Hei Shui back to Cang Shui, it enters the Chinese territory." Miscellaneous Records of a Mission to Ryukyu (Shi Liu Qiu Za Lu), a book written in 1683 by Wang Ji, an imperial envoy of the Qing Dynasty, stated that "Hei Shui Gou", situated outside Chi Yu, is the "boundary between China and foreign land". In 1756, Zhou Huang, a deputy imperial envoy of the Qing Dynasty, recorded in his book, the Annals of Ryukyu (Liu Qiu Guo Zhi Lue), that Ryukyu "is separated from the waters of Fujian by Hei Shui Gou to the west".

The waters surrounding Diaoyu Dao are traditionally Chinese fishing ground. Chinese fishermen have, for generations, engaged in fishery activities in these waters. In the past, Diaoyu Dao was used as a navigation marker by the Chinese people living on the southeast coast.

2. Diaoyu Dao had long been under China's jurisdiction

In the early years of the Ming Dynasty, China placed Diaoyu Dao under its coastal defense to guard against the invasion of Japanese pirates along its southeast coast. In 1561 (the 40th year of the reign of Emperor Jiajing of the Ming Dynasty), An Illustrated Compendium on Maritime Security (Chou Hai Tu Bian) compiled by Zheng Ruozeng under the auspices of Hu Zongxian, the supreme commander of the southeast coastal defense of the Ming court, included the Diaoyu Dao Islands on the "Map of Coastal Mountains and Sands" (Yan Hai Shan Sha Tu) and incorporated them into the jurisdiction of the coastal defense of the Ming court. The Complete Map of Unified Maritime Territory for Coastal Defense (Qian Kun Yi Tong Hai Fang Quan Tu), drawn up by Xu Bida and others in 1605 (the 33rd year of the reign of Emperor Wanli of the Ming Dynasty) and the Treatise on Military Preparations.Coastal Defense II.Map of Fujian's Coastal Mountains and Sands (Wu Bei Zhi.Hai Fang Er.Fu Jian Yan Hai Shan Sha Tu), drawn up by Mao Yuanyi in 1621 (the first year of the reign of Emperor Tianqi of the Ming Dynasty), also included the Diaoyu Dao Islands as part of China's maritime territory.

The Qing court not only incorporated the Diaoyu Dao Islands into the scope of China's coastal defense as the Ming court did, but also clearly placed the islands under the jurisdiction of the local government of Taiwan. Official documents of the Qing court, such as A Tour of Duty in the Taiwan Strait (Tai Hai Shi Cha Lu) and Annals of Taiwan Prefecture (Tai Wan Fu Zhi) all gave detailed accounts concerning China's administration over Diaoyu Dao. Volume 86 of Recompiled General Annals of Fujian (Chong Zuan Fu Jian Tong Zhi), a book compiled by Chen Shouqi and others in 1871 (the tenth year of the reign of Emperor Tongzhi of the Qing Dynasty), included Diaoyu Dao as a strategic location for coastal defense and placed the islands under the jurisdiction of Gamalan, Taiwan (known as Yilan County today).

3. Chinese and foreign maps show that Diaoyu Dao belongs to China

The Roadmap to Ryukyu (Liu Qiu Guo Hai Tu) in the Shi Liu Qiu Lu written by imperial title-conferring envoy Xiao Chongye in 1579 (the seventh year of the reign of Emperor Wanli of the Ming Dynasty), the Record of the Interpreters of August Ming (Huang Ming Xiang Xu Lu) written by Mao Ruizheng in 1629 (the second year of the reign of Emperor Chongzhen of the Ming Dynasty), the Great Universal Geographic Map (Kun Yu Quan Tu) created in 1767 (the 32nd year of the reign of Emperor Qianlong of the Qing Dynasty), and the Atlas of the Great Qing Dynasty (Huang Chao Zhong Wai Yi Tong Yu Tu) published in 1863 (the second year of the reign of Emperor Tongzhi of the Qing Dynasty) all marked Diaoyu Dao as China's territory.

The book Illustrated Outline of the Three Countries written by Hayashi Shihei in 1785 was the earliest Japanese literature to mention Diaoyu Dao. The Map of the Three Provinces and 36 Islands of Ryukyu in the book put Diaoyu Dao as being apart from the 36 islands of Ryukyu and colored it the same as the mainland of China, indicating that Diaoyu Dao was part of China's territory.

The Map of East China Sea Littoral States created by the French cartographer Pierre Lapie and others in 1809 colored Diaoyu Dao, Huangwei Yu, Chiwei Yu and the Taiwan Island as the same. Maps such as A New Map of China from the Latest Authorities published in Britain in 1811, Colton's China published in the United States in 1859, and A Map of China's East Coast: Hongkong to Gulf of Liao-Tung compiled by the British Navy in 1877 all marked Diaoyu Dao as part of China's territory.

II. Japan Grabbed Diaoyu Dao from China

Japan accelerated its invasion and external expansion after the Meiji Restoration. Japan seized Ryukyu in 1879 and changed its name to Okinawa Prefecture. Soon after that, Japan began to act covertly to invade and occupy Diaoyu Dao and secretly "included" Diaoyu Dao in its territory at the end of the Sino-Japanese War of 1894-1895. Japan then forced China to sign the unequal Treaty of Shimonoseki and cede to Japan the island of Formosa (Taiwan), together with Diaoyu Dao and all other islands appertaining or belonging to the said island of Formosa.

1. Japan's covert moves to seize Diaoyu Dao

In 1884, a Japanese man claimed that he first landed on Diaoyu Dao and found the island to be uninhabited. The Japanese government then dispatched secret facts-finding missions to Diaoyu Dao and attempted to invade and occupy the island. The above-mentioned plots by Japan triggered China's alert. On September 6, 1885 (the 28th day of the 7th month in the 11th year of the reign of Emperor Guangxu of the Qing Dynasty), the Chinese newspaper Shen-pao (Shanghai News) reported: "Recently, Japanese flags have been seen on the islands northeast to Taiwan, revealing Japan's intention to occupy these islands." But the Japanese government did not dare to take any further action for fear of reaction from China.

After the secret facts-finding missions to Diaoyu Dao, the governor of Okinawa Prefecture sent a report in secrecy to the Minister of Internal Affairs Yamagata Aritomo on September 22, 1885, saying that these uninhabited islands were, in fact, the same Diaoyu Tai, Huangwei Yu and Chiwe Yu that were recorded in the Records of Messages from Chong-shan (Zhong Shan Chuan Xin Lu) and known well to imperial title-conferring envoys of the Qing court on their voyages to Ryukyu, and that he had doubts as to whether or not sovereignty markers should be set up and therefore asked for instruction. The Minister of Internal Affairs Yamagata Aritomo solicited opinion from the Foreign Minister Inoue Kaoru on October 9. Inoue Kaoru replied in a letter to Yamagata Aritomo on October 21, "At present, any open moves such as placing sovereignty markers are bound to alert the Qing imperial court. Therefore, it is advisable not to go beyond field surveys and detailed reports on the shapes of the bays, land and other resources for future development. In the meantime, we will wait for a better time to engage in such activities as putting up sovereignty markers and embarking on development on the islands." Inoue Kaoru also made a special emphasis that "it is inappropriate to publicize the missions on official gazette or newspapers." As a result, the Japanese government did not approve of the request of Okinawa Prefecture to set up sovereignty markers.

The governor of Okinawa Prefecture submitted the matter for approval to the Minister of Internal Affairs once again on January 13, 1890, saying that Diaoyu Dao and other "above-mentioned uninhabited islands have remained under no specific jurisdiction", and that he "intends to place them under the jurisdiction of the Office of Yaeyama Islands." On November 2, 1893, the governor of Okinawa Prefecture applied once again for setting up sovereignty markers to incorporate the islands into Japan's territory. The Japanese government did not respond. On May 12, 1894, two months before the Sino-Japanese War, the secret facts-finding missions to Diaoyu Dao by Okinawa Prefecture came to a final conclusion, "Ever since the prefecture police surveyed the island in 1885 (the 18th year of the Meiji period), there have been no subsequent investigations. As a result, it is difficult to provide any specific reports on it… In addition, there exist no old records related to the said island or folklore and legends demonstrating that the island belongs to our country."

Japan's attempts to occupy Diaoyu Dao were clearly recorded in Japan Diplomatic Documents compiled by the Japanese Foreign Ministry. Relevant documents evidently show that the Japanese government intended to occupy Diaoyu Dao, but refrained from acting impetuously as it was fully aware of China's sovereignty over these islands.

Japan waged the Sino-Japanese War in July 1894. Towards the end of November 1894, Japanese forces seized the Chinese port of Lushun (then known as Port Arthur), virtually securing defeat of the Qing court. Against such backdrop, the Japanese Minister of Internal Affairs Yasushi Nomura wrote to Foreign Minister Mutsu Munemitsu on December 27 that the "circumstances have now changed", and called for a decision by the cabinet on the issue of setting up sovereignty markers in Diaoyu Dao and incorporating the island into Japan's territory. Mutsu Munemitsu expressed his support for the proposal in his reply to Yasushi Nomura on January 11, 1895. The Japanese cabinet secretly passed a resolution on January 14 to "place" Diaoyu Dao under the jurisdiction of Okinawa Prefecture.

Japan's official documents show that from the time of the facts-finding missions to Diaoyu Dao in 1885 to the occupation of the islands in 1895, Japan had consistently acted in secrecy without making its moves public. This further proves that Japan's claim of sovereignty over Diaoyu Dao does not have legal effect under international law.

2. Diaoyu Dao was ceded to Japan together with the Taiwan Island

On April 17, 1895, the Qing court was defeated in the Sino-Japanese War and forced to sign the unequal Treaty of Shimonoseki and cede to Japan "the island of Formosa (Taiwan), together with all islands appertaining or belonging to the said island of Formosa". The Diaoyu Dao Islands were ceded to Japan as "islands appertaining or belonging to the said island of Formosa". In 1900, Japan changed the name of Diaoyu Dao to "Senkaku Islands".

III. Backroom Deals Between the United States and Japan Concerning Diaoyu Dao are Illegal and Invalid

Diaoyu Dao was returned to China after the Second World War. However, the United States arbitrarily included Diaoyu Dao under its trusteeship in the 1950s and "returned" the "power of administration" over Diaoyu Dao to Japan in the 1970s. The backroom deals between the United States and Japan concerning Diaoyu Dao are acts of grave violation of China's territorial sovereignty. They are illegal and invalid. They have not and cannot change the fact that Diaoyu Dao belongs to China.

1. Diaoyu Dao was returned to China after the Second World War

In December 1941, the Chinese government officially declared war against Japan together with the abrogation of all treaties between China and Japan. In December 1943, the Cairo Declaration stated in explicit terms that "all the territories Japan has stolen from the Chinese, such as Manchuria, Formosa [Taiwan] and the Pescadores, shall be restored to the Republic of China. Japan will also be expelled from all other territories which she has taken by violence and greed.” In July 1945, the Potsdam Proclamation stated in Article 8: “The terms of the Cairo Declaration shall be carried out and Japanese sovereignty shall be limited to the islands of Honshu, Hokkaido, Kyushu, Shikoku and such minor islands as we determine.” On September 2, 1945, the Japanese government accepted the Potsdam Proclamation in explicit terms with the Japanese Instrument of Surrender and pledged to faithfully fulfill the obligations enshrined in the provisions of the Potsdam Proclamation. On January 29, 1946, the Supreme Commander for the Allied Powers Instruction (SCAPIN) No.677 clearly defined Japan’s power of administration to “include the four main islands of Japan (Hokkaido, Honshu, Kyushu and Shikoku) and the approximately 1,000 smaller adjacent islands, including the Tsushima Islands and the Ryukyu Islands north of the 30th parallel of North Latitude”. On October 25, 1945, the ceremony for accepting Japan’s surrender in Taiwan Province of the China War Theater was held in Taipei, and the Chinese government officially recovered Taiwan. On September 29, 1972, the Japanese government committed with all seriousness in the China-Japan Joint Statement that “the Government of Japan fully understands and respects this stand of the Government of the People’s Republic of China [Taiwan is an inalienable part of the territory of the People's Republic of China], and it firmly maintains its stand under Article 8 of the Potsdam Proclamation."

These facts show that in accordance with the Cairo Declaration, the Potsdam Proclamation and the Japanese Instrument of Surrender, Diaoyu Dao, as affiliated islands of Taiwan, should be returned, together with Taiwan, to China.

2. The United States illegally included Diaoyu Dao under its trusteeship

On September 8, 1951, Japan, the United States and a number of other countries signed the Treaty of Peace with Japan (commonly known as the Treaty of San Francisco) with China being excluded from it. The treaty placed the Nansei Islands south of the 29th parallel of North Latitude under United Nations' trusteeship, with the United States as the sole administering authority. It should be pointed out that the Nansei Islands placed under the administration of the United States in the Treaty of Peace with Japan did not include Diaoyu Dao.

The United States Civil Administration of the Ryukyu Islands (USCAR) issued Civil Administration Ordinance No. 68 (Provisions of the Government of the Ryukyu Islands) on February 29, 1952 and Civil Administration Proclamation No. 27 (defining the "geographical boundary lines of the Ryukyu Islands") on December 25, 1953, arbitrarily expanding its jurisdiction to include China's Diaoyu Dao. However, there were no legal grounds whatsoever for the US act, to which China has firmly opposed.

3. The United States and Japan conducted backroom deals concerning the "power of administration" over Diaoyu Dao

On June 17, 1971, Japan and the United States signed the Agreement Concerning the Ryukyu Islands and the Daito Islands (Okinawa Reversion Agreement), which provided that any and all powers of administration over the Ryukyu Islands and Diaoyu Dao would be "returned" to Japan. The Chinese people, including overseas Chinese, all condemned such a backroom deal. On December 30, 1971, the Chinese Ministry of Foreign Affairs issued a solemn statement, pointing out that "it is completely illegal for the government of the United States and Japan to include China's Diaoyu Dao Islands into the territories to be returned to Japan in the Okinawa Reversion Agreement and that it can by no means change the People's Republic of China's territorial sovereignty over the Diaoyu Dao Islands". The Taiwan authorities also expressed firm opposition to the backroom deal between the United States and Japan.

In response to the strong opposition of the Chinese government and people, the United States had to publicly clarify its position on the sovereignty over Diaoyu Dao. In October 1971, the US administration stated that "the United States believes that a return of administrative rights over those islands to Japan, from which the rights were received, can in no way prejudice any underlying claims. The United States cannot add to the legal rights Japan possessed before it transferred administration of the islands to us, nor can the United States, by giving back what it received, diminish the rights of other claimants… The United States has made no claim to Diaoyu Dao and considers that any conflicting claims to the islands are a matter for resolution by the parties concerned." In November 1971, when presenting the Okinawa Reversion Agreement to the US Senate for ratification, the US Department of State stressed that the United States took a neutral position with regard to the competing Japanese and Chinese claims to the islands, despite the return of administrative rights over the islands to Japan.

IV. Japan's Claim of Sovereignty over Diaoyu Dao Is Totally Unfounded

On March 8, 1972, Japan's Ministry of Foreign Affairs issued the Basic View on the Sovereignty over the Senkaku Islands in an attempt to explain the Japanese government's claims of sovereignty over Diaoyu Dao. First, Japan claims that Diaoyu Dao was "terra nullius" and not part of Pescadores, Formosa [Taiwan] or their affiliated islands which were ceded to Japan by the Qing government in accordance with the Treaty of Shimonoseki. Second, Japan claims that Diaoyu Dao was not included in the territory which Japan renounced under Article 2 of the Treaty of San Francisco, but was placed under the administration of the United States as part of the Nansei Islands in accordance with Article 3 of the said treaty, and was included in the area for which the administrative rights were reverted to Japan in accordance with the Okinawa Reversion Agreement. Third, Japan claims that China didn't regard Diaoyu Dao as part of Taiwan and had never challenged the inclusion of the islands in the area over which the United States exercised administrative rights in accordance with Article 3 of the Treaty of San Francisco.

Such claims by Japan fly in the face of facts and are totally unfounded.

Diaoyu Dao belongs to China. It is by no means "terra nullius". China is the indisputable owner of Diaoyu Dao as it had exercised valid jurisdiction over the island for several hundred years long before the Japanese people "discovered" it. As stated above, voluminous Japanese official documents prove that Japan was fully aware that according to international law, Diaoyu Dao has long been part of China and was not "terra nullius". Japan's act to include Diaoyu Dao as "terra nullius" into its territory based on the "occupation" principle is in fact an illegal act of occupying Chinese territory and has no legal effect according to international law.

Diaoyu Dao has always been affiliated to China's Taiwan Island both in geographical terms and in accordance with China's historical jurisdiction practice. Through the unequal Treaty of Shimonoseki, Japan forced the Qing court to cede to it "the island of Taiwan, together with all islands appertaining or belonging to it", including Diaoyu Dao. International legal documents such as the Cairo Declaration and the Potsdam Proclamation provide that Japan must unconditionally return the territories it has stolen from China. These documents also clearly define Japan's territory, which by no means includes Diaoyu Dao. Japan's attempted occupation of Diaoyu Dao, in essence, constitutes a challenge to the post-war international order established by such legal documents as the Cairo Declaration and the Potsdam Proclamation and seriously violates the obligations Japan should undertake according to international law.

Diaoyu Dao was not placed under the trusteeship established by the Treaty of San Francisco, which was signed between the United States and other countries with Japan and is partial in nature. The United States arbitrarily expanded the scope of trusteeship to include Diaoyu Dao, which is China's territory, and later "returned" the "power of administration" over Diaoyu Dao to Japan. This has no legal basis and is totally invalid according to international law. The government and people of China have always explicitly opposed such illegal acts of the United States and Japan.

V. China has Taken Resolute Measures to Safeguard its Sovereignty over Diaoyu Dao

China has, over the past years, taken resolute measures to safeguard its sovereignty over Diaoyu Dao.

China has, through the diplomatic channel, strongly protested against and condemned the backroom deals between the United States and Japan over Diaoyu Dao. On August 15, 1951, before the San Francisco Conference, the Chinese government made a statement: "If the People's Republic of China is excluded from the preparation, formulation and signing of the peace treaty with Japan, it will, no matter what its content and outcome are, be regarded as illegal and therefore invalid by the central people's government." On September 18, 1951, the Chinese government issued another statement stressing that the Treaty of San Francisco is illegal and invalid and can under no circumstances be recognized. In 1971, responding to the ratifications of the Okinawa Reversion Agreement by the US Congress and Japanese Diet, the Chinese Foreign Ministry issued a stern statement which pointed out that the Diaoyu Dao Islands have been an indivisible part of the Chinese territory since ancient times.

In response to Japan's illegal violation of China's sovereignty over Diaoyu Dao, the Chinese government has taken active and forceful measures such as issuing diplomatic statements, making serious representations with Japan and submitting notes of protest to the United Nations, solemnly stating China's consistent proposition, principle and position, firmly upholding China's territorial sovereignty and maritime rights and interests, and earnestly protecting the safety of life and property of Chinese citizens.

China has enacted domestic laws, which clearly provide that Diaoyu Dao belongs to China. In 1958, the Chinese government released a statement on the territorial sea, announcing that Taiwan and its adjacent islands belong to China. In light of Japan's repeated violations of China's sovereignty over Diaoyu Dao since the 1970s, China adopted the Law of the People's Republic of China on the Territorial Sea and the Contiguous Zone in 1992, which unequivocally prescribes that "Taiwan and the various affiliated islands including Diaoyu Dao" belong to China. The 2009 Law of the People's Republic of China on the Protection of Offshore Islands establishes the protection, development and management system of offshore islands and prescribes the determination and announcement of the names of offshore islands, on the basis of which China announced the standard names of Diaoyu Dao and some of its affiliated islands in March 2012. On September 10, 2012, the Chinese government issued a statement announcing the baselines of the territorial sea of Diaoyu Dao and its affiliated islands. On September 13, the Chinese government deposited the coordinates table and chart of the base points and baselines of the territorial sea of Diaoyu Dao and its affiliated islands with the Secretary-General of the United Nations.

China has maintained routine presence and exercised jurisdiction in the waters of Diaoyu Dao. China's marine surveillance vessels have been carrying out law enforcement patrol missions in the waters of Diaoyu Dao, and fishery administration law enforcement vessels have been conducting regular law enforcement patrols and fishery protection missions to uphold normal fishing order in the waters of Diaoyu Dao. China has also exercised administration over Diaoyu Dao and the adjacent waters by releasing weather forecasts and through oceanographic monitoring and forecasting.

Over the years, the issue of Diaoyu Dao has attracted attention from Hong Kong and Macao compatriots, Taiwan compatriots and overseas Chinese. Diaoyu Dao has been an inherent territory of China since ancient times. This is the common position of the entire Chinese nation. The Chinese nation has the strong resolve to uphold state sovereignty and territorial integrity. The compatriots across the Taiwan Straits stand firmly together on matters of principle to the nation and in the efforts to uphold national interests and dignity. The compatriots from Hong Kong, Macao and Taiwan and the overseas Chinese have all carried out various forms of activities to safeguard China's territorial sovereignty over Diaoyu Dao, strongly expressing the just position of the Chinese nation, and displaying to the rest of the world that the peace-loving Chinese nation has the determination and the will to uphold China's state sovereignty and territorial integrity.

Conclusion

Diaoyu Dao has been an inherent territory of China since ancient times, and China has indisputable sovereignty over Diaoyu Dao. As China and Japan were normalizing relations and concluding the Sino-Japanese Treaty of Peace and Friendship in the 1970s, the then leaders of the two countries, acting in the larger interest of China-Japan relations, reached important understanding and consensus on "leaving the issue of Diaoyu Dao to be resolved later." But in recent years, Japan has repeatedly taken unilateral measures concerning Diaoyu Dao and conducted in particular the so-called "nationalization" of Diaoyu Dao. This severely infringed upon China's sovereignty and ran counter to the understanding and consensus reached between the older generation of leaders of the two countries. It has not only seriously damaged China-Japan relations, but also rejected and challenged the outcomes of the victory of the World Anti-Fascist War.

China strongly urges Japan to respect history and international law and immediately stop all actions that undermine China's territorial sovereignty. The Chinese government has the unshakable resolve and will to uphold the nation's territorial sovereignty. It has the confidence and ability to safeguard China's state sovereignty and territorial integrity.

AMBASSADOR LOCKE: Well, welcome everyone. And we’re so honored to have Secretary Hillary Clinton with us today. And she brought the beautiful weather, so let’s thank her for the – (cheers) – beautiful weather and the very clean air. But she’s with us in the midst of another extremely busy globetrotting itinerary from the Cook Islands down near New Zealand then to Indonesia, up here to China. She came in last evening. Then she’s going to go back down tonight to Timor-Leste and then off to Brunei and then back up to Vladivostok for the APEC Economic Leaders’ Meeting.

It means to all of us, Secretary Clinton, that you’re here to take time to meet and greet our Embassy and their families. We know that this is very much in character, however, with her remarkable tenure as Secretary of State. She’s traveled more than – get a load of this – 865,000 miles and visited more than 100 countries. And China was her very first trip abroad as Secretary of State, and since then she has spent more than 365 days on the road in – a full year in less than four years as Secretary of State.

I have to let you know that the Secretary’s dedication and stamina and – are absolutely amazing. As I indicated, she came in last night. Our very first meetings with the Chinese Ministry of Foreign Affairs and top Chinese Government officials started at nine o’clock and did not end until almost one o’clock in the morning. Everyone else in the room, including the Chinese and the American staff, were falling asleep, having a hard time. (Laughter.) I was fidgeting in my chair, trying to stay alert. And I look over to Secretary Clinton. She’s sitting perfectly straight up, at full attention and alert. And your mom would be very, very proud. (Laughter.) Very energized.

But you cannot capture her remarkable career in public service in numbers. She was, of course, an amazing First Lady of the United States of America. She’s been a champion of human rights all around the world, standing up for women’s rights in particular. And we all remember her very, very first trip to China, in where she famously said that women’s rights are human rights. (Cheers and applause.) But her commitment to public service runs deep, and after serving as our nation’s First Lady, she was a very effective U.S. senator who gained bipartisan respect, something that we need a lot more of in the United States Congress these days.

For our own part, Mona and I have valued her as a friend and as a colleague. And we have a picture – we can show her the picture – in our home of Mona and myself with Secretary Clinton, then First Lady Clinton, and President Clinton during the Clintons’ 1996 reelection campaign. And Mona and I – we were running for governor in Washington and we are on bus trip through the back route of Washington State, and President Clinton and First Lady Clinton were giving us advice on how to be public servants.

And I don’t think you’ll ever forget also that later when our several-month-old Emily was on your shoulder, and you were carrying her on your shoulder. And she was, of course, the First Lady of America visiting the State of Washington, and our few-month-old baby girl, of course, when you’re on someone’s shoulder, had a little bit of a burp. (Laughter.)

But we’re so proud and honored to have you here. And I’ve served with you when you were First Lady and we were governor. I served with you as fellow cabinet members under President Obama’s Administration, and now I’m just so proud and honored to be part of your State Department team here in Beijing. (Applause.)

Madam Secretary, as you can see today, we have a large number of employees and families here to see you, and the hours and the miles you’ve spent on the road speak to your dedication, and the enthusiastic audience here today reflects our appreciation for all of your hard work, but also our admiration for your leadership, courage, tenacity, and stamina. I know that the people of China actually have a very special fondness for you, and I learned just recently that in Mandarin many Chinese refer you to as Secretary Xi-la-li, or Secretary Hillary. They refer to you like a friend.

On behalf of the men and women and the families from the State Department and all foreign affairs agencies here at Embassy Beijing, we thank you again for being here today. You’ve been to China as our nation’s First Lady, a U.S. senator, and now as Secretary of State. And this probably your – perhaps your last visit in that capacity as Secretary of State, but we expect to see you back again in another capacity in government after 2016. (Cheers and applause.) We’re looking for an even higher title then.

Ladies and gentlemen, our great honor to have with us, our great boss, Secretary of State Hillary Rodham Clinton. (Cheers and applause.)

SECRETARY CLINTON: Yes, I’ll be back as ambassador – (laughter) – a great opportunity to serve and to be a colleague of such extraordinary public servants as all of you.

As the Ambassador said, I’ve known Gary and Mona for many years now, and I am so pleased to see the impact they are both having on China and in furthering our relationship, which is so vital to both of our countries. I really am so grateful. It’s hard to believe that it was only last August that you were sworn in as our ambassador. It’s gone by very quickly. It’s been somewhat of an eventful year here at Embassy Beijing. And there’s no surprise on my part at a lot of the accomplishments that have taken place under Gary’s leadership. And I’m so pleased that Mona can be a great ambassador as well to the Chinese people. She is one of our great assets here on behalf of American diplomacy. So to both Gary and Mona and to your three children, thank you for serving your country in such a wonderful way. (Applause.)

And I want to thank DCM Bob Wang. Thank you, Bob, for your service as well. And all of you, I’m sure, know how important we feel about what we’re doing here in the Asia Pacific, and in particular in the U.S.-China relationship. It’s a complicated relationship. There’s no doubt about that. But we believe strongly it’s a vital relationship and one of the most important in determining the kind of future that we’ll have for the beautiful children and young people that I just took a picture with outside.

We have – and have said it many times – a commitment to a successful China, a China that continues to serve the needs economically of their own people, but also a China that is a positive force for global security, stability, and prosperity. Now, we are blazing new territory here, trying to find the right balance between cooperation and competition. We literally are figuring it out each day, and we are counting on all of you and your colleagues, not only here in Beijing but across China, to help us do just that. It means a lot of long hours and a lot of extra work, but we are grateful to you.

Our mission to China has almost 2,000 employees, representatives from 19 different federal agencies. That alone shows what a premium we place on the relationship. And when I worked to try to combine all of the dialogues that were happening when the Obama Administration came into office, I said I wanted to create an umbrella, because we have so many different agencies and concerns that are being acted on every day. We need to be sure that we coordinate more effectively. So the Strategic and Economic Dialogue was meant to be the mechanism for that level of coordination and to develop habits of cooperation between and among our governments.

It is not just the size that matters. Obviously, this is a very large country and will require a large American presence. But it is the way you have translated this mission into results for Chinese and Americans alike. I told Gary that one of the unbelievable accomplishments of his tenure in really less than a year is the way you have set records for processing visas. You really made a difference in accelerating the ability of Chinese to come to the United States. Because I believe firmly in these people-to-people transactions, our business-to-business transactions, our student exchanges, recreation, and travel. We need to keep that flow going. And I am very grateful for the way that you have set the standard.

We have tried to support you in that, but the work has been done by this mission here in Beijing and across the country. We brag everywhere we go, I and others in the State Department, about everything you’ve done to improve the speed and volume of visa processing. But I think it bears repeating, dropping wait times from more than 50 days in 2011 to six days is hugely impressive. And when you translate those visas into tourist spending and new business investment, it has a direct impact on our own economic recovery back home. So more Chinese students, more business people, more tourists. And I understand you are on pace to process as many as 1.4 million visa applications this year. So I want you all to give yourselves a round of applause for such an amazing achievement. (Applause.)

And there’s so much else that you do every single day. Those of you not working directly in consular affairs, you’re working to advance human rights and democracy in a very challenging and fast-paced environment. And I want to take just a moment to remember that when I was here in May I was proud to present our Department-wide Human Rights Award to four winners from mission China. I want to, again, reiterate how important your work is in promoting the universal values that we believe in and that we think are the birthright of every human being. Human rights are as fundamental with our agenda with China as economic statecraft, so I thank you for your dedication and commitment. And again, let’s give a round of applause to all the working on behalf of human rights and democracy. (Applause.)

Now, I will take credit for the clear day and the pollution-free environment – (laughter) – but I know that it’s something that affects you, and particularly if you have children here, something that you are concerned about, especially during the hot summer months. So I want to thank the Embassy and the environment, science, and technology and health staff for your commitment to monitoring and improving the air quality for everyone who works in our facilities. You’re not only helping people stay healthy, but you’re leading by example and keeping the focus on a major problem that affects many millions of Chinese citizens as well. I know that there was a little bit of grief for publicizing the air pollution quality measurements, but I think that was all to the good, because it really is important to get information that can help people, whether they’re here on our Embassy team or out in the communities here and around China.

I also want to thank our local Chinese staff. I know how challenging it is from time to time to be part of this incredible effort we’re undertaking to improve relations between our two countries and to put us on a very firm foundation for the future. But could all our local Chinese staff just raise your hands? Because I want to give you a round of applause as well. (Applause.) It’s true all over the world that ambassadors and Secretaries of State come and go, but our locally employed staff remain the link between the United States and the people of China. You’re the memory bank and the nerve center, and we are grateful to you for your expertise and experience.

To all of our team here, Chinese and American staff and families alike, thank you. Thank you for your commitment, and in many cases your sacrifice. Particularly for Americans, I know living so far from home, from family, from friends can be a challenge. But this is what you signed up for. You signed up for going out into the world and exercising American influence on behalf of American values and American interests and American security. And we could not – we absolutely could not – expect to make progress in this vital relationship without you being willing to do so.

So for me, I am personally honored to serve with colleagues like all of you. I think it’s an especially tumultuous but exciting time in history to be working on behalf of the United States, and especially here in China. It’s exciting for me to come back and see the progress that has taken place here in China and to be determined that we’re going to keep forging this positive, cooperative, comprehensive relationship that President Obama and President Hu Jintao have committed to.

I just finished a very long press conference with Foreign Minister Yang, and he was asked, look – by the Chinese press – don’t you think America’s just out to contain you and don’t you think that conflict is inevitable? And he said what I had said earlier in the press conference: We are trying to do something which has never been done before, where you have a rising power and a dominant power. And as that rising power assumes greater and greater influence and reach far beyond its borders, we want to see China be a responsible global leader, on the side of helping to solve problems and prevent conflict.

Yes. Do we have disagreements? Of course. What two nations don’t? What two people don’t? That seems to be obvious to me. And we will continue to be forthright about our disagreements, whether it’s on human rights or the South China Sea or anything else. But overall we are committed to ensuring that we find as many areas of cooperation as possible and that we produce practical results for our people and the Chinese people, as well as the region and the world.

So when we talk about our people-to-people exchanges – some of you helped when I did that last May; it was genuinely moving to see the young American student and the young Chinese student talking about what it had meant to their lives to have studied in the other country – when we talk about the 100,000 Strong, when we are trying to convey more clearly what Americans stand for, when we had the Shanghai Expo and the USA pavilion was staffed by young Americans of every ethnic and racial background, speaking Chinese, hosting all of the visitors who were coming, we are building connections, government-to-government, people-to-people. And we could not do that without all of you and the many hundreds of others who work with you every single day.

Now, I am going to try to shake as many hands as I can before I leave. I only have three more meetings and a dinner left. (Laughter.) But I hope that you know how grateful we are in Washington. We are well aware that we could not do what we are attempting without all of you.

So Gary and Mona, thank you for being such a dynamic duo, leading our Embassy. I love reading about the tweets and the blogs about Gary’s backpack – (laughter) – and buying coffee. And I want to see more about you, Mona. I want to see you out there meeting and working with and interacting with more Chinese people as well. Because we want to have a full court press so everybody knows that we are committed to this relationship, committed to the ongoing depth and breadth of it, and that we are going to persevere through the difficult and challenging times, some of which you might remember from last May here at the Embassy, because we know it is ultimately in the interest of the United States and China and the world for us to do so.

Thank you very much. (Applause.)

FOREIGN MINISTER YANG: (In Chinese.)

MODERATOR: (Via interpreter.) Now Secretary Clinton will make an opening statement.

SECRETARY CLINTON: Let me begin by thanking Foreign Minister Yang for his long commitment to strengthening the bonds between China and the United States. And we have had constructive and productive in-depth discussions last night for a number of hours and then again this morning with President Hu Jintao. I conveyed to President Hu Jintao the warm regards from President Obama.

I am pleased to return to China for my fifth visit, I think, although I’ve lost track, as U.S. Secretary of State. I came on my very first trip in early 2009, and this has been part of our overarching engagement in Asia. And as Minister Yang just said, we have institutionalized a number of mechanisms for ongoing dialogue. Our Strategic and Economic Dialogue, our consultation on People-to-People Exchange, our Strategic Security Dialogue, our Asia Pacific Consultation, our new Middle East Dialogue, and all the rest of our engagement really exemplifies how hard we are working at every level of our government to build habits of cooperation and to open channels of communication. We literally consult with each other almost on a daily basis about every consequential issue facing our nations and the world today.

As I have said before, our two nations are trying to do something that has never been done in history, which is to write a new answer to the question of what happens when an established power and a rising power meet. Both President Obama and I have said frequently that the United States welcomes the rise of a strong, prosperous, and peaceful China. We want China to continue to succeed in delivering economic opportunity to the Chinese people. That will, in turn, have a positive impact on the global economy. We want China to play a greater role in world affairs. That strengthens global stability, helps solve urgent challenges. And we are convinced that our two countries gain far more when we cooperate with one another than when we descend into an unhealthy competition. So we are committed to managing our differences effectively and expanding our cooperation wherever and whenever possible.

We see this moment as a historic opportunity for our two countries, and indeed, for others as well. To make the most of it, the United States and China must strive to achieve practical outcomes that benefit each of us as well as the broader region and world. That has been the theme of my meetings in Beijing today, and it started with our extensive conversations with the Foreign Minister and his colleagues, which went well past midnight and then continued this morning. Later today, I will be meeting with other Chinese officials, as the Foreign Minister has just outlined. And let me say how pleased I am to have this chance to exchange views in advance of APEC, where I will be representing President Obama.

One issue we discussed at length is the evolving situation in Syria. The United States strongly believes the simplest and best solution to end the violence is for there to be a peaceful political transition that respects the dignity, aspirations, and rights of the Syrian people. The United States wants to work with China and other international partners to take effective steps to end the violence and bring about that political transition, because doing so, we believe, serves our common interest as well as the interest of Syrians and others in the region.

We discussed our shared commitment in preventing Iran from acquiring nuclear weapons and our work together in the P-5+1 as well as at the upcoming IAEA Board of Governors meeting. China recently reduced its purchase of Iranian oil; and while it took this step for its own commercial and energy security reasons, it aligns with our shared interest regarding Iran and our hope that Iran will live up to its international obligations.

We had a productive conversation about how China can use its unique influence with respect to North Korea. There is an opportunity for the new leadership in North Korea to improve the lives of the North Korean people. At the same time, we wish to continue our joint efforts to bring about the denuclearization of the Korean Peninsula.

I also raised the growing threat of cyber attacks that are occurring on an increasing basis. Both the United States and China are victims of cyber attacks. Intellectual property, commercial data, national security information is being targeted. This is an issue of increasing concern to the business community and the Government of the United States, as well as many other countries, and it is vital that we work together to curb this behavior.

Another issue, as the Minister mentioned, was the South China Sea. I reiterated, as I have on many occasions, the United States does not take a position on competing territorial claims. Our interest is in the maintenance of peace and stability, respect for international law, freedom of navigation, and unimpeded lawful commerce. And as a friend to the countries involved, we do believe it’s in everyone’s interest that China and ASEAN engage in a diplomatic process toward the shared goal of a code of conduct.

On some of these issues, China and the United States have much to agree on, and we are engaged in very cooperative behavior to try to reach our common goal. On others, such as human rights, we do not always see eye to eye, but we continue to talk together. And we will never agree on all matters. No two countries do. But we are learning how to manage our differences, deal openly with misunderstandings when they do occur, and remain in communication as transparently and clearly as possible. We have taken to heart the vision set by our two presidents to build a relationship that is positive, cooperative, and comprehensive and that delivers benefits to both our nations, and that, in turn, helps to drive peace, stability, progress, and prosperity throughout the region and the world.

So let me again thank the Foreign Minister and President Hu Jintao for this friendship, for this very important set of consultations. I look forward to the rest of my meetings today, and I thank the people of China for once again welcoming me and my delegation to your country.

FOREIGN MINISTER YANG: (Via interpreter.) Thank you, Madam Secretary.

MODERATOR: (Via interpreter.) Now we open up the floor for questions. China Daily.

QUESTION: (Via interpreter.) Good morning, Madam Secretary. The United States is implementing a rebalancing strategy in the Asia Pacific region. And some senior U.S. officials, including yourself, have repeatedly said that this is not targeted at China. But judging from some recent U.S. moves in the region, including the strengthening of military alliances with countries in the region, many people have come to the conclusion that the fundamental role of the strategy is to contain China and to thwart China’s development. How do you look at this?

SECRETARY CLINTON: Well, thank you for asking that question, because I want to be very clear. As the President and I have said many times, the United States welcomes a strong, stable, prosperous China that plays a role in world affairs commensurate with its size and helps to maintain and shape the global order. And we believe strongly that China has a vital role as a force for security and peace, stability and prosperity, regionally and globally. And so along with the rest of the international community, the United States counts on China’s leadership in addressing many of our common global challenges.

So that is why we have worked so intensively. We have deepened and broadened our cooperation on a range of issues bilaterally, regionally, and globally. Our two presidents have met 12 times. Vice President Biden and Vice President Xi have had very successful exchanged visits in each of our countries. We have held four Strategic and Economic Dialogues, which took the government-to-government relationship much deeper and broader than at any time prior to the Obama Administration.

So I’m very proud of the strength and resilience that we have built into our relationship. It makes it possible for us to talk about anything and to find ways to tackle issues frankly and forthrightly.

Now, that includes our work on economic and trade issues, which are very critical to creating jobs and opportunity on both sides of the Pacific. We are very clear, as we have these discussions, about the need to develop what we call a level playing field for economic investments in both our countries. It also enables us to work together through multilateral institutions, like the East Asia Summit, which the United States has joined out of respect for the importance of that organization; APEC, which is another vehicle. I’ll be seeing President Hu and other Chinese officials in Vladivostok in just a few days.

So it means we can cooperate on a much broader range of issues, but we do not see eye-to-eye on everything. And I would not expect anyone to imagine that two countries as large and diverse as we are would ever see eye-to-eye. We have different experiences, different perspectives. But what we have done is to embed the importance of dialogue and cooperation so that when we work together, it’s to the benefit of everyone. When we have these differences, we work through them.

And I am absolutely convinced that our collaboration has been vital. We’ve worked together on peace in Sudan and South Sudan. We are working to deal with Iran’s nuclear ambitions. We haven’t agreed on how to handle Syria, but we haven’t stopped talking about what should be done, because the violence continues. The instability is quite concerning. We don’t agree on a lot of human rights issues, but we have maintained a strong and ongoing dialogue. And this is a relationship that matters to both of us, and I am very convinced that we’ve established a strong foundation, government-to-government and people-to-people.

I cannot help what someone in your country says or someone in my country says. We are going to have critics in both of our countries who are going to second-guess decisions that we are making. But I feel strongly that we are on the right track in building a positive, cooperative, comprehensive relationship for the 21^st century.

MS. NULAND: All right. Next question. (Laughter.) The next question, Indira Lakshmanan from Bloomberg News, please.

QUESTION: Thank you. Foreign Minister Yang, your ministry spokesman said this week that countries outside the region shouldn’t intervene in China Seas territorial disputes. Do you accept that the U.S. has a legitimate national interest in ensuring freedom of navigation and commerce in the South and East China Seas? Or does Vice President Xi’s cancellation of his meeting with the Secretary signal displeasure with U.S. interference? And do you agree with state media commentaries that say increased U.S. naval and military presence in the Pacific is about containing China?

And Madam Secretary, do you come out of these talks any more confident that China is ready to sign up to a code of conduct on the South Seas issues?

Thank you.

FOREIGN MINISTER YANG: (Via interpreter.) On the South China Sea, the position of the Chinese Government has been consistent and clear-cut. China has sovereignty over the islands in the South China Sea and their adjacent waters. There is plentiful historical and jurisprudential evidence for that.

As for the dispute over the sovereignty of some islands and reefs of the Nansha Islands and the overlapping rights, interests, and claims over some waters of the South China Sea, these should be discussed by the directly concerned countries on the basis of the fact – of historical fact and international law, and handled and settled through direct negotiations and friendly consultation. People talk about the importance of respecting the DOC. What I have outlined is not just China’s position, but an important principle and spirit of the DOC. It is the consensus of all the signatories to the DOC and important commitment the parties have made.

Recently, I have visited several of these Asian countries, who are also member-states of ASEAN. Like China, these countries also believe that the parties concerned should act in accordance with the principles and spirit of the DOC and on the basis of consensus work towards the eventual adoption of a code of conduct in the South China Sea.

Nowhere else do China and the United States share more converging interest and interact more frequently than in the Asia Pacific region. At the moment, the international situation continues to undergo profound and complex changes, and the prospect of a world economic recovery is still quite grim. We hope that China and the United States will work together to develop a positive and pragmatic relationship. That is also the shared expectation of the people in the Asia Pacific region. We hope to work with the United States and other countries in the Asia Pacific to make our region one of openness, inclusiveness, mutual benefit, and win-win progress.

As for the United States policy towards the Asia Pacific region, we have always hoped that the United States would size up the situation and make sure that its policy is in conformity with the trends of our current era and the general wish of countries in the region to seek peace, development, and cooperation. And this is also China’s wish and has been China’s way of behavior. We believe our two sides should step up consultation on Asia Pacific affairs and to make a success of the East Asia Summit and other important meetings before the end of the year.

And I wish to emphasize that the Asia Pacific Economic Leaders meeting is just a couple of days away. Our two sides need to step up communication and cooperation to make sure the APEC meeting will be a full success.

The current schedule of the Secretary’s visit has been agreed by the two sides. I hope people will not add unnecessary speculation. We attach a great deal of importance to Secretary Clinton’s visit to China. And I want to add also that the freedom and safety of navigation in the South China Sea is assured. For China and our neighboring countries, the South China Sea is really a lifeline for exchanges, trade, and commerce. There is no issue currently in this area, nor will there ever be issues in that area in the future. Thank you.

SECRETARY CLINTON: I appreciate the Minister’s comments about the commitment China has to a code of conduct that was foreshadowed in the Declaration of Conduct agreed to by China and ASEAN nations 10 years ago. We believe, as I said in Jakarta, that it is timely now to proceed with that work and help to lower the tensions and create the code of conduct in the next period, hopefully in preparation for the East Asia Summit.

After my talks over the last few days, I believe that with leadership and commitment China and ASEAN can ramp up their diplomacy. And the United States stands ready to support that process in any way that would be helpful to the parties.

MS. NULAND: Next question, Margaret Brennan, CBS News.

QUESTION: Thank you. On Iran, it’s continuing to pursue a nuclear program and negotiations have stalled. Specifically, what steps is China willing to take to prevent the pursuit of a nuclear weapon?

And on Syria, China at the Security Council has blocked any outside intervention to stop the ongoing violence. Is there any agreement on how to bring about a political transition?

FOREIGN MINISTER YANG: (Via interpreter.) On the question of nuclear issues in the Middle East, I wish to emphasize that China is opposed to the efforts of any country, including Iran, to develop nuclear weapons. At the same time, we believe the Iranian nuclear issue should be resolved peacefully through diplomatic negotiations. We believe there is positive value in the P-5+1 dialogue with Iran, whatever form it may take. We believe the parties should continue to exercise calm and be committed to diplomatic negotiations.

Some parties have put forward some proposals. They need to be studied seriously. The positive elements in those proposals should be taken seriously and be incorporated. China has been active and serious in our participation in P-5+1 dialogue with Iran. And in our contact with various parties, we’ve been emphasizing that there should be a clear and objective reading of the situation. China stands ready to stay in close contact, communication, and coordination with the United States and other relevant parties on the Iranian nuclear issue.

China strictly abides by the relevant UN Security Council resolutions. Of course, all along we have been opposed to unilateral sanctions. When such sanctions affect other countries and damage other countries’ interests, it is something we cannot accept. Although there might be some divergent views between China, the United States, or others on the Iranian issue, we believe there is an ongoing momentum of exchange, communication, and cooperation. And we hope to sustain the momentum of exchanges and cooperation with the relevant parties. China will continue to work persistently for the peaceful settlement of the Iranian nuclear issue.

On the question of Syria, I wish to emphasize that although Mr. Kofi Annan has stepped down as the Joint Special Envoy, but it is the general view of the international community that his six-point plan should continue to be implemented. Secretary Clinton and I and the foreign ministers of some other countries took part in the Foreign Ministerial Meeting of the Action Group for Syria, which took place in Geneva. Like many countries, China shares the view that the communique of that foreign ministers meeting has positive significance for appropriately handling and resolving the Syrian issue. And we are willing to ramp up communication with the relevant countries in the UN Security Council and to carry out coordination. And the relevant UN Security Council resolutions regarding Syria should be implemented in earnest.

Although the situation is very complex, China has been emphasizing all along that the various parties should arrive at a cessation of fire and an end to violence, and the various parties in Syria should begin a political dialogue. And like many countries, we support a period of political transition in Syria.

We also believe that any solution should come from the people of Syria and reflect their wishes. It should not be imposed from outside. We are all member-states of the United Nations. We believe that on the question of Syria the purposes and principles of the UN Charter should be upheld and implemented, especially the principle of non-interference in other countries’ internal affairs.

And on the question of Syria, let me emphasize that China is not partial to any individual or any party. I think history will judge that China’s position on the Syrian question is a promotion of the appropriate handling and resolution of the Syria issue. For what we have in mind is the interest of the people in Syria and the region and the interest of peace, stability, and development in the region and around the world.

The various countries have some differing views on the issue of Syria. I believe the parties need to increase their consultation, all for the sake of peace, stability, and development in the region as well as the well being of the Syrian people.

SECRETARY CLINTON: Thank you very much for your question. And before I turn to Syria, let me just say we have worked very closely with China in the P-5+1 and in the Security Council to create unprecedented pressure on the Iranian Government.

With respect to Syria, it is no secret that we have been disappointed by Russia and China’s actions blocking tougher UN Security Council resolutions, and we hope to continue to unite behind a real path forward to end the violence in Syria. We share the goal of wanting to see the violence end and the political transition begin, and we are discussing additional ways we can bring that about.

We believe that the situation in Syria is a threat to peace and stability in the entire region, and the longer the conflict goes on the greater the risk that it spills over borders and destabilizes neighboring countries. We have already seen dangerous clashes in Lebanon and growing tensions in Turkey and Jordan. We have discussed with our Chinese counterparts the need to respond to the UN’s appeal for contributions to support the humanitarian needs of the people. The best course of action remains to unite the Security Council behind real consequences if President Assad continues to brutalize his own people and threaten the security of the region.

I agree with the Foreign Minister that the communique issued as a result of our meeting in Geneva is a very useful framework for moving forward, and we will continue to consult to see whether that is something that the Security Council itself could adopt as a message to the government and the opposition about what is expected.

Meanwhile, the United States will continue to work with a growing group of likeminded nations to support the Syrian opposition and plan for the day after Assad goes, because we are convinced that he will. Thank you.

MODERATOR: (Via interpreter.) Final question, Xinhua News Agency.

QUESTION: (Via interpreter.) I have a question for Foreign Minister Yang. We’ve taken note of the repeated statements from both China and the United States on various occasions that both sides are committed to building a cooperative partnership and to exploring a new type of major country relationship. But we also see that from time to time the two countries have disputes on some economic and trade issues. Some people even posit that confrontation between China and the United States is inevitable. How do you look at this?

FOREIGN MINISTER YANG: (Via interpreter.) Before answering this question, please allow me to make some additional points regarding the Iranian nuclear issue.

The UN Secretary General and the Arab League have appointed a new Joint Special Envoy for Syria, Mr. Brahimi. Recently, I talked with him on the phone. I said in the phone call that China fully supports his mediation efforts, and we hope all the parties will also support his mediation efforts so that there can be an appropriate and peaceful solution to the situation in Syria.

We hope that members of the international community will bring their positive influence to bear and get the various parties in Syria to adopt a realistic, calm, and constructive attitude so that there can be an early beginning of political dialogue and transition in that country. A Syria that is peaceful, stable, and enjoying development, bringing benefits to the people of not just that country but also the region.

And we pay very close attention to the humanitarian issue surrounding Syria. We have already channeled humanitarian assistance to some people in Syria in plight, and we will provide assistance to the Syrian refugees in Lebanon, Jordan, and some other countries.

This year marks the 40^th anniversary of Mr. Nixon’s visit to China and the issuance of the Shanghai Communique. In these 40 years, the China-U.S. relationship has gone through a lot, but generally speaking it has been continuously moving forward, bringing tangible benefits to the people of our two countries and contributing to peace, stability, and development in the world. President Hu Jintao and President Obama have had 12 face-to-face meetings, and they have reached important consensus on working together to push forward a China-U.S. cooperative partnership based on mutual respect and mutual benefit and on working together to explore the construction of a new type of major country relationship. This points the direction for the further development of our bilateral relationship. The various government departments in both countries should redouble efforts to implement this joint vision of our presidents.

The economic relationship between China and the United States is an important driving force of our overall relationship. In the economic exchanges between two large nations such as ours, it is quite inevitable that there might be some disputes or even frictions. We hope that both sides will act in the spirit of openness and appropriately handle and resolve these issues through consultation. Actually, the two sides have already made some important progress in that regard.

China and the United States differ from each other in our histories, our cultures, ideologies, social systems, and actual national conditions. So it’s impossible for our two countries to see eye to eye on all the issues, but we believe that the mutual respect for each other’s core interests and major concerns is an important precondition for the steady and smooth development of our bilateral relationship. If we can stay focused on that, then we can overcome various disputes or frictions and their distraction to the relationship and maintain the dialogue and cooperation, which is the primary facet of our relationship and to make sure this relationship will continue to be mutually beneficial going forward.

It is apparent to all that China has made important progress in its human rights. On the basis of mutual respect and nonintervention in other’s internal affairs, we’d like to continue to have human rights dialogue with the United States and some other countries.

Like many countries, China is also a victim of cyber attacks. We’d like to work with the United States and some others to step up our communication and cooperation with respect to ensuring cyber security.

And China is making continuous efforts towards the denuclearization of the Korean Peninsula and the maintenance of peace and stability on the Peninsula. We support the efforts of the relevant countries to maintain and increase dialogue with the Democratic People’s Republic of Korea.

In short, history and facts has repeatedly proven that China and the United States have interwoven interests, and cooperation will benefit both sides where confrontation will hurt both sides. It has been China’s clear choice to work to promote our cooperative partnership with the United States on the basis of the three joint communiques and joint statements. This will serve the fundamental interests of people in both countries, and it is what the international community expects us to do in the 21^st century.

Thank you.

MODERATOR: (Via interpreter.) This brings us to the end of the joint press conference. I want to thank Foreign Minister Yang and Secretary Clinton.

FOREIGN MINISTER YANG: (Via interpreter) Madam Secretary, on behalf of the Chinese Government, a warm welcome on your visit to China. Madam Secretary, we place high importance on your visit. Tomorrow, several Chinese leaders will have meetings with you. In recent years, the China-U.S. relationship has maintained stability and achieved development, and we have made important progress in some areas.

Maintaining the healthy and steady development of our relationship serves the fundamental interests of our two countries and two peoples and is conducive to stability, peace, and development in the Asia Pacific region and beyond. China stands ready to work with the U.S. side, guided by the joint vision of our two presidents to further push forward the China-U.S. cooperative partnership based on mutual respect and mutual benefit and to explore a new type of major country relationship.

This evening, I’d be happy to exchange views with you on how to further push forward our bilateral relationship and on some important international and regional issues. Again, warm welcome to China.

SECRETARY CLINTON: Well, Minister Yang, thank you for that warm welcome on behalf of my delegation and myself. We are very pleased to be, once again, in China to have this opportunity to exchange views. We are committed to building a cooperative partnership with China; it is a key aspect of our rebalancing in the Asia Pacific. And we have had a lot of in depth consultations and high-level meetings over the last three and a half years. Just this past year, we had the fourth session of our Strategic and Economic Dialogue and a 12^th meeting between our two presidents. And we continue to stress the importance of the practical cooperation that underlies our comprehensive relationship.

So again, tonight we’ll have a chance to explore issues in our bilateral relationship as well as regional and international matters that are of importance. So thank you again for the warm welcome to this new foreign ministry building.

The Department of State, the embassy, and consulates general in Chengdu, Guangzhou, Shanghai, Shenyang, and Wuhan consistently urged the government to expand the scope of religious freedom in accordance with the rights codified in the constitution and internationally recognized norms. U.S. officials criticized abuses of religious freedom, acknowledged positive trends, and met with religious believers, family members of religious prisoners, and religious freedom defenders. The embassy protested the imprisonment of individuals on charges related to their religious practices and other abuses of religious freedom. Since 1999 the secretary of state has designated the country as a “Country of Particular Concern” (CPC) under the International Religious Freedom Act (IRFA) for particularly severe violations of religious freedom. On August 18, the secretary redesignated the country as a CPC.

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Rare earths are an important, non-renewable natural resource with increasingly wider applications in economic and social development.

China is among the countries with relatively rich rare earth reserves. Since the 1950s, remarkable progress has been witnessed made in China's rare earth industry. After many years of effort, China has become the world's largest producer, consumer and exporter of rare earth products.

While bringing benefits to mankind, the exploitation of rare earth has brought about increasingly significant problems regarding this resource and the environment. In the exploitation and utilization of rare earth, the rational utilization and effective protection of the environment pose common challenges for the world at large. In recent years, China has taken comprehensive measures in the links of mining, production and exporting of rare earth goods and strengthened efforts for the protection of the resource and the environment, endeavoring to ensure a sustainable and healthy development of this industry.

With the in-depth development of economic globalization, China is involved in more extensive international exchanges and cooperation in the field of rare earth. Always honoring the rules and living up to its commitments, China has provided the world with large quantities of rare earth products. It will continue to follow the WTO rules, strengthen scientific management of this industry and supply rare earth products to the global market, so as to make its due contribution to the development and prosperity of the world economy.

For some time now, some countries have been particularly fretful about the situation of China's rare earth industry and related policies, doing a lot of guesswork and conjuring up many stories. We hereby give a presentation about China's rare earth industry in order to further provide the international community with a better understanding of this issue.

I.Current Situation of China's Rare Earth Industry

Rare earths are a group of 17 chemical elements in the periodic table of the elements, i.e., Lanthanum (La), Cerium (Ce), Praseodymium (Pr), Neodymium (Nd), Promethium (Pm), Samarium (Sm), Europium (Eu), Gadolinium (Gd), Terbium (Tb), Dysprosium (Dy), Holmium (Ho), Erbium (Er), Thulium (Tm), Ytterbium (Yb) and Lutecium (Lu), and their congeners Scandium (Sc) and Yttrium (Y). According to their atomic weights and physicochemical properties, they are divided into light, middle and heavy rare earth elements. The first five above-mentioned elements are light ones, and the rest are either middle or heavy ones. Because of their unique physicochemical properties, rare earth elements are considered indispensable in modern industry as they are extensively used in areas such as new energy, new materials, energy conservation and environmental protection, aeronautics and astronautics and electronic information, to name but a few.

China is relatively abundant in rare earth resources, and its rare earth reserves account for approximately 23 percent of the world's total. China's rare earth resources display the following characteristics:

- Their distribution presents a "light north, heavy south" pattern. Light rare earth mines are mainly located in Baotou of the Inner Mongolia Autonomous Region, and other northern areas, as well as in Liangshan of Sichuan Province, while ion-absorbed-type middle and heavy rare earth deposits are mainly found in Ganzhou of Jiangxi Province, Longyan of Fujian Province, and some other southern areas.

- The types of rare earth resources are rather diversified. China has a rich variety of rare earth minerals, including bastnaesite, monazite, ion-absorption minerals, xenotime, fergusonite, and others, with a relatively complete range of rare earth elements. Among them, the ion-absorption middle and heavy rare earth deposits occupy an important position in the world.

- The associated radioactive elements of light rare earth minerals pose major problems for the environment. Most of China's light rare earth deposits ores can be industrially mined, but thorium (Th) and other radioactive elements are difficult to treat, and therefore great attention must be paid to its impact on people's health and the ecology when they are mined, smelted and separated.

- Ion-absorption middle and heavy rare earth ores have poor occurrence conditions. In ion-absorbed-type rare earth deposits, the rare earth elements are absorbed in the soil in the form of ions, making it difficult for industrial exploitation due to sparse distribution and low abundance rate.

Since the introduction of the reform and opening-up policies in the late 1970s, China's rare earth industry has seen rapid development. Major progress has been made in the research and development of relevant mining, smelting and utilizing technologies, and the increasing expansion of the industrial scale has basically satisfied the needs of the nation's economic growth and social development.

- A complete industrial system has been achieved. China has developed three major rare earth production areas, i.e., the light rare earth production areas in Baotou of Inner Mongolia and Liangshan of Sichuan, and middle and heavy rare earth production areas in the five southern provinces centering around Ganzhou of Jiangxi Province. With a complete industrial system armed with mining, dressing, smelting and separating technologies and incorporating equipment manufacturing, material processing and end-product utilization, China can produce over 400 varieties of rare earth products in more than 1,000 specifications. In 2011, China produced 96,900 tonnes of rare earth smelting separation products, accounting for more than 90 percent of the world's total output.

- The market environment is gradually improving as China is constantly expediting reform in the rare earth industry, promoting the development of a market system featuring diversified investment, independent decision-making by businesses and pricing according to supply and demand. In recent years, investment in China's rare earth industry has experienced rapid growth, the market has been constantly expanded, state-owned, privately owned and foreign-invested sectors coexist, and the value of the rare earth metal market is approaching 100 billion yuan. The market order in this sector is gradually improving, and progressive development is being made in the merger and reorganization of businesses. The old picture of a "small, scattered, and disorderly" rare earth industry has vanished.

- Scientific and technological level has improved further. After many years of development, China has established a relatively complete R&D system, pioneered numerous technologies of international advanced levels in rare earth mining and dressing, smelting, separating, etc., and its unique mining and dressing processes and advanced separating techniques have laid a solid foundation for efficient exploitation and utilization of rare earth resources. The rare earth new materials industry has experienced steady development, and industrialization has been achieved in using rare earths to produce permanent-magnet, luminescent, hydrogen-storage, and catalytic materials, and other new materials, providing support for the restructuring and upgrading of traditional industries, and the development of emerging industries of strategic importance.

The rapid development of China's rare earth industry has not only satisfied domestic demand for economic and social development, but also made important contributions to the world's rare earth supply. For many years, China has been faithfully fulfilling its pledges upon its accession to the WTO, honoring the WTO rules, and promoting fair trade in rare earths. Currently, China supplies over 90 percent of the global market rare earth needs with 23 percent of the world's total reserves, its output of permanent-magnet, luminescent, hydrogen-storage and polishing materials, which use rare earths as raw materials, accounts for more than 70 percent of the world's total, and China-produced rare earth materials, parts and components, as well as rare earth end products, such as energy-saving lamps, special and small electric motors and NiMH batteries, satisfied the development needs of high-tech industries of other countries, especially those of the developed countries.

Despite its rapid development, China's rare earth industry also faces many problems, for which China has paid a big price. The following are some of the problems:

- Excessive exploitation of rare earth resources. After more than 50 years of excessive mining, China's rare earth reserves have kept declining and the years of guaranteed rare earth supply have been reducing. The decline of rare earth resources in major mining areas is accelerating, as most of the original resources are depleted. In Baotou, only one-third of the original volume of rare earth resources is available in the main mining areas, and the reserve-extraction ratio of ion-absorption rare earth mines in China's southern provinces has declined from 50 two decades ago to the present 15. Most of the southern ion-absorption rare earth deposits are located in remote mountainous areas. There are so many mines scattering over a large area that it is difficult and costly to monitor their operation. As a result, illegal mining has severely depleted local resources, and mines rich in reserves and easy to exploit are are favored over the others, resulting in a low recovery rate of the rare earth resources. Less that 50 percent of such resources are recovered in ion-absorption rare earth mines in southern China, and only ten percent of the Baotou reserves are dressed and utilized.

- Severe damage to the ecological environment. Outdated production processes and techniques in the mining, dressing, smelting and separating of rare earth ores have severely damaged surface vegetation, caused soil erosion, pollution, and acidification, and reduced or even eliminated food crop output. In the past, the outmoded tank leaching and heap leaching techniques were employed at ion-absorption middle and heavy rare earth mines, creating 2,000 tonnes of tailings for the production of every tonne of REO (rare earth oxide). Although more advanced in-situ leaching method has been widely adopted, large quantities of ammonium nitrogen, heavy metal and other pollutants are being produced, resulting in the destruction of vegetation and severe pollution of surface water, ground water and farmland. Light rare earth mines usually contain many associated metals, and large quantities of toxic and hazardous gases, waste water with high concentration of ammonium nitrogen and radioactive residues are generated during the processes of smelting and separating. In some places, the excessive rare earth mining has resulted in landslides, clogged rivers, environmental pollution emergencies, and even major accidents and disasters, causing great damage to people's safety and health, and the ecological environment. At the same time, the restoration and improvement of the environment has also heavily burdened some rare earth production areas.

- Irrational industrial structure. China's rare earth industry has huge over-capacity in smelting and separating. On the other hand, the research and development of rare earth materials and components is lagging behind, its level of rare earth new materials development and end-product application technologies is significantly lower than the advanced international level, and the IPR ownership, and the production and processing technologies of new-type rare earth materials and components are relatively small in number. As a result, low-end products overflow while high-end products are in short supply. China' s rare earth metals industry, relatively small in scale, features a low concentration rate with numerous businesses, but lacks large enterprises with core competitiveness. Self-discipline in the industry is also weak, and vicious competition exists to some extent.

- Severe divergence between price and value. Over quite a long period of time, the price of rare earth products has remained low and failed to reflect their value, the scarcity of the resources has not been appropriately represented, and the damage to the ecological environment has not been properly compensated for. Since the second half of 2010, despite the gradual rise in the price of rare earth products, the rise has been much lower than that in the price rise of other raw materials like gold, copper and iron ore. From 2000 to 2010, the price of rare earth products rose by 2.5-fold, while that of gold, copper and iron ore increased by 4.4-, 4.1-, and 4.8-fold during the same period, respectively.

- Grave smuggling. Due to multiple factors, including domestic and international demand, the smuggling of rare earth products to overseas markets continues to be a problem in spite of the efforts made by China's customs listing it as a key criminal act to crack down on. From 2006 to 2008, the volumes of rare earth products imported from China, according to statistics collected by from foreign customs, were 35 percent, 59 percent and 36 percent higher than the volumes exported, as statistics released by the Chinese customs show, and the figure from foreign customs is 1.2-fold over the Chinese figure in 2011.

To address the salient problems in the development of China's rare earth industry, the Chinese government has tightened supervision over it. In May 2011, the State Council issued Guidelines on Promoting the Sustainable and Healthy Development of the Rare Earth Industry (hereinafter referred to as the "Guidelines"), attaching more importance to the protection of resources and the environment, and the realization of sustainable development. According to the "Guidelines," the government – in accordance with law – will strengthen control over the mining, production, circulation, import and export, and other links of the rare earth industry, and study and formulate as well as amend and improve related laws and regulations on the administration of this industry. The Chinese government has established an inter-departmental coordinating mechanism for the rare earth industry to make overall plans and study of the national strategy, program, plan, policy, and other important issues concerning the development of the rare earth industry. The state has also set up a rare earth office to coordinate and propose plans on the mining, production, reserve, and import and export of rare earth materials. The relevant departments of the State Council will perform their respective administrative functions accordingly. In April 2012, Association of China Rare Earth Industry was founded with official approval. It is expected to play an important role in promoting self-discipline in the industry, regulating the industrial order, and proactively carrying out international cooperation and exchanges, among other functions. A year or so has passed since the implementation of the "Guidelines," the transformation of the development pattern of China's rare earth industry has picked up speed, and significant improvement has been seen in its development order.

II. Principles and Targets of Development

1. Fundamental Principles

- Adhering to environmental protection and resource conservation. The state will implement stricter standards for ecological protection and protective exploitation policies concerning rare earth resources, improve relevant laws and regulations on the industry's administration, and crack down on all violations of laws and regulations according to law.

- Adhering to total-amount control and optimizing reserves. The state will quicken its steps to implement the conglomerate strategy, promote structural adjustment of the industry, actively push forward technological innovation, strictly control the mining, smelting and separating capacities, phase out outdated capacity, and further increase the concentration rate of the industry.

- Adhering to giving consideration to both the domestic and international markets and resources. The state will take synchronized administrative measures on rare earth mining, production and export, and encourage international exchanges and cooperation.

- Adhering to coordinated development of local economy and society. The state will strive to correctly handle the relations between local and overall development and current and long-term development, and maintain a normal order of industrial development.

2. Main Targets

Within a short period of time, the state will strive to establish a regulated and orderly system of rare earth resource exploitation, smelting and separating, and market circulation, and effectively control the disorderly exploitation of resource, deterioration of the ecological environment, blind expansion of production, and rampant smuggling; increase the recycling rate of rare earth resources, the recycling rate of ore dressing recovery, and the rate of comprehensive utilization, enforce effective control over the intensity of resource exploitation, and restore the reserve-extraction ratio to a proper level. It will make sure the discharge of waste water and gas and slag meet the established standards, and effectively restore the ecological environment in key areas. It will push forward merger and reorganization in the rare earth industry, and develop large-scale, highly efficient, and clean production enterprises. New product development and new technology application will be accelerated. On this basis, the state will further improve related policies and laws and regulations regarding the rare earth industry, gradually establish a unified, standardized, and highly efficient administrative system for the industry, and develop a sustainable and healthy development pattern featuring rational mining, orderly production, efficient utilization, advanced technology and intensive development.

III. Effectively Protecting and Rationally Utilizing Rare Earth Resources

Rare earths, as a non-renewable natural resource, need to be effectively protected and rationally utilized. As part of its drive to ensure the sustainable use of resources, China has been practicing protective exploitation of its rare earth resources for many years.

According to China's Mineral Resources Law promulgated in the 1980s, the state adopts a policy of planned exploitation with regard to mining areas that are embraced in state plans and are of great value to the national economy and specified minerals for which protective exploitation is prescribed by the state. In 1991, China prescribed protective exploitation for ion-absorption rare earth resources, exercising planned, unified control in all related procedures, including mining, dressing, smelting, processing, selling and export. In 2006, China began to exercise total-amount control over the exploitation of rare earths. In 2007, the state incorporated the production of rare earths into management by mandatory planning. In 2008, the state issued the National Plan for Mineral Resources (2008-2015) to exercise planned regulation and control, restrictive exploitation, tightened access and comprehensive utilization for rare earths and some other specified mineral resources, of which protective exploitation is prescribed by the state. In 2009, the state took back the power for registering, examining and approving the prospecting and mining of specified minerals, of which protective exploitation is prescribed by the state. In 2011, China adjusted the tax rates on mining of rare earths. The adjusted new tax rate for light rare earths (including bastnaesite and monazite) is 60 yuan per tonne, and for middle and heavy rare earths (including xenotime and ion-absorption rare earths) is 30 yuan per tonne, much higher than the rates before the adjustment, which ranged from 0.4 yuan per tonne to 2 yuan per tonne. The state also established a strategic reserve system and kept the rare earth reserves in the form of resources and products, designated the first 11 rare earth mining areas to be embraced in state plans, and formulated a special plan for key rare earth mining areas. China has tightened control on mining rights and enforced a system of mining rights allocation plans. In principle, the state has put a moratorium on accepting new registration applications for rare earth prospecting and mining, and prohibits existing mines from expanding their production capacities. The state exercises strict control over the total rare earth mining and production volumes to reduce resources development intensity, slow the depletion of resources, and advance sustainable development.

In recent years, China has launched special campaigns to regulate rare earth mining and production, effectively protecting and rationally utilizing rare earth resources in various ways. The state has tightened control of the total volume of rare earth mining and mandatorily planned quotas for rare earth production by means of satellite photography, video monitoring, regular inspection, monthly report system, special invoice checking, and opening phone lines to receive reports concerning violations of related laws and regulations. In pursuance of related laws concerning rare earths, China has cracked down on illegal rare earth mining and mining that exceeded quotas prescribed by the state, as well as on production activities of rare earth smelting and separation enterprises that were unplanned or exceeded the state-set quotas. China also has strengthened joint supervision in key rare earth production areas, investigated and punished rare earth enterprises that conducted mining and production in violation of laws and regulations, polluted the environment, caused wastes in resources, or did not have the necessary conditions to ensure production safety, and called to account those enterprises and individuals responsible for these violations in accordance with the law. The state has re-examined permits for rare earth prospecting and mining, and publicized a list of legitimate mining enterprises. It has also accelerated the formation of a long-term mechanism for regulating the market order and supervision of rare earth mining and production, advancing the merger and reorganization of rare earth enterprises, and phasing out outdated processes and capacities to realize large-scale and intensive production. By way of special rectification campaigns, more than 600 cases of illegal prospecting and mining were investigated and rectified, more than 100 cases were placed on file for further action, and 13 mines and 76 smelting and separation enterprises were ordered to cease production for rectification. In this way, the trend of illegal mining and production has been reversed.

The Chinese government has stressed the comprehensive utilization of rare earth resources. Over the past few years, the state has reinforced research into the geological structure of ion-absorption rare earth mines, advanced the building of "green" mines and comprehensive utilization demonstration bases, developed environmental-friendly and efficient mining technologies to increase the recovery rates of rare earths by a large margin, extended support to the development of new flotation reagents and ore-dressing equipment to raise the dressing recovery rates of rare earths, and worked to recover lean ores and tailings. China promotes balanced utilization of rare earth elements, encourages research into the application of light rare earth elements, such as lanthanum and cerium, whose reserves are relatively abundant, and expedites the development of technology for reducing or providing substitutes for the use of scarce heavy rare earth elements, such as europium, terbium and dysprosium. The state also fosters the comprehensive recycling of paragenetic ores of scarce rare earths that are difficult to recover during the process of ore dressing and smelting, and encourages the recycling of rare earth associated ores, including niobium, tantalum, thorium, strontium, potassium and fluorite.

China gives great support to the development of the circular economy in this field, and works hard for the recovery and utilization of secondary rare earth resources. The state encourages the development of special processes, technologies and equipment for the collection, processing, separation and refining of rare earth wastes, supports the building of specialized bases for the recovery and utilization of secondary rare earth resources, including molten salts after pyrometallurgy, slag, waste permanent magnet materials and motors, waste NiMH batteries, waste fluorescent lamps, dead catalysts, used polishing powder, and other waste electronic components containing rare earth elements.

IV. Better Coordination of Rare Earth Utilization with Environmental Protection

In recent years, out of the need of environmental protection, China has been improving its control over high-energy consuming, highly polluting and resource-based products and related industries. In the rare earth industry in particular, the state has adopted a series of effective measures to better coordinate rare earth development and utilization with environmental protection. China will never develop the rare earth industry at the expense of its environment.

The state has strengthened control of the rare earth industry with regard to environmental protection and formulated relevant laws and regulations, which is essential to the better coordination of rare earth utilization with environmental protection. Since the 1980s, China has enacted about a dozen laws related to environmental protection, including the Environmental Protection Law and the Law on the Prevention and Control of Water Pollution, and established the systems of environmental impact assessment, control of the total pollutant discharge, and ordered treatment of pollution within a time limit. The state promulgated and put into effect the Regulations on Land Reclamation to ensure the full fulfillment of land reclamation obligations, demanding that mining, environmental protection and land reclamation should be conducted concurrently to timely restore the eco-environment that has been damaged by mining. Since the implementation of the 11th Five-Year Plan (2006-2010), the state has listed energy conservation and emission reduction as part of the objectives of national economic and social development, and mandated the targets of reducing the intensity of energy consumption, chemical oxygen demand (COD) and sulfur-dioxide emission. The 12th Five-Year Plan (2011-2015) has added reducing the intensity of carbon-dioxide emission and emission of ammonia nitrogen and nitrogen oxides to the list of mandatory targets. In 2011, to intensify environment protection efforts in the rare earth industry, the state enforced the Pollutant Discharge Standards for the Rare Earth Industry, which sets the limits of COD, and emission of such pollutants as ammonia nitrogen, phosphorus, fluorine, thorium, heavy metals, sulfur dioxide, chlorine gas, and particulates for rare earth enterprises. At present, China has been making studies in the establishment of an environmental risk assessment system for the rare earth industry.

Earnest enforcement of laws and regulations on environmental protection has been the key to maintaining a good environment while developing and utilizing rare earth resources. In recent years, the state has enforced the environmental impact assessment system to the letter. An analysis, prediction and assessment report of the environmental impact that may be caused by a rare earth construction, expansion or renovation project must be submitted in advance, along with countermeasures to prevent and mitigate the impact. No project shall be implemented before it passes the assessment. To intensify environmental protection efforts in the rare earth industry, the state also strictly observes the stipulation in the Environmental Protection Law that installations for the prevention and control of pollution at a construction project must be designed, built and commissioned together with the principal part of the project, and that a construction project should not be commissioned or used until such installations are examined and considered up-to-standard by environmental protection authorities in charge. China exercises a pollution discharge license system and implements the Discharge Standards of Pollutants for the Rare Earth Industry. Rare earth enterprises are forbidden to discharge pollutants before they obtain pollution discharge licenses from the environmental protection authorities, and should strictly observe the standards on the density, quantity and channels of pollutant discharge. The state adopts a system of compulsory elimination of obsolete processes and equipment, and prohibits the use of tank and heap leaching methods for ion-absorption rare earths and the mining of monazite deposits only. The government also bans the use of technologies that cause heavy pollution and severe damage to the environment, and acts to prevent ecological degradation and environmental pollution at the source. In recent years, China has been stricter in implementing the deposit system for protecting and restoring the geological environment of rare earth mines, urging rare earth enterprises to carry out their economic responsibilities for environmental protection and restoration, and gradually establishing a responsibility mechanism of environmental control and ecological restoration for the mines.

The state carries out special environmental protection campaigns to regulate the activities of the rare earth industry. In these campaigns, governments at all levels require rare earth enterprises to accelerate the construction of environmental protection facilities, abide by the pollutant discharge standards, and implement clean production. Enterprises that do not meet these requirements shall be ordered to cease production for pollution control in accordance with the law, and shall be closed down if they still fail to meet the standards after the deadline set for them to correct their ways. An overall environmental protection inspection has been conducted since 2011 on all rare earth mines, smelting, separation and metal production enterprises, investigating and punishing rare earth enterprises responsible for polluting the environment. So far, the state has published two lists of a total of 56 enterprises that have met environmental protection standards. As a result, the rare earth industry and its enterprises have been urged to put in more than four billion yuan on pollution control and technology upgrading, markedly enhancing the environmental protection level of the industry. Regarding enterprises that generate heavy pollution, pose environmental hazards, cause strong complaints from the public, or violate laws and regulations on environmental protection, the state will publicize their cases, urge them to rectify their activities within a specified period of time, supervise their rectification process, and take other disciplinary actions necessary in accordance with the law. Governments at all levels will appropriate funds to address ecological damage and pollution caused by tailings and slag, which have been formed over a long period of time.

V. Promoting Technological Advancement and Industrial Upgrading

China makes it a priority to enhance the level of scientific devel-opment and utilization of rare earth products. The state strives to create a favorable policy environment for expediting the technological advancement and upgrading of the rare earth industry, overcoming resource and environmental bottlenecks and providing technological support for the sustainable development of rare earth industry.

The state encourages technological innovation in the rare earth industry. The Outline of the National Program for Long- and Me-dium-term Scientific and Technological Development (2006-2020) lists rare earth technologies as a key field of research and develop-ment to get state support. The state supports basic studies and studies on frontier technologies related to rare earths, as well as the research and development, application and spread of critical industrial technologies, and promotes the establishment of an enterprise-centered, market-oriented technological innovation system that combines the efforts of enterprises, universities and research institutes. China actively develops environmentally-friendly, advanced and appropriate rare earth exploitation technologies, highly efficient mining technologies suited to complex geological conditions, and comprehensive recovery technologies for paragenetic and associated mineral resources, in order to raise the recovery rates and cyclical utilization levels of the resources. The country makes vigorous efforts in organizing research and development of advanced technologies for low-carbon and low-salt discharge, manufacturing of ultra-pure products, membrane separation, recovery and utilization of associated thorium resources, recovery and treatment of fluorine and sulfur in tail gas, recycling of chemical raw materials, and automatic production control, to realize the efficient and clean smelting and separation of rare earth metals. The government guides rare earth production and application enterprises, scientific research institutes and institutions of higher learning to develop deep processing and new material application technologies. It works hard to foster science and technology personnel, strengthen the protection of intellectual property rights, and establish technological standards, in order to create favorable conditions for the development of rare earth technologies.

Over the past few years, China has accelerated the technological transformation of rare earth enterprises, encouraged the use of effi-cient and green technologies for mining and ore dressing, such as in-situ leaching, and advanced equipment to renovate rare earth mines, enhanced their performance in comprehensive resource utilization, ecological restoration, environmental protection and safe production. It has built and improved facilities for the storage and treatment of tailings to protect and make better use of tailing resources. The state also encourages the transformation of existing production lines of rare earth smelting and separation by using advanced equipment and technologies, such as separation without using ammonia, and fuzzy simultaneous extraction technology, in order to reduce the consumption of chemical materials and discharge of the “three wastes,” namely, waste gas, waste water and waste residues. New technologies and equipment featuring low discharge and low energy consumption are adopted to renovate rare earth smelting enterprises, to increase production efficiency, improve product quality and  lower energy and material consumption. The state is also accelerating the elimination of ammonia saponification extraction, chloride electrolysis, hydrometallurgical synthesis of rare earth fluoride, and other obsolete processes and capacities. It encourages enterprises to combine technological transformation with merger and reorganization and elimination of outdated capacities, in order to get backward rare earth enterprises to close down, suspend operations, merge with others or change their lines of production.

Readjusting and optimizing industrial structure is a crucial step in promoting the sustained and healthy development of the rare earth industry. The Chinese government exercises strict control over the total volume of rare earth smelting and separation, and will not approve any new rare earth smelting and separation projects except for those state-sanctioned projects of merger and reorganization and for distribution optimum. Existing rare earth smelting and separation projects are prohibited from expanding their scale of production. The state resolutely halts the construction of projects that are undertaken in violation of relevant regulations, and will punish, in accordance with the law, departments and individuals responsible for giving ap-proval beyond their authority and those responsible for building the projects in violation of relevant regulations. China adjusts the structure of processed rare earth products, curtails the excessive consumption of rare earth resources by low-end products, and reduces the output of low-grade processed products that require high rare earth consumption. It aims to follow the international scientific and technological and overall industrial development trend and encourage the growth of high-tech rare earth application industries with high added value. In addition, the state expedites the development of high-performance rare earth materials and devices, including magnetic, luminescent, hydrogen- storage, and catalytic materials, and encourages the application of rare earth materials in the fields of information, new energy, energy conservation, environmental protection and health care. The states encourages enterprises to strengthen innovation in management, establish the modern enterprise system, and accelerate industrial upgrading, in order to transform them into modern enterprises that save resources, protect the environment, follow the path of intensive development and actively fulfill their social responsibilities.

VI. Promoting Fair Trade and International Cooperation

Opening up is a basic state policy of China. In the field of rare earths, China gives simultaneous consideration to both domestic and international resources and markets, and follows a win-win strategy that both ensures a reasonable supply of rare earth products onto the international market and helps protect the environment and resources. China will continue its efforts in promoting fair trade and international exchanges and cooperation in this field.

In view of the needs of protecting the environment and resources and developing in a sustainable way, and after giving overall considerations to the domestic and international markets, the carrying capacity of resources and environment, as well as domestic production conditions, China strictly controls the total volumes of rare earth mining and production, and takes restrictive measures on the mining, production, consumption and export of rare earth products simultaneously. The state sets a reasonable quota for annual rare earth exports that basically satisfies the normal demand of the international market. Meanwhile, China tightens customs control, regulates the management of declarations to be filed by enterprises, and orders rare earth export enterprises to comply with the industrial policies, industry access and environmental standards. The state is reinforcing its supervision and control over export enterprises and the self-discipline of the industry. In accordance with the law, it investigates and punishes enterprises that export rare earth products clandestinely, export products procured from illegal channels or commit other acts disrupting the normal order of rare earth export. In 2011, the state carried out a special campaign to crack down on rare earth smuggling, during which it tracked down 769 tons of smuggled rare earth products and 23 criminal suspects in eight cases. Meanwhile, the state strictly bans the import of rare earth products containing radioactive substances that exceed the prescribed limits.

Regarding rare earth trade, the Chinese government has reiterated on more than one occasion that China will continue its rare earth supply to the international market. The tightened control over rare earth export by the Chinese government is carried out in concert with that over the mining, production and other links of the rare earth industry. This is in alignment with China’s sustainable development and the interests of all countries in the world. China opposes politicizing the rare earth issue, and is willing to strengthen dialogue and cooperation with other rare earth producers and consumers in a constructive and responsible manner, to work together with them in preventing excessive speculation in the rare earth market and solving the resource and environmental problems in the development of the industry. It also hopes that countries and regions with abundant rare earth reserves will make active efforts in developing their own re-sources to diversify the supply and expand rare earth trade in the international market, shouldering together the responsibility of global rare earth supply in order to meet the needs of the sustainable development of the world economy.

In recent years, China has been actively creating a fair and open environment for foreign investment, encouraging foreign investment in environment restoration, waste product recycling, and high-end application development and equipment manufacturing in the rare earth industry. Enterprises from the United States, Germany, France, Canada and Japan have invested a total of 6.1 billion yuan in China’s rare earth industry, establishing 38 sole-proprietorship and joint-venture enterprises. Their products are mainly made for export to meet the needs of the mother countries of these investors. China encourages domestic enterprises to follow international practice and market rules to participate actively in international technological and economic cooperation in the field of rare earths.

China has actively participated in international exchanges in the field of rare earths. It has consecutively established the International Conference on Rare Earth Development and Application, In-ternational Rare Earth Industry Summit, Baotou Rare Earth Industry Forum, and other platforms for academic exchanges. China has taken an active part in activities held by the International Workshop on Rare Earth Permanent Magnets, International Commission on Illumination and other related international organizations. It has conducted bilateral and multilateral exchanges and dialogues on a broad range of issues concerning rare earth with the US, the EU, Russia and Japan, to share information, enhance mutual understanding, and work hand in hand to promote the sustainable development of rare earth science and technology and the rare earth industry as a whole.

The sustained, healthy development of the rare earth industry is crucial to the sustainable use of rare earth reserves as important natural resources of the world, as well as to the protection of Planet Earth, which is home to all mankind. Nowadays, as all countries de-pend on each other for existence and prosperity, they should strengthen cooperation and share responsibilities and achievements. In future, China will adhere to the Scientific Outlook on Development, improve its rare earth policies, reinforce supervision over the industry, and work closely with the international community to safeguard a fair and rational order of the rare earth market, better coordinate rare earth development and utilization with the protection of the environment and resources, and make new contributions to the world’s economic growth and scientific and technological development.