I was here in Guangdong in 1984. At that time rural reform had been under way for several years, and we were just beginning to introduce urban reform and to establish special economic zones. Eight years have passed since then. This time, during my trip here, I have found that the rapid growth in the Shenzhen and Zhuhai special economic zones and some other areas has exceeded my expectations. After what I have seen, I am even more confident.

The situation in China is now stable. That is because, for one thing, we resolutely adhered to socialism when we quelled the unrest in 1989 and because, for another, we have persisted in the policies of reform and opening to the outside world. If we hadn't taken action to prove that we were still adhering to those policies, the situation would not be stable. The future of China hinges on our adhering to those policies, and we should explain that fully to the people.

It is late for us to be developing Shanghai, so we have to work hard.

When we decided to establish the four special economic zones in 1979, we chose them mainly on the basis of their geographical advantages. Shenzhen is adjacent to Hong Kong, and Zhuhai is close to Macao. We chose Shantou because there are many natives of nearby Chaozhou living in Southeast Asian countries. Xiamen became a special economic zone because many natives of southern Fujian have emigrated to other countries and gone into trade. However, we did not take the intellectual advantages of Shanghai into account. Since the people of Shanghai are clever and well educated, if we had decided to establish a special economic zone here, the city would look very different now.

There are many unpredictable factors affecting the international situation, and the contradictions are becoming increasingly evident. The current situation is more complex and chaotic than in the past, when the two hegemonist powers were contending for world domination. No one knows how to clear up the mess. Some developing countries would like China to become the leader of the Third World. But we absolutely cannot do that -- this is one of our basic state policies. We can't afford to do it and besides, we aren't strong enough. There is nothing to be gained by playing that role; we would only lose most of our initiative. China will always side with the Third World countries, but we shall never seek hegemony over them or serve as their leader. Nevertheless, we cannot simply do nothing in international affairs; we have to make our contribution. In what respect? I think we should help promote the establishment of a new international political and economic order. We do not fear anyone, but we should not give offence to anyone either. We should act in accordance with the Five Principles of Peaceful Coexistence and never deviate from them.

Recently the Taiwan side has shown a little more flexibility. Nevertheless, some people in Taiwan want to create ``one country, two governments'' and even to change the composition of the United Nations. In reality, they are still trying to create ``two Chinas''. At present, the United Nations recognizes the Government of the People's Republic of China as the sole legal government of China, and Taiwan as a part of China. How can the authorities in Taiwan be called the Chinese Government? They can't. Nothing could be more reasonable than the ``one country, two systems'' arrangement. What would Taiwan stand to lose by it? This is an opportunity for Taiwan and the entire nation. All of us should work hard to push Taiwan towards reunification.

Ever since last year some countries have imposed sanctions on China. I think, first, they have no right to do so; second, experience has proved that China has the ability to withstand these sanctions. Our economic development has been affected to some extent, but not very seriously. In fact, the sanctions are gradually abating. One special feature of China's development is that it has proceeded under international sanctions for most of the forty years since the founding of the People's Republic. If there is nothing else we're good at, we're good at withstanding sanctions. So we are not worried or pessimistic about them; we take them calmly. Despite the trouble that has arisen in Eastern Europe and the Soviet Union, and despite the sanctions imposed by seven Western countries, we adhere to one principle: to maintain contacts and build good relations with the Soviet Union, with the United States, and also with Japan and the European countries. We have never wavered in this principle. China is magnanimous and is not upset by trifles like that.