Premier Wen Jiabao, who was on an official visit to the United States, gave an interview to CNN's Lou Dobbs in Boston.

DOBBS:Mr. Premier, you've had a whirlwind visit to the United States, your first official visit as premier of China. Give us your impression.

WEN:In fact, this is a very important visit. And this visit has also been very successful. In a few hours time, I will be leaving your country, the United States. So here, I want to take this opportunity to express my thanks to President Bush, and to the government and people of the United States, for the very warm hospitality I have enjoyed during this visit. And I think this warm hospitality is not just for myself, but is also for the 1.3 billion people of China. During my visit, I had talks with President Bush and other leaders of this country in a friendly, candid, cooperative and a constructive atmosphere. We had in-depth exchanges of ideas about China-U.S. relations, about major international questions, and reached a broad major understanding. And we are both of the view that the further strengthening and improvement of China-U.S. relations not only serves the interest of our two peoples, but is also conducive to peace and stability in the whole world. To be sure, there are differences between our two countries, and it is hardly possible for us to see eye to eye with each other on 100 percent of things. But we can make 100 percent of effort to remove these differences and ensure smooth development of our constructive and cooperative relationship. This visit for me has been a very pleasant experience. Although it is quite short -- it lasted only three days -- I attended up to 30 various functions and activities, and I reached out extensively to people of different circles in this country. I have brought with me the best of wishes of the Chinese people towards the American people, and I'm sure I will bring back to the Chinese people a positive message of this desire of the American people for the further development and growth of our relations.

DOBBS:Mr. Premier, one of the issues has been the rhetoric of President Bush from the time he took office. We move from statements about viewing China as a strategic competitor, to now, with the culmination of your visit, talking about diplomatic partners. If you would frame for us what you think this means as an understanding between you, your government, and President Bush.

WEN:We both believe that the China-U.S. bilateral relationship is the most important state-to-state relationship in our world. The development of our relations is conducive not just to peace and stability in Asia-Pacific, but also to peace and prosperity of the whole world. We are of the same view that to have a mature bilateral relationship, both our two sides should work carefully to safeguard such a relationship. We cannot allow the bond of friendship between our two countries to be broken simply because of some minor problems. This would require strategic vision and strategic courage in the perception and handling of China-U.S. relations.

DOBBS:Mr. Premier, one of the tests, obviously, will come on the Korean Peninsula, the talks, the six-party talks that you and your government started with the North Koreans, very important to maintaining stability on the peninsula. Obviously, this United States government is critically interested in the elimination of the North Korean nuclear weapons program. Is there a common view on the part of the Chinese government? And is the Chinese government going to continue to take the lead in achieving that goal?

WEN:China does not believe that the Korean Peninsula should have nuclear weapons. So therefore, we believe that the nuclear issue on the Korean Peninsula should be resolved through peaceful means and through diplomatic means in the interest of peace and stability on the peninsula. We believe that active efforts should be made to promote the six-party talks, which is the best way to peacefully resolve the issue. The Chinese government will actively undertake various coordinating and mediating efforts to facilitate the six-party talks.

DOBBS:Mr. Premier, on another very sensitive issue which tensions are rising, Taiwan. Your government has made it very clear that it does not accept the referendum that is proceeding in Taiwan. President Bush called upon the Taiwanese government to withdraw the referendum. President Chen said the referendum goes ahead. What is your best judgment of the situation and your view as to what happens next?

WEN:The position of the Chinese government on a question of Taiwan has always been consistent. That is, we always follow the principle of peaceful reunification and one country, two systems. And we have been doing a great deal. And we have been making our utmost effort and utmost sincerity to achieve this prospect. However, such efforts by our side have met with the challenges from the Taiwan authority and from the Taiwan separatist forces. We respect the desire of the Taiwan people to develop and pursue democracy. However, we firmly oppose the attempts by certain separatist forces in Taiwan to pursue Taiwan independence under the disguise of promoting democracy in an attempt to cut of Taiwan from the mainland. So we have expressed our firm determination and strength to safeguard state unity that is exactly designed to safeguard peace and stability in the Taiwan Straits. We also made it very clear that as long as the slightest hope for peace exists, we will exert our utmost to strive for the peaceful reunification of the motherland. We appreciate the reaffirmation by President Bush of his one-China policy, and for his sending a clear signal to Taiwan security forces.

DOBBS:President Bush also said that he wanted to preserve the status quo as a matter of U.S. policy. The status quo, in your judgment, is it endangered by this referendum significantly?

WEN:The purpose of the so-called defensive referendum that Chen Shui-bian has been going after is to undermine the status quo. And it is designed to cut off Taiwan from the sacred territory of the Chinese motherland. So we have to have a clear understanding of the nature of what he's going after. In fact, the democracy is just a disguise, an excuse. And so his efforts look to be quite deceptive.

DOBBS:Premier Wen, in 2000, your government issued a white paper. And with one condition, which could lead to war, would be the obvious end of all opportunity for reunification talks. How confident are you at this stage about reunification talks between Taiwan and China proceeding and leading to a constructive dialogue?

WEN:I want to make it clear, first and foremost, that the potential for war is by no means targeted at our Taiwan compatriots, but rather it targets the separatist supporters in Taiwan. The people in Taiwan are our blood brothers and sisters. So as long as even the slightest hope for peace exists, we will work to our utmost to strive for the peaceful process. In fact, with the eight-point proposal put forward by President Jiang Zemin, and with a series of measures the mainland has initiated, we have repeatedly reaffirmed that as long as Taiwan recognizes the one-China principle, the two sides of the Taiwan Straits may have dialogue. And the dialogues and talks can cover any topic. But the problem is -- it is the Taiwan authorities that reject such talks and negotiations with mainland.

DOBBS:Mr. Premier, one of the talks -- the most important talks in your early premiership has been with President Bush on the issue of trade. You are responsible for the entire vast Chinese economy. And one of the most difficult issues between our countries is the trade imbalance. Tremendous deficits, could reach $130 billion this year. Do you have the sense that you and President Bush have reached an understanding about reaching a balance in the near balance in the near future in trade between our two countries?

WEN:Firstly, I would like to say that the rapid expansion of trade between our two countries has benefited our two peoples. Twenty-five years ago, trade between our two countries was barely valued at $2.5 billion. But this year, two-way trade between us tops $100 billion. Is it true to say that the development of trade only benefits one country at the expense of the other? Definitely not. Trade between our two countries has brought tremendous benefit to the people of both countries. As to the question of American deficit in Sino-US trade, the two countries have different statistics. But the United States does have a sizeable deficit in trade with China. And so in a constructive approach I proposed to President Bush five proposals. Firstly, we seek mutual benefits and win-win results. We should look at the larger picture and larger interests of our trade for each country. We should not just to consider our own interests, we should also take into account the interests of the other country. Secondly, we should give priority to development, that is, reducing American imports from China is not a solution. We should expand instead U.S. exports to China. That would require a simultaneous effort by the United States to lift the various restrictions on exporting to the Chinese market. Thirdly, the two countries should establish and improve a coordinating mechanism for the resolution of trade issues. I proposed this specifically to President Bush to raise the level of our joint committee on commerce and trade. This committee will now be headed by our vice premier, Madame Wu Yi, while on your side, Secretary of Commerce Don Evans and Trade Representative Robert Zoellick will chair this commission. Fourthly, the two countries should approach trade issues on the basis of equal consultations, rather than imposing restrictions or sanctions. Fifthly, economic and trade issues should not be politicized. President Bush expressed full agreement with all my five proposals. As far as I know, the two sides are making positive preparation for launching the inaugural session of the upgraded JCCT session next spring.

DOBBS:Mr. Premier, your sense of how quickly a trade balance, recognizing all of the elements that you have just enumerated, how quickly do you think a meaningful trade balance can be achieved between China and the United States?

WEN:In fact, I think this will be an objective that would require some time and joint efforts by the two sides. We have demonstrated our utmost sincerity and we are very much ready to increase our imports from your country. At the same time, we hope that United States will open more to China, especially in the high-tech sector. I'm an optimist.

DOBBS:One -- optimism usually serves best those in commerce. And this has been a long process. It has been a miracle for China. We have moved into an era that is new to our economics, new to our political leaders. But one thing that remains, and that is politics and economics do combine no matter how much we would like them not to at times. President Bush is under considerable pressure, political pressure in the Congress to react with tariffs, to seek a change in the trade balance as quickly as possible, through political means. Do you believe that we will see that trade deficit eliminated to the point quickly enough so that it will not be a political problem for President Bush?

WEN:In fact, China has adopted active measures to address that. And we will continue to take such measures. The five-point proposal that I just listed represents an effort by senior leaders of the two countries to take a strategic look at where we are on this question. Naturally this would also require closer mutual understanding between the two countries. I want to point out that the U.S. exports overall increased by 15 percent this year. But in the first 10 months of this year, its trade with China grew by 20 percent, whereas its trade with other countries only increased by about 2 to 3 percentage points. I should also say that the U.S. exports, to China in particular, have increased by fairly big margins. That is my first point. Secondly, this year China's total trade, including import and export, is valued at about $800 billion, but our imports have been growing at a pace of more than 40 percent whereas exports only went up by 32 percent. We also need to keep in mind the fact that when U.S. trade deficit is increasing, China's trade deficit with other countries in Asia is also increasing. And so there is indeed a structural nature associated with [the] U.S. trade imbalance, and also that is a reflection of shifting commercial patterns and relations among different countries. Despite that, we will still try to promote a balance in our bilateral trade in an active and positive approach. And our efforts will be applied not just in this time -- in this quite extraordinary political time for the United States -- but it will be extended for the long term.

DOBBS:Mr. Premier, I just want to say thank you for accelerating the progress towards that balance and accelerating the mutual understanding that's so important to both our peoples, we thank you very much, Premier Wen.