But the most significant changes in China are not only in big cities like Shanghai, but also in the vast rural areas.

I wonder how many people noticed that on the first day of 2006 China abolished the agricultural tax.

For 2,600 years, successive governments in the Middle Kingdom mainly depended on taxing the farmers.

This move marked China's transition from an agrarian to an industrial society.

In 2007, with the implementation of the program to extend power supply to every village, many people saw electric light for the first time in their lives.

About half of the rural population in China has never gone to hospital for economic reasons.

A cooperative medical care scheme now covers 90 percent of rural China. Though small, starting at 50 yuan ($7.35) per person and now 100 yuan ($14.7), it has enabled many farmers to be cared for during times of sickness.

Although prosperity is not evenly shared and there is still poverty in the countryside, we are confident that the trend of prosperity is going to continue and the people will be better off with each passing year.

I can't talk about China without mentioning the political and democratic development.

The world tends to overestimate the economic progress in China and overlook China's progress in political reform and socialist democratic development.

Before coming here, I searched through Baidu, a Chinese search engine, for "China's democratic political reform." I got 1.39 million results in less than a second. There are very different opinions on this subject and some interesting analyses and suggestions.

For me, having seen the anarchy of the "cultural revolution" of the 1960s and having witnessed the progress of reform, I can see China has come a long way in the development of democratic decision-making and the rule of law.

Take the role of the National People's Congress, for example. It has assumed a very important role in China's political life.

Of the 231 laws in China, 223 were promulgated in the past 30 years.

The National People's Congress is covering huge legislative work that in many countries was done over hundreds of years.

The Property Law took a record seven years of debate throughout the country.

When the Labor Law was debated, the National People's Congress received 200,000 suggestions, 65 percent of which came from the grassroots level.

I remember the first time international journalists appeared during the National People's Congress, the delegates were quite surprised.

Now they come in larger numbers, 800 this year. They even sat in on some of the meetings and asked questions.

President Hu Jintao said at the 17th National Congress of the Communist Party of China (CPC), "Power should operate in the sunshine."

At the center of the democratic reform is the decision-making process.

Both the Party and the government have set up a structure under which major decisions are made only after full consultations.

Transparency in the personnel system has also been a focus of constant reform measures.

I once visited the Ministry of Science and Technology and saw in the entrance hall some large posters about who was going to be promoted and soliciting opinions.

This is done at all levels and for all important posts.

Elections were introduced at the rural level 10 years ago. Some 64,000 villagers' committees had been set up as of the end of 2004, all of them being directly elected.

Eighty-five percent of villages have set up mechanisms for making important decisions.

However, I am not saying that China has a perfect democratic system.

The reason the President used the term democracy about 60 times [in his report to the 17th CPC National Congress] is precisely because, as the General Secretary of the CPC Central Committee, he wanted to emphasize its importance and was calling for greater effort to develop democracy in the Party and the government.

We are halfway through the reform program and everything is still in transition.

Just as you can see new buildings in Beijing every year, you will also see new political development in China every year. The direction is toward greater openness, transparency and accountability.

On the international front, the role China wants to play is to encourage dialogue and cooperation.

We do not believe in imposing our will on others, or interfering in other countries' internal affairs.

We see our role in the world as to contribute to peace. China's interests have never been so closely linked with those of the world and vice versa.

The financial crisis has brought home the fact that we are sharing one boat. As the Chinese President remarked at the London summit, only by working together can we steer the boat to its desired destination.

Now coming back to the question with which I started the speech, is China a power?

I firmly believe that China, a country with 1.3 billion people, smart, hardworking and happy, is destined to be a strong country in the world. But China will not become a hegemony.

China has come this far not through war, but through hard work by its vast number of people and through fair trade with the world. The source of China's strength is its economy.

China's diplomatic objective is to promote peace and cooperation in the world, in which China can continue to prosper and its people can achieve a better life.