Q: Mr. President, given the weakness of the dollar and the turmoil in the financial markets and the recent poor economic indicators, what are you going to do to calm the economy _ calm the markets and keep the economy from sliding into a recession? A: Well, one thing I'm not going to do is comment on levels of the market, except to say that there's been a substantial increase over the last year, and some are reading the recent couple of days as corrections, although I gather it recovered a little bit yesterday, and the market has always been an indicator, and it's been one that's been read quite positively. But I don't want to get into market levels. What I do want to do is establish sound policies, and I'm convinced that if we can get the cooperation of Congress that we need on reducing the deficit, that that will go a long way, not market prices but in terms of the fundamentals on the economy. It's slowed down a little. There's a lot of prediction that it will be slow for a while and then have a rather robust step-up come summer. But I don't know. All I know is that we've got to not bash anybody but get out there and try to enact policies that will help keep the longest recovery in modern history going. Q: You said that you felt that there was room for further reduction of interest rates. Given the need to attract foreign investment from overseas where rates are high, how do you square that with your call for lower interest rates? A: You mean to attract -- Q: Attract foreign investment to cover the U.S. deficit and yet though we're competing against the foreign investment _ A: I think that people see U.S. _ the U.S. still, regardless of what's temporary out there, as the safest haven for investment anywhere in the world, and I want to conduct the fiscal policies of this government so they will continue to see it that way. John, then Charles, then we'll take -- Q: Going back to the vote on the Chinese student visas, you and your people have been trying to get that vote delayed. Is that because you have some indications from the Chinese that they may soon release Fang Lizhi ... A: No. Q: ... and if this vote goes against you, it could hurt his chances? A: No, it is not, but I don't think it will help his chances. But I would love to see that step taken by the Chinese. But it isn't _ there's not a _ I think we're reconciled to the fact that the vote will go forward tomorrow in the Senate. Q: When you try to defend your China policy, one thing you never do is talk about the ``China card.'' You seem to hate that expression, even though when Kissinger and Nixon were doing it, it was considered a master stroke of foreign policy, playing the Chinese off against the Soviets. If Gorbachev does fall from power and is succeeded by men whose role model is Joe Stalin, aren't you going to have to play the China card, too? A: I don't think you ``play a card.'' I think that's gratuitously offensive to the Soviets and to the Chinese. But one of the reasons I want to stay engaged is that there are geopolitical reasons to have good relations or improved relations even under these unsatisfactory conditions. And it's going to be hard to do because of the human rights setback. But I want to have some contact. I want to retain contact because, as you look around the world, take a look at Cambodia. Take a look at Japan. Take a look at a lot of countries in the Pacific. China is a key player. And I'd like to think that our representations will have them move forward on the human rights side so we can have a more normalized relationship with them. Q: Mr. President, regarding the Soviet Union, have you in the course of these events going on in Baku, or any of your senior people _ I see General Scowcroft is here _ been in touch with Mr. Gorbachev or his people to discuss how severe it is, and ... A: Well, we've had contact with them. I don't remember when my last contact was with Mr. Gorbachev, but it didn't relate specifically to the Baku. Q: Could I then follow, sir, to ask you to reconcile, if you can, the position that you've taken that you say you want Mr. Gorbachev to survive and succeed, and on the other hand, you have areas of the Soviet Union such as the Baltics that you do not recognize as being part of the Soviet Union, and where you say you favor an independent pursuit of their own destiny. Does he succeed if they secede? A: Well, he _ that's again, at this juncture the U.S. position is well known, and you've stated it correctly, that we have not recognized the status of the Baltics. However, what I say that we want to do is to encourage Mr. Gorbachev's stand that peaceful change is the order of the day. And he's sorting out some very difficult internal problems in these three Baltic countries. And I don't think it helps facilitate things for us to fine tune all that. They know our position. I talked to him about this, incidentally, at Malta. But the thing I think is that, in looking at the Soviet scene there, that he is still adhering as best he can to the concept of peaceful change in the Baltics. And that's got to dominate.
