In self-assured mood before setting off for a visit to Europe, Wen Jiabao, the Chinese Prime Minister, voiced his confidence today in the strength of his booming economy but ruled out any swift advance towards greater democracy.

The Prime Minister, whose main task is to manage China’s race to prosperity, appeared in high spirits as he welcomed a small group of journalists to the Throne Hall of the Effulgent Pole-Star, where Qing dynasty emperors in the 19th century received foreign tributaries and Deng Xiaoping in 1986 first shook hands with the Queen.

Mr Wen, 64, granted a rare interview within the vermilion walls that surround the sprawling garden-palace complex in Beijing where emperors once reviewed archers and which is now the headquarters of China’s ruling Communist Party. He will leave this week to attend the sixth summit of the Asia-Europe Meeting before flying on to Britain, Germany and Tajikistan.

He made clear that a visit to one of the world’s oldest democracies would not encourage Beijing to accelerate the introduction of direct elections at home.

China’s progress towards democracy would be a very gradual process and the Prime Minister avoided giving a timetable. China’s huge size, its enormous population and the large gaps between rich and poor, educated and uneducated, were reasons he cited for the Communist Party’s decision to delay change.

He said: “Multi-candidacy elections are practised in China and the number of candidates standing for election will increase.”

He said China would steadily improve the system of nomination of candidates to enable the people to have a greater say and more choice. He was referring to direct elections for leaders of China’s 680,000 villages — the lowest administrative area in China where sometimes more than one candidate is allowed to contest.

Elections higher up the chain would not come without greater evidence that the system was effective. If direct elections in villages resulted in better management then the system could be tried in townships. “We are confident that when the people are capable of running a village through direct election, they will later be able to run a township, then a county and a province.”

He cited the principle of people as masters of the nation.

He appeared to step back from a statement during a visit by Tony Blair, the British Prime Minister, to Beijing last September when Mr Wen suggested township elections might be possible in just a few years.

The absence of democracy posed no obstacle to the advance of economic reform in his view.

Mr Wen voiced confidence in the Government’s ability to sustain the current boom, although he took care to calm the anxieties of those who fear China’s rapid rise may prove a threat to other nations.

China, helped by a huge population, a high level of education, a strong savings rate and a commitment to capitalist-style market reforms, could overcome obstacles in the way of development. This remark was a veiled reference by Mr Wen to the overhang from Stalinist-style central planning and lumbering state-owned enterprises that have remained tied to government apron strings, avoiding pressure to compete in an open marketplace.

Mr Wen said: “We are in a position to ensure continued and fairly fast growth of China’s economy for a considerable period of time to come, and we have full confidence in our ability to do so.”

But problems abound. Not only shortages of energy and resources and the degradation of the environment. He openly addressed the social inequities and dissatisfaction that have resulted from corruption and abuse of government policy. He cited illegal land grabs and forced resettlement of people to make way for urban renovation schemes.

Stressing the need for political reform at some stage, he said: “An effective system will prevent bad people from running wild, while a dysfunctional system will keep good people from performing good deeds and even make them commit wrongdoing.” Most of China numerous industrial and environmental accidents were to blame on official dereliction of duty and corruption.

On China’s currency, the renminbi, which is widely regarded as undervalued, he ruled out any dramatic shift and said the currency would be allowed to rise gradually, in line with market movements.

“The floating band will be gradually expanded. So there will be no more ‘surprise’ adjustment in renminbi exchange rate.”

Mr Wen did not confine his remarks to domestic issues, choosing to demonstrate China’s growing clout on the world stage by outlining policy towards the nuclear programmes of Iran and North Korea.

Stressing China’s long-held desire for a peaceful resolution to these two crises, he warned Iran to take heed of international concerns and to act to constructively.

He urged an early resumption of talks, referring to Tehran’s statement to Kofi Annan, the visiting UN Secretary-General, this week that it wanted to negotiate an end to its stand-off with the West. He said: “We hope the parties concerned will be patient, show flexibility and work for the early resumption of negotiations.”

China has close ties to Tehran with trade reaching nearly $8 billion in the first seven months of this year, much of that in the form of oil imports to fuel economic growth. Beijing has been vocal in urging negotiations, part of its traditional opposition to the use of sanctions in international diplomacy although it has always tried to avoid exercising its veto in the United Nations.

Mr Wen took the opportunity to display China’s antipathy. “Our goal is to bring about eventual peaceful resolution of these issues. But imposing sanctions will not necessarily get us there, and may even prove counterproductive. The parties involved should be cautious about moving towards sanctions.”

Times Recommends

• Rio Tinto four held as China prepares case
• Diplomats must keep heads down and trousers up
• When in Rome should one make like Berlusconi?