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|China - Relations with U.S. (Notes)
From Revolution to the Shanghai Communique
As the PLA armies moved south to complete the communist conquest of China in 1949, the American Embassy followed the Nationalist government headed by Chiang Kai-shek, finally moving to Taipei later that year. U.S. consular officials remained in mainland China. The new P.R.C. Government was hostile to this official American presence, and all U.S. personnel were withdrawn from the mainland in early 1950. Any remaining hope of normalizing relations ended when U.S. and Chinese communist forces fought on opposing sides in the Korean conflict.
Beginning in 1954 and continuing until 1970, the United States and China held 136 meetings at the ambassadorial level, first at Geneva and later at Warsaw. In the late 1960s, U.S. and Chinese political leaders decided that improved bilateral relations were in their common interest. In 1969, the United States initiated measures to relax trade restrictions and other impediments to bilateral contact. On July 15, 1971, President Nixon announced that his Assistant for National Security Affairs, Dr. Henry Kissinger, had made a secret trip to Beijing to initiate direct contact with the Chinese leadership and that he, the President, had been invited to visit China.
In February 1972, President Nixon traveled to Beijing, Hangzhou, and Shanghai. At the conclusion of his trip, the U.S. and Chinese Governments issued the 'Shanghai Communique,' a statement of their foreign policy views. (For the complete text of the Shanghai Communique, see the Department of State Bulletin, March 20, 1972).
In the Communique, both nations pledged to work toward the full normalization of diplomatic relations. The U.S. acknowledged the Chinese position that all Chinese on both sides of the Taiwan Strait maintain that there is only one China and that Taiwan is part of China. The statement enabled the U.S. and China to temporarily set aside the 'crucial question obstructing the normalization of relations'--Taiwan--and to open trade and other contacts.
Liaison Office, 1973-78
In May 1973, in an effort to build toward the establishment of formal diplomatic relations, the U.S. and China established the United States Liaison Office (USLO) in Beijing and a counterpart Chinese office in Washington, DC. In the years between 1973 and 1978, such distinguished Americans as David Bruce, George H.W. Bush, Thomas Gates, and Leonard Woodcock served as chiefs of the USLO with the personal rank of Ambassador.
President Ford visited China in 1975 and reaffirmed the U.S. interest in normalizing relations with Beijing. Shortly after taking office in 1977, President Carter again reaffirmed the interest expressed in the Shanghai Communique. The United States and China announced on December 15, 1978, that the two governments would establish diplomatic relations on January 1, 1979.
In the Joint Communique on the Establishment of Diplomatic Relations dated January 1, 1979, the United States transferred diplomatic recognition from Taipei to Beijing. The U.S. reiterated the Shanghai Communique's acknowledgment of the Chinese position that there is only one China and that Taiwan is a part of China; Beijing acknowledged that the American people would continue to carry on commercial, cultural, and other unofficial contacts with the people of Taiwan. The Taiwan Relations Act made the necessary changes in U.S. domestic law to permit such unofficial relations with Taiwan to flourish.
U.S.-China Relations Since Normalization
Vice Premier Deng Xiaoping's January 1979 visit to Washington, DC, initiated a series of important, high-level exchanges, which continued until the spring of 1989. This resulted in many bilateral agreements--especially in the fields of scientific, technological, and cultural interchange and trade relations. Since early 1979, the United States and China have initiated hundreds of joint research projects and cooperative programs under the Agreement on Cooperation in Science and Technology, the largest bilateral program.
On March 1, 1979, the United States and China formally established embassies in Beijing and Washington, DC. During 1979, outstanding private claims were resolved, and a bilateral trade agreement was concluded. Vice President Walter Mondale reciprocated Vice Premier Deng's visit with an August 1979 trip to China. This visit led to agreements in September 1980 on maritime affairs, civil aviation links, and textile matters, as well as a bilateral consular convention.
As a consequence of high-level and working-level contacts initiated in 1980, U.S. dialogue with China broadened to cover a wide range of issues, including global and regional strategic problems, political-military questions, including arms control, UN and other multilateral organization affairs, and international narcotics matters.
The expanding relationship that followed normalization was threatened in 1981 by Chinese objections to the level of U.S. arms sales to Taiwan. Secretary of State Alexander Haig visited China in June 1981 in an effort to resolve Chinese questions about America's unofficial relations with Taiwan. Eight months of negotiations produced the U.S.-China joint communique of August 17, 1982. In this third communique, the U.S. stated its intention to reduce gradually the level of arms sales to Taiwan, and the Chinese described as a fundamental policy their effort to strive for a peaceful resolution to the Taiwan question. Meanwhile, Vice President Bush visited China in May 1982.
High-level exchanges continued to be a significant means for developing U.S.-China relations in the 1980s. President Reagan and Premier Zhao Ziyang made reciprocal visits in 1984. In July 1985, President Li Xiannian traveled to the United States, the first such visit by a Chinese head of state. Vice President Bush visited China in October 1985 and opened the U.S. Consulate General in Chengdu, the U.S.'s fourth consular post in China. Further exchanges of cabinet-level officials occurred between 1985-89, capped by President Bush's visit to Beijing in February 1989.
In the period before the June 3-4, 1989 crackdown, a large and growing number of cultural exchange activities undertaken at all levels gave the American and Chinese peoples broad exposure to each other's cultural, artistic, and educational achievements. Numerous Chinese professional and official delegations visited the United States each month. Many of these exchanges continued after Tiananmen.
Bilateral Relations After Tiananmen
Following the Chinese authorities' brutal suppression of demonstrators in June 1989, the U.S. and other governments enacted a number of measures to express their condemnation of China's blatant violation of the basic human rights of its citizens. The U.S. suspended high-level official exchanges with China and weapons exports from the U.S. to China. The U.S. also imposed a number of economic sanctions. In the summer of 1990, at the G-7 Houston summit, Western nations called for renewed political and economic reforms in China, particularly in the field of human rights.
Tiananmen disrupted the U.S.-China trade relationship, and U.S. investors' interest in China dropped dramatically. The U.S. Government also responded to the political repression by suspending certain trade and investment programs on June 5 and 20, 1989. Some sanctions were legislated; others were executive actions. Examples include:
The U.S. Trade and Development Agency (TDA)--new activities in China were suspended from June 1989 until January 2001, when then-President Clinton lifted this suspension. Overseas Private Insurance Corporation (OPIC)--new activities suspended since June 1989. Development Bank Lending/IMF Credits--the United States does not support development bank lending and will not support IMF credits to China except for projects that address basic human needs. Munitions List Exports--subject to certain exceptions, no licenses may be issued for the export of any defense article on the U.S. Munitions List. This restriction may be waived upon a presidential national interest determination. Arms Imports--import of defense articles from China was banned after the imposition of the ban on arms exports to China. The import ban was subsequently waived by the Administration and re-imposed on May 26, 1994. It covers all items on the Bureau of Alcohol, Tobacco, Firearms, and Explosives' Munitions Import List.
In 1996, the P.R.C. conducted military exercises in waters close to Taiwan in an apparent effort at intimidation, after Taiwan's former President, Lee Teng-huei made a private visit to the U.S. The United States dispatched two aircraft carrier battle groups to the region. Subsequently, tensions in the Taiwan Strait diminished, and relations between the U.S. and China have improved, with increased high-level exchanges and progress on numerous bilateral issues, including human rights, nonproliferation, and trade. Former Chinese president Jiang Zemin visited the United States in the fall of 1997, the first state visit to the U.S. by a Chinese president since 1985. In connection with that visit, the two sides reached agreement on implementation of their 1985 agreement on peaceful nuclear cooperation, as well as a number of other issues. Former President Clinton visited China in June 1998. He traveled extensively in China, and direct interaction with the Chinese people included live speeches, press conference and a radio show, allowing the President to convey first-hand to the Chinese people a sense of American ideals and values.
Relations between the U.S. and China were severely strained by the tragic accidental bombing of the Chinese Embassy in Belgrade in May 1999. By the end of 1999, relations began to gradually improve. In October 1999, the two sides reached agreement on humanitarian payments for families of those who died and those who were injured as well as payments for damages to respective diplomatic properties in Belgrade and China. Relations further cooled when, in April 2001, a Chinese F-8 fighter collided with a U.S. EP-3 reconnaissance aircraft flying over international waters south of China. The EP-3 was able to make an emergency landing on China's Hainan Island despite extensive damage; the P.R.C. aircraft crashed with the loss of its pilot. Following extensive negotiations, the crew of the EP-3 was allowed to leave China 11 days later, but the U.S. aircraft was not permitted to depart for another 3 months.
Subsequently, the relationship gradually improved. President George W. Bush visited China in February 2002 and met with President Jiang Zemin in Crawford, Texas in October. President Bush hosted Premier Wen Jiabao in Washington in December 2003. President Bush first met Hu Jintao in his new capacity as P.R.C. President on the margins of the G-8 Summit in Evian in June 2003, and at subsequent international fora, such as the September 2004 APEC meeting in Chile, the July 2005 G-8 summit in Scotland, and the September 2005 UN General Assembly meetings in New York. President Bush traveled to China in November 2005, an official visit that was reciprocated in April 2006 when President Hu met with President Bush in Washington.
U.S. China policy has been consistent. For seven consecutive administrations, U.S. policy has been to encourage China's opening and integration into the global system. As a result, China has moved from being a relatively isolated and poor country to one that is a key participant in international institutions and a major trading nation. The U.S. encourages China to play an active role as a responsible stakeholder in the international community, working with the U.S. and other countries to support and strengthen the international system that has enabled China's success. As Secretary of State Condoleezza Rice has noted, 'America has reason to welcome a confident, peaceful, and prosperous China. We want China as a global partner, able and willing to match its growing capabilities to its international responsibilities.' Deputy Secretary John Negroponte and other senior State Department officials have continued to engage in regular and intensive discussions with their P.R.C. counterparts through the U.S.-China Senior Dialogue, a process set in motion by an agreement between Presidents Bush and Hu at the 2004 APEC summit in Santiago, Chile. The Senior Dialogue covers a wide range of key bilateral, regional, and global issues, including denuclearization of the Korean Peninsula, curbing Iran's pursuit of a nuclear weapons capability, and addressing the humanitarian crisis in Darfur; human rights; and climate change and energy security.
China has an important role to play in global, regional, and bilateral counterterrorism efforts, and has supported coalition efforts in Afghanistan and Iraq. Following the September 11, 2001 terrorist attacks (9-11) in New York City and Washington, DC, China offered strong public support for the war on terrorism and has been an important partner in U.S. counterterrorism efforts. Shortly after 9-11, the U.S. and China also commenced a counterterrorism dialogue, the most recent round of which was held in Washington in November 2005 and focused on the threat of WMD falling into the hands of terrorists. Inspections under the Container Security Initiative (CSI) are now underway at the major ports of Shenzhen, Shanghai, and Hong Kong. China has also agreed to participate in the Department of Energy's Megaports Initiative, a critical part of our efforts to detect the flow of nuclear materials. China voted in favor of UN Security Council Resolution 1373, publicly supported the coalition campaign in Afghanistan, and contributed $150 million of bilateral assistance to Afghan reconstruction following the defeat of the Taliban. China participated in both the Iraq Neighbors and International Compact with Iraq meetings in 2007 and has voiced strong support for the Government of Iraq following the country's December 2005 parliamentary elections. China has pledged $25 million to Iraqi reconstruction and taken measures to forgive Iraq's sovereign debt to China.
The U.S. and China have cooperated with growing effectiveness on various aspects of law enforcement, including computer crime, intellectual property rights enforcement, human smuggling, and corruption. The most recent meeting of the U.S.-China Joint Liaison Group on law enforcement cooperation took place in Washington in June 2007.
China and the U.S. have also been working closely with the international community to address threats to global security, such as those posed by North Korea and Iran's nuclear programs. China has played a constructive role in hosting the Six-Party Talks and in brokering the February 2007 agreement on Initial Actions. The U.S. looks to Beijing to use its unique influence with Pyongyang to ensure that North Korea implements fully its commitments under the September 2005 Statement of Principles. China has publicly stated that it does not want Iran to acquire nuclear weapons and has voted in support of sanctions resolutions on Iran at UN Security Council. On these and other important issues, such as the ongoing humanitarian crisis in Darfur, the U.S. expects China to join with the international community in finding solutions. China's participation is critical to efforts to combat transnational health threats such as avian influenza and HIV/AIDS, and both the U.S. and China play an important role in new multilateral energy initiatives, such as the Asia-Pacific Partnership.
While the United States looks forward to a constructive and broad-based relationship with China--a message reiterated by President Bush when he met with President Hu in April 2006 in Washington--there remain areas of potential disagreement. U.S.-China relations are sometimes complicated by events in Taiwan and Hong Kong. The United States does not support Taiwan independence and opposes unilateral steps, by either side, to change the status quo. At the same time, the U.S. has made it clear that cross-strait differences should be resolved peacefully and in a manner acceptable to people on both sides of the Strait. At various points in the past several years, China's has expressed concern about the U.S. making statements on the political evolution of Hong Kong and has stressed that political stability there is paramount for economic growth. The NPC's passage of an Anti-Secession law in March 2005 was viewed as unhelpful to the cause of promoting cross-Strait and regional stability by the U.S. and precipitated critical high-level statements by both sides.
U.S.-China Economic Relations
U.S. direct investment in China covers a wide range of manufacturing sectors, several large hotel projects, restaurant chains, and petrochemicals. U.S. companies have entered agreements establishing more than 20,000 equity joint ventures, contractual joint ventures, and wholly foreign-owned enterprises in China. More than 100 U.S.-based multinationals have projects in China, some with multiple investments. Cumulative U.S. investment in China is estimated at $54 billion, through the end of 2005, making the U.S. the second-largest foreign investor in China.
Total two-way trade between China and the U.S. grew from $33 billion in 1992 to over $347 trillion in 2006. The United States is China's second-largest trading partner, and China is now the third-largest trading partner for the United States (after Canada and Mexico). U.S. exports to China have been growing more rapidly than to any other market (up 20% in 2004, 20% in 2005, and 32% in 2006). U.S. imports from China grew 18.5% in 2006, bringing the U.S. trade deficit with China to $233 billion. Some of the factors that influence the U.S. trade deficit with China include:
A shift of low-end assembly industries to China from the newly industrialized economies (NIEs) in Asia. China has increasingly become the last link in a long chain of value-added production. Because U.S. trade data attributes the full value of a product to the final assembler, Chinese value-added gets over-counted. Strong U.S. demand for Chinese goods. China's restrictive trade practices, which have included an array of barriers to foreign goods and services, often aimed at protecting state-owned enterprises. Under its WTO accession agreement, China is reducing tariffs and eliminating import licensing requirements, as well as addressing other trade barriers.
The U.S. approach to its economic relations with China has two main elements:
First, the United States seeks to fully integrate China into the global, rules-based economic and trading system. China's participation in the global economy will nurture the process of economic reform, encourage China to take on responsibilities commensurate with its growing influence, and increase China's stake in the stability and prosperity of East Asia.
Second, the United States seeks to expand U.S. exporters' and investors' access to the Chinese market. As China grows and develops, its needs for imported goods and services will grow even more rapidly. The U.S. Government will continue to work with China's leadership to ensure full and timely conformity with China's WTO commitments--including effective protection of intellectual property rights--and to encourage China to move to a flexible, market-based exchange rate in order to further increase U.S. exports of goods, agricultural products, and services to the P.R.C.
In order to achieve these objectives, the U.S. has engaged with China in the Strategic Economic Dialogue (SED). The SED is a biannual event, focusing on three major themes: Maintaining sustainable growth without large trade imbalances; Continued opening of markets to trade, competition, and investment; Cooperation on energy security, energy efficiency, and the environmental and health impacts.
The SED is based on recognition by both China and the U.S. of our mutual interest in strengthening the global economy, addressing global imbalances, and promoting energy security and environmentally sustainable growth. Secretary of the Treasury Hank Paulson led the U.S. delegation during both previous SEDs, while Vice Premier Wu Yi led the Chinese delegation. The third SED is expected to take place in Beijing in December 2007.
Chinese Diplomatic Representation in the U.S.
In addition to China's Embassy in Washington, DC, there are Chinese Consulates General in Chicago, Houston, Los Angeles, New York, and San Francisco.
Embassy of the People's Republic of China
2300 Connecticut Avenue, NW
Washington, DC 20008
Tel.: (202) 328-2500
Consulate General of the People's Republic of China-New York
520 12th Avenue
New York, NY 10036
Tel.: (212) 868-7752
Consulate General of the People's Republic of China-San Francisco
1450 Laguna Street
San Francisco, California 94115
Tel.: (415) 563-4885
Consulate General of the People's Republic of China-Houston
3417 Montrose Blvd.
Houston, Texas 77006
Tel.: (713) 524-4311
Consulate General of the People's Republic of China-Chicago
100 West Erie St.
Chicago, Illinois 60610
Tel.: (312) 803-0098
Consulate General of the People's Republic of China-Los Angeles
502 Shatto Place, Suite 300
Los Angeles, California 90020
Tel.: (213) 807-8088
U.S. Diplomatic Representation in China
In addition to the U.S. Embassy in Beijing, there are U.S. Consulates General in Chengdu, Guangzhou, Shanghai, and Shenyang.
American Embassy Beijing
Xiu Shui Bei Jie 3
People's Republic of China
Tel.: (86) (10) 6532-3831, FAX: (86) (10) 6532-3178