October 30, 1997

U.S. and China Reach Trade Pacts but Clash on Rights

By JOHN M. BRODER

ASHINGTON -- President Clinton and the Chinese president, Jiang Zemin, engaged in a day of unexpectedly contentious talks on Wednesday that produced several significant commercial agreements but appeared to broaden the gulf between the two powers on human rights.

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China agreed to buy $3 billion worth of American civilian airplanes and to make concessions that clear the way for American companies to compete to sell nuclear reactors to China.

The concession, announced by Clinton, was that China would abandon its nuclear cooperation program with Iran, which U.S. officials suspect was a cover for the development of nuclear weapons. China's assurances will permit American companies to bid on commercial nuclear power contracts in China that are potentially worth $60 billion.

The agreements came after Jiang, leading an aggressive Chinese delegation that refused to follow the script written for the summit meeting, tried but failed to win concessions on trade from the American side. Even though he did not get all he wanted, Jiang will leave Washington on Thursday with his stature as a global leader enhanced.

Jiang emerged from the summit talks as a recognized major world player, commanding one of the globe's most powerful armies and one of its largest and fastest-growing economies. He shared a stage as an equal with the president of the United States, and while he had to endure some stinging criticism of his country's human-rights record, he left with the grudging respect of official Washington for the forceful way he played his hand.

American officials hailed the business accords as the product of a successful policy of "constructive engagement" with the Asian giant.

But if the summit was a victory for commercial diplomacy, it did little to assuage American concerns about political and religious rights in China.

Jiang stood beside Clinton at a joint news conference this afternoon and forcefully defended China's historic preference for order over personal freedom, even when it leads to the abridgement of individual rights.

The Chinese president emphasized the mutual economic benefits of the relationship between the two countries and tried to minimize the "noises" he heard from human rights protesters gathered in Lafayette Park across from the White House.

"President Clinton and I share the view that China and the United States enjoy a high degree of complementarity and a huge potential for cooperation in the economic and trade fields," he said in his opening remarks. But Clinton insisted that the China could not expect to prosper while suppressing social and political freedoms. He said that the United States and China had "profound disagreements" on Beijing's treatment of its citizens even as it sought to broaden the two countries' business ties.

"The American people greatly admire China's extraordinary economic transformation, and we understand the importance that your own experiences and your present challenges lead you to place upon maintaining stability," Clinton said. "But we also believe that China will enjoy more growth and more stability as it embraces more fully the political as well as the economic aspirations of all your people."

Later, at a state dinner at the White House, the two presidents kept their respective tones as they exchanged toasts. Acknowledging Jiang's interest in American history, Clinton said : "Long before the United States was even born, China was a stronghold of creativity, knowledge and wealth." Many of China's earliest contributions, Clinton went on, "still enrich our lives today."

Jiang said, "Differences that cannot be resolved for the time being can be put aside while concentrating on seeking common ground." The countries' joint interests in peace, security and prosperity outweigh their differences, he said.

At the earlier press conference, Jiang, 71, told a global television audience that a country of 1.2 billion could not progress toward economic reform and renewal without "social and political stability."

"The concepts on democracy, on human rights and on freedoms are relative and specific ones, and they are to be determined by the specific national situation of different countries," Jiang said.

He offered no apologies for the brutal suppression of pro-democracy demonstrators in Tiananmen Square in 1989 or for his country's continued jailing of dissidents today. And he warned Clinton against interfering in China's internal affairs.

Clinton, responding to Jiang in a moment of drama that defined the distance between the United States and China on the fundamental question of human rights, declared the Chinese government to be "on the wrong side of history" in its response to the Tiananmen demonstrations and in its approach to personal liberties.

"I believe that what happened and the aftermath and the continuing reluctance to tolerate political dissent has kept China from politically developing the level of support in the rest of the world that otherwise would have been developed," Clinton said.

The exchange encapsulated a two-day meeting designed to move Washington and Beijing toward warmer relations and more regular contacts. But three-and-a-half hours of face-to-face talks between the two leaders did not appear to bring the two significantly closer.

During one exchange on human rights, Clinton offered an unusual defense of freedom of speech in the United States. "In our country I think it would amaze many of our Chinese guests to see some of the things that have been written and said about me -- my family -- our government, our policies. And yet after all this time I'm still standing here, and our country is stronger than it was before those words were uttered six years ago."

Then Clinton turned and amended his statement: "Excuse me. Before those words began to be said six years ago. They're still being said every day."

At other times the news conference, Clinton and iang appeared to be talking past each other, addressing skeptical domestic constituencies rather than each other.

Jiang was asked if he would release two prominent political prisoners, Wang Dan and Wei Jingsheng. Jiang replied peremptorily, "I am the president of the People's Republic of China, not the chief judge of the Supreme Court of China."

SandyBerger, the White House national security adviser, called the news conference at the conclusion of the two leaders' meetings "an extraordinary event" that could never have occurred in China.

"I don't suspect that President Jiang has ever been subjected to a press conference like that," Berger said. "I think that's good and I think that's healthy."

Senior American officials said that the Chinese negotiated very aggressively over the last three days. Officials who attended the meetings said that while the Chinese were tough and at times intransigent, the summit brought a new level of candor to the relationship that had not been present in four previous meetings between Clinton and Jiang.

"There has been an evolution from their first, highly scripted meeting in Seattle in 1993," this official said. "Jiang is much more willing to leave his talking points to speak clearly and directly. There was a forthrightness about these discussion that allows us to do problem-solving at these meetings, rather than just reading notes at each other."

Although the leaders were not asked about allegations now being investigated in Congress that China funneled illegal campaign contributions into last year's election, Clinton did raise the issue in private, Berger said. He said that Mr. Jiang had repeated what he has said on the subject several times before, that China had not engaged in illegal activity but that he would cooperate with American officials involved in the investigation.

Despite the frost at the summit, there were propitious winds on trade and business development, although they come at a price of tolerating China's present tariff structure and its human rights record.

Clinton said he would lift a 12-year ban the sale of American nuclear technology to China, an action long sought by American corporations avidly eyeing the estimated $60 billion Chinese market for civilian nuclear power plants. The move, which has fostered protests in Congress, requires Clinton to certify that China has ceased supplying technology that could be used for nuclear weapons development to Iran and other countries.

Officials said that China has provided written assurances that it will engage in no further nuclear cooperation with Iran, and will end two existing contracts. The administration said it will make the classified agreement with China available to members of Congress.

Clinton, anticipating criticism on the nuclear deal, called the agreement a "win-win-win" for the United States. "It serves America's national security, environmental and economic interests," he said.

Jiang announced that China would accede to the Information Technology Agreement signed last winter, which will eliminate China's steep tariffs on imported computer and telecommunications equipment.

The leaders also announced a contract for the sale to China of 50 Boeing jetliners worth $3 billion.

But Clinton rejected one Chinese request -- that the United States make a firm commitment to helping China join the World Trade Organization by the end of 1998. Chinese officials pointed out that the United States made a similiar agreement with Russia for its entry into the WTO. Clinton said he would do "everything possible" to bring China into the WTO, but he would not ask the organization to bend its rules on tariffs and non-tariff trade barriers to ease China's entry.

The summit produced a number of lesser accords, including a commitment to high-level visits on economic, security, environmental and law-enforcement issues. The United States will open an office of the Drug Enforcement Agency in Beijing and send lawyers and jurists to China to consult on development of civil and criminal justice systems.

Clinton announced that he would visit China in the second half of next year, the first American president to do so since President George Bush's trip in 1989 before the Tiananmen Square bloodbath.

China and the United States -- the world's two largest producers of greenhouse gases -- agreed to cooperate on finding a workable solution to the problem of global warming. American companies will be given access to Chinese markets to build cleaner power plants, more efficient automobiles and rural power stations.

The administration's hope had been that the summit would be marked by significant advances in the economic arena, where the United States and China have historically made the greatest progress. But Wednesday's results, officials conceded, were disappointing.

"The general tone was intransigence," one senior administration official said. "Friendly, cooperative-sounding intransigence."

There were some areas the two sides could boast about. The order for Boeing was significantly larger than most officials here anticipated: 50 planes for $3 billion instead of 30 planes for $2 billion. And Chinese authorities abandoned their previous opposition to joining the Information Technology Agreement, which reduces tariffs on computer and many other information-technology products to zero within the next seven years. That affects about $1.8 billion in American exports to China, and is a fast-growing sector of trade.

Clinton and Jiang twice touched on the financial turmoil in Asia, and Jiang went to some lengths to argue that the underlying condition of Hong Kong is solid, despite the huge drop in the Hong Kong market. At Clinton's suggestion, the two men agreed that Treasury Secretary Robert Rubin and Zhu Rongji, China's economic czar, should work together to "promote financial stability in Asia." But Treasury officials said that there was not yet a concrete plan for accomplishing that goal.