continue at sustained levels. Tin, tungsten, and antimony among the metals will continue to register imports of significance. Gum rosin and essential oils grew rapidly in 1974 and should continue. Textiles, clothing, bristles, feathers, and down will maintain a strong showing. Americans continue to enjoy Chinese artworks and antiques, but fireworks, a perennial leader, have declined, in part owing to problems meeting new U.S. safety standards. Petroleum exports to the United States do not appear to be a factor although U.S.-owned oil companies may buy Chinese oil for distribution in East Asia. American importers will continue to attend the Fairs in Canton in substantial numbers. The Chinese trade deficit with the United States will be sharply reduced in 1975, running perhaps $100 million. The deficit is likely to continue, its future magnitude being governed primarily by the size of Chinese agricultural purchases in the United States. Perspective The issues and problems confronting the Sino-American relationship have been enumerated and the possibility for growth in trade evaluated. The prospects are positive and not at all bleak, but it seems worth reminding ourselves that of the principal nations of the world probably none is closer to economic self-sufficiency than China. At the same time, Chinese ideology coupled with the planning of a centrally controlled economy and a deliberate government policy of being highly self-reliant injects a political element into commercial relationships to a degree seen few places elsewhere in the world. The centralized management of foreign trade insures its subordination to political needs where necessary while still providing a mechanism for viable trade under the quite different conditions of commerce prevailing in market and centrally planned economies. The resultant trading system, unique to the PRC although with some similarities to those in Eastern Europe and the Soviet Union, has enabled the Chinese to consistently retain the initiative in the commercial relationship. Americans should be quick to realize that China is not a market. for 50 million automobiles or refrigerators, but a highly selective one dependent on the dictates of Peking's planning. To the extent the PRC chooses to emphasize rapid, rational economic growth in the years ahead, the market for some American products, particularly those of a more advanced technological nature, appears good. To be successful, and there are successful American businessmen in the China trade, one requires large amounts of patience and a fine appreciation of Chinese decisionmaking and commercial practice. APPENDIXES THE SHANGHAI COMMUNIQUE SHANGHAI, February 27, 1972.-Following is the text of the communique issued today at the conclusion of the meetings between President Nixon and Premier Chou En-lai: "President Richard Nixon of the United States of America visited the People's Republic of China at the invitation of Premier Chou En-lai of the People's Republic of China from February 21 to February 28, 1972. Accompanying the President were Mrs. Nixon, U.S. Secretary of State William Rogers, Assistant to the President Dr. Henry Kissinger, and other American officials. "President Nixon met with Chairman Mao Tse-tung of the Communist Party of China on February 21. The two leaders had a serious and frank exchange of views on Sino-United States relations and world affairs. "During the visit, extensive, earnest, and frank discussions were held between President Nixon and Premier Chou En-lai on the normalization of relations between the United States and the People's Republic of China, as well as on other matters of interest to both sides. In addition, Secretary of State William Rogers and Foreign Minister Chi Peng-fei held talks in the same spirit. "President Nixon and his party visited Peking and viewed cultural, industrial, and agricultural sites, and they also toured Hangchow and Shanghai where, continuing discussions with Chinese leaders, they viewed similar places of interest. "The leaders of the People's Republic of China and the United States of America found it beneficial to have this opportunity, after so many years without contact, to present candidly to one another their views on a variety of issues. They reviewed the international situation in which important changes and great upheavals are taking place and expounded their respective positions and attitudes." The United States side stated: "Peace in Asia and peace in the world requires efforts both to reduce immediate tensions and to eliminate the basic causes of conflict. The United States will work for a just and secure peace: just, because it fulfills the aspirations of peoples and nations for freedom and progress; secure, because it removes the danger of foreign aggression. The United States supports individual freedom and social progress for all the peoples of the world, free of outside pressure or intervention. "The United States believes that the effort to reduce tensions is served by improving communications between countries that have different ideologies so as to lessen the risks of confrontation through accident, miscalculation, or misunderstanding. Countries should treat each other with mutual respect and be willing to compete peacefully, letting performance be the ultimate judge. No country should claim infallibility and each country should be prepared to reexamine its own attitudes for the common good. "The United States stressed that the peoples of Indochina should be allowed to determine their destiny without outside intervention; its constant primary objective has been a negotiated solution; the eight-point proposal put forward by the Republic of Vietnam and the United States on January 27, 1972, represents the basis for the attainment of that objective; in the absence of a negotiated settlement the United States envisages the ultimate withdrawal of all U.S. forces from the region consistent with the aim of self-determination for each country of Indochina. "The United States will maintain its close ties with and support for the Republic of Korea. The United States will support efforts of the Republic of Korea to seek a relaxation of tension and increase communications in the Korean Peninsula. The United States places the highest value on its friendly relations with Japan; it will continue to develop the existing close bonds. Consistent with the United Nations Security Council Resolution of December 21, 1971, the United States favors the continuation of the cease-fire between India and Pakistan and the withdrawal of all military forces to within their own territories and to their own sides of the cease-fire line in Jammu and Kashmir; the United States supports the right of the peoples of South Asia to shape their own future in peace, free of military threat, and without having the area become the subject of big-power rivalry." The Chinese side stated: "Whenever there is oppression, there is resistance. Countries want independence, nations want liberation, and the people want revolution-this has become the irresistible trend of history. All nations, big or small, should be equal; big nations should not bully the small and strong nations should not bully the weak. China will never be a superpower and it opposes hegemony and power politics of any kind. "The Chinese side stated that it firmly supports the struggles of all oppressed people and nations for freedom and liberation and that the people of all countries have the right to choose their social systems according to their own wishes and the right to safeguard the independence, sovereignty, and territorial integrity of their own countries and oppose foreign aggression, interference, control, and subversion. All foreign troops should be withdrawn to their own countries. "The Chinese side expressed its firm support to the peoples of Vietnam, Laos, and Cambodia in their efforts for the attainment of their goals and its firm support to the seven-point proposal of the Provisional Revolutionary Government of the Republic of South Vietnam and the elaboration of February this year on the two key problems in the proposal, and to the Joint Declaration of the Summit Conference of the Indochinese Peoples. "It firmly supports the eight-point program for the peaceful unification of Korea put forward by the Government of the Democratic People's Republic of Korea on April 12, 1971, and the stand for the abolition of the 'U.N. Commission for the Unification and Rehabilitation of Korea.' It firmly opposes the revival and outward expansion of Japanese militarism and firmly supports the Japanese people's desire to build an independent, democratic, peaceful, and neutral Japan. It firmly maintains that India and Pakistan should, in accordance with the United Nations resolutions on the India-Pakistan question, immediately withdraw all their forces to their respective territories and to their own sides of the cease-fire in Jammu and Kashmir and firmly supports the Pakistan Government and people in their struggle to preserve their independence and sovereignty and the people of Jammu and Kashmir in their struggle for the right of selfdetermination. "There are essential differences between China and the United States in their social systems and foreign policies. However, the two sides agreed that countries, regardless of their social systems, should conduct their relations on the principles of respect for the sovereignty and territorial integrity of all states, nonaggression against other states, noninterference in the internal affairs of other states, equality, and mutual benefit, and peaceful coexistence. International disputes should be settled on this basis, without resorting to the use or threat of force. The United States and the People's Republic of China are prepared to apply these principles to their mutual relations." With these principles of international relations in mind the two sides stated that: "Progress toward the normalization of relations between China and the United States is in the interests of all countries. "Both wish to reduce the danger of international military conflict. "Neither should seek hegemony in the Asia-Pacific region and each is opposed to the efforts by any other country or group of countries to etablish such hegemony; and "Neither is prepared to negotiate on behalf of any third party or to enter into agreements or understandings with the other directed at other states. "Both sides are of the view that it would be against the interests of the peoples of the world for any major country to collude with another against other countries, or for major countries to divide up the world into spheres of interest. "The sides reviewed the long-standing serious disputes between China and the United States." The Chinese side reaffirmed its position: "The Taiwan question is the crucial question obstructing the normalization of relations between China and the United States; the Government of the People's Republic of China is the sole legal government of China; Taiwan is a province of China which has long been returned to the motherland; the liberation of Taiwan is China's internal affair in which no other country has the right to interfere; and all U.S. forces and military installations must be withdrawn from Taiwan. The Chinese government firmly opposes any activities which aim at the creation of 'one China, one Taiwan,' 'oneChina, two governments,' 'two China' and 'Independent Taiwan' or advocate that 'the status of Taiwan remains to be determined.'" The U.S. side declared: "The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The U.S. Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves. With this prospect in mind. it affirms the ultimate objective of the withdrawal of all U.S. forces and military installations on Taiwan as the tension in the area diminishes." The two sides agreed that it is desirable to broaden the understanding between the two peoples. To this end, they discussed specific areas in such fields as science, technology, culture, sports, and journalism, in which people-to-people contacts and exchanges would be mutually beneficial. Each side undertakes to facilitate the further development of such contacts and exchanges. Both sides view bilateral trade as another area from which mutual benefits can be derived, and agree that economic relations based in equality and mutual benefit are in the interest of the peoples of the two countries. They agree to facilitate the progressive development of trade between their two countries. The two sides agree that they will stay in contact through various channels, including the sending of a senior U.S. representative to Peking, from time to time for concrete consultations to further the normalization of relations between the two countries and continue to exchange views on issues of common interest. The two sides expressed the hope that the gains achieved during this visit would open up new prospects for the relations between the two countries. They believe that the normalization of relations between the two countries is not only in the interest of the Chinese and American peoples but also contributes to the relaxation of tension in Asia and the world. President Nixon, Mrs. Nixon, and the American party express their appreciation for the gracious hospitality shown by the government and people of the People's Republic of China. THE WHITE HOUSE COMMUNIQUE-UNITED STATES-PEOPLE'S REPUBLIC OF CHINA FEBRUARY 22, 1973. Dr. Henry A. Kissinger, Assistant to the U.S. President for National Security Affairs, visited the People's Republic of China from February 15 to February 19, 1973. He was accompanied by Herbert G. Klein, Alfred Le S. Jenkins, Richard T. Kennedy, John H. Holdridge, Winston Lord, Jonathan T. Howe, Richard Solomon, and Peter W. Rodman. Chairman Mao Tse-tung received Dr. Kissinger. Dr. Kissinger and members of his party held wide-ranging conversations with Premier Chou En-lai, Foreign Minister Chi Peng-fei, Vice Foreign Minister Chiao Kuan-hua, and other Chinese officials. Mr. Jenkins held parallel talks on technical subjects with Assistant Foreign Minister Chang Wen-chin. All these talks were conducted in an unconstrained atmosphere and were earnest, frank, and constructive. The two sides reviewed the development of relations between the two countries in the year that has passed since President Nixon's visit to the People's Republic of China and other issues of mutual concern. They reaffirmed the principles of the Joint Communique issued at Shanghai in February 1972 and their joint commitment to bring about a normalization of relations. They held that the progress that has been made during this period is beneficial to the people of their two countries. The two sides agreed that the time was appropriate for accelerating the normalization of relations. To this end, they undertook to broaden their contacts in all fields. They agreed on a concrete program of expanding trade as well as scientific, cultural, and other exchanges. To facilitate this process and to improve communications, it was agreed that in the near future each side will establish a liaison office in the capital of the other. Details will be worked out through existing channels. The two sides agreed that normalization of relations between the United States and the People's Republic of China will contribute to the relaxation of tension in Asia and in the world. Dr. Kissinger and his party expressed their deep appreciation for the warm hospitality extended to them. JOINT COMMUNIQUE-UNITED STATES-PEOPLE'S REPUBLIC OF CHINA PEKING, November 29, 1974. Dr. Henry A. Kissinger, U.S. Secretary of State and assistant to the President for National Security Affairs, visited the People's Reublic of China from November 25 through November 29, 1974. The Chinese and United States sides held frank, wide-ranging and mutually beneficial talks. They reaffirmed their unchanged commitment to the principles of the Shanghai Communique. The two governments agreed that President Gerald R. Ford would visit the People's Republic of China in 1975. II. Organization and function of China's foreign trade apparatus - 536 536 The ministry of foreign trade.. 538 The China council for the promotion of international trade. 539 Federal and State regulation. 579 Office of PRC affairs, U.S. Department of State.. Export-import bank credits, private financing, and the Johnson VII. Facilitating commercial relations Bureau of East-West trade, U.S. Department of Commerce. United States liaison office, Peking.. People's Republic of China Liaison Office National council for United States-China trade VIII. Recommendations. Elements of a Sino-U.S. trade agreement. Conditions precedent to MFN for China_ Areas which merit congressional attention. IX. Summary and prognosis._ 579 580 581 581 581 581 582 582 582 585 593 593 594 APPENDIXES I. China's foreign trade corporations II. China's trade related agencies. III. United States-People's Republic of China trade statistics. 596 597 599 *Mr. Theroux, a partner in the law firm of Baker & McKenzie, Washington, D.C., visited China six times between 1972 and 1975. He served 2 years as Vice President of the National Council for U.S.-China Trade. |