In the wake of the announcement that China’s bilateral trade deficit with America overtook America’s trade deficit with Japan in October 1997 by 10 percent, trade issues were an important part of the meetings between Presidents Jiang Zemin and Bill Clinton. Before the summit, National Security Advisor Sandy Berger presented China with a list of five priority areas in which the U.S. felt progress needed to be made: tariffs, non-tariffs, services, agriculture, and information technology.
The week before the summit, a trade mission from China came to the U.S., demonstrating that China was taking definitive steps to bridge the growing trade deficit. The end result of the trade negotiations was $4.2 billion in purchases of U.S. aircraft, car parts, fertilizer, and natural gas. Aetna’s insurance license application was approved, making it the second insurer from America to operate in China; Xinhua agreed to an interim proposal securing market access terms for financial information companies; and the U.S. and China assented to a measure that would provide effective price disciplines in commercial space launch activity.
Expanding trade with China remains an integral part of furthering U.S.-China relations. The size and potential market opportunities make China an attractive trading partner. According to the Chinese Embassy, a total of 140,000 overseas-funded business enterprises were already operating in China in 1996. Also, China is the largest agricultural producer and consumer in the world. It is the world’s leading exporter of fruits, vegetables, and processed foods, but is also a major importer of grains, cottons, and edible oils. The U.S. sees enormous opportunities in China for its manufactured goods, high-tech products, and services.
To illustrate the level of U.S. interest in improving business ties, U.S. Secretary of the Treasury Richard Rubin traveled to China in September 1997. During his visit, Rubin encouraged China to use its foreign-exchange reserves to buy capital goods and improve its ailing industries. At the time, China confirmed that it would buy a number of aircraft from Boeing.
In contrast, on the issue of China’s joining the World Trade Organization (WTO), little progress was made. In October 1997, China made some concessions while U.S. Secretary of Commerce William Daley was in Beijing. China offered to submit proposals for liberalizing services, abolish all agricultural export subsidies once it becomes a member of the WTO, and end all import licensing requirements contingent on the termination of textile quotas by the industrialized nations.
U.S.-China Summit agreements
Unresolved Trade Issues
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