Week of July 16, 1999

SUMMARY:

The World Cup contest between the American and Chinese women’s?soccer teams, may prove to play the same role as the ping-pong matches of the 1970s in opening up U.S.-China relations after a period of tension. An exchange of letters between Presidents Bill Clinton and Jiang Zemin, and the publication of a picture of Clinton with the Chinese soccer team in the Beijing Evening News (a state-run tabloid), denote a slight improvement in tense relations. Clinton’s efforts to meet with the Chinese team after the championship game and Jiang’s same-day response to Clinton’s letter indicate each leaders?interest in continuing bilateral relations despite recent strains caused by allegations of Chinese campaign interference and espionage, failure to reach agreement on China’s entry into the WTO, the accidental American bombing of the Chinese embassy in Belgrade, and Taiwan’s renunciation of the ‘One-China?formula.

SUMMARY:

Foreign lenders have approached the Guangdong government in an effort to re-start negotiations regarding loans made to Guangdong Enterprises that they charge were guaranteed by the provincial government. The lenders are hopeful that the government will not allow the state-owned-enterprise to go bankrupt as was the case with another financially strapped company, Guangdong International Trust and Investment, known as GITIC. On the premise that the loans were guaranteed by the Guangdong government, the foreign banks that lent funds to the company rejected a plan to overhaul the company that would split the losses between the government and the lenders. Instead, working on the assumption that the Chinese government can not afford to alienate foreign investment, they demanded that the Guangdong government pour $1.8 million into the company to allow it to resume making interest payments on the loans. Financial analysts expressed skepticism that the government would assume full financial responsibility, speculating that it was more likely to allow the company to go bankrupt.

SUMMARY:

Amidst tense U.S.-China relations, Taiwanese President Lee Teng-hui renounced the ‘One-China?context on which cross-strait relations have been based. Lee stated that Taiwan will henceforth treat relations with China on a "state-to-state" basis, thereby nullifying the need for Taiwan to declare independence. China and the United States have restrained overt reactions and sought clarification on the matter from Taiwan. The definition of the ‘One-China?policy is widely debated, and has two interpretations. China’s definition is that there is One China, including Taiwan, with Beijing as the sole sovereign government. The widely accepted international meaning is that there is one China, including the mainland and Taiwan, the status of its government yet undetermined. Lee has reassure the international community that the new definition does not imply a policy change, and national unification remains the primary goal. Many America scholars believe that Lee’s primary goal was to strengthen the ruling Nationalist Party’s position in Taiwanese domestic politics in preparation of national elections to be held next spring.

The U.S. and China This Week