Week of December 26, 1999

SUMMARY:

On Thursday, December 16, the United States and China reached agreement over compensation for the April bombing of the Chinese embassy in Belgrade. While the U.S. agreed to pay $28 million in compensation for the destruction of the embassy, China agreed to pay $2.87 million for damages to American diplomatic missions in riots following the bombing. Although the agreement resolves one issue in recently troubled bilateral relations, many areas of contention remain. China has reiterated demands that Washington explain the bombing satisfactorily, dismissing U.S. explanations of faulty intelligence as implausible. The U.S. Congress will begin debating whether to grant China permanent normal trade relations in January, in an atmosphere still clouded by details of the Cox report, allegations of human rights abuses, and China’s arrest and detention of Falun Gong members.

SUMMARY:

The leaders of Russia and China concluded a two-day summit December 10 where the sound of joint frustration at the U.S. policy was a common refrain. In a final statement Friday on combating separatism and terrorism, both leaders stressed the closeness of their nations?ties. Despite a recent week-long battle with pneumonia, Russian President Boris Yeltsin was eager to gain Chinese support for its much-criticized campaign in Chechnya. Chinese President Jiang Zemin sustained the Russian position, receiving Yeltsin’s affirmation of Russian support for China’s position on Taiwan. Although Chinese foreign policy traditionally stresses national sovereignty and non-intervention in internal conflicts, both nations fear that the precedent of the recent international intervention in Kosovo may be used to apply to Taiwan, Tibet or Chechnya. Both leaders criticized US hegemony, both worldwide and in the Asia-Pacific region, the weakening of the United Nations and its Security Council, as well as U.S. threats to amend the ABM treaty.

SUMMARY:

Li Jinhua, China’s auditor-general, announced on December 16 that hundreds of banks, government offices and state-owned companies experienced cases of misappropriated funds in 1999. Li attributed many cases to a lack of market expertise, but also cited corruption and problems with the legal system as contributing factors. Despite continuous anti-graft campaigns, corruption and misuse of funds are still rampant. Figures were released on a case-by-case basis; an estimate of total loss due to graft and misappropriation was not given.

SUMMARY:

Police and an estimated 1500 displaced auto workers from the now-defunct Chengdu Automobile Production Factory in Sichuan Province scuffled during a demonstration to protest official corruption and non-payment of unemployment compensation, according to the Information Centre of Human Rights and Democratic Movement in China. Workers had not been paid compensation benefits for two months, but were also protesting corruption among the officials managing the state-run plant. China’s entrance into the World Trade Organization may further disrupt its automobile sector, forcing layoffs and closing at other factories.

SUMMARY:

In the Great Hall of the People Chinese President Jiang Zemin accepted the credentials of U.S. Ambassador Joseph Prueher Wednesday morning . Ambassador Prueher brings significant expertise in Chinese affairs to the post. In 1996, he was commander of the U.S. Pacific forces that sent warships into the Taiwan Strait. The U.S.'s presence was due to escalating tensions between the mainland and Taiwan regarding Taiwan's upcoming elections. With the dissipation of tensions in that area, Admiral Prueher remained in the Pacific until this year. During his time abroad, the Admiral is reputed to have made many high level contacts among the mainland's government officials.

SUMMARY:

Chinese Foreign Ministry spokeswoman Zhang Qiyue blamed the case on a cold-war mentality in the U.S. that intended to portray China as an enemy and undermine U.S.- China relations. A team of foreign policy analysts at Stanford University found the allegations contained in the unclassified version of the Cox to be unsubstantiated.

INTERNATIONAL RELATIONS: Macao Returns to China

SUMMARY:

On December 19, Portugal officially handed over the territory of Macao to China in a midnight ceremony. PLA troops rolled in the following day with a warm welcome from the former colony’s citizens. Many hope that China will be able to curb the gambling related violence of Chinese triad gangs. China’s President Jiang Zemin hopes to move the spotlight to eventual reunification with Taiwan, the last territory remaining outside of China’s control.

The U.S. and China This Week