1974 The Far Eastern Economic Review

July 1, 1974. Not long after Mao met Nixon in 1972, I joined something called the “Edgar Snow Society,” in the hopes that identification with the communist China sympathizer and author of “Red Star Over China” might somehow land me a visa for the People’s Republic.  The ploy failed.   I had to wait to visit China.  In 1974, I found myself writing about China from the frustrating distance of Washington D.C. for the Far Eastern Economic Review

Reprinted below is one of about a half dozen articles on China I wrote during 1974 for the Far Eastern Economic Review.  [In December 2009, Dow Jones, the owner of what had become a monthly opinion journal finally shut it down.  The Far Eastern Economic Review founded in 1946 was no more.  I considered myself fortunate to have worked for the magazine in the 1970’s.   The eccentric Editor, the late Derek Davies and his larger-than-life, Managing Editor in the mid 70’s, the late Russell Spurr were a delight to work for.]



Reference: Vol. 85, No. 26, 1 July 1974, Focus 8

FOCUS -America In Asia

THE US AND CHINA : The euphoria of Peking detente starts to fade

By James Laurie

STANDING at the head of a banquet table last month with Ambassador Huang Chen of the Peking's Liaison Office in Washington, the US Secretary of State, Henry Kissinger, quoted in his distinct German accent the turn-of-the-century English author Samuel Butler: "Communication at its best is like a painting, a compromise with impossibility." 

Kissinger was speaking of the progress made towards normalizing relations between the US and China. His painting, said Kissinger, was "taking shape," and the process of bilateral relations as far as the United States was concerned remained "firmly on course." But Kissinger warned his audience of government officials, scholars and businessmen that "it would be unreasonable to expect a smooth and unchecked progression."

In fact, the progress of Sino-US friendship since Kissinger's last visit to Peking in November 1973 has been far from smooth and unchecked at many points. Scholars and diplomats disagree about the state of relations since November. State Department officials like to say a "plateau" has been reached after a period of rapid development. 

More independent specialists, while not seeing any major setback in relations, speak of a "downturn." Whether it is a plateau, a downturn, a cooling, a lull, or a slackening off, people in Washington no longer talk about Chinese-American friendship in the glowing, almost euphoric, terms they did just after President Nixon's trip to China in February 1972.

The problems of Sino-US detente must be tied to the current domestic political troubles of both countries. Haunted by fears and predictions that he may not be President much longer, Richard Nixon has relegated the China question to one of his lowest priorities. Troubled by divisions in Peking, attacks from the radical left and perhaps an eclipse in power and influence, Premier Chou En-lai may well have stopped pushing the US link as hard. Tangible signs of disenchantment appear on both sides.

The Chinese, both in private conversations in Peking and in talks at the Mission here, have complained of a growing feeling that the United States has not lived up to the "spirit" of the 1972 Shanghai Communique. The "progress towards normalization" mentioned in the communique has been too slow. The slowness, many believe, has been particularly painful for those like Chou, who may be under increasing pressure to come up with something truly concrete as a result of detente to show both his left-wing critics and Chairman Mao.

Taiwan remains the critical stumbling block. As the US-Chinese communique following the Kissinger visit last November reiterated, normalization "can be realized only on the basis of confirming the principle of one China." US State Department officials maintain they detect no sense or urgency in Peking about the issue of resolving Taiwan's status. Yet the Taiwan question has been complicated by several recent Nixon Administration moves.

Earlier this year, the US gave Taiwan the go-ahead to open two new consulates here, one in Kansas City, Missouri, and the other in Portland, Oregon. The Peking Liaison Office in Washington ,officials of which are rather confined to the eastern corridor between Washington and New York, clearly registered their displeasure. In March, Peking again grew restive about US policy towards Taiwan. President Nixon gave the prominent US diplomat Leonard Unger the ambassadorship. Both Unger's seniority and the quickness of the appointment disturbed Peking. US officials explaining it to the Chinese defended the action. "If and when we sever or downgrade diplomatic relations with Taiwan," said one diplomat, "we will need a strong and effective representative in Taipei to carry out the difficult mission." The continued US military presence in Taiwan provides Peking with a third objection to US policy. Although the American troop strength in Taiwan is now down to about 5,000, there are no signs the number will be reduced further in the near future.
The Nixon Administration's apparent boost to Taiwan's status seems at least indirectly linked to the President's growing concern with impeachment and conviction on the grounds of "high crimes and misdemeanors." The President's men are actively seeking support in the US Senate to prevent him being thrown out of office if and when he goes on trial before that body. Nixon needs 34 out of 100 votes in the Senate to stay in office, and many of those he is counting on to save him are hard line conservatives and anticommunists, some of whom have strong connections to what in the 1950s and 1960s was called "the China Lobby." In Washington, the lobby, led by such stalwarts as the wife of the late "flying tiger," Commander Claire Chenault, had until recently a stronger voice in support on Chiang Kai-shek than the Taiwan Embassy. As some here now see it, it would certainly not be beyond Nixon's options to backpedal on Peking and revert to the old Nixon of the 1950s if the support of this group becomes necessary to save him.

The official Chinese position towards Watergate, or "Shui-Min" as it is called, remains one of public silence. Privately, as one State Department official put it: "Peking is puzzled, fascinated and deeply disturbed by it all." Like every other embassy here, the political officers of the 57-man Chinese Liaison Office scurry about reading the daily dose of newspaper exposes and asking hundreds of questions of US officials about legal moves against the President, deliberations of the House Judiciary Committee, and the prospects for impeachment and conviction. The mission then dispatches long memos to Peking on the happenings.

One recent positive result of the preoccupation with the demise of Nixon has been a new evaluation of the way the American brand of parliamentary democracy works. "Until all this," said one scholar, "the Chinese hardly realized the US Congress existed; they now begin to see its importance." Indeed, the Chinese have begun to solidify relations with Congress, and feeling there is little more that Nixon can do for detente they are casting their eyes about for his potential successors. 

Even Kissinger recently sought to convince the Chinese that Nixon's survival is not essential for the improvement of US-Chinese ties. Kissinger underlined this view in his remarks at that banquet on June 3 when he said:  "The normalization of relations with the People's Republic of China is a permanent and essential element in our foreign policy. A primary task in the second term of any administration is to leave an ongoing legacy to its successors. No policy of this Administration has greater bipartisan support than the normalization of relations with the PRC."

While the diplomatic path between Peking and Washington may seem pretty rocky now, there are some hopeful signs. Huang Chen, the head of the Chinese delegation here, did after all return to Washington in April and is now appearing at a number of official and social functions after an absence which lasted almost five months. The Americans have also been pleased by the increase in the number of invitations they received to the Canton Trade Fair in April; 250 compared to 190 for the Autumn 1973 Fair. Most of all, the Americans are ecstatic over the new trade statistics compiled.

For the first four months of 1974, total trade with China reached US$441.2 million, exceeding the total trade with the Soviet Union in that period by more than $100 million. Figures for the first quarter of the year are more than half the total two-way trade figure for all of 1973, which amounted to $803.4 million. The US Commerce Department predicts total trade for 1974 will soar to $1,270 million. If so, the United States will rank only behind Japan as China's biggest trading partner. The balance of that trade, of course, remains lopsidedly in favor of the United States by a 10:1 ratio, a fact that hardly pleases Peking.

As in 1973, more than 70% of US exports will be agricultural products such as wheat, cotton, corn and soybeans. The US has also begun fulfilling the largest industrial plant and equipment deal worked out with the Chinese to date. The M. W. Kellogg Company, a division of Pullman Inc., signed contracts last June and August for materials worth $200 million to build eight ammonia plants for the production of fertilizer. The deliveries which begin now will continue well into 1976 under the terms of the contracts. The agreement with the Kellogg Company was $50 million greater than the 1972 deal with Boeing and the United Aircraft Corporation for the supply of ten Boeing 707 passenger jets. Delivery of those aircraft and accessories was completed in May.

While trade prospects look bright for the immediate future, the Americans express some serious disappointments, even in this highly lucrative field.

It had been hoped the dispute over frozen claims and assets in the two nations would have been solved by now. The $196.8 million in American claims against China and the $76.5 million in Chinese assets seized by the US under the Foreign Assets Control Regulations at the time of the Korean War, prevent direct shipping or banking arrangements. US State Department officials are hopeful the talks on this issue, which got underway in February 1973, are "in their final stages." These officials say the terms have been worked out and it is only the final wording which is now being debated. But the same officials refuse to provide details of the agreement or give a date when signatures can be expected. Indeed, it is understood that the signing of the agreement had been scheduled for as early as last November, but was abruptly cancelled by the Chinese, for no stated reason, during Kissinger's visit.

It could be that the Chinese are stalling on the claims and assets question until after the issue of most-favored-nation status for China is resolved. The Chinese are anxious to have the discriminatory tariffs on Chinese goods removed, and US experts believe such a move would increase China's exports to the United States by at least 20%, and would possibly boost it four times over its current level of about $64 million. The tariff problem, however, is currently bottled up in the US Senate, where removal of discriminatory tariffs for China is tied to the Jackson Amendment to the US Trade Reform Act, designed to deny the Soviet Union most-favored-nation status unless the Soviets ease their emigration policies. Despite efforts to convince Senators that the Russians may indeed be willing to ease restrictions, and despite other efforts to separate the China question from the Soviet one, it may be some time before the issue is resolved.

Another disappointment for the Americans involves the exchange of trade delegations to work out commercial problems. Last November, the Chinese invited a delegation led by Donald Burnham, Chairman of the National Council on US-China Trade, to Peking for a working session. Peking indicated it would continue the discussions of outstanding trade problems such as pricing, packaging, marketing, trademarks, and patents in the United States this summer. They would send Wang Yao-ting, President of the China Council for the Promotion of International Trade (CCPIT), along with representatives of all eight Chinese trading companies. The visit has now been postponed indefinitely, though US trade officials say it may come off early in 1975. Opinion is divided here as to whether the cancellation was the result of internal Chinese political considerations or was a rebuke to the US Government for its less than enthusiastic China policy.

Overall, the prospects for dramatic moves towards further rapid improvement in, or normalization of, Sino-US relations are dim for the remainder of the Nixon Administration, however long that should be. The uncertain political climate in the United States and the uncertainties in China as well do not make bold moves likely. Retrenchment and a policy of go slow and play it safe seem suited to both sides. Trade will continue to grow, but if tariff and frozen asset questions are not resolved, the expansion cannot continue indefinitely. Cultural and scientific exchanges will continue and are continuing, though at a frequency somewhat less than a year ago. Progress will be slow as both countries remain a hostage of domestic political considerations.

[Far Eastern Economic Review 1974]