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As Gore visits, China announces two major deals with U.S. companies

March 25, 1997

BEIJING (AP) _ With Vice President Al Gore on hand to celebrate, China signed lucrative deals Tuesday with Boeing and General Motors and agreed to allow the United States to maintain its Hong Kong consulate when the colony reverts to Chinese rule.

In an agreement worth $685 million to Seattle-based Boeing Corp., China’s civil aviation authority arranged to purchase five of the aerospace giant’s 777-200 series passenger jets.

And General Motors Corp. said it was launching a $1.3 billion joint venture with a Chinese automaker to manufacture 100,000 Buick Regal and Century sedans a year in China.

Clinton administration officials traveling with Gore hailed the agreements as evidence that China was becoming a more reliable partner _ and as proof that the policy of engagement was bearing fruit.

Last spring, in a blow to Boeing, China ordered $1.5 billion in planes from Airbus Industrie of Europe, delayed a $4 billion aircraft deal with Boeing and other companies and chose a consortium led by British Aerospace and Aerospatiale of France as partners to build a 100-seat jetliner.

The trade announcements came as Gore opened two days of talks with China’s leaders. It marked the highest-level U.S. visit in eight years _ since then-President George Bush was here four months before the 1989 crackdown on pro-democracy demonstrators in Tiananmen Square.

Premier Li Peng was attending the signing ceremonies with Gore, and the two were meeting throughout the day. On Wednesday, Gore was meeting with President Jiang Zemin to provide a framework for Jiang’s state visit to Washington this fall.

Just inside the Great Hall of the People on the edge of Tiananmen Square, Li greeted Gore with a handshake and they stood stiffly on a platform while a military band played the Chinese and U.S. national anthems. Two young school children presented Gore and his wife, Tipper, with bouquets of flowers.

Li said he expects Gore’s visit to enhance ``the friendly relations and cooperation″ between China and the United States.

``The improvement of our relations serves the interests of both peoples,″ he said.

Gore’s agenda was crowded with areas of friction _ disputes over human rights and U.S. access to Chinese markets, and American displeasure with China’s sales of missile technology and weapons to nations the United States considers unfriendly.

``The nonproliferation of weapons of mass destruction is a crucial goal of the United States,″ Gore told reporters after a meeting with Li.

But he said his overriding mission was to demonstrate the U.S.-Chinese relationship was maturing to a level of understanding that would allow cordial daily relations despite disagreements.

To make his case that it was time to take the relationship to a new level, Gore cited a Chinese poem from the Tang Dynasty, which ended 1,100 years ago:

``The sun beyond the mountain glows

``The Yellow River seaward flows

``But if you desire a grander sight,

``Then you must scale a greater height.″

Gore also sought China’s help on two fronts: in convincing North Korea to join South Korea in formal peace talks, and in working to lower emissions of so-called greenhouse gases even as China relies on coal to meet energy needs soaring to match economic growth.

Gore said his mission would not be derailed by allegations China tried to funnel money illegally into last year’s U.S. elections. China has forcefully denied those allegations and blamed them on anti-China forces in Taiwan and the United States.

Critics of the administration’s China policy assert that the United States has little to show for its decision to delink progress on human rights from economic relations. These critics include House Democratic leader Dick Gephardt of Missouri, a potential Gore rival in the 2000 presidential campaign.

Gore aides said the new business deals were a powerful rejoinder.

``If the administration is doing the work to benefit people across the country in a positive way _ in their pocketbooks _ there should be less criticism,″ said Gore spokeswoman Ginny Terzano.

Under the agreement with Boeing, three of the 777s are to be delivered to Air China in the fourth quarter of 1998; the other two in 1999.

Boeing, which has 4,500 parts suppliers in all 50 states, has been competing fiercely against the European Airbus consortium for China’s business, expected to total as much as $120 billion over the next two decades.

Chrysler Corp. has a joint agreement to manufacture its Jeep Cherokee in China, and General Motors has been scrambling to establish a firmer foothold in the Asian market. GM said its agreement with the state-owned Shanghai Automotive Industry Corp. would mean $1.5 billion in U.S. exports in the first five years of operation, trickling off to $100 million after new stamping, transmission and engine plants are built.

On the diplomatic front, Gore was on hand to watch U.S. Ambassador James Sasser sign the Hong Kong consulate agreement. Administration officials predicted the agreement would send reassuring signals to the 35,000 U.S. citizens and others in Hong Kong worried China will roll back individual freedoms when British rule ends July 1.

As Gore arrived, he promised to discuss U.S. differences with China. But it was clear the administration’s strategy was based on keeping specific public criticism to a minimum in the belief that the Chinese government responds, slowly but best, to private entreaties.

This approach, however, has left the administration open to criticism.

Citing China’s human rights record, for example, Gephardt has announced he will oppose renewing China’s preferable trade status when the question comes up this summer.

Gore advisers said several Chinese academics, student leaders, artists and business leaders who have been critical of the Beijing government were invited to a dinner Wednesday at the U.S. Embassy. They acknowledged none was a major public critic.

Update hourly