Press Briefing by Mike McCurry, Sandy Berger, Gene Sperling

Office of the Press Secretary
(Beijing, People's Republic of China)

For Immediate Release June 27, 1998


Shangri-la Hotel Beijing, People's Republic of China

4:12 P.M. (L) MR. MCCURRY: Let me explain what we'll do. I'm delighted to have here the President's National Security Advisor, Samuel Berger; and the President's National Economic Advisor, Gene Sperling. They're going to do a variety of things, so sit back and enjoy yourself for a while. They will -- first, Sandy will provide a readout of the bilateral meetings the President conducted today with President Jiang Zemin. He will then go through elements that are contained in the fact sheet and the agreements that have been reached so you better understand the remarkable substantive achievements that occurred at this summit.

And then Mr. Sperling will provide a readout of the working lunch held today with Premier Zhu Rongji and that delegation, talk a little bit about the economic issues that were raised at this summit. And then we will turn to your questions. And we apologize for the lengthy presentation, but it's one that we think is important so that you understand in greater detail the substantive achievements of this summit.

With that, Mr. Berger. Delighted to have you.

MR. BERGER: Thank you, Mr. McCurry.

I think this has been quite an extraordinary day in the evolution of U.S.-China relations. The summit today and the press conference which followed I believe demonstrate more graphically than anything we could possibly have said that the premise that we have been proceeding along is correct. That is that engagement with the Chinese can advance America's interests and its values. This is a summit that produced substantial results that will make life more secure and improve lives in other ways for the American people and for the Chinese people.

We also saw today a truly historic press conference that for the first time witnessed the leader of the United States and the leader of China discussing and debating a range of issues, but most particularly human rights, to a live audience across China and the United States. A President of the United States and a President of China not only speaking to themselves, not only speaking to the press, but speaking to their own people and speaking to each other's people.

There were a number of firsts involved in that press conference, and in the events of the past several hours. I think it's the first time that a foreign leader has addressed Tiananmen as directly as the President did in his remarks. It is, as far as we know, the first time a press conference held by a foreign leader has been broadcast live. It certainly was the most extensive public discussion by far between a Chinese leader and an American leader on human rights.

And it was extraordinary in other ways as well. President Jiang at various points invited President Clinton to add to his comments, thereby deciding to engage in this discussion rather than seeking in any way to truncate it.

I will come back to that and answer your questions about it in a few moments. Let me go to the other side of the equation here, because this was a summit that produced substantial concrete results, and we're very pleased with those results. Let me just go through them, hopefully not in excruciating detail, but in some detail.

I think perhaps the most important developments in this summit came, as they have generally in the last few meetings, in the area of nonproliferation, as China increasingly becomes part of the global nonproliferation regime. We have an agreement with the Chinese not to target our strategic nuclear weapons under their respective control at each other. I think this is an important step, as I talked about yesterday as we speculated about its possibility.

In the missile area, there are several pieces here. I think the most important piece, one that I am particularly pleased about, is that the Chinese have agreed now to actively study joining the MTCR. Now, what does that mean? The Chinese in the past have said unilaterally that they would adhere to the MTCR guidelines. That is a kind of a general commitment and it doesn't necessarily include all of the technology and components that are part of the annex of the MTCR, and it's not binding in any kind of international way.

This is an important towards joining the MTCR, and we have seen in the past -- whether it's been the Covenant on Civil and Political Rights or various other measures -- the Chinese often do these -- jump across the river in two or three steps. And here they have said basically that they are moving towards considering joining the MTCR. That would be a very significant development in terms of the sale of missile technology worldwide.

On chemical weapons, we agreed that we would strengthen our controls even further of the export of dual-use chemicals, that is those that can be used in perfectly legitimate commercial uses and those that can be used in weapons. China has just announced that it will expand its list of chemical precursors that will be under those controls.

In the area of biological weapons, I think you've heard me and the President, others, talk about our desire, perhaps this year, but as soon as possible, to negotiate an enforcement protocol for the Biological Weapons Convention, which does not have enforcement machinery. And the Chinese have agreed to work with us towards that objective.

And finally in this area, the Chinese have agreed with us on practices for end-use visits on U.S. high-technology exports to China. This has been an important issue back in Washington. We will now have a procedure for verifying that exports that are going to a location are at that location through a process of visits and inspection.

In the area of the security dialogue, the two Presidents talked considerably about South Asia, and both committed to place heavy priority over the next months to trying to de-escalate the tensions in the region. China has a unique historical relationship both with Pakistan and with India -- asymmetrical relationship -- and obviously can be a very important part of this process.

In the area of human rights, in addition to the press conference itself, which I think was a powerful discussion beaming across China about the relationship between freedom and government and the past and the future, we've agreed that we will resume our bilateral dialogue on human rights. The Chinese earlier had indicated they would sign the International Covenant on Civil and Political Rights, indicated they will do so this fall.

And on religious freedom, we agreed that we would continue to exchange among officials, as we had earlier this year with the mission of the three clerics, and that the State Department and the Chinese Ministry of Foreign Affairs will resume its dialogue.

I will let Gene talk about the economic area.

On energy and environment -- I talked about this yesterday -- I think this is extremely important -- China, growing as fast as it is, will surpass the United States as the largest emitter of greenhouse gases in 10 or 15 years. And we will now intensify substantially our cooperation on clean energy, with American technology, working with the Chinese, working on a nationwide air quality monitoring network, working on power projects and coal bed methane technologies, as well as having an energy finance conference so that we can talk about how China can finance an economic growth pattern that does not replicate the energy -- the wasteful energy pattern of the developed countries in the postwar period.

In science and technology, a area where we have been cooperating for 20 years, we will continue that cooperation, emphasizing a number of areas I will mention -- particularly disease, fighting disease. We're going to be cooperating in several areas including child health issues, birth defects, and health hazards due to environmental factors. The President mentioned this in his statement, talked about some of the things that have happened as a result of this cooperation.

In the area of rule of law, we will work with the Chinese on a more robust project, working with their judges, with their lawyers, training them on judicial systems, judicial practices. And also we will hold an important meeting with them in November on legal protection of human rights, including international human rights covenants, criminal procedural rights, legal protection of religious freedom and other issues.

There are a number of other things that are in the fact sheet, but I think it's a very rich and diverse set of steps which continue the process that has been ongoing now for the last two years at least of strengthening and deepening and widening this relationship.

Now, let me just speak for a second about the meeting itself. The meeting started with an extended bilateral -- probably 10 on each side, 12 on each side. The President -- both Presidents exchanged obviously their commitments to the relationship and the President began with South Asia, talked about the role that China had played in the P-5 and chairing that and helping to move towards a common position of the international community with respect to what India and Pakistan need to do to get this process reversed.

They talked about Korea, Kim Dae Jong, and the cooperation that we have there, both for trying to move a process of reconciliation between North and South, as well as making sure that the agreed framework that has stopped North Korea's nuclear program is adhered to.

The President in his larger meeting raised three economic issues -- Asian financial crisis, trade and the economy and the environment. Again, Gene will talk about those. On the economy and the environment, the President said basically that China can avoid the mistakes that the developed world made over the last 30 years in developing a very high carbon energy base and do so in ways that don't impair its growth, but don't impair its environment.

Then we went to a smaller meeting. President Jiang expressed gratitude to President Clinton for coming to China, notwithstanding the criticism of the trip that a few people have raised at home. And the President said that there never was a question in his mind to give in to the critics, that he believes that the United States gains an advantage from engagement -- can gain an advantage from engagement, and the President must do what's in the best interest for the United States; that we can cooperate and it's important that we discuss areas of disagreement.

There was a lengthy discussion of trade and WTO. On human rights, the President acknowledged the steps that China has taken with respect to release of dissidents -- some dissidents -- his agreement to sign the Covenant, invitation granted to the religious clerics, and said the question now is where do we go from here; how do we get on the right side of history together. He said that that would have, he thought, enormous impact -- that that, that is, China's opening up and giving greater degree of political freedom, a greater degree of freedom of expression, would have an enormous impact on China's standing, it would be a source of strength for China, not weakness. And as he said in the press conference, it would be a source, ultimately, of stability for China, not instability.

He talked about a number of areas he mentioned in the press conference in general terms that China could undertake with respect to prisoner releases, with respect to freedom of access to information. He raised the question of the arrest or the detention of the dissidents over the last few days. He mentioned the question of jamming Radio Free Asia and he said that he looked hopefully to China for improvement.

On Taiwan, the President restated our basic policy, one China policy. It continues to be at the heart of our policy, based on the three communiques. We don't support independence for Taiwan or one China, one Taiwan, or Taiwan's membership in organizations that require statehood; but that it is extraordinarily important to the United States that the issue between China and Taiwan be resolved peacefully. And that was a point the President emphasized.

There was some discussion of Tibet. You heard a reprise of that to some degree at the press conference. And the President urged President Jiang to engage in a dialogue with the Dalai Lama based upon a commitment or a statement that the Dalai Lama acknowledging that Tibet is a part of China. The President said he believed that the Dalai Lama would do that.

He urged President Jiang to take the step which he said had importance not only for the people of Tibet, but also for people around the world who I think have a particular feeling for the cultural and religious identity of Tibet and want to see it preserved.

Let me stop. Let me ask Gene to fill in the economic pieces. And then I will seek to answer your questions.

MR. SPERLING: Clearly, one of the things we are most pleased with during this trip is that both in the meeting yesterday with Secretary Rubin and then again with the working lunch today with the President, Premier Zhu Rongji was very strong and quite unambiguous in his commitment to not devalue the currency in China, and expressed the view that that would be harmful to the region, to Hong Kong, and ultimately, in the long-term, harmful to China; that whatever difficulties and short-term costs, that this was a sound approach for the region. And the President was strong in his praise for the sound judgment and responsible judgment that that showed.

As you know, the President had asked Secretary Rubin to go out a day earlier and have a preliminary conversation. That went very well yesterday. And again the President went through many of these issues with the Premier over the working lunch.

On the joint -- on accession to the World Trade Organization, there was clearly progress made, but clearly it didn't go far enough. We said before that, as we've always said, we needed a commercially viable package and that that would be our test. I can tell you that over the last several weeks, Charlene Barshefsky and her team, Deputy USTR Fisher and Assistant USTR Cassidy, I think showed tremendous skill in both pushing and engaging their Chinese counterparts and in making some significant progress. We just have farther to go.

A new round of talks has been scheduled for the week of July 20th in Geneva. The areas where progress was made was in new tariff cuts across a wide range of products, though not enough, particularly in some of the key export areas that are important to American workers and producers; reductions in some nontariff barriers, such as quotas and licensing procedures; a new financial service offer; and their very first telecommunications market access proposal.

I think China got a better understanding of what it would take. I think that it was made clear that while the President would like to see a time when there is permanent MFN, that that could only be done in the context of a strong and commercially viable WTO package.

On other fronts -- I won't go through everything in the fact sheet, but Secretary Daley certainly made progress in strengthening our export controls with China. China has agreed to a framework for permitting end-use verification inspections of U.S. dual-use high-technology exports. There is a five-year aviation initiative that will focus on airport infrastructure development, training, management, air traffic control systems. On Monday Secretary Daley will be part of several contract signings.

And one thing in particular we're very pleased with due to some very hard work right up to the last minute was that we are announcing the first exchange of Labor Secretaries to go over a broad dialogue of labor issues, including core labor standards, employment creation policies. And I think this is very important in continuing progress and some of the intersection between some of the economic issues and the freedom of association issues.

In the meeting with Zhu, it started by him telling the President of some of his previous visits prior to his current job, and the President inviting the Premier to come to the United States. He warmly received that, though obviously any type of dates would have to be discussed.

The President had a significant conversation with him on climate change, echoing some of the things that Sandy just went over in his conversation with President Jiang Zemin -- the notion that when the President is trying to bring in China into the Kyoto framework with targets and timetables, that he does not mean them to be targets or timetables that would limit China's growth, and that he believes that with the right type of energy policy earlier, that there can even be potential for reducing the growth of greenhouse gas emissions while encouraging growth.

There was also a significant discussion on Japan and the Asian financial crisis. This was at the point where the Premier made very clear to the President that as a matter of their responsibility to the region and to their neighbors and to Hong Kong, as well as economic sense for China, that they would not consider devaluing. There was discussion of the situation in Japan and what the economic challenges were there.

The Premier went through some of the issues with their own economic plan, their tremendous challenge in trying to deal with the 300,000 state-operated enterprises and their efforts to create a social safety net to deal with things, the problems and the challenges that result from that. He spoke of the fact that they were focusing very much on infrastructure investment, long-term infrastructure investment as their way of further stimulus, and the President was supportive of the long-term investment focus on that as opposed to a commercial subsidy focus.

On the WTO, the President talked about the importance of making progress. One thing I would say is that at this meeting the President had invited and the Chinese had invited the congressional delegation to be at the meeting. During the discussion in which the President was talking about the importance of making further progress on trade, he asked a few members of the congressional delegation to speak. Senator Rockefeller and Senator Baucus talked about the importance from their perspective in maintaining support for open economic relations with China and for eventually getting permanent MFN or not having to fight such hard battles every year, of having greater open markets and doing more on the export side so as to bring down the trade deficit. Congressman Hamilton also strongly made these points and stressed that the effort of himself and people to continue open trade relations with China.

The President echoed that the status quo was not in an acceptable place and that we needed to make further progress.

With that -- since I know you are anxious to get to questions -- I will stop, either Sandy or I will be available for any questions you have. Thanks.

Q: Sandy, did we somehow signal to President Jiang that President Clinton would raise the issue of Tiananmen Square in the press conference, that he would, in fact, speak at some length on what that meant to the American people and to him?

MR. BERGER: No, there was no specific conversation with President Jiang about what the President intended to say.

Q: That wasn't the question.

MR. BERGER: Yes, I said no.

Q: Did he signal in any way, not whether there was specific conversation.

MR. BERGER: No, didn't pull his ear, didn't --

Q: And none of you talked to your counterparts at a lower level?


Q: Sandy, what message should other governments in Asia -- Japan, India, for that matter, Taiwan -- take from this new relationship that you are forming with China?

MR. BERGER: As far as I know, every leader that we have met with from Asia has encouraged us to develop a good, strong relationship with China. Well, we haven't had a conversation with the new Indian government of great depth, although we look forward to having discussions with them. But certainly, the Japanese, Prime Minister Hashimoto, the Koreans, President Kim Dae Jong. I think that the nations in this region know that we are not forming an alliance with China. They know that we are not -- that an improving relationship with China is not directed against any of them, but that stability in China and bringing China into the global and regional regime is to their advantage.

So I think we've tried to make it quite clear to each of them -- we do have, of course, security relationships with a number of those countries -- with Japan, with Korea, with Thailand, with the Philippines, with Australia. Those are qualitatively different relationships. Those are defense security relationships. But I think the others, for the most part, prefer to see a strong, good relationship between the United States and China than a tense and hostile relationship.

Q: Can you help us and point to any particular place in the human rights debate that we watched where President Clinton's stated views on human rights in China moved at all, or where you think President Jiang's position on human rights budged an inch?

MR. BERGER: Well, I think, first of all, the very fact that this happened is a movement on the part of the Chinese. It would have been unthinkable for that to happen even five years ago, perhaps even yesterday. So the fact that President Jiang not only was willing to engage, but seemed almost eager to engage in that dialogue -- there were times when he turned to the President where he could have cut off the discussion, and said, President Clinton, do you want to add anything to that.

What you're seeing in that press conference to some degree is a window into what has happened in the evolution of their relationship over the past few years. What I have seen in these meetings, where two leaders now have a level of mutual respect sufficient that they can engage in these discussions with a good deal of honesty and candor.

I think there were a number of moments -- I think that when President Clinton said at one point, I'd like to add a comment; first of all, I think this debate and discussion has been healthy and a good thing, and then went into a discussion of the relationship between stability and freedom. What he has been saying in many different ways and now is saying directly to the people of China is that: I understand China's apprehension, at least the leadership's apprehension, about disintegration." China has had historic problems of breaking up. But in the future, stability and freedom are not inconsistent. The better way to get stability in this new world is greater degree of freedom -- I think that's a very strong message to the people of China.

And I think the President was aware that this was being broadcast live and I think was speaking to the broader audience in that respect.

Q: Sandy, how was he aware that it was being broadcast live? You didn't know going into this that it was going to be, did you?

MR. BERGER: We knew as we came out of the meeting, I think Mike had received some indication before the press conference that it would be broadcast live. And I think maybe on radio live. We've heard reports from some of our embassy people of cab drivers stopping and pulling over to the side of the street to listen to this. Those are unverified, and they are sourced to the U.S. embassy personnel.

Q: -- mentioned that he would work on helping with people who are being arrested because of the counterrevolutionary law, that they were being arrested and put in jail. But wouldn't it be a matter of semantics, because people are being arrested now for endangering the safety of the country? So what would be your --

MR. BERGER: Well, I think the President made clear that he opposed arresting anybody for the expression of their views, of their political views, and made some suggestions to President Jiang as to concrete steps that might be taken in that direction. But we would oppose, obviously, the arrest for anyone for expression of religious freedom, for expression of their political views.

I think part of this dialogue was President Clinton saying to the Chinese people and to President Jiang, let me explain America's values to the Chinese people and why that has made America strong, and why that can make China stronger.

Q: President Jiang Zemin stated very clearly the idea of political contributions to the U.S. was absurd and sheer fabrication. President Clinton didn't say anything about that. Do you know his views on the matter, or what's the White House position?

MR. BERGER: I'm sorry, what was the predicate of -- I just didn't hear the first part.

Q: Political contributions.

MR. BERGER: Oh. This is a matter we have raised before with President Jiang and other Chinese leaders. They have in the past said things similar to what President Jiang said today; that is that they have conducted their own investigation and they have not found anything to bear out the proposition that the Chinese government was engaged in an effort to funnel campaign finances into political parties in the United States. That is as matter for the Justice Department to investigate and we urged, as we always have, the Chinese government to cooperate.

Q: On a related issue, did the issue of satellite export waivers come up in any of the meetings -- past, present or future export waivers?

MR. BERGER: Did not come up. I mean, it certainly has come up in our discussions with the Chinese at other levels; did not come up in the summit. But as you know, I think our view is that while there are some instances of private companies that are being investigated, that our policy with respect to satellite launches on Chinese satellites is one that serves the national interest and has not compromised our national security.

Q: Sandy, can I ask about a couple of pieces of language that came out today -- one, an additional piece of the language and one that was omitted, and I'd like to ask your explanation of what these two things meant. The first one was, in talking about the detargeting, there was an interesting phrase about weapons under their respective control. Is that a reference, for instance, maybe to weapons on NATO bases in Europe? What does it mean -- weapons that are under the respective control?

And the second is an omission, or seemed to me to be an omission. After the summit I did not hear a repetition of the Taiwan Relations Act as being one of the pillars of American policy toward Taiwan. Does that Relations Act continue to be a policy of ours?

MR. BERGER: With respect to -- the issue of arms sales did not come up in the press conference. Obviously with respect to that, our template, our guidance is the three communiques and U.S. law. And with respect to missiles under our control, that means all missiles that are under U.S. control. I'd rather not get into that more specifically.

Q: You said that the President reiterated -- policy with regards to Taiwan to President Jiang. Then why didn't the President make that a part of his statement at the press conference? Was that by mutual agreement?


Q: And one more. During the President's stay in China, is he planning to address that issue in public?

MR. BERGER: There is no change here in the policy. Secretary Albright articulated it when she was here. Others have articulated it. I think I answered a question yesterday, answered a question today with respect to the policy. I don't know whether -- it's not inconceivable to me that at some point between now and the end -- there is a lot of speeches to go -- that the President will address Taiwan somewhat more specifically.

Q: Did he specifically mention -- the three nos to President Jiang? Did the President specifically state --

MR. BERGER: He stated what our policy is. It includes those elements -- also the three communiques, the one China policy, peaceful resolution of the dispute. He restated our policy.

Q: When did the United States begin talking about -- when did the United States start saying that it formally opposes independence for Taiwan?

MR. BERGER: That has been part of our policy I think for quite some time.

Q: That would be the case even if the democratically-elected government of Taiwan chose that, or there was a democratic referendum that overwhelmingly favored it?

MR. BERGER: No, we believe that the status -- the issue of the future of Taiwan and China should be resolved between the two entities and between the two peoples. And it is inherent in the three communiques that we do not support the independence of Taiwan. That goes back long before we got here.

Q: Can I follow up? Did the President restate the three nos of the one China policy on his own, or he was responding to a request from President Jiang? And also, what was President Jiang's response to the President's point that the pursuit of a cross-strait dialogue is the best way to achieve a final peaceful resolution?

MR. BERGER: I have not in my readout tried to characterize President Jiang's comments. I would suggest that you go to the Chinese government for that.

Q: What about my point --

MR. BERGER: The President stated this in the context of a discussion on Taiwan which President Jiang talked at some length about Taiwan, and the President articulated our policy.

MR. MCCURRY: Our counterparts on the Chinese side, Zhu Bangzao, the spokesman for the Foreign Ministry, very graciously delayed his briefing, their readout, until 5:00 p.m. I wanted to alert everyone of that. That will begin shortly -- those of you who have got responsibility to cover that event as well.

Q: Where is that?

MR. MCCURRY: You can inquire -- Paul, do you know where they're doing that? Up around the corner, very nearby. So I did want to advise you of that. We will continue for a short while here for those of you in the White House press who've got some more questions.

Q: On the environment, I would like to ask you, we all feel like China has a moral obligation to act on human rights. You sounded very strongly on your commitment to environmental dialogue with China. So is there a feeling that we, as developed countries -- America as the richest country -- has a moral obligation to help China do its job on clean energy and the environment?

MR. BERGER: The whole premise of our approach -- maybe we can just actually keep it a little bit down back there so I can try to answer the question. Our whole premise at Kyoto was that developed countries such as the United States had basic obligations to deal with the emissions that are causing greenhouse gases and global warming. And we undertook very substantial cuts in our levels over a period of time.

But we also said that if we cut, and the developing world, like China, doesn't cut, the planet doesn't know whether emission comes from Shanghai or San Francisco. So we'll have the same problem. And therefore we asked the developing countries to undertake their own efforts and to participate

with us in a emissions control exchange regime whereby investments that are private sector could make clean energy in the developing world would both provide them an investment and provide our companies with credit for emissions control.

Q: Just a quick question, clarification from yesterday. You described China as an authoritarian regime -- communist states are generally regarded as totalitarian. Is this an upgrade or a downgrade? (Laughter.)

MR. BERGER: Any single word doesn't capture I think a regime as complicated as China. This is a regime in transition. In some respects, as I said yesterday, the people in this country have a far better life than they did when I first came here 20 years ago, or 10 years ago or 5 years ago -- not only in their economic life, but also in their ability to choose what they do for work, whether they're educated, whether they travel, whether they have cable television and a whole range -- whether they elect their village mayor.

Now, at the same time, this is a one-party state and it has a very tight control on -- certainly on public expression, on political dissent. And in that respect it is authoritarian.

Q: -- clarify the earlier question, what is this phrase, "under their respective control"?

MR. BERGER: Let me have a conversation with you later about that.

Q: Sandy, on the question of transition, the President has now had seven meetings, I think, with Jiang. Do you see him as a transitional figure of sort of the Gorbachevian mold or is it something less than that or is it something more than that?

MR. BERGER: Well, first of all, one has to be humble about predicting the future of American leadership, let alone the future of Chinese leadership. I do not believe that President Jiang is a transitional figure. I think that he has consolidated his support within the government and that has been affirmed by various institutions. I think that he has strong control of the government.

Obviously, others in this government are extraordinary important -- for example, Premier Zhu Rongji, who has special influence in the massive economic restructuring going on here. But I think President Jiang is not a transitional figure. I think he is someone who, I would expect -- and I would hope that's he's not a transitional figure, I'd hope that he's a figure that accelerates the transition of China.

Q: But is he a reformational figure? MR. BERGER: Well, I think we'll have to make those judgments looking backwards. I think that what he did today was rather interesting. I think there are many ways to have reacted to that situation in the press conference. His instinct was not to cut it off. His instinct was to engage in the discussion, in the dialogue, in the debate, even to prolong it. I think that's an interesting instinct. And I hope that he will be a figure that sees the relationship between economic reform and political reform in China.

Q: Did President Clinton directly complain to President Jiang about the recent detention of U.S. dissidents, and did President Jiang indicate that this would cease while President Clinton was in this country for his visit?

MR. BERGER: President Clinton specifically raised it. I'm not -- I don't believe President Jiang specifically responded to it, although others have said that the three individuals, in particular, have been released. Obviously, we don't -- we're not able to verify that independently, although I think there has been some confirmation of that in a few of the cases.

Q: There were reports that people in other parts of the country were picked up, too. It isn't just those three.

MR. BERGER: Well, the President raised it, and not just -- the President raised it in the larger sense of how counterproductive it is for these things to -- and how much of a mistake it is for these patterns to be repeated in connection with official visitors, and urged that it be stopped.

Q: Something on the economy. I just wanted to ask something about the intervention. We've seen that the yen has weakened again, and independent of the words that have been exchanged today, does the U.S. plan or will consider the possibility of a new intervention in the market should the yen weaken further? And was this discussed directly with the Chinese, whether they can participate in that?

MR. SPERLING: Well, I think that what our view is, what the President has communicated is that the main thing that will determine the strength of the yen in the coming weeks and month is going to be the actions Japan takes itself, particularly in the banking and financial restruction area, to restore confidence. It was within the context of serious statements by both Prime Minister Hashimoto and Finance Minister Matsunaga on serious statements foreshadowing significant action that the intervention was taken.

So I think that the real test will be -- the real test in the view that currency follows in the long-term fundamentals will be the actions that Japan takes. As Secretary Rubin has said and repeated, currency intervention is a tool that obviously is available and will be used by the Secretary of Treasury when he feels its appropriate, and will not be used when he doesn't feel it's appropriate.

The terms of the discussion, there certainly was discussion of currency issues in more depth in the meeting with Secretary Rubin and Zhu Rongji yesterday. It came up a little, the overall issue did, in the meeting with the President today. I don't recall that it did in the meeting with President Jiang Zemin.

Q: So what did they actually talk about regarding Japan? Did they both just kind of -- that Japan isn't taking much action, but will support Japan if they do, or did the Chinese side say, we'd appreciate it if the U.S. put a little bit more pressure on Japan to stimulate its economy and so on? What did they actually talk about?

MR. SPERLING: Well, I don't want to do too much, as Sandy suggested, debriefing on their comments. But I think what was significant is that they were not suggesting that their actions -- that China's actions on devaluation were dependent on Japan or the yen. What they were suggesting was that they felt that regardless of the circumstances it would be nonadvantageous for the region and for China in the long-term to devalue and to risk another wave of competitive devaluations.

So, again, they were very reassuring on their pledge not to devalue and they were not hedging that commitment that was given both to the President and to Secretary Rubin on actions by the Japanese government or the movement of the yen.

Q: Can you tell us more about the conversation of yesterday between Secretary Rubin and Zhu?

MR. SPERLING: It was a very in depth conversation. I think it must have lasted an hour and 20 minutes. I think Secretary Rubin did give a readout to some of the reporters who were with him yesterday.

There was a lot of conversation simply about what China itself was doing about what the restructuring they were doing, their growth targets. Secretary Rubin praised in the meeting the fact that to the extent they were trying to stimulate the economy, they were not focusing on commercial investments, which they suggested would lead to the kind of redundancy that they were trying to avoid, but rather on infrastructure investments; that they had been growing at 10 percent, 15 percent over this first half of the year in infrastructure investments from highways, railroads, power plant commitments. So it was a very in-depth discussion of what they were doing. Certainly, Japan and currency issues came up. I don't feel I should go into too much more in what -- in their conversation.

Q: Sandy, do you have a take on why the Chinese reversed course on the question of televising the remarks after earlier signaling not a lot of flexibility on that question? And, since is the last question, more broadly, can you speculate on what you think this improved relationship between the two leaders is going to mean over the next six months or year in terms of policy advances or other summits, what have you?

MR. BERGER: I knew you'd ask that question and I've been waiting to say, I told you yesterday, not to make a judgment based on the first day.

Q: I took your advice, Sandy. (Laughter.)


I think it's a very interesting decision that they made to televise the press conference. And I'm not -- I think it's a very encouraging decision because in many ways, one had to believe that, given the fact that the arrival ceremony was in front of the Great Hall of the People, adjacent to Tiananmen Square, that the President might address it. There certainly had been a good deal of speculation in the press about that. And so I think, notwithstanding that, they made a judgment -- I mean, we have been encouraging them to give as much access to the President, and in every contact we've had the Chinese -- when Madeleine was out here, when I was out here, Jim's contacts in the last few days, we have said, we want the President -- it's very important for the President to be able to speak to the Chinese people. And I think they realized it was important to us, and I think they want this summit to be successful not just for them, but I think for the relationship.

In terms of where the relationship is going, I hope that this puts on a solid and higher level of cooperation. I hope that those who are critical of the relationship at home will see that through engagement you can get a lot of serious things done and promote America's values and maybe even advance the process of change in China all at the same time; that these are not multiple choice, you've got to pick one or the other.

I think today proved that premise to be correct. And I think there is a willingness on the part of the President and I think there is a willingness on the part of President Jiang to keep building as we have. We have built on each of these summits -- the October summit, this summit -- substantial achievements in a widening area of cooperation while talking about our differences in increasingly candid and open and honest terms. That can only be good.

And I hope that that will continue and I hope that those who saw this back home will realize that this is an important relationship, there is an enormous amount at stake, that you can aggressively pursue your interests and aggressively pursue your values at the same time.

THE PRESS: Thank you.

China Briefings - June 27, 1998

Achievements of U.S. - China Summit

Press Briefing by McCurry, Berger, Sperling

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