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Economic & Trade Relations
Special> Sino-U.S. Economic & Trade Relations> Economic & Trade Relations
UPDATED: January 14, 2008 NO.3 JAN.17, 2008
China-U.S. Relations 2007 in Retrospect

Points of Pride

Historical communiqué commemorated

The year 2007 marked the 35th anniversary of the signing of the China-U.S. Shanghai Communiqué, a landmark document that opened the door to the normalization of their bilateral relations. The communiqué was issued in Shanghai on February 28, 1972, the day then-U.S. President Richard Nixon wrapped up his ice-breaking tour to China. The two countries formally established diplomatic relations seven years later.

Cooperation on international issues

China and the United States worked closely together on several international matters. They made substantial progress in resolving the North Korean nuclear issue with the signing of a joint statement on February 13. The United States has increasingly recognized the importance of cooperating with China on contentious international issues.

Strategic Economic Dialogue (SED)

Senior Chinese and U.S. officials held the second and third sessions of the SED co-chaired by Chinese Vice Premier Wu Yi and U.S. Treasury Secretary Henry Paulson. The biannual dialogue mechanism addresses bilateral and global strategic economic issues of common concern. The second session of the dialogue held in Washington on May 22-23 focused on the service sector, energy and the environment, the rebalancing of growth and innovation. During the third session of the SED in Beijing on December 12-13, the two sides signed agreements to cooperate in the fields of food, animal feed, drug and medical device safety. They also reached a broad consensus on the financial service industry, product quality and food safety, energy and the environment, transparency, investment, China's market economy status and balanced economic growth.

Strategic Dialogue

Chinese Vice Foreign Minister Dai Bingguo and U.S. Deputy Secretary of State John Negroponte held the fourth China-

U.S. Strategic Dialogue in Washington on June 20-21. During the two-day dialogue, which Washington referred to as a Senior Dialogue, the two reviewed major developments in their bilateral relations to provide a platform on which to map out the future. The talks also touched on a wide range of international issues, such as the denuclearization of the Korean Peninsula, the Darfur issue, climate change and nuclear non-proliferation.

Presidential meetings

Chinese President Hu Jintao met U.S. President George W. Bush on the sidelines of the economic leaders' meeting at the Asia-Pacific Economic Cooperation forum on September 6 in Sydney, Australia. The two presidents also met on the sidelines of the outreach session of the Group of Eight summit in Heiligendamm, Germany, on June 8.

Taiwan question

The United States reaffirmed its position on the Taiwan question: The United States firmly adheres to the one-China policy, observes the three U.S.-China joint communiqués and opposes any unilateral act to change the status quo across the Taiwan Straits. The U.S. Government opposes the move by the Taiwan authorities to hold a "referendum on Taiwan's UN membership."

Military hotline

During U.S. Secretary of Defense Robert Gates' visit to China on November 4-6, the two countries agreed to set up a direct telephone link between the Chinese Defense Ministry and the U.S. Department of Defense, the first of its kind between China and another country. The hotline will provide instant contact between Chinese and U.S. defense and military leaders on major issues of common concern.

Tourist destination

China and the United States signed a memorandum of understanding in Beijing on December 11, which will allow Chinese tourists to travel to the United States in groups on tourist visas. Previously, the United States issued only business visas to Chinese citizens. With the signing of the memorandum of understanding, the number of Chinese tourists in the United States will reach 579,000 by 2011, up from 320,000 in 2006, according to the U.S. Commerce Department.

Ambitious investment

Within three months of being set up, China Investment Corp., the country's sovereign wealth fund, injected $5 billion into the second largest U.S. investment bank, Morgan Stanley, in December. Morgan Stanley was selling stakes to bolster its capital in the wake of a major loss caused by its exposure to U.S. subprime mortgage crisis and related securities.

Points of Contention

Anti-satellite missile test

China launched a ground-based missile on January 11 to destroy an aging weather satellite, triggering concern from the United States.

Toy recalls

From August to the beginning of September, U.S.-based Mattel Inc., the largest toy company in the world, issued three recalls of more than 21 million toys produced by Chinese manufacturers in just one month. Mattel later admitted that the vast majority of its recalled toys suffered from design flaws rather than manufacturing errors in China.

Trade frictions

The United States initiated a number of combined anti-dumping and anti-subsidy investigations into Chinese products such as steel tubes, off-road tires and woven sacks, sparking strong opposition from China.

Dalai Lama

U.S. President George W. Bush met the Dalai Lama in the White House on October 16, despite opposition from Beijing. It was the first public appearance with the Dalai Lama for a sitting U.S. president. The Dalai Lama also received the U.S. Congressional Gold Medal, America's highest civilian honor, during his stay in Washington. The Chinese Government strongly protested the moves, calling them "wanton interferences in China's internal affairs."

Food safety

Chinese animal feed and seafood exported to the United States prompted safety concerns, while some U.S. exports, including frozen pork and health food products, were found unsafe according to Chinese standards.

Weapon sales to Taiwan

The U.S. Department of Defense announced tentative plans to sell 12 P-3C antisubmarine aircraft and 144 cruise missiles to Taiwan in September, on which China voiced its "strong dissatisfaction and resolute opposition."

Kitty Hawk incident

The U.S. aircraft carrier USS Kitty Hawk was due to call at Hong Kong on November 21 to give its crew a four-day leave to spend Thanksgiving with their families. China first refused the ship access and later allowed it to dock "out of humanitarian considerations." However, the United States said it was too late and the ship sailed to Japan.

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