WORLD

Reagan woos the giant

ANN FINLAYSON May 7 1984
WORLD

Reagan woos the giant

ANN FINLAYSON May 7 1984

Reagan woos the giant

WORLD

CHINA

Arare 21-gun salute signalled the importance that Ronald Reagan’s hosts accorded the occasion. When the president began a fiveday tour of China last week he clearly shared that mood of high significance. In meetings with government officials Reagan carefully downplayed deeply

rooted Sino-American disputes and his own suspicions of the Chinese. “The differences between our two countries amount to very little as compared to the areas of agreement,” he told President Li Xiannian at a banquet at the Diaoyutai Guest House. “We will now work together as friends and neighbors.” Reagan had resisted a temptation “to put a ‘Buy American’ sticker” on his luggage, but the economic enticements that were largely responsible for the visit were apparent everywhere he travelled. From Peking’s Great Hall of the People and the old imperial city of Xi’an to the Great Wall, Reagan continually stressed his desire for a new, mutually advantageous relationship “to build dynamic growth economies” and “to contribute to peace and stability not only in the Pacific region but on a global scale.” And to emphasize the spirit of amity, Chinese and American officials initialled a nuclear co-operation agreement after White House spokesmen had

declared that Washington is “satisfied” that China will not use U.S. nuclear aid to build weapons.

Still, the Chinese openly voiced their disagreement with U.S. policy on such fundamental issues as Taiwan, nuclear arms reduction and Central America. And they censored whole sections of the

televised version of an address Reagan delivered to an audience of 600 academics and Communist party officials. The censors excised the president’s comments extolling the virtues of capitalism, Western democracy and religion. Also deleted: a warning about the “threat” that Soviet missiles and troops on China’s northern borders posed to Peking. Chinese foreign ministry spokesman Qi Huaiyuan said it would have been “inappropriate” for the Chinese media to broadcast Reagan’s comments about a third country. For his part, White House spokesman Larry Speakes said he regretted the omissions but he conceded that the issue was “an internal matter for the Chinese to decide.” Still, Reagan later softened his rhetoric against the Soviet Union. Senior U.S. aides said he had told China’s diminutive leader, Deng Xiaoping, that progress in Peking’s reconciliation talks with Moscow would enhance peace prospects in the Pacific.

Chinese sensitivity over the issue of Taiwan was clearly evident. During an hour-and-40-minute interview in the Great Hall of the People, Deng Xiaoping told Reagan that he hoped U.S. leaders would give serious consideration to Peking’s views on the subject. Deng said that the mainland had made clear its desire for reunification with Taipei by agreeing to allow the island to retain its capitalist system even after reunification. Earlier, Li had told Reagan at a banquet that the Chinese people “eagerly long for reunification of their motherland.”

For his part, Chinese Prime Minister Zhao Ziyang urged the United States and the Soviet Union to resume nuclear arms reduction talks. Zhao told Reagan he hoped for a halt in the deployment of mediumrange nuclear missiles in Europe and he added that failure to reach agreement would mean an inevitable escalation of the arms race. Zhao also expressed opposition to some U.S. actions in Central America and the Middle East. “China is very much concerned about the worsening tension in Central America,” he said. “We oppose meddling in the affairs of Central America by any big power.” Rather than enter a debate, Reagan took a first-hand * look at the social and economic changes that are rapidly transforming China from the primitive rural society that former president Richard Nixon encountered on his historic 1972 visit into a modern industrial state.

The spartan policies of Mao Tse-tung and the Cultural Revolution have given way to sweeping reforms that have begun to alter the country’s most basic economic and cultural realities. In the eight years since Mao’s death his successor, Deng Xiaoping, has quietly pursued a very different goal: to turn China into a modern state by the year 2000, quadrupling the country’s gross national product, doubling its output of energy and raising the average per capita annual income to $800 from $300. That awesome undertaking requires not only widespread internal change but a major inflow of foreign assistance, trade and technology. Deng is trying to ensure that the United States provides a large part of the assistance, supplementing the growing trade China conducts with Japan and the Soviet Union.

In some areas China is still a primitive society, struggling with problems that range from primitive social customs, including female infanticide, to abject poverty in numerous regions and corruption. More than 800 million Chinese, a fifth of the world’s population, still exist as subsistence farmers.

But Deng’s pragmatic attempts to stimulate productivity have included modern—and capitalistic—interpretations of the values of competition and incentives. For one thing, the state encourages farmers through a “responsibility system”—which entitles them to retain profits after fulfilling production quotas. Then any surplus can be sold on the free market. In 1983 more than 10 per cent of all farmers had profit-making sideline occupations, and last month at the Great Hall Chinese leaders entertained 20 peasants who have recently become rich under the new system. One of them, 37-year-old Zhang Wenkang from Sichuan province, was named “King of the Tomato” for perfecting a method of increasing his yield. Last year Zhang earned the relatively huge sum of $5,000.

The entrepreneurial spirit is also evident in the cities. Officials estimate that more than two million laborers and shopkeepers are now in business for themselves. Privately owned stores have sprung up to provide eager consumers who can afford them, with everything from cosmetics to Kenny Rogers tapes. Retail sales last year exceeded $142 billion, an increase of 10.5 per cent over 1982. An ever-growing amount of that gain is finding its way into private pockets.

Industry, as well, is undergoing radical changes. The responsibility system penalizes workers for their companies’ losses and rewards them for profits. Last October government officials told all factory managers to cut losses or lose their jobs. Reagan’s tour included a visit to the Shanghai-Foxboro Co., a $10-million factory where American managers are supervising 270 Chinese workers in the production of hightech industrial measuring equipment. The factory is a prototype of the kind of economic co-operation the Chinese leader seeks.

As Reagan prepared to fly home at week’s end, there was no evidence of any major improvement in Sino-American relations. But his trip, which both highlighted his commitment to the Pacific Basin and drew attention away from the Democratic party leadership race at home, was a powerful illustration of the new directions in which Reagan is taking U.S. policy. It also demonstrated the economic awakening of an international giant.

-ANN FINLAYSON, with Wendy Lin in

Peking.

ANN FINLAYSON

Wendy Lin