I. Political Relations

China and Bhutan have established diplomatic relations yet, but they enjoy friendly relations. Bhutan has time-honored historical relations with China and China's Tibet in particular. In 1971, it voted in favor of restoring China's legitimate seat in the UN. In 1974, at the invitation of the Bhutanese Royal Government, Chinese Charge d'affaires ad interim to India Ma Muming attended the coronation of His Majesty Jigme Singye Wangchuck. Since 1979, leaders of the two countries have exchanged congratulatory messages on the occasions of the National Day of the other country. In 1983, State Councilor Wu Xueqian met Bhutanese Foreign Minister Dawa Tsering in New York, and held consultations over developing Sino- Bhutanese relations. Living Buddha Dilgo Khyentse Guru Rinpoche of the Bhutanese Roval Family, visited China, In 1985, and 1988, and Vice-Chairman of the Standing Committee of the NPC Ban, Vice-Chairman of CPPCC and President of the National Buddhist Association Zhao Puchu met him respectively. In 1990, Bhutanese Sport Delegation participated in the Asian Games held in Beijing. In 1995, Bhutanese Princess Soram Wangchuck attended the 4th World Women's Conference. Starting from 1994, Chinese Ambassadors Cheng Ruisheng, Pei Yuanying, Zhou Gang and Hua Junduo have paid six working visits to Bhutan respectively, and exchanged views with His Majesty and Bhutanese foreign minister on further developing Sino-Bhutanese relations. In June 2000, Bhutanese Ambassador to India Dago Tshering was invited to visit China, thus realizing the exchange of visits between Chinese and Bhutanese ambassadors to India, and opening up a new channel for contact, apart from border talks between the two countries. In 2001, Bhutanese cultural, official and auditing delegations visited China respectively. In April 2002, Speaker of the Bhutanese National Assembly Ugyen Dorji at the invitation of Chairman Li Peng, attended the 3rd annual meeting of Peace Association of Asian Parliaments held in China and made a stop-over visit. In May the same year, Finance Minister Xiang Huaicheng met his Bhutanese counterpart Yeshey Zimba who was attending the annual meeting of the council of Asia Development Bank Held in China. In October, Vice Auditor-General of China's State Auditing Administration Ling Huan visited Bhutan. 16 rounds of border talks were held between China and Bhutan from 1984 to 2002. During the talks, Chinese leaders and the Bhutanese king met the delegation from the other country. The former elaborated basic principles of China's policy toward Bhutan and made clear that China valued the traditional friendship between the Chinese and Bhutanese people, attached importance to developing friendly relations between the two countries, respected Bhutan's independence and sovereignty and cover interfered in Bhutan's internal affairs. With regard to the development of the bilateral relations, they hoped contacts would gradually increase and welcomed Bhutanese friends to come to China for business, study, pilgrimage and visits of relatives and friends. In 1998, China and Bhutan held the 12th round of border talks in Beijing and signed the Agreement between the Governments of the People's Republic of China and Kingdom of Bhutan on Maintenance of Tranquility and Peace in the Sino-Bhutanese Border Areas. As the first treaty signed between the two governments, it has major significance in maintaining stability in the Sino-Bhutanese border areas and eventually finding an equitable solution to the border question.

The two countries have had sound cooperation in international affairs. Since 1995, confronted with the pressure from the West, Bhutan has supported China for 5 consecutive years in upsetting the anti-China motions at the UN conferences of human rights. It also supported China's stance on Taiwan question by opposing Gaoxiong to host 2002 Asian Games. As Vice-chairman of the 55th UN General Assembly, Bhutan supported China in rejecting the so-called Taiwan's Participation motion in the UN.

II. Economic and Trade Relations

Border trade volume between China and Bhutan is insignificant. China's exports and imports totaled US$ 1.954 million in 2000, some US$ 1.6 million in 2001 and approximately US$ 1 million in 2002.

III. Contacts and Cooperation in Other Fields

Contacts have just started in cultural, educational and other fields. At the request of the Royal Government of Bhutan, China offered a small number of government scholarships to the Bhutanese side, but no Bhutanese students have been sent to study in China.

In 2001 and 2002, exchange of visits started between the auditing sectors of the two countries.

IV. Important Bilateral Agreements

On December 8, 1998, the two governments signed the agreement on maintaining peace and tranquility in the Sino-Bhutanese border areas.

On December 1, 2000, the two governments reached agreement on retaining Bhutan's honorary consulate in Macao Special Region through an exchange of letters.