1. Bilateral Trade

Since the establishment of diplomatic relations between China and the United States in 1979, the bilateral trade has witnessed fairly rapid growth. Especially in recent years, trade between the two countries has maintained a sound momentum of rapid growth. According to statistics from the Chinese Customs, the two-way trade volume reached US$54.94 billion in 1998, a 12.1% increase over that of 1997. China's exports to the U.S. reached US$37.98 billion, an increase of 16.1%, while China's imports from the U.S. reached US$16.96 billion, an increase of 4.0%. China saw a favorable trade balance of US$21.02 billion in 1998. In the period from January to June 1999, China-U.S. bilateral trade volume totaled US$27.12 billion, increasing by 11.5% over that of the first half of 1998, with China's exports to the U.S. reaching US$18.11 billion, an increase of 8.4%, and China's imports from the U.S. US$9.00 billion.

The primary items that China imported from the U.S. were fertilizer, airplanes, chemical products, medical care instruments, etc., while China's exports were mainly textile, clothing, shoes, suitcases and machinery. The U.S. remains as China's second largest trading partner while China continues to be the fourth largest trading partner of the U.S..

China-U.S. bilateral trade, investment,economic and technological cooperation maintained good momentum of development in 2000. According to statistics from the Chinese Customs, the two way trade volume totaled US$74.47 billion, a 21.1% increase over that of 1999. China's exports to the U.S. amounted to US$52.1 billion, an increase of 24.2%, while China's imports from the U.S. reached US$22.36 billion, up 14.5%. China saw a favorable trade balance of US$29.74 billion in 2000. The U.S. remains as China's second largest trading partner while China continues to be the fourth largest trading partner of the U.S.


2. Bilateral Investment

With China's continuously improved investment environment in recent years, the U.S. enterprises' enthusiasm to invest in China remains high. In 1998, U.S. businesses invested in 2,215 projects in China, with the agreed-upon investment valued at US$6.21billion and the actual inflow of investment valued at US$3.91 billion, which represented an increase of 1.2%, 25.8% and 20.8% respectively over those in 1997. From January to July 1999, U.S. invested in 1,163 projects in China, with the agreed-upon investment valued at US$3.49billion and the actual inflow of investment valued at US$2.22 billion, which represented an increase of 0.52%, 5.04% and 12% respectively. By the end of July 1999, the U.S.-invested projects reached a total of 27,744, with the agreed-upon investment valued at US$49.8billion and the actual inflow of investment valued at US$23.63 billion. U.S. businesses have invested in such fields as machinery, metallurgy, petroleum, electronics, telecommunications, chemical industry, textile, light industries, food agriculture, medicine, real estate as well in the pilot opening-up sectors of finance, insurances, foreign trade, accounting, freight transport service, etc. Many U.S. businesses are doing very well in China and have decided to invest even more in their operations.


3. High-Level Economic and Trade Exchanges

Thanks to the efforts by the two governments and business communities, great achievements have been made in China-U.S. economic and trade cooperation in recent years. From late October to early November 1997, President Jiang Zemin paid a successful state visit to the U.S., giving a strong impetus to the development of an all-round bilateral relationship, including a sound trade and economic relationship. In June 1998, during President Bill Clinton's state visit to China, China and the U.S. had a broad and in-depth discussion on a wide range of issues, and signed the Agreement on Peaceful Nuclear Cooperation.

In May 1998, the 11th Session of the China-U.S Joint Economic Committee was held in Washington, D.C. At the meeting, both sides had a thorough discussion on international and domestic issues of common interest.) In December 1998, the 12th Session of the China -U.S. Joint Committee on Commerce and Trade was held in Washington, D.C. The two sides exchanged views on a wide range of issues of common interest and reached a series of agreements on trade and economic cooperation in various areas. In March 1999, U.S. Secretary of Commerce Dally led a trans-sectoral infrastructure mission to Beijing, and signed with the Chinese side several agreements and memoranda. From April 6 to 14, 1999, Premier Zhu Rongji paid an official visit to the U.S. Premier Zhu and President Clinton released a joint statement on China's accession to the WTO. Premier Zhu and Vice President Gore jointly chaired the Second Session of the China-U.S. Forum on Environment and Development. The two sides also signed a series of protocols and letters of intention in the areas of agriculture, civil aviation, customs, energy, environment, etc.

On March 7, 2000, the 13th Session of the China-U.S. Joint Committee on Commerce and Trade was held in Beijing. Chinese Minister of Foreign Trade and Economic Cooperation Shi Guangsheng and U.S. Secretary of Commerce William Dally co-chaired the meeting. The two sides exchanged views on such issues of common interest as China's Permanent Normal Trade Relations (PNTR) with the U.S., China's accession to the WTO, trade and investment, sector cooperation, commerce law, etc. The two sides issued a joint statement at the conclusion of the meeting. President Jiang Zemin and Premier Zhu Rongji met with the U.S. delegation.

On October 27, 2000, the 13th Session of the China-U.S Joint Economic Committee was held in Washington, D.C. Chinese Minister of Finance Xiang Huaicheng and U.S. Secretary of Treasury Lawrence Summers co-chaired the meeting. The two sides had a discussion on various issues, such as macro economy & banking, enforcement of international law, economic structure reform, regional economic development, among other matters.


4. Bilateral Talks on China's Accession to the WTO

After the U.S. bombing of the Chinese Embassy in Belgrade on May 8, China-U.S. bilateral talks on China's accession to the WTO was suspended. The U.S. side repeatedly asked to resume the talks. To that end, President Clinton wrote to President Jiang expressing the hope to continue the WTO talks. President Jiang agreed in his return letter. Before the APEC meeting in Auckland, New Zealand, the two countries resumed contacts on the issue of China's accession to the WTO. On September 11, President Jiang Zemin and President Clinton met in the APEC Leaders Informal Meeting in Auckland and exchanged views on China's accession to the WTO. Shi Guangsheng, Chinese Minister of Foreign Trade and Economic Cooperation (MOFTEC) and U.S. Trade Representative Charlene Barshefsky held talks on the WTO issue during the APEC meeting.

(From November 10 to 15, the Chinese Government Delegation headed by Minister Shi Guangsheng and the U.S. Government Delegation headed by Ambassador Barshefsky and Mr. Gene Sperling, Director of the U.S. National Economic Council, held negotiations in Beijing on China's accession to the WTO. The two sides singed on November 15 the Bilateral Agreement Between the Government of China and the Government of the U.S. on China's Accession to the WTO.)


5. Most Favored Nation (MFN) Status

In July 1979, the Chinese Government and the U.S. Government signed the Agreement on Trade Relations between China and the United States, which went into effect in February of the following year, enabling the two sides to give each other MFN status. MFN is a mutually beneficial trade arrangement between China and the U.S. on none-levy of discriminative custom duties on each other's exports on reciprocal basis, which has played a positive role in promoting the bilateral trade relations between the two countries. The political turmoil in the spring of 1989 made the MFN an outstanding issue in China-U.S. relations. Some members of the U.S. Congress submited various kinds of bills each year demanding the members of the removal of the MFN to China or conditioning its extension. In May 1994, the U.S. Government announced the delinking of the annual MFN review with the human rights issue. In July 1998, President Clinton signed the 1998 Reform Act of the U.S. Internal Revenue Agency . According to this act, the term of the "MFN" was changed to "Normal Trade Relations" (NTR). In June 3, 1999, President Clinton announced the extension of China's NTR for another year. On July 27, the U.S. House of Representatives voted down a bill removing China's NTR by 260 to 170. On July 28, Zhu Bangzao, spokesman of the Chinese Ministry of Foreign Affairs, said in his comment that it is wise for the U.S. House of Representatives to vote down the so-called bill of "cancelling China's NTR" and that the U.S. side should go along with the trend of the time and solve the issue of China's permanent NTR at an early date so as to create favorable conditions for the sustained development of China-U.S. economic and trade relations.

Chinese Minister of Finance Xiang Huaicheng and U.S. Secretary of Treasury Lawrence Summers co-chaired the 12th Session of the China-U.S. Joint Economic Committee (JEC) in Beijing on October 25,1999. The two sides discussed international and domestic financial issues and issued a joint statement.

Chinese animals and plants inspection and quarantine authorities sent a team to California, Florida and other U.S. states for preliminary inspection of citrus in January 2000. At the end of February, China National Cereal & Oil Import & Export Corporation sent a team to inspect the western region of the U.S and hold business talks with its U.S. partners. Consequently the team ordered 50,000 tons of U.S. wheat. Vice Minister of Foreign Trade and Economic Cooperation Sun Zhenyu led a mission to the U.S. for the China -U.S. Joint Committee on Commerce and Trade (JCCT) mid-term consultation in late February 2000. The two sides exchanged views on issues such as China's accession to the WTO and U.S. granting Permanent Normal Trade Relations (PNTR) status to China , etc.

Chinese Minister of Foreign Trade and Economic Cooperation Shi Guangsheng and U.S. Secretary of Commerce William Daley co-chaired the 13th Session of the China-U.S. JCCT in Beijing on April 7, 2000. The two sides exchanged views on the PNTR, the development of China's West and other issues, and issued a joint statement.

(China's Accession to the WTO)

From November 10 to 15, 1999, the Chinese Government Delegation headed by Shi Guangsheng, Minister of Foreign Trade and Economic Cooperation and the U.S. Government Delegation headed by Barshefsky, U.S. Trade Representative and Gene Sperling, Director of the U.S. National Economic Council, held negotiations in Beijing on China's accession to the WTO. The two sides singed on November 15 the Bilateral Agreement between the Government of the people's Republic of China and the Government of the United Stades of America on China's Accession to the WTO.

(Permanent Normal Trade Relations (PNTR))

China and the U.S. signed a bilateral agreement on China's accession to the WTO on November 15, 1999. The U.S. Government promised to make all efforts to press to solve the issue of China Permanent Normal Trade Status. On January 10, 2000, U.S. President Bill Clinton announced the establishment of a team consisting of his cabinet members and headed by Secretary of Commerce William Daley and White House Deputy Chief of Staff Steve Ricchetti to coordinate with the Congress and urge the Congress to support the U.S.-China WTO agreement. Thereafter in the State of the Union Address and on many other important occasions, President Clinton urged both Republicans and Democrats in the Congress to support the agreement and grant the China PNTR. On March 8, the Clinton Administration submitted a bill on granting China PNTR.

On May 24, the U.S. House of Representatives passed a bill granting China PNTR by a favorable majority of 237 votes against 197 votes. On September. 19, the U.S. Senate passed the same bill with 83 for, 15 against, and 2 abstentions. On October10, the bill was signed by President Clinton into law. That marked the death of the twenty–year- long practice of examination and debate on granting China the Most Favored Nation (MFN) status on the U.S. side, thus removing the long-existing obstacle to the development of China-U.S. trade relations, and was of major significance for the sustained, healthy and smooth development of the bilateral economic cooperation as well as the overall China-U.S. relationship. With regard to some contents of the act that interfere with China's internal affairs and are harmful to China's national interest, the Chinese side made serious representations to the U.S. side, and explicitly made clear its position of firm opposition.

On July 18, the U.S. House of Representatives voted down a bill put forward by the House Representative Dana Rohrabacher on the cancellation of Normal Trade Relations status to China with a majority votes of 218 against 147, which made that status extended for another year.