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U.S. Department of State

Background Notes: China, November 1996

Released by the Bureau of East Asian and Pacific Affairs.

Official Name: People's Republic of China

PROFILE

Geography

Total area: 9.6 million sq. km. Slightly larger than U.S.; world's third-largest country (after Russia and Canada).
Cities: Capital--Beijing. Other major cities--Shanghai, Tianjin, Guangzhou, Shenyang, Wuhan, Chengdu.
Terrain: Mostly mountainous, high plateaus, deserts in west; plains, deltas, and hills in east.
Climate: Tropical in south to subarctic in north.

People

Nationality: Noun and adjective--Chinese (sing. and pl.).
Population (1995): About 1.2 billion.
Growth rate (1995): 1.05%.
Health (1993): Infant mortality rate--52/1,000. Life expectancy--68 yrs. male, 72 yrs. female.
Ethnic groups: Han Chinese 93%; Zhuang, Uygur, Hui, Yi, Tibetan, Miao, Manchu, Mongol, Buyi, Korean, and other nationalities 6.7%.
Religion: Officially atheist; most important elements of religion are Confucianism, Taoism, and Buddhism; Muslim 2%-3%, Christian 1%.
Language: Standard Chinese (Putonghua, or Mandarin) plus many local dialects.
Education: Years compulsory-- nine. Literacy--78%. Attendance (est.)--80%.
Work force (630 million): Agriculture and forestry--52%. Industry--23%. Services, including commerce--14.6%.

Government

Type: Communist party-led state.
Constitution: December 4, 1982.
Independence: Unification under the Qin (Ch'in) Dynasty 221 BC; Qing (Ch'ing or Manchu) Dynasty replaced by a republic on February 12, 1912; People's Republic established October 1, 1949.
Branches: Executive--president, vice president, State Council, premier. Legislative--unicameral National People's Congress. Judicial--Supreme People's Court.

Economy

GNP (1995): $664 billion.
Per capita GDP: $554.
Annual real growth rate (1995): 9.8%.
Natural resources: Coal, iron ore, crude oil, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminum, lead, zinc, uranium, world's largest hydroelectric potential.
Agriculture: among the world's largest producers of rice, potatoes, sorghum, peanuts, tea, millet, barley, and pork; commercial crops include cotton, other fibers, and oilseeds; produces variety of livestock products; basically self-sufficient in food.
Trade (1995): Exports--$148.7 billion: textiles; garments; telecommunications and recording equipment; petroleum; minerals. Partners--Hong Kong, Japan, EU, U.S., ASEAN. Imports--$132.0 billion: specialized industrial machinery; chemicals; manufactured goods; steel; textile; yarn; fertilizer. Partners--Hong Kong, Japan, EU, U.S., ASEAN.

U.S.-CHINA RELATIONS

The United States seeks constructive relations with a strong, stable, open, and prosperous China that is integrated into the international community and acts as responsible member of that community. The U.S. needs a constructive working relationship with China because:

-- The People's Republic of China (P.R.C.) plays a major role in the post-Cold War world;
-- It is the world's most populous nation (about 1.2 billion people) and the third-largest in land mass (after Russia and Canada);
-- It has nuclear weapons, is a growing military power, and plays a key role in regional stability;
-- As one of the five permanent members of the UN Security Council, China has veto power over Security Council resolutions dealing with key multilateral issues, including international peacekeeping and the resolution of regional conflicts; and
-- China is undergoing extraordinary economic growth and promises to be a preeminent economic power early in the next century.

In the 1972 Shanghai Communique signed during President Nixon's historic trip to China, the United States adopted a "one China policy." This policy acknowledges that Chinese on both sides of the Taiwan Strait maintain that there is only one China and that Taiwan is part of China. In 1979, the United States established relations with the P.R.C. and transferred diplomatic recognition from Taipei to Beijing. A 1979 Joint Communique reflected this change, and Beijing agreed that the American people would continue to carry on commercial, cultural, and other unofficial contacts with the people of Taiwan. The 1979 Taiwan Relations Act, and a third Joint Communique signed in 1982, further defined the U.S.-China relationship as well as unofficial U.S. relations with the people of Taiwan.

In September 1993, President Clinton launched a policy of comprehensive engagement with China to pursue U.S. interests through intensive, high-level dialogue with the Chinese. This policy seeks:

-- Constructive Chinese participation in the UN Security Council and in the resolution of regional conflicts to enhance global peace and security;
-- Active participation by China in multilateral nonproliferation regimes, which is necessary to halt the spread of weapons of mass destruction and their delivery systems;
-- Economic and trade relations with China that meet U.S. economic interests;
-- Respect for internationally recognized standards of human rights and the rule of law in China; and
-- Chinese cooperation on global issues, particularly to combat alien smuggling and narcotics trafficking and to improve protection of the environment.

Regional security remains a key issue in the U.S.-China relations. The United States has a long-term interest in peace and stability in Asia; there are approximately 100,000 American soldiers stationed in the Asia-Pacific region. China plays a key role in regional security issues, including resolving the North Korean nuclear issue, reaching a peaceful settlement of the territorial dispute over the South China Sea and Spratly Islands, and building democracy and peace in Cambodia. The United States supports China's active participation in evolving regional security institutions, most prominently the ASEAN (Association of Southeast Asian Nations) Regional Forum and the Northeast Asia Security Dialogue.

With regard to other nuclear and security issues, the United States and China have agreed to work together to try to achieve an international convention banning the production of fissile materials for nuclear weapons or other nuclear explosive devices. China is a signatory to the Nuclear Non-Proliferation Treaty (NPT), signed the Comprehensive Test Ban Treaty in 1996, and has banned the exports of intermediate and long-range missiles. In May 1995, China voted in favor of indefinite extension of the NPT, a top priority in U.S. foreign policy. The United States continues to urge China to stop all nuclear cooperation with Iran's nuclear power generation program; become a member of the Missile Technology Control Regime (MTCR) to further restrict transfers of missile components and technology; and control strictly exports of chemical and biological weapon precursors.

Trade and Investment

China's economy will soon be among the world's largest. The country has a quarter of the world's population--a vast pool of potential consumers for U.S. products and services--and market-oriented reforms have recently helped generate very rapid economic growth. The World Bank has predicted that China's economy will grow 8%-10% per year until the year 2000 and has estimated that China's economic output will reach $10 trillion by the middle of the next century.

With this rapid economic expansion, China's market will be increasingly important for United Sates commercial interests. The U.S. currently grants China most-favored-nation trading status (see Government and Political Conditions). In some sectors, access to the Chinese market has become a critical element of U.S. producers' growth strategies. U.S.-China trade has continued to climb, reaching $57.3 billion in 1995--up from $48.1 billion the previous year. Recently, however, China's exports to the U.S. have accounted for most of the growth in bilateral trade. The U.S. merchandise trade deficit with China was about $33.8 billion in 1995, exceeded only by the U.S. bilateral trade deficit with Japan. In order to build a balanced and sustainable bilateral trading relationship, it will be essential to obtain greater market access for U.S. products and services in China

Seeking to participate in China's rapid economic growth, major multinational corporations from around the world have shown great interest in investing in China. The United States is the third-largest source of such investment, after Hong Kong and Taiwan. Globally, China is second only to the United States as recipient of foreign direct investment.

The increasingly important U.S. economic and trade relations with China are an important element of the Administration's "comprehensive engagement" strategy. In economics and trade, there are two main elements to the U.S. approach.

First, the United States seeks to fully integrate China into the global, market-based economic and trading system. China's participation in the global economy will nurture the process of economic reform and increase China's stake in the stability and prosperity of East Asia.

Second, the United States seeks to expand U.S. exporters' and investors' access to the Chinese market. As China grows and develops, its needs for imported goods and services will grow even more rapidly.

China is now in its 10th year of negotiations for accession to the World Trade Organization (WTO)--formerly the General Agreement on Tariffs and Trade (GATT). To gain WTO entry, all prospective WTO members are required to comply with certain fundamental trading disciplines and offer substantially expanded market access to other members of the organization.

Securing China's accession to the WTO on these terms will contribute to China's economic transformation, spur economic growth in the U.S. and other WTO-member economies, and support the integrity of the international trading system. The United States continues to work with China and other WTO members toward a commercially viable accession protocol.

Many major trading entities--among them the United States, the European Union, and Japan--have shared concerns with respect to China's accession. These concerns include efforts to obtain satisfactory market access offers for both goods and services, full trading rights for all potential Chinese consumers and end-users, nondiscrimination between foreign and local commercial operations in China, the reduction of monopolistic state trading practices, and the elimination of arbitrary or non-scientific technical standards.

The United States and China also maintain a very active dialogue on bilateral trade issues. In the past year, the two sides have concluded agreements on the protection of intellectual property rights (IPR), textiles, and satellite launches.

U.S. and Chinese negotiators meet regularly to review progress in implementing these and other important commercial agreements, such as the bilateral agreement on enforcement of intellectual property rights. In areas where China has failed to comply with its international commitments, the Administration has exercised its legislative authority to conduct investigations and, when necessary, propose appropriate trade sanctions. These efforts will not only expand the commercial opportunities open to U.S. exporters in China but also contribute to China's efforts to bring its trade regime into compliance with the WTO and with other international commercial standards.

The United States continues to expand its export promotion efforts and its scientific and technical exchange programs in China. The U.S. and China recently renewed their Bilateral Science and Technology Agreement for another five years. Last April, the two countries held their first Sustainable Development Forum which is intended to expand cooperation in the environmental field. The Joint Commission on Commerce and Trade, hosted by the Commerce Department in September, discussed expansion of long-term economic and business ties between China and the United States.

The U.S. economic relationship with Hong Kong is closely tied to U.S.-China relations. Under the 1984 Sino-British Joint Declaration, Hong Kong will become a Special Administrative Region (SAR) of the P.R.C. on July 1, 1997. U.S. concerns over this transition include economic and investment issues. The United States has substantial economic and social ties with Hong Kong, with an estimated $8 billion to $10 billion invested there. There are 900,000 U.S. firms and 30,000 Americans resident in Hong Kong. The United States is Hong Kong's second largest market--importing $10.2 billion in 1995--and Hong Kong is America's 14th-largest trading partner--$14.2 billion in U.S. exports in 1995.

The United States and China both are members of the Asia-Pacific Economic Cooperation forum (APEC). At the November 1994 APEC summit in Bogor, Indonesia, President Clinton, Chinese President Jiang Zemin, and the other APEC leaders pledged to meet the goal of free and open trade and investment in the Asia-Pacific region by the year 2020.

Principal U.S. Embassy Officials

Ambassador--James R. Sasser
Deputy Chief of Mission--William C. McCahill
Political Officer--William A. Stanton
Economic Officer--Robert Ludan, Acting
Commercial Officer--Ying Lam

The U.S. embassy in China is located at Xiu Shui Bei Jie 3, 100600, Beijing; tel. [86] (10) 6532-3831; fax [86] (10) 6532-6422.

GOVERNMENT AND POLITICAL CONDITIONS

China has been a one-party state controlled by the Chinese Communist Party (CCP) since 1949. The P.R.C. was founded that year following the communist victory in a civil war with the ruling Nationalist Chinese; the Nationalists fled to Taiwan.

China is ruled by a CCP Politburo and a shrinking circle of retired but still powerful senior leaders such as Deng Xiaoping. Despite continued official adherence to Marxism-Leninism, in recent years economic decision-making has become less ideological, more decentralized, and increasingly market-oriented. The P.R.C. Government position is that China is developing a "socialist market economy with Chinese characteristics."

The Chinese Government has always been subordinate to the CCP; its role is to implement party policies. The primary instruments of state power are the State Council, an executive body corresponding to a cabinet; and the National People's Congress (NPC), a legislative body. Members of the State Council include the premier, a variable number of vice premiers, nine state councilors, the heads of ministries, and the heads of other commissions and agencies attached to the State Council.

Under the Chinese constitution, the NPC theoretically is the state's leading government body. Members are elected by secret ballot for a five-year term by provincial-level people's congresses. It meets annually for about two weeks to review major new policy initiatives presented to it by the State Council after endorsement by the Communist Party's Central Committee. Although the NPC generally approves these initiatives, NPC committees debate in closed sessions, and changes may be made to accommodate alternative views.

Although traditionally not considered independent of the party and government, China's judiciary continues to undergo rapid reform. The drive to establish a functioning legal system first began in 1979. China's 1982 constitution--adopted by the NPC--emphasizes the rule of law under which even party leaders are held accountable. A mainstay of China's legal system is the use of mediation committees, groups of citizens who resolve about 90% of civil disputes and some minor criminal cases at no cost to the parties. Trained lawyers and legal aides remain scarce, complicating delivery of legal services in the courts. An Administrative Procedure Law allows citizens to sue officials for abuse of authority or malfeasance. The highest court of appeal for civil or criminal cases is the Supreme People's Court.

Fundamental human rights provided for in China's 1982 constitution are frequently ignored in practice, particularly when the citizens challenge the CCP's political authority. Those charged with political offenses--as opposed to common crimes--are frequently treated harshly and arbitrarily. Freedom of association, religion, speech, and the press are severely restricted in practice.

Following the P.R.C. Government's suppression of the democracy movement at Tiananmen Square in June 1989, the U.S. and other nations imposed a number of sanctions against China. Some of these Tiananmen-era U.S. sanctions remain in place. The Trade Act of 1974--specifically, the Jackson-Vanik amendment--requires an annual review of China's emigration record for China to retain its most-favored-nation trading status (MFN). This annual review remains in effect and, since 1990, has been the focus of efforts in both the executive and legislative branches to assess our overall relationship with China, including China's performance on human rights issues.

In May 1993, President Clinton signed an Executive Order tying renewal of China's MFN in 1994 to progress in several human rights areas. Although China did not achieve "overall significant progress" in certain areas identified in the Executive Order, the President decided to renew China's MFN status on May 26, 1994. He noted that China met the two mandatory requirements on immigration and prison labor.

Taking into account these results and other vital U.S. interests, and convinced that the time had come for a new approach, the President decided to de-link the annual MFN process from China's human rights performance. At the same time, the President decided to adopt a new human rights strategy, maintaining human rights concerns as an essential part of our engagement with China but in a broader context. The President also ordered a several additional steps to support those seeking to foster the rule of law and a more open civil society in China.

The United States and China have conducted seven rounds of bilateral dialogue on human rights issues since October 1993. The United States continues to press China on core human rights concerns: release of prisoners of conscience and medical parole cases; resumption of negotiations with the Dalai Lama on protecting the distinctive heritage and culture of Tibet; and concluding an agreement with international humanitarian organizations to permit visits to Chinese prisons and prisoners. In addition, U.S. concerns over Hong Kong's transition to Chinese rule in 1997 include ensuring continued respect for human rights and the rule of law in Hong Kong.

The United States has been disappointed with China's progress on human rights since MFN renewal in May 1994. The United States continues to urge China to adhere to internationally recognized human rights standards.

Principal Officials

President and Chinese Communist Party General Secretary--Jiang Zemin
Vice President--Rong Yiren
Premier of the State Council--Li Peng
Minister of Foreign Affairs--Qian Qichen
Ambassador to the U.S.--Li Daoyu
Ambassador to the UN--Qin Huasun

China maintains an embassy in the United States at 2300 Connecticut Ave. NW, Washington, DC 20008; tel. 202-328-2500/2501/2502.

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides Travel Warnings and Consular Information Sheets. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Consular Information Sheets exist for all countries and include information on immigration practices, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the subject country. They can be obtained by telephone at (202) 647-5225 or by fax at (202) 647-3000. To access the Consular Affairs Bulletin Board by computer, dial (202) 647-9225, via a modem with standard settings. Bureau of Consular Affairs' publications on obtaining passports and planning a safe trip abroad are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at (404) 332-4559 gives the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280, price $14.00) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S. (for this country, see "Principal Government Officials" listing in this publication).

Upon their arrival in a country, U.S. citizens are encouraged to register at the U.S. embassy (see "Principal U.S. Embassy Officials" listing in this publication). This may help family members contact you in case of an emergency.

Further Electronic Information

Consular Affairs Bulletin Board (CABB). Available by modem, the CABB provides Consular Information Sheets, Travel Warnings, and helpful information for travelers. Access at (202) 647-9225 is free of charge to anyone with a personal computer, modem, telecommunications software, and a telephone line.

Department of State Foreign Affairs Network. Available on the Internet, DOSFAN provides timely, global access to official U.S. foreign policy information. Updated daily, DOSFAN includes Background Notes; Dispatch, the official weekly magazine of U.S. foreign policy; daily press briefings; directories of key officers of foreign service posts; etc. DOSFAN's World Wide Web site is at ; this site has a link to the DOSFAN Gopher Research Collection, which also is accessible at gopher://gopher.state.gov or gopher://gopher.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on a quarterly basis by the U.S. Department of State, USFAC archives information on the Department of State Foreign Affairs Network, and includes an array of official foreign policy information from 1990 to the present. Priced at $80 ($100 foreign), one-year subscriptions include four discs (MSDOS and Macintosh compatible) and are available from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 37194, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or fax (202) 512-2250.

Federal Bulletin Board (BBS). A broad range of foreign policy information also is carried on the BBS, operated by the U.S. Government Printing Office (GPO). By modem, dial (202) 512-1387. For general BBS information, call (202) 512-1530.

National Trade Data Bank (NTDB). Operated by the U.S. Department of Commerce, the NTDB contains a wealth of trade-related information, including Country Commercial Guides. It is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more information.

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