177. Memorandum of Record1


  • Secretary Blumenthal Trip to China

On December 19 Secretary Blumenthal discussed plans for his upcoming trip to China with Messrs. Holbrooke, Oksenberg, Fisher, and Hallford. It was agreed that the underlying aim of Secretary Blumenthal’s trip would be to establish a basis for normal economic relations between the U.S. and China. The focus of this effort would be threefold: (1) a claims/asset settlement; (2) an overall framework signifying inten[Page 666]tion to achieve a trade agreement; and (3) a government-to-government structure to provide a forum for continuing discussion on economic matters between the two countries.

Secretary Blumenthal envisaged signing a document that specifically addresses these three objectives by establishing a joint U.S.–PRC Economic Commission that would guide further economic cooperation; announcing agreement on a formula for settlement of the claims/asset problem; and recognizing the intention of both countries to move toward negotiation of Trade Agreement that would provide MFN, access to EXIM credits, etc.

It was further noted that the Blumenthal visit is an integral part of the transition process and needs to be coordinated closely with the preparations for the preceding Teng visit and the following visit of Secretary Kreps.

The timing of the trip will be arranged to coincide with the March 1 establishment of Embassies and exchange of Ambassadors.

The President should use the Teng visit to introduce the purposes of the Blumenthal trip. Secretary Blumenthal’s trip will likewise establish a basis for a Kreps follow-on, in that negotiation of the substance of a trade agreement—MFN, patent and copyright protection, safeguards against market disruption, protection of industrial rights and processes, arrangements for the settlement of commercial disputes, arrangements for trade and tourist promotion, etc., is within the purview of Commerce/STR.

Dick Fisher and Scott Hallford were named as the action officers for Treasury and State respectively to prepare and coordinate the visit.

  1. Source: Carter Library, National Security Affairs, Staff Material, Far East, Oksenberg Subject File, Box 24, Blumenthal 2/79 Trip to China: 12/78–2/79. Confidential. Drafted by Hallford. Copies were sent to Fisher, Holbrooke, Oksenberg, and Sullivan.