Foreign Relations of the United States, 1977–1980, Volume XIII, China

190. Summary of Conclusions of a Policy Review Committee Meeting¹

Washington, January 8, 1979, 10:05–10:45 a.m.

[Omitted here is the list of attendees of the meeting, which is printed with the meeting minutes, see Document 189. There is one discrepancy between the two lists: the minutes do not list Aaron as a participant, whereas the list accompanying this Summary of Conclusions does.]

SUMMARY OF CONCLUSIONS

Secretary Blumenthal chaired this meeting today to access the issues in developing an expanded economic relationship with the PRC:

—Settlement of Claims/Asset Issue. The President will be encouraged to broach this subject with Teng Hsio-p’ing, and Secretary Blumenthal will push the issue further during his trip to China. Secretary Blumenthal and Secretary Vance will initiate consultations on the Hill in order to assess Congressional sentiment as to an equitable solution to a thorny issue. It is likely that some Chinese contribution will be necessary in order to have a package that will sell on the Hill.

— MFN and Government Credit for the PRC. The meeting identified this as one of the major emerging issues in our China relationship. Secretaries Vance, Kreps, and Blumenthal all feel it would be unwise for the Administration to either seek a waiver of Jackson–Vanik or to seek Congressional legislation that would place China in a favored position as far as MFN and credit is concerned. However, in the light of SALT and MTN, it is not clear that the Hill would be receptive to modification of Jackson–Vanik for both the Soviet Union and China. We face a conundrum: the Chinese are unlikely to enter into a trade agreement with us, as they have with Japan and Western European countries, without MFN and credit; the Administration is unlikely to extend MFN and credit without being able to do so toward the Soviet Union as well; yet the Hill may be more willing to extend MFN and credit unilaterally to China. We will begin consultations on the Hill on this issue immediately, in the first instance with Secretaries Vance and Blumenthal consulting the pertinent Committee Chairman. We want to retain control over this issue, and not lose initiative to those on the Hill who would be willing to see our trade policy adopt a “China tilt.”

The PRC meeting touched more briefly on the desirability of reaching a civil aviation agreement, on Commerce developing business facilities in the PRC, on Ambassador Strauss’ initial discussions with the Chinese on January 22 on PRC textile exports to the U.S., and on the lack of ExIm funding for China trade, should the possibility open up.

State will coordinate with the other pertinent agencies to develop talking points on all of these issues for the President’s meeting with Vice Premier Teng.

1. Source: Carter Library, National Security Affairs, Staff Material, Far East, Oksenberg Subject File, Box 45, Meetings: 1/1–9/79. Confidential. A January 10 covering memorandum from Dodson to Aaron is ibid. For the minutes of the meeting, see Document 189.