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

208. Memorandum of Conversation¹

Washington, January 30, 1979, 9:40 a.m.

SUBJECT

• Summary of the President’s Third Meeting with the People’s Republic of China Vice Premier Deng Xiaoping re: Economic Relations, Claims Assets, Immigration, Technology Transfer, Civil Aviation and Maritime Agreement, Student Exchange, Journalists, Counsular Arrangements, Refugees, Nuclear Testing, Taiwan, Communication, SALT and Taiwan

PARTICIPANTS

• President Jimmy Carter
• Vice President Walter Mondale
• Secretary of State Cyrus Vance
• Secretary of Treasury Michael Blumenthal
• Dr. Zbigniew Brzezinski, Assistant to the President for National Security Affairs
• Leonard Woodcock, U.S. Ambassador to the PRC
• Richard Holbrooke, Assistant Secretary of State for East Asian and Pacific Affairs
• David Aaron, Deputy Assistant to the President for National Security Affairs
• Jody Powell, Press Secretary
• Hamilton Jordan, Assistant to the President
• Robert Lipshutz, Assistant to the President
• Jerrold Schecter, Staff Member, NSC
• Frank Press, Director, Office of Science and Technology Policy and Science and Technology Advisor to the President
• Michel Oksenberg, Staff Member, NSC
• Charles Freeman, Director, PRC Desk, Department of State
• Vice Premier Deng Xiaoping
• Vice Premier Fang Yi
• Foreign Minister Huang Hua
• Ambassador Chai Zemin
• Vice Foreign Minister Zhang Wenjin
• Acting Head of Department of American and Oceanian Affairs Zhu Qizhen
• Head of the Department of Protocol Wei Yongqing
• Pu Shouchang, Member, State Planning Commission
• Lien Zhengpao, Notetaker

President Carter: Mr. Vice Premier, the visit so far for us has been one of pleasure, gratification, and delight. Our whole nation was moved last night with emotion and friendship because of the obviously good relationship that exists.²

Vice Premier Deng: And we are indeed very grateful, Mr. President, to you and to the American Government for having such a good and cordial arrangement. We had indeed a very happy time yesterday. Not only yesterday, but the day before yesterday was a happy day.

Economic Relations

President Carter: One of the immediate benefits to both our countries will be to establish normal trade relations. This morning perhaps we can spend our time together discussing some of the bilateral issues which will lead to the maximum benefit of such relations. The first obstacle that must be overcome is to resolve the claims and assets question, a matter that has been under discussion for several years. I think that both sides need to maintain a flexible and constructive approach if an early resolution of these differences is possible.

Claims/Assets

Vice Premier Deng: We can discuss this now.

Secretary Vance: Mike, you might want to say a few words on this.³

Vice Premier Deng: We have noted that you have said that both sides should take a constructive and flexible approach to this problem.

President Carter: I think the many technical details could best be discussed at another session. Secretary Blumenthal will be representing our government and will be working on this even before he comes to China next month. Also, this claims problem is related to an overall trade agreement. We think it would be advisable to establish, in addition to resolving claims, a commission representing both nations to take maximum benefit from all trade questions, and I have asked Secretary Blumenthal to be the Chairman of this commission from our side. So I think we can let the Secretary and your representatives discuss the details of the claims question. That might be better than to take our time this morning.

Vice Premier Deng: I do not think there is much difficulty on this matter. It will not be difficult to solve this assets question. We also have the practice of establishing a joint commission with other countries so we agree to your suggestion of this economic commission. Fine. On your side the co-chairman will be Mr. Blumenthal of the Treasury Department, and our side will be our Minister of Finance Mr. Chang Ching-fu. Frankly speaking, we also have the idea that we could sign a long-term trade agreement, such as the long-term trade agreement we reached with Japan, at least equal in magnitude, in volume of trade.

President Carter: That is very encouraging. We hope to have maximum trade with China also. The trade opportunities will be greatly affected by Congressional decisions, and your meetings with the leaders of Congress will be very important in determining the flexibility we have in trade with China.⁴

Immigration

Vice Premier Deng: On the amendment supported by Senator Jackson, it really has nothing to do with China. The Jackson amendment demands that the Soviet Union allow free emigration.⁵ Would you like to import ten million Chinese? There is no question like that for China. We have a number of Chinese who are moving to Hong Kong every year. The Hong Kong authorities are complaining that too many Chinese are going to Hong Kong. In response to such questions by the Hong Kong authorities, we have imposed a number of restrictions. And indeed if Chinese were to swarm into the United States like a tidal wave, I do not think you would agree to it either. And the Foreign Minister says Canada faces a similar problem. At first the Canadian Government wanted us to let more people go to Canada to join their families. Now they say too many are coming and they want to put restrictions on people coming to Canada. I can very frankly tell you, Mr. President, that in the past, at the time of the Gang of Four, indeed we had very strict restrictions with regard to people who wanted to emigrate. This is now changed, as has the question of intermarriage of Chinese and people of other nationalities, and allowing Chinese to visit families abroad. All such questions have been solved.

Another change in our policy is with regard to people whom we considered in the past to have betrayed the country in escaping abroad. Our policy has changed toward these people as well. The Dalai Lama is one case. If he wants to come back to China, we are ready to welcome him. For instance, a Chinese musician who ran away from China has expressed some desire to come back. We would welcome him back to China to remain, or for a short visit, or just to come back for some musical performances.

Claims and Assets

President Carter: One point I wish to make clear on the claims and assets question is that the blocked assets may not be adequate to cover the claims. This is one of the questions we need to pursue—Secretary Blumenthal and the Finance Minister.

Vice Premier Deng: With regard, however, to specific items, I do not think that this question would affect the specific items. For instance, General Motors in considering various corporate projects discussed with us only on the specific items of cooperation without discussing this claims-assets problem. Also Pan Am; the question of payment is now considered to be solved through the profits gained by tourism. As for the individual items, they can be considered solved in that way. With regard to payments, it could be done either by the means of compensatory trade or means of joint investment or even we could consider having some U.S. businessmen opening up some factories in China. We would welcome all that.

President Carter: That may not be adequate, but I think it is best to just leave it as a question not yet resolved, and let the negotiators pursue it.

Vice Premier Deng: I would like, however, just to say a few words in principle; that is, the discrepancy in the assets frozen by the two sides is not so large. For instance, my understanding is that we took over around $200 million worth of your properties and our property, which has been frozen in the States, is something around $70 or $80 million. The discrepancy is only around $100 million or so. Under those circumstances maybe we could even solve this question today.

If the discrepancy in the assets is not so big, maybe we can consider the following methods: U.S. property which we confiscated can be looked upon as an interest-free loan which we will return to you within a certain period of time, or maybe with a token interest. Anyway, we should not have such a question affecting development of trade between our two countries, but as for specific details we can let them consider them.

President Carter: I would like to say the result of that would be very beneficial and perhaps before another meeting tomorrow there could be some resolution of the difference at least in principle and perhaps we can set that as a goal.

Vice Premier Deng: I believe there will be no difficulties.

President Carter: Who can represent you in discussions with Mr. Blumenthal?

Vice Premier Deng: If Secretary Blumenthal will be your representative, then Foreign Minister Huang Hua will be our representative.

Technology Transfer

President Carter: Very fine. We have some restrictions, as you know, on the export of high technology items, but we will make these restrictions under our existing law as flexible as possible. If an advanced computer, for instance, is certified by our Secretary of Commerce, Mrs. Kreps, to be used for civilian purposes only, then there would be no problem with the sale of this type of equipment.

Vice Premier Deng: It is really a question of interpretation.

President Carter: Sure. And if there is a doubt, then instead of a direct sale other possibilities are available, such as a long-term lease from the computer manufacturer. We will do everything we can to make this restriction flexible.

Vice Premier Deng: This is also acceptable to us, this method.

Civil Aviation and Maritime Agreement

President Carter: Another item we need to resolve as soon as possible is the question of civil aviation. We would like to have maximum opportunity for travel to China. From our perspective, it is necessary to have multiple airlines and not just one, and we would of course like to have the air fares as low as possible to encourage more travel. We also look forward to a maritime agreement, if China believes it would be in the interest of both nations to encourage the use of ships to transport goods between our two countries.

Vice Premier Deng: I can reply right away that we agree to sign an aviation agreement and a maritime agreement.

President Carter: Very good.

Vice Premier Deng: But probably there is no time to do it this time.

President Carter: Perhaps when Secretaries Kreps and Blumenthal come to China we can have the basic work done to conclude an agreement.

Vice Premier Deng: I agree.

Student Exchange

President Carter: We are also quite pleased at the resolution of the problem concerning exchange of students, and I want to express my thanks to you for that. We want to have maximum opportunity to have student exchange, which will greatly enhance our science and technology cooperation in the future.

Vice Premier Deng: But at the present time, there can be no real reciprocity as yet on the exchange of students. We lack the conditions to accept a great number of students at the present time, but we will create the conditions for American students to come to China.

President Carter: We hope you will encourage our students to come to your country not only for academic instruction and in advanced sciences but also to learn more about your people and your country.

Vice Premier Deng: But when a student comes to China, there must be some minimum living conditions available, and we do not have enough of that so we still need at least a short period of transition before we can accept more.

President Carter: One thing that concerns us, once you decide how many of our students can come to China: We want you to be flexible and not exclude some students unless it is absolutely necessary.

Vice Premier Deng: We adopt an open attitude, and these students will not be affected by their political or ideological beliefs. We have no worries of being influenced by your social system or your ideology, just like you are not expressing any worries about our students expressing their point of view and ideology.

President Carter: I think both our nations are committed enough to our ideologies not to be concerned about the students’ attitudes.

Vice Premier Deng: Anyway, our students in the United States will not be able to play a subversive role, nor will your students in China.

Journalists

President Carter: We would also like to have maximum exchange of journalists. I would be very pleased to send you 10,000 journalists.

Vice Premier Deng: That would be a bit too much.

President Carter: But they have a great commitment to maximum freedom of reporting without censorship and with an ability to report accurately the news from both sides. We will do everything we can to give this freedom to Chinese journalists who come here, and we would like a spirit of reciprocity.

(Vice Premier Fang Yi and Vice Minister Chang Wen-chin converse with the Vice Premier.)

Vice Premier Deng: The Vice Premier was saying that there will be no such limitations and Vice Minister said that only trouble now is because of limited conditions travel is still not possible to every part of the country at the present time. But gradually we will create conditions for broader travel. We will have no censorship. For instance, you may know that there is the so-called “democratic wall.” There many views are expressed and reporters report on it, and we are not worried about such reports. But I would like to advise our American friends to realize that some of those posters express views of only a few individuals. That does not matter. It will not affect the overall situation.

President Carter: We have the same circumstances here.

Vice Premier Deng: You have many more such.

Consular Arrangements

President Carter: We observe with great interest the freedom of expression. I understand that consular arrangements have been concluded.

Secretary Vance: We will be signing that tomorrow.⁶

President Carter: We would hope that our Embassy could expand to accommodate the increase of trade and relations with your country. We recognize that you have trouble with space, but we hope you will make space for more people on our ambassadorial staff and hope that your government will assure that they have adequate living space.

Vice Premier Deng: Ambassador Woodcock mentioned that to me personally. And I agreed that we will think of ways to solve this problem.

President Carter: If you can satisfy Ambassador Woodcock, then I will be satisfied.

Vice Premier Deng: Of course that is still difficult. But anyway we will think of a way.

Refugees

President Carter: Is there any possibility of China accepting more refugees who are leaving Vietnam who are Chinese?

Vice Premier Deng: This is a complicated question because the numbers are too great. You know that at present we do not have full employment. And for us it is quite a heavy burden. The Foreign Minister says that already 200,000 refugees of Chinese descent have come to China, including some of them who are even Vietnamese. This question not only concerns Vietnam; in Southeast Asia as a whole, we have ten million people of Chinese descent. A lot of these refugees are really the bad elements in Vietnam—those who do not work or even hooligans—and those who really do honest work are left behind. And those refugees who escape or are driven out come with practically no property whatsoever—just the clothes on their back and maybe one shirt. So we have a strong reaction to this.

President Carter: We have accepted about 180,000 of the refugees, and Malaysia and other countries are overrun with refugees who leave Vietnam and cannot go back.

Vice Premier Deng: That is a big problem.

President Carter: We will take even more this year and sincerely hope that you would establish some strict requirement to accommodate a substantial number of these refugees if they meet standards you establish.

Vice Premier Deng: At the beginning we did accommodate great numbers of refugees. In fact, even more than the number you mentioned. But it is really very difficult for us to accommodate more. And what is more, we are worried about a chain reaction.

President Carter: I would like to emphasize my encouragement to China to cooperate in accepting these refugees, many of whom are responsible and substantial business leaders and trained persons. If you do not accept any of them, it means the rest of us have to accept all of them, and I would like you to be as flexible as possible on this.

Vice Premier Deng: But these businessmen, when they have left Vietnam, they have been completely deprived of all their property. But we are ready to accept some of such businessmen with managerial abilities. The Foreign Minister said it is also a question of nationality. Many of these people are Vietnamese citizens, who lived in Vietnam for generations, but yet they have been driven out in great numbers.

President Carter: We face the same problem, and we would like to face it together with you.

Vice Premier Deng: We will study this problem. We have already accepted more than 200,000 of them and some who came to China now want to leave China.

Nuclear Testing

President Carter: I understand. One other sensitive matter is the nuclear testing that you conduct in the atmosphere. Each time you conduct a test, the nuclear fallout comes on my people. If it is possible for you to conduct such tests underground as we ourselves do, this will be a very fine announcement that could be made. I know that you have the technology to do so, and this is a very serious symbolic problem for our people when the fallout comes.

Vice Premier Deng: For the time being, that is still difficult; but our atmospheric tests are very limited.

President Carter: Dr. Press is an expert on this subject and, within the bounds of our national security laws, he would be glad to consult with you on how the change to underground tests might be made more easily.

Vice Premier Deng: We may consult with Dr. Press, but at the present time we are not able to commit ourselves not to conduct atmospheric tests. If we were to talk reason on this matter, we could say that the Soviet Union and the United States have conducted so many atmospheric tests whereas the number of tests we have conducted is very small. But we would be prepared to have consultations with Dr. Press.

President Carter: It is a problem for us when Chinese radioactivity falls on our people, and we want you to know that.

Vice Premier Deng: If you are able to supply us with some technical help in this respect, maybe it could be solved easier. Anyway, we will consult on this problem.

Taiwan

President Carter: The only other problem I have on my list concerns Taiwan. I think we have negotiated long enough to understand the attitude of each other and as far as our public approval for normalization and the approval by the Congress of necessary legislation, any reference to patience or peaceful resolution on your part to the Congress or to the public would be very helpful. Just to repeat the statements that the Vice Premier has made since our announcement would be completely adequate. They are very fine, very constructive statements.

Vice Premier Deng: What I have already said I said from a responsible position—as an authoritative spokesman—and I will repeat it. But it also includes what I have said, namely that we Chinese cannot hide that Taiwan is part of China and in saying that it is really beneficial to a peaceful resolution of the problem. I believe in this respect both the American Government and the Japanese Government can make a contribution; that is, to urge Taiwan authorities to engage in negotiations with our government. Here we have a wish we would like to express to the American Government. Please do not create a condition under which Chiang Ching-kuo could thrust his tail to the skies and think he has nothing to fear and thereby prevent negotiations. Because if Chiang Ching-kuo simply refuses to conduct negotiations with us, what else can we do?

I said previously that there are two conditions under which we will be forced not to use peaceful means. One situation is when the Taiwan authorities just absolutely refuse to talk with us. We believe that the methods of reunification which we have put forward and the various methods given were very magnanimous. But if under those circumstances they still will not negotiate with us, what choice do we have? Of course, we do not mean that such changes will take place in one or two years time. But if such a state of affairs continues over a long period of time then we cannot consider other possibilities. Another situation would be for the Soviet Union to go into Taiwan. I think if that were to take place then maybe both our countries will work together to solve the problem. Just those two circumstances.

And then with regard to providing weapons to Taiwan authorities. With regard to those you have already promised to deliver, there is no problem with completing your commitment. But after that we hope the American Government will be very prudent. As for whether the weapons are defensive or offensive, there is really no clear line of demarcation. Regardless of what defensive weapon it might be, it would not be difficult for them to cross Taiwan Straits.

President Carter: There is a great difference in F–5 and F–15 airplanes. We intend to be prudent.

Vice Premier Deng: We just want to express our wish. Anyway, both our sides have openly expressed our positions on this matter and will continue to express such a position.

Communication

President Carter: One thing I would like to suggest—in the future, after your visit is concluded, I would like to exchange private letters or communications with you if a problem arises that would be of concern. It would be helpful for me to have a channel of communication with you.

Vice Premier Deng: Very good. And then there is, of course, Ambassador Woodcock and Ambassador Chai Zemin.

President Carter: Very good, and I hope you will extend this invitation to communicate directly to Premier Hua Guofeng. Are there other items that you would like to stress this morning?

Vice Premier Deng: I do not have anything more. And I believe that our discussions have been very frank.

President Carter: I am very pleased.

Vice Premier Deng: And we could also say that our discussions have been cordial. But, of course, it is impossible for us to be completely unanimous on every question. You cannot expect that. But we could say, as you yourself have said, that we have many common points of global strategy and global interest.

SALT and Taiwan

President Carter: I think the discussions have been frank, cordial, and very constructive. I look forward to seeing you again tomorrow for the signing cermonies. I am sure you will enjoy your visit to Congress and the people of Atlanta, Houston, and Seattle. I remind you of the two sensitive issues—one concerns SALT, and you said you had no objection to SALT as being necessary; the other concerns Taiwan and your emphasis on patience even if they do not negotiate would also be very helpful. Those were the two items where your comments to the Congress would be very helpful for our friendship.

Vice Premier Deng: With regard to the first question, we will say that there is nothing to be said against negotiations between the U.S. and the Soviet Union but at the same time we would like to say that we do not believe that such negotiations will be able to restrain the Soviet Union. If I were to say something more, I would say that it was really to put restraint on hegemonism, to hold back hegemonism we need to do some down-to-earth things. With regard to Taiwan, I will reiterate that we will adopt a fair and reasonable policy and will try our very best to use peaceful means to solve the Taiwan question. And on this question we have patience, but this patience cannot be unlimited. You say we Chinese have two hats, just like Americans. We all have two hats.

President Carter: Thank you.

1. Source: Carter Library, National Security Affairs, Staff Material, Office, Outside the System File, Box 47, China: President’s Meeting with Vice Premier Deng: 1–2/79. Top Secret; Sensitive; Eyes Only. According to the President’s Daily Diary, the meeting took place in the Oval Office and lasted until 10:52 a.m. (Carter Library, Presidential Materials) Carter received talking points from Brzezinski before the meeting. (Carter Library, National Security Affairs, Brzezinski Material, VIP Visit File, Box 2, China: Vice Premier Deng Xiaoping, 1/28/79–2/1/79: 1/25/79 Briefing Book [III])
2. For the text of the toasts by Carter and Deng at the state dinner the evening of January 29 and their remarks after a performance at the Kennedy Center, which were broadcast live on nationwide television, see Public Papers: Carter, 1979, pp. 192–195.
3. Vance is referring to Michael Blumenthal.
4. Later on January 30, Deng met privately with Senator Byrd and attended a luncheon with 85 Senators. (“Teng, on Capitol Hill, Says Peking Must Keep Taiwan Options Open,” The New York Times, January 31, 1979, p. A1)
5. See footnote 4, Document 189.
6. See Document 210.