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

209. Memorandum of Conversation¹

Washington, January 31, 1979, 8–9 a.m.

SUBJECT

• Summary of Cabinet Members’ Meeting with Chinese Vice Premier Deng Xiaoping

PARTICIPANTS

• United States
• Michael Blumenthal, Secretary of the Treasury
• Bob Bergland, Secretary of Agriculture
• Juanita Kreps, Secretary of Commerce
• Joseph Califano, Secretary of Health, Education, and Welfare
• Patricia Harris, Secretary of Housing and Urban Development
• Brock Adams, Secretary of Transportation
• Andrew Young, U.S. Representative to the U.N.
• Robert Strauss, Special Representative for Trade Negotiations
• Richard Holbrooke, Assistant Secretary of State for East Asia
• Michel Oksenberg, Staff Member, NSC
• Frank Press, Director, Office of Science and Technology Policy
• Richard Chen (Notetaker)
• People’s Republic of China
• Vice Premier Deng Xiaoping
• Vice Premier Fang Yi
• Foreign Minister Huang Hua
• Deputy Foreign Minister Zang Wen Jin
• Chai Tse-min, PRC Ambassador to the U.S.
• Pu Shou Chang, Special Assistant
• Chen Hui, Interpreter

Deng: Welcome, welcome. It ought to be me hosting, but Secretary Blumenthal is very gracious in taking care of the bill for this breakfast. I am very grateful.

Blumenthal: The Secretary of the Treasury usually doesn’t like to take care of bills, but for our special guest, I am glad to do so. Mr. Vice Premier, thank you very much for taking time to meet us this morning. On behalf of all the Cabinet members, I welcome this opportunity to meet with you to exchange views on matters of mutual interest to the United States and China. The Cabinet members represent Departments of the United States Government, and we are all looking forward to the development of the US–China relationship. Some of us have already been to China; some will go in the future. They are all eager to help you and President Carter do things that are of interest to both our peoples. I wish you would tell us what we can do to help you. Of course, I know already that the Departments of Treasury and Agriculture, and the Ambassador to the United Nations have certain contact with your government.

Deng: There are a lot of areas in which all of you here can help us. Since normalization, you are now able to cooperate with us. The Department of Treasury is important. I wish that in your consideration you would not use computers but political consideration. I’m referring to the assets problems and the package deal solution.

Blumenthal: We are trying to solve these problems. You went to the Congress yesterday, and I am sure you know that our solution would require their approval.

Deng: We need to solve these asset problems. Then it will be possible for trade agreements. I hope that we can come to some understanding before you come to China. I have discussed this matter with President Carter, and I have given my thoughts. Have you given yours?

Blumenthal: We are discussing this with your Foreign Minister, and we will discuss it further today. I even anticipate that there might be some announcement on this matter before you leave.

Deng: We were not in agreement yesterday, and we should continue the discussion today.

Blumenthal: Yes, we need to continue working.

Deng: The difference is still too big. The difference should be handled in the form of an interest-free loan that we repay in the future. China, even though poor, is not concerned with this small sum of money.

Blumenthal: I think we may proceed in this direction.

Deng: Among you Secretary and Minister, you can talk about it again. Now on trade, our anticipation is that the amount of trade between the United States and China should not be lower than that of Japan.

Kreps: We should accelerate our pace. Japan’s export is far greater than ours.

Deng: Once the most favored nation issue is resolved, your competitiveness is better than the Japanese.

Kreps: Yes. And we are working with American businessmen. They hope to expand trade with China and we will cooperate with them. Of course, we need to solve these problems first.

Deng: First, we have to take care of letting Chinese goods into the U.S. market, because somebody has raised the issue of how the Chinese are going to pay for all of this. For instance, Taiwan is a small place, and yet it can still do quite a sizable amount of business with you. If our problem is solved, I believe our trade will be ten times greater. If this is an exaggeration, we should at least be able to double that amount.

Kreps: We will strive for ten times greater.

Blumenthal: May I introduce you to Ambassador Strauss, our Special Trade Representative, who works very closely with the Department of Commerce on trade matters. Mr. Strauss, do you have some remarks you wish to make?

Strauss: Mr. Vice Premier, I am the Special Trade Representative. We have begun informal talks on textile issues, and I would like to follow your advice. That is, we should not rely on computers but rather on political consideration.

Deng: I agree with you.

Strauss: President Carter asked me to accompany you during your trip so that I may continue discussion on trade matters.

Deng: That is very good. Thanks.

Blumenthal: I would now like to introduce you to Mr. Bergland, our Secretary of Agriculture.

Bergland: Last October until the beginning of November I was in China.² During that time you were visiting other countries. I had the pleasure of meeting with Chinese leaders in agriculture, foreign trade, and the light industry. We talked about how to help your modernization in agriculture, and we had informal agreement. We had developed schedules for the exchange of agricultural scientists between our countries. In March the Chinese agricultural scientists will come to our country to learn our advanced techniques in agricultural machinery, and they will stay until 1980. They will also learn the advanced irrigation technique and the seeds, feedstocks, and food processing. During the same period the U.S. agricultural scientists will go to China to learn and teach these key areas. The yield of your land is among the highest in the world. However, you need enormous labor to achieve that. In February we will have five groups going to China to work in five areas, i.e., agricultural machinery, bakery design, soybean, feed processing, food processing and cannery, and start the cooperation between China and the United States. They are not marketing people, but rather engineers, scientists, chemists, and management personnel. They will cooperate with your proper departments, and I believe there are areas that we can learn from each other. The Chinese agricultural methods are ancient ones. However, some of your methods are worth learning. For example, plant breeding that renders high yield of grains was developed by the Chinese. One problem that we should be careful of is the modernization of agriculture; that is, how to introduce machinery which reduces labor and at the same time maintain a high yield, because the Chinese land has already had a very high yield. I wish we could share our knowledge. Thank you.

Deng: I hope you will help us as best you can. On agricultural machinery and scientific research related to agriculture after our careful evaluation, we consider yours is better. In China, the per capita arable land is too small. Therefore, during the introduction of mechanization for agricultural modernization, we need to keep in mind how to obtain an even higher yield. These can only be solved by science, in such areas as seeds, fertilizer, and pesticides. In seeds, whether we should have three or four harvests is worth studying. Maybe it is the other way around—you may have one harvest which is better than two, or two better than three, as long as it gives a higher yield. In short, to solve the agricultural problem is one of the most fundamental of our four modernizations. Of course, all four modernizations are inter-related. However, if we do not increase production in agriculture, other modernization would be affected. We hope you can help us.

Blumenthal: We will sign an agreement in the area of science and technology during your visit. In addition to the cooperation of agriculture, it is another fine relation our countries have started. I wonder if Mr. Press, our science advisor to the President, has anything to say.

Press: Mr. Vice Premier, in this area I think that you probably would agree to use computers instead of politics. (Laughter)

Deng: We have mentioned this for many years. It is you who are unwilling (to consider our use of computers). (Laughter)

Press: I commend your choice of science and technology as one of your four modernization programs because it is the foundation of industry and agriculture. It has been the reason of our achievement in this country. We are glad that this agreement will help your modernization as well as be mutually beneficial. The Science and Technology Agreement will lead to commercial activities, particularly in the advanced technology areas. On a global point of view, regardless of whether it is the Chinese scientists or the American scientists who discover a cure for cancer or new sources of energy, the results would be, namely, benefit to the world. Collective intelligence will certainly help earlier achievements of these goals. Even though we are going to sign the Science and Technology Agreement this afternoon, in reality the cooperation between our two countries has already begun. For instance, China has sent over 100 students and scholars to this country, and we will start sending our students to China. In the development of science and technology, I urge your attention on management and organization. Through these considerations, you can better import and fully utilize new technology.

Deng: That is correct. You have touched the key point. Without proper management, regardless of how good the technology, it will not have its usefulness. This is exactly our weakness.

Blumenthal: Mr. Califano is the Secretary of Health, Education, and Welfare. His Department is the biggest Department in our government. He has many areas of interest that he wishes to learn from China; for instance, the public health service that China gives to its vast population at a very low cost.

Califano: Mr. Vice Premier. We have many common interests in the area of education. There are many groups who have visited China from my Department. I wish that we would increase our contact. We also would encourage in the future students to go to China through our grants, and through the Science and Technology Agreement. We are interested in your early education for those children who are under six years old. We are focussing our attention in this area. These children are our future strength. In the area of higher education we have excess capacity and would encourage foreign students to come to our colleges. You have successfully provided public health services to the remote villages. We are also interested in your prevention of contagious disease and general medicine. We have the most advanced medical equipment and technology in the world and we wish to share them with you. Like Mr. Press said a moment ago, management is important in our area. We want to apply technology to our social needs, but in the meantime make sure that it does not incur a great expense. Mr. Vice Premier, our Department has one of the largest computers which helps us better manage and we would also like to share with you. I believe that bio-medicine is included in the Science and Technology Agreement, and we are looking forward to meeting with Mr. Huang Xia Si, Chief of your Academy of Medical Science.

Deng: Yes. I know him. He is one of our better-known scientists.

Califano: I hope that Vice Premier Fang, while visiting Houston, will go to one of our most famous medical facilities, Texas Medical Center. In short, we are looking forward to providing a foundation for a closer relationship for the good of future generations.

Deng: I am willing, and we should cooperate. Recently you sent your advance medical team to provide medical care for Mr. Boumediene. We sent our acupuncture team. (Laughter)

Blumenthal: We have only five minutes left. I wonder if Secretary Harris has any comment?

Harris: Mr. Vice Premier, I was very happy to receive your Mayor’s delegation; our exchange has been instant. We have many problems in common and my Deputy Secretary for Policy and Research will be visiting China. We wish to study the building construction in seismic area. In the trends of development, there are differences between our countries. Our trend is moving from the city to the suburbs and not from the country to the city. Yet we can still exchange our experience.

Deng: That is fine.

Blumenthal: We have already had discussions in the area of transportation, so Mr. Adams, if you will permit, we will not discuss transportation at this meeting.

Ambassador Young, do you have any remarks to make?

Young: Thank you, Mr. Secretary. Mr. Vice Premier, we have been in very close cooperation, especially on the Kampuchea issue. We are grateful for your cooperation on African issues, particularly Namibia. We have spent many hours together during Prince Sihanouk’s visit. We wish to learn from your experience how to deal with Non-Aligned Nations, to be friends with them and not having them end up with the Soviet Union. Prince Sihanouk explained very clearly the Vietnam invasion of Kampuchea, as well as the roles played by the Soviet Union and Cuba in general. We are looking forward to continuing the cooperation between our two countries.

Deng: I am aware that the United States mission to the United Nations has cooperated effectively with our mission. I hope that this will continue.

You have expressed a lot of your aspirations and many comments to me. Let me say a few words to you. I hope all of you present will provide, in your corresponding area, the very best. Of course, you do not have things that are of 1950 vintage. We still have many facilities of that period. I wish that you would provide us the 1970’s rather than the 1960’s. I hope you will provide the late 1970’s rather than the early 1970’s. Do you understand?

Multiple Response: Yes, we understand.

Deng: If you understand that, I thank you.

Blumenthal: Thank you very much, Mr. Vice Premier, for this opportunity to meet with you. I hope your visit is a successful one in which you will see many things of interest to you. I am sure that the American people will welcome you with both arms.

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. Secret. The breakfast meeting took place at Blair House.
2. See Document 156.