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Review of 2001 Friday, 28 December, 2001, 17:41 GMT
China's comeback year
Chinese President Jiang Zemin and US President George W Bush
Old arguments have been put on the back burner
By Rupert Wingfield-Hayes in Beijing

Twelve months ago, relations between the United States and China looked set for some rough times.

With hindsight, the picture is very different.

President Bush capped off the year on Thursday by granting China permanent normal trade status with Washington.

Mr Bush hailed the move as the final step in normalising US-China relations, a far cry from the White House rhetoric at the beginning of the year.

Bad omens

In January, as the new President was sworn in, none of the omens looked good.

President Bush had campaigned on a promise to "get tough" with China amid a US trade deficit with Beijing running at a billion dollars a week.


China has become a trusted ally of the United States in its war on terrorism, a country worthy of hosting the Olympic games, and an important player in the world economy.

Satellite image of the US spy plane on a Chinese airstrip
The spy plane incident sent relations to an all-time low

That had to change, he said.

He was also promising to push ahead with deployment of a missile defence system, the so called NMD, which China vehemently opposed.

More provocative still, Mr Bush said he would grant Taiwan a massive new arms package to help it defend itself against China.

It was a move sure to infuriate Beijing and, when it came in March, the arms package was even bigger than predicted.

On top of the ships, helicopters, tanks and missiles that were expected, the US was promising to supply Taiwan with a fleet of brand new submarines, something every previous US administration, even President Reagan, had shied away from.

As predicted, the Chinese Government was furious, but it was nothing to the rage that was soon to come.

Spy plane

On 1 April, a US surveillance aircraft flying close to the southern coast of China was struck in mid-air by a Chinese fighter jet.

The two aircraft plummeted out of control.


Dark murmurings from the Bush administration indicated that all trust had been destroyed, some said it would take a long time recover

At the last moment, the US pilot was able to recover his plane and make an emergency landing on a nearby Chinese island.

The pilot of the Chinese plane was less fortunate.

His jet plunged in to the South China Sea and he was never seen again.

It was the start of an 11-day standoff which pushed US-China relations to their lowest point in years.

Eventually the US crew were released, but US-China relations had been deeply scarred by the incident.

Dark murmurings from the Bush administration indicated all trust had been destroyed, some said it would take a long time recover.

And yet only five months later, President Bush was jetting in to Shanghai to meet President Jiang Zemin face-to-face, smiling and patting China's top communist on the back, proclaiming him a close ally.

So what happened?

Transformation

If 11 September, as many have said, changed the world forever, it has certainly had a revolutionising effect on Sino-US relations.

With its veto on the UN Security Council, China's support was suddenly vital to Washington in building a coalition against Osama Bin Laden.

Chinese President Jiang Zemin and US President George W Bush
China is now a full member of the international club

China also had enormous influence in Pakistan, the country that Washington needed most to back its decision to declare war on the Taleban regime in Afghanistan.

But aside from a united front in the so-called war against terrorism, China has its own reasons for looking more positively on its relations with the United States.

Despite the spy plane debacle, it has been an excellent year for China on the international stage.

In July, Beijing was awarded the right to host the 2008 Olympic games.

In September, Shanghai took centre stage as host of the annual leaders' summit of the Asia-Pacific Economic Cooperation (APEC) forum.

Finally, and perhaps most significantly, China was accepted into the World Trade Organisation in November after 15 years of trying.

Full membership of the international club ended decades of feeling ostracised and picked upon by the outside world.

So as 2001 draws to a close, China has become a trusted ally of the United States in its war on terrorism, a country worthy of hosting the Olympic games, and an important player in the world economy.

Mixed blessings

But there are many reasons why China's newfound place in the sun might not last.

China's Olympic logo
Further validation came from the Olympic committee

WTO membership for one will be a mixed blessing.

It will bring many painful challenges to China's economy, including the loss of millions of jobs as outdated state-run industries are driven in to bankruptcy.

As the cost of membership starts to become clear, there could be a popular backlash against "foreign exploiters", in particular the United States.

And what about those old issues, the US trade deficit, Taiwan and the proposed missile defence system?

With Washington distracted by its war against terrorism, and Beijing focused on maintaining economic growth, they have been put on the back burner.

But they have far from disappeared.



Deal's history

Analysis

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See also:

28 Dec 01 | Business
US normalises trade with China
27 Dec 01 | Business
China publishes WTO terms in Chinese
21 Dec 01 | Business
Japan and China settle trade row
13 Dec 01 | Business
China firms 'fake' profits
13 Dec 01 | Business
China: an economic super power?
12 Dec 01 | Business
China grants insurance licences
12 Dec 01 | Business
Oil giants to sell petrol in China
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