Both sides hoped this visit would improve relations, which are traditionally marred by disagreements concerning human rights, trade, Taiwan, Tibet and nuclear proliferation. More recent sources of tension include the new Hong Kong administration, and disagreements over progress on environmental treaties on the agenda for the Kyoto Climate Change Conference in December.

Jiang hopes the visit will have presented a more amenable picture of China to the US public as well as the government, although he lacks the personal charm that characterised Deng Xiaoping's successful visit in February 1979.

Current situation

Relations between the US and China are particularly strained over accusations of human rights abuses, military expansionism and allegations that Chinese money was used to try to influence US elections.

Tensions frequently run high between the two countries. In June 1995, the US infuriated Beijing by the decision to allow a visit from the President of Taiwan, Lee Teng-hui.

In March 1996, at the time of Taiwan's first presidential elections, Washington sent two aircraft carriers to the region after Beijing asserted its military presence in the region by carrying out manouevres off the island's coast.

Behind the tension is superpower rivalry. China is convinced that it is well on its way to becoming economically, militarily, and politically the dominant power in Asia and a truly global power.

The belief that China is threatening world peace by selling military and nuclear technology to countries like Iran and Pakistan is met with great suspicion in the US.

Sino-US relations

In 1972 President Nixon made an historic trip to China during which he signed the Shanghai Communiqué. As part of the policy of developing counterweights to the USSR, the US adopted a 'one China policy' and recognised that Taiwan is part of China.

In 1979 the US established relations with the People's Republic of China and transferred diplomatic recognition from Taipei, in Taiwan, to Beijing.

The Clinton administration's China policy has generally lacked coherence and seen a number of sharp turns. During the 1992 election campaign and at the outset of his term, President Clinton pursued a policy that emphasised the use of economic leverage to actively promote human rights and democracy in China.

Opposition to trade with China stems from an unusual left-right coalition in Congress, the left citing China's record on human rights, while right-wingers point out China's prohibitive market restrictions.

In 1993, at the outset of the trading status renewal procedure, President Clinton stated that in succeeding years China would have to meet a series of conditions regarding human rights and democratic reform. On May 26, 1994, the President announced his decision to renew the trading status despite Beijing's failure to meet the conditions specified.

A laissez-faire attitude promoting trade has prevailed in more recent years, although this year's Most-Favoured Nation trade status renewal debate was the most contentious in years.

Most-Favoured Nation status

Most-Favoured Nation (MFN) status is granted by the US administration to all but six countries. Countries with the status receive trading rights and the lowest possible tariffs. Without MFN countries face import tariffs averaging 44%.

China's MFN status comes up for renewal each year under a law barring trade privileges to countries without free markets systems.

On May 19, 1997, President Clinton announced his decision to renew MFN status for China unconditionally. On June 24, 1997, the US House of Representatives voted by a margin of 259 to 173 to renew China's MFN status for another year, backing President Clinton.

The annual MFN debate is proving more of a Congressional battle, and the issue of Hong Kong is likely to have a continuing bearing on the annual debate in the US Congress over whether to extend MFN trading status to China year after year.

Some argue that the US needs to stand up to China over MFN to show that no undermining of Hong Kong's liberties will be tolerated. Others argue that if the US revokes MFN, it will lose all leverage over Hong Kong and risk putting China on a path of confrontation, in which Beijing feels it has nothing to lose. The former Hong Kong administration argued that ending MFN would seriously undermine Hong Kong's economic and financial position.

The Clinton administration now claims to be committed to continuing the trading relationship as part of its broader strategy of 'constructive engagement' and perceives the continued status as vital to the economic and political security of Hong Kong.

"Constructive engagement" entails maintaining trade and high level dialogue while still pushing for human rights and democratic reform, but avoiding outright confrontation, hoping that maintaining co-operation will help develop democratic forces in the Chinese leadership and society.

While maintaining that ending trade privileges could amount to a declaration of economic war that would isolate China from the world community, the Clinton administration admits that trade privileges are a clumsy weapon and risk undermining the US economy.

"Treating China as our enemy could well make China our enemy," is the official line, according to Sandy Berger, president Clinton's National Security Adviser.

Relations with China have also been complicated by the Asia-gate scandal surrounding funding for President Clinton's 1996 re-election campaign, in which it is alleged that money was illegally funnelled into the campaign by foreign organisations and individuals, including Chinese officials, to gain influence.

Trade and investment

China's economic growth has been proceeding at breakneck speed and it is seen as one of the most important markets and trading partners by the developed and developing world.

US-China trade reached $57.3bn in 1995. Recently, Chinese exports to the US have accounted for much of China's domestic growth leading to US calls for greater market access for US products and services in China. The main areas of tension have been intellectual property rights and accession to the World Trade Organisation (WTO).

Many in Congress are also unhappy with the $40bn trade deficit the US runs with China. Next year, China may surpass Japan as the single largest source of the US trade deficit, increasing criticism of China's trading practises. The figures have been called into question as inaccurate and misleading, especially as they partly reflect increased foreign investment in the country.

Economy

Thanks to its vast population and market oriented reforms, China's economy will soon be the largest in the world. A number of reports suggest that by 2020, if market reforms continue, the Chinese economy will be larger than that of the US.

Economic growth has created a new set of social problems and dilemmas which the Chinese leadership is only just beginning to grapple with. Continued growth is also an increasingly significant political. The introduction of market ideas has effectively undermined much of the Marxist ideology that used to guide the communist party. Many in Beijing have now come to see that their continued hold on power rests to a large extent on their ability to deliver material improvements to the Chinese people.

Economic growth is therefore the new means of keeping the nation together and the people supportive of the government.

Hong Kong

Some figures in the US have called for Hong Kong to be a test case for US relations with China, making plain to Beijing that unless it fully adheres to treaty obligations, it will encounter American obstacles to its full international acceptance and entry to bodies such as the World Trade Organisation. An increased emphasis on human rights in Hong Kong could effectively lead to this strategy by default.

Other figures in the US foreign policy establishment have argued that to confront China too readily, to talk of containment and to treat it and talk of it as an enemy, will turn it into an enemy and create a new Cold War in Asia. These figures, including Henry Kissinger, have tended to hold more sway in the Clinton administration and argue that a continued policy of constructive engagement is the only way to pursue the long term interests of the US and avoid escalating tension.

Hong Kong may well prove to be the ultimate arbiter of these differing viewpoints and many have seen it as a test case and indicator for China's aspirations for Taiwan.

Chinese attitude to regional security

US relations with China are closely intertwined with wider issues of Asian security.

The US currently has approximately 100,000 soldiers in the Asia-Pacific region. China perceives the continued presence of the US in Asia as unwelcome, viewing with some concern strengthened security alliances between the US and Japan and Australia.

China has called for an abrogation of the five bilateral alliances the US has in Asia, arguing that they are unnecessary after the end of the Cold War and that "Asians can protect Asian security." China is particularly concerned at the possibility that the US may pursue a policy of containment and any hint of such a stance is taken very seriously by the Chinese.

Sensitive about past defeats and subjugation by Western powers, China regards any pronouncements or activities by the West in either domestic politics or Asian security as unwelcome interference. Many other Asian nations, including Japan and South Korea hope the US will play a balancing role in the region, helping to avoid Chinese expansionism or hegemony.

China still considers Taiwan an integral part of its territory and has explicitly stated that any move by Taiwan to declare independence will lead to a Chinese attack. While the US continues to adhere to the 'one China' policy, it has warned China that any attempt to retake Taiwan by force will be met with US resistance.

Non-proliferation

China is a signatory to the Nuclear Non-Proliferation Treaty and signed the Comprehensive Test Ban Treaty in 1996. However, proliferation and arms sales remain another flash point in Sino-US relations.

The sale of weapons by the Chinese to Pakistan, Syria and Libya and deals with Iran and Iraq have aroused serious concern in Washington. The most serious recent case was the sale of M-11 missiles to Pakistan. The US is wary of pushing the issue too far, as China has proved effective in working to persuade North Korea to abandon its nuclear weapon program. Meanwhile, China is concerned with the sale of Western arms to Taiwan.

Human rights

Human rights have been the most visible point of contention between China and the US since the 1989 Tiananmen Square crackdown. The memory of the crushing of the democracy movement are strong in the minds of many Americans as well as the situation in Tibet, and Republicans in Congress have also been angered at the persecution of Christians in China.

Early in his administration, President Clinton supported the linking of Most-Favoured Nation Trading Status with human rights performance. But in 1994, Clinton disassociated human rights from MFN after the policy generated too many difficulties for the administration. Concern over the issue in the White House and Congress has not abated.

Global environmental issues

The group of seven economic powers (G7 countries) and China do not hold a united negotiating line on Earth Summit targets. India and China are particularly concerned about having targets imposed on them for the reduction of greenhouse gas emissions, and often argue in favour of a per capita pollution quota which would promote technological advancement to Western standards.

Recent Earth Summits have seen developed countries agreeing to transfer funding and technology to developing countries to help them respond to climate change, in return for commitment by those states to agree on pollution levels.

However, recent statements by President Clinton indicate that the United States will refuse to honour their commitment to take measures aimed at reducing their greenhouse gas emissions to 1990 levels by the year 2000.

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