By Tao Wenzhao

In the past year Sino-US relations continued to develop steadily, evidenced by frequent contacts between the top leaders.

Chinese President Hu Jintao visited the United States in April. In July, Hu again met with US President George W. Bush, this time in Moscow, during the G8 (Group of Eight) dialogue with developing countries. They met in November in Hanoi, during the Asia-Pacific Economic Cooperation Forum, where they talked about bilateral, regional and international affairs, reaching consensus on many issues.

The Sino-US relationship is moving beyond the bilateral scope to cover regional and global security and economic matters. Exchanges at various levels and between diverse sectors, trade and economic cooperation in particular, are going ahead in a big way.

By all accounts, the two countries share more interests and are becoming increasingly dependent on one another strategically and economically.

For example, the two countries strengthened cooperation on nuclear non-proliferation in 2006, dealing with Iran's nuclear bidding and working particularly closely on the Korean Peninsula nuclear crisis.

To get more bargaining chips for future negotiations, North Korea conducted a nuclear test in October, in defiance of the international community's opposition.

China, while voicing strong opposition to the test, worked with other United Nations Security Council members to see that Resolution 1718 was passed, imposing sanctions on North Korea's nuclear and missile undertakings while sending a clear, firm, yet appropriately worded message to North Korea.

At the same time, the Chinese government sent State Councilor Tang Jiaxuan to the United States and North Korea, to offer his good offices between the two and try to help bring all relevant parties back to the six-party talks, which had remained in recess since November 2005.

China's efforts, together with other parties' efforts, eventually paid off, with the six-party talks reconvening on December 18.

Although the five-day talks ended without substantial breakthroughs, the parties reiterated their commitment to denuclearize the Korean Peninsula through negotiations and diplomacy.

At the same time, US and North Korea financial specialists had talks on removing the financial sanctions against North Korea. They agreed to continue the negotiations this month.

Though the road ahead is still full of bumps, the six-party talks remain the best way to resolve the Korean Peninsula nuclear issue.

Concerning Taiwan, back in December, 2003, US President Bush, at a press conference with visiting Chinese Premier Wen Jiabao, openly lashed out at Taiwan leader Chen Shui-bian for trying to unilaterally change the status quo across the Taiwan Straits. The press conference remarks created a new situation in which China and the United States, in a de facto way, were jointly trying to stave off the attempt at "legal Taiwan independence".

Chen Shui-bian, in his Spring Festival speech on January 29, 2006, pushed for abolishing "NUC" (National Unification Council) and "NUG" (National Unification Guidelines), sending shockwaves across the Straits and to the United States.

Under pressure from Washington, Chen revised his wording to: "NUC will cease to function and the NUG will cease to be applicable."

But some Taiwan officials said there was no substantial difference between "abolishing" and "ceasing to function and be applicable".

A US official, in a statement on March 2, 2006, urged the Taiwan authority to state unequivocally that it had not taken any action to abolish NUC and change the status quo.
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The US State Department deputy spokesman Adam Ereli also expressed concern over Chen Shui-bian's attempt to revise the "constitution," which could mark a step towards "Taiwan independence".

But there are some deep-rooted contradictions in the United States' Taiwan policy.

On the one hand, senior US officials vow to stick to the one-China principle. But on the other hand, they state time and again that they will honor the Taiwan Relations Act. This was testified to by remarks made by both US Secretary of State Condoleezza Rice and Defense Secretary Robert Gates.

On the trade front, in the first 10 months of 2006, US exports to China reached US$50 billion. If the momentum continues, China is expected to become the United States' third largest market.

In addition, the United States is China's biggest foreign investment source. By the end of this past October, 51,325 US-invested enterprises had been set up in China, with a total investment of US$52.9 billion.

The United States needs China to help bring down the prices of capital, commodities and labor. Good and cheap Chinese goods help the United States maintain a low inflation rate, saving Americans more than US$100 billion.

Also, US-China trade helps directly or indirectly create 4 million to 8 million jobs in the United States.

It is against this backdrop that the first Sino-US strategic economic dialogue was held in Beijing in December. The dialogue will be held every year to facilitate communication between the two countries and promote bilateral cooperation at a higher level and with a wider scope.

In spite of the progress made in Sino-US relations in 2006, Washington still harbors profound misgivings about China's development, which are reflected in some passages in the White House's National Security Strategy Report and the US Defense Department's Quadrennial Defense Review Report.

The misgivings will remain for a fairly long time to come and can only be cleared away in the course of ongoing development of bilateral ties.

The author is a researcher with the Institute of American Studies at the Chinese Academy of Social Sciences.

(China Daily January 5, 2007)