At 5:45 a.m. of May 8, Beijing time, the U.S.-led NATO brazenly fired five bombs from different angles on the Chinese Embassy in the Federal Republic of Yugoslavia, which caused three Chinese journalists dead, more than twenty Embassy staff injured, and the Embassy building seriously damaged. On the morning of the same day, the Chinese Government issued a statement, expressing its utmost indignation and severe condemnation of such brutal act and lodging its strongest protest. On the afternoon of the same day, Chinese Vice Foreign Minister Wang Yingfan called in James Sasser, U.S. Ambassador to China, and made a solemn representation to the U.S. side on U.S.-led NATO's bombing of the Chinese Embassy in the Federal Republic of Yugoslavia and lodged the strongest protest to the U.S.-led NATO. On May 9, U.S. President Clinton sent a letter to President Jiang Zemin, in which Clinton expressed his apology and sincere condolence for "the tragic situation and human losses in Chinese Embassy in Belgrade yesterday". On May 10, the Foreign Ministry Spokesperson issued an announcement, declaring the postponement of the high-level military contacts between the armed forces of China and the U.S., China-U.S. consultations in the fields of proliferation prevention, arms control and international security and the suspension of the dialogue on human rights between the two countries. On the afternoon of the same day, Foreign Minister Tang Jiaxuan made a solemn representation again to James Sasser, U.S. Ambassador to China, demanding that the U.S. side apologize to the Chinese Government, the Chinese people and the relatives of the victims in an open and official manner, carry out a complete and thorough investigation of the bombing incident, promptly make public the detailed results of the investigation and severely punish those responsible. On May 14, President Jiang Zemin had a phone talk with President Clinton at the latter's request. President Clinton expressed his regrets over the bombing incident and undertook to order a thorough and complete investigation of the incident. On June 16, Thomas Pickering, U.S. Under Secretary of State and special envoy to U.S. President, visited China and presented to the Chinese Government a U.S. Government report on the result of its investigation into the U.S.-led NATO's bombing of the Chinese Embassy in the Federal Republic of Yugoslavia. On July 10, the Chinese women's soccer team lost to the U.S. team by 4 to 5, ranking the second in the final of the Third Women Soccer World Cup in Los Angeles, U.S.A. On July 11, in response to a letter from President Clinton on July 10, President Jiang Zemin wrote back, expressing congratulations on the championship of the U.S. team in the Third Women Soccer World Cup and hoping that the friendly exchanges in various fields between the two peoples would be constantly deepened and expanded . In July, China and the U.S. held two rounds of talks on resolving the U.S. compensation for the Chinese human casualties and property losses caused by the U.S. bombing of the Chinese Embassy in the Federal Republic of Yugoslavia, and agreement was reached on the human casualties compensation. The U.S. side agreed to promptly pay US$ 4.5 million to the Chinese Government. On July 25, Chinese Foreign Minister Tang Jiaxuan met with U.S. Secretary of State Madeline Albright while attending the ASEAN Regional Forum (ARF) meeting in Singapore. On September 11, President Jiang Zemin and President Bill Clinton held an official meeting during the APEC Informal Leaders Meeting in Auckland, New Zealand. The Meeting was positive and constructive. The two sides stated that China and the U.S. should continue to build towards the constructive strategic partnership gearing towards the 21st century. President Jiang Zemin elaborated China's principled positions on the question of Taiwan. President Clinton reiterated that the U.S. adhered to its one China policy. Both sides believed that the meeting would be a positive guidance for the bilateral negotiation on China's accession to the WTO. This summit was an important meeting since the exchange of visits by the heads of state of the two countries and has great significance for the restoration, improvement and development of China-U.S. relations.

On September 12,Vice Premier Qian Qichen, accompanying President Jiang Zemin on his visit, met with U.S. Secretary of State Madeline Albright and Mr. Samuel Berger, Assistant to the President for National Security Affairs in Auckland, New Zealand. Prior to this meeting, Foreign Minister Tang Jiaxuan met with U.S. Secretary of State Madeline Albright on September 9.