# Secretary Kissinger's Talks in China, November 1974/Lin-Habib Memcon Nov 28

SECRET/NODIS
DEPARTMENT OF STATE
Memorandum of Conversation
| DATE: | November 28, 1974 9:00 a.m. |
| SUBJECT: | Secretary Kissinger's Visit to Peking: Counterpart Discussions on Exchanges and Claims/Assets (Second Session) |
PARTICIPANTS: Lin Ping - Director, American and Oceanic Affairs Department Tsien Ta-yung - Counselor, PRC Liaison Office in Washington Cheng Chi-hung - Deputy Director, U.S. Section Ni Yao-li - Staff Member, American and Oceanic Affairs Department Chao Chia, Staff Member, American and Oceanic Affairs Department Ambassador Philip C. Habib, Assistant Secretary of State for East Asian Affairs William H. Gleysteen, Deputy Assistant Secretary, EA Oscar V. Armstrong, Director, EA/PRCM
(Note: The secretary who took verbatim notes mislaid her steno pad after returning to Washington. This record is based on Armstrong's notes.)
Lin led off by commenting on the exchanges. He said these had proceeded very well on the whole in 1974, and he asked Habib to convey the Chinese side's appreciation for the reception given to Chinese delegations. Eight American groups will have visited China in 1974, the foreign affairs group will be carried over into 1975, and the U.S. side did not send the track and field team. The Chinese sent seven groups to the U.S., and two from the 1974 list (the arts troupe and the CCPIT) would take place in 1975. (He did not mention that the Chinese municipal officials, on the 1974 list, did not come.)
Lin then outlined the number of groups the CSC and NC would send or receive in 1975. His explanation was rather confusing, but it added up to the initial Chinese response to the proposals of the Committee on Scholarly Communication with the PRC (CSC) and the National Committee for US-China Relations (NC). (For CSC, 5 to China, 7 to the U.S. For NC, 3 to China, 2 to the U.S.)
​Lin then discussed Congressional visits, saying that the visits are of some help in promoting understanding and are in the spirit of the Shanghai Communique. He said the Chinese are willing to receive another Congressional group in 1975, totaling 15 persons, including both Congressmen and Congresswomen. Because of limited facilities, the PRC cannot meet all Congressional requests.
Lin then launched into a fairly lengthy discussion of numerical reciprocity, his main point being that numerical reciprocity is a good general principle, need not be strictly observed in anyone year. (He cited statistics for 1973-75, designed to show that for this period as a whole, there was in fact approximate numerical reciprocity.) Moreover, it should be looked at in terms of the U.S. and Chinese sides, not taking into account any particular organization. There are many U.S. organizations, the CSC, the NC, and the NCUSCT, as well as delegations sponsored by none of these organizations (apparently a reference to Congressional visits, etc.).
Lin said Habib's suggestions regarding Congressional groups, White House Fellows and environmental delegations will be referred to the appropriate Chinese organizations for their consideration.
Lin said Habib had mentioned possible difficulty in sending an amateur track and field team. This was on the 1974 list, but was cancelled by the NC. The NC proposed it again for 1975, the Chinese gave their approval, and the NC raised no disagreement. The Chinese would like to know as soon as possible if a track and field team will be sent to China.
Lin said that the petrochemical, automation and communications delegations are obviously scientific and technical since they were included in the list of scientific and technical exchanges. The scientific and technical exchanges should not be limited to seminars; some should also visit sites. It is therefore hard to understand why the U.S. side raised the question; the question does not arise.
In responding to these remarks, Habib first said he would convey the Chinese appreciation to the U.S. organizations, and asked that Lin also convey our appreciation to the appropriate Chinese organizations.
​With respect to reciprocity, Habib said that he wanted to mention, for future consideration, the desirability of reciprocity in the type as well as the number of exchanges.
Habib said that to avoid any misunderstanding he would like to compare the detailed list of exchanges. He then read the CSC and National Committee lists. There was a brief discussion about whether the National Committee's proposal was for a delegation consisting solely of the Council on Foreign Relations or whether it would include other world affairs organizations, with Lin maintaining the former position.
Mr. Habib said that both the CSC and the NC have suggested other possible exchanges for 1975. We hope that we can tell them that the Chinese will take these additional proposals under consideration for example, a visit to the U.S. by a group of Chinese municipal officials was on the 1974 list but was not implemented. Also the NC would welcome a delegation from the Chinese People's Institute for Foreign Affairs. Regarding Congressional delegations, we agree with Lin that these are a great help and in the spirit of the Shanghai Communique. Regarding Lin's suggestion that some women members of Congress could be included in a Congressional delegation, those members will appreciate the Chinese interest in them. With respect to the one Congressional delegation which Lin mentioned, we assume that the figure of 15 did not include staff. It might be more fruitful to divide this number into two groups rather than having them all in one. Could the Chinese side consider this? There is also the question of wives. We can pursue the matter of a Congressional group later but perhaps two groups would be more useful.
Habib said that we will inform the two committees of Chinese views. The dialogue on these exchanges can be continued in Washington and Peking.
He then noted that Lin Ping had said that the Chinese would review our proposals about Congressional visits, the White House Fellows and an environmental exchange. We hope that on the latter two it might be possible to maintain the principle of reciprocity for example, White House Fellows going to China and a delegation of young Chinese leaders going to the U.S. would be an excellent pairing.
​There could also be reciprocal visits by environmentalists. It is also worthwhile to consider whether some type of Chinese delegation might visit the U.S. to reciprocate the Congressional visits.
Lin Ping said he had a few comments on what Habib had said. Regarding qualitative as well as numerical reciprocity, the exchanges are of course mutual. In general there should be reciprocity of quality, but this is not an absolute certainty in any one year. Some times one side can send one type of delegation and the other side cannot reciprocate in the same year. Instead it might be able to do so the following year or a year after that and in some fields we cannot reach qualitative reciprocity. For example, there is no way the Chinese can reciprocate Congressional visits. In some fields reciprocity is also related to the state of political relations.
Habib said he appreciated Lin's point but our doors are always open to any delegations the Chinese think they can send.
Tsien Ta-yung, referring to the idea of qualitative reciprocity, humorously noted that in 1975 the Chinese will receive an American delegation to study early man but the Chinese can hardly send a delegation to the U.S. to study early American man. As another example, although he has been in the U.S. for one and a half years, he does not know of anything equivalent to the Chinese martial arts group.
Habib said that he was referring to qualitative reciprocity in broad terms; obviously we must be practical. Lin Ping rejoindered that even in broad terms qualitative reciprocity cannot be achieved. Decisions must be based on the actual conditions and situations.
Habib gave as an example the fact that the Chinese would be sending a performing arts troupe and perhaps a sports team to the U.S. to be hosted by the National Committee, while the Chinese would be receiving a group of mayors and a foreign affairs delegation. This is the type of situation we should consider in the future as part of our planning process.
Lin Ping said that we should both look at qualitative reciprocity from an all around viewpoint, not a limited viewpoint.
​Lin then referred to what he called the Council on Foreign Affairs Delegation, which he noted was proposed by the U.S. last year. If this delegation is to include other organizations, this is something new. It will have to be discussed with the concerned Chinese organizations, but it will probably be difficult.
Habib responded that there are a variety of Foreign Affairs groups and suggested that the PRCLO discuss the matter with the National Committee in order to get a better understanding of the situation and to avoid the problem of singling out any one organization.
Lin Ping said the matter need not be discussed further now; it will be passed on to the organizations concerned. However, he personally thinks it is better to stay with the original agreement on a delegation from the Current Foreign Relations. Habib said that he believed that that was not the original proposal but the matter could be left for further discussion by the concerned organizations. He and Lin need not get into such details now. Lin agreed.
Lin noted that Habib had asked if he could tell the CSC and the NC that the Chinese will take their additional proposals under consideration. There must be some misunderstanding regarding what matters would be passed to the concerned organizations for consideration. He was previously referring only to the proposals regarding the White House Fellows and the environmentalists. Regarding the CSC and NC proposals, we think general agreement has been reached. In his personal opinion there is little possibility for agreement on these additional proposals.
Habib said that he would convey that to the two committees, and leave them to work out details.
Lin then suggested that the list for 1975 had been agreed. Habib said "no." He will report to the committees and they will be in touch with PRCLO. Lin said that without question there should be contact between the Liaison Offices and the organizations concerned. Past experience shows that each side cannot have too many in any one year; eight for each side is feasible. The number is related in part to available facilities.
​Lin then said that the figure of 15 for the Congressional delegation included staff and wives. He stressed that the delegation should be comprised of members of Congress. In the past some wives had been included and the Chinese would leave this question for the U.S. side's discussion with Congress. The Chinese are willing to receive some wives, but they would be included in the figure of 15. We think that we do not want a delegation that is half members of Congress and half wives; the responsible organization would have problems.
Habib responded that this might make the wives' union very unhappy. The Chinese have been so hospitable with previous Congressional wives that a precedent has been set.
Lin Ping said that in the past wives were included in the total number. With respect to dividing the Congressional group into two visits, we think it best to have it all at one time. From past experience 15 is an ideal size; if it's larger the arrangements cannot be as good.
Habib said he did not wish to debate the point but Congress is a most important group with respect to our long-term relations based on the Shanghai Communique. We hope the Chinese will keep this in mind in terms of our mutual long term objective. However, we need not pursue particulars now; we can be in touch through normal channels.
Lin said that with respect to claims/assets he had already expressed his views and noted that Habib had said he would have some further remarks.
Habib said that he had reviewed the bondholders' issue and has concluded that this need not be an issue between us. He wished to make one point clear: we have not asked your Government to accept these bonds as a claim against the PRC. We did not mention the bond holders' question to create an issue; we raised it to explain that it was not an issue. Perhaps we should not have raised it but in any event it need not be part of the claims settlement. He then repeated that we have not asked the Chinese Government to accept these bonds as claims against the PRC.
​Habib then commented on the problem of a definition of the assets, saying that he wished first to briefly review its history. In the February 1973 draft, there was language which met our needs. In March, the Chinese side presented a revised draft which eliminated some of our language. Since then, we have made an effort to find a way to meet our needs that would be acceptable to the Chinese side. This is not a side issue, nor is it a new one. Our purpose is merely to find language acceptable to both sides. In November 1973 the Chinese said that the changes it proposed were not intended to change the content of a settlement. Our suggestions also are not intended to change the content of a settlement. We still consider that we are talking about a package proposal and about issues present from the beginning. After my study of the record, it seems to me that the only matter preventing a settlement is language to define the assets. I hope that this explanation is satisfactory to Director Lin.
Lin asked why we raised the bondholder's question if it is not an issue. Habib responded that we raised it in order to make it clear that it is not an issue and not part of a settlement. Tsien interjected, "Should we raise all questions that don't exist?" Habib said we were talking about a matter somewhat related to a claim settlement. He repeated that we are not asking the PRC to acknowledge a liability. He said that he hoped that what he has explained removes any misunderstanding.
Tsien maintained that the issue arose after the US side raised it, so now it is an issue. It is new question. Habib answered that if we had intended it to be part of a settlement, we would have put it in the draft.
Lin said Habib had said that the issue does not exist and that the US has not maintained that the bonds are a claim against the PRC. If the US had not raised the question, we would not have responded. In March 1973 in the proposed exchange of letters, the US side attached a note about bondholders. This meant it was an issue. Thus there was a hidden meaning behind it. The US side has said it would not espouse the bondholder claims but that it cannot prevent them from making claims. This is a contradiction. Because of this, we stated our point of view in November 1973.
​Habib said we seem to be going in a circle. My statements should break that circle. I suggest you study my statement. As I have stated, we are not saying that these bonds constitute a claim. If my explanation is not satisfactory, let's put the matter to one side now and consider other aspects. There is no hidden meaning in what I have been saying.
Lin said he had listened carefully to Habib's explanation. Habib had said he never raised this issue. Habib responded that he had stated that we are not asking the PRC to accept the bonds as a claim against the PRC, then reiterated there was no hidden meaning in his statements. You can make it an issue if you wish but I have made a clear statement of our views.
Lin said that he did not agree that this is an issue created by the Chinese side. Such a statement is a distortion of the fact. Habib said that he does not wish to pursue the matter. If you do not accept my explanation, let's not pursue it. You can study what I have said and I will study your statements. We can put it aside now and consider it later. However, I have not distorted the facts. Lin reiterated that the US side is creating a side issue and that is not a distortion of the fact because it is in the record. We have explained our position and we stick to it. Habib said that he has explained our position and there is no need to discuss further.
Lin said, "All right," and Tsien added that we will agree to disagree. Habib noted that that often happens.
Lin then said that Habib had raised the question of a definition of the assets. The US side used the wording "designated nationals and special designated nationals." We believe this is also a side issue created by the US side. It was the US side which raised the question of terminology. This is not just a question of terminology. It contains serious political questions. Habib must know the background of the term "designated nationals." It is a product of the hostile attitude of the US Government in 1950. If we still use that term, it would not be in the spirit of the Shanghai Communique. The American side said it would like to find some appropriate term. In the December 22 Aide-Memoire, it still insisted upon the implications of that term. The only change was in method, not essence. So we could not accept the wording.
​Habib said that in recent exchanges, we have avoided use of those terms which Lin finds objectionable. Lin responded that this was a change in form but not in essence. Habib said that we are trying to find terms that are legally acceptable. Lin asked "What laws?" Habib said we must take into account possible litigation, otherwise we are laying ourselves open to court suits. Lin asked what the law is based on. Habib said it is not just a question of a law. Claimants can take the US Government to court if the assets are not properly defined. We must define the assets that are blocked; that's all that we are trying to do in words acceptable to both sides. If we can't reach agreement, we can come back to it later. After further study we might find wording acceptable to both of us. The problem is that if the assets are not defined an owner of an asset can go to court and claim that the asset has not been assigned to the US Government.
Lin responded that the Chinese side had carefully considered the matter and has no need to study it further. "I asked what the law was based upon; you talked a lot but did not answer my question."
Habib said that he had been trying to define the problem. If we understand the problem we can find an answer. I understand your difficulty. The question is whether we can find a solution.
Lin reiterated that he had asked what the law was based on. Habib has not answered; instead he has talked in a round about way. But he, Lin, can answer the question. The US side actually wants to follow the hostile law of 1950. If we accept that hostile law, it will create a strong reaction. It is a political question, not a legal one.
Habib answered that he had been trying to define the problem. If there is no solution now, we can put it off until later. After further consideration, we may find a solution.
Lin said the Chinese position was made clear in November 1973 and in the proposed exchange of letters. Habib had said that the purpose is to find a solution acceptable to both. It is not for us to put forward a solution but the US side must think of a solution. Our position has been made clear. Perhaps Habib thinks the US in December put forward a solution. We studied it carefully. There was a change in form but none in essence. This means that the US side still insists upon its unreasonable demand. We have had two talks and the US side has not made a new proposal. This shows
​that the US side is not sincere. If the matter stands as it is now, there is no way to find a solution. I thought you would make a new proposal.
Habib noted that Lin had said we should understand the Chinese position. We hope they will understand ours.
Lin said that to settle the matter we must follow the spirit of the Shanghai Communique and the February 1973 agreement in principle. We must think about a political package settlement. If the US insists on using the term "designated nationals," it would not be in accord with the Shanghai Communique and the February 1973 agreement.
Habib said each side could study the matter and come back to it later.
Lin noted the question of the $17 million involved in third country banks and said he would like to hear Habib's comments. Habib said we agree that we should look at the settlement as a package. When we get to the package, all the items will be in it.
Lin said he fully agreed regarding the package settlement and the Chinese side is trying to solve the matter in the spirit of a package settlement. Habib said we are approaching the matter in the same spirit.
Lin said that it was in the spirit of a package settlement the Chinese side put forward its November 1973 proposals. Since Habib has made no new comment he would reiterate their position. The US side has no right to ask for the $17 million withdrawn from third country banks. This concerns our relations with third countries, and the banks have also raised the matter. This is why we cannot give back the $17 million.
Habib said that we had accepted Premier Chou En-lai's proposal as part of the package and we still consider it as part of the package. Lin said that the Chinese side had made its position clear in the past, but the US side had created side issues and made unreasonable demands. Therefore the Chinese side had withdrawn the offer regarding the $17 million. Habib responded that when we find the package, it will cover everything. Lin said that his understanding of a package settlement is different. The package is a political package; it need not contain every small item.
​There was a further inconclusive discussion, during which Lin again mentioned the US side's "lack of sincerity," which Habib denied.
Habib then mentioned the question of press representation and visits, saying that the American press had asked that the matter be raised. We will be interested in anything Lin has to say on the subject. He noted that very few American journalists had been permitted to visit the PRC recently.
Lin said that in the present stage of relations between the US and PRC, permanent press representation in each other's countries was not feasible. Regarding press visits, there have been some (he mentioned Sam Jaffe), so the question does not arise. If individual journalists are interested in visiting, they will have to apply.
Habib said he understood the Chinese position.
The meeting then ended.