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Reagan slashed at the Soviets, but he was generally careful not to suggest in public that Peking was making common cause with the U.S. Even so, the Chinese were uncomfortable with Reagan's implications that both nations have the same anti-Soviet outlook. The Chinese mentioned their worry about the nuclear arms race, particularly the deployment of U.S. missiles in Europe. Deng was more sympathetic than Hu had been, conceding that the Euromissile equation had to be cast in terms of deterring the Soviets. But the Chinese feel that the U.S. should not deploy any more missiles and that the Soviets should dismantle theirs. Deng warned Reagan that if he pushes too hard in Europe he will risk a backlash among Western allies.
Korea. The didact Hu reminded Reagan that China opposes the presence of U.S. troops in South Korea. The salient issue, however, is reunification of the two Koreas. China has long urged the U.S. to sponsor talks with North and South Korea toward that end. Reagan suggested to Deng on Saturday that such talks would make sense only if China took part as a fourth negotiator. Deng begged off.
U.S.-Chinese trade. This is the area of the most unambiguous promise and, because of the unalloyed exploitation of China by Western capitalists in the past, one of the most deeply sensitive. This year's commerce between the two economies will approach $6 billion, a record. Only Japan trades more with China. The Chinese seek to sell more textiles in the U.S., and they want practically unlimited access to American technology.
In fact, the principal accomplishments of the trip concern trade. One routine treaty with Peking will regulate international corporate taxation. Not quite finished is an accord that would govern more sensitive business transactions, such as repatriation of profits and possible expropriation of U.S. property. Essentially, Washington is insisting that U.S. investors be granted the same financial rights as Chinese.*
Potentially most significant of all the drafts is the "executive agreement" that would permit the construction of nuclear reactors in China by U.S. companies. Negotiators had been haggling over the issue since 1981, and during the ten days preceding Reagan's visit, they met practically around the clock. The final sticking point: the Atomic Energy Act requires a foreign buyer of nuclear-power equipment to get Washington's permission whenever it wants to recycle used radioactive fuel, since reprocessed fuel can be used to make nuclear weapons. China, feeling its independence pinched, had refused to submit to the constraint until lust before the President arrived. Some hasty semantic finesse did the trick. Said one U.S. official in Peking: "The language is, quite frankly, fuzzy." The President has not formally signed it yet. Already, however, the woebegone U.S. nuclear industry is looking breathlessly at a country that is only now building its first, smallish reactor, but that plans to install a dozen much bigger plants by the end of the century. The Chinese nuclear business might be worth $20 billion or more to U.S. firms. Another agreement includes an especially glamorous provision: a planned 1984 American film festival in Peking with a greatest-hits bill from Hollywood's past few years, including Coal Miner's Daughter and Kramer vs. Kramer.