US-China nuclear pact may be out of Reagan's reach
Washington — President Reagan can expect a warm welcome when he travels to China later this month. But a nuclear cooperation agreement with China is expected for the time being to remain beyond reach.
A State Department official said that the two sides have made ''substantial progress'' toward an agreement and are in contact concerning the remaining issues through the American Embassy in Peking.
The official did not rule out reaching an agreement before President Reagan goes to China two weeks from now but acknowledged that an accord would be difficult to achieve in such a short period of time.
The key issue to be resolved concerns Chinese objections to a congressionally mandated US requirement for the right to approve uses of spent fuel from US-built nuclear power reactors whether that fuel is supplied by the US or any other source. Reagan could waive this requirement on grounds of furthering national security or nonprofileration objectives but is unlikely to do so.
This has led to speculation that the US-China nuclear cooperation agreement is becoming too controversial - as well as possibly subject to too much congressional review and criticism - to suit the Reagan administration in an election year.
But postponement of the agreement could mean the loss for American industry to the French competition in this year alone of $1.8 billion. This is the sum the Chinese are to spend for two nuclear reactors planned for Guangdong Province in the south of China.
In addition to the negotiations over nuclear cooperation, the US and China are engaged in talks over a complicated bilateral investment treaty that are expected to continue into 1985. President Reagan will have agreements on taxes and on cultural exchanges to sign when he gets to Peking, but these are in a less weighty category than the projected nuclear cooperation and investment accords.
Despite the difficulties involved in the negotiations over these two agreements, experts tend to agree that the overall picture for US-China trade has improved. Roger W. Sullivan, executive vice-president of the National Council for US-China Trade, summed the situation up by saying the council is optimistic about the prospects both for further improvement in relations and an expansion of trade.
''In the past two years, we have seen resolution of the major issues confronting the relationship, and though irritants and problems remain, we believe that they are manageable, and that continued forward movement is possible,'' said Sullivan last week in testimony before a House of Representatives subcommittee.
The trade council estimates that US-China trade in 1984 could reach as much as $5.5 to $6 billion - about a 30 percent increase over last year.
Mr. Sullivan, who is a former State Department official, pointed to several remaining obstacles to US-China trade. But he said they were not the ''major stumbling blocks which once littered the path, but rather the normal problems and disputes of the sort which characterize our relationships with even the best of our friends.''
Among these obstacles, he listed:
* A congressional amendment introduced by Sen. William Proxmire (D) of Wisconsin which would require a joint resolution of Congress approving executive agreements on nuclear cooperation before such agreements would come into effect.
* Technology transfer guidelines which remain more restrictive than those of other nations, thus granting those nations a competitive edge. (American companies could lose between $500 million and half a billion dollars in the sale of a broadcast satellite system and some related items because of controls more restrictive than those of the major competitor in this area, the Federal Republic of Germany, Sullivan says).
* A lack of effective export financing. (Japan, which is the leader in bilateral aid to China, has made available concessional financing which is, in effect, tied to Japanese exports.) Just last month Japanese Prime Minister Yasuhiro Nakasone traveled to Peking with an offer of an additional $2.1 billion in concessional financing for use in a number of areas, including hydropower. According to Sullivan, the US has traditionally dominated this area.
But despite the lack of a US competitive edge in some areas as well as other obstacles to trade growth, the Chinese would apparently prefer American technology in a number of areas over that of the competitors. One China specialist, Parris H. Chang of Pennsylvania State University, explains it this way in a paper to be presented at the meeting on China later this month of the American Academy of Political and Social Science:
''To succeed in its drive to modernization - which will have important bearing on the legitimacy and viability of the Deng Xiaoping leadership group, hence a top government priority - China must have access to advanced Western technology. Deng and his associates count on the West, especially the US, to help train a new generation of Chinese scientists and engineers and hope to use Western capital, technology, and expertise to speed up Peking's program of 'four modernizations.' ''