Published by: World Tibet Network News, Saturday, October 26, 1996

By Scott Hillis

BEIJING, Oct 24 (Reuter) - China said Thursday Sino-U.S disputes over Taiwan, trade and human rights could lead to cold war but that a forthcoming visit to the United States by Defense Minister Chi Haotian could help turn relations around.

"Both countries differ on the issues of Taiwan, strategic security, trade and human rights. These disputes could lead to a cold war between the two countries," the official China Daily said.

"That would be a tragedy not only for China and the United States, but for the world."

While China said that Sino-U.S. trade ties had improved it warned that major problems, including Beijing's long-delayed entry into the World Trade Organization (WTO), still needed to be resolved.

It also hinted at possible retaliation against a U.S. decision last month to slap punitive charges against Chinese textile quotas -- a move it described as "totally unacceptable."

"The Sino-U.S. economic relationship is recovering, but two major issues concerning Sino-U.S. economic links need to be settled," the China Daily quoted Foreign Trade Minister Wu Yi Wu as saying.

Those two issues were Beijing's failure to join the WTO and the lack of permanent most-favored-nation trade status for Chinese goods in the U.S. market.

Wang Jisi, director of the Institute of American Studies of the Chinese Academy of Social Sciences, warned that the United States could treat China as the enemy.

"Although the United States has not treated China as an enemy, the possibility remains it may yet do so," Wang, one of China's top experts on U.S. affairs was quoted as saying by the newspaper.

It said the U.S. Congress and media seem to oppose a sound Sino-American relationship and strongly believe a rising China will threaten the interests of their country.

Some Chinese interpret U.S. policy as seeking to divide China by promoting gradual independence for Taiwan and Tibet, the newspaper said.

Minister Chi's long-delayed visit to the United States before the end of 1996 could improve Sino-U.S. ties, it said.

"His visit will help put Sino-American relations on a healthier track, although it's unlikely they will regain the level of the 1980s," Xie Wenqing, senior research fellow at the China Institute for International Strategic Studies, was quoted as saying.

China postponed Chi's visit to Washington in March, infuriated by a U.S. decision to order two aircraft carriers into seas near Taiwan as the island held its first direct presidential elections in the face of Chinese missile tests and live-fire war games.

Secretary of State Warren Christopher's arrival in China next month is expected to mark the highest point in ties since they were chilled by a private visit to the United States by Taiwan's President Lee Teng-hui in June 1995.

The trip enraged Beijing, which opposes all attempts by the island to break out of its diplomatic isolation. China has considered Taiwan a rebel province since a 1949 civil war.

"The Sino-U.S. relationship is at the crossroad and strategic dialogue is one way to win a chance for improvement," Yuan Ming, director of the Institute of International Relations at Beijing University, was quoted as saying.

Yuan said China thinks the United States should be its biggest partner in its modernization drive, but in Beijing's eyes, Washington is at the same time the "biggest troublemaker."