An Opening to the Middle Kingdom

By Evan Thomas

Reagan skillfully blends politics and diplomacy in China

It was supposed to be an exhibition of capitalism at work, a marketplace near the ancient city of Xian where farmers and other vendors conduct business free of state control. It was in fact a contrivance, a Potemkin-like set where the customers were programmed not to begin buying until after the President and Mrs. Reagan arrived, and to cease as soon as their motorcade departed.

But no matter. Ronald Reagan is an old actor with a fine appreciation for the well-staged media event. By the time he left China last week after a successful six-day visit, Reagan was convinced that his Chinese hosts really were catching the "free-market spirit." So optimistic was he about the prospects for friendship and trade that in one ad lib he referred to the People's Republic as "socalled Communist China," a remarkably benign description coming from a once unrelenting cold warrior who used to call the P.R.C. "Red China." The turnabout is perhaps more Reagan's than China's, but there was little doubt that the governments of both nations have, in Reagan's words, "reached a new level of understanding."

For Reagan, the trip was superb political theater, a perfect antidote to his election-year vulnerabilities. For a solid week on the evening news, he appeared not as the bellicose ideologue who can somehow manage to sleep through crises, but rather as the pragmatic peacemaker who can travel half the globe with nary a yawn or a stumble. Stopping over in Fairbanks, Alaska, on the return flight, he described his trip in terms that sounded suspiciously like a campaign speech. "My visit to China has convinced me that our future is bright," he told 500 community leaders packed into a local auditorium. "America is on the edge of a new era of peace, prosperity and commerce." Sounding a bit like the Great Helmsman, Reagan expansively predicted that Americans can "expect great leaps in their quality of life in the next century." Asked about the political dividends from his journey, Reagan replied: "I don't think it can hurt."

The President managed to turn the trip into a diplomatic double play. For 31 hours, he patiently waited in Fairbanks in order to cross paths with Pope John Paul II, whose plane was refueling there en route to South Korea (see WORLD). Posing with the Pontiff behind a lectern bearing the Presidential Seal, Reagan told a crowd of 5,000 standing in a cold drizzle that his trip to China had been a "long journey for peace." After the two leaders met privately in an airport lounge for 20 minutes, the Pope dropped Reagan off at Air Force One and returned to a runway podium for wa brief liturgy. "He is a | charming person," the "Pontiff later told reporters, "and I am not disagreeable either." But some Vatican officials were irked that the Pope had been used as a political prop. Indeed, a camera crew from the Republican National Committee filmed the encounter, and it will no doubt turn up in television ads aimed at the 26 million Catholic voters in the U.S.

Politics aside, Reagan's trip had substantive diplomatic and economic consequences. The two nations took several practical steps to open up China to U.S. investors, including an agreement that will effectively exempt American corporations from paying U.S. income taxes on profits earned and already taxed in China. In the weeks ahead, a high-level Chinese mission will visit the U.S. to discuss trade and commerce, and Defense Minister Zhang Aiping will go to Washington to talk over military matters, including possible arms sales to the People's Republic by the U.S.

More significant, the U.S. and China reached an accord that would allow American companies to build nuclear power plants in China, an agreement that could be worth billions of dollars to the troubled U.S. nuclear industry. The deal had been three years in the making. The chief stumbling blocks were the Atomic Energy Act of 1954, and the Nuclear NonProliferation Act of 1978, which require foreign buyers to get Washington's permission before recycling any U.S.-provided nuclear fuel. Reprocessed fuel can be used to make weapons. The Chinese were reluctant to make any concessions that would impinge on their sovereignty, but finally agreed not to violate U.S. legal restrictions on reprocessing. The particulars have not been worked out, however, and the deal could be torpedoed in Congress, where sensitivity to nuclear proliferation is high. Nonetheless, the agreement showed flexibility by the Chinese, who were willing to let it be known publicly that they had made the final concession.

The trip was full of such encouraging portents. No longer did Chinese leaders talk of "dark clouds" over the Sino-American relationship. Instead, their language was conciliatory. In a final phone conversation before Reagan's departure, Chinese Premier Zhao Ziyang told him, "I think your visit has enhanced understanding and improved relations between our two countries."

White House aides are convinced that the present regime in China is genuinely pragmatic and sincere in its desire for modernization. Even when de facto Ruler Deng Xiaoping and Zhao criticized Reagan privately for U.S. policies in the Middle East and Central America, TIME Peking Bureau Chief David Aikman reported, they seemed more concerned about means than ends. The Chinese leaders tacitly approved of Reagan's steps to check the U.S.S.R. (including his arms buildup), but warned the President that he needed to be more artful in his dealings with the Soviets, who are skillful meddlers and propagandists in the Third World.

While wary of the Soviets, who have 52 divisions on their northern border, the Chinese made it clear that they wanted a neutral role with the superpowers. (The Soviet news agency TASS was apparently unconvinced; it rapped the Chinese for condoning Reagan's "militarist course.") Reagan did his best to draw the Chinese closer, while acknowledging that he did not expect the "friendship" between the two countries to blossom into an "alliance." Chinese Communists are more to his liking than Soviet ones, Reagan said, because they are not "expansionist" and are willing to experiment with capitalism.

A self-described salesman, Reagan could not resist preaching the virtues of democracy to his Chinese audiences. At Fudan University, he sounded like a solicitous parent: "I draw your attention to what I am about to say," he told 500 students, who sat rapt and serious, "because it is so important to an understanding of my country. We believe in the dignity of each man, woman and child." Then he quoted from the Declaration of Independence. Reagan, who had earlier visited the excavation site of the vast terra cotta army protecting the tomb of the Emperor Qin, warned that the two nations must "escape the fate of the buried armies of Xian--the buried warriors who stood for centuries frozen in time, frozen in unknowing enmity." The Fudan students, most of whom understood English, interrupted his speech nine times with applause. At the end, Reagan, his actor's head bobbing, clapped back. He told the students, "I just go home with a dream in my heart that we have started a friendship between two great peoples."

Chinese authorities, who had censored his anti-Soviet remarks from national television broadcasts the week before, beamed his Fudan speech live on Shanghai television, though without translation. Official press accounts the next day, however, omitted his references not only to the Declaration of Independence, but to the Bible and the contributions of two Chinese immigrants to the U.S., Architect I.M. Pei and Computer Entrepreneur An Wang.

Reagan's great leap forward with the Chinese was actually a return to the more amicable ties established by Presidents Nixon, Ford and Carter. In his first two years in office, Reagan neglected the People's Republic and boosted arms sales to Taiwan, despite a 1982 promise by the U.S. not to do so. Taiwan, Deng warned Reagan last week, remains a "knot" in Sino-American relations.

The President's trip brought a personal flavor to the growing rapprochement. Having spent time with Deng and the rest of the top echelon, said a White House aide, "the President sees them as human beings, not as some anonymous red horde." For Deng, the "most important progress is that I met the President for the first time." A major concern of U.S. diplomats is whether Deng, 79, will be able to install a new generation of leaders who share his distrust of the Soviets and fascination with free enterprise. If he cannot, the door to the Middle Kingdom could slam shut as quickly as it opened. --By Evan Thomas. Reported by Robert Ajemian and Laurence I. Barrett with the President

With reporting by Robert Ajemian, Laurence I. Barrett