China, Moscow sign $14B agreement

Press, 12 July 1985, Page 6

China, Moscow sign $14B agreement

A ?USI4 billion ($29.54 billion) deal signed in Moscow between the Soviet Union and China has highlighted mutually beneficial trade as a basis for a new mood, if not wholesale reconciliation, between Moscow and Peking. Under the agreement, signed by a Chinese VicePremier, Yao Yilin, and a Soviet Deputy Prime Minister, Ivan Arkhipov, yesterday, total annual trade between the estranged communist super-Powers will double by 1990 to SUS3.S billion ($7.38 billion).

Moscow will help modernise the industrial plants constructed in China by Soviet engineers during the years when the Soviet Union guided Chinese development before an ideological rift in the early 19605.

Most of the details of the new agreement were worked out in December when Mr Arkhipov visited Peking. Mr Yao is now returning that visit and will tour several Soviet cities during an eight-day stay that began on Wednesday.

Chinese sources emphasised privately that there was no likelihood of a

return to the close alliance of 30 years ago. Peking’s growing contacts with the United States are diplomatically avoided in public SinoSoviet talks. The Chinese President, Mr Li Xiannian, was due to leave Peking last evening for an extensive visit to the United States and Canada.

Among the first foreign affairs statements by the new Soviet leader, Mikhail Gorbachev, after he took office in March was an expression of interest in a

radical improvement of relations with Peking. Western analysts have said that the process has been speeded by Soviet concern that a United StatesChinese understanding would emerge, which would result in an “encirclement” of the Soviet Union. But bi-annual talks held alternately in Moscow and Peking have shown no sign of movement on the issues cited by China as blocking improved relations — Soviet troop levels in Mongolia and on their common border, Moscow’s entanglement in Afghanistan, and its support for Vietnam’s intervention in Kampuchea. The trade agreement will, make certain aspects of economic life easier for both Powers, providing Soviet citizens, particularly in Siberia, with increased supplies of Chinese agricultural produce and consumer goods. It has been described by some Western diplomats in Moscow as an eastern extension of Moscow’s declared policy of co-opera-tion “between countries with differing social systems”, the doctrine normally used to justify trade with the capitalist West.