(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00367R000201450001-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: January 12, 2017
• Document Release Date: April 1, 2010
• Sequence Number: 1
• Publication Date: April 5, 1984
• Content Type: MEMO

~. ~ Sanitized Copy Approved for Release 2011/03/11 :CIA-RDP04T00367R000201450001-1
Central Intelligence Agency
Washington, D. C. 20505
DIRECTORATE OF INTELLIGENCE
5 April 1984
China: US-China Maritime Negotiations
The Chinese suddenly retracted or abandoned most of their
demands and apparently are now willing to meet key US
requirements for a new maritime agreement. In response, US
negotiators are preparing to resume discussions in Beijing
beginning 9 April, some two weeks before the Presidential
visit. According to Embassy Beijing, Chinese maritime officials
are behaving as though higher authorities are putting pressure on
them to reach agreement--apparently as part of the effort to
ensure a successful Presidential visit.
The maritime interests of both countries have been operating
without an agreement since 16 December 1983. Efforts to
negotiate a new agreement foundered largely because the Chinese
were unwilling to make the kind of commitments necessary to meet
the agreement's stipulation that one-third of the total cargo
shipped be carried in US bottoms. The Chinese apparently are now
willing to provide a domestic feeder service to pick up cargo in
shallower Chinese ports not accessible to larger US vessels, and
to transship cargo to Hong Kong and Japan for pickup by US
.ships. This could expand the volume of cargo carried by US
ships. The Chinese also are offering to provide quarterly
statistics on cargo sharing but the exact accounting mechanism
still needs to be negotiated--weight tons or dollar value. The
Chinese use weight tons for statistical purposes but a ear
willing to work with a dollar value for US cargoes.
The Chinese, however, are now seeking 'a formal US guarantee
for their one-third share of cargo. China has thus far had no
difficulty in acquiring its share. We believe this issue may be
a Chinese negotiating ploy to avoid the appearance of giving in
on all issues; it also could be used to stalemate negotiations if
discussions do not go smoothly. Liberal access to the more
This memorandum was prepared by of the Development
Issues Branch of the China Division, ice of East Asian
Analysis for the NSC Staff. Questions and comments are welcome
and may be addressed to the author at
EA M 84-10083
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`~ numerous US ports (a 3-to-1 US-PRC ratio) already gives the
Chinese access to a greater market share.
Economic Factors
~~ Economic issues probably are also behind the recent push to
get negotiations moving again. Lack of an agreement complicates
scheduling problems and is much more costly to the Chinese
maritime sector because it carries the bulk of US-China trade.
The Chinese now are required to give seven days notice of port
calls and pay port tonnage fees of $1.06 compared with four days
and 6 cents under the old agreement. US ships were required to
give seven days notice for Chinese ports even under the old
agreement.
'The Chinese, moreover, are rapidly expanding their merchant
fleet, in part with an eye to the US market. In addition to
additions from domestic shipyards, China has over 50 ships on
order at foreign shipyards. The Shanghai Ocean Shipping Company
alone has ordered 22 container ships for delivery by 1985. We
believe the Chinese now realize the disadvantages of operating
without an agreement and are willing to negotiate seriously a new
agreement. Waiting out the Chinese has had little effect on the
US maritime industry because it had not been getting its share of
the cargo in any case.
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CONFIDENTIAL
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 I:IINF I IIHN I I AI
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SUBJECT: China: US-PRC Maritime Negotiations
Distribution:
National Security Council
1 - David Laux, Senior Staff Assistant for China, Taiwan and Hong
Kong, Room 302, Old Executive Office Building
Department of Transportation
1 - Bruce Hendrickson, Office of International Affairs,
Maritime Administration, Room 7310, Department of
Transportation
Department of State
1 - Charles Martin, INR/EAP/CH, Room 8840,
1 - Gordon Brown, Office of Maritime Affairs (EB/TT/MA),
Room 5826
Central Intelligence Agency
DDI
Exec. Dir/DCI
NIO/EA
D N IC
D/OEA
Ch/CH/D
Ch/Prod
OCR/ISG
CH/FOR
CH/DOM
CH/DEF
CH/DEV
OCO/IMB/CB
-3-
CONFIDENTIAL
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