U.S. and China sew up embassy damages deal

U.S. and China sew up embassy damages deal

BEIJING (Reuters): The United States and China said on Thursday they reached a compensation agreement on NATO's bombing of the Chinese embassy in Belgrade in another step towards healing a rift that plunged relations into crisis.

The agreement also covered compensation for damage to U.S. diplomatic missions in China during violent protests against the bombing.

Thursday's deal follows soon after a landmark pact last month between Beijing and Washington on China's entry to the World Trade Organization (WTO) in another indication of warming ties.

But China repeated its demands that the United States give a satisfactory explanation of the bombing and punish those responsible, maintaining the moral high ground for possible future disputes, analysts said.

The United States agreed to pay China $28 million for destruction of the Belgrade embassy, while China would pay $2.87 million for damage to U.S. missions, U.S. State Department legal adviser David Andrews told a news conference.

"I hope this day marks the beginning of a more positive trend in U.S.-China relations," Andrews said.

"These figures reflect what both sides see as fair payment for the property damage based on the delegations' five meetings that comprised an extensive review."

But there was no immediate word on when payments would be made or who would pay first.

Andrews said the U.S. payment would be included in the budget for the 2001 fiscal year, meaning it must be approved by a Congress dominated by antagonism towards China in recent months.

Congress has been in an uproar over charges of Chinese nuclear spying and human rights abuses, and faces lobbying from labor groups against the WTO deal on which it has to vote.

The May 7 embassy bombing during NATO's spring air campaign against Yugoslavia killed three Chinese and wounded 27.

Spurred on by a vitriolic state media campaign, protesters burnt the U.S. consul-general's home in China's southwestern city of Chengdu and pelted the U.S. embassy in Beijing with rocks.

Western diplomats say Washington had sought around $5 million for damage to its missions and was reluctant to set a precedent for compensation for damage during military conflicts.

"This was a unique and tragic event. It does not set a precedent," a U.S. official said.

Foreign Ministry spokeswoman Zhang Qiyue said the deal would help improve China-U.S. ties but urged Washington to go further.

"The United States should make a thorough investigation, punish those responsible, and provide China with a satisfactory explanation of the bombing," Zhang told a news conference.

Those were among four demands an enraged China made after the bombing. It also demanded an apology and compensation for the embassy and the victims.

Beijing accepted $4.5 million for families of those killed or wounded, and U.S. President Bill Clinton made a public apology.

But China has never accepted the U.S. explanation that the bombing was a tragic mistake caused by intelligence blunders.

Diplomats said Washington was unlikely to offer further explanation or punish any individuals. "The Chinese probably accept it was a cock-up rather than a conspiracy, but it's obviously not politically sound for them to say so," said one Western diplomat.

Beijing was likely to use the issue as a trump card if candidates for U.S. presidential elections next year advocate toughening policies towards China, he said.

There was no immediate word on whether Thursday's deal would lead to a resumption of dialogues suspended after the bombing, including those on the sensitive subjects of human rights, nuclear weapons proliferation and military issues.

Asked when such dialogues would resume, the Foreign Ministry's Zhang repeated the demand for an explanation and punishments.

Diplomats said closer military ties would be fostered by the new U.S. ambassador to China, retired Admiral John Prueher, who presented his credentials on Wednesday.