CEOL - US, China seal deal on compensation for Belgrade embassy bombing

BEIJING, Dec 16, 1999 -- (Reuters) The United States and China said on Thursday they reached a deal on compensation claims for NATO's bombing of the Chinese embassy in Belgrade in another step towards healing a rift that plunged relations into crisis.

The deal, which also covered compensation for damage to U.S. diplomatic missions in violent protests against the bombing, follows a landmark agreement between the two nations paving the way for China's entry to the World Trade Organization (WTO).

However, China repeated its demands that the United States give a satisfactory explanation of the bombing and punish those responsible, suggesting the row is not over for good.

The United States agreed to pay China $28 million in compensation for destruction of the embassy, U.S. State Department legal adviser David Andrews told a news conference.

China also agreed to pay $2.87 million for damage to American diplomatic missions in China during the angry protests that followed, Andrews said.

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

No word on timing of payments

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.

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

The May 7 embassy bombing during NATO's spring air campaign against Yugoslavia killed three Chinese, wounded 27 and prompted days of angry protests in China.

Spurred on by a vitriolic state media campaign, protesters burnt the U.S. consul-general's home in the 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.

China repeats final two demands

The official Xinhua news agency quoted Foreign Ministry spokesman Zhu Bangzao as saying the $28 million would cover "property loss and damage suffered by China" as a result of the bombing. Xinhua made no mention of the U.S. counter claim.

"The U.S. government should conduct a comprehensive and thorough investigation into the bombing, severely punish the perpetrators and give a satisfactory account of the incident to the Chinese government and people as soon as possible," he said.

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 the 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 a string of intelligence blunders.

Does deal mean dialogues resumed?

Beijing suspended WTO negotiations with Washington after the bombing and initially refused to reopen talks until it received a satisfactory explanation. Haggling over compensation claims hampered talks when they resumed in September.

China also cut off a series of dialogues intended to improve relations, including those on the sensitive subjects of human rights, nuclear weapons proliferation and military issues.

There was no immediate word on whether Thursday's deal would lead to a resumption of those dialogues.

Western diplomats said bilateral relations were still hampered by a wide range of disputes, including human rights, Taiwan and most recently over U.S. allegations that China stole nuclear arms secrets.

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