US rejects $1 million tab from China for spy plane costs

Saturday, July 7th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ The United States has no intention of paying a $1 million bill China has submitted for the three months a Navy reconnaissance plane spent on Chinese soil, a State Department official said Friday.

The plane made an emergency landing on the Chinese island of Hainan on April 1 after colliding with a Chinese military aircraft. It was disassembled and returned to U.S. custody this week.

A State Department official, asking not to be identified, said the expenses were exaggerated.

This came a day after Rear Adm. Craig Quigley, a Pentagon spokesman, said the administration was prepared to reimburse China for reasonable costs.

The costs were related mostly to support provided by the Chinese government and local businesses while a Lockheed Martin recovery crew was on Hainan.

The disassembled plane was flown to Dobbins Air Reserve Base on Thursday.

Zhang Yuan Yuan, the spokesman at the Chinese Embassy, said he had no idea where the $1 million figure came from. He said the two sides will hold talks to decide on an appropriate compensation figure.

In response, a senior State Department official said the figure was based on a fax sent by Chinese officials to the U.S. embassy in Beijing. The fax was several pages and contained an itemized list of the charges, he said.

The downing of the plane caused acrimony between the two countries initially but both have seemed eager in recent days for a more productive relationship.

Deputy Secretary of State Richard Armitage noted Friday that China has been more accommodating lately partly because it is interested in successful trips to China by Secretary of State Colin Powell later this month and by President Bush in October.

Referring to Bush's planned visit to Shanghai to attend an Asia-Pacific summit, Armitage told reporters that the Chinese ``don't want to do anything to disrupt the atmosphere.''

As an example of Chinese cooperation, he noted that Beijing has moved closer to the administration's position on a new system of ``smart sanctions'' for Iraq that would allow greater flows of civilian goods while tightening up military-related imports and smuggling.

Earlier, China had been aligning itself with Russia's opposition to the administration plan.

The Washington Post reported Friday that China softened its position after the United States dropped its objections to more than $80 million in frozen Chinese business deals with Iraq.

``I don't think the Chinese are swayed by $80 million,'' Armitage said, suggesting that China has higher priorities on its agenda.

In New York, China's U.N. Ambassador Wang Yingfan was asked about the newspaper's report.

``I don't think that that's a kind of trading off like that,'' he said. ``We have our principles, and we have discussed with U.S., and on the basic items we finally agreed. Certainly, I think they have tried to meet with our concern about this.''

Armitage said the State Department was mistaken when it reported Thursday that trials had begun in China for an American citizen and a U.S. permanent resident on charges they spied for Taiwan.

The American citizen is Li Shaomin, who was formally charged in May. He is a business professor at City University of Hong Kong who was taken into custody on Feb. 25 after walking across the border into China to visit a friend.

The permanent U.S. resident is Gao Zhan, an American University professor who was detained on Feb. 11.

State Department spokesman Richard Boucher attributed the mistake to a mistranslation of what a Chinese Foreign Ministry spokesman said.

He said Li's trial will begin on July 14. He had no information on when Gao will be tried.

There has been official speculation that the trials will produce early convictions followed by deportations.

Armitage said the detentions of Li and Gao along with a number of other U.S. passport holders appear to be hurting China internationally.

He said the administration is hopeful that China wants to resolve these cases ``quickly and favorably.''