Peking says report will aggravate bad relations

SINO-US relations descended into acrimony yesterday as Peking dismissed accusations of nuclear espionage as "groundless" and said they came from those who "harbour deep prejudice and hostility" towards China.

The US congressional report was fuelled by "ulterior motives", China's foreign ministry spokesman said. These motives included America's need to divert attention from the recent Nato bombing of the Chinese embassy in Belgrade, which Peking still publicly maintains was deliberate.

"Under this situation, some Americans have intensified the creation of rumours to exaggerate that China stole US nuclear technology," said Zhu Bangzao. "The goal is to stir up anti-Chinese sentiment by spreading the theory of a China threat."

After an outpouring of nationalist public outrage, the Belgrade embassy bombing on 7 May is still being presented by the state-controlled media as a US-led plot to bully, humiliate or test China. In the same spirit, the Cox report was lambasted by Mr Zhu as part of a conspiracy by anti- China forces in America to undermine Sino-US relations. "We think some people in the United States insist on clinging to the Cold War mentality," said Mr Zhu. "They harbour deep prejudice and hostility towards China. They have created a lot of rumours to try to disturb and destroy Sino-US relations."

That bilateral relationship now seems set on a downward spiral with no obvious brake to stop the fall. Chinese media have encouraged virulent anti-US sentiments since the embassy bombing, provoking protests in mainland cities. The People's Daily, the mouthpiece of the Communist Party, carried a full page of anti-US and anti-Nato cartoons and poems yesterday sent in by readers. One cartoon portrayed the US wielding a cutlass and leading other Nato members toward a building labelled "the house of sovereign rights" and yelling "Blast this house today, split it up and make it collapse".

Relations will further sour during the run-up to the politically charged 10th anniversary of the 4 June Tiananmen Square crackdown on pro-democracy protesters. Mr Zhu yesterday attacked the US congress for "wantonly distorting" facts about the military suppression.

The Cox report, which details two decades of alleged espionage by China, will provide further ammunition for China's hardliners, who argue that Peking has been too accommodating and trusting in its relations with Washington.

The question remains whether China can afford a sharply deteriorating Sino-US relationship.

Foreign investment on the mainland is falling, exports are down, and Peking desperately needs US technology and investment to sustain its modernisation drive.