For Americans, Mr. Premier, the very mention of China holds a sense of allure. It conjures up images of the Yangtze River alive with traditional fanchuan [sailboat] and modern steamers, with the wide deserts of the north, of the bamboo forests in the southwest that are home to pandas, golden monkeys, and so many other animals native only to China, of the rich, productive fields and farmlands of the east, and of the huge cities like Beijing and Shanghai.

All these provide a sharp contrast with America and remind us of China's sweep and vitality. Yet what strikes us most, perhaps, is the sense of China's history. Chinese records date back 3,500 years. Kingdoms rose and fell in China long before we in the West saw the rise and fall of Rome. And your people were creating and building architectural wonders more than a thousand years before Christopher Columbus discovered America.

By contrast, Mr. Premier, it was barely four centuries ago that the first European settlers landed on our eastern coast. These hardy men and women and those who followed them came from virtually every nation in Europe. They felled trees, planted crops, built towns, and established legislatures. Later, many thousands came from China and joined the pioneers who were establishing farms and towns in the American West.

I have to interject here and think if they had only come earlier and the earliest had come from across the Pacific instead of the Atlantic, the Capitol would now be in California. [Laughter]

But together these diverse peoples built a great and free nation. Today that nation represents a powerful force for peace in the world and is leading a technological revolution that ranges from tiny microchips to voyages through the vastness of space.

Our national experience has instilled in all Americans certain fundamental beliefs. It has taught us that for a nation to prosper there must be peace, and that for men and women to work together, they must respect each other's rights. And just as these beliefs guide our dealings with one another, they've guided us from the first in our dealings with other nations.

Just over a century ago, Ulysses S. Grant, then a former President, came to China and described America's foreign policy goals to the Chinese leaders of that time. ``We believe,'' he said, ``that fair play, consideration for the rights of others, and respect for international law will always command the respect of nations and lead to peace. I know of no other consideration that enters into our foreign relations.''

Well, the policy that President Grant described then remains our policy now. For nearly four decades, the United States and her allies have kept the peace in Europe. Throughout the world, the United States is supporting the causes of national self-determination and economic progress. And in the interest of peace for our children and our children's children, we're working to achieve an equitable and balanced reduction of nuclear arms.

Our aims and commitments are fully consistent with the sovereignty, independence, and economic development of all nations, including China. We seek no expansion but the expansion of good will and opportunity; no victory but the victory of peace.

China and the United States, Mr. Premier, differ markedly in their values, forms of government, and economic systems. To ignore or understate our differences would be to do an injustice to both. But we both believe that despite our differences our people are united in their desire to resist foreign threats, raise their families in prosperity and peace, and go as far in this life as their intelligence and imagination might take them. We hold more than enough in common to provide firm ground on which we can work together for the benefit of both.

In the 12 years since the long silence between our nations was broken by the signing of the Shanghai Communique, China and America have begun a productive partnership. Our cooperation has helped to provide a counterbalance to aggressive world forces. In recent years, we have formed new and important bonds in other fields as well, expanding our cultural and academic exchanges.

One figure tells a big part of the story. Just 5 years ago, there were no more than a handful of Chinese and Americans studying in each other's countries. Since then, several hundred American scholars have come to China, and more than 10,000 Chinese students have gone to America. These students are forming the ties of friendship and understanding on which the future of our relationship depends.

At the same time, our two nations have begun economic exchanges that are growing in importance every day. Today China exports tons of foodstuffs, raw materials, and manufactured goods to the United States each year. America in turn supplies China with grain, transportation equipment, and scientific instruments, and the United States is helping China to acquire the capital and technology so vital to a growing economy. Already, some of the many joint Chinese-American business ventures have begun to bear fruit. This magnificent hotel is the outcome of just such a joint venture.

As our relationship has matured, Mr. Premier, both our nations have undergone important changes. In the past 12 years, we in the United States have had four Presidential administrations. Each has worked steadfastly to improve the Chinese-American friendship. Here in China, you, too, have had changes in leadership. But you, too, have remained firmly committed to the friendship between our nations. We in the United States are particularly pleased by the new emphasis on economic development. We congratulate you, Mr. Premier, and the other Chinese leaders who have worked so diligently and boldly to improve the lives of the Chinese people. We recognize that it took courage to set these policies in place. And you have our pledge to give you our full cooperation as you modernize your nation's economy.

To view China and the United States as immense lands a world apart is to see one aspect of the truth. But in this century, there's another view that is even more meaningful. It is the view of a small green and blue ball spinning in the darkness of space -- a sight that has so deeply moved all who have seen it. That view is a view of the future, for it shows one planet, our planet, where all nations seem as close neighbors. Our two nations, Mr. Premier, are firmly committed to that future.

So, ladies and gentlemen, please join me in a toast. To your health, Mr. Premier; to the health of President Li, General Secretary Hu, Chairman Deng, and the other Chinese leaders I've been privileged to meet; and to the everlasting friendship of the Chinese and American people.

And if I say the final word that I was going to say, with the glass that I will hold in my hand -- I'm afraid we can't do it. I was going to say gan bei [bottoms up]. [Laughter]

Note: The President spoke at 9:28 p.m. in the Grand Ballroom at the Great Wall Hotel.