NEW YORK – Pandamania in WashingtonChina has agreed to let two pandas stay in the National Zoo for five years. Newsweek's Melinda Liu reports on the panda diplomacy—and the expectation of a new cub. Plus, watch adorable panda videos.

What some Americans and Chinese will see as an important breakthrough is being eclipsed by the pomp of the White House state dinner and by the lengthy joint statement summing up ties between the world’s two most important nations. This hidden breakthrough has nothing to do with human rights or currency exchange rates or other heavy issues weighing on Chinese President Hu Jintao’s shoulders during his state visit. Rather, it’s about pandas. Specifically, it’s a new bilateral agreement extending by five additional years the U.S. stay of two adult pandas on loan from China to the Smithsonian National Zoological Park in Washington, DC.

Videos: Adorable Pandas

Nurturing these goofy, adorable, chubby—and endangered—creatures may not be as urgent a global priority as, say, shutting down North Korea’s nukes. But what’s come to be called “panda diplomacy” has been used by Chinese rulers to win allies overseas for a thousand years. And unlike most pressing Sino-U.S. issues—which seem to get ever pricklier as ties between the two economic giants grow more complex—the issue of pandas is pretty simple.

The panda phenom first hit Washington just after U.S. President Richard Nixon’s ground-breaking 1972 visit to China, which paved the way for re-opening ties between the two countries after decades of Cold War enmity. Pat Buchanan, who was a member of Nixon’s entourage, recalls how the White House, preoccupied with geostrategic issues, paid little attention to the two pandas, Hsing Hsing and Ling Ling, presented by Beijing to Washington to cement the new relationship. The U.S. government was utterly unprepared for the uproar and adulation that erupted after the two animals arrived at the National Zoo. "The Chinese really scored heavily," he recalled. "We didn't realize what a smash they would be."

At its core, the new cooperation pact is about ensuring that female panda Mei Xiang will mate with her mate Tian Tian—or be artificially inseminated—in hopes that she’ll give birth to a brother or sister to the phenomenally popular panda cub named Taishan who was born at the National Zoo on July 9, 2005. Taishan’s cute antics drew tens of millions of viewers to the zoo’s pandacam site. But China’s panda “loan policies” stipulated that Taishan had to return home at a certain age, in order to participate in a captive breeding program. So after a number of postponements Taishan left the land of his birth nearly a year ago and arrived in China, amidst much media attention and poignant displays of sadness from American fans. “Washington's beloved giant panda adolescent was saluted as if he were a departing young prince,” said the Washington Post, “Subjects wept. They shouted their love from an overlook. They prayed that he might one day find a suitable princess in the far-off land that will be his new home.”

Now Americans can hope for another made-in-America panda cub. The new agreement states that China will send specialists in anesthesia, mating, breeding and cub-raising to the United States, said China Wildlife Conservation Association official Zang Chulin, who briefed media Wednesday at a hotel not far from the zoo where Mei Xiang and Tian Tian reside. "We hope to see some good results at an early date,” he said. the announcement was considered so significant that personnel at the Chinese delegation’s press center switched off a television broadcasting the live joint press conference with Presidents Barack Obama and Hu Jintao, so that mainland officials could hold a panda briefing. A table in the briefing room was loaded with government-supplied literature about China, including two DVD’s about pandas (one was titled “Raising Baby Giant Panda”).

The new agreement, which runs through December 2015 is valued at $500,000 a year. Zang declared it “a great opportunity …to advance our friendship” between China and America. When asked precisely why Americans loved pandas so much, another official, Zhang Shanning replied, “I heard an expert say that when giant pandas are sitting while eating, they look like [human] babies. And babies elicit fondness from people.” He acknowledged however that different experts had different opinions about pandas’ uncanny ability to win over humans. “This is a very interesting question… Scientists are studying it.”