The Clinton–Jiang Summits: An American Perspective

The Clinton–Jiang Summits: An American Perspective

Dr. Harry Harding _*
to the Asia Society Hong Kong Center
at the Conrad International Hotel

Hong Kong, May 28, 1998

Speeches and Transcripts: 1998

I’m very honored to be the keynote speaker for this important conference on U.S.–China relations sponsored by the Hong Kong America Center and supported by the Asia Society and the American Chamber of Commerce. The Hong Kong SAR is a highly suitable venue for an examination of the relationship between the United States and China. I think it will be a venue that will be used more and more often in the years ahead. And this conference, coming as it does between the twin summits of 1997 and 1998, offers a perfect time at which to do so. I’d like to divide my presentation this evening into three parts. First, to review the origins and outcomes of President Jiang Zemin’s visit to the United States in October–November of last year; second, to make some predictions, and even offer some recommendations about President Clinton’s upcoming trip to China at the end of June and the beginning of July; finally, to look a bit further into the future, assessing the prospects for building a constructive strategic partnership between the United States and China, and suggesting what might become of China–U.S. relations should we fail to do so.

Origins of the 1997 Summit

Now as we all know, U.S.–China relations experienced considerable tension throughout much of the 1990s. The Tiananmen crisis of 1989 placed human rights at the heart of the relationship, and the Clinton administration threatened to terminate China’s Most Favored Nation (MFN) status unless its human rights record improved. The collapse of the Soviet Union in 1991 meant that the two countries no longer faced a common enemy and therefore, no longer had an obvious strategic rationale for their relationship. The growing trade imbalance between the two countries made the economic relationship a cause of contention rather than a basis for cooperation. The American sale of F–16s to Taiwan in 1992 and especially, the permission for Lee Teng-hui to visit Cornell University in 1995, led the Chinese to suspect that the United States was tolerating, if not actively promoting, pro-independence tendencies on Taiwan.

Now, in 1994 the Clinton administration backed away from its threat to cancel China’s MFN status and announced a policy of comprehensive engagement with Beijing—but the US–China relationship remained very strained. There was still little dialogue between Chinese and American leaders on the highest level. The two governments focused on their differences and found it very difficult to explicitly identify their common interests. Little progress was made in addressing controversial bilateral issues; there was no shared strategic framework for the future of U.S.–China relations. By 1996–97, the relationship between the two countries reached a low ebb. Public opinion on both sides was inflamed—in the United States, by more frequent calls for the containment of China, economically and strategically; in China, by a growing perception of the United States as “China’s next enemy,” and by support for the idea that “China should say no” to American pressures on trade, human rights and proliferation. Most dangerous of all, the Chinese military exercises in the Taiwan Strait in 1996, and the American dispatch of two carrier battle groups off the coast of Taiwan in response, showed that the two countries could conceivably engage in a military confrontation over the Taiwan issue.

Somewhat paradoxically, these escalating tensions broke the logjam in U.S.–China relations. In relatively short order, the two countries agreed to restore normal bilateral dialogue of the highest level, a dialogue that had been suspended ever since the Tiananmen crisis of 1989. Specifically, they agreed to an exchange of state visits. The first, by Jiang Zemin to the U.S. in 1997, to be followed by Bill Clinton’s first visit to China at some later time. Thus, the two countries agreed on their first full-dress summit meeting in almost a decade. But what kind of summit would it be? Some officials on both sides envisioned little more than a symbolic event—one that would signify that the two countries had successfully weathered the tensions of the 1990s, and that their relationship now was more friendly and stable. But these officials doubted whether the summit could achieve significant progress on the issues that continue to divide the two countries, or even whether it could produce any substantive written statement. But as the date of the summit approached, initial explorations between the two countries revealed that a more ambitious agenda could indeed be feasible, and at the end of the day, the summit yielded both symbolism and substance. The summit sent important messages to people in both countries. It produced a significant joint statement which introduced a new conceptual framework for Sino–American relations, and which announced a surprisingly large number of concrete agreements between the two countries. Let me discuss these accomplishments in somewhat greater detail.

Achievements of the 1997 Summit

First, although the summit produced far more than just symbolism, its symbolic content remains significant. For China, the fact that the summit was a state visit reflected the full normalization of China’s official contact with the United States, ending the diplomatic sanctions imposed by Washington after the Tiananmen crisis in 1989. And for the United States—by visiting Williamsburg, Independence Hall, Wall Street, and Harvard, Jiang Zemin was willing to acknowledge values and historical facts that are fundamentally important to Americans. Although it had moments of tension, the joint press conference in which President Clinton publicly criticized China’s record on human rights showed that the two leaders could deal frankly with contentious issues without disrupting the summit, their personal relationship, or their country’s bilateral ties.

Second, the summit produced a new conceptual framework for Sino–American relations—that the two sides agreed to work toward a constructive strategic partnership. This formula has two significant implications: by committing themselves to a constructive strategic partnership, the two leaders were indicating that, after nearly a decade of tension, they want their bilateral relationship to be positive and stable. At the same time, by portraying that this is a goal to be worked toward, not a situation already achieved, they also acknowledged that creating such a relationship will require additional work. The concept of a constructive strategic partnership implies that the Chinese and the Americans share significant common interests. And indeed both in the joint statement as well as in some significant speeches made by American and Chinese leaders surrounding the summit, the two countries gave for the first time since Tiananmen a comprehensive, explicit and persuasive list of what those interests are, including maintaining peace and stability, promoting economic growth, preventing proliferation, advancing regional cooperation, and addressing various emerging trans-national issues. The joint statement then explained that the essence of a constructive strategic partnership will be to increase cooperation, to meet challenges and seize opportunities related to those common interests, and implied that it was also to make concrete progress on narrowing the two countries’ remaining differences on bilateral and monolateral issues.

Third, the joint statement revealed that the summit reached a surprisingly large number of specific agreements on various issues. The joint statement was divided into nine sections, or what the American side calls “baskets”, including such issues as trade, human rights, non-proliferation, military-to-military relations, and energy and the environment. Altogether, the nine baskets included, by my count, twenty-four specific agreements reached during the summit. The two countries agreed, for example, to regular exchanges and visits by their Presidents, cabinet ministers and sub-cabinet officials; to establish a direct Presidential communications link; to reinstate the 1985 bilateral agreement on peaceful nuclear cooperation, to strengthen maritime safety; to hold military-to-military exchanges in the areas of humanitarian exchange and disaster relief, and so forth.

Thus, last year’s summit achieved far more than some cautious officials on each side had predicted. As a result, it served to stabilize the bilateral relations between China and the United States. The successful summit reinforced the determination of the two Presidents to build a cooperative relationship—it caused the critics of that relationship in both countries to fall silent at least for a time. In other words, there was less talk in America about the need to contain China and less talk in China about the desirability of saying no to the United States. However, it is essential to understand that the political base for the relationship remains shallow in both countries. Although the critics may be less vocal now than they were a year ago, they have not disappeared.

Predictions and Recommendations for the 1998 Summit

In China, for example, there are still people in both the intellectual and official communities who believe that the United States is attempting to restrict the rise of Chinese power through a policy of subverting, dividing, and containing China. They believe that this policy remains the ultimate explanation for the continued American pressure on human rights, the American insistence on opening China’s markets for goods and services in the WTO negotiations, and the steady American criticism of China’s record on non-proliferation. In the U.S. in turn, many members of Congress believe that China continues to violate international norms in the areas of human rights, trade, and non-proliferation. They are also extremely critical of the Clinton administration for failing to take a tougher approach towards those alleged transgressions. A variety of interest groups concerned with issues such as religion, national security, labor, human rights, and the environment and so forth regularly attack Chinese behavior, often because doing so helps them mobilize political support for their broader political agendas. Meanwhile the Clinton administration has been put very much on the defensive by the latest evidence of Chinese contributions to the Democratic National Committee and by the charge that these contributions led it to permit American aerospace firms to use Chinese rockets to launch their satellites. Some of the critics are even proposing that because of this new evidence, the President’s trip to China be postponed or canceled.

One example of the remaining suspicion—mutual suspicion on both sides—is the reaction to the recent Indian nuclear tests. Now this is an issue on which Beijing and Washington should easily have found common ground. Both have closer ties to Pakistan than to India, both are committed to the principle of non-proliferation, so both could join in a condemnation of India’s decision to resume nuclear testing. And this is of course the position that has been taken by the two governments. But the public reaction in the two societies has been somewhat different.

In the United States, much editorial opinion has excused the Indian nuclear tests as an understandable reaction to the rise of Chinese military power unchecked by the United States. In China I understand, an even more bizarre analysis has been circulating in private circles—that whatever its public position, the United States actually welcomed and may secretly have assisted India’s nuclear weapons program as a way of providing a counterweight to China. Now this remaining mutual suspicion reflects the fact that the underlying structural problems in U.S.–China relations were not removed by the first summit.

Overview of Structural Problems

The rapid growth of the Chinese economy and the slower but steady rise of Chinese military power is shifting the relative balance between China and America. And yet this shift in relative power is not being moderated by a common enemy, common ethnic ties, or common ideology. Second, China’s trade surplus with the United States continues to grow at a time when protectionist sentiments remain strong in the United States despite the vitality of the American economy. Third, the United States remains preoccupied with violations of human rights in China, a policy the Chinese regard as ill-intentioned, ill-informed, and an unwarranted intervention in their internal affairs. Fourth, the United States retains a residual security commitment to Taiwan during a period when the mood on the island seems to be shifting away from reunification toward at least de facto independence and toward a more visible and active role in international affairs.

These four structural problems will complicate China–U.S. relations for the foreseeable future. So, given all of this, the second summit will be an important test of the new Sino–American relationship. Can the progress of the first summit be consolidated? Can further progress be made in managing or resolving remaining issues in the relationship? I hope that modest, but still notable progress can be made at the summit on both the symbolic and the substantive levels. In all candor, I don’t think we will see a summit that will exceed people’s expectations in the same way that the first one did. But even to achieve modest progress will require considerable effort by the two sides. Let me consider the four central issues in the relationship, giving what I regard as a realistic assessment of what might be achieved.

Human Rights

First, human rights. There has been some progress on human rights inside China since the last summit. Several prominent dissidents have been released, and there has been renewed discussion of political reform. China is continuing to take gradual but significant steps in the areas of conducting competitive village elections, expanding the role of legislatures, strengthening the rule of law, and reforming the bureaucracy. Although most aspects of human rights are internal matters, not subject to bilateral negotiations, the summit could still be the occasion for further progress. Beijing could, in particular, sign the International Covenant on Civil and Political Rites, and submit both that covenant and the parallel convention on economic, social and cultural rites to the NPC for ratification, hopefully with a minimal number of reservations. The two sides could also complete the work on the formation of a forum of non-governmental organizations on human rights as agreed to in the 1997 Summit.

Trade

Second, trade. Here, the single most important accomplishment would be to make significant concrete progress toward China’s membership in the World Trade Organization. Unfortunately, full resolution of this issue at the upcoming summit is very unlikely. As we all know, the United States has a very ambitious agenda in these negotiations—seeing them as a way of removing most of the structural barriers towards bilateral trade and investment relations with China, and thus reducing the Chinese trade surplus with the United States. But China finds it difficult to significantly relax the restrictions on imports and financial services at a time when it is in the midst of reform of its state-owned enterprises, when unemployment and therefore urban unrest is increasing, and when its banking system is unsound. Moreover, Beijing seems to believe that its determination not to devalue the renminbi at the height of the Asian financial crisis should earn it as a reward somewhat easier terms of entry to the WTO. Given the great complexity of this issue, it will take active high-level leadership in both countries to break the logjam.

The most obvious framework for dealing with the issue is to have relatively strict terms for China’s entry in the WTO, but to have a more generous schedule for implementation. To encourage Beijing to complete the negotiations expeditiously, the United States could also offer to grant China permanent Most Favored Nation status at some appropriate stage of China’s entry into the WTO, and to propose China for participation in the annual G–7 Summits. It may also be necessary to roll back American tariffs on Chinese products to pre-Uruguay Round levels so that China does not continue to enjoy the benefits that should reasonably be restricted to countries that are members of the WTO. If, as it is likely, the WTO negotiations cannot be completed in time for the summit, there are still other steps, lesser but important steps, that could be taken on trade and economic issues.

These might include, first, Chinese measures to reduce tariff and non-tariff barriers aimed at increasing the growth of imports from the U.S. These could be presented as a kind of down payment on China’s bid for membership in the WTO. Second, in return, an American agreement to lift the ban on OPIC—that is Overseas Private Investment Corporation—investment guarantees and on export financing under the Trade Development Program—two of the remaining sanctions on China that were originally imposed after the Tiananmen crisis. And third, a mutual agreement that as part of their constructive strategic partnership the two countries will regularly discuss the economic and financial situation in the Asia–Pacific region with an eye to drawing appropriate lessons from the recent Asian financial crisis and to adopting measures to prevent its recurrence.

Security Issues

Third, security issues. Here the most pressing item on the agenda is to agree to full Chinese membership in and compliance with the Missile Technology Control Regime or MTCR. But once again, one should not be too optimistic that this issue can be resolved in time for the summit. One hears growing Chinese criticism of the MTCR, of its structure as an international regime, and of the particular weapons systems it covers. At the same time, some Americans have questioned whether Beijing should be offered membership in a regime that involves intensive sharing of intelligence on sensitive technologies. Above all, there is now sharp criticism in Washington of any relaxation on the export of American missile-related technology to China—a proposal that had been part of the Clinton administration’s negotiating strategy to win Beijing’s agreement to join the MTCR. So, failing resolution of the issue of China’s membership in the MTCR, could progress be made on other security issues?

From an American perspective, the most important step would be to deepen the military-to-military ties between China and the U.S. These ties have expanded rapidly in recent years, but they remain relatively shallow and superficial to the point that the U.S. Defense Department, previously a strong supporter of the administration’s policy of comprehensive engagement with China, increasingly complains that visiting American officers are not allowed to inspect the equipment or installations they request, and that discussions with their Chinese counterparts are ritualistic, and that the United States is sharing far more information on security matters with China than it is receiving in return. Accordingly, it’s time for a much more candid and fruitful dialogue on key security matters, including not only the two countries’ views on sub-regional, regional, and global security problems, but also on their own deployments, doctrines, budgets, and strategies. One cannot have a constructive strategic partnership if it is governed by secrecy rather than by transparency. In addition, it would be highly beneficial if each side could welcome the other’s role as a major power in the Asia–Pacific region. This would speak to the suspicion in China that the U.S. has adopted a policy of containing China, and to the suspicion in the United States that China seeks to break up the American alliance system in the region and to compel the withdrawal of American forces from the Western Pacific.

Taiwan

Finally, let me turn to the issue of Taiwan. Chinese policy analysts have recently drawn up a long list of measures they would like the United States to adopt on the subject of Taiwan. These include most notably, some kind of moratorium on American arms sales to Taiwan, particularly with regard to theater missile defenses, or some type of reassurance that Taiwan lies outside the geographic scope of the U.S.–Japan Mutual Security Treaty. Frankly speaking, it is virtually inconceivable that the United States will accept such proposals. Much more realistic is the idea that the United States would agree to reiterate more formally, the policy on Taiwan that was presented orally by State Department spokesman James Rubin on October 1st last year, during the first Clinton–Jiang summit. That policy, known by Chinese, although I should say not by Americans, as the policy of the “Three Nos”, stipulated that the United States does not support a “One China, One Taiwan” policy or a “Two China” policy, does not support Taiwan independence, and does not support Taiwan’s membership in international organizations that require members to be states. That statement, which merely summarized long-standing American policy towards Taiwan, could reasonably be restated more formally, in my view, during the second summit. But the real crux of the Taiwan issue lies not in Washington, but in cross-straits relations.

Although there has been some progress towards the resumption of cross-straits dialogue in recent months, and although economic and social links between Taiwan and the mainland continue to grow, there is much more that could be done to improve relations between Beijing and Taipei. Some leaders in mainland China have already hinted that the formula of “One Country, Two Systems” that has been implemented successfully in Hong Kong, need not be applied to Taiwan. Instead, they’ve suggested that the structure and even the name of a unified China would be a subject for negotiation between the two sides. In the meantime however, many Taiwanese remain suspicious of what they regard as Beijing’s efforts to restrict Taiwan’s participation in the international community. Beijing could gain enormous goodwill, both internationally and in Taiwan, if it were to announce that it had no objection if Taiwan were to join the WTO even before the PRC did, once the negotiations on Taiwan’s application for membership had been completed. In return, Taiwan could significantly expand both official dialogue and direct transportation links with the mainland. In short it’s possible for the two sides to make some significant progress on these four central issues in U.S.–China relations even though they would not resolve any of them completely. In addition to this, I would hope that the summit could achieve two other significant accomplishments.

Recommendations

First, the two Presidents should carefully and candidly review the progress that has been made in fulfilling the twenty-odd specific agreements contained in the joint statement from the first summit. This kind of report card is essential to reassure the skeptics in both countries who believe that summit meetings produce nothing but empty words, promises that are never fulfilled. Some Americans have used the phrase “sustainable engagement” to refer to the need to ensure that the process of bilateral dialogue produces concrete results—that’s what the two Presidents should show that they have achieved in the months since the October summit of last year.

Second, President Clinton’s visit to China presents an enormous opportunity for the American people to gain through the President’s eyes, a better understanding of the complexity of the situation in China and the progress that is being made in both economic and political reforms. Put differently, it is an occasion for Americans to acquire visual images of China that might replace or at least supplement those dating from the protests in Tiananmen Square nearly ten years ago, images of course that will be replayed by the American media when the President receives his official welcome to Beijing on that same spot. For this transformation of images to occur, however, President Clinton must see more than selected scenic and historic sites and a joint-venture or two. He and through him, the American people, must see a much broader cross-section of today’s China: a desperately poor village trying to develop a feasible strategy of development, a prosperous village with extensive rural industry, a coastal city with its gleaming office towers and modern shopping malls, a grim interior city battling air pollution, and bankrupt state enterprises. The President should meet with senior Chinese leaders and promising younger officials, with scientists and artists, with state enterprise managers and entrepreneurs, with urban Chinese who have just purchased their own apartments as well as with rural Chinese who have earned enough money to buy a newer and larger home. This requires, in other words, that Chinese leaders arrange for the President not the standard tour from the Great Hall to the Great Wall that a first-time visitor might book from a commercial travel service, but rather the more illuminating itinerary that a thoughtful—I might add, well-connected-Chinese might arrange for a close American friend.

The Future of U.S.–China Relations

Now looking beyond the second summit, what are the further prospects for U.S.–China relations? What kind of relationship might we reasonably try to build for the twenty-first century? At last year’s summit, the two Presidents answered that question in general terms when they agreed to, and I quote, “build toward a constructive strategic partnership between our two countries.” But what does that phrase mean? How far have we come toward realizing that vision and what more needs to be done to achieve it?

A Constructive Strategic Partnership

To me, each word in the phrase “constructive strategic partnership” implies something significant. A partnership implies a relationship based on significant common interests, common interests that both sides regard as more important than their remaining differences. It also implies that the two countries build close and relatively intense ties at both the official and the unofficial levels, rather than maintaining a shallow, episodic, arms-linked relationship. A strategic partnership implies that these common interests are long-term concerns, not just temporary needs, and that the relationship is therefore enduring, rather than transitory. A constructive strategic partnership implies that the two countries pursue those common interests through active cooperation and in which they work hard to narrow remaining differences through sincere negotiation.

Now, a constructive strategic partnership has its limits. We’re not envisioning an alliance between China and the United States. Nor are we envisioning an exclusive relationship; each of us will maintain other partnerships, and in the American case, alliances with other nations with whom we are close. But, a constructive strategic partnership would still imply an enduring, positive relationship between our two countries. And, it would stand in sharp contrast to more negative forms of relationships which are dominated by conflicting interests, divergent values or competing objectives.

Now with that definition in mind, how would I characterize Sino–American relations today, in between the two summits? Clearly, we’ve made a great deal of progress away from the tension and hostility of the early to mid 1990s. I would describe the situation as follows: we’ve identified our common interests and we have agreed that they are more important than our differences; we have restored more regular high-level official contact and dialogue between our leaders; we have begun to build personal relationships between our leaders; and we pursue parallel policies on important regional and global issues.

Trust—The Common Denominator

Now all of these are important steps in the right direction, but in my judgment they add up to far less than a constructive strategic partnership. What’s missing? Although we give lip service to our common interests, there are still many doubts that these common interests will dominate our actions, that the promises we make to each other will be kept, and that goodwill can be assumed. Although we have restored more regular high-level dialogue, much of that dialogue, as I’ve already noted, remains superficial. In particular, our dialogue on security issues, especially between our two military establishments, does not yet involve true transparency. Although our highest leaders may have begun to build personal relationships, those ties rest on a very weak political base. There remain in both countries those who are deeply skeptical that our two countries can avoid an adversarial relationship. And finally, although we may pursue parallel policies on significant issues, we do not yet work actively and visibly together in acknowledging our cooperation.

Now there is I think a common denominator here that links the doubts about the meaningfulness of our common interests, the superficiality of our dialogue, and our inability to work visibly together. That common denominator is that there is still not a high level of trust between our two countries, at either the official or the unofficial levels. And thus, our constructive strategic partnership remains incomplete. To borrow two terms from France’s rich vocabulary of international affairs, we have achieved a detente, a reduction of tensions, but not yet a rapproachment, or a lasting accommodation. How then can we complete the task of building a constructive strategic partnership? Some Chinese analysts have said that this task is complicated by the fact that Americans and Chinese build trust in different ways. Americans think that trust comes from concrete progress in managing specific issues; Chinese believe that trust comes from agreement on basic principles. Chinese therefore, think that trust enables cooperation; whereas, Americans are convinced that cooperation builds trust. Now fortunately, while these two approaches are certainly different, they’re not contradictory. They suggest that we need to take a multi-track approach to the problem.

First, through both words and deeds, we must reassure each other that we wish each other well. As noted above, the United States needs to confirm that it wishes China every success in its historic drive for modernization and reform, that it welcomes China’s rise as a major power, and that it does not seek either to weaken China, nor to contain its influence. Conversely, China should assure the United States that it welcomes the continued American role in the Asia–Pacific region, that it seeks the United States as a valued partner in China’s efforts at modernization and reform, and that it does not seek to exclude the United States from the region. These kinds of reassurance help establish the good, mutual intentions that are so important to Chinese.

Second, we also need to make measurable progress in narrowing our differences to achieve visible cooperation and the advancing of our common objectives, and above all, to implement with sincerity and goodwill the agreements we reach. This will help produce the sense of concrete achievement that is so important to Americans. Third, we need to deal with each other always with candor, sincerity, and mutual respect-values that different as we are, both societies value.

Prospects for the Future

Now moving from detente to rapproachment and successfully building the constructive strategic partnership will not be an easy task, especially given the deep structural problems in the relationship that I’ve already outlined. What happens if we don’t succeed?

One possibility is that we simply remain where we are—in a relationship that about a dozen or ten years ago I described as neither friend nor foe. This relationship will be relatively shallow and aloof. But, as China grows stronger, such a relationship will simply not be sustainable. The two countries’ interests will intersect in so many places and on so many issues, that a distant relationship is increasingly unlikely. Another possibility, of course, is an adversarial relationship, in which the two countries’ ties are dominated by their conflicting interests, values, and perspectives. This too, I think, or at least I hope, is unlikely. I would like to think that our common interests, if only our common interests in avoiding military confrontation and in maintaining our economic ties, will be strong enough to prevent us from devolving into a cold war, let alone a hot one.

So the most likely alternative to partnership, in my view, is competition in which China and the United States constantly seek advantage over one another, viewing their relationship primarily as a zero-sum game in which one side loses to the extent that the other side gains. As I’ve just implied, a competitive relationship is far short of an adversarial one. Competitors do not wish normally to destroy their opponents—only to defeat them. Competition is normally conducted within rules and usually within reason. Often, competitors can work together to maintain the broader economic and strategic environment that supports their competition and sometimes, even to turn away new rivals who wish to enter that competition. But a competitive relationship would entail far more friction and far less cooperation than a constructive partnership: there would be more differences on bilateral, regional, and global issues; trust would be minimal, goodwill would not be assumed; cooperation in pursuing common interests and in narrowing differences would therefore be limited and would occur only after the most protracted and contentious bargaining. Thus, a constructive partnership is vastly preferable to the most likely alternative, which is a competitive relationship, and yet it will take considerable effort to achieve that objective. That is the deeper challenge of the second Sino–American Summit and of the continued engagement between our leaders and our societies that will follow it.

Thank you very much.

Questions & Answers

Professor Harding also answered several questions from the audience:

You didn’t extensively discuss U.S.–China trade. Perhaps U.S–China trade is a meaningful component of Jiang Zemin’s and President Clinton’s talk?

Well, I did mention trade as one of the four principal issues that I think will be discussed at the summit, and I mentioned the growing trade imbalance, at least as calculated by the United States, as one of what I call the four structural problems in the relationship. So, I think it will be one of the major points discussed.

Earlier this year, as I listened to my government in Washington, there seemed to be a sense that the summit could indeed focus on trade, and there might be some real progress, especially on WTO. I would have to say now, what I hear is much more pessimistic on that point. As I said in my talk, although many of us outside government can see what an agreement may look like, we also would have to say that it is unlikely that it will be achieved, at least in its entirety in the summit. Therefore, I suggested that what might happen would be a more partial set of agreements, possibly within the WTO framework, that could lead above all to an increase in American exports to China.

Many people in the government have come to the assessment that the real problem here is not so much that Chinese exports to the U.S. are growing, but that American exports to China are not, and that given the gap that already exists in the two-way flow of goods, you would have to have a huge increase in the growth rate of American exports to China even to begin to narrow that gap. So the aim should be, how can we increase American exports to China in ways other than the episodic Chinese purchase mission to the United States, which whatever its good intentions, simply reflects to many Americans the relatively state-directed nature of Chinese trade, which they then promptly criticize. I think trade will be a key issue, but I am not optimistic that the most important potential achievement, agreement on WTO membership for China, will actually be achieved.

Professor Harding, with exquisite and elegant timing, the long-running campaign finance scandal has appeared to implicate China approximately six weeks before the summit. Would you care to comment on the implications?

Yes, that’s a very good question, and this is very serious indeed, because it would seem that two key propositions are being validated or supported at the same time. One, that very well connected people in the PRC channelled campaign contributions to the United States that are illegal under American law; secondly, that there is some connection between those contributions and an actual change in American policies, specifically on export controls on missile-related technology. So those are the two absolutely central issues at stake—was money transferred and did it buy something? The evidence now seems to be much more supporting at least the first proposition and probably, possibly the second, than ever before.

Now having said that, what are the implications? The specific implications are probably relatively muted at this point. As I mentioned in my talk, they have led to demands that the President cancel or postpone his trip; from what I read this morning, that’s not going to happen, and certainly should not happen in my judgement. So that kind of a scenario, I think, is not going to come about. What I think that this has done, and I think that in fact this problem or this consequence had emerged even earlier, is that it ends for the time being any possibility of securing China’s full participation in the Missile Technology Control Regime; so it eliminates one of the possibilities for significant progress at the summit.

The implications for the summit are visible but not dire. It simply removed one possible major achievement, but it doesn’t make it impossible to have a reasonably successful meeting. What concerns me is the broader question—if you want an analogy or metaphor, American criticism of China and of the President’s policy towards China is like a flame; sometimes it burns up and then gradually it burns down until more fuel is put on it. The flames had risen very high in early 1997 with the early allegations about illegal campaign contributions and with the publication of the book The Coming Conflict With China. At the end of the summit, at the end of last year, the flames had died down, some overly optimistic people may have thought that the flames had gone out, but as this will be a metaphor that only my American friends will appreciate, as Smokey the Bear teaches us, a campfire may appear to have gone out, but unless it is thoroughly doused not with water but with dirt, you can’t be sure. And what we find is that now a little more fuel has been put on the fire and how rapidly those flames can spurt up again.

I think the basic lesson is very simple, and that is that there still is enormous skepticism about China in the United States, and there are also those who see that there is great potential political advantage to be found in using the China issue as a lever with which to criticize the Clinton administration.

Dr. Harding, can you see the impact of this China–U.S. Presidential summit on Japan, because it can affect U.S.–Japan relations and Sino–Japan relations, as you know, Japan is a key player in this region. Also, what does Japan want to see in the U.S.–China relationship?

Well I think the second question is a little bit easier to answer because it is a broader one. The broader question is quite easy. I think that it wants a relationship that is not too cold and not too warm. It wants—I forget which nursery rhyme or fable this comes from—but wants the porridge to be just right. In other words, Japan does not want a hostile U.S.–China relationship in which it would be forced to choose sides in a very tense and awkward way, but nor does it want a very close U.S.–China relationship from which Japan in some way would be excluded. This is a very common phenomena as we know in great power politics—we like to see not too much tension, but some tension occurring.

As to how the summit will affect Japan right now, I think that maybe things will work out all right from the Japanese perspective. As you all know, the Japanese had come under considerable criticism in recent months for their chronic inability to deal with their own internal economic problems and with the way in which Japan was thereby failing to perform its responsibility to serve as an engine of growth to get the rest of the region out of the financial crisis. Temper in the United States was growing short and patience with Japan was wearing thin. In that context, the Japanese were concerned that the euphoria that seemed to be surrounding U.S.–China relations would lead to a phenomenon by which the Americans would move from bashing Japan to passing Japan. In other words, Japan would simply be ignored by the United States in its rush towards a constructive strategic partnership with China.

The fact that the prospects for the second summit no longer seem so euphoric as they might have before, is probably some reassurance to Japan, although some Japanese continue to ask why President Clinton finds so much time to visit China and no time to visit them on either the way in or the way out. So there is some concern in Japan, perhaps less than there was a few months or so ago, but it’s a concern that we all have to accept. I think that some have said that we are in a process of competitive bilateralism-countries including Japan improve their relations with second countries in order to gain some advantage over third countries, so this is not a game that only the United States and Americans play, the Japanese do it too, and they shouldn’t be so surprised when other countries join in.

Ronnie Chan: Can I add here Harry, that in a recent conference of the Asia Society, one very distinguished Japanese journalist mentioned the U.S.–China–Japan trilateral relationship, and he made a statement: “After all, Japan is America’s ally but not China,” which means that it seems that there is a lot of Cold War mentality that is still lingering on where “I am America’s ally, you are not,” and that goes to show what you have said about competitive bilateral relationships.

I would have to say, as I said in my talk, America does have alliances and we are not envisioning that at this point our relationship with China is going to become an alliance. I think it is fair to say objectively that the U.S.–Japan relationship, whatever the tensions, is qualitatively different than the U.S.–China relationship and will remain so for the foreseeable future. Now that doesn’t mean that there won’t be periods of great cooperation with China and periods of great tension with Japan, but I think I would not fundamentally differ with what he said, but I’m also not sure what specific conclusions he sought to draw from that statement of fact.

Harry, I’d like to return to the statement you made a few minutes ago about political advantage and ask you, if you would, to reflect a little more on that. We’ll soon have a lame duck President. To what extent do you think the summit itself and some of the measures that you’ve been talking about will become an issue in the next presidential election and how might that affect the upcoming summit?

I frankly do not believe that under any kind of reasonable scenario at the moment that U.S.–China relations are going to become a fundamental issue in presidential politics. I think presidential politics revolve around three broad issues, always. These are the issues of war and peace, the economy, and corruption or scandals.

I think that the President on the issue of war—clearly we are not in a war. At this point America clearly remains at peace, and more importantly, he can argue that by trying to construct a constructive strategic partnership with China he is trying to reduce the chances of war. Now the Republicans can claim that it is naive, that we should be bolstering our defenses and containing China, but I don’t think that they’re going to win that particular debate. It may be a draw at best, so I don’t see them gaining enormous advantage from that particular issue.

The economy remains strong. The Republicans—and some Democrats—will continue to hammer away at the issue of protectionism, but given the strength of the economy, I would have to continue to predict that as we’ve seen in many past elections, the protectionist candidate always loses, either in the primaries or in the general election. So I don’t think that that is a particularly potent issue.

One issue where the president, the only issue where President Clinton is vulnerable at the moment is in the area of scandal and corruption. And unfortunately, he is quite vulnerable on those issues right now. The Republicans especially will try to use the alleged campaign financing scandal to weaken the Democrats and especially Vice-President Gore who has had, as we all know, a connection with a slightly different aspect of the so-called “China Connection.”

So I think that’s how it will play out. It will only be an issue to the extent that it triggers a more general concern with one of the big three issues I’ve just outlined.

I’m always curious in these conversations that Taiwan seems to be almost an article of faith, that we should support that island. I’m curious to know what you would think if you were Secretary of State and you had an open book to work on, why should the United States continue to support the Taiwan community? I mean China’s not going to really attack them—they’re going to do fine without our support. Why don’t we just say “We’re done with you, we’ve supported you for fifty years, we’re done?”

Well, fortunately I can dismiss both of your premises: A) I’m not going to be Secretary of State and, B) even if I were, it wouldn’t be as you called it an open book or a blank page. I think that we do have, for both very good reasons of morality and national interest and ongoing political commitment, we do have ongoing commitments to Taiwan, but we have to define very carefully what they are. I don’t think that we can write Taiwan off and I don’t think that we should. On the other hand, I also don’t think we should go to the other extreme and give Taiwan a blank check and say that no matter what you do, we will support you.

There are some Americans who, and I find this very troubling, seem to be saying just the latter—that because Taiwan is a democracy, and because the United States came into being itself through a unilateral declaration of independence, that if Taiwan declared its independence from the rest of China, that the United States should back it up. Some have some curious variants on it; some say that we should simultaneously not recognize that act but still back it up, as if that somehow would deter Taiwan from going through with it.

My point of view is very, very simple, and very consistent for many, many years, and that is that our interest is in a peaceful resolution of this issue at some point in the future by the two sides of the Taiwan Straits. I do not care, and I don’t think the United States should care, what the outcome of that resolution is. If it is unification, that’s wonderful, if it’s something else, that’s fine with me too. Whatever the two sides agree on is fine with us as long as it occurs without the use of coercion by either side. It’s a natural, peaceful, mutually acceptable process. At the same time, I also believe that the United States should resist, object to, the attempt of either side to impose its will unilaterally on the other. That would apply to an unprovoked use of force by the PRC in an attempt to try to promote unification more quickly; it would also equally apply to a unilateral declaration of independence by Taiwan.

So is that supporting Taiwan? Yes, in certain circumstances it is, and I think it’s under the right circumstances, frankly. I would agree with your premise that these circumstances may be relative. Really we certainly hope that this is not a commitment that we would ever have to honor—that everyone would act so responsibly that this contingency would not come to pass. But I think that this is an appropriate commitment. I think that conversely, it is not an appropriate commitment to simply give a blank check and say, “Any use of force by the PRC, no matter why it was provoked, is considered to be out of the question by the United States.” So I think that that middle course is what I would favor myself.

First off, thank you for a terrific talk. As I sat here looking at you while you were talking, I realized that there was one topic that I think you didn’t touch on, and that’s because if I look above you I see the Hong Kong–America Center, the American Chamber of Commerce in Hong Kong, Asia Society Hong Kong Center. I wonder if you could comment briefly on the significance of the trip for Hong Kong, how the elections played in Washington, and American’s perception of what’s going on in Hong Kong right now.

Well I didn’t, you’re right, I did not mention Hong Kong and I think that was deliberate and I think it’s for a good reason, and that is that Hong Kong is not a major item on the agenda, and that’s good, because if it were a major item on the agenda, we’d know why—it was because there was some problem going on here.

I think that Hong Kong—I’ve had some practice answering this question today, so I’ll just give you the line that I’ve developed, having been asked it ever since 7:50 this morning, on through several meetings with the press. First of all, Americans do care about Hong Kong. That’s one reason the President will be coming here at the end of his visit to other parts of China. At present, the situation seems to be going very smoothly with regard to the transition. It’s not all over yet; there are lots of concerns for the future, but so far so good, and I think that’s the message that the President will convey. If Hong Kong were to go sour—a very unlikely situation we hope—but if it were, that would introduce a major negative factor into U.S.–China relations. It would not only reactivate the question of human rights, but it would also raise to the highest level the question of whether China can be trusted to fulfil its international commitments, because it will be argued that any violation of the arrangements for Hong Kong is a violation of solemn international undertakings that China took when it signed the Joint Declaration with Great Britain.

Beyond that, what is the role of Hong Kong? As I said in the introductory remarks, I think it is an increasingly important venue for discussion among Chinese and Americans of U.S.–China relations. This is not a role that it played in the past. The change in status interestingly, makes it possible for Hong Kong to be a significant venue, not the only one— we’ll continue to have meetings in the United States and the rest of China, perhaps in third countries—but Hong Kong is playing a major role as a venue and hopefully, Hong Kong will develop its own voice and will make increasingly important contributions to that dialogue itself.

Finally, the question is whether over the next twenty, thirty, forty, fifty years, Hong Kong is going to be a kind of model for the rest of China. It’s already an engine of economic growth. Will it also begin to be a model for the rest of China as to how a Chinese society can govern itself and succeed economically in today’s world? And, if fifty years from now the rest of China or major parts of it look a lot more like Hong Kong than they do today, that will be a huge plus in U.S.–China relations. So that’s the role of Hong Kong as I see it and the fact that I didn’t mention it means good news rather than bad news. It means things are going pretty well.

Mr. Harding, I have two questions. One is could you explain the reasons President Clinton visits China ahead of schedule? Second, what kind of impact will the Congressional critics of President Clinton have on his trip to China?

As for the dates, I would suggest that you refer those questions to the two governments involved. I really don’t know the answer. When you say “ahead of schedule” I guess my answer would be I don’t know what schedule you are referring to. I’m not sure there ever was a schedule. There was certainly a debate that I perceived over how soon the second summit should be held. To be very frank about it, my impression was that working-level officials, who were exhausted by the first summit, wanted the second summit to be held as quickly as possible, along the lines of the exchange of Summits in 1984 between President Reagan and Prime Minister Zhao Ziyang, because they realized that the quicker the second summit came, the more likely it could be simply a ceremonial, symbolic meeting where no one would expect that you could do anything further, and they would have less pressure on them to produce results. Other people wanted the summit about a year later, after the elections, precisely because it was felt that then there would be pressure established to achieve more progress, and the administration would be relatively free of the constraints of a Congressional election that will be held in November of this year.

So, at the end of the day they split the difference, and from what I understand it was basically a function of the President’s overall schedule, plus China’s great desire that it not be linked to the President’s visit to the APEC summit later this year, and the fact that you could not have a visit right during the height of the Congressional election campaign, which gets us then to your second question—as to the effect of the Congressional criticism.

It clearly is not making the summit impossible. The summit is going to go forward. But obviously it does warn the President that he had better not make agreements with the Chinese that don’t stand up to Congressional scrutiny. It certainly did not affect the first summit in a negative way. We had twenty-four agreements, and the summit was relatively well-received in the United States, but it does mean that the President has to be cautious because, to reiterate again a point I’ve made consistently tonight, his political base on this issue in the United States is weak.

It’s probably a bit unfair because it’s such short time, but could you comment a little bit on your thoughts on what’s going on within China in terms of the restructuring of the bureaucracy, the unemployment, the potential for disaster that has and how that might impact relations and summits and so forth?

I’m not happy that’s the last question; it’s a hard one and I’m tempted to rush through the answer and go to bed, but I’ll try to give it the seriousness it deserves. I think on the one hand, we have to say that it’s remarkable how well China is doing, given the enormousness of its problems and the real consequences of reform. Millions of people have been thrown out of work by the state enterprise reforms that have already been undertaken, and yet, while there have been some protests, the situation remains relatively stable. So that’s the good news. The bad news is that the objective situation is likely to get substantially worse in the months and years ahead. As you said, significant numbers of officials are going to be laid off. You are going to begin to, at least in theory, restructure the largest state-owned enterprises. So far it’s millions of people laid off from the small and medium-sized ones-now, you’re going to hit the big ones, focusing on concentrations of workers in cities that are not doing particularly well already—all this in a context of China’s growth slowing down, incoming foreign direct investment slowing down, export growth slowing down, so it could be a fairly dicey situation.

The implications of this for the United States are, number one, this is one reason why the Chinese are not keen to move forward rapidly on WTO, especially with regard to the liberalization of their financial markets. I would have to say that the experience of the rest of the region in the Asian financial crisis indicates that they may have a point. Many people are now questioning the openness of financial markets, of convertibility of capital accounts, and are asking whether the risks that these impose on economies in the region are worth the very real gains. So it will make progress on WTO less likely if there should be significant urban unrest in China that is suppressed by force and widely reported in the American news media. I don’t have to tell you what that will mean—that talk about putting fuel back on the fire—this would be taking a tanker truck of high-octane fuel and dumping it on the flames. It will be terrible for U.S.–China relations. So that’s why we really should wish China well in these efforts. This is an enormously daunting task, and I have the utmost admiration for the determination of the Chinese leadership to see this through to the end, even though it will cause considerable social and economic hardship and pain for many Chinese.

One last point that I learned in talking to some Chinese friends recently which adds to my concern: they tell me that many Chinese college students this year cannot find jobs. Now that surprises me because we know there is an overall shortage of college-educated labor in China. But this year, with the slowing down of the economy, the cutbacks in government, obviously cutbacks in the state sector, many people, especially those who are not in business and science can’t find work. The combination of an unemployed intellectual community and unemployed urban labor is extremely explosive in any society. So this is getting into a very dangerous situation in China, and I would say that we should wish China, its people, and its leaders all the best, because their determination is admirable, but the road ahead may be quite difficult.

*: Dr. Harry Harding is the Dean of the Elliott School of International Affairs at George Washington University. Back.