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Policy Impact Panel
US-China Relations: Current Tensions, Policy Choices
March 29, 1996
DATE March 29, 1996
TIME 9:00 AM-12:30 PM
PROGRAM Policy Impact Panel, US-China Relations: Current Tension, Policy Choices
Dr. LESLIE GELB (President, Council on Foreign Relations): Good morning, ladies and gentlemen. My name is Leslie Gelb, President of the Council on Foreign Relations. On behalf of the council on Foreign Relations and the National Committee on US-China Relations, I'd like to welcome you to our fifth Policy Impact Panel. We created these panels to help establish the facts of an important issue and to illuminate policy options. These objectives are very much interrelated, first looking at the situation, the facts--the analysis of how serious the problems are and exactly what the problems are, and folding into the second set of questions dealing with policy alternatives and strategy. The idea is to go back to old-style congressional hearings, systematic questioning and responses, so that we get some answers.
Today's panel will be chaired by Carla Hills. Ambassador Hills was the US Trade Representative. She is now Chairman and CEO of Hills and Company, and she is also a member of the two sponsoring organizations: the Council on Foreign Relations and the National Committee, US-China Relations. I turn the proceedings over to Ambassador Hills.
Ambassador CARLA A. HILLS (Panel Chair; Former US Trade Representative and Chairman & CEO of Hills and Company): Thank you very much, Dr. Gelb, and welcome to all of you on this cold and somewhat snowy and dreary morning.
Your spirits will be brightened by the exchange that, we think, will follow at this Policy Impact Panel which we've entitled US-China Relations: Current Tensions and Policy Choices. And our purpose is to discuss how the United States can simultaneously and effectively pursue its multiple objectives in security, human rights and business interests with the People's Republic of China.
The panel will hear from three groups of witnesses. Our first group is clearly a very distinguished group of experts, and they will have an hour and a half to first present their views in five to six minutes, followed by questions that we will put to the group after each, as I have the opportunity to address their particular issues.
And in this first group, we will talk about the human rights issues in China and the US policies to further those interests. We will talk about US business interests and how we are proceeding on that front. We will talk about the US security interests and--with the People's Republic of China, and include the issues of Taiwan and nuclear proliferation. And we will conclude with the global issues of common concern.
During the second session, we will focus on the administration's policies with the People's Republic of China. And in the final and third session, we will hear from a member of Congress, a former ambassador to China and an Asian scholar.
Let me begin by briefly introducing our very distinguished panel. At my far right is Barber Conable, who served as President of the World Bank and as a US Representative and currently is Chairman of the National Committee on US-China Relations. To my immediate right is James Woolsey, Partner at Shea & Garnder. He was Director of the Central Intelligence and General Counsel to the US Senate Committee on Armed Services. And to my left is Elizabeth Economy, who is a Fellow of Chinese studies with the Council on Foreign Relations. She has taught at the Jackson School of International Studies and written and briefed extensively on the subject of China.
And with that, I would call upon our first witness, Ms. Sidney Jones, who we are so pleased to have you join us. Ms. Jones is currently Executive Director of the Human Rights Watch/Asia. She has worked with Amnesty International and the Ford Foundation, and she is published extensively. And she will focus her remarks on the human rights situation as it exists in China. Thank you.
Ms. SIDNEY JONES (Executive Director, Human Rights Watch/Asia): Thank you very much.
Let me start by saying that I think there are few in this room that would dispute the fact that China has a poor human rights record. You only have to look at the most recent human rights report at the State Department to get detailed evidence of this problem. The question is how best or even whether to address the problem, as some assume that in a period of political uncertainty and heightened nationalism any outside pressure is just going to make things worse.
Needless to say, I disagree. I think we need to look at human rights issues in China in terms of three categories: first, those that can be best addressed in terms of long-term development; those where a mixture of public advocacy and development assistance is desirable; and those where only sustained public criticism backed by effective pressure is possible. The last category is obviously the most controversial.
Without going through an exhaustive list, I would put some of the shortcomings of China's legal system in the first category and stress the importance of continuing all programs to strengthen the rule of law through legal education, training and exchange programs. There are important efforts at legal reform going on in China, some of which are aimed at abuses like prolonged administrative detention, and these should be supported and expanded. The Fulbright program, the kind of training that was built into the IPR agreement, the exchanges run by the National Committee on US-China Relations, even things like the USIA Visitors program, are all the kinds of initiatives that need to continue.
In the second category, I would put human rights abuses that affect major social groups inside China, such as the problems we identified in state orphanages and the larger problem of abandoned children in China, or abuses affecting China's vast floating population. These are areas where public exposure of abuse and greater accountability of public officials are critical, but where international advocacy should be combined with social science research and long-term development assistance strategies, including, in the first case, for example, training of orphanage staff.
The third category is the most sensitive, but also the most urgent: abuses associated with political and religious dissent where immediate action is needed now to ensure that some of China's most courageous and creative citizens don't have their lives destroyed by prolonged detention, sometimes accompanied by torture, and to ensure that areas like Tibet are protected from some of the worst aspects of the current wave of nationalism. It was these abuses that the Clinton administration first tried to address in the May 1993 executive order on MFN, where China was asked to show significant progress on humane treatment of prisoners, release and full accounting of political prisoners arrested in connection with pro-democracy activities, protection of Tibet's religious and cultural heritage, unhindered broadcast into China and implementation of the 1992 memorandum of understanding between China and the US on prison labor.
Unlike the first two categories, where at some level there is recognition by Chinese officials of the gravity of the problem, and this is a recognition that permits some kind of constructive solution to be undertaken, there has been a steady deterioration on all fronts in category three, particularly since the United States delinked most favored nation status in human rights in May of 1994, and this became a signal for the general easing of international pressure on human rights in China.
The most important leaders of China's human rights and democracy movement remain in detention. Torture and abuse in the various institutions making up the Chinese prison system remain high. Repression in Tibet has steadily increased, particularly since July 1994. Negotiations with the International Committee of the Red Cross have effectively stopped, and China has stalled on its commitment under the 1992 MOU on prison labor.
Whatever value delinkage may have had in terms of the overall US-China relationship, its only impact on the protection of human rights outlined above has been negative. I want to emphasize that the kind of human rights issues addressed by the 1993 executive order are only one aspect of human rights in China, but it's an aspect that can't be effectively addressed by a long-term strategy. It involves human rights violations that can't wait decades to be addressed.
Some have argued that the dissident community is tiny and US-China relations shouldn't be held hostage to it. But while the number of individuals willing to publicly and peacefully challenge the legitimacy of the Chinese leadership may be small, the government's response to them has a chilling effect that's much broader. The detention of Wei Jingsheng may be driven by the same factors that led the Chinese government to react in such a hostile way to the prospect of a democratic government in Taiwan. There's also Hong Kong after 1997. If the United States and other governments take no action beyond quiet diplomacy now, how will they react when China goes beyond dissolving Ledgco to more far-reaching assaults on the rule of law?
Effective pressure on China in these areas means pressure with teeth. It doesn't do any good to rely on China's good faith in making promises on human rights, as some European countries seem to be doing now in the run-up to the debate on China in the UN Human Rights Commission. If China took any steps in intellectual property rights--and it may not have taken enough--it was because there were credible sanctions at the other end.
In the current political climate, there is no way we can expect any progress on issues of political prisoners, arbitrary detention, better human rights monitoring in Tibet in the short term unless there is a clear cost to lack of progress. Public stigmatization is part of that, but another kind of cost could take the form of denying China membership in the club that it wants to be part of rather than, in the case of MFN, taking away something it already has.
There are few such clubs available. None of them are totally desirable, but one of them is the WTO. We agree fully with what Jim Shinn calls conditional engagement, and we don't believe that imposing sanctions simply out of frustration with China's behavior on a wide range of issues from human rights to Taiwan is useful. But we do believe that carrots without sticks on human rights issues is as wrongheaded as sticks without carrots.
The options are limited, as I said, but one possibility is having the President certify to Congress that China has made certain concrete human rights improvements, as well as trade reforms, before the US will agree to Chinese access to the WTO. US officials in various contexts have raised this possibility. In December, a senior official said that the Clinton administration was sending the message that while rights were not explicitly part of the WTO negotiations, it was part of the atmosphere.
For those who resist linking trade and human rights, it's worth noting that China does precisely that. It uses trade as an instrument for achieving non-trade-related goals. It tried to buy the 2000 Olympics by promising contracts and trade deals and temporarily releasing Wei Jingsheng. It offered to finalize a $4 billion deal with Boeing in exchange for a US agreement to freeze IPR sanctions. It appears to be dangling the prospect of a big Airbus deal in front of the French if France breaks the EU consensus on sponsoring a human rights resolution at the UN Human Rights Commission in Geneva now. At the same time, Chinese officials, in some instances, have not hesitated to use human rights violations as a way of furthering commercial goals, and there have been a number of businesspeople arrested in connection with this.
Trade and human rights are already deeply linked, and making access to the WTO contingent on human rights improvement is not going to create a linkage from scratch. It also offers a prospect for multilateral action in that parliaments in some European countries might be persuaded to work on their governments to follow a US model, and I think we need to look at the Li Peng visit to Paris in the next few weeks as a test case of the extent to which popular pressure can be mobilized in France to get Chirac to address human rights concerns in China--an uphill battle, if there ever is one.
Any multilateral action is going to require not only popular pressure within the countries concerned, but forceful and sustained lobbying by the US on its G-7 partners. If there was a credible alternative to economic pressure to bring about improvements in this category of human rights problems, we would back it. At the same time, we do back the more developmental strategies for dealing with other categories of human rights issues. But we haven't found such an alternative, and we're convinced that quiet pressure by itself is not going to bring about improvements.
To sum up, the US clearly has an interest in the protection of human rights in China. Strengthening the rule of law and accountability of public officials are goals everyone can agree on, and those goals are served, to some extent, by the process of continued economic reform. But the political repression taking place now is not amenable to long-term development strategies, and the thousands of people who are its victims need help today, not several decades hence. There aren't many tools available, and we need to try and use the ones we've got. Thank you.
Amb. HILLS: Thank you, Ms. Jones. We will voice questions after all of the panelists have had an opportunity to speak. And our next panelist is Dr. Robert Kapp, who is currently President of the US-China Business Council, who was formerly President of the Washington Council on International Trade and Executive Director of the Washington State China Relations Council in Seattle, Washington. Dr. Kapp will comment on US commercial interests.
Dr. ROBERT A. KAPP (President, US-China Business Council): Thank you, Ambassador Hills. I'm delighted to be here. I want to commend the Committee and the Council, both of which I am happy to be a member of, for continuing their fine work in the effort to enhance American public understanding of very complex issues that the United States and China face together.
The US-China Business Council is a group of about 300 American companies, most of them quite well-established in their work with China. I speak today offering my own views and not as the spokesperson for a consensus--a formal consensus by my council.
I'm going to talk just for a moment about broad business trends over the last year or so, and then turn to what I think are broader and more important issues for this section of the program. And in the question-and-answer, we can come back to facts and figures, if you wish.
Basically, in the last year, the Chinese economy has continued to grow very rapidly, but at a more stable and sedate pace than in the breakneck years of '93 and '94. GNP growth is down at around 11 percent; employment--inflation at about 14 percent; US exports to China last year grew by approximately 25 percent, making China the largest--or rather the fastest-growing market for US exports among our many trade partners. US investment in China now totals about $25 billion, which is a lot, but pales before the Hong Kong-Macau total of nearly $250 billion. Nevertheless, American companies, especially companies with broad, long-term strategies for global development, have now concluded definitively that China must be an integral part of their corporate strategy and, in fact, will be, in many cases, a kind of almost do-or-die economy with which to deal over the medium to long term.
There have been many cases at successful businesses, both investments and businesses selling to China over the last year, and there have been cases of disappointment, of course. The many Chinese sectors are beginning to open to foreign presence in a way that was not the case before, and that's to be applauded. Tariffs have been dropped significantly in the last couple of months, and that's to be applauded. On the other hand, the US business community perceives not only the persistence of many long-term difficulties that are endemic to China's political and economic system, but also, in some cases, evidence of a growing--you might call it economic nationalism on the Chinese side, which poses new problems for American businesses seeking to do their work there. Those problems, of course, include the familiar areas of intellectual property rights, market access, lack of transparency, the incompleteness of a Western-style legal system and so forth.
Overall, US exports to China, taking the standard Commerce Department rule of thumb of 20,000 jobs per $1 billion in exports, could be said to account for 200,000 or so American jobs. Those rules of thumb, of course, are not perfect, but the point is that in virtually every state and in most industries now in many of the service sectors, China has a very significant and meaningful part of the overall economic fabric of American life. On the import side as well, of course, Chinese imports to the United States offer a wide range of products at affordable or economical prices and appropriate quality that make China a significant provider to American consumers.
Now enough on that. I want to turn, in this short amount of time I have, to a couple of more serious, if you will, points. The first is that we are in the midst of a periodic China convulsion. We've had them before. The term `awakening dragon' has been resurrected from the trash heap of journalistic history and is to be found in practically every magazine and every newspaper today. America goes through these periods of convulsive attention to China. In the past, they have tended to be followed by periods of disattention.
And let me just say that in this period, I think we need to be careful that we not, as a nation, set our minds to showing, in every case, that what we seen in China is a proof of malevolence. Let me offer some thoughts that have been said to me in recent days.
`They're importing US grain.' One would think that would be good. `No. It means that it portends Chinese expansionism because they're going to be a food-hungry giant.'
`They face an energy shortage as the result of their success in raising the GNP of their citizens from destitution to middling development country levels in 20 years.' Good news that they're raising their citizens' livelihoods? `No. It portends Chinese expansionism because they're going to be energy short and they're going to go looking outside of their borders for supplies of energy.'
`They grapple uncertainly with the fate of state owned industrial behemoths bequeathed to them by the Maoist, Stalinist inheritance, and they redis--resist shutdowns or privatizations that might throw 100 million people out of work.' Interpretation: `They're turning their backs on modernization.'
`They permit people to become wealthy by hard work or by shadier means, and income disparities grow as state-mandated egalitarianism wanes'--a hallowed shibboleth of many in American political circles, that it should wane. The interpretation: `The regime is creating social privileges on the shoulders of the immiserated.' And so on.
`A vast schema of laws has been promulgated at the central level, and more will follow. Chinese parliamentarians and legal specialists come to the United States and other advanced economies on study missions practically weekly, examining how we have approached central issues of property rights, investments regulation, social insurance and the like.' Interpretation: `They're either trying to steal our secrets,' or `They just pass laws but don't enforce them.'
`They relinquished a totalitarian power to force citizens to remain fixed in geographic place, unable to move or to search for greater opportunities, and 100 million people leave the poverty of the farms'--remember that in the United States all but 5 percent of the population has long since left the farm--`to look for opportunities in cities far from home.' Interpretation: `China has created an army of homeless.'
In other words, I think we're at at a time in the national dialogue when, if we choose to and if we set our minds to it, anything that we see in China can be interpreted in a negative if not menacing light, and I think that the nation will not be served by that.
The simpler question that I ask today, that I asked two years ago when I first came to Washington to work with the Council, that I believe the United States should be asking--is not, `What should the United States be doing to China in order to compel China to do what we think they ought to do?' particularly in their domestic affairs, but rather, `Under what conditions will China most likely evolve in directions most compatible with US hopes and values?' This is the central question, and I think the answer for most of us is to be found--we hope will be found in an encouragement and an enhancement of US contact with China--the word `engagement' doesn't translate well into Chinese and I try to avoid using it; it has military connotations to it--but contact with China and true interchange with the PRC.
A couple of other points about the broad framework within which we conduct this annual debate. Number one, China is never going to provide foreign countries the satisfaction of doing what other countries tell it to do, and making clear that it has done so because other countries have told it to do so. I mean, who can look back to China, since 1978, and not conclude that in a great many ways the People's Republic of China, coming out of the chaos and the violence and unbridled human rights anarchy of the cultural revolution and the political frenzy of the cultural revolution, has moved in directions that most Americans would applaud and consider progressive despite the fits and starts and the two steps forward and the one steps back?
But we are kidding ourselves if, in our own domestic political dialogue, we assume that by taking policy measures here, whether they be legislative or executive, and announcing them to China and the world that we will find the Chinese doing what we want and telling us that they did it because we want them to. They may take the steps we want, but we're kidding ourselves if we expect that we're going to be able to bank that progress and go back to the voters or go back to the media and say, `You see? They did it because we told them to.'
The China field is a little like the man snapping his fingers to keep the elephants away. When told that there are no elephants for 10,000 miles, the man says, `You see? It really works.' All of us seek, in one way or another, to claim that our views or our views conveyed to China have been the decisive views that have compelled China or induced China to behave in ways that we would like to see them behave--the Chinese. And I think, frankly, that is a kind of a lost cause.
A couple of other points before I stop on issues relating to trade. One of the issues which is obviously going to be controversial this year, and perhaps in the future, is the rising merchandise trade deficit between the United States and China in which China sells more goods by value to the United States than we do to China. It is true that there is a merchandise trade deficit and that it has increased in recent years. It is, however, in my view and the view of others whom my council respects very much, not true that the deficit is what US government figures crack it up to be. The simplest reason for that is that many of the products that are produced in China move to the United States through Hong Kong and they are booked as Chinese exports to the United States even when value is added in Hong Kong, whereas when we ship goods to China through Hong Kong, those are exports from the United States to Hong Kong. They don't count as exports to China.
The second point about the trade deficit is that the United States' ability to export to China is significantly impaired by US regulations, some of them in the form of sanctions, which prevent the US from conducting exports of range of valuable materials and products which the Chinese want and would very likely acquire from the United States if we were permitted--if American businesses were permitted to export them. And we need to recognize that we can't have it both ways, in complaining of the rising merchandise trade deficit while failing to see that US export prohibitions, in some cases, play a role in that.
Beyond that, of course, there are market barriers in China--lots of them. It is a difficult market to enter, a difficult market in which to compete. To the extent that those fall within the purview of American trade law, there are times when the power of the US government, through the trade bureaucracy, needs to be invoked and is.
On WTO, yes, a commercially acceptable agreement is required. The Chinese themselves are giving strong signals now that they're prepared to wait a while; that it's not that urgent; that they don't really think that the United States is going to make any breakthroughs this year and that they don't think they will either. But one thing to remember about the WTO accession is that for normal WTO members, a fact, a given of membership in the World Trade Organization is permanent, unconditional, most favored nation treatment.
I call MFN `MFNNST'--or most favored nation, no special treatment--to remind people who are not close to this subject of the fact that most favored nation treatment doesn't mean a special favor given to only one country; it is the kind of treatment that virtually all countries give each other and the United States gives to all but six or eight pariah countries around the world. But under the WTO, if you're a member, you get permanent, unconditional MFN.
In the American case, thanks to American law--namely, the Jackson-Vanik amendment to the Trade Act of '74--we've already said to the Chinese, `Even if you jump through the hoops and do everything we tell you to do to get into WTO, we the United States are not going to grant you permanent, unconditional MFN because we've got a domestic law that says we've got to go through the annual review.' And it's my personal view, which will not be shared by all in the room, that the Jackson-Vanik amendment, which was aimed at Soviet Jewish immigration and which is focused in its wording on the permission to emigrate, is essentially irrelevant to the issue of US-China trade relations and should be put out of the way.
On Tiananmen and other sanctions--it's a tough issue. We all know the damage that Tiananmen did and has done to US-China relations, and we all share the shock and dismay that we remember so vividly from 1989. Let me, however, offer a couple of points as relates to Tiananmen sanctions and US trade with China.
You know, to the great credit of the people of Taiwan, the tragedy of 1947 in which the Nationalist army killed 18,000 Tiawanese, primarily people of higher education, and decapitated at one stroke the intellectual elite the indigenous intellectual elite of Taiwan has finally been brought to light, and one can only give credit to Lee Teng-hui and his party and to the people of Taiwan for discussing this so openly 45 years later. The Kwanji massacre in Korea is coming to light after 16 years. A Thai massacre of a few years ago has never received serious attention in the United States. The Mexico City massacre of 1968 disappeared into the mists of history and so on. I'm concerned, in a way, that as terrible as the Tiananmen issue was, the United States has to look to some of its consistencies in its approach to that.
So for all its fits and starts, we believe the trade and economic contact with China has been and continues to be the strongest and most positive element in a fragile and difficult relationship. American companies are not missionaries of the American way and they should not be, but they are dignified representatives of American attitudes and assumptions. They learn from their Chinese counterparts and hosts, and the Chinese learn from them. They struggle with a difficult cultural, political and material environment, and they learn to adapt their assumptions and operating methods to Chinese reality. They scratch their heads in amazement at the depictions of China that most often make the headlines in the TV news in the United States.
Some of their people thrive in China and believe that they are participating in one of the great social transformations of human history. Others throw up their hands in exasperation and frustration and return home in a year or less. The best and most successful of them learn patience and humility right away, realizing that no matter how brilliantly successful they have been on their stateside careers or even in earlier overseas assignments, China is larger and heavier than they and their companies are, and that their progress and success in China will be measured in inches, not miles; decades, not days. Thank you.
Amb. HILLS: Thank you, Dr. Kapp. Our next witness is Ambassador Paul Wolfowitz. Delighted to have you here. Ambassador Wolfowitz is Dean of the Nitze School of Advanced International Studies at Johns Hopkins, former Ambassador to Indonesia, and he's served in a number of important posts in both State and Defense and written extensively. We're pleased to have you give an overview of US security relations with China.
Ambassador PAUL D. WOLFOWITZ (Dean, Paul H. Nitze School of Advanced International Studies, Johns Hopkins University and Former Assistant Secretary of State for East Asian and Pacific Affairs): Thank you, Ambassador Hills, and I know you don't want to waste time on kudos, but let me just pass one to the Council and the Committee for this effort to shed some light on an extremely important subject on which there is, perhaps, a little too much heat at times.
I've been asked to talk about the security aspects of our relationship. And the first point I would like to make may not sound like a security point, but I believe that the democratic elections in Taiwan that we've just witnessed are an event of major strategic importance in East Asia and one that we should very much welcome. Why is that? I would say it's so because, particularly, I believe that the prospects of China itself developing peaceful relations with the rest of the world will be much greater if China moves toward democracy. And I believe the development of democracy in Taiwan is a very helpful example for other Chinese societies, particularly the biggest one.
Just as the success of economic development in Taiwan and Singapore and Hong Kong, I believe, had a powerful effect in China, I think successful political development in other Chinese societies can be a constructive force. And in this respect, I think issues of human rights and democracy are of enormous importance, not just from a humanitarian point of view but a strategic importance. However, in my view, this administration's approach has erred in several ways: first, by overestimating our influence on the course of events in China; secondly, by raising issues in ways that have often been counterproductive; and third, by allowing this issue at times to dominate all other aspects of the relationship, including some that I think at times have been more important.
And while our influence over the larger course of democratic development in China is limited, and I think it will be greater if we recognize those limitations, we have a very important role to play in protecting the continued evolution of democracy in Taiwan. By doing that, we can also do a lot to preserve peace in the Taiwan Strait, to give Taiwan the confidence that it needs to deal with China in a positive way, as it has done in the past and it hopefully is beginning to do again now, and to keep the door open to an eventual peaceful unification.
Second point I would like to make concerns China's future as a military superpower. There are many reasons--almost unnecessary to state them--why our relationship with China is of such importance. The economic aspects that Bob Kapp just talked about, obviously, would probably stand at the top of a current list. But in terms of long-term peace and security of the Pacific region--indeed, of the world--perhaps nothing is more important than the growth of Chinese military capabilities. But I think one has to put a very strong emphasis on China as a prospective military superpower. It is not a military superpower today. I think it is clearly on the way to becoming one. And those two facts we have to deal with.
One could try to talk about the level of the Chinese defense budget, but the minute you do, with or without classified numbers, you get into an area of almost hopeless controversy and uncertainty. You could take Chinese official figures which could go as low as $6 billion, or you could take serious observers who have produced estimates as high as $140 billion, which would indeed make it one of the largest defense budgets in the world. Given that uncertainty, it's equally uncertain at what rate the Chinese military is growing. Again, from the official figures, you could claim that the Chinese defense budget has been flat or even declining in real terms, a contention which I would find hard to credit. Indeed, I find Chinese official figures hard to credit on this point, let me say.
On the other hand, you could reasonably assume that it's growing as fast as the Chinese economy or even faster, which, of course, would mean real growth of 10 percent a year and a doubling in six or seven years. But this emphasizes, I think, the importance of working cooperatively with the Chinese to develop greater transparency about their military activities and their military development. When one looks at Chinese military development, one is reminded of trying to measure it of the difficulties we had in earlier years measuring Soviet military capabilities. I think we had a lot of progress even with the old Soviet Union in getting greater transparency about military activities. I think it would be a very constructive step with China.
But if one stands back from the numbers, I would make two points. First, it's a mistake to exaggerate China's current military capabilities. It starts from a low base. It is a heavily manpower-intensive military with very low level of modernization. Its main capabilities are on its own territory or immediately adjacent land territory. Its ability to project power is extremely limited.
The second thing, though, I would say is that it's a mistake to assume anything other than that at present trends China will become a military superpower sometime in the next 15 to 25 years. Now for Americans, that may seem much too long to think about. For the Chinese, that's just a very brief moment in history.
I think this underscores the importance of developing a relationship with China during this period in which China becomes a support and not a threat--regionally, to the peace and stability of the Pacific region, and globally, as a responsible member of the international community--particularly with respect to the issue of sales of weapons and military technology.
The third point I would like to make is that our security relationship with China includes very important elements of cooperation, as well as elements of conflict. Of these, I think none is more important right now than the issue of peace and stability on the Korean peninsula. Indeed, whatever anxieties may have been raised by the recent tension in the Taiwan Strait, I think it remains the fact that the greatest current danger of a major war in Asia remains in Korea. And despite some very important differences of approach and even differences of interest between the United States and China, our two countries share a very large common interest in preventing war in Korea and in promoting a soft landing for a rapidly decaying North Korean regime.
I think this is an example of where the administration's strategy failed. Taking the MFN issue to an ultimately fruitless confrontation with China in the spring of 1994 was probably a mistake on its own terms--was a mistake on its own terms. It was even more a mistake to do it at the very time when the North Korean problem was approaching a moment of crisis and when Chinese cooperation on North Korea could have been extremely valuable.
I think we need to work with China to move beyond the nuclear agreement, to promote real North-South political reconciliation in Korea and reduction of conventional military forces. China, like Japan, like Russia and, of course, most of all, our South Korean ally, can play a role.
Fourth point I'd like to make concerns the recent Chinese actions in the Taiwan Straits. Those should be and are a matter of very serious concern. Even beyond the threat posed to Taiwan, we have witnessed very disturbing behavior with respect to international sea lanes. There would be potential chaos in the Western Pacific if every country, at will, could shut down sea lanes under the pretext of politically motivated military exercises. It is not tolerable.
With respect to Taiwan specifically, Chinese actions, I think, put a serious question mark over what was declared to be China's, and I quote, "fundamental policy," unquote, of peaceful reunification, a policy that formed the basis of positions that the United States affirmed in the 1982 joint communique on arms sales to Taiwan. As the communique says, the United States government appreciates and understands--I think one would have to put it in the past tense after the events of the last few weeks--we understood and appreciated at the time that Chinese policy which provided, and I quote, "favorable conditions for the settlement of US-China differences over the question of US arms sales to Taiwan," unquote. China's recent behavior marks a disturbing departure from that fundamental policy, and I believe calls for re-examination of certain aspects of the implementation of the 1982 communique.
More specifically, at the time of the communique, the United States said that it would take account of inflation in determining the quantitative level of arms sales to Taiwan. We have never done so. We have reduced the quantitative level year after year in nominal terms, and of course, given inflation, much more in real terms. I think we should take a serious look at taking account of inflation in some form now.
And secondly, I think, given the actions that we've seen in recent weeks and months and the threats that have been made, we need to reconsider some of the qualitative limits we've imposed on ourselves, with respect particularly to the systems that could assist in countering blockade or systems that could assist in defending against ballistic missiles.
But let me emphasize the point is not in any way to create a Taiwanese military threat to China or politically to encourage unilateral Taiwanese moves toward independence. To the contrary, a more secure Taiwan--a Taiwan that is secure that its existing liberties will be preserved--is a Taiwan that will be more capable of dealing openly with China and moving toward a peaceful resolution of their differences.
I think in this recent crisis, the United States belatedly but successfully demonstrated resolve, a resolve that was important and welcome throughout Asia. I believe we have learned the mistake of the policy of strategic ambiguity, and I hope that the Chinese have learned a lesson from relying on those statements. I think China itself is going to find that it will pay a price for its recent actions, to begin with, in a strengthening of US-Japan's security relationship and indeed in many of our relationships throughout Asia. We need to put this behind us, but we need to put it behind us on a basis of going back to the essential peaceful approach that was underlaid previous policy.
Let me just say very briefly, and we can discuss it more in questions if you like, the very important question of China's sales of missiles and nuclear- and chemical-related technology to unpleasant countries, and by that I mean particularly Pakistan and Iran. There are problems here. There are problems with respect to Chinese adherence to its commitments under the non-proliferation treaty and the missile technology control regime. There are problems with respect to the enforcement of US law. But beyond the legal problems, there are strategic issues. And in that respect, the two cases, I think, are different, and we should think about the differences.
With Pakistan, our concerns--which are substantial--mainly focus on the issue of stability in South Asia which, to be fair, is a problem not caused only by Pakistan but to a significant extent by India's own nuclear program, and a secondary concern about possible Pakistani exports. With Iran, I believe our concerns are much more fundamental. We're talking about a country that is ultimately more dangerous--or at least, with its present regime, a regime that has hostile intentions toward the entire Persian Gulf and, indeed, toward the West, in general. I believe that as important as it is to emphasize adherence to treaties and adherence to law, I think at times our approach becomes too legalistic; legalistic at the expense of engaging China on a strategic discussion about why these actions have a broader destabilizing effect and strategically lacking in our effort to enlist other countries.
If I had to make one single point on this issue, it would be that we will make much more progress, I think, in curbing disturbing Chinese behavior here if we can find a way to approach this issue multilaterally and not simply on a bilateral US-Chinese basis.
Finally, let me just conclude, coming back to the human rights issue, which I know is not in the security portfolio, but I think it is very important to stress my view that as important as the human rights issue is--and I hope I've made that clear--I think MFN is the wrong instrument for promoting human rights. It's wrong in part--but this is not the main point--because it hurts American interests, it hurts American business, and indeed, that is one of the reasons ultimately I suppose why the administration backed off. But it's wrong from an even more serious point of view because it hurts the Chinese private sector, a private sector whose growth has been the greatest source of progress on human rights in China. And I agree very much with Bob Kapp. Despite all the setbacks, despite all the horrible treatment of heroic figures like Wei Jingsheng, the human rights situation in China today is substantially better than it was 10 years ago when I visited with Secretary Shultz, and it is light years better than it was 20 years ago.
I think our policy should find a way to raise these individual issues to find tailored sanctions and, probably better, not advertised sanctions--that at least the Chinese know that we mean what we say when we raise them--but not to let it dominate everything in our relationship, and certainly not to pursue it in a way that hurts the very private sector in China that we want to see grow.
Thank you, Madame Chairman.
Amb. HILLS: Thank you, Ambassador. Our final speaker is Dr. Harry Harding, who is Dean of the Elliott School of International Affairs at George Washington University. He is a specialist in Asian affairs with an emphasis on China. He's written a number of books, all of which have been very well received, including recently "The Fragile Relationship: US-China Since 1972", which received the outstanding academic book award. We're delighted to have you, Dr. Harding.
Dr. HARRY HARDING (Dean, Elliott School of International Affairs, George Washington University): Thank you very much, Ambassador Hills. It's a great honor and a great pleasure for me to appear here this morning.
The organizers of this panel have asked me to identify the major international issues of mutual interest to China and the United States, and then to discuss the prospects for cooperation between our two countries. It's very easy to answer the first part of the question. China is already playing, or will soon play, a major role in virtually every international issue of interest to the United States.
As the previous speakers have already pointed out, China is central to peace and stability in East Asia, to the successful functioning of the UN Security Council, to the development and implementation of non-proliferation regimes, to the creation of mechanisms for cooperative security, to the operation of regional and global economic institutions, to the global legitimization of international standards of human rights, and to the protection of the world's international physical environment.
The second question I've been given is, unfortunately, much more problematic. Can China and the United States cooperate effectively on these issues? And here the answer is: It depends. It depends on how they define these issues and on whether they can agree on a strategic framework for dealing with them.
What is striking is the very limited conclusions that can be drawn from an analysis of the two countries' national interests. On the one hand, China and the United States have few intrinsic conflicts of interest. They have no territorial disputes; they're not near neighbors; their economies are not highly competitive with each other. And yet at the same time, nor do they have intrinsic common interests. They do not, for example, share a common enemy any longer, nor do they share a common culture or ideology. And what this suggests, as Bob Kapp has already implied, is that the future of Sino-American relations will be shaped by the ways in which the leaders and peoples of the two countries define their national interests.
On any of the issues I've already mentioned, the two countries could choose to work together or they could define their interests in a more competitive or conflictual manner. To cite but a few examples, in this approach to the international economy, China could choose to adopt a neo-mercantilist policy, demanding access to foreign markets, including the American market, while limiting access to its own. Alternatively, it could choose a more liberal approach, accepting freer access to its own market in exchange for maintaining access to export markets abroad. In its approach to human rights, the United States could choose to criticize every Chinese departure from the democratic ideal and threaten sanctions against these violations of international norms. Alternatively, the United States could choose to regard respect for human rights as a long-term enterprise and could work together with China to develop more humane and responsive governance.
Or, a final example, China could recognize its responsibility to protect the international environment and assign a high priority to environmental protection. Alternatively, it could choose to interpret international environmental regimes as ill-intentioned efforts to slow economic development in countries like China, and thus, to keep them poor and weak.
Thus, the two countries have a choice as to how to handle these critical questions. How can they do so in ways that will promote cooperative behavior? It is now commonly accepted, or at least increasingly commonly accepted, that the principal objective of US policy toward China should be to ensure that China honors established norms of international behavior. This is meant to reassure Beijing that we are not expecting China to follow unilateral American preferences but rather to adhere to rules and institutions that are universally accepted. Unfortunately, thus far, China's response to this approach has not been wholly forthcoming. Many Chinese leaders and analysts view this policy as a policy of so-called soft containment, as an attempt to control China's behavior through diplomatic and legal methods rather than by military or geopolitical means.
Some of them ask bluntly why China should follow any rules that it did not write, especially when it believes that some of those rules, such as those on non-proliferation, trade liberalization and environmental protection, advance the interests of richer and more powerful countries against the poorer and weaker ones. Other Chinese are a bit more accommodating. But they ask what China will get in return for honoring these international rules. If China stops selling M-11 missiles to Pakistan, will the US stop selling F-16s to Taiwan? If China agrees to trade liberalization as the price for admission to the WTO, will the US agree to grant China permanent, unconditional most-favored-nation status? And if China releases a few political prisoners, will the United States refrain from public criticism of China in the UN Commission on Human Rights? In short, China seems to view compliance with international norms not as a matter of automatic obligation, but rather as the occasion for bargaining for quid pro quos.
This presents the United States, and China, in fact, with an important strategic choice. How do we deal with China's reluctance to accept the principle of automatic compliance with international rules and regimes? Essentially, we have three options. One is to impose sanctions against China for violations of international norms. The problem here is that we find it difficult to find sanctions that would be effective. Minor economic sanctions, especially on the export side, unless commonly applied by all of China's other major trading partners, would have little effect but to disadvantage American exporters. More powerful economic sanctions, such as the revocation of China's most-favored-nation status, would drive the Sino-American relationship into confrontation, thus ending much hope that the two countries could cooperate on the global and regional issues I've been discussing.
The second strategy is to find positive incentives--to reward China for compliance. To some degree, it may be possible to do something that China wants or to stop doing something China doesn't like in exchange for cooperative Chinese behavior on major issues. And yet this approach will be difficult for Americans to accept. For one thing, it accepts China's position, outlined above, that adherence to international norms is a subject for negotiation rather than a matter of automatic compliance.
Thirdly, we could try to persuade China that adherence to international norms is in China's own interest since all countries benefit from widespread acceptance of these universal standards. This is the most desirable strategy, but in some ways would be the most difficult. It would require us to spell out more clearly what obligations we want China to accept and why those obligations will, in the end, benefit China. We will have to convince Beijing that we do not have the hidden intention of keeping China weak, preventing its development or obstructing its emergence as a major power.
And furthermore, we will have to accept China's right to participate in the drafting of new rules and even in the redrafting of old ones. China's integration into the international community, in other words, will necessarily involve the transformation of the rules of that community, as well as the alteration of China's present mode of behavior.
In short, although it is necessary and appropriate to say that China must accept international standards of behavior, it is not sufficient. We must decide how to deal with China's skeptical response. Some combination of negative sanctions and positive incentives will doubtless be required. But in addition, we will have to devote more effort to persuading China of the legitimacy of those international norms, the benefits China will achieve from honoring them, and our good intentions in upholding them. If both China and the US can abide by those norms, and if they can, therefore, define their national interests accordingly, then--and I might add only then--will the prospects for cooperation on the full range of international issues facing our two countries will be greatly enhanced.
Thank you.
Amb. HILLS: Thank you very much. Barber Conable will have the first question.
Hon. BARBER CONABLE Jr. (Former US Representative and World Bank President; Chairman, National Committee on US-China Relations): All right. Thank you very much, Madame Chairman.
I, of course, am affected by my experience and am interested in a relationship between the bilateral and the multilateral. It seems to me that we have what could be described as a rather excessively bilateral relationship with China at this point. And on issues like human rights, Ms. Jones, it seems to me that China's very bad human rights record generally is not an insult to Americans but an insult to humanity. And one of the questions is: How do we enlist a multilateral resolution of this issue? Dr. Harding has talked about the problem of China negotiating its entry into multilateral arrangements. And yet, isn't that what should be generally our goal if we are to have a China that is a comfortable cohabitor in this world?
I'm particularly interested in the relationship of this question to the WTO, where it seems that the sooner we can get China into a framework of trade, where other countries would also be interested in maintaining a good trading relationship with China--the sooner we can do that, the better off we will be. And yet we seem to be the sole arbiter of China's entry into the WTO. I'd just like to have some further discussion of this, and let's start with Ms. Jones there.
Ms. JONES: Thank you. Let me start by saying that I also agree that any multilateral approach on human rights is preferable to a unilateral approach; there's no question about that. But I also think that the United States needs to play a leading role in putting that multilateral coalition together. And I'm not always convinced that we're putting as much resources into building that coalition as we could. For example, last year, before the United Nations Human Rights Commission meeting, there were people from the administration out lobbying various members of the commission as early as October, November, when the commission was going to meet in March. This year the lobbying started much later, and it was clear that there wasn't as much heart in the effort as there was before. This happens on a wide range of things.
If you're going to have any kind of multilateral trading pressure, then the lobbying is clearly going to be more intense than you would need if you were just going to get a resolution at the United Nations Commission in Geneva, which means you're going to have to devote as much time and resources into building that coalition as you would have to do for something like getting a major resolution at the Security Council or working on multilateral cooperation in the security sphere more generally.
In the case of the WTO, I think what we're asking for is not that the rules on access to the WTO be changed, but that if we require some kind of presidential certification by Congress, for example, that could also become a model for trying to get NGOs and other non-governmental organizations to put pressure on parliaments in Germany or in France or in Europe to try and get grass-roots pressure to bring about the kind of multilateral coalition that governments themselves don't particularly want to be part of. And I think it's our responsibility, but it's also the responsibility of members of Congress to try and ensure that those ties take place.
Hon. CONABLE: Mm-hmm. All right. It does seem to me that we underestimate our potential as an influence on multilateral resolutions generally.
Ms. JONES: But can I just say that if we take one or two concrete measures that we want to see brought about--and one of those has always been access by the International Committee of the Red Cross to Chinese prisons--if there's any one measure that would improve the treatment of some of the people in jail in China, that's it. It's an issue which there isn't any necessary knee-jerk reaction against, from countries like Japan or Europe, and what it would require is some kind of systematic lobbying effort to go around and get that pressure on China in some form or another, and it doesn't happen. And I'm not sure why it doesn't happen.
Hon. CONABLE: But--does any other panelist want to comment?
Amb. WOLFOWITZ: Yeah. I'd like to comment. I agree with what Sidney Jones said, and one reason it doesn't happen or wasn't happening until recently is because at the same time that we said we cared about democracy and human rights in China, we dealt with the largest democracy in Asia, namely Japan, as though the only thing that mattered was the sale of auto parts. I'm very much in favor of selling auto parts in Japan, but I think the notion that we have no strategic relationship with Japan now that the Cold War is over is absolute nonsense. And I beginning to think the administration is learning that lesson, and I think Secretary Perry's trip and the president's trip may begin to correct it a little.
But you've got to approach the relationship with your important allies as covering these things across the board. And you're absolutely right; these issues should be raised. When the Japanese care about something--they cared about Chinese nuclear testing--they found a way to send a message without dragging in trade issues. And I think--by the way, I think the WTO is not going to be an instrument for human rights--I mean, precisely because trade is not a good instrument for sanctioning with respect to human rights, so it's going to depend much more on dealing with countries like Japan that are giving China huge freebies, and they can withhold some of those if China misbehaves.
Amb. HILLS: Ambassador Woolsey.
Hon. R. JAMES WOOLSEY (Former Director, Central Intelligence; Partner, Shea & Gardner): I'd like to return to Paul Wolfowitz's opening point about the importance of the elections in Taiwan as a strategic event, and ask his and perhaps some of the other panelists' thoughts about the Chinese response to those elections--sort of pre-emptive response--and the American strategic response to China's missile firings and other recent actions.
First of all, until President Li visited, I believe, your and Barber Conable's alma mater--and his--late last spring, relations between Taiwan and the mainland seemed to be going reasonably well. People were exchanging 10 points and 12 points and talking, at least indirectly. Do I surmise from your comments that you don't really believe that it was some propensity on the mainland to be hostile to the Ivy League, to land grant colleges or perhaps to the music of "Far Above Kyoga's Waters," but rather the forthcoming elections...
Hon. CONABLE: It's pronounced `KAYoga.'
Hon. WOOLSEY: KAYoga--I'm sorry. I didn't mean to--those of us from other parts of the country have trouble with that. I'm sorry, Barber.
If it was not really the forthcoming elections in Taiwan which were such a great affront on the mainland and led to the Chinese reaction--or in other words, do you believe that the responses of last summer--the missile firings of last summer and the missile firings of a few weeks ago--were really occasioned by actions that President Li was taking in international affairs to perhaps enhance Taiwan's international position, the attempt to enter the United Nations and so on, or were they principally occasioned by China's concern about a real democracy coming into existence in Taiwan?
Amb. WOLFOWITZ: First, I guess I should point out that not only Secretary Woolsey but Ambassador Hills are graduates of what we learned to call the Cornell of the West, in Stanford, I believe, we'll get this one straight.
Hon. WOOLSEY: Far above Pacifics.
Amb. WOLFOWITZ: I think one of the problems is this is a heavily overdetermined event. There were many things propelling the Chinese in this direction, not least of which is the fact that they're in the course of a presidential election of their own, except there are no rules for it; there's no timetable for it; but they are competing with one another for leadership and power, and any issue that comes forward that can be seized in that way--it's a very sensitive time.
I think we've gone a bit too far in blaming ourselves, although I think we mishandled the visa issue. I think if we had said straightforwardly from the beginning, `This is an unofficial visit. He's going to his alma mater.' As a matter of fact, if you want a calmed-down, pro-independent sentiment in Taiwan, give them a little bit of dignity. We got ourselves in this box in part because we wouldn't let him get off his airplane in Hawaii when he was passing through. We don't have to treat them like an independent country--that's part of the deal with China--but we can treat them with some respect and some dignity, and when we don't pay a price internally.
I think that whole thing could have been handled--I think there's a lot of silliness about Lee Teng-hui promoting independence in Taiwan. In any case, we can make it very clear Taiwan's not going to get in the United Nations if China, much less the United States, opposes it. Taiwan's not going to be recognized as an independent country if the major powers of the world say, `It's contrary to our policy.'
They are afraid, I think, to some extent, that democracy in Taiwan will lead to these international issues that cause them problems. But I do believe, although it's denied, that they are simply afraid of democracy. And you can't explain what they're doing in Hong Kong in terms of Lee Teng-hui visiting Cornell. There is a democratic infection, from their point of view, which they're trying to insulate and keep out of China.
I think we should recognize this makes the whole issue of human rights extremely delicate, and while I'd like to see democracy grow and spread, I don't think we'll help our cause by suggesting we're hoping for the imminent collapse of the regime there. I think gradual evolution--of course, they label peaceful evolution as a problem--I think gradual evolution is what we should go for.
Hon. WOOLSEY: Could I follow with one question?
Amb. HILLS: Certainly.
Hon. WOOLSEY: Dr. Harding gave us an excellent taxonomy of sanctions and the problems with those, positive incentives, the problems with trying to persuade China that compliance is in its own interests with these various international agreements and regimes. You had a very interesting thought which was sort of outside that envelope, which was that perhaps in light of what has happened, particularly with the recent missile launches, the terms of our obligations under the '82 communique should be reexamined with respect to qualitative sales to Taiwan, and you mentioned particularly ballistic missile defense. I'd be interested in your views and if you'd expand on that.
Amb. WOLFOWITZ: To be candid, I don't feel in a position to make a detailed recommendation. I think this is something the administration, with all the facts available to it, should look at. And they have taken some steps in releasing the Patriot I think it's the PACT II version of Patriot to Taiwan, although, as I understand, in part because of this declining ceiling on arms sales, it's going to be quite a long time before those actually arrive. But there are more advanced ballistic missile technologies, and I think given what we've seen, one should consider that the goal is to maintain an ability over time, if the Chinese continue pushing the envelope from their side, to have improving abilities to deal with it. And, in fact, I believe President Reagan made it rather clear to the Congress when we signed the communique that the whole idea of qualitative and quantitative balance included--excuse me--qualitative and quantitative limits included that idea of balance.
I'm not suggesting we should give up the communique; I think it's an important framework of our relationship. But the underpinnings of that communique--the most fundamental piece of it--is a peaceful approach. The more we can get back to a peaceful approach, which we have not seen in the last few months, the better it will be for everybody, including China.
Amb. HILLS: I too was very interested in Dr. Harding's three suggestions of the sanctions, the positive incentives, and my understanding of your words was that persuasion in China's own interest was, although difficult, the most effective. Were we to re-examine the communique, as Ambassador Wolfowitz has suggested, do you think that we have an opportunity to persuade?
Dr. HARDING: I think the Taiwan issue is such an emotional one to China, and one in which they are so suspicious of American intentions and American interference as they see it, that we'll have a very tough job. However, the argument that I would make is the following. China faces an exquisite dilemma with regard to Taiwan because they have two interrelated but distinct objectives. On the one hand, they want to deter independence, but on the other hand, they want to promote unification. The use of military threat and pressure may deter independence. It certainly has had a very sobering effect on Taiwan in the last several months. But the dilemma is that the harder they push to deter independence, the less incentive they have for people on Taiwan to support unification. Who wants to agree to unification to a country that is firing missiles just outside your major ports? And that's what I would argue to Beijing--to try to ask them is this really--has this really been in their long-term interest, not only in terms of the damage that is done to American perceptions of China, but more importantly to the process of peaceful reunification--or indeed any kind of reunification that the Chinese say they want?
One can really ask: Who are the people who are promoting, in effect, the separation of Taiwan from the mainland? I would say it's the hard-liners in Beijing who, by constant military threat and pressure, are vastly reducing the desire of people in Taiwan to pursue the objective of national reunification.
Hon. WOOLSEY: Follow with a...
Amb. HILLS: Certainly.
Hon. WOOLSEY: ...quick question to Dr. Harding. Is it at least possible that the very aggressive Chinese stance against Taiwan recently has been pursued intentionally by Li Peng, hard-line elements in the PLA, as a move essentially against Jiang Zemin...
Dr. HARDING: I...
Hon. WOOLSEY: ...an effort essentially to create confrontation with the United States in such a way as to make Jiang Zemin look weak?
Dr. HARDING: I think it's difficult to comment on the specific decision to launch these series of military exercises. But I do think that from the point of view of Chinese domestic politics, Jiang Zemin's eight points of the beginning of last year were seen as a conciliatory gesture to Taiwan. From the point of view of Chinese domestic politics, the Lee Teng-hui visit was seen as an inappropriate response, and therefore Jiang Zemin has been vulnerable on this issue, yes.
Hon. CONABLE: Carla...
Amb. HILLS: Yes.
Hon. CONABLE: I have a different question, politicians have dirty minds, I guess, but I've kind of been wondering to the extent of which Lee Teng-hui, who has persisted in his belief that there should be ultimately a peaceful reunification of China, was pushing for the larger role for Taiwan in global affairs, at least in part to try to pre-empt and co-opt the independence movement in Taiwan. And is it possible, even, that mainland China, being concerned about the independence movement among the younger people of Taiwan, wanted to build up Lee Teng-hui, and one...
Amb HILLS: That...
Hon. CONABLE: ...way to do it was to make it appear that they were very much concerned about his election? Therefore, send a few missiles over just to kind of reassure the Taiwanese people that Lee Teng-hui was not really pro-peaceful unification?
Dr. HARDING: Is that directed at me?
Amb. HILLS: Or anyone else who wants to take that.
Hon. CONABLE: Anyone else who wants to do it. I just wonder--there's more there than meets the eye.
Dr. HARDING: Well, I happen to think that the Chinese miscalculated.
Hon. CONABLE: Yeah. All right. That may be true.
Dr. HARDING: I think that they saw that they'd had some positive effect with the earlier missile tests and figured they'd get twice as much effect if they had even more large-scale military exercises. But I think that your basic point is extremely important, that there are people on Taiwan who believe, understandably, that their society demands, requires, deserves a more dignified, a more active place in the international community. Some believe that the only way you get to do that is through independence. And I think that what Lee Teng-hui is trying to do is to provide an alternative and thus to co-opt the people who believe that independence is the only way to go.
Amb. WOLFOWITZ: Bob Kapp wants to say something.
Dr. KAPP: Chairman Conable, the only thing I'd add to that is we mustn't forget that even in that closed political system, which we find so hard to parse, what we do know about its decision-making suggests that almost all decisions are taken after significant debate and often conflict. In the old days, the conflicts were so bad that if you lost you were perhaps never seen again--or at least never seen in office again. And to the credit of this regime, they've managed to contain their conflicts in a more stable way since the late '70s. But nevertheless, we know perfectly well, on issue after issue, that there has been terrific policy debate. And sometimes, after the fact, after certain people pass from the scene, the truth comes out, the rumors are confirmed, and we discover that certain decisions taken at the time were taken for nefarious motives or were later rejected and so on.
I don't think we've seen the end, by any means, of the story on the decision-making of the People's Republic of China with regard to US relations themselves and particularly with regard--well, I would say three: US relations themselves, Tiananmen, and certainly, the most recent year or so, of conflict between the United States and Taiwan. I completely agree with Professor Harding that it's difficult to conclude that the Chinese did not miscalculate in their efforts vis-a-vis Taiwan, and somebody's going to ask what happened.
Hon. CONABLE: Yeah.
Dr. KAPP: And one of these days we'll know who asked, and we'll know the answer, but it may not come out for a while.
Hon. CONABLE: My theory of mainland complicity in the re-election of Lee Teng-hui is--would be very much advanced if there were to be a noticeable and immediate effort to re-establish discussions between the two, but I don't see that happening, so I have to acknowledge...
Hon. WOOLSEY: Let me just...
Hon. CONABLE: ...my theory may be a little farfetched.
Hon. WOOLSEY: Let me add one footnote. Leading figures in the DPP during the campaign accuse the mainland Chinese of launching this in order to support Lee Teng-hui, and indeed, it's rather difficult to figure out, if the Chinese thought they were going to undercut support, who they wanted the people of Taiwan to vote for. The other two candidates never really went anywhere, so what they were doing was either enhancing the position of Lee Teng-hui or of Dr. Peng, the DPP candidate. I mean, it wasn't--a miscalculation is really rather kind, I think. It has got to be one of the stupidest blunders, at least in terms of American public opinion and in terms of counterproductive activity with respect to what went on in Taiwan, of modern Far Eastern foreign policy, I would think.
Amb. HILLS: Hearing no dissent to that ambiguous statement, Dr. Economy, would you like to ask a question?
Dr. ELIZABETH ECONOMY (Questioner; Fellow for China, Council on Foreign Relations): Yes. I'd like to return, if we could, to the issue of human rights because I think it's one of the most difficult and sensitive ones with which we have to grapple. We have, at this point in time, an almost 20-year history of engagement with the PRC, and it seems to me that at this point we ought to have learned some lessons. We've tried sanctions and stigmatization on the one hand, we've tried engagement on the other, and I'm curious why we're still wondering what's going to work. I'm wondering whether, Ms. Jones, you have drawn any lessons from our 18 years, I guess, really of engagement policy, concerning what works either with bilateral, multilateral pressure, or what are the domestic drivers within the PRC that are making change, either advancements or regressions, in Chinese human rights policy. That's something that's been almost ignored by the panel.
Ms. JONES: Well, I think I would again return to the different kinds of human rights abuses because I do think that the long-term programs of organizations, like the National Committee, like the Ford Foundation, like some of the programs funded by the US government have been good in terms of exposing a wide range of Chinese graduate students, for example, and--and--and others to different ideas, different systems, and those have had positive repercussions in terms of, for example, the legal system, in particular. But I don't see any particular positive development on the Chinese government's willingness to acknowledge the legitimacy of political dissent, for example. I don't see any particular cause-and-effect relationship between the development that's taken place. In fact, there may even be a negative one in the sense that the current government feels more threatened by some of the new ideas that are coming back into China and, indeed, by some of the reforms that are taking place.
In terms of what lessons we've learned from trying to apply sanctions, it's actually a very mixed lesson as well. It's clear that in the very short period--and it was very short--where the MFN pressure was perceived to some extent as being credible by the Chinese government, there were specific, concrete results that occurred in terms of releases of political prisoners, in terms of beginnings of negotiations with the International Committee of the Red Cross. And our conclusion from that was that at some level international pressure that's sustained and credible can produce results. But if it isn't sustained and certainly if it's not credible, it's counterproductive.
So our search now is to find some mixture of these long-term development trends, which have clearly paid off to some degree, and the very specific, targeted, concrete sanctions or penalization that will produce the short-term benefits that we've seen in the past. I don't think there's any one secular trend that we can point to on the human rights deal.
Amb. HILLS: Were you impressed, Ms. Jones, with Dr. Harding's division that looked at issues in terms of sanctions, but also suggested that persuasion in the Chinese interest--and I think Ambassador Wolfowitz suggested that both Taiwan's movement toward democracy and its economic prosperity have stood out as neon lights of comparison--that taking the comparison and the quiet persuasion as a model, that that does not offer some hope for your issues--our issues--about human rights? I point to the fact that I was impressed when Ambassador Stapleton Roy pointed out that if you look at the last 150 years of modern Chinese history you can't avoid the conclusion that the last 15 years were by far the best, and the last 24 months had real progress in terms of, as he put it, prosperity, individual choice, access to outside sources of information, freedom of movement within the country and stability of economic conditions. And certainly, in comparison to the period of 1950 or 1960, when China self-imposed isolation--that, from a human rights point of view, was really the depths of despair.
Ms. JONES: No question it was the depths of despair and no question that the human rights situation today, in terms of individual freedom, is certainly far better--no one would question that--than it was under the cultural revolution, for example. But I do think that people ought to be paying much more attention to the implications of failing to address the kinds of political repression that we still see for Hong Kong, for example, after 1997. I don't see any prospect for positive developments in terms of continued protection of even the rule of law in Hong Kong after 1997. And I feel there's a direct relationship between the failure to address some of the issues now in China and what happens after 1997.
In terms of Dr. Harding's...
Amb. HILLS: Well, to criticize China for what is going to happen after 1997 is--may be a wee bit premature.
Ms. JONES: But I think there are steps that China is taking now which are certainly cause for great concern. The most recent--their statement, `They will dissolve Ledgco' is just one example. The...
Amb. HILLS: If you listen to our statements in our legislative body--forgive me, Barber...
Ms. JONES: But let me go back to Dr. Harding's analysis because while I believe that the taxonomy can be useful, I would like to see more specifics on what a mixture of positive inducements and sanctions on the human rights feel on the human rights issue would be, because I'm more impressed by Dr. Harding's analysis of China's reaction to some of this pressure as a quid pro quo demonstration. Even now as this discussion is taking place in the UN Commission on Human Rights--or beginning to take place, there's a debate about whether China's promise to accede to two international treaties--the two major international treaties on human rights--would be sufficient to drop any kind of resolution that European Union countries and the United States might bring. What we've got there is China wants to make these promises--promises only. There's no indication when they would ratify these treaties; there's no indication of whether they would ever be implemented or enforced. If you're going to have some kind of positive inducement, such as dropping pressure, you've got to have something more concrete in return, and we haven't found what that proper mixture is. And if Dr. Harding has, I'd love to hear it.
Dr. HARDING: Well, you put me on the spot. I think, actually, the whole point of my presentation was not to provide answers, but to sound a very cautionary note. Since I've been one of the ones who has been most supportive of the notion of integrating China into community and expecting it to follow international norms and obligations, I'm just reporting the rather disheartening Chinese response, and then raising the question: How do we deal with that response?
Amb. HILLS: It's very helpful.
Dr. HARDING: Let me deal with the question that Sidney raises. It seems to me that what this does indicate is the extraordinary Chinese sensitivity to the UN Human Rights Commission, that this seems to be a body whose actions they care about. And I have been quite struck by their enormous desire to prevent resolutions critical of China from being adopted or even introduced. This suggests that this is an area of leverage, and I think it is precisely because of the multilateral character of it. Now, obviously, this is an ongoing process, and to say that we will not introduce or adopt a resolution this year doesn't say that we won't consider it in some future year if the situation warrants it. So the trade-off that Sidney is suggesting, which would fall under my second category--not doing something that they don't want us to do if they do something that we want them to do--this is the kind of quid pro quo.
But we have to understand that this will look very unsavory to many people who, as I say, tend to think that these international norms should be a matter of automatic obligation, and you don't get rewarded for following the rules any more than you get paid $50 every time you stop at a stop sign.
Ms. JONES: But it's not just--can I just follow up on that? Because it's not just a question of being rewarded for something or dropping something in order to get something out of the Chinese government. In this case, what we've seen, as we've seen in a number of other areas, is promises to do something, and the crux of the matter is how do you get real, substantial improvements in human rights and not just promises to ratify X or promises to give positive consideration to Y. That's what we've gotten thus far. We haven't gotten concrete improvements.
Amb. HILLS: We have limited time, and both Dr. Kapp and Ambassador Wolfowitz have indicated that they want to have a word. So we'll give you each...
Amb. WOLFOWITZ: I'll try to keep it to a word, but I think it's...
Amb. HILLS: ...60 seconds.
Amb. WOLFOWITZ: I think it's very important to try to get to a point where we can raise issues, we can put a spotlight on issues, we can even embarrass the Chinese on issues without feeling it is then our obligation to punish them if they don't do what we want. We tend, in a way, to treat them like children--and they feel that they're being treated that way: `If you don't do what I tell you, I'll punish you'--instead of treating them like adults. We don't deal with other adults, necessarily, by objecting to something and then saying, `If you don't do it, I'll take away your allowance.'
In addition, there is, I think, a dilemma that it is often much easier for any country, especially China, to do what we ask if it doesn't appear as they're doing it--as though they're doing it under American pressure. And I think the way some of these things would work best is if you had a long agenda, you went through them with the Chinese, you raised some human rights issues; later on they would raise some things they ask from you. As they say, one hand washes the other. They will know why you're withholding some things, but you don't have to broadcast it. You don't have to make it a matter of public humiliation.
I think we tend too much--again, because of a kind of legal perspective on everything--to think that every action has to have a punishment if it's not followed. The power of rhetoric, the power of persuasion, the power of international embarrassment is very, very great, and we shouldn't shrink from doing that because then we don't know what we'll do if they say no. That's the other problem.
Amb. HILLS: Thank you. Dr. Kapp.
Dr. KAPP: I'll keep it short, Ambassador Hills, and, as usual, anecdotal.
Years ago, on one of my early trips to China, I had a meeting with a Chinese figure, and the first meeting of two was a disaster. It was full of table-pounding and recitation of high principle and accusations of bad conduct levied against me and so forth and so on. And the next day it was all sweetness and light and `Let's cooperate' and hands across the sea and `We have to increase our exchanges' and `Our two countries have complementary interests' and so on.
And I said to this man in exasperation, `I really am mystified by what's going on here. I mean, how is it that yesterday you were so hard-nosed and so unpleasant, and today you are so accommodating and so genial?' And he said, `Bob, you've got to remember, we Chinese are a celestial and a terrestrial people.' And although I was very young then and probably would take that with a little less seriousness now, I have remembered that line, and I think we can all point to cases where that is exactly the case. The trick in our relationships with China is to emphasize the terrestrial whenever possible and to encourage the display of terrestrialism.
The other anecdote, equally interesting to me, was a meeting not much more recently with a Chinese official to discuss a tax matter on behalf of my council and the businesses in my Council. And by way of opening, I explained that I, of course, understood completely that this tax matter was a matter for the Chinese government in its own sovereignty to handle, but that we wanted to help to explain what we felt were the likely responses from Western investors, American investors, if the matter went ahead. And when I finished my remarks, the person to whom I was speaking said, `Well, thank you very much for beginning by saying that you understand this to be a matter for the Chinese government in its sovereignty to manage and to handle, and that you do not seek to influence the Chinese government.' And I took the liberty of interrupting him to say, `Sir, please excuse me, but the whole reason I'm sitting here today is that I do seek to influence the Chinese government.'
And I was fascinated thinking about it later. It could have been a matter of just language, of course; this man's English is not perfect and we were talking in English. But I was fascinated by what I sometimes perceive to be a kind of 19th-century notion rooted in China's self--the pervasive understanding of China's history of victimization at the hands of the West in the 19th and early 20th century, and that is that recognition of China's sovereignty is tantamount to the abandonment of any expectation of influence over China. That is a serious matter that we've all encountered in different walks of life and which, we hope, through patience and experience, more and more people in China will come to abandon. I mean, it's obviously a long-term evolutionary issue. Thank you.
Amb. HILLS: Well, we want to thank our four experts. You have been really splendid and insightful and definitely celestial.
Well, we're indeed very, very pleased that you would take the time to be here. Our next witness is Assistant Secretary of State for East Asian and Pacific Affairs. He has a long history of distinguished service with the Department of State, which includes his appointment as US Ambassador to China. He also served as President of the Council of Foreign Relations, so we believe it is appropriate that you should come and participate in these hearings. And without taking more time, although your resume certainly entitles you to a lot longer introduction, let me give you the floor.
Sec. WINSTON LORD (Assistant Secretary of State for East Asian and Pacific Affairs, United States Department of State): Thank you very much, and it is a professional and personal pleasure to be here.
Indeed, as a friend of both the Council and the National Committee, I thought it was important that we help you make headlines today, so I'm here to tell you that I'm authorized to announce the administration's decision on the export of Chinese rig magnets to Pakistan. Well, not exactly all the details, but I can give you the key attributes of that decision.
The administration decision will accomplish the following: We will follow US law; we will promote non-proliferation; we will promote positive US-Chinese relations and a decision will be warmly received in China; we will gather widespread support here at home in the US Congress and in public opinion; and we will aggressively promote US exports. Oh, by the way, we will also, through this decision, deliver to every member of the Council and the Committee two tickets to the Final Four in the Meadowlands.
Amb. HILLS: And that's where you get our attention.
Hon. CONABLE: It's not April 1st yet, Winston.
Sec. LORD: My point, of course, to the panel is that devising a policy toward China is a complex and difficult task.
Let's begin with--by exploding some current myths and misperceptions: number one, that rocky relations with the PRC are America's fault; number two, we should switch from engagement to containment; number three, engagement equals appeasement; number four, the administration has not conducted a strategic dialogue with China. All four of those, of course, are wrong.
First, rocky relations. I think it's time Americans shed the masochism in certain quarters, including some of my former colleagues. The view is that whenever there's a troubled relationship with China, it's due to American miscues. The reality is that our relations with China, for the foreseeable future, are bound to be sweet and sour no matter how perfect and how steady our course. I've dealt with the Chinese for over 25 years; this is the most difficult mood I've ever had to deal with.
The end of the Cold War and the Soviet threat, Tiananmen Square and growing Chinese assertiveness have combined to strain the American domestic consensus. No single leader is there in China with the vision and authority to steer China's course like Mao or Zhou or Deng. They're in a succession period and no leader can afford to look soft on sensitive issues or toward America, whether its sovereignty, like Taiwan, Tibet or Hong Kong, human rights, military exports, etc. Nationalism is replacing discredited Marxism. China is a growing economic and military power. The role of the PLA is increasing. There is tremendous self-confidence, including when they contrast their experience with that of the Soviet Union and if they look at their diplomatic comeback since Tiananmen Square.
At the same time, there is tremendous uncertainty. Reforms have brought great growth. They've also brought disparities of income, corruption, tension between the center and the provinces. And in continuing reforms, they feel they have to choose between instability caused by inflation and instability caused by unemployment. I don't know how much stability there is or political self-confidence if they have to lock up an electrician again for 14 years. There's always tension with an emerging power which is being integrated into the world's systems, and rules and values it doesn't necessarily share and didn't have a hand in shaping. They are suspicious of the United States, and I can give you many examples. There is the embarrassing contrast to examples of other Chinese performance, for example, in Taiwan and Hong Kong.
All this adds up to dealing with a complex, difficult, prickly partner with thousands of years of experience as being the number one middle kingdom and 150 years of humiliation by foreigners. Put another way, it would be helpful if the apologists for Beijing would recognize it is not all the US' fault when the Chinese fire missiles near Taiwan, export dangerous technology, keep their market closed, violate human rights and stir concerns throughout the Asia-Pacific region.
Second myth: We should move to containment. First, that would be a self-fulfilling prophecy, turning China into an enemy. It would mean a major commitment and shifting of American resources, including military, economic and diplomatic resources. Secondly, it would forfeit cooperation on international issues--UN veto, regional security matters including Korea, etc., arms control, global issues like the environment, drugs and crime, and it would forfeit the huge Chinese market.
Thirdly, the United States would be totally alone. I do not know one country in Asia-Pacific region, or perhaps in the world, that would join us in a containment policy of China. We would impose severe strains with our friends and allies, including Japan, the rest of Asia and Europe.
Third myth: That engagement means appeasement. This is a straw person...
Engagement is not a favor to China or rolling over in front of Chinese demands. Engagement means firmness where necessary, cooperation where possible, with the strategic goal of maintaining as positive relations as possible while managing our differences. Engagement means promoting American interests. Engagement means drawing China into the international community. If engagement fails, despite our best efforts, then in the next century, we can turn reluctantly to try to marshal international containment, and we will have a better chance at that point if we first demonstrated our reasonableness.
Fourth: That the US has not conducted a strategic dialogue. We have consistently conducted a strategic dialogue the last few years, including, in the last few weeks, at a very comprehensive and sustained level, and we will continue to do so. It is important, but it is and has been done, but we're not dealing with authoritative, visionary interlocutors.
How about US policy, therefore, against this backdrop? What should be US policy and, indeed, what is administration policy toward China? In a phrase, comprehensive engagement with one China. It's the policy of six administrations of both political parties, five of which I've served. We must strive to restore a bipartisan consensus, and I think this administration has been delinquent in spelling out consistently and articulately from the highest level the rationale for our approach. Individual issues seem to be jerking us around as opposed to people seeing the larger context.
China will be a major power. We cannot stop that; we can only try to influence it so that it is cooperative and not disruptive. Over the longer term, into the next century, we must seek, with others, to integrate China into regional and global communities so that China will both enjoy the benefits of participation and undergo the discipline and obligations of participation induced by their growing states. In short, we should seek to tame any potential adventurism through interdependence.
We, therefore, proceed through comprehensive engagement along the following lines. First, it recognizes inevitable frictions. This is a growing, emerging power dealing with an established superpower: their different histories, cultures, social systems, ideologies, stages of development. Secondly, it recognizes the huge stakes involved, and for this audience, I needn't give a long litany. But we're talking largest population in the world, nuclear power, UN veto, enormous market, growing military power and exports, influence on regional security, influence on global issues, rich culture, etc.
And comprehensive engagement recognizes that China, despite our problems and despite the suspicions, wants and needs good relations with the United States, for economic reasons: technology investment--we take a third of their exports; our management skills--they don't wish to be dominated by Japan; for geopolitical reasons--the fear of resurgence of Russian nationalism, Japanese militarism, a united Korea, perhaps with nuclear weapons and other tense neighborly relations, like India and Vietnam.
Therefore, with this rationale, we proceed as follows: We paint our strategic objectives in the context with the Chinese; we've done that consistently. Why? It's in our long-term, mutual interest to have a positive relationship. We reassure China again, as being in our own national interests, that China be strong, stable and prosperous. We reaffirm a one-China policy. This is the most sensitive issue. Our policy through several administrations has not only served our interest; it has served Taiwan's interest and stability in the region.
We remind China, however, that we're a superpower. This means showing consistent and enlightened leadership globally. And, therefore, what we do in places like Russia or Bosnia or the Middle East or North Korea is extremely important. We hold on and strengthen our alliances, and you will see, when the president visits Japan, just how solid shape that reliance is, including the security dimensions. We maintain our force levels in the Asia-Pacific region to fight budget pressures elsewhere. We now have as many forces in Asia as we have in Europe. We improve relations with countries like India, Vietnam and possibly, over the longer run, North Korea. We move our carriers on occasion.
We welcome China into regional and global institutions, though with certain obligations as well as benefits. This means genuinely wanting them in the WTO, working with them in APEC, working with them on regional security dialogues, working with them on arms control regimes. We promote and defend US interests and values and try to contain the frictions, which will come, as best we can, whether it's on Taiwan or non-proliferation or Chinese markets or human rights. We must maintain firmness in such areas, for credibility in China and to maintain domestic support for our policy.
We seek to expand cooperation or parallel policies wherever possible, to further our goals and to demonstrate to our domestic audience the benefits for engagement. Very quickly, China, in its own self-interest, has been constructive in North Korea, and I would take issue with some of what Paul said, but I won't have time to go into that right now. They have cut off aid to the Khmer Rouge and support the current government. Even in the area like non-proliferation, where we have great difficulties, if you'd look at China's position now vs. 10 or 15 years ago when they were saying nuclear weapons were good for you, in effect, they have come a long way.
Now we have tremendous problems, but even in that area, whether it's joining the NPT, chemical weapons convention, agreeing to ban missile exports, comprehensive test ban treaty, engaging in export control talks, the picture is not all bleak. We have many common interests in this area, including in North Korea and South Asia.
And on trade, despite the terrible problems, our exports, as you've already heard, are going up faster there than anywhere else in the world, 25 percent last year.
In the United Nations they can be annoying at times, but they've been abstaining, not vetoing issues of interest to us. On global issues, you just cannot tackle the environment or the flow of drugs or alien smuggling or international crime without dealing with China. And we pursue military-to-military talks and engagement because the PLA has growing influence in that society, because we wish to encourage transparency, get a sense of their intentions, and because they're important on non-proliferation.
In short, we're trying to construct a broad enough agenda so that we can maintain momentum for overall relations and offset the inevitable disagreements and tensions where we have difficulties.
Let me spend the rest of my remarks on, more specifically, what US policy is toward current issues, having given you, I hope, a conceptual framework. We're working on the positive agenda that I've described above even as we grapple with what I would call the four key problems now in front of us: Taiwan, non-proliferation, trade and human rights.
On Taiwan, you've seen continuity through six administrations. We will pursue that. Nothing has changed: one China free communication to communiques, Taiwan Relations Act, official relations with Beijing, unofficial relations with Taiwan, not changed by the Li visit or anything else. We will not tolerate aggression by China. We will not tolerate provocation by Taiwan. China and Taiwan must settle their future status directly between them. The US will not mediate. The US will not broker, but we insist that this process be peaceful. We will deter the use of force, and our general posture in fulfilling our obligations under the TRA and our defensive arms sales, and recently, in addition to public and private statements making clear that grave consequences would flow from resort to the use of force, and moving some of our naval assets around to prevent miscalculations.
By the way, this has received universal support in the Asia-Pacific region, sometimes expressed more euphorically in private than public, but nevertheless universal.
At the same time, we are conveying to the Chinese, and will continue to do so, that we have not changed our policy--it is one China--and that we are simultaneously urging restraint on Taiwan. But the fundamental premise--and this has already been discussed--of our policy here--and we made this clear to the Chinese--is that any solution will be peaceful. And, indeed, that's embedded in the 1982 communique.
With Taiwan, we are also providing reassurances that we will deter the use of force; that it's in its interests, however, to show restraint; and that--to work for a peaceful Taiwan Strait and that US policies have served Taiwan security, prosperity and democracy; that it should draw its own conclusions about policy but doesn't really feel that pushing the envelope on international identity, at this point, serves its interests. And is there not some interest in the status quo ante in terms of autonomy and their own self-interest, rather than flirting with independence? Finally, we're telling our Taiwan friends, would they please deal with the administration and not do end runs with the US Congress.
The past week has been encouraging--about as encouraging as one could hope in the wake of the elections, but it's still tense. Both sides are maintaining their basic positions. One would not expect them to change in a week. But thanks in part, I think, to US policy, we've seen coming out of China the stopping of their exercises, a ceasing, or at least lowering, of the vilification of Li and a reoffer for high level talks between the two sides. The US will continue to urge restraint on both sides and suggests that they resume the dialogue.
Out of Taiwan, you've seen reaffirmation during and since the campaign that Li and his people are for unification, albeit gradually, and they are against independence. Mr. Li has already made it clear that he has decided he doesn't plan to travel overseas very much in 1996. They're sticking to their application to the United Nations, but they recognize it'll take time. There's been foreshadowing of new initiatives toward the mainland with a strong, popular mandate.
Now, again, it's too early to throw our hats in the air, but that's about as good as you can do in a week. But we have no illusions; it's a tense situation and neither side has basically changed its position. I don't have time to go into Hong Kong. It's a very important issue. It's not unrelated, of course, to Taiwan, and one of the damages that China's suffered in its missile firing, etc., were stirring more anxieties in Hong Kong itself, but I want to make clear we have tremendous stakes in Hong Kong, and this will be a higher-profile issue as we head toward 1997.
On non-proliferation, as I said, the overall trend has some positive elements, but, of course, there are some very disturbing actions by China. Some are ambiguous with respect to intelligence. Some they never agreed to the rules in the first place. Some are not illegal, but they're very imprudent; for example, with Iran.
So we have a lot of delicate choices, including the current rigmanu issue which, of course, I really cannot comment on at this point. But we've got to weigh credibility in Beijing about our firmness, maintaining a productive dialogue with them on these issues, maintaining US domestic support, promoting non-proliferation above all costs, following US law, no matter how crazy it is. And I would say to sanction $70,000 worth of exports with huge sanctions which cut off our exports to China doesn't seem to be the most effective way to go about it, but we will apply the US law. We've offered an approach to China that would defuse the present crisis and resume peaceful nuclear cooperation, but we have a ways to go here, to say the least.
On trade, the third major issue, we, of course, wish to open that Chinese market and we have a significant deficit, although there is some statistical anomalies. We genuinely want them in the WTO, but it must be on commercially acceptable terms, and that's not just our position; that's the position of all the other trading partners. We've given them a detailed road map of what we would expect in the WTO. We're waiting for their response. We're willing to move forward as fast as we can, but there's got to be a meaningful response. I agree with one of the speakers that I don't think China's all that anxious to get into the WTO now if it's going to cost them anything in terms of state enterprises and unemployment.
We're very firm on intellectual property rights enforcement. They've had a year to enforce a very good agreement of a year ago. We've tried to work with them on that. They have taken some steps, but more at the retail level that at the factories. They've closed some factories down, but there are many still operating, and we do not believe that they cannot shut these factories. If these factories, instead of turning out Michael Jackson CDs, were turning out pictures of Tiananmen Square demonstrations, they'd be shut down in a New York minute. The US is losing between $1 billion and $2 billion in this area. It's related to WTO accession and market access, and our performance in this is related to our ability to preserve MFN status.
And let me say right here, though the president hasn't officially set forth our policy, it's very clear that we will continue a policy of maintaining MFN status for China for reasons already mentioned, including our business interests, reform in China, but also because to cut it off would hurt innocent bystanders very severely, like Hong Kong and Taiwan.
Finally, on human rights: The best we can do with China at this point is to agree to disagree. We tried to avoid confrontation in Geneva, but we got stiffed by the Chinese, as has Europe recently. So we never even had a dialogue, let alone any advance on human rights, and I don't foresee much chance of real movement on some of these sensitive issues in the current scene.
We're not being arrogant or imposing our principles; we're talking about international obligations. We're talking about the rule of law, which is in their own self-interest. We do recognize--and I think we should do this, perhaps, more forcefully--that China has made some major social and economic advances in its society and they do deserve credit. And every now and then, we might point to our own shortcomings.
The fact is, however, that China's been tougher on the Geneva resolution after we delinked MFN than they were before we delinked MFN, so we have a ma--a matter here of credibility, we have a matter of maintaining domestic support and we have a matter of preserving MFN, which is a larger goal right here with respect to Chinese interests, it would seem to me.
We pursue this not just of our idealism, but concrete interest, and Paul Wolfowitz pointed some of this out. China has concrete interests. You cannot develop in the age of information and technology with open economics and closed politics. They're going to have to open up politically; they will over time. And in the US, it serves our security interests. An open society is less aggressive, an easier partner to deal with. We also want to align with the future. Tiananmen Square was a watershed event.
So we have signaled to the Chinese very clearly that despite our efforts to avoid confrontation, we're going to have to engage in that in Geneva. We would like to contain the fallout with respect to our overall relationship, because it's one of several goals. But let's, particularly in the wake of the Taiwan election--can we please, as we debate this issue, discard the patronizing, self-serving, racist shibboleth that somehow Asians or Chinese don't care about individual freedom? I'm getting sick and tired of this. It's just not correct.
And in conclusion, we must seek to get through this difficult period: the mine fields of 1996, suggested above, plus an election year here and the tricky succession period in China. On the above issues, we need a mix of resolve, resolution, defusing, a process to manage them or containing differences where they're inevitable. We're going to continue to work hard in the areas of cooperation, like Korea, Cambodia, the environment, the regional, economic and security dialogues, and let us hope we can somehow get to 1997 with sufficient positive foundations to allow a more sustained and higher level engagement in the president's second term. But this will require restraint and reciprocal efforts by the Chinese and, above all, it will require a bipartisan consensus being repaired in this nation, and I hope this panel can make a significant contribution to that goal. Thank you very much.
Amb. HILLS: Thank you very much. You outline some very difficult issues: Taiwan, nuclear proliferation, trade, Hong Kong, as on your desk, and none of us envy you. You were, I believe, here when Dr. Harding suggested a strategic framework for looking at the issues with China. He had a three pronged suggestion. One is sanctions where there is violation of international norms, but he said where our sanctions were minor, so we could keep the door open, they were ineffective. And where they were minor, our international partners did not join. And where they were major, such as being linked with non-renewal of MFN, they absolutely defeated the purpose. They were too nuclear.
Secondly, that we could have positive incentives in exchange for positive behavior. And, in some instances, I think that that works. I was taken by your notion that China has made major progress, but when you delinked human rights from MFN, in fact, human rights did not advance, although I think you would agree that in some other areas, you did make progress, and sometimes you don't have a progress straight across the field.
But thirdly, Dr. Harding suggested that our best approach might well be to persuade China that the things we wanted to accomplish were in their own interest, and it was also suggested by Ambassador Wolfowitz that combined with broadening the agenda--you've mentioned all the things that are on our agenda, and I'm wondering if, in mix with some of the things that are on the Chinese agenda so that there can be some trade-offs--certainly, in my experience in dealing with economic issues, it's much preferable to look at a broad range of economic issues that advantage both sides so that there can be progress. And certainly, we see that in multilateral trade talks. Indeed, one of the things that we have found is that bilateral negotiations frequently fail, but in a multilateral sense, where one party puts something on the table and another puts something on the table and you have a broader agenda, you achieve progress. And I'm wondering your thought--you have such a broad US agenda--whether, if we took--and I'll name it the Harding strategic framework of persuading China within a broader context of these issues, how do you think that that fits with existing administration policy and what do you think in the future if it is a--somewhat of an add on?
Sec. LORD: It really reflects a fundamental part of administration policy, and I agree with much of what Harry Harding said, including the fact on human rights--specifically, you're going to need a mixture of all three. I have to tell you, persuading China--it's in its self-interest, even when it's very clear, for example, that open society helps development. In fact, you've got to have, in the age of internet, fax machines, CNN--you need the rule of law for investment; you need a free press for fighting corruption. It's not an easy sell, but that's the kind of arguments we make, rather than some arrogant, moral crusade.
With respect to multilateral--and I'll get to your basic point in a minute--of course, we want European and Japanese and other help on nonproliferation or trade or human rights. Good luck. We try very hard; they hold our coats while we take on the Chinese and they gobble up the contracts, so it makes it very difficult--very difficult, indeed. We will continue to try to get as much support as possible. It is not an easy sell. And so to just say that's the great prescription doesn't answer our policy dilemmas.
Of course, you have to deal with another country, particularly a great power in terms of, what are their interests and their sensitivities as well as your own? And in the issues I outlined we're implicitly invoking theirs. I mean, Taiwan, obviously, is in a class by itself, but then, they've made that clear. And I've made clear, although we've taken firm action, widely applauded, even by our critics here at home and certainly around Asia, to deter a miscalculation in the Taiwan Straits. At the same time, we've been assuring Beijing that we've been urging restraint on Taiwan, and even as we won't tolerate aggression, we're not going to tolerate provocation and we urge resumption of dialogue. I think we've been very forthcoming on Taiwan with China in a way entirely consistent with our friendship with Taiwan, and let us take this occasion to congratulate them on the election. These are not mutually exclusive. It is a delicate balancing act, but we've done it through several administrations and it's promoted everyone's interests, including Taiwan.
So on their most important issue, to get to your trade off, we've provided these assurances as well as making sure there's no miscalculation, and let's see whether there is restraint on both sides. Nonproliferation--we not only are working on current issues to try to see whether we can get enough from China to be consistent with US law not to have to elevate frictions, but also how we can get on with peaceful nuclear cooperation, which is of interest to them. On trade, we genuinely are trying to get them in the WTO, but they're not just another poor country with no obligations; we don't consider them a totally advanced country. They're in a unique situation. We've given them specific ways in which they can get in; that's very important to them. And I've mentioned other areas we have mutual cooperation. So I agree with your basic point. You've got to try to have a trade-off. That is exactly the approach we're taking, including not only these tactical issues, but the strategic vision I was talking about: why it's in our common interests, over the long run, into the next century, to work together.
Amb. HILLS: Thank you. Barber.
Hon. CONABLE: I'm not trying to sound like Henry Kissinger, but I would like to know what your perception is of the geopolitical ambitions of China at this point. Every time we go out there, we hear from them, `You don't need us anymore. The Cold War's over. You don't need to use us as a balancing force against Russia.' Yet, when we look at how they behave in multinational fora, generally, they seem to be somewhat aloof and somewhat inclined to look as if they want to go it alone.
And one of the questions I have is there any signs of a rapprochement toward Russia at all? Under the circumstances, that would be, in some ways, the logical thing to do. Their evolution has been somewhat different from that of Russia since the end of the Cold War. They are reformed economically, but have been very slow on the political side. The Russians moved more rapidly on the political side, but not as fast on the economic side and so forth. And they do have some interest in Russia, of course, is showing some signs of being interested in resuming hegemony over some of the former CIS states; we hear that, anyway. And that might be of some interest to the Chinese because of the threat of fundamentalist Islam if this independence continues in the southern Russian republics. Russia, were it to resume control, for instance, of some of those republics, would be a countering force to fundamentalist Islam, in all probability.
Well, I'm just asking, how do you view China's ambitions globally?
Sec. LORD: I think you have to separate the short and the long term.
Hon. CONABLE: Yes.
Sec. LORD: In the long term, they want to be number one again; there's nothing wrong with that. They've been number one through most of history so, of course, they want to be number one again. Now is that going to be a disruptive or a cooperative, number one? Will they be number one? The jury is out; I've indicated our policy is to try to influence them in a constructive direction. For the short term, however, I think they're definitely focusing on internal development. Of course, they flex their muscles a little bit in the South China Sea and Taiwan Straits and so on, but basically, they know that in order to develop, they need good trade and investment and political relations with their neighbors, so I think they're going to try to promote that.
And that gets you to Russia. Yes, there has been a tactical improvement of relations. We welcome that because there's no threat to us over the long term. These two giants with open territory across their borders and...
Hon. CONABLE: Did it help China upgrade its military, though?
Sec. LORD: Yes, but, as Paul said, it's from a low base. And we're watching it closely, but it's not something that has to concern us for the near term. We'll watch it closely. Obviously, there is an impact on China's neighbors sooner than there is on us, and we've got to be careful about that. But China needs us for two reasons I mentioned: not only the economics, which everyone cites, but they take the long view. And maybe they're a little suspicious of us now, but as they look in decades and centuries, they do worry about Russian nationalism; they do worry about Japanese militarism. They're not going to state this. They're going to say, `We have no more leverage because the Cold War is over.' The fact is, US-China relations are more important than ever, without the Soviet threat, in my opinion, and that's why we want to construct a relationship with them.
Amb. HILLS: Dr. Economy.
Dr. ECONOMY: Now it seems to me that between Congress and China, the administration is somewhat between a rock and a hard place. And you've articulated difficulties in pursuing your strategy of comprehensive engagement with China. I'm curious whether or not you have a strategy for resuming a useful dialogue with Congress, and not just to draw bipartisan support but, really, to bring a lot of Democrats back into the fold on issues like Taiwan.
Sec. LORD: Well, we are vigorously pursuing that. I've spent a good part of my time the last three years, and certainly in the last few months, on this, as have many other top leaders. Obviously, we've got a long way to go. We have many new members of Congress that don't have a historical feel, for example, for a one China policy. Part of the problem is China's actions, as I suggested. I mean, it is not easy to make the case for China, particularly in contrast to Taiwan. Sometimes the advancements they have made don't get proper attention. Sometimes they do get undue criticism. But their bad press and their bad relations with Congress is not just a matter of public relations; it has to do with some things that disturb Americans and disturb the Congress.
Nevertheless, we're going to have to work very hard--I agree with you--with the Congress, because you've got liberals particularly worried about human rights; you've got conservatives saying, `We ought to go for containment'; you've got people on the economic side saying, `We're getting taken to the cleaners'; we have people worried about arms control and nonproliferation. It is a very difficult sell. But we believe firmly--and I've tried to reaffirm that today--that constructive relations in China are in our US national interests, no matter how difficult, and in order to maintain that, we're going to have to work hard with the Congress.
Obviously, China's got to work with the Congress. And one of the advantages of Ambassador Sasser's appointment is, of course, he can bring Capitol Hill experience and can try to help bridge the Chinese and the Congress. We'd like to see more congresspeople visit China, but China itself has got to be more effective with the Congress. They could take some lessons from their Taiwan friends.
Amb. HILLS: Ambassador Woolsey.
Hon. WOOLSEY: Winston, first let me compliment you on your statement. It's no less than what I would have expected, based on 33 years of--off and on of working together. It's a superb overall statement of American policy.
Let me return to Hong Kong. Our chairman is correct in saying that China hasn't done these things yet, but there was a 100 and something vote to one--one courageous individual--a week or two ago.
Hon. CONABLE: He's since lost his job, by the way.
Hon. WOOLSEY: Yes. I know that. I was about to say, he's headed for Sinkiang or somewhere. And Ledgco looks like it will bite the dust. And if Hong Kong, once it's taken over in a year--and this, in part, depends on British immigration policy as well as some other things--but if the Chinese find that what they have in hand is some very attractive buildings and a partially completed airport and some talented workers but that much of the capital and many of the individuals that have made Hong Kong what it is--the source of $250 billion of investment in the mainland and so forth--are gone, it strikes me that the future of Chinese relations with Taiwan, Chinese relations with us, China's ability to open to the rest of the world and a great deal else are going to be fundamentally affected for the worse.
What on earth can China do now, in the aftermath of the vote to abolish Ledgco, to convince the people of Hong Kong that they really are going to be able to live in some type of a free environment after 1997?
Sec. LORD: Let me spend a couple of minutes on Hong Kong, because I wasn't able to give it the proper due in my statement. And, Madam Chairman, I'm willing to squeeze out an extra five minutes beyond...
Amb. HILLS: We accept.
Sec. LORD: ...the deadline. My next appointment's only with some US senators, so it's not...
Amb. HILLS: Strike that from the record.
Sec. LORD: Yes.
Hon. WOOLSEY: You're halfway there, Winston. You're nearly over the hills.
Sec. LORD: And I'll get back to your specific question. And if I forget it, remind me; I'm not being evasive. The big question is: Is the Hong Kong transition going to be successful? And I'm here to fearlessly predict that it either will be successful or won't be.
The fact is that China has a huge stake in the future of Hong Kong. I don't have to rehearse all the economic reasons. Also, it has a tremendous demonstration impact on Taiwan; I might add, vice versa as well. When you fire missiles near Taiwan, you don't help confidence in Hong Kong. And there's the whole question of face. They got this golden goose; I don't know what you do to a goose, but you know, you're going to...
Hon. WOOLSEY: You're going to kill it.
Sec. LORD: ...you're going to kill it, I guess, you know? So they wanted to show that they can run it well, even as Britain has run it well.
Well, there's some good news and bad news. Despite this self-interest, China's entirely capable of messing it up. We hope not. We genuinely want, in China's interest and in the Hong Kong people's interest and our own interest and regional stability interest and economic interest and humanitarian interests, that the Chinese and the Hong Kong people and, at least for a while, the British, work out a future that would mean a stable and prosperous Hong Kong.
We have a huge stake. We've made that clear. We're also not getting in the middle of it, but we have been making points that we think are in China's own self-interest. For example, the rule of law is crucial for investment. Transparency is crucial for business confidence. Many points are like that without overly lecturing them. So that's the reasons why you think it might work, not to mention the tremendous intelligence and resiliency of the Hong Kong people. And every time I visit there, it's hard to believe these people won't get through anything. They're just fantastic individuals.
So that's all the good news. And, indeed, for example, there are some promising signs. Don't worry; I'll get to the bad news in a minute--some promising signs. There is no brain drain right now. The people who emigrate--they're coming back faster to Hong Kong than they're leaving. Now, of course, they've got an extra passport with them, but nevertheless...
Hon. WOOLSEY: Wise, wise.
Sec. LORD: ...investment figures are holding up, etc. And there have been some agreements, some improvement of relations with Great Britain, some agreements on the airport, final court of appeal, although there's some debate about whether that's constituted properly and so on.
The bad news is, things like dissolving Ledgco--and for those who say, `Well, why did Britain care about democracy only in the last few years? They didn't care about it for 100 years,' the answer is Tiananmen Square. So dissolving Ledgco, shunning people who are the most popular in Hong Kong, threatening the Bill of Rights, suggesting--although I think since muddied and retracted--that civil servants take oaths of office and things--oaths of loyalty and so on--this does not engender great confidence, nor does creeping self-censorship in the press. And one hopes that Communist bureaucrats won't interfere with the managing of the economic system when they take over.
So the jury is out. We genuinely want it to be a positive future for reasons I've said. Finally, advice to China: We have to be very careful here not to be presumptuous, but we also have a clear stake and, therefore, we do speak out. I don't like to get into details of prescriptions, but I would like to emphasize to the Chinese that they really--if they would just fulfill the letter and spirit of the 1984 declaration, I think Hong Kong would prosper. It's got to have genuine autonomy. It's got to be the way China envisions it in 1984, presumably--namely, what's special about Hong Kong would be allowed to continue so that it wouldn't be upset, that there would genuinely be one country, two systems. And so that general prescription is what I would urge, and we very much support the 1984 agreement between London and Beijing.
Amb. HILLS: We thank you very much. We don't want you to keep your senators waiting. And we appreciate your taking the time to come and share with us your views. I see that our next panel of witnesses has arrived, also from the Hill, and we want to give them full expression of their points of view.
Sec. LORD: Thank you. I've enjoyed it.
Amb. HILLS: We are now about to start our third session, and we welcome our third panel. We are particularly pleased that Congresswoman Pelosi, member of the US House of Representatives, could be here. As all of you know, she represents the city of San Francisco in Congress and serves on the House Appropriations Committee and a number of other committees and is extraordinarily busy. She has concentrated her efforts in an area of our interest, namely human rights, and in that area, she has championed the cause of democratic reform in China.
We invite you to give us the benefit of your views in about five minutes. We will ask the other panelists to do the same, and then we will open to questions. And, again, I want to thank you for taking the time to come and be with us.
Representative PELOSI: Thank you very much, Ambassador Hills, for your kind welcome.
I'm pleased to join this distinguished panel in front of another distinguished panel to talk about this very important issue to our country. I think that we can stipulate from the start that we all hope for and will work for a brilliant relationship with China--economically, politically, culturally, diplomatically and in every way. I, myself, being part of the California delegation, represent, in my own district--I'm blessed with a large number of Chinese-Americans, who obviously have a great interest in this relationship as well.
When you say `busy,' everyone in this room, I'm certain, is very busy. When I received your invitation, I was looking forward to a nice, cerebral morning where I could listen to all of this intellectual capacity gathered here, mobilized and focused on this issue. Little did I know at the time that as a member of the Appropriations Committee, I would be on a short leash because we're doing the omnibus appropriations bill right this minute. We may fail, and that's what's going on now, but thank you for allowing me to go first in case I have to run out of the room, and it would only be because of an issue of that magnitude that...
Amb. HILLS: We understand.
Rep. PELOSI: ...the bill. I was fully prepared to miss some garden variety votes, but on the Committee, that wouldn't be possible. Madam Chair--Madam Ambassador, I thought I might start off by saying that yesterday, I had the honor of meeting with one of China's most prominent dissidents, Han Dongfang, a young man whose courage, determination and commitment to the cause of freedom are exemplary. Han has put his life on the line of the rights of China's working people. Despite the personal cost, he has sustained his faith in the rightness of his cause. He intends to continue his activities in the face of great personal sacrifice. Han Dongfang, Wei Jingsheng, who I'm sure you--we're all familiar with, the champion of freedom in China, and thousands of other Chinese dissidents, known and unknown, continue their fight for freedom against the odds. I believe they are truly an inspiration.
I believe--then, to move from the human rights to another context, I believe that an important test by which our foreign policy should be gauged is: How does it make the world safer, people freer and the trade fairer; recognizing three of our areas of concern, security, economics and pro-democratic reform. On all of these three counts, I believe that the Clinton administration policy has fallen short.
Since the 1994 decision to delink trade and human rights, I do not believe that the world is a safer place because of China's proliferation activities. Non-safeguarded countries, including Pakistan and Iran, have received advanced technology for weapons of mass destruction from China.
Trade is not freer. China maintains its barriers to American products. I believe that when you were trade representative--and our current trade representative--you worked very hard to bring down those barriers. Nonetheless, they continue to exist. At the same time, China continues to pirate American software, movies and music, continues to violate American copyrights and counterfeit our products and continues the use of slave labor for export goods. I believe that only a handful of industries--because only a handful of industries in the US have their products accepted into the Chinese market, the cost to our economy resulted from China's trade policies has been great, as when we started this fight at the time of Tiananmen Square, the trade deficit was $3 billion. In five years, it grew by 1,000 percent to $30 billion. Last year, it was approaching $40 billion; this year it will approach $50 billion and, as you know, in a short time, will surpass Japan.
And the people are not freer. Human rights and basic freedoms--freedom of press, speech, religion freedom to organize--continue to deteriorate in China and Tibet. The administration's own Country Report, recently released, provides ample documentation of the deterioration in human rights in China. It says, `The experience of China in the past few years demonstrates that while economic growth, trade and social mobility create an improved standard of living, they cannot, by themselves, bring about greater respect for human rights in the absence of a willingness by political authorities to abide by the fundamental international norms.'
I don't think that construction engagement has worked. You're aware of that, Madam Chair, of my views on this subject, but I would like to note for the record that I support President Clinton's recent actions on Taiwan. I believe that, despite some early confusion on message, the administration's strategy of sending the carrier groups to the area was prudent and successful.
President Lee and the people of Taiwan, I believe, though, should be commended for their courage. They stood down the Chinese and carried through with their democratic process in the face of blatant and reckless intimidation. Taiwan can proudly serve as a model of democracy in Asia. It can serve as a model for how to deal successfully with bullying by China's authoritarian government.
One important lesson from the crisis is that standing firm in the face of the Chinese government, intransigence works. We should now take this lesson and apply it to all facets of our relationship with China, including trade, proliferation and human rights. If we stand firm, if we are consistent, we get results.
Madam Ambassador, as I mentioned, I have a longer statement, too, I'll submit for the record, but I did want to make a few points, because I fear my time is running out. And that is that one of the concerns that we have at the US-China--those of us at--also, earlier this morning, I had a meeting of the Congressional Working Group on China, which I chair with my colleague, Frank Wolf, and what we were reviewing there were some of the options available for Congress as we approach the MFN season again.
There is a large contingent in Congress that wants to just flat out vote for a motion denying the president's request for a special waiver. There again, those of us who are trying to find some middle ground--it could relate to the World Trade Organization; it could relate strictly to trade for trade, sanctions relating to intellectual property; it could trade--there--run--the Republic--among the majority, there's a movement to talk about products made by the PLA, a motion that we had proposed in the past. I tell you that just to say that that kind of coming together now, as everyone is putting their proposals on the table. We are considering them and we will come up with an approach as an alternative to complete revocation. But I believe that complete revocation will have the votes in the House of Representatives. Last year, we moved to table it, and many of our colleagues were very, very angry and said this year we would not have that privilege. They would not leave it to us to decide whether we would take a vote on complete revocation or not. So that will be a certain vote, and I think it will prevail.
But the point I want to make is that when it comes to proliferation, when it comes to trade sanctions, when it comes to human rights, we must have--have consistency. Part of the title, I think, of this conference is `impact,' and we have to understand the impact of our actions not only in the US-China relationship--and that's certainly very important--but the impact it has when we try to find a way out on sanctions for proliferation because of economics, when, indeed, we would not apply that same standard to another country where the economic relationship is not as important. Same thing with human rights; same thing with the intellectual property issue.
We cannot ignore the violations, not only because of what they mean in this relationship, but for US policy throughout the rest of the world. I'd be very happy to answer any questions you may have and, as I say, go into more detail in my written statement. With that, again, I want to reiterate how pleased I am to be invited here today and to be among all who I--I think consider, whatever our differences, the US-China relationship an important one that we must improve. Thank you, Madam Chairman.
Amb. HILLS: Congresswoman Pelosi, thank you so very much. Our normal format would be to permit Ambassador Lilley and Mr. Shinn to make comments and then to engage in a dialogue together. Do you think that you may be able to stay until past 12:30?
Rep. PELOSI: Well, I will try to stay as long as I can, and when you see me running out the door, it means I got the friendly nod from the...
Amb. HILLS: All right.
Rep. PELOSI: But I'm certainly...
Amb. HILLS: Let me ask the panel: Do you have a question that cannot wait?
Hon. CONABLE: Well, I want to be sure I understand the implications of what you're saying, Congressman Pelosi. Are you in favor of terminating the policy of constructive engagement?
Rep. PELOSI: No, I'm not. I'm not in favor of that. I'm just saying that the policy that the Clinton administration has advanced has not been successful. Their version of constructive engagement I do not think has been successful, but I am not...
Hon. CONABLE: But you would not favor moving containment?
Rep. PELOSI: I'm not for a containment policy, no.
Hon. CONABLE: I see. Yeah.
Rep. PELOSI: That is not--I hope I make it clear to you that when we talk about disagreeing, it's not necessarily disagreeing with the one China policy, peaceful reunification of China and Taiwan and the rest of that. It's the approach that the administration has taken and the opportunities, I believe, that they have missed in not being very clear about what our limits are in the relationship.
Hon. CONABLE: That's all I have.
Amb. HILLS: Thank you. Let me, then, just go next to Ambassador Lilley, who is Resident Fellow and Director of Asian Studies at the American Enterprise Institute. He has served as Ambassador both to China and to the Republic of Korea and, interestingly, he was born in China. And we very much look forward to your remarks, Ambassador Lilley.
Ambassador JAMES R. LILLEY (Director of Asian Studies, American Enterprise Institute, and Former Ambassador to China): Thank you, Madam Chairman. I'm going to break my presentation into three brief parts: past experiences, wars and military action and policy interaction between the United States and China.
If you'll indulge me, very briefly, in a walk through history, when you introduce Western concepts into China, be it Christianity, Marxist Leninism or free markets, you are going to get something, in many cases, that's unrecognizable coming out the other end. You may have wishful thinking about what you want China to be, but you're going to end up jilted and disappointed.
When we introduced Christianity into China with the Jesuits in the late 16th century and then the missionaries after the Opium War, you got the T'ai-p'ing Rebellion, with the Chinese saying, `I'm the younger brother of Jesus Christ,' and with 20 million dead Chinese. Later you had the termination of the rebellion against the Manchu regime. You still have Christianity in China; it's a strong, vibrant, protest religion. But China is not a Christian nation.
Number two: When you introduced Marxist Leninism into China in 1921, when they founded the party, 1949 when Chairman Mao took over China, you got the great leap forward. A mad dash to communism in 15 years, utopian communism; what you got was the back yard for--furnaces, the communes, close planting and probably 30 million or 40 million people dead. You still have socialism in China with Chinese characteristics, but communism as an ideology was turned on its head and is largely dead.
When you introduced free-market forces and democracy into China in 1978, as Deng did in his reforms, you're going to get something you don't quite expect. What you see happening in China--and we Americans should look very closely at this--is the volatile situation behind the boom that we focus on most of the time.
Agriculture--can they feed their nation? Pollution and corruption--read The Washington Post today. Regional pulls against the center, wealth disparities and floating populations.
When you throw a match into this volatile situation and meddle in it, you are inviting disaster if you aren't very, very careful. Enough said on Western introductions into China. Let's move on.
How about wars? We've had a number of wars with China, military confrontations, going back to the Opium War--humiliation for China. We certainly saw the Japanese humiliate China in 1895 when they took Taiwan away from them, and we Americans fought them in Korea, where the losses were catastrophic, and it was a standoff. The Chinese, since 1985, have wisely taken on what they call wars on their periphery against weaker powers. They have a concept of extended sovereignty. They're going to be a great power. They aren't aggressive, because all they're doing is defending their sovereignty. What I'm saying is, in wars with China, be very careful. You won easy ones in the old days, but the most recent wars have been much rougher.
Three: policy interaction. What do you do about this? It seems to me in Taiwan we've recently had a lesson. What you do in Taiwan is essentially take force off the table as an option. There is a no-force solution to what happens in Taiwan. If they do engage in force, they engage the United States. We are not asking them to compromise their sacred principle and not renounce force; we're saying, `You will never use it.' That's out. You could have your trade boom with Taiwan, you can have your free communications; I think there's been remarkable progress since the elections and since the introduction of the American fleet and the termination of the exercises. We've had the hand of friendship held out. We see the movement towards the free communications, towards a summit meeting, towards resolution of the difficulties across the board. And you have this all done in the context of a very volatile, transitional leadership in China and a leadership in Taiwan that is brand new, that has just won a mandate.
Number two: Taiwan. I believe it's manageable. I believe the Chinese can handle it among themselves. I believe they have high-level, sensible talks. All we say in the United States, and this is what Winston Lord said: Take force off the table.
Number two: economics. It seems to me--and, Madam Chairman, you know a lot more about this than I do--that these are manageable issues. We've dealt with very bloody-minded countries all over the world. You don't let this tear the relationship down, whether it's intellectual property rights, entrance into the World Trade Organization or market access. These are manageable problems that are handled with manageable, reciprocal arrangements on both sides.
Number three: proliferation. This, of course, is the most serious and dangerous problem. And, as people have said before, it's quite clear you cannot handle this alone--it must be multilateral--and you must have better-tailored sanctions to what the Chinese do. You've got to find out where their soft spots are. We've done this in the past successfully; we can do it in the future successfully. It's good intelligence; it's knowing how to use this; and craft sanctions with your allies and friends, and yourself, to make the pain--the punishment fit the crime.
Three: democracy and human rights. It seems to me that we have to protect democracy and human rights where they exist today, and this is particularly in Hong Kong and Taiwan. You cannot see Hong Kong slide under the Chinese yoke without making a serious issue of their violation of the human rights of the people of Hong Kong who seek it.
Number two: It's quite clear, from the record of the past 15 years, that private diplomacy, quiet diplomacy, with a male fist works much better than loud harassment of China and humiliation of them. I think also that it's important that we do not focus our interests on trying to change China internally. When you start messing around with this thing, you are going to get consequences you are not going to like, and it seems to me when they take their system and try to export it, with their track record and the great leap forward and the cultural revolution in Tiananmen, they haven't earned the extension of their system, and this has to be challenged and we have to take the lead in challenging that.
I think it's very important to recognize, too, that it's not just China that is challenging the United States on human rights and our interpretation of human rights in Asia; it's all of Asia, minus a few good countries. You have a movement in Asia from Li Bonyal in Singapore to Kim Chong II in North Korea to the Vietnamese to the Chinese, saying that authoritarian systems, political dogmatism and free markets in the socialist birdcage work. And we challenge you to tell us that your system works better. Your system was most successful in Asia when you had Park Chung-Hee in Korea, Jam Jing-Boi in Taiwan, Li Bonyal in Singapore. And you didn't get drawn into peripheral issues. We challenge that. The latest success we have is Lee Teng-hui, but we have a lot of other successes, too: Kim Young Sam in Korea, the Japanese system, President Ramos in the Philippines.
Next: international issues. These have all been touched on by Paul Wolfowitz and others. Certainly we have to work with China, and there are key international issues on which we can work together, and we start with North Korea. I won't go into it, but I agree with Paul that this is the single most dangerous problem in Asia, much more dangerous than the Taiwan Straits.
Number two: India-Pakistan. Director Deutch of CIA said this is probably the most dangerous situation in South Asia. It's very dangerous. They have nuclear weapons. They are confrontational. They fought three wars. You have to be careful.
And, of course, Japan and Russia: These two nations are very important to Asia. China and the United States can agree and they can disagree, but these are all manageable.
In summary, it seems to me that it's very important to remember that China cuts deals. When you craft your incentives and disincentives effectively, they have a consistent record of cutting deals, whether it's Saddam Hussein, the Khmer Rouge in Cambodia, Kim Il Sung in Korea or the Asian Development Bank. They cut deals.
Second: Between their fundamental principles of sovereignty and unity and ours of democracy and free markets, there's a wide range of compromise which can work. These do not have to be confrontational, but China has to understand that our commitment to free markets means you don't mess around with international sea lanes. That's manageable, too, as it has been in the South China Sea.
I think it's very important that China understand--and I talked about disincentives--the serious disincentives--it's just happened in the Taiwan Straits. As Winston Lord pointed out, almost every nation in Asia stood with us on this one. You did the right thing. I think it's very important that this happen. The American-Japan security relations has been strengthened and deepened, which is an anathema to China, and finally, you have stimulated the theater missile defense debate, which--China says they will not tolerate having theater missile defense in Asia. They have telegraphed their vulnerabilities.
The strength of the US shield in Asia has proved itself important again and again, and I agree with the administration 100 percent: we need--for employment, we need strength, and the demonstration of carriers, to me, was a sensitive stroke, especially when it was combined with the frigate going into Shanghai as a symbol of friendship.
We want to see democracy and prosperity move in Asia, but I think it's quite clear, and the historical record tells us, that when the United States stands by its friends, be they South Korea, Philippines, Taiwan, Japan--we stand by them; they have their economy prosper, they have democracy rise and they reach out. It's South Korea reaching out to North Korea; it's Taiwan and China reaching out to each other. This happens when the United States is strong; when the United States is weak, they tend to fight.
And finally, I would just say that one factor that we haven't really dwelt on and which I'd be glad to talk more about later is the huge power of the Chinese diaspora, this 50 million of brilliant Chinese from Singapore to Silicon Valley to Vancouver to the Philippines to Taiwan to Hong Kong to Shanghai. This is a huge power that is changing China in gradual ways towards some sort of a more open society. But again, don't try to predict what's going to happen in China. It'll come out differently than we expect. Thank you.
Amb. HILLS: Thank you very much. Our final speaker in this third session is James Shinn, who is the C.V. Starr Senior Fellow for Asia at the Council of Foreign Relations. He is the Director of the Council's multi-year Asia project, which has undertaken a comprehensive review of American foreign policy in both Northeast and Southeast Asia, and he is the Editor of a new publication, "Weaving the Net: Conditional Engagement in China."
We're delighted to have you join us.
Mr. JAMES SHINN (C.V. Starr Senior Fellow for Asia, Council on Foreign Relations): Thanks. It's an honor to get to chime in at the end of such a long list of distinguished speakers. I have to point out in all candor that I'm neither a former ambassador nor--no one elected me to anything, either. And I should point out, I guess, that since I was trained as a Japanologist, it almost automatically makes suspect anything I say on the issue of China.
The second disclaimer is that my religious persuasion is that of a moderate Republican, which appears to be a vanishing species, and also suspect on China.
And the third and the most important disclaimer is, I don't have a clue whether China's going to evolve into a peaceful trading partner of the US or whether China's going to emerge as a belligerent adversary. But nobody else does, either. In fact, about the only thing everybody could agree on this morning is, first of all, the stakes are huge, depending upon which way China goes, and secondly, that we have some, but limited, ability to shape the course of that evolution.
So what I would suggest to you, very quickly, is a paradigm, if you will, to look at China, and then very quickly try and derive some policy solutions to the issues that Ambassador Lilley raised. And this strategy, for better or for worse, was coined `conditional engagement.' It was dreamed up by a study group at the Council last year. This wisdom is in that small, red book that you alluded to, and, if I can insert a commercial plug for the Council, you can buy one from us or you could even buy it from Brookings.
But the simpleminded strategy of conditional engagement is that if you don't know how China's going to develop, then a wise approach to deal with this uncertainty is simply to posit some rules--what Harry Harding referred to, I think, as the norms of international conduct--and to negotiate these with the PRC. If these rules are consistently broken, then you can fairly assume that you do, in fact, have a belligerent adversary on your hands, and you need to react accordingly, but at least you know what to do, rather than react on an ad hoc basis.
The other two elements besides the rules of this strategy are to really push economic engagement, which everyone agrees is our best hope to bring about moderate political change inside China. As Secretary Lord said, you can only run a closed political system and an open economy in parallel for so long before you get some spillover effects.
And the last element of the strategy, but equally important, is what you would call a security hedge, which is to be prepared for the worst.
So very briefly, what can you recommend from this simpleminded strategy, in terms of the problems we have to deal with today? Now the first is, it would be nice to get the principles upon which we deal with China out in the open rather than rely upon communiques, which have probably carried us about as far as we can go. This would require senior-level contact--if you will, a summit--between President Clinton and the Chinese, which may not be politically attractive on either side in the current environment, but, I would argue, is absolutely necessary and would help dispel some of the paranoia on both sides. And the last benefit of having some principles negotiated is that we force ourselves to clarify our priorities on this side.
In terms of economic engagement, if this is, in fact, your best bet to bring about change in China, then that suggests some nos and some yeses. The first no is that you do not hold your best bet hostage to other political goals, as laudable as they may be, like human rights. The annual MFN debate, where the members of Congress have to pour all of their reactions to all of the difficult relationship with China into one vote, is not a very attractive proposition.
The yeses in terms of economics are that you do want to bring them into the WTO, for reasons that have been discussed amply here. You do want to have a very active trade promotion and trade negotiation exercise, and you treat IPR as a trade issue, which is what it is, not as grand politics.
Third and finally, in terms of security--this is a much touchier area, but I would agree very much with comments by Ambassador Wolfowitz, which is that there are serious security concerns. There are rules on nuclear nonproliferation. This is not a peripheral security issue to the US, but the concept of symmetrical, tit-for-tat response, which suggests that Chinese violations of nonproliferation would be best responded to within the security arena, perhaps, as you might have suggested, stretching the envelope, shipping weapons to Taiwan or, for that matter even Vietnam, but not, again, halting the trade flows, which are your best bet in the long run.
And finally, in terms of security, it would make sense to gradually and prudently, but systematically, design your military engagement and your forward deployment in Asia to prepare for the unpleasant contingency that you may, in fact, have an adversary on your hands at some point. And that involves a lot more responsibility on the part of our allies, both in terms of financial burden, but particularly in terms of forestructures.
So let me close with some suggestions for dealing with that other uncertain, sometimes peaceful but occasionally belligerent actor in this, which is the United States Congress. There is no silver bullet for this that I would defer to Representative Pelosi on how the administration can bring more people under the tent on this, but it seems to me that the touchstone for this should be the precedent of three decades of dealing with the Soviet Union. There the issue wasn't, `Maybe they'll become an adversary.' They were the evil empire; they were invading their neighbors and subverting our neighbors. But for a variety of reasons, several administrations of both parties managed to maintain a reasonably bipartisan approach in dealing with the Soviets because we didn't have the luxury of not doing so. Now the tactics of this are much more difficult than the principle, but certainly a lot more consultation as was done with the Soviets on every arms negotiation up at the Hill--a lot more education, if you will, so the Hill is aware of the consequences of their votes. And lastly, I would say, a bit more leadership by the executive to make it clear, not just at the Hill, but to their constituents, just how big the stakes are in the game that we're playing with China.
Amb. HILLS: Thank you...
Mr. SHINN: Thank you.
Amb. HILLS: ...very much. Ambassador Woolsey has the first question.
Hon. WOOLSEY: Let me ask any or all of the panelists to address the issue of proliferation a bit more. As several speakers have recognized, this is, in terms of dealing with the outside world, the single most dangerous thing that the Chinese do, not just the magnets to Pakistan or the gunboats to Iran within the last few days of publicity, but systematically across the board, the wherewithal for the manufacture of various types of development of various types of weapons of mass destruction and ballistic missiles and other systems to carry them. It is probably the single largest complaint that we have with China, even given trade and human rights concerns because it runs the risk of absolute disaster, particularly with respect to China's exports to the Mideast.
I'd like to ask each panelist to focus especially on proliferation of weapons of mass destruction and especially ballistic missiles, and the wherewithal for either and to give us, as best they can, what specific things the United States government can and should do to deter or punish China, if one wants to use that word--and one panelist did--for this systematic behavior over the years.
Amb. HILLS: Yes. Congresswoman Pelosi.
Rep. PELOSI: Since I began, I will--first of all, Mr. Woolsey, I completely agree with you that this is the critical issue. As the expression goes, `One nuclear bomb can ruin your whole day.' Nothing--everything else is eclipsed--is eclipsed by the proliferation issue because it does, indeed, make the world a more dangerous place, whether we're talking chemicals, advanced missile technology or nuclear technology transfers. I believe that we need to revisit the issue of the sanctions. I'm not in disagreement with what Ambassador Lilley said earlier about shaping sanctions in a way that they will be effective. Because the administration hesitates to use the sanctions that are the law, those sanctions are not a credible threat. The Chinese government knows all it has to do is put pressure on the business community and put pressure on the administration and the importance of the proliferation issue is diminished.
I believe--and I said this publicly to the secretary yesterday in our hearings on foreign operations--or maybe it was the day before; we've been in appropriations for so many days now--that while I respect the need of the administration to verify, confirm that these transfers took place and that the government officials in Beijing were aware of them, it is not right that the administration try to find an out. Because that sends the wrong message not only to the Chinese, but many potential and actual proliferators who are out there. So if the administration does not ever intend to use these sanctions or intends to waive them immediately, then we should come together and say, `What are the appropriate sanctions?'
And we've been--when Dr. Economy was at a conference--we were all out at Aspen on this same subject of China, I proposed that to Secretary Perry and said, `If you don't want these sanctions, make some suggestions, let's come together on what is the appropriate response if it isn't in the economic arena.' So I think that the United States has to say to China, `We have been trying to be constructively engaged with you on these other issues, but we draw the line on the proliferation issue.' This is a national security issue that's a very unforgiving issue, because any violation, not only their transfer but the use of it in the hands of rogue states, you know the consequences. And I think it's hypocritical of the administration to have an embargo, practically, on Iran--on trade with Iran and then look the other way when China is trading advanced missile technology, gunboats, etc., to Iran and not to mention the chemical weapons allegations as well to Iran.
So we have to be consistent and we have to address the sanctions issue in a very serious way, including some of the ideas that were proposed here that maybe they shouldn't be economic, and maybe they should be strategic-related to security in our relationships with other countries.
Amb. HILLS: Ambassador Lilley, do you want to comment on...
Amb. LILLEY: OK. I think there's a long track record here about what works and what doesn't work. We had the silkworm anti-ship missiles to Iran, we had the intermediate range ballistic missiles to Saudi Arabia and we had the nuclear technology to Pakistan and chemical precursors to Libya. We nailed each one of these intelligence channels, sometimes by a resourceful attache, sometimes by overhead photography. And when you've detected these things, the sanctions tailored at the time, let's say, in the first missile sales to Pakistan, were basically satellites and a super Cray computer. And these were very carefully tailored to the particular vulnerability that China had at the time, namely that we did control the satellites, and this we knew was a major issue of national prestige.
And so China, when we withdrew that, joined, as you know, the missile technology control--or adhered to the missile technology control regime, joined the Nuclear Nonproliferation Treaty. At least you had the framework in which you could slug it out. In other instances, what works and doesn't work, certainly what you have now, and my friends in the NSC tell me that the satellite doesn't work anymore because others will pick it up if we drop it. The obvious thing is, you've got to go to the other parties, if they happen to be Germany and others, and say, `You've got to join us on this one.' I know it's tough to do, but that's the only way you can do it. I'm sorry.
And it seems to me that, also, as China begins to take on other nations in terms of what it does--continuing nuclear testing, Tiananmen, its expansion of military budgets and some perception of power projection--you do trigger reactions in Japan. And for the first time, we saw Japan actually withdraw some of its grant aid as a result of the latest China nuclear test. And what you also saw, as a very effective ingredient in my tenure in China, was the use of international financial institutions. I know this is a tough one, but we were able to do it, and the combination of the Japanese third yen loan package and world bank loans--$2 billion to $3 billion a year--very important for China, extremely important, as was the third yen loan package, as was a skillful use of the most favored nation issue in this context. You are talking $20 billion to $30 billion that go into China.
So I'm saying that I can't give you the very specific prescriptions you can use today because I haven't seen the data, but it seems to me there's been a consistent pattern in the past where these things have worked, sometimes only temporarily, where China has responded. Certainly, the international disapproval they got after the IRBM sale to Saudi Arabia, I think, effectively checked, at least since 1987, any additional IRBM sales.
So I think there are things that we can do, and history, I think, teaches us lessons that we can apply in a new environment.
Mr. SHINN: In the interest of time, I'll pass.
Amb. HILLS: All right.
Mr. SHINN: Do you have another question?
Amb. HILLS: We will give Barber Conable the last word.
Hon. CONABLE: The last word? Well, I was sitting here this morning listening to very interesting and very fine testimony and trying to discern where we really have any leverage with China, and I guess probably the conclusion I'd come to from the testimony is that we have more leverage in the trade area than anywhere else, simply because of the strong mutual benefits that are almost immediate there, and they're growing quite rapidly. Obviously, there are difficulties with the trade relationship, too. But I'm wondering if that suggests a strategy here. Should we continue to try to engage across the board, or should we try to build on where the real leverage is in an effort to get to that point where it will be clear, eventually, that it is of such importance to--to our relationship that other issues can be built on it significantly? I just wonder--this is a very general comment, but I wonder if...
Amb. HILLS: And I was suggesting that we ask Jim Shinn to answer that, since he didn't address the last question.
Hon. CONABLE: It's all right. Well, I think he already has said that there's an area of considerable leverage there.
Mr. SHINN: I think that's a wise strategical alternative, particularly since the `we'--in the term of exercising leverage can be markets as well as governments.
Hon. CONABLE: Yes, that's true.
Mr. SHINN: People talk freely today about the ability of China's dependency on imported oil to be a positive incentive for good behavior. I think the same is true for growing imports of wheat. I'd also argue--and you're not going to like this--that China's dependence upon the world capital markets, which react quickly and sometimes very--very strongly to negative behavior by the PRC, is an almost automatic--automatic form of encouraging good behavior. That would suggest that maybe world bank lending and lending from Japan, which, in effect, substitutes for commercial bank borrowings, maybe isn't such a good idea as a source of leverage.
Hon. CONABLE: Japan's about $2 billion and the World Bank's about $3 billion, I guess.
Mr. SHINN: Yeah. That's a lot of money. I don't see the reason to eliminate the hard budget constraint from the Chinese government so they can spend $1 billion more on the PLA, for example, when otherwise, they'd have to borrow that from occasionally unforgiving commercial credit markets.
Hon. CONABLE: The World Bank isn't as attractive to China as it used to be, because they don't qualify for IDA loans anymore...
Amb. HILLS: That's right.
Hon. CONABLE: ...in all probability because of the progress they've made.
Amb. HILLS: That's right.
Hon. CONABLE: Well, any other questions?
Rep. PELOSI: Madam Chair, may I have a question.
Amb. HILLS: Absolutely.
Rep. PELOSI: I would just like to say one thing, because now that you're back to the economic issues again, I did want to respectfully disagree with Mr. Shinn about--we all agree that you can only have a parallel system of economic reform and...
Mr. SHINN: Closed politics--yeah.
Rep. PELOSI: ...closed politics for so long. I fear that--I hope that he's right, but I fear that he may not be, and that as long as a decision is made by an authoritarian regime to be repressive on the political side, and as long as the world is lured by the elusive, if not real, markets of China, that that the hard currency that consolidates the position of the regime can enable them to carry this thing on for a very long time, and while I'm not saying here that we should help form a democratic government in China--that isn't the point--what we're talking about is to identify with the aspirations of those who say that freedom of expression is a value that we have as a country and it should apply in China, where there are markets, as well as it applies in other parts of the world.
And some of us believe that we do have leverage in that the Chinese economy, the hard currency that the Chinese regime has, springs largely from their access to the US market and this huge trade advantage that they enjoy with us, and that does give us some leverage. That's why the MFN debate becomes the central debate.
But let me say that part of the MFN debate is getting leverage with the administration.
We don't really even expect it to become the law and I don't think most people want it to be, but it's just a statement to the administration to say, `Get a policy. Stick by it, whatever it is--whatever it is. You know, we may not agree with it; you became president, you call the shot, but stick by the policy.' And that's why, last year, we moved to table the MFN vote instead to create a bipartisan--we had over 14--4--400 votes--the B Rider bill, which created a framework for a diplomatic relationship with China. Why were we doing this? In the absence of that framework coming from the executive branch, where it more appropriately should be coming from.
So, therefore, you see--when you put the rap on Congress about coming to the floor and making these statements and the rest, well, people are concerned about a $40 billion trade deficit and the continued repression in terms of human rights and the proliferation and etc., etc. But if the administration would move to do something sane and real on proliferation, if they would move on IPR appropriately, if they would aggressively pursue a multilateral form the human rights resolution at the UN Commission on Human Rights, I think you would see some change.
The one thing that is the most important thing for the Chinese to hear is a unified voice, and we would--Congress, I know--I don't speak for everyone there but I know the group that I work with--would defer to the administration because the prize would be a unified voice that the Chinese would be hearing. So I think that the one area of disagreement I hear is that everything isn't about just let nature take its course; economic reform will lead to political reform. I think we have to identify with the moderates in China and the dissidents who speak out for freedom there, but in a way that keeps us constructively engaged. And with that I once again thank you for the opportunity to be here.
Amb. HILLS: Well, I want to thank our witnesses on behalf of the panel. You were really superb to be here and to give us the time. I want to compliment, also, the Council on Foreign Relations and the National Committee on US-China Relations, who have taken this up--a very, very important issue. As Secretary Lord stated in his testimony, I think, as Congresswoman Pelosi has so eloquently stated, the administration, Secretary Lord suggests, would--was remiss in not setting its message clearly before Congress and the American people, and efforts like this to talk about the issues may not reach a consensus, but I do think that they help us focus on a very important relationship that we simply are going to have to deal with in the years ahead.
And I think there was one consensus, and that is our fundamental interest in having a good bilateral relationship with China, which represents 20 percent of the world's people. And to all of you who've helped us do this, we're very, very grateful, and I thank you so much.
And this meeting is now adjourned.
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