1997 Congressional Hearings
Special Weapons
Nuclear, Chemical, Biological and Missile


SINO-AMERICAN RELATIONS AND U.S. POLICY OPTIONS

Statement of Jeffrey A. Bader

Deputy Assistant Secretary of State
Bureau of East Asian and Pacific Affairs

Before the House International Relations Committee
Subcommittee on East Asian and Pacific Affairs

April 23, 1997

Mr. Chairman, I welcome this opportunity to appear before you to discuss United States policy toward China. There is a vigorous debate in this country concerning the U.S.-China relationship. This hearing will make an important contribution to that discussion, and will help inform our policy decisions. Just as important, I think there are some misunderstandings about U.S. interests in the relationship, and this hearing should contribute to a better public understanding of the issues.

The current discussion of our China policy implicitly recognizes that the Sino-American relationship is one of the most important in the world, and is rapidly becoming even more crucial. Any discussion of our China policy should properly consider our position as an Asia-Pacific power and our overall relationship with the dynamic countries of the Asia-Pacific. The United States has a long history of involvement in Asia, and there are numerous measures of the growth of that interaction. From the days of the clipper ship to those of the microchip, we have had extensive trade with East Asia. Asia became our most important trading region in the early 1980s. Last year, our trade with China was $63 billion, up from less than $8 billion ten years earlier. The American Chamber of Commerce in Hong Kong is the largest in the world outside of the U.S.; those in Beijing and Shanghai have grown exponentially. Today, a growing number of our citizens trace their ethnic background to the nations of the Asia-Pacific region; record numbers of visitors and students find their way from Asia to the U.S.

We have critical security interests in East Asia. Our commitment to regional security has provided the foundation upon which Asia's remarkable prosperity could grow. In the span of a single lifetime, America has fought three wars in East Asia. As I speak, our forces face the world's last Stalinist regime in Korea. We have mutual defense treaties with Australia, Thailand, the Philippines, Japan, and South Korea. In recognition of these interests, 100,000 American troops are forward deployed today throughout the Pacific and we recently renewed the cornerstone of our Asian alliance system, our Mutual Security Agreement with Japan. Finally, the Taiwan Relations Act clearly sets forth our abiding interest in the peace and security of Taiwan and the Western Pacific.

The People's Republic of China, in turn, is a key regional power in Asia, and its phenomenal growth rate means that we must assume it will become still more important. Its actions will be a pivotal factor for good or ill in the area's stability. It shares borders with more countries than any other in the world, fourteen, and has unresolved border issues with four. It has a territorial dispute with Japan in the East China Sea and with several countries in the South China Sea. From the Korean Peninsula to the Spratly Islands, China is a key factor in regional stability. The PRC is assuming a larger and more meaningful role in regional coordination bodies such as APEC and the ASEAN Regional Forum.

China also plays a global role. It is a permanent member of the United Nations Security Council. It is destined to be a major influence on the world's environment and energy use. It has large and growing commercial interests all over the world. Clearly, America's interests in East Asia and Beijing's important role there mean that China is today a country of great significance to American interests, a significance that will increase in years to come.

In short, it is inevitable that China will play a growing role in the world. That role can be helpful or harmful, and it is the task of American diplomacy to ensure that it is the former. Our goal, and that of our regional allies, is to encourage China's full and responsible integration into the international community.

For the past 25 years, six Presidents have striven to achieve proper balance in our relationship with China, vigorously promoting our interests and cooperating where possible. To accomplish our goals, we need a clear-eyed policy that firmly advances American interests and values. We must unhesitatingly assert our interests on issues ranging from protection of intellectual property to the preservation of Hong Kong's way of life. We must confidently voice our belief in the universality of human rights. And we must proclaim and make clear our commitment to the peaceful resolution of the differences between the PRC and Taiwan.

Such a clear-eyed policy must also recognize our many shared interests. It must recognize that our trade benefits both sides, not just one. It must recognize that, like us, China wants and needs peace and stability in East Asia. And it must recognize the tremendous benefits that have accrued to both sides when we have cooperated. We fought side by side during the Second World War, and our strategic cooperation helped win the Cold War.

But there are also things we must not do. We must not demonize China. Some Americans tend to think that because China is not a democratic friend, it is necessarily an enemy, and must therefore be opposed. That is a false choice, and one we would not be long in regretting if we made it. To treat China as an enemy is to ensure that it will behave as one.

We must also not exaggerate China's current power. While China has some great strengths -- its enormous population, its foreign exchange reserves of over $100 billion, second only to Japan, and its nuclear arsenal -- the day when China will be a superpower is still far away. China's weaknesses are still far more conspicuous than its strengths. The state-owned enterprise sector of the economy is woefully inefficient. Estimates of the number of Chinese still living in absolute poverty range from 65 million to 350 million. Its per capita national product is less than Indonesia's. There is not a single technological field in which China is a leader. The PRC military does not have a force projection capability, and it is not likely to have one for some years.

Some advocate a policy of containment toward China. Such a policy would have numerous shortcomings: it would forfeit the historic opportunity to enlist China's participation in meeting common challenges and would disrupt relations with our allies, none of whom see the wisdom of such a policy. We should exhaust every effort to integrate China into the international system. If the PRC switches course and transforms into a dangerous and expansionist international actor, there will be time enough in the future to adopt a different strategy, and no shortage of other countries similarly disposed.

Our policy of comprehensive engagement is designed to pursue cooperation with China where appropriate while opposing those Chinese actions and policies with which we disagree. At the same time, we keep our eye on the long-term goal of bringing China firmly into the international system as a responsible participant. Only through a policy that engages China can we hope to accomplish these goals. We welcome a secure, prosperous and open China. Such a China will be a constructive member of the international community, and a valuable partner for the United States.

Our policy has produced significant achievements: China played an important cooperative role in our successful effort to freeze North Korea's nuclear program. This signal success of American foreign policy has enhanced stability on the Korean Peninsula, and might not have been possible without Beijing's cooperation. I will go into greater detail on specific issues later in my statement, but let me note here that we have worked with China to our mutual advantage on intellectual property, nuclear nonproliferation, combating alien smuggling, and in our extensive dialogue on environmental issues.

We also, however, spell out our differences with Beijing's human rights practices and forthrightly express our concerns about proliferation of weapons of mass destruction. We have made clear our expectation that Beijing will continue to adhere to a peaceful approach to the Taiwan issue. When the PRC fired missiles over Taiwan last year, we deployed two aircraft carrier task forces to the region to avert any dangerous miscalculation. This deployment also demonstrated that we have the will to protect our interests in the region.

The past year has seen an improvement in the tone of our relations with China. A series of high-level visits to the PRC -- by Former National Security Adviser Lake, Former Secretary Christopher, Secretary Albright, and Vice President Gore -- have helped put the relationship on a more stable foundation. Later this year, the President looks forward to hosting President Jiang Zemin for a state visit here in Washington. We do not pursue high-level meetings for their own sake, but rather to advance our own interests and to voice our concerns at the highest levels.

A very important area in our bilateral relations with the PRC this year is the reversion of Hong Kong to Chinese sovereignty. The United States has a strong interest in a successful transition, by which we mean a transition in accord with the 1984 China-U.K. Joint Declaration, thereby preserving the autonomy and way of life of Hong Kong. As mandated by the Hong Kong Policy Act of 1992, we will monitor developments and report on the outcome of the transition, including preservation and extension of civil liberties, fundamental freedoms and the rule of law.

U.S. trade, investment, and business with Hong Kong flourish in a virtually barrier-free environment. Our exports to Hong Kong, many of which are re-exported to China, total over $14 billion; our two-way trade is over $24 billion. U.S. companies have almost $14 billion of investment in Hong Kong, and some 37,000 Americans live and work there. U.S. Navy ships visit Hong Kong at the rate of 60-80 port calls per year. And cooperation between Hong Kong and U.S. law enforcement agencies makes a real difference in our efforts to combat drug trafficking, illegal alien smuggling, organized crime, and counterfeiting.

Our goal is to protect these vital interests. We support the Joint Declaration on Hong Kong between China and Great Britain, which provides a sound basis for the smooth transfer of sovereignty. Through diplomatic contacts and in public statements and speeches, we have advocated the importance of maintaining Hong Kong's high degree of autonomy and protection of basic freedoms. President Clinton and Secretary Albright demonstrated publicly our commitment to the preservation of those basic freedoms in their meetings last week with Martin Lee, leader of the political party with most representation in Hong Kong's legislature.

Another useful tool in our diplomacy on this issue has been the U.S.-Hong Kong Policy Act. The Act provides the U.S. with authority to treat Hong Kong for various purposes as an entity distinct from China after 1997 and thus reinforces the "One Country, Two Systems" principle by maintaining separate treatment for MFN, visas, export controls and a separate textile quota. The Hong Kong Reversion Bill which recently passed the House provides another yardstick to measure Hong Kong's success in its transition. If you will allow me to digress here for a moment, Mr. Chairman, I want to congratulate you on this fine bill. In furtherance of our Hong Kong policy, we have negotiated bilateral agreements in areas appropriate to Hong Kong's autonomy, such as extradition, mutual legal assistance, prisoner transfer, and air services. We hope the Senate will ratify these agreements. We also encourage private exchanges through USIA programs in areas such as the rule of law, freedom of information, and legislative, journalistic and academic exchanges. Finally, we have concluded an agreement to maintain our Consulate General in Hong Kong and are negotiating to continue port calls by U.S. Navy ships.

We have fundamental disagreements with China's human rights practices, which do not meet international norms. The PRC continues to imprison dissidents for the peaceful expression of their views. We are concerned about the maintenance of Tibet's unique cultural, religious and linguistic heritage; we have urged Beijing to reopen negotiations with the Dalai Lama. We believe China should provide access to its prisons to international humanitarian organizations. We have urged it to sign and ratify the UN Covenants on Civil and Political Rights and on Economic, Social and Cultural Rights, and are pleased by Beijing's recent announcement that it will sign the latter covenant. We also stress to the PRC the importance of the freedom to practice religion: in particular, we are disturbed by reports of heightened restrictions on religious freedom, increased harassment of religious groups, including Protestant and Catholic groups, and reports of the destruction of house churches. These are issues about which Americans feel passionately. Secretary Albright and the Vice President spoke candidly and frankly about these issues during their recent visits to China; we will continue to do so. In the words of Secretary Albright, we will "tell it like it is." Most recently, we were disappointed that a majority of members of the UN Human Rights Commission voted to foreclose debate on Chinese human rights practices by voting for a "no action" motion preventing a resolution we cosponsored from coming to the floor for debate. China's human rights practices are a legitimate topic for debate and discussion in international fora, and especially in the UNHRC.

On the other hand, we should acknowledge the significant progress China has made on human rights concerns in the past 15 years. Today, the average Chinese enjoys greatly expanded freedom of choice in terms of employment, education, housing, travel at home and abroad, and greater access to information than ever in China's history. Beijing has also begun to pass new criminal and civil laws designed to protect citizens' rights and bring China closer to international norms. We will be monitoring their implementation. Finally, the PRC is conducting village elections in rural areas, and perhaps half of China's rural population has participated in these first tentative steps toward grass-roots democracy.

We have made mixed progress in recent years on nonproliferation issues. China's statement in May of last year that it would not provide assistance to unsafeguarded nuclear facilities is particularly important. In 1994, the PRC agreed to abide by the guidelines and parameters of the Missile Technology Control Regime and signed and ratified the Nuclear Nonproliferation Treaty and the Chemical Weapons Convention (although it has not yet deposited its instrument of ratification for the CWC). We are having useful talks with Beijing concerning issues involving the export of nuclear technology, and expect further progress as we work toward meeting conditions necessary to implement our 1985 agreement on uses of peaceful nuclear energy. Nonproliferation is a vital issue, and China's evolving attitude toward nonproliferation norms is a welcome and significant change from its past actions.

Unfortunately, there are other nonproliferation issues where progress has been disappointing. We have expressed our strong concerns about China's inadequate controls on the export of materials and technology that can be used in missile development and chemical and biological warfare; about shipments to Iran by Chinese companies of dual-use chemicals that could be used in a weapons program, and about its arms sales to Iran and Pakistan. At every level, including at the very top, we stress the importance we place on nonproliferation and urge China to accept and abide by international nonproliferation agreements and norms. Where we disagree, we express our concerns frankly. We will continue a series of intensive discussions at the expert level to make satisfactory progress in these areas. If we determine there are violations of our laws, we will not hesitate to take appropriate action against those responsible, as we have done in the past.

As I mentioned earlier, we also have some recent accomplishments on trade issues. The June 1996 accord with China on its protection of intellectual property is an important achievement that has already advanced our efforts to protect American products in one of our strongest export industries. Last February, we concluded a textile agreement that provides expanded access to the Chinese market for American textile producers. The contracts that Boeing and General Motors signed during Vice President Gore's trip to China last month illustrate both the current importance of the Chinese market and its vast potential. We have reinvigorated our discussions with China for its accession to the World Trade Organization, and have made some progress toward a meaningful accession package. By subjecting its trade practices to international disciplines, China's accession to the WTO would be a significant step toward improving the ability of American firms to sell their products there; it would also represent a milestone in our broader strategy of integrating the PRC into the world community.

In spite of these achievements, we face a growing trade deficit with China. The reasons for the increase in the deficit are many, including the large-scale shift of labor-intensive, export-processing operations from other parts of Asia to China, the strength of the U.S. economy, and the extensive web of barriers U.S. companies face in the China market. In addressing the deficit we do not seek to limit China's exports to the U.S. American consumers welcome China's inexpensive products. Rather, we seek to remove the barriers confronting American exports to China. We are pursuing this goal with all the tools at our disposal, including WTO accession negotiations and continued bilateral trade efforts.

As we look to the future on trade issues, I would particularly like to stress the importance of the continuation of China's Most Favored Nation (MFN) status. This Administration, like all others of both parties since 1979, believes that continuing China's MFN -- i.e., normal -- trading status is critical to advancing our national interests with regard to China. We should remember that MFN status is, after all, not special treatment, but merely the ordinary tariff treatment we give to virtually every country in the world. Failure to continue MFN would severely damage our relations with China and our efforts to advance US goals in important areas such as human rights, nonproliferation, trade, etc. We should also bear in mind that failure to continue MFN would damage Hong Kong, whose economy is closely intertwined with that of the PRC, just at the time when it most needs our reassurance and support.

One of the thorniest and potentially most volatile issues in our relationship is Taiwan. This Administration, like the five before it, remains committed to a "one-China" policy. That policy is enunciated in the three communiques we have signed with Beijing. We remain committed to our unofficial relationship with Taiwan, and have made clear our expectation that Beijing will continue to adhere to a peaceful approach to the Taiwan issue. As enunciated in the Taiwan Relations Act (TRA), any attempt to determine the future of Taiwan by other than peaceful means would be of grave concern to the United States, and in our discussions with Beijing we endeavor to ensure that the PRC is under no misconceptions about our position.

We have made clear to Beijing that we will fulfill our commitment under the TRA to provide Taiwan with the defensive arms necessary to maintain a sufficient self-defense capability. We stress that our arms sales to Taiwan are consistent with the 1982 U.S.-PRC Joint Communique. The overriding goal of our policy on arms sales is to maintain peace and stability in the Taiwan Strait. Our sales and leases of defensive arms, including military aircraft, naval vessels, and a variety of air defense and anti-ship missiles, have helped maintain a cross-Strait military balance. The PRC's commitment to a peaceful approach to the Taiwan question as specified under the 1982 Joint Communique has also contributed to the maintenance of regional peace and stability.

We emphasize to both sides the importance of avoiding actions that the other could view as provocative. We are pleased by the reduction of tension in the Taiwan Strait in the past year, and would like to see the resumption of dialogue between Beijing and Taipei. We have made clear to both sides that the future relationship between Taipei and Beijing is a matter to be resolved directly by the parties.

In sum, Mr. Chairman, our bilateral relationship with China is likely to be one of our most complex and important foreign policy challenges for many years to come. When we look at this relationship, we see that it encompasses a broad array of important, sometimes vital, American interests. We see many problems, but we also see many achievements. In our eagerness to address the problems, we must not ignore our achievements. Rather, we must build on the achievements while reducing the problems.

Thank you, Mr. Chairman.