[Senate Hearing 106-43]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 106-43
 
  UNITED STATES-TAIWAN RELATIONS: THE 20TH ANNIVERSARY OF THE TAIWAN 
                             RELATIONS ACT

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 25, 1999

                               __________

       Printed for the use of the Committee on Foreign Relations


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate
                               -----------

                      U.S. GOVERNMENT PRINTING OFFICE
55-823 cc                     WASHINGTON : 1999




                     COMMITTEE ON FOREIGN RELATIONS

                 JESSE HELMS, North Carolina, Chairman
RICHARD G. LUGAR, Indiana            JOSEPH R. BIDEN, Jr., Delaware
PAUL COVERDELL, Georgia              PAUL S. SARBANES, Maryland
CHUCK HAGEL, Nebraska                CHRISTOPHER J. DODD, Connecticut
GORDON H. SMITH, Oregon              JOHN F. KERRY, Massachusetts
ROD GRAMS, Minnesota                 RUSSELL D. FEINGOLD, Wisconsin
SAM BROWNBACK, Kansas                PAUL D. WELLSTONE, Minnesota
CRAIG THOMAS, Wyoming                BARBARA BOXER, California
JOHN ASHCROFT, Missouri              ROBERT G. TORRICELLI, New Jersey
BILL FRIST, Tennessee
                     James W. Nance, Staff Director
                 Edwin K. Hall, Minority Staff Director

                                  (ii)

  


                            C O N T E N T S

                              ----------                              
                                                                   Page

Feldman, Hon. Harvey J., Senior Fellow, Asia Studies Center, The 
  Heritage Foundation, Arlington, VA.............................    28
    Prepared statement of........................................    30
Ford, Carl W., Jr., President, Ford and Associates, Washington, 
  DC.............................................................    33
    Prepared statement of........................................    36
Helms, Senator Jesse, U.S. Senator from North Carolina, prepared 
  statement of...................................................     3
Kramer, Hon. Franklin D., Assistant Secretary of Defense for 
  International Security Affairs.................................    16
    Prepared statement of........................................    18
Lampton, Dr. David M., Director of China Studies, Nitze School of 
  Advanced International Studies, Johns Hopkins University, 
  Washington, DC.................................................    42
    Prepared statement of........................................    44
Murkowski, Hon. Frank H., U.S. Senator from Alaska...............     6
Roth, Hon. Stanley O., Assistant Secretary of State for East 
  Asian and Pacific Affairs......................................     9
    Prepared statement of........................................    12

                                Appendix

Responses of Assistant Secretary Roth to Questions Submitted by 
  Senator Helms..................................................    51
Responses of Assistant Secretary Kramer to Questions Submitted by 
  Senator Helms..................................................    52

                                 (iii)

  


  UNITED STATES-TAIWAN RELATIONS: THE 20TH ANNIVERSARY OF THE TAIWAN 
                             RELATIONS ACT

                              ----------                              


                        THURSDAY, MARCH 25, 1999

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:16 a.m. in 
Room SD-419, Dirksen Senate Office Building, Hon. Jesse A. 
Helms (chairman of the committee) presiding.
    Present: Senators Helms, Hagel, Kerry, and Torricelli.
    The Chairman. Well, I say to my colleagues that we are 
hitting the high water mark this morning. We have some 
excellent witnesses, the first being Senator Murkowski, 
Assistant Secretary Roth, and then Assistant Secretary Kramer, 
who are our primary panelists, and I thank all of you, of 
course, for coming.
    As is so often the case, all of us belong to more than one 
committee, and it is inevitable about half the time that the 
other committee will be meeting with something that they need a 
quorum, so Senator Biden will be here presently, and I know you 
will be glad to see him.
    Well, we are here this morning to examine the future of 
U.S. policy toward Taiwan, and we are approaching the 20th 
anniversary of the Taiwan Relations Act, which was signed into 
law on April 10, 1979, and I remember it well, as do other 
Senators, those heady days when Congress moved to rewrite the 
draft of the bill sent to us by the Carter administration after 
abruptly breaking relations with the Republic of China on 
Taiwan.
    I had a lot of problems myself with the Carter policy, and 
I still do, but in the end we in Congress managed to craft 
legislation that has thus far withstood the test of time. 
During the past 20 years the Taiwan Relations Act has served as 
basis for the continued growth of our cultural and commercial 
relations with our great friends on Taiwan. That growth, when 
you stop to think about it, has been nothing short of amazing. 
In 1978, our two-way trade with the Republic of China was $7 
billion. Today it is more than $53 billion, not bad I would say 
to Frank Murkowski for a customs territory, as the World Trade 
Organization has defined Taiwan. I wish we had a few more 
customs territories over in Asia right now.
    We have also seen the impressive and instructive 
transformation of the Republic of China from a country under 
martial law to today's vibrant multiparty democracy with a 
spirited opposition, a free press, and a flourishing civil 
society.
    Now, I use the word instructive because I am convinced that 
in this transformation the Republic of China on Taiwan has 
proved for the world to see that it is the model for the 
future, the future of Chinese civilization, and I do not 
exaggerate when I say that.
    But most important in my view were the defense provisions 
of the Taiwan Relations Act, and by enacting into law that the 
United States would consider any effort to determine Taiwan's 
future by other than peaceful means should be a matter of great 
concern to our country, the United States of America, and that 
we would maintain the capacity to resist any resort to force 
against Taiwan, and that the United States would provide 
defensive arms to Taiwan, the United States put Red China on 
notice that we expect them to keep their hands off of our 
friends.
    Well, that formula has worked pretty well so far. I have no 
doubt that the Taiwan Relations Act has been a major factor in 
keeping the Republic of China on Taiwan secure and free and 
autonomous in the face of persistent hostility and pressure 
from Red China.
    But there are areas of concern that dictate that we must at 
least review our implementation of the Taiwan Relations Act. 
For instance, Taiwan's democratic development and economic 
stability have made it increasingly difficult to ignore 
Taiwan's justified cause for greater participation in 
international organizations. The Taiwan Relations Act 
specifically stipulates that nothing in that act can be used as 
a basis for denying membership, let alone participation in, for 
Taiwan in international organizations.
    In its 1994 policy review, the Clinton administration 
committed itself to efforts to secure membership or greater 
participation by Taiwan in these international organizations, 
yet Taiwan this day remains something of an international 
outcast. Its voice cannot even be heard in the World Health 
Organization. Its membership in the WTO is being held hostage 
to China's accession, so the 19th largest economy in the world 
is barred from the World Bank and the IMF.
    I think those things speak for themselves. I think we 
learned in Latin that the definition of all of this is res ipsa 
loquitur, the thing speaks for itself. In any event, more needs 
to be done in these instances, and I invite comment on this 
from our witnesses, and I expect we will get it.
    Most disturbing, however, is the increasing threat to 
Taiwan from Communist China. In recent years China has been 
engaged in a major military buildup, much of it clearly aimed 
at Taiwan. Last month we learned from the Pentagon in its 
report to Congress that China has been and will continue to 
deploy a large number of missiles directly across from the 
strait, from Taiwan. Taiwan has little or no defense against 
these missiles, and in 1995 and 1996 mainland China 
demonstrated beyond doubt that it is willing to use these 
missiles to intimidate Taiwan, if not the United States and 
other countries.
    Well, the Pentagon report makes it clear that China's vast 
qualitative edge in naval and air assets, coupled with its 
ongoing modernization, would today prove overwhelming vis-a-vis 
Taiwan in any sort of military confrontation barring third 
party, that is to say, American intervention. The report 
concludes that the Taiwan's future success in deterring China's 
aggression will be dependent on its contingent acquisition of 
modern arms, technology and equipment and its ability to deal 
with a number of systemic problems, such as logistics.
    And I am going to ask unanimous consent, presuming that it 
will be granted, that the balance of my statement be included 
in the record as if read.
    [The prepared statement of Senator Helms follows:]

                  Prepared Statement of Senator Helms

    Welcome to our distinguished witnesses this morning. Senator 
Murkowski, Assistant Secretary Roth, Assistant Secretary Kramer, our 
private panelists--thank all of you for coming to discuss the important 
topic of Taiwan.
    We are here to examine the future of U.S. policy toward Taiwan--as 
we approach the 20th anniversary of the Taiwan Relations Act, which was 
signed into law on April 10, 1979.
    I well recall, as do other Senators here, those heady days when 
Congress moved to re-write the draft of the bill sent to us by the 
Carter administration after abruptly breaking relations with the 
Republic of China on Taiwan. I had a lot of problems with the Carter 
policy at the time--I still do.
    But in the end, we managed to craft legislation that has thus far 
withstood the test of time. During the past twenty years, the Taiwan 
Relations Act has served as a basis for the continued growth of our 
commercial and cultural relations with our good friends there. That 
growth has been amazing: in 1978, our two-way trade with the Republic 
of China was $7 billion; today it is more than $53 billion. (Not bad 
for a ``customs territory,'' as the World Trade Organization has 
defined Taiwan.)
    We have also seen the impressive and instructive transformation of 
the Republic of China from a country under martial law to today's 
vibrant, multi-party democracy, with a spirited opposition, a free 
press and a flourishing civil society.
    I used the word instructive because I am convinced that in this 
transformation, the Republic of China on Taiwan has proved for the 
world to see that it is the model for the future of Chinese 
civilization.
    But, most important, in my view, were the defense provisions of the 
Taiwan Relations Act. By enacting into law that the United States would 
consider any effort to determine Taiwan's future by other than peaceful 
means to be a matter of grave concern to our country, and that we would 
maintain the capacity to resist any resort to force against Taiwan, and 
that the U.S. would provide defensive arms to Taiwan--the United States 
put Red China on notice that we expect them to keep their hands off our 
friends.
    The formula has worked well so far. I have no doubt that the Taiwan 
Relations Act has been a major factor in keeping the Republic of China 
on Taiwan secure, free and autonomous in the face of persistent 
hostility and pressure from Red China.
    But, there are areas of concern that dictate that we must at least 
review our implementation of the Taiwan Relations Act. For instance, 
Taiwan's democratic development and economic stability have made it 
increasingly difficult to ignore Taiwan's justified calls for greater 
participation in international organizations.
    The Taiwan Relations Act specifically stipulates that nothing in 
that act can be used as a basis for denying membership, let alone 
participation, to Taiwan in international organizations. In its 1994 
policy review, the Clinton administration committed itself to efforts 
to secure membership or greater participation by Taiwan in these 
international organizations.
    Yet Taiwan remains something of an international outcast. Its voice 
cannot today even be heard in the World Health Organization. Its 
membership in the WTO is being held hostage to China's accession. And 
the 19th largest economy in the world is barred from the World Bank and 
the IMF.
    Clearly more needs to be done in these instances and I invite 
comment on this from our witnesses.
    Most disturbing, however, is the increasing threat to Taiwan from 
Communist China. For years, China has been engaged in a major military 
buildup, much of it clearly aimed at Taiwan. Last month, we learned 
from the Pentagon in its report to Congress that China has been and 
will continue to deploy a large number of missiles directly across the 
strait from Taiwan. Taiwan has little or no defense against these 
missiles, and in 1995 and 1996, Mainland China demonstrated beyond a 
doubt that it is willing to use these missiles to intimidate Taiwan if 
not more than that.
    The Pentagon report makes it clear that China's vast quantitative 
edge in naval and air assets, coupled with its ongoing modernization, 
would today prove overwhelming vis-a-vis Taiwan in any sort of military 
confrontation, barring third party, i.e., American, intervention. The 
report concludes that Taiwan's future success in deterring Chinese 
aggression will be dependent on its continued acquisition of modern 
arms, technology and equipment and its ability to deal with a number of 
systemic problems, such as logistics.
    And that's where the U.S. needs to step in. The United States is 
the only power in the world that can guarantee Taiwan's right to 
acquire these weapons and deal with its systemic problems. The question 
is, will we? Communist China has coupled its military buildup and 
threats against Taiwan with increased pressure on the United States to 
limit or cease its arms sales to Taiwan.
    The situation is sadly reminiscent of 1982, when the Reagan 
administration unwisely yielded to Chinese pressure and agreed to limit 
and reduce our arms sales to Taiwan.
    Will the Clinton administration do something similar--perhaps 
deliver a gift to Premier Zhu next month? Or will the Clinton 
administration implement sections 3(a) and 3(b) of the Taiwan Relations 
Act, which oblige the U.S. to sell defensive arms to Taiwan based 
solely upon our judgement of Taiwan's needs.
    Many Senators and Members of Congress, myself included, are going 
to need a lot of convincing that this administration will have the 
fortitude to withstand China's assualt on our arms sales to Taiwan in 
light of last summer's cave in on the so-called ``three-noes'' 
question. In any event, Taiwan's defense needs are going up, and I will 
look forward to a discussion of whether our arms sales to Taiwan should 
go up as well.
    In any event, it is time to begin a discussion of whether the U.S. 
should be doing more in terms of exchanges, training and planning with 
Taiwan's military. The Taiwan military has operated in virtual 
isolation for twenty years, which has contributed to some of the 
systemic problems alluded to in the Pentagon report.
    It boils down to an inevitable and unavoidable question. Why is it 
that when the Secretary of Defense and other top officials of our 
Government can rub elbows in Beijing, the State Department prevents any 
U.S. officer above the rank of colonel from setting foot in Taiwan?
    Now as you know, yesterday I introduced legislation that addresses 
many of these issues and I would invite comment from our panelists on 
the bill itself or these issues generally.

    The Chairman. Would the distinguished Senator from 
Massachusetts, representing the Democrat minority, have a 
statement?
    Senator Kerry. Mr. Chairman, a very brief one, and I thank 
the chair.
    I want to commend you for holding this hearing. It is 
obviously very timely, not just because it is the 20th 
anniversary of the Taiwan Relations Act, but also because we 
are now engaged in a very important debate over whether the 
policy that we have been pursuing, the broad policy of 
engagement followed by every President since President Nixon, 
is still the most effective approach to China. Over the past 20 
years we have witnessed very dramatic changes in Taiwan. It has 
transformed itself from an authoritarian system into a rough-
and-tumble multiparty democracy with a flourishing free market 
economy, and it has become a symbol of what others in Asia, 
including China, can achieve over time, and what we would hope 
that they would achieve over time.
    The past 20 years has also seen a dramatic transformation 
of Taiwan's economic relationship with China itself. Taiwan has 
followed a very deliberate strategy of engagement with China. 
Notwithstanding fundamental political differences with Beijing 
over the question of reunification, Taiwan has developed a 
robust trading relationship particularly with the southern 
provinces, which form a critical export market for Taiwanese 
products. That trade relationship is now valued at about $30 
billion, but that really tells only about half the story, Mr. 
Chairman.
    Taiwan's companies' investments in China have surged in 
recent years, particularly in the area of high technology, with 
more than 10,000 investments worth more than $6 billion just in 
the past 2 years. Moreover, the pace of Taiwan's investment in 
China has doubled since 1996. Taiwan companies now rely on 
their factories in China to manufacture more than half of the 
sophisticated electronic components for the personal computers 
which are ultimately purchased by American, European, and Asian 
consumers.
    These investments have led to a growing network of informal 
contacts between Taiwan and its neighbor across the strait. 
Family visits, academic exchanges, and tourism are flourishing. 
Many of those belonging to the new generation emerging on 
Taiwan, young people for whom China's Communist revolution is 
ancient history, are eager to rediscover their roots, or just 
become better acquainted with the mainland.
    Most importantly, Taiwan and China have opened a critical 
cross-strait dialog, a beginning on the difficult road of 
determining the relationship between these two entities over 
time. After an ice-breaking visit by Taiwanese Representative 
Koo to China last year, direct high-level political talks are 
likely to resume this fall on Taiwan. This would obviously be a 
very welcome and encouraging development.
    Taiwan has engaged China for one basic reason. They 
recognize that in the end Taiwan and China alone, only the two 
of them, can really answer the question of how they are going 
to be related to each other in the 21st century.
    Now, obviously, the United States has played a vital role, 
and I think it is a role we can and should be proud of. Our 
explicit commitment to Taiwan's security and prosperity 
reflected in the Taiwan Relations Act has strengthened Taiwan's 
hand in dealing with a much larger, more powerful, and 
sometimes provocative neighbor. It is essential that we 
maintain that commitment, but in so doing we need to be careful 
ourselves not to take actions which would discourage the recent 
trend of improving cross-strait relations, or allow either 
party to use the United States as a pawn in their political 
dialog.
    For example, we all know that China poses a potential 
threat to Taiwan. In recent years, China has increased the 
numbers of M-9 ballistic missiles opposite Taiwan, and we have 
responded, appropriately in my judgment, by providing Taiwan 
with Patriot missile batteries and advanced fighter aircraft to 
enhance its deterrent capability.
    Some have argued that we should more rapidly go further, 
that we should now rush to develop and deploy a theater missile 
defense system [TMD] which would cover Taiwan. I do not 
necessarily deny the possibility of doing that, but before we 
do it, we should be certain that it fits into the context of 
the increasing cross-strait relationships that I referred to 
and also that the unintended consequences have been answered, 
that by deploying TMD we will not ultimately decrease, rather 
than increase Taiwan's security, and shred rather than enhance 
their engagement with China, and our own.
    These are important questions, Mr. Chairman, and we clearly 
need to have answers to them. Everyone understands, and we talk 
in this country sometimes about the Chinese notion of yin and 
yang, which is essentially a notion about balance. The Taiwan 
Relations Act is a very important component of that balance, 
balance between our relationship with Taiwan and the 
inescapable ingredient of our engagement with China, but it is 
not the only ingredient. Another ingredient is our commitment 
to the one China policy we have pursued in the past, and our 
determination to avoid provocative actions which undermine that 
commitment and the possible peaceful resolution of the Taiwan 
question.
    So, Mr. Chairman, as we proceed with our own debate over 
the merits of the policy of engagement with China, we need to 
keep in mind the consequences of any change or an abandonment 
of that policy and the impact it would have in terms of the 
strategic and political consequences not only for us but for 
Taiwan itself. I thank the chair.
    The Chairman. I thank the Senator.
    Before we proceed further, just one moment to suggest that 
this record shows the sadness of this committee and expression 
of friendship to our distinguished friend, Mr. Lugar, who lost 
his mother last night. She must have been a great lady if she 
raised Dick Lugar. Senator Murkowski, you are now front and 
center.

 STATEMENT OF HON. FRANK H. MURKOWSKI, U.S. SENATOR FROM ALASKA

    Senator Murkowski. Thank you very much, Mr. Chairman. I 
appreciate the opportunity to be with you this morning, and I 
want to thank you for welcoming me back to the Foreign 
Relations Committee, where I served as a member for 12 years. 
Regretfully, I left for the Finance Committee, but sometimes we 
have to do those things.
    I also want to recognize Senator Hagel, who chaired with me 
a hearing of the Energy and Natural Resources Committee this 
morning on global climate change, which I might add is still 
going on. I want to recognize my good friend Senator Kerry as 
well.
    I also want to thank Senator Biden and the other members of 
the committee for approving on Tuesday two resolutions which I, 
along with others, introduced regarding the Taiwan issue, first 
was Senate Concurrent Resolution 17 commemorating the 20th 
anniversary of the Taiwan Relations Act, and Senate Resolution 
26, regarding Taiwan's participation in the World Health 
Organization. These are both timely and important measures that 
I hope the full Senate will adopt in the next few days.
    Mr. Chairman, looking back over 20 years, well, we have 
come a long way since then. I think there was an ad to that 
effect, we've come a long way, baby.
    I was not a Member of the Senate in 1979 when the Congress 
passed the Taiwan Relations Act, I came in 1980, but I have 
great respect for the wisdom of those who preceded me and 
played a role in the negotiations in passing this enduring 
piece of legislation. It would be interesting to hear from some 
of those folks now.
    I recall reading a statement from former Senator Boren, who 
is in the education business now at the University of Oklahoma, 
during the debate over the adoption of the Taiwan Relations 
Act: ``we are here setting precedent, not merely a matter of 
legal precedents of the past. We are here setting policy. How 
healthy it would be for us to state, as a matter of policy, 
that while we are going to move ahead with a relationship with 
800 million people on the mainland, that does not mean that we 
have to turn our backs on the people of Taiwan, who have been 
our friends.'' That statement was made March 12, 1979.
    In talking to my colleagues and former administration 
officials who were here for the creation of the Taiwan 
Relations Act, you really get the sense that no one--I think 
the chairman expressed this--no one really expected Taiwan to 
be around for very long. But Taiwan has not only survived, 
Taiwan has thrived. Taiwan has turned into one of the Asian 
tigers, and has weathered the Asian flu far better than any 
other Asian country. She is a full-fledged multiparty 
democracy, a democracy that respects human rights and civil 
liberties, and she serves as a model of successful democratic 
reform. It is almost a case where she had no other choice but 
to make it work, regardless of the adverse circumstances, and 
she has. The positive changes in Taiwan are really a tribute to 
the spirit and the perseverance of her people, who have 
achieved an almost impossible dream in the view of many 20 
years ago.
    The United States cannot take credit for Taiwan's 
achievement, but we can be proud of the role the Taiwan 
Relations Act has played are that we in Congress and in the 
administration have played in maintaining peace, security, and 
stability throughout East Asia.
    There have been many times, as the chairman knows, over the 
past 20 years when tensions have gripped the Taiwan Strait. 
Most recently, in 1996, China chose to launch missiles over 
Taiwan on the eve of the first direct Presidential election on 
the island.
    We might interpret that the mainland was trying to 
interfere in the election process, but if so, it seems to have 
back-fired because President Lee was elected by a greater 
majority than otherwise he might have been, but in any event, 
that is conjecture.
    The Clinton administration responded appropriately by 
sending two aircraft carriers to the region. This action was 
consistent with both the spirit and the letter of the Taiwan 
Relations Act, and I believe demonstrates the resolve of the 
United States to stand by our commitments to the people of 
Taiwan.
    All who have studied the Taiwan Relations Act recognize 
that, at its heart, it is really about one thing, and that is 
security. The most important commitment the United States made 
is in section 3, and it reads as follows: ``the United States 
will make available to Taiwan such defense articles and defense 
services in such quantity as may be necessary to enable Taiwan 
to maintain a sufficient self-defense capability.''
    I want to emphasize that the act talks about sufficient 
self-defense capability, not offensive capability. I think that 
is what we have to keep in mind, and that has been our policy.
    As we near the 20th anniversary of the Taiwan Relations Act 
on April 10, it is important to reflect on this commitment and 
others incorporated in the Taiwan Relations Act, and to 
determine whether our policies indeed meet that commitment.
    Back in 1978, when the United States broke off our 
diplomatic relations with the Republic of China and recognized 
the People's Republic of China, we lived in a very different 
world. We had a wall dividing the two Germanies, the Soviet 
Union was the Evil Empire, and the people of Taiwan lived under 
martial law. This was the state of the world when the United 
States passed the Taiwan Relations Act.
    Although the world has changed dramatically since then, our 
policies have not. The Clinton administration conducted a 
review of our policies toward Taiwan in 1994. They made some 
small corrective adjustments regarding what level of meetings 
could take place, where they could occur, and so forth. I 
welcomed those changes, but I believe that we can and should do 
more.
    The Department of State committed also to ``support more 
actively,'' Taiwan's membership in international organizations 
that accept non-States--non-States--as members and to ``look 
for ways to have Taiwan's voice heard'' in international 
organizations where Taiwan's membership is not possible.
    We are all aware of Taiwan's responsiveness to world 
causes, famines, significant contributions for the betterment 
of mankind. They are always called upon, and they always give.
    As a consequence, I would encourage consideration by the 
administration more specifically to recognize that this is 
indeed a need unfulfilled that can be met, and as a consequence 
I submitted Senate Resolution 26 urging Taiwan's participation 
in the World Health Organization.
    There was an epidemic in Taiwan not so long ago, a rather 
unusual type of flu, and the World Health Organization was 
unable to be responsive. That is tragic and unneeded. After 
all, we are all inter-tied with our health needs and exposures 
as we travel internationally.
    Another resolution that I introduced, Senate Concurrent 
Resolution 17, expresses concern about several issues, 
including the process for evaluating Taiwan's self-defense 
needs and the lack of high-level dialog between Taiwan's senior 
military officials and American defense officials on many 
issues of mutual concern. The resolution also expresses the 
Congress' grave concern over the possible threat to security in 
the Taiwan Strait from China's defense mobilization and 
modernization and procurement, as documented in the February 1, 
1999 report to Congress by the Secretary of Defense on the 
security situation in the Taiwan Strait. This includes, of 
course, China's growing arsenal of nuclear and conventionally 
armed ballistic missiles.
    With Secretary Kramer here today I would like to commend 
the Pentagon for producing what I found to be a very 
informative report, and I hope that similar reports can be 
produced for Congress on an annual basis.
    I understand that our chairman, Chairman Helms, yesterday 
introduced the U.S.-Taiwan Security Enhancement Act, which 
would codify some of the policies suggested in my resolution, 
and I welcome your initiative, Mr. Chairman, and I ask that I 
might be added as a cosponsor.
    Because the Congress and this committee in particular play 
such a strategic and key role in the oversight and 
implementation of the Taiwan Relations Act, I think it is very 
fitting that we take special note of this important 
anniversary, as the chairman has. I look forward to working 
with my colleagues and with the administration in maintaining 
our strong and special relationship with Taiwan.
    Mr. Chairman, I thank you for the opportunity to appear 
before you today. I would be pleased to respond to any 
questions.
    The Chairman. Thank you very much, Senator. You are a 
distinguished alumnus of this committee, and any time you want 
to come back we will see if we cannot find a place for you.
    I have no questions for the Senator.
    Senator Murkowski. Thank you very much, gentlemen.
    The Chairman. You are welcome to come up here and sit with 
us. I know you do not have anything else to do today.
    Senator Murkowski. I have got another place to sit. Thank 
you.
    The Chairman. He is almost running out the door because he 
has so much to do. Seriously, Frank, we are glad that you came.
    The second panel, the Honorable Frank Kramer, who I 
mentioned a while ago, who is Assistant Secretary of Defense 
for International Security Affairs, and the Honorable Stanley 
Roth, Assistant Secretary of State for East Asian and Pacific 
Affairs, and if you gentlemen will enjoy where you have already 
taken a seat, that will be great, and your entire prepared 
remarks will be made a part of the record, and you can, if you 
want to let us have time to discuss the subject with you, you 
may want to summarize your statement, but I am going to leave 
that up to you.
    I appreciate your coming. Mr. Kramer, why don't you 
proceed, or----
    Mr. Roth. However you would like, Mr. Chairman. Initially I 
would set the context----
    The Chairman. Well, I see it says Kramer and Roth. Why 
don't you go first, then.

STATEMENT OF HON. STANLEY O. ROTH, ASSISTANT SECRETARY OF STATE 
               FOR EAST ASIAN AND PACIFIC AFFAIRS

    Mr. Roth. Let me set the context, and then I understand 
that many of the specific questions relate more directly to 
Assistant Secretary Kramer's portfolio on the defense side, but 
I wanted to make a few remarks.
    The Chairman. Good.
    Mr. Roth. First, I wanted to start with a personal note, 
Mr. Chairman, because I became a staffer on Capitol Hill 20 
years ago this past February, and the very first issue I worked 
on, despite the fact that I was a Middle East expert at the 
time, was the Taiwan Relations Act, and I have had a personal 
interest in it ever since.
    And to tell you the truth I quite agree with the assessment 
that you made and the assessment that Senator Murkowski made 
that the legislation sent up by the administration at that time 
was grossly inadequate, and if not for the work of the Congress 
I think that we would have a radically different situation in 
the region today, so I think that the accomplishments in the 
TRA are very great, and that Congress deserves a very large 
share of the credit.
    I may also say for the sake of history my own role as a 
very junior 25-year-old staffer to a junior Member on the House 
side was not great, but it was the first issue I worked on. I 
am not attempting to take credit personally for the success.
    Having set that context, I do want to make just a few basic 
points. First, I think that the combination of the 
normalization of relations with the PRC in 1979 and the passage 
of the enhanced Taiwan Relations Act with the Congress' input, 
has worked. I think as a result of it the world is radically 
different than it was in 1979, and three sets of bilateral 
relationships have flourished. Obviously U.S.-China 
relationships are radically different and improved from where 
they were in 1979, despite all the problems, and that 
relationship is not the focus of our hearing today.
    But second, I think it is important to recognize that the 
peace and stability that came upon the Asian region as a result 
of normalization was enormously beneficial to Taiwan and to 
U.S.-Taiwan relations. I will not dwell on this point, because 
it has already been made by many of the speakers, but I can 
remember as a staffer organizing hearings on human rights 
violations and the Taiwan-Kaosiung incident, assassination of 
opposition leaders in the United States, and all of that is 
gone. This is a totally different world. Taiwan is a role model 
on human rights. It is a role model on economic development, 
and I think that this enormous, staggering progress that has 
been made in Taiwan is largely attributable to the people of 
Taiwan, but that could not have happened without the 
environment that was created by normalization.
    But the third point that I want to spend just a little more 
time on is what has changed in the relationship between China 
and Taiwan, because here is where the most dramatic change has 
taken place, and I agree with Senator Kerry.
    Who would have thought in 1979 that you would have had $30 
billion worth of Taiwan investments on the mainland. Who would 
have thought in 1979 that you would have millions of Taiwanese 
visiting the mainland? Who would have thought in 1979 that you 
would have high-level political talks between China and Taiwan, 
and that Taiwan Representative Mr. Koo would be received by 
Jiang Zemin and others at Diaouyutai, the State Guest House.
    So this is a radical change in the relationship, and I 
think ultimately stabilizing in terms of reducing tensions, 
because the ties between the two parties on either side of the 
strait are so great. So all this is my way of saying I think 
there is a lot to feel good about. A lot has worked over the 
past 20 years.
    In my statement I give a lot of statistics and go into 
great detail about the recent Wang-Koo meeting, but in the 
interest of time that you have expressed I will just leave that 
for the record, and get directly to the question of assessing 
the effectiveness of the TRA.
    I think that clearly we should consider the TRA to have 
been a success. I think clearly that it has managed to provide 
for Taiwan security. Taiwan has not withered and disappeared. 
As Senator Murkowski said, you know, was the fear 20 years ago. 
I think that in fact we look at recent assessments of the 
security situation by the Pentagon.
    The conclusion is that except in a few areas, and missiles 
has been highlighted as just one, that essentially the dynamic 
equilibrium of forces in the Taiwan Strait has not changed 
dramatically over the last two decades. That is a very major 
accomplishment, and it demonstrates that for 20 years the TRA 
has been effective.
    And consistent with our obligations under the TRA, we and 
other administrations before us, in close consultation with the 
Congress, have approved a long list of defensive weaponry which 
I list in my testimony but will not do in the interests of 
time.
    But let me turn to the hot issue of the moment, which, of 
course, is TMD. The question of Taiwan and a theoretical 
theater missile defense strategy has, of course, been a topic 
of much discussion recently.
    First, let me set out some important technical points. TMD 
is a defensive system for which no deployment decisions, other 
than the protection of our own forces, has been made. This high 
altitude system technology is in the early stages of 
development, with potential deployment at least some years 
away.
    But that said, I would like to emphasize the critical point 
that Secretary Albright made in Beijing to the Chinese, which 
was, the issue of TMD is not solely, or even largely an 
American decision. The issue of TMD is going to be influenced 
by what China does. What China does matters, and the Secretary 
laid out to the Chinese very clearly that you cannot expect 
countries to ignore missile threats.
    For example, China objected strenuously to the sale of TMD 
to Japan, a treaty ally of the United States, which faces a 
real, legitimate threat from missiles from North Korea, and you 
cannot expect the leadership of Japan to just live with this 
threat without seeking some results, so the Secretary said to 
the Chinese, look, if you do not want Japan to acquire TMD, you 
are going to have to help Japan deal with the threat. Talk to 
the North Koreans about their missiles and tell them to 
negotiate with us.
    It is exactly the same point with Taiwan. It is 
unreasonable to say that China can deploy unlimited numbers of 
missiles that can reach Taiwan's territory, and that Taiwan's 
leaders have no obligation to think of defenses.
    So what China does matters, and we have told them that they 
ought to be addressing Taiwan's concerns if they do not want to 
see the possibility of TMD introduced into the region.
    We have worked and urged the PRC to exercise restraints on 
missiles, to work toward confidence-building measures with 
Taiwan, and to press North Korea to forego its missile 
ambition. These factors are under PRC's direct control or 
considerable influence, and the PRC's actions affect the future 
perceived need for TMD.
    Put differently, we do not preclude the possibility of 
Taiwan having access to TMD. Our decisions on this will be 
guided by the same basic factors that have shaped our decisions 
to date on the provision of defensive capabilities to Taiwan.
    In my testimony I go on to describe the success of the 
economic relationship, but you highlighted that in your 
statement, so I will skip over that section.
    I also then go on to describe Clinton administration policy 
at great length. I go back to the review of 1994. I will skip a 
lot of the details and instead go to the issue that you have 
raised and several of your colleagues, membership in 
international organizations.
    In the policy review, it was decided that the United States 
would support Taiwan's participation in international 
organizations that do not require statehood as a basis for 
membership, and would support opportunities for Taiwan's voice 
to be heard where membership is not possible.
    Since then, Taiwan has joined some tactical organizations 
like the Global Government Forum on Semiconductors. Frankly, 
however, and I know you like frankness, this is not a smashing 
success. Movement on this front has not been nearly as rapid as 
we had envisioned. We have found that there are simply not as 
many opportunities as we had initially hoped to find 
organizations which do not have membership of the State, and 
the PRC has been actively and adamantly opposed to many of 
Taiwan's attempts at membership or participation in 
international organizations.
    However, we view successful Taiwan participation in the 
Olympics, the ASEAN Development Bank, and APEC as clear 
examples of the contributions that Taiwan can make 
internationally and should be able to make. These contributions 
became possible because Beijing and Taipei found formulas to 
resolve participation. In the future, we hope that improved 
relations in the strait that may grow out of enhanced cross-
strait dialog and lead to similar creative solutions to the 
issue of greater access for Taiwan to additional international 
organizations.
    Finally, for the record, even though you have heard this 
from me many times, Mr. Chairman, let me emphasize one aspect 
of the administration's policy that has not changed, and will 
not change. The administration continues to insist that cross-
strait differences be resolved peacefully.
    The depth and firmness of the administration's resolve on 
this point was dramatically demonstrated in March 1996, when 
President Clinton ordered two U.S. carrier battle groups to the 
waters near Taiwan in response to provocative PRC missile 
tests. The visible U.S. strength, and the obvious U.S. signal 
of continued support for peaceful resolution of issues between 
the PRC and Taiwan was effective in counteracting the 
escalating tensions in the region at that time.
    Let me conclude my statement at this time.
    [The prepared statement of Mr. Roth follows:]

               Prepared Statement of Hon. Stanley O. Roth

                              introduction
    Mr. Chairman, thank you for the opportunity to address this 
committee on the twentieth anniversary of the Taiwan Relations Act. I 
look forward to exchanging ideas and points of view, and to affirming 
that we are following the best possible path for an issue we all care a 
great deal about.
    As many of you may know, some twenty years ago I was a new foreign 
policy specialist on Congressman Steve Solarz's staff. When President 
Carter decided to recognize the People's Republic of China, I found 
myself grappling with my first significant policy issue: the nature of 
U.S.-Taiwan relations in a fundamentally changed world. It was, in 
fact, the Taiwan question--how to preserve the long-standing friendship 
and common interests between the U.S. and Taiwan in the absence of 
diplomatic relations--that initiated my interest in Asia and shaped my 
life's work.
    I vividly remember the confused and anxious atmosphere of 1979, as 
well as the sense of solemn urgency. Clearly, the challenge of what 
ultimately became the Taiwan Relations Act--the TRA--was to ensure that 
normalization of our relations with the People's Republic of China did 
not result in the abandonment of Taiwan. This premise led to the 
articulation of the fundamental goals of the TRA as laid out in Section 
2(a):

          ``(1) to help maintain peace, security, and stability in the 
        Western Pacific; and
          ``(2) to promote the foreign policy of the United States by 
        authorizing the continuation of commercial, cultural, and other 
        relations between the people of the United States and the 
        people on Taiwan.''

    I have no hesitation in declaring the TRA a resounding success. 
Over the past twenty years, the TRA has not only helped to preserve the 
substance of our relationship with Taiwan, it has also contributed to 
the conditions which have enabled the U.S., the PRC, and Taiwan to 
achieve a great deal more.
                            no zero sum game
    In reviewing the past twenty years of these three intertwined 
relationships--U.S.-PRC, U.S.-Taiwan, and Beijing-Taipei--what becomes 
absolutely apparent is that gains in one relationship do not dictate a 
loss in either of the other two. In fact, the reverse is true: gains in 
one have contributed to gains in the others.
    As I noted earlier, the TRA was born of the U.S. decision to 
normalize relations with the PRC. The U.S.-PRC relationship that 
followed that decision--for all of its ups and downs--has contributed 
enormously to stability and peace in Asia.
    In turn, this positive Asian environment, supplemented by the 
specific assurances of the TRA, has been conducive to the people of 
Taiwan developing and applying their great creativity and capabilities 
to bettering their lives. The result has been Taiwan's extraordinary 
economic and political development. The unofficial U.S.-Taiwan 
relationship has prospered accordingly.
    Arguably, however, while the gains in the U.S.-PRC and the 
unofficial U.S.-Taiwan relationship have been formidable, the Beijing-
Taipei relationship has actually experienced the most dramatic 
improvement. The trade, personal contacts, and dialogue now taking 
place were unimaginable twenty years ago when propaganda-filled 
artillery shells were still being traded across the strait. Today, 
economic figures tell a much different story.
    In the five years from 1993 to 1998, cross-strait trade has grown 
on average by over 13 percent per year, and stood at $22.5 billion at 
the end of 1998. In fact, trade with the PRC accounted for over 10 
percent of Taiwan's trade with the rest of the world in 1998, making 
the PRC Taiwan's third largest overall trade partner surpassed only by 
the U.S. and Japan.
    Imports from the PRC to Taiwan are growing even faster--by an 
average of over 40 percent per year over the last five years--albeit 
from a lower base. 3.9 percent of Taiwan's global imports came from the 
PRC in 1998.
    Contracted Taiwan investment in the PRC now exceeds $30 billion. 
With 30,000 individual Taiwan firms having invested in the PRC, over 
three million mainland Chinese are now employed with firms benefiting 
from that commitment of funds.
    Economic ties have led to increasing personal ties. Up to 200,000 
Taiwan business people now live and work in the PRC. Since the opening 
of cross-strait travel a decade ago, more than ten million Taiwan 
residents have visited the mainland.
    This greater economic interaction is positive. Taiwan's security 
over the long term depends more on the two sides coming to terms with 
each other than on the particular military balance. Much like Adam 
Smith's invisible hand of the market place, myriad individual economic 
and social ties across the strait will contribute to an aggregate self-
interest in maintaining the best possible cross-strait relations.
    Politically, gains are also apparent. One of the most salutary 
developments in East Asia during the early 1990s was the emergence of a 
dialogue between Taiwan's Straits Exchange Foundation, or SEF, 
responsible for Taiwan's unofficial relations with the mainland, and 
the Mainland's Association for Relations Across the Taiwan Strait, or 
ARATS. The dialogue, cut off by the PRC after the Lee Teng-hui visit in 
1995, has begun to be revived this past year. As I am sure you are 
aware Mr. Chairman, in late 1998, SEF Chairman Koo Chen-fu led a 
twelve-member delegation on a five-day ``ice-melting'' visit to the 
mainland. In addition to meetings with ARATS Chairman Wang Daohan, the 
visit also included a meeting with PRC President Jiang Zemin and other 
ranking PRC officials. In a good will gesture, Chairman Koo was invited 
to stay at the PRC's official Diaouyutai State Guest House; an offer he 
accepted.
    Koo's October visit was able to reach a four-point consensus which 
includes:

          a return visit to Taiwan by ARATS Chairman Wang, a visit now 
        scheduled for Fall;
          further dialogue on political, economic, and other issues;
          more exchanges between SEF and ARATS; and
          greater assistance (on personal safety and property) for 
        people visiting the mainland, and vice versa.

    Chairman Koo's meeting with President Jiang Zemin was the highest 
level contact between Beijing and Taipei since 1949. As such, it 
substantially improved the climate for cross-strait exchanges. The 
consensus that was forged provides an excellent framework for 
developing the approaches necessary to resolve the difficult issues 
between the two sides.
                 assessing the effectiveness of the tra
    We should frankly acknowledge that Taiwan would prefer official 
diplomatic relations with the United States to unofficial relations. 
However, that said, the fact that our relations are unofficial has not 
harmed Taiwan's core interests in achieving security, prosperity, and 
freedom.
    Twenty years ago, Taiwan was under martial law and had significant 
human rights violations. That Taiwan no longer exists. Today, to my 
great pleasure, human rights violations are no longer necessary topics 
of discussion. Politically, Taiwan has a vibrant democracy 
characterized by free elections, a free press and dynamic political 
campaigns. The 1996 direct election of the President and Vice President 
stands out as a particular high point, and Taiwan's competitive 
democratic system continues to mature.
    Taiwan's political metamorphosis has been profound and serves as an 
example of peaceful democratic change in the region and beyond. The 
shelter of the TRA, made real by each successive administration's 
commitment to its provisions, helped make this transformation possible.
    Taiwan's immediate security was a major concern twenty years ago. 
There were those who feared that absent formalized defense arrangements 
with the U.S., Taiwan would be subject to military intimidation by the 
PRC. Clearly, the provisions of the TRA have been critical in enhancing 
Taiwan's ability to defend itself.
    The Department of Defense's recent assessment of the security 
situation in the Taiwan Strait concludes that, except in a few areas, 
despite modest qualitative improvements in the military forces of both 
China and Taiwan, the dynamic equilibrium of those forces in the Taiwan 
Strait has not changed dramatically over the last two decades. This 
assessment means that for twenty years the TRA has been effective.
    Consistent with our obligations under the Taiwan Relations Act to 
provide Taiwan with arms of a defensive character, and in close 
consultation with Congress, U.S. administrations have provided Taiwan 
with a range of defensive weaponry including F-16s, Knox class 
frigates, helicopters, and tanks as well as a variety of air-to-air, 
surface-to-air, and anti-ship defensive missiles. We continually 
reevaluate Taiwan's posture to ensure we provide it with sufficient 
self-defense capability while complying with the terms of the 1982 
Communique.
    The question of Taiwan and a theoretical theater missile defense--
TMD--strategy, has of course been a topic of much discussion recently. 
First, let me set out some important technical points. TMD is a 
defensive system for which no deployment decisions, other than for 
protection of our own forces, have been made. This high-altitude system 
technology is in the early stages of development with potential 
deployment at least some years away.
    But, that said, I think it is critical to emphasize that the PRC's 
actions are a key factor in the region's, and Taiwan's, interest in 
TMD. We have urged the PRC to exercise restraint on missiles, to work 
toward confidence-building measures with Taiwan, and to press North 
Korea to forgo its missile ambitions. These factors are under the PRC's 
direct control or considerable influence, and the PRC's actions can 
affect future perceived need for TMD. Put differently, we do not 
preclude the possibility of Taiwan having access to TMD. Our decisions 
on this will be guided by the same basic factors that have shaped our 
decisions to date on the provision of defensive capabilities to Taiwan.
    Political development and military security have contributed to 
Taiwan's tremendous economic development over the past two decades. As 
a result, the U.S. and Taiwan now share a vibrant, mutually beneficial 
trade relationship. Taiwan is the 14th largest trading economy in the 
world and the seventh largest market for U.S. exports. It constitutes 
our fifth largest foreign agricultural market and a major market for 
U.S. automobiles. For our part, the U.S. absorbs one fourth of all 
Taiwan exports, and our annual bilateral trade exceeds $50 billion.
    The economic partnership, moreover, continues to grow. Taiwan's 
sophisticated economy is largely withstanding the Asian Financial 
Crisis and acting as a support for the region. Taipei is now pursuing 
an ambitious, multi-billion dollar series of infrastructure projects--
projects for which U.S. firms are helping to provide professional 
services and equipment. Taiwan and the U.S. passed a milestone in their 
economic relationship last year with the successful completion of 
bilateral market access negotiations concerning Taiwan's application to 
the World Trade Organization. All indications are that Taiwan will 
continue to be an important export market for the United States.
                     clinton administration policy
    The Clinton Administration has been faithful to both the letter and 
the spirit of the TRA.
    In 1994 the Administration carried out a lengthy interagency review 
of U.S.-Taiwan policy--the first such review launched by any 
administration of either political party since 1979--in order to 
determine that all that could be done was being done. On the basis of 
that review, the Administration has undertaken a number of specific 
steps. While these steps were briefed extensively to the Congress at 
the time the decisions were made, I think it would be helpful to review 
some of the decisions.
    First, high level U.S. officials from economic and technical 
agencies up to cabinet level, are now authorized to travel to Taiwan 
when appropriate. Last November, Energy Secretary Richardson traveled 
to Taipei to attend the annual meeting of the U.S.-Taiwan Business 
Council, following the precedents set in 1994 and 1996, when then 
Secretary of Transportation Pena and then Small Business Administrator 
Lader attended similar meetings. Cabinet-level officials have attended 
the Council's meetings in the United States in the alternate years.
    Second, the Trade and Investment Framework Agreement--TIFA--talks 
and the Subcabinet-Level Economic Dialogue--SLED--were established to 
promote bilateral economic ties. In 1998, under the auspices of AIT and 
TECRO, they were hosted here in Washington and addressed a large 
spectrum of economic issues. TIFA meetings have been led by the USTR 
and the SLED talks by Treasury. Since 1994, then Under Secretary and 
now Deputy Treasury Secretary Larry Summers headed SLED for Treasury.
    Third, it was decided that the United States would support Taiwan's 
participation in international organizations that do not require 
statehood as a basis for membership, and would support opportunities 
for Taiwan's voice to be heard where membership is not possible. Since 
then, Taiwan has joined some technical organizations like the Global 
Government Forum on Semiconductors. Frankly, however, movement on this 
front has not been nearly as rapid as we had envisioned. We have found 
that there simply are not as many opportunities as we initially 
estimated, and the PRC has been actively and adamantly opposed to many 
of Taiwan's attempts at membership or participation.
    However, we view successful Taiwan participation in the Olympics, 
the Asian Development Bank, and APEC as clear examples of the 
contributions that Taiwan can make, and should be able to make, in 
international settings. These contributions are possible because 
Beijing and Taipei found formulas to resolve participation. In the 
future, we hope that improved relations in the strait that may grow out 
of enhanced cross-strait dialogue, can lead to similarly creative 
solutions to the issue of greater access for Taiwan to additional 
international organizations.
    Finally, let me emphasize one aspect of the Administration's policy 
that has not changed. The Administration continues to insist that cross 
strait differences be resolved peacefully. The depth and firmness of 
the Administration's resolve on this point was dramatically 
demonstrated in March of 1996, when President Clinton ordered two U.S. 
carriers to the waters near Taiwan in response to provocative PRC 
missile tests. The visible U.S. strength, and the obvious U.S. signal 
of continued support for peaceful resolution of issues between the PRC 
and Taiwan, was effective in counteracting the escalating tensions in 
the region.
                               conclusion
    U.S. relations with the PRC and the people of Taiwan are likely to 
be one of our most complex and important foreign policy challenges for 
many years to come. This Administration, like the five Republican and 
Democratic Administrations before it, firmly believes that the future 
of cross-strait relations is a matter for Beijing and Taipei to 
resolve. No Administration has taken a position on how or when they 
should do so. What we have said, and what I repeat here today, is that 
the United States has an abiding interest that any resolution be 
peaceful.
    Over the last twenty years the TRA has served our interests well. I 
fully expect that it will continue to do so during the next twenty 
years.

    The Chairman. Very well. Mr. Kramer.

 STATEMENT OF HON. FRANKLIN D. KRAMER, ASSISTANT SECRETARY OF 
           DEFENSE FOR INTERNATIONAL SECURITY AFFAIRS

    Mr. Kramer. Mr. Chairman, thank you for the opportunity to 
discuss these issues with you. As you said, I have a prepared 
statement which is in the record, so let me just make five 
short points and then we can go to questions.
    The first point I would make in terms of our overall 
policy, which as you said is one of ensuring peace and 
stability in the Taiwan Strait, that that is part of our 
overall security policy for the Asia Pacific as a whole. We do 
that in three broad ways, through the maintenance of a forward 
presence of 100,000 forces, through working with our allies and 
friends, and through engaging China, and on the last I might 
point out that certainly in the defense area all of our friends 
and our allies ask us about our engagement and encourage us to 
do it.
    The second point I would make with respect to Taiwan is 
that we fully implement the provisions of the Taiwan Relations 
Act not only because it is the law, but also because it is good 
policy to do so, as you said. Our focus is, by helping Taiwan 
maintain a self defense capability, that creates the 
circumstances in which one can create a peaceful security 
situation in the Taiwan Strait.
    We also engage with the PRC, and we do that likewise in the 
defense area.
    The third point I would like to discuss briefly is just how 
we do this. We did send the report up that you have alluded to 
already, so that has a great deal of detail, but let me make a 
few points to you and then we can discuss them at greater 
length.
    We focus on the missions that Taiwan has to be able to 
undertake successfully. There is an air mission, a sea mission, 
and a land mission, if you will, and in each of these areas we 
have substantial relationships both with respect to hardware 
and also working on personnel and training kind of issues.
    For example, in the air area we have sold early warning 
airplanes, we have sold air defense planes like the F-16's, we 
have provided air defense systems, most notably, for example, 
the modified air defense system, which is a Patriot derivative, 
we have provided Stinger missiles.
    On the sea we talk about ensuring control of the sea lines 
of communication dealing with antisubmarine warfare. We have 
provided Knox frigates. We have provided the technical know-how 
so that Taiwan can produce the Perry class frigates. We have 
provided the Harpoon missile.
    On land, we have provided M-60 tanks, helicopters, the 
Hellfire missile, advanced communications systems.
    This is a pretty formidable capability, and it is one that 
we have worked with very closely in my office and the entire 
Defense Department, as well as with the State Department to do 
this.
    One point I would make is that these are sometimes fairly 
expensive systems, and Taiwan does not have an unlimited 
budget, so we have to work very closely with them to be quite 
cost-effective. We have regular consultations in which we do 
that.
    We also work with them a great deal on what we tend in 
shorthand to call software, the kinds of things that makes 
militaries really effective, personnel and training and 
logistics. On the personnel side, for example, we have had 
recent visits which have focused on the reserve system for 
Taiwan which is necessary given their relatively small 
population and their smaller, as compared to the PRC, smaller 
armed forces.
    We work with them on training, and we have had them work on 
issues of how we do training so that they can do similar 
effective training. We're dealing with logistics management, 
focused on integrated logistics, computer-assistive logistics. 
We work on C4I, command, control, communications and computers, 
and intelligence. And in particular we are working on a data 
link system, and we are going to undertake in the near future 
an overall assessment of their C4I, and we also work with them 
on modeling and simulation, and we will be helping them set up 
a stand-alone simulation center.
    General Tong, who as you know is the commander-in-chief of 
their armed forces, was here in October, the Secretary of 
Defense met with him, I met with him, he is very interested in 
these issues, and I would say if I had to pick one set of 
things that are more important than anything, it is these 
software issues.
    I work on these kinds of things for many countries around 
the world, as does Secretary Cohen, and our focus always, first 
and foremost, is on personnel and training. It does not mean 
that hardware is not important, but I just want to underscore 
for you, Mr. Chairman, how important these other issues are.
    As already has been mentioned, sometimes a defense 
relationship is not enough, and if necessary, we do view 
threats to Taiwan as a matter of grave concern, and as I think 
you have mentioned, some of the other Senators have mentioned, 
Mr. Roth had mentioned in March 1996 in response to a 
provocative threat we did, in fact, put the carriers off of 
Taiwan for very deliberate reasons.
    On the other side of the strait, my fourth point, we do 
engage with China. We do this to pursue our mutual interests, 
and also to deal with their areas of profound differences. We 
have common interest, for example, for peace and stability on 
the Korean peninsula. We have concerns about nuclear testing in 
South Asia, and we have differences with respect to the U.S.-
Japanese military relationship. We obviously have differences 
with respect to Taiwan.
    When we go forward on areas of mutual interest, we do so in 
a transparent way. We seek reciprocity, and we do this to avoid 
the possibilities of miscalculation, misinformation on their 
side. We want to gain insights into their thinking, and we want 
to increase communications.
    Some examples of what we have done, for example, include 
the maritime military agreement which Secretary Cohen signed 
last year. This reduces the possibility for incidents at sea. 
We have functional exchanges. The Chinese Defense University is 
here right now, the president, I should say, and we have 
exchanges on humanitarian activities, disaster relief, for 
example. We have lots of open communications. The Secretary of 
Defense visited China, as you know, last year. This year the 
chairman of the Joint Chiefs of Staff. I visited, for example.
    We are clear--and this is my last point, really--as 
Secretary Roth has said, that our activities with China are not 
a zero sum game with respect to Taiwan. We insist on peaceful 
resolution, and what we are trying to do is create security and 
stability in the strait so that we can come and let the parties 
come to a peaceful resolution.
    Let me stop there, Mr. Chairman. I am sure you have got 
lots of questions. I would be happy to answer them.
    [The prepared statement of Mr. Kramer follows:]

             Prepared Statement of Hon. Franklin D. Kramer

    Good afternoon Mr. Chairman and Members of the Committee. Thank you 
for this opportunity to speak to you about the security situation in 
the Taiwan Strait. It is especially important to address these issues 
on the eve of 20th anniversary of the Taiwan Relations Act. In the 
interest of reserving time to answer any questions you may have, I 
respectfully request that the following statement be entered into 
record. I have prepared a brief statement that specifically addresses 
your interest in the views of the Department of Defense toward the 
security situation in the Taiwan Strait.
    Let me first say that the overarching U.S. goal is to preserve 
peace and stability in the Asia-Pacific region. The policy of the 
United States toward Taiwan and the PRC is integral to this goal. We 
maintain our obligations toward Taiwan as stipulated in the Taiwan 
Relations Act, but also because it is good policy to do so. We also 
maintain a policy of comprehensive engagement with the PRC, also 
because it is good policy to do so. These two approaches are 
complementary to one another and support our often-stated interest that 
the PRC and Taiwan work out their differences peacefully. To that end, 
we are encouraged by the resumption of cross-strait talks. A 
constructive and peaceful Taiwan-PRC dialogue serves the interest of 
all the parties and is a major element in achieving long-term regional 
peace and stability.
    Our commitment to peace and stability is further bolstered by the 
maintenance of approximately 100,000 U.S. troops in the region, a 
policy most recently reaffirmed by Secretary Cohen in DoD's 1998 East 
Asia Strategy Report. There have been times when more than simple 
dialogue and presence have been necessary to maintain stability. 
America's enduring commitment is well-known and widely appreciated 
throughout the region, and contributes to our overall approach to the 
cross-strait issue. Our commitment to take the necessary actions was 
visibly demonstrated in March 1996 by our deployment of two carrier 
battle groups to the region in response to provocative PRC missile 
exercises.
                       u.s. policy toward taiwan
    Now, let me specifically address our policy toward Taiwan. The 
Taiwan Relations Act (TRA) of 1979 forms the legal basis of U.S. policy 
regarding the security of Taiwan. Its premise is that an adequate 
defense in Taiwan is conducive to maintaining peace and security while 
differences remain between Taiwan and the PRC. Section 2(b) states:

          It is the policy of the United States to consider any effort 
        to determine the future of Taiwan by other than peaceful means, 
        including by boycotts or embargoes, a threat to the peace and 
        security of the Western Pacific area and of grave concern to 
        the United States; to provide Taiwan with arms of a defensive 
        character; and to maintain the capacity of the United States to 
        resist any resort to force or other forms of coercion that 
        would jeopardize the security, or the social or economic 
        system, of the people of Taiwan.

    Section 3 of the TRA also provides that the ``United States will 
make available to Taiwan such defense articles and defense services in 
such quantity as may be necessary to enable Taiwan to maintain a 
sufficient self-defense capability.''
    We take our obligation to assist Taiwan in maintaining a self-
defense capability very seriously. We do so not only because it is 
mandated by U.S. law in the TRA, but also because it is in our own 
national interest. We understand that as long as one has a capable 
defense, the security environment will be more conducive to peaceful 
dialogue, and thus the whole region will be more stable.
    Let me also call attention to an aspect of the August 17, 1982, 
Joint Communique between the United States and the People's Republic of 
China that is extremely important to Taiwan's security. In this 
document, the PRC stated that its ``fundamental policy'' is ``to strive 
for a peaceful resolution to the Taiwan question.'' Based on that PRC 
assurance, the United States Government made reciprocal statements 
concerning our arms sales to Taiwan--that we would not increase the 
quantity or quality of arms and, in fact, intend gradually to reduce 
these sales. At the time the Joint Communique was issued, we made it 
clear that our intentions were premised upon the PRC's continued 
adherence to a peaceful resolution of differences with Taiwan.
    While the PRC adheres to the 1982 Communique, we also recognize 
that the PRC has not renounced the option of overtaking Taiwan by 
force. Accordingly, we carefully monitor the PRC's military 
modernization program, especially as it relates to Taiwan, to determine 
how best to provide Taiwan an appropriate ``sufficient self-defense 
capability.''
U.S. Defense Assistance to Taiwan
    We continually reevaluate Taiwan's defense posture and self-defense 
capabilities and consult with Taiwan about its needs. In assessing 
these needs, the Department of Defense has dedicated significant 
intelligence resources over the past two decades to monitoring the 
military balance in the strait. We also have an active dialogue with 
Taiwan's defense establishment to keep current on their defense needs.
    Consistent with our obligations under the TRA, we have helped 
Taiwan achieve a formidable capacity to defend itself and to maintain a 
strong defense posture. Taiwan has acquired several defensive systems 
from the U.S. in recent years, including E-2T airborne early warning 
aircraft, NIKE, HAWK and CHAPARRAL ground-based batteries, and 150 F-16 
fighters to enhance its air-defense capability; Knox-class frigates for 
anti-submarine warfare (ASW) and to protect its sea lines of 
communication (SLOCs); and M-60A tanks and armed helicopters to counter 
an amphibious invasion. We have also provided support for Taiwan to 
construct for itself the more advanced Perry-class frigates to assist 
in ASW and protection of SLOCs; sold F-16-launched HARPOON missiles for 
ASW; and provided the Modified Air Defense System, a Patriot system 
derivative.
    In addition to these hardware sales, we are increasingly focusing 
on enhancing functional areas in Taiwan's defense system to enable 
Taiwan to better apply the equipment at hand, and optimize and 
integrate its capabilities for its key missions of air defense, anti-
amphibious invasion, anti-submarine warfare and protection of sea lines 
of communication. We conduct functional exchanges and host programs 
under FMS and IMET to address such areas as personnel, training, 
logistics management, development of joint service doctrines, and C4I. 
The contribution of such ``software'' assistance will add measurably to 
Taiwan's overall defense posture.
    The United States has abided by its commitments to Taiwan. 
Similarly, Taiwan's security will also be enhanced as we work to 
improve relations with the PRC.
                      u.s.-china engagement policy
    The Administration remains firmly committed to our engagement 
strategy with China. This strategy is consistent with and appropriate 
for relations between two major countries with both vital mutual 
interests and profound differences in outlook and beliefs.
    Indeed, engagement and pursuit of a cooperative relationship are 
not to gloss over the very critical differences we have with Beijing's 
leaders on a wide range of issues. Our broader security dialogues with 
China aim at narrowing differences on key foreign policy issues. Yet we 
continue to have divergent perspectives on Taiwan, U.S.-Japan security 
ties, and overall U.S. regional security strategy.
    On the other hand, we are developing important common global and 
regional security interests. Key among these is the maintenance of 
peace and stability on the Korean Peninsula. We also share concerns 
about nuclear testing in India and Pakistan and a range of non-
conventional transnational security threats, including terrorism, drug 
trafficking, environmental degradation, and the spread of infectious 
diseases. China is also becoming increasingly committed to the 
maintenance of global WMD non-proliferation regimes.
    Ultimately, our policy is designed to pursue cooperation with China 
where appropriate while opposing Chinese actions and policies with 
which we disagree.
U.S. Military-to-Military Relationship with China
    The relationship of the Department of Defense with the People's 
Liberation Army (PLA) is an integral part of the overall Administration 
strategy of comprehensive engagement with the PRC. Sustained senior-
level dialogue and interaction at all levels will enable us to develop 
better mutual understanding of capabilities, commitments and 
intentions; enhance confidence; and promote trust in order to avoid 
miscalculations and misperceptions that can lead to conflict. The 
principles of transparency, reciprocity and pursuit of mutual interests 
inform our military engagement activities. Through this approach, DoD 
has advanced several objectives in its relationship with the PLA:

   Reduce the possibility for miscalculations and accidents 
        between operational forces through development of a variety of 
        confidence-building measures (e.g., 1997 Military Maritime 
        Agreement, ship visits, informational exchange on military 
        environmental security, humanitarian assistance/disaster relief 
        cooperation)
   Gain operational insights into the PLA through bilateral 
        functional exchanges (e.g., military medicine, military law, 
        defense university exchanges, language programs)
   Ensure open communications during times of tension through 
        routine senior-level defense dialogues (e.g., annual SecDef 
        meetings, vice-ministerial level discussions (Defense 
        Consultative Talks), service chief visits, CINC visits)
   Monitor PLA influence in PRC internal politics and foreign 
        policy decision-making
   Expand PLA participation in appropriate multinational and 
        multilateral military activities (e.g., conferences on military 
        law, management, medicine)
   Enhance understanding of China's strategic doctrine through 
        continuing Sino-American security dialogue

    We will continue our dialogue with the Chinese national security 
community to articulate our vital interests, cooperate in those areas 
where we share common security interests, and to minimize differences 
in those areas where our interests differ. Such dialogues do not harm 
Taiwan's interests.
    Indeed, in all our dialogues, we make clear to the PRC that we will 
continue to support Taiwan in its legitimate defense needs not only 
because it is required by U.S. law, but also because it serves the 
wider interests of peace and stability in the region. We also have made 
clear that we support only a peaceful resolution of the Taiwan issue, 
and regard any attempt to resolve the issue by other than peaceful 
means, or any other action that threatens regional stability, to be 
contrary to our security interests.
    Finally, it is important to reiterate our belief that any 
improvements in the U.S.-PRC bilateral relationship are not zero-sum: 
they will not come at Taiwan's expense, but rather serve to dampen 
possible PRC misperceptions, enhance mutual trust and transparency; and 
promote restraint. Taiwan will be a primary beneficiary of the regional 
peace and stability fostered by positive Washington-Beijing relations. 
We believe the Taiwan people share this view.
    Ultimately, however, the U.S. position is that the Taiwan issue is 
for the Chinese on both sides of the strait to resolve. This remains 
the best approach and our policy must remain consistent in this regard. 
Indeed, this is the only long-term guarantee of a peaceful and durable 
solution across the Taiwan Strait. It is also a necessary element in 
guaranteeing long-term peace and stability in East Asia.
    Mr. Chairman, it is particularly important to note that six 
administrations of both parties have understood that comprehensive 
engagement with Beijing represents the best way to promote our 
interests and to encourage a positive and constructive PRC role with 
the world. This policy has served the interests of the United States, 
the PRC, Taiwan, and regional security and prosperity. It has enabled 
us to pursue engagement with China and strong, unofficial ties with 
Taiwan. It has enabled Taiwan's people and leaders to maintain their 
security, produce one of the world's economic miracles, and consolidate 
its democracy.
    Our relations with Taiwan and the PRC are likely to be one of our 
most complex and important foreign policy challenges for many years to 
come. Indeed, the global political and regional environment is very 
different today than at the time the three Communiques and Taiwan 
Relations Act were formulated and implemented. Nonetheless, these 
documents have served U.S. interests in maintaining peace and stability 
in the Taiwan Strait for more than 20 years and remain the best 
framework for guiding U.S. policies into the future. Thank you, Mr. 
Chairman.

    The Chairman. Very well. We will have 5 minutes for 
Senators, because we have another panel coming.
    Mr. Roth, I am not being picky, picky, picky, but there is 
a lot of talk about the three noes, no, no, no. Now, can you 
tell me when and where, either in a document or in a public 
statement, or whatever, any previous administration has ever 
stated that the U.S. policy is, quote, we do not support 
independence for Taiwan, as President Clinton did last summer?
    Mr. Roth. Well, Mr. Chairman, we, the administration sent 
up to you a letter which detailed in great length the entire 
story of the three noes, or so-called three noes, as we refer 
to them, and I did not bring it with me again today, but the 
basic point, which I want to reiterate on the record, and which 
I think has helped to calm the situation, has been no change in 
the administration policy. Every point made there had been made 
before by a previous administration and there was no change 
whatsoever.
    The Chairman. So you think that is what the President 
meant? Do you think that is what the President meant when he 
said that, flat out?
    Mr. Roth. I think the President had absolutely no intent of 
changing our policy toward Taiwan, that is correct.
    The Chairman. Well, now, the closest I could find is that 
Henry Kissinger told the Chinese in 1971 in private that, ``the 
U.S. does not seek independence, does not seek independence for 
Taiwan,'' and as far as we have been able to establish, this 
President is the first to say that the U.S. does not support 
independence.
    If you have any documents on that in your file, would you 
send me a----
    Mr. Roth. Of course.
    [The information appears in the appendix on page 51.]
    The Chairman. Because I want to have a complete file.
    Mr. Roth. Sure, and I hope we agree that we both do not 
believe that there should have been any change of policy toward 
Taiwan, and that in fact the administration has been consistent 
in its one China policy all along, as well as in its robust 
support for the unofficial relationship in Taiwan, and we spent 
a lot of time trying to reassure the Taiwanese of that point.
    The Chairman. Neither you nor I would blame the Taiwanese 
for listening to every word, and I do not blame them. I would 
have drawn the same conclusion that they have.
    Now, on April 8, I believe you are going to be here 2 or 3 
days. The Chinese, mainland Chinese Premier Zhu will be here 
for his summit with President Clinton. Now, what kind of signal 
do you think that sends to Taiwan that the Communist Chinese 
premier will be here on exactly the 20th anniversary of the 
Taiwan Relations Act? Was that just an accident?
    Mr. Roth. The scheduling had a lot to do with the 
combination of the President's scheduling and their scheduling. 
It certainly was not intended in any way to be symbolism with 
respect to the 20th anniversary. That is not the purpose of it 
at all.
    The Chairman. You are confident of that? You are 
conscious--that is a conscious statement you are making as a 
known fact, is that correct?
    Mr. Roth. Yes. Let me put it more categorically. The 
administration is very proud of its track record with respect 
to its relationship, albeit unofficial, with Taiwan. We believe 
we have a very strong record of support for that relationship, 
and are doing nothing to undermine it.
    The Chairman. I am not trying to embarrass you. These 
things happen. Now, I am sure that Mr. Clinton was involved 
with other things and he did not sit down and tell the mainland 
Chinese come over here because this will be the 20th 
anniversary, et cetera, et cetera. I know that. But you do not 
think the White House even thought about it being the 20th 
anniversary?
    Mr. Roth. I really do not, Mr. Chairman.
    The Chairman. All right.
    Mr. Roth. I never heard that point raised once in any 
administration meeting.
    The Chairman. Well, it is clear that the reunification of 
Taiwan, as mainland China calls it, is an increasingly high 
priority for Beijing, and part of Beijing's strategy quite 
obviously will be the ending of U.S. arms to Taiwan. What do 
you think is going to be the topic of the agenda for Premier 
Zhu's visit?
    Mr. Roth. I think that while the entire range of issues in 
U.S.-China relations will be on the agenda, as you know, he has 
primary responsibility for economic issues. I think the 
question of WTO accession and other economic issues will 
probably be at the top of his agenda.
    We will, of course, insist that a number of issues be on 
the agenda, that we are going to raise all of our concerns on 
issues ranging from human rights and nonproliferation to 
country-specific issues as well and, of course, we will 
reaffirm our positions on Taiwan.
    The Chairman. What do you think the President is going to 
say if the premier says, you have got to stop this arms 
business with Taiwan? What is the President going to say about 
that?
    Mr. Roth. I think he will say what he has always said, that 
we obey our obligations under the Taiwan Relations Act, that is 
the law of the land, to sell defensive equipment as well as our 
obligations under the three communiques.
    He will also reiterate the crucial point that, you know, we 
believe that China should renounce the use of force with 
respect to Taiwan, and that would change the situation in a 
fundamental way that they have been unwilling to do.
    The Chairman. That will be, if I heard you correctly, that 
will be sort of like telling him to go fly a kite, we are going 
to do what we think is right under the Taiwan Act, and that is 
what you think the President is going to do?
    Mr. Roth. Yes. He has said that to Chinese leaders on many 
occasions, and he will say that again.
    The Chairman. Well, my time is up and I will recognize the 
distinguished Senator from Massachusetts.
    Senator Kerry. Mr. Chairman, thank you very much. Let me 
sort of follow up on some of the questions of the chairman and 
see if we can go a little further.
    How do both of you assess the current Chinese deployments 
and the current level of threat toward Taiwan with respect to 
the strait.
    Mr. Roth. Let me give a very general answer, and then I 
will let Secretary Kramer give the detailed one.
    To me, I look at this in the context of overall Chinese 
military modernization as well as----
    Senator Kerry. Can you both pull the mikes down and closer, 
maybe?
    Mr. Roth. I look at this first of all in the context of 
overall Chinese military modernization, and more importantly, 
overall context of Chinese economic development, that China is 
in a situation as a result of its high levels of economic 
growth where it is increasingly able to have spending on both 
guns and butter, so that it can increase military expenditures 
while increasing other expenditures.
    As a result, there is a long-term military modernization 
process, starting from a fairly modest base, but nevertheless 
we have seen the Chinese makes strides in a number of different 
areas not limited to missiles, with more strides expected in 
the future.
    As a result of that, obviously the military capability 
increases vis-a-vis Taiwan, vis-a-vis others as well.
    Senator Kerry. Mr. Kramer, what do you say to that?
    Mr. Kramer. We sent up a very detailed answer in the 
report, as you know. Let me try and summarize that. The 
chairman alluded to it, of course.
    I have said in my statement that we have helped Taiwan 
modernize quite substantially, and we have, and I do not want 
to repeat all those, but we have done so in each of the air, 
land, sea areas.
    As Secretary Roth has said, the Chinese themselves have 
also modernized. They have done so with considerable Russian 
assistance, for example, and they have done so also internally. 
There are a large number of so-called short-range missiles, as 
the report lays out, in the areas that are opposite Taiwan, and 
that is an imbalance, if you will, because at the moment it is 
very difficult for anyone, ourselves included, to defend 
against those kinds of systems.
    The Chinese have a very large force as compared to Taiwan. 
In round figures, they have got about 2.5 million in the 
military plus about a million-person auxiliary. In round 
figures they have about 4,000 aircraft. They will probably get 
down to about 2,000 because they are modernizing but also 
decreasing.
    Taiwan on the other hand has about 400,000 total, and its 
military I think they have about 400 modern aircraft, so just 
quantitatively there are differences.
    Senator Kerry. Let me just stop you there for 1 minute. In 
terms of threat perception and deterrence, is it not fair to 
say that the balance is not judged by the numbers of troops in 
uniform versus numbers of troops in China, because in fact the 
specific ambivalence of the United States with respect to what 
role we might play is also a component of that calculation.
    Mr. Kramer. Yes, and where I was going was, I think that it 
is fair to say that Taiwan nonetheless, despite those 
differences, itself has a fairly formidable capability. That is 
what I was saying in my statement.
    Then if you factor in the United States, as I think the 
Chinese in fact do, then the overall situation is quite 
different, and we say, and we mean, both in law and in policy, 
that we would consider any threat to Taiwan a matter of grave 
concern, and I think this administration demonstrated that as a 
matter of fact with the support of the Congress in March 1996.
    Senator Kerry. Well, building on that, I mean, I think all 
of us share a cross-party-line uniform commitment that we are 
supportive of Taiwan's right to work through this process and 
not to be threatened, and certainly we would all of us react, I 
think swiftly, to any effort by China, as we have made clear in 
the past, to do so in some forceful way.
    I have suggested, during the last deployment, that we 
should be less ambivalent about it, frankly. I mean, it has 
sort of been a calculated ambivalence. I am prepared to be very 
unambivalent about it.
    Now, given that, it seems to me that China needs to clearly 
calculate what the United States and world response would be, 
and therefore, looking at that balance, we then have to make 
judgments about what happens with deployment of weapons, and 
where we proceed.
    If you could both share with the committee, what weapons do 
you think might be necessary now, if any, and what would the 
impact be, in your judgment, on the perceived balance and 
status quo that we have that has led to these talks, led to 
this increased cultural exchange, that seems to be moving down 
a road carefully? What would the result of a shift in weaponry 
be to both of those calculations, in your mutual judgments?
    Mr. Roth. I think the key point to make is that ultimately 
Taiwan security is not going to be determined by military force 
or by any specific discrete sales, that ultimately Taiwan 
security is going to be determined by the state of the cross-
strait relationship between China and Taiwan and what they work 
out between themselves and, of course, the policy of external 
players, with us being the primary one.
    But I think we cannot define this as a purely military 
equation that can be influenced by one discrete sale solving 
Taiwan's problems, which is clearly not the case.
    In that context, I think one of the calculations for Taiwan 
has to be, what is the diplomatic impact of steps it might take 
on the military side, and could they end up worse off by virtue 
of any specific acquisition, rather than better off in 
fundamental security.
    Mr. Kramer. In addition to that, Senator, obviously we will 
continue our policy of providing sufficient quantities of 
weaponry and also I really want to underscore again the 
personnel work and the training work that we are doing with 
Taiwan is extremely important. We do this across the board. 
That is to say, you should not look at it as a single silver 
bullet. That is not the way that militaries really operate, and 
that is not what makes the difference in terms of an overall 
capability.
    We also are very clear with the Chinese, and I think you 
should understand--you probably do, but let me underscore that 
the Chinese themselves are very clear with respect to the U.S. 
position. After March 1996 I think there was a fundamental 
reassessment in their own thinking. I think that was good.
    I think that the entire region was very appreciative of 
what the United States did. We certainly spoke to all the 
countries in the region about this. They were uniformly 
positive on what we had done, and there you hear anecdotally 
even from the Chinese things like, well, they look at Taiwan 
and they sort of see a medium-sized person that is themselves, 
and a smaller person that is Taiwan, but then there is a big 
person behind Taiwan, and that is us.
    So I think in the overall what we need to do is continue 
broadly the kind of policy which requires us to evaluate on a 
case-by-case basis as we do what kind of systems are necessary, 
but I think you have to look at the military as a whole.
    The Chairman. Senator Torricelli.
    Senator Torricelli. Thank you, Mr. Chairman. I barely have 
a voice, Mr. Chairman, so if the witnesses will bear with me.
    Recently, Chairman Helms and I introduced the Taiwan 
Security Enhancement Act. I would like to apply its provisions 
against your interpretations of the Taiwan Relations Act in 
three specific categories that we have included in our 
legislation.
    First, we provide that there be a continuation of the 
necessary equipment to maintain defense, including specifically 
satellite early warning data, advanced air-to-air missiles, and 
diesel submarine technology. Are there any of those items which 
in your judgment are, per se, inconsistent with the provisions 
of the Taiwan Relations Act allowing the United States, indeed, 
giving the United States the obligation in my judgment to 
maintain defensive capabilities in Taiwan, since by my own 
interpretation each of these items that we have enumerated in 
our legislation are by definition defensive in design and 
intention.
    Mr. Kramer. Let me take the question first, and let me 
answer it first directly and then a little more broadly about 
the act.
    Some of these items are actually discussed in the report, 
and the overall issues I think are important for us to look at, 
shared early warning, air-to-air missiles, submarines can all 
fit into a modern military. We have some of these ourselves, 
and in areas where we do not, like diesel submarines, we have 
nuclear submarines.
    On the other hand, as I mentioned before, Taiwan does not 
have unlimited amounts of money, and it needs to focus very 
clearly on what is the most cost-effective kinds of things to 
purchase, and we have specific talks for those reasons. The way 
I would ask you to look at it is by mission area, which was 
what I was trying to suggest.
    If we are thinking about a military confrontation, 
obviously the best confrontation is the one that they can 
avoid, so we want to give them as good a deterrent capability 
as possible, and then we need to be involved appropriately. As 
the act itself says, the Taiwan Relations Act, we would view 
any problem along these lines with grave concern.
    Shared early warning, air-to-air missiles, and diesel subs, 
can be the right thing to do, but they would not necessarily 
be, and we have to go through the whole activity.
    Senator Torricelli. Let me interrupt you a moment, because 
I am going to lose time, because I want to get specifically to 
the point of whether or not you think they are the right 
judgment. The chairman of the committee and I have drafted this 
legislation and have identified specific items, in that it is 
our belief that they are consistent with the Taiwan Relations 
Act.
    I do not know how you would interpret our opportunity and 
obligation to provide defense assistance to Taiwan and come to 
a different conclusion about satellite warning systems, advance 
air-to-air missiles, missile defense systems. They are by 
definition defensive. I am not asking you to endorse the sales. 
I am asking you if you have a contrary view that these weapons 
clearly could not be defensive, or subject it to an 
interpretation which might--on no other basis could be 
defensive.
    Mr. Kramer. Frankly, first of all I think that we do sales 
in a way that is designed to enhance Taiwan's self-defense 
relationship.
    Air-to-air missiles certainly can be used in a defensive 
context, but they can be used offensively also. I do not mean 
to say that the sale would be inconsistent with the Taiwan 
Relations Act, but I do not think that you can necessarily say 
that a system like an air-to-air missile could not be used 
offensively.
    Senator Torricelli. Well, anything can be used offensively. 
I could take an iron shield and hit somebody over the head with 
it and make it an offensive weapon.
    Having given you the opportunity to say that these by 
definition could not be offensive weapons, you have not done 
so.
    Mr. Kramer. Correct.
    Senator Torricelli. Therefore, I assume that we are not 
inconsistent with the provisions of the act.
    The second provision in our legislation is to enhance the 
staff of the American Institute in Taiwan, because we want it 
to be effective. Clearly, the staffing at the institute cannot 
be a violation of our obligation under the Taiwan Relations Act 
if that staffing is necessary to carry out the mission in 
Taipei.
    Mr. Roth. Of course. It is not clear to me, however, what 
the need is that you are trying to address.
    Senator Torricelli. Simply that as the economy of Taiwan 
expands, the relationship has grown dramatically in 20 years, 
it is now our ninth largest trading partner, there may be a 
need to have a greater staff presence to meet our obligations, 
the point here again being that does not appear to me to per se 
be any violation to the Taiwan Relations Act.
    To conclude, Mr. Chairman, the third is participation in 
our defense colleges to maintain the professionalism of their 
military and understanding of each other's institutions. That, 
again I would argue is not a violation of the Taiwan Relations 
Act. It is simply maintaining qualitative capability, the 
conclusion of this being that I think Chairman Helms and I have 
identified items that simply meet our obligations under the 
act, and I have not to my satisfaction heard an argument they 
are not defensive sufficiently in nature that they are not 
consistent with the act.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Thank you, gentlemen. We have another panel.
    Senator Kerry. Could we--is it possible just to follow up 
with one or two questions quickly on that subject, Mr. 
Chairman?
    The Chairman. Sure. Let's keep it as brief as we can, 
because they have to go and we have another panel.
    Senator Kerry. I will keep it brief. We are all under time 
constraints and I do not want to press it, but just very 
quickly, I thought I heard you say that air-to-air can be 
offensive.
    Mr. Kramer. Of course.
    Senator Kerry. So that might not necessarily fit 
automatically.
    Mr. Kramer. Let me be clear. We sell air-to-air missiles to 
Taiwan already. They have the M-9. I forget which version it 
is. So of course I think that the sale of air-to-air missiles 
in general terms is consistent with the act.
    What I was saying, and let me be quite specific. I only had 
a chance to quickly peruse the legislation. As I read it, it 
was not a question of whether they were consistent with the 
act, if that is the right way to look at it. It is a question 
of whether we were required to sell or not, and what I was 
trying to say to you is that what I would like to do is to 
exercise the judgment with Taiwan to look at their militaries 
overall and decide what ought to be sold.
    I think that there are arguments to sell air-to-air 
missiles. That is why we sell them, and you can make similar 
arguments.
    What I would not like, frankly, is to be required to do so 
if that would not be the best overall use of Taiwan's funds.
    Senator Kerry. One other question, Mr. Chairman, just 6 
seconds. Maybe I will make a comment. It seems to me that the 
judgment I am hearing, I mean, if the United States remains 
steadfast, as you and I want it to, that the ultimate issue of 
whether Taiwan is going to be safer or not has to be really 
thought out in the context of any sale.
    It is conceivable, is it not, that by selling certain 
weapons deemed to be defensive, that you could invite a greater 
deployment of offense or decoy or other kinds of things that 
actually leads you into greater instability, as we have seen in 
50 years of an arms race, so that ultimately it still becomes 
the United States that is the equalizing factor, number 1, and 
number 2, that you could in effect, even by fitting under a 
pure definition of defense, not necessarily enhance security.
    Mr. Roth. Absolutely. That was the point I was trying to 
make in my previous response to your question.
    Senator Kerry. So we need to measure that carefully.
    Mr. Roth. Very much so.
    The Chairman. Well, maybe--since we all extended it a 
little bit, I hope that this Government's position will be in a 
delicate, political way to say, they had better be safer, to 
mainland China, because if we do not stand flat-footed for our 
ally over there, we are going to be making a serious mistake.
    Senator Torricelli. Mr. Chairman, you may want the record 
to be corrected that our legislation only authorizes the sale.
    The Chairman. That is correct.
    Senator Torricelli. It does not require them. We are not 
imposing weapons on Taiwan that it cannot afford or does not 
want in its own judgment. We simply authorize them.
    The Chairman. That is correct.
    Gentlemen, thank you very much. I would appreciate to have 
another hour with you. Maybe we can get you back one of these 
days.
    Mr. Kramer. Thank you very much, Mr. Chairman.
    The Chairman. Thank you very much.
    Now for panel 3, three distinguished gentlemen, additional 
gentlemen, Hon. Harvey Feldman, Senior Fellow for Asian Studies 
at the Heritage Foundation, and Mr. Carl W. Ford, Jr., 
president of Ford & Associates in Washington, and Dr. David M. 
Lampton, director of China studies at the Nitze School of 
Advanced International Studies at Johns Hopkins, when the house 
clears just a little bit.
    As I said, I would like to be here until 2:00 or 3:00 with 
you gentlemen, but you would not like to be here with me till 
2:00 or 3:00, and I have two or three other meetings, but if 
you wish to summarize your statements with an understanding 
that they will be included in the record in full, that would be 
helpful, because I think we learn a lot more by being able to 
have an exchange between the Senators. So Mr. Feldman, we will 
be glad to hear from you first.

 STATEMENT OF HON. HARVEY FELDMAN, SENIOR FELLOW, ASIA STUDIES 
         CENTER, THE HERITAGE FOUNDATION, ARLINGTON, VA

    Ambassador Feldman. Thank you very much, Senator, and I 
will just try to make a few points, but I thought I might begin 
by giving a bit of my own background.
    I was the Country Director for Republic of China Affairs in 
the State Department through normalization. I cochaired the 
drafting committee in the State Department that prepared the 
first draft of the Taiwan Relations Act, and later I worked 
with this committee as a representative of the Carter 
administration in the revision that made it the great act that 
it is today and, Mr. Chairman, you yourself were very kind and 
complimented me on my work on that occasion.
    The Chairman. I was going to say, welcome home.
    Ambassador Feldman. Thank you, sir.
    I wanted to point out that although the draft we prepared 
in the State Department was inadequate in some respects, 
nevertheless it accomplished a few things. Today, we take it 
for granted that despite the absence of formal relations with 
Taiwan we can trade, invest, sell arms, sell enriched uranium, 
that the American Institute in Taiwan can provide just about 
all the services that our former embassy provided.
    And all of these things were contained in one magic 
sentence that we came up with in that State Department draft 
that said, whenever the laws of the United States refer to or 
relate to foreign countries, nations, States, Governments, or 
similar entities, such terms shall include and such laws shall 
apply with respect to Taiwan, unquote.
    I will come back to that later, because that becomes very 
key on the question of Taiwan's membership in international 
organizations.
    But as we have seen and said, the State Department bill did 
not go far enough, so there was a bipartisan effort, led in the 
Senate by Frank Church, Jake Javits, Dick Stone, and you 
yourself, Mr. Chairman. In the House we should remember and 
applaud Lester Wolff, Dante Fascell, Clem Zablocki, and Ed 
Derwinsky.
    And so what we came up with--I am including myself. I guess 
perhaps I should not. What the Congress came up with was a 
treaty which the Congress drafted through legislative action, 
and successive administrations have had to abide by that 
treaty.
    We are all familiar with the security assurances in that 
treaty, but there are a couple of other points in there that 
people may not be quite so familiar with. For example, the 
language, threat to the peace and security of the Western 
Pacific, which is in the TRA, intentionally replicated the 
language of Article VII of the United Nations Charter about 
threats to international peace and security and the obligation 
of States to take up arms to meet those threats. That is in 
there, a direct replica.
    And the other thing it says in that same section is that 
any attempt to use coercion against Taiwan would be an 
international matter, and not a domestic matter, as the PRC 
continually tries to tell us.
    I want to talk a bit about international organizations. Mr. 
Chairman, there is language that says nothing in this act may 
be construed as a basis for supporting the exclusion or 
expulsion of Taiwan from continued membership in any 
international financial institution, or any other international 
organization.
    Now, that is phrased negatively, but the legislative 
history makes it very, very plain that Congress intended the 
administration, the Carter administration and those that have 
followed, to support Taiwan's membership in those organizations 
which it belonged to in 1979, and that included the Bank and 
the Fund, the International Monetary Fund, and the World Bank.
    In fact, Taiwan's membership in those two international 
financial institutions continued for 9 years after it was 
expelled from the General Assembly, making the point that you 
did not have to be a member of the General Assembly to belong 
to the Bank and the Fund. Taiwan was expelled from the Bank and 
the Fund only when the United States ceased supporting its 
membership.
    Now, there are a whole host of organizations that I believe 
Taiwan could and should belong to today. There are humanitarian 
organizations, there are technical bodies: the International 
Civil Aviation Organization, the International 
Telecommunications Union, the World Postal Union, all of these 
bodies exclude Taiwan. By the way, there is even one body which 
is open even to nonself-governing territories, and that is the 
World Meteorological Organization.
    Now, you heard Assistant Secretary Roth today, and I heard 
Bob Suettinger, who used to be on the National Security Council 
staff yesterday at a meeting at the Woodrow Wilson Center say, 
well, we tried to do something about these organizations, but 
it is just too tough because the PRC opposes.
    Well, of course the PRC opposes, but I do not think that is 
any reason why, if we believe that Taiwan should be in 
humanitarian organizations, in technical bodies, in the World 
Intellectual Property Organization, and of course the World 
Meteorological Organization, I think we should stand up on our 
hind legs and say so and not be intimidated.
    I also want to point out that although in his three noes 
statement President Clinton said that the United States would 
not support Taiwan's membership in any international 
organization that required Statehood for membership, in fact 
the TRA says something very different.
    What the TRA says is what I just read to you, that whenever 
the laws of the United States refer or relate to foreign 
countries, nations, States, Governments or similar entities, 
such terms shall include and such laws shall apply with respect 
to Taiwan, because United States law requires that we can sell 
enriched uranium only to friendly States, and we can sell arms 
only to friendly Governments. So what this means is that as far 
as the United States law is concerned, the Government of Taiwan 
is a friendly Government, and Taiwan is a State.
    The PRC objects. The PRC says it is a matter of domestic 
jurisdiction, but the Taiwan Relations Act says something 
different, says it is international. And if the Congress said 
nothing should be construed as a basis for supporting exclusion 
or expulsion from international organizations, why, it seems to 
me the Congress must have meant the Congress believes Taiwan 
has a right to belong to those organizations, i.e., it has the 
qualifications for membership.
    Mention has been made by Senator Murkowski of the World 
Health Organization. The World Health Organization presents a 
particular problem, because its charter says it is open only to 
members of the General Assembly, States members of the United 
Nations. But under the World Health Organization there is 
another body, and it is called the World Health Assembly.
    The Director General of WHO has the authority to invite to 
the meetings of the World Health Assembly whoever the Director 
wishes, and I think it is time for the United States to whisper 
in the ear of the Director General of the World Health 
Organization, ``We think you ought to invite some medical 
associations from Taiwan to your next meeting of the World 
Health Assembly.'' I see no reason why we cannot do that.
    I want to conclude with just one final thought, and that is 
that at the time, as has been said, at the time the Taiwan 
Relations Act was drafted, signed into law, Taiwan was a one-
party authoritarian State under martial law. I think had it 
been a democracy at the time, President Carter could not have 
possibly accepted that third condition that the PRC imposed, 
that we could not have any form of official relationship with 
Taiwan. That was the third condition he accepted. I think had 
Taiwan been a democracy,it politically would have been 
impossible to accept that condition.
    Well, Taiwan is a democracy today. Taiwan has a parliament 
which is elected by the people. Taiwan has a president who is 
elected by the people. Taiwan is a democracy today. So we have 
locked ourselves into an artificial relationship that bears no 
relation with reality, and I think perhaps we ought to consider 
doing something about that.
    Thank you, Mr. Chairman.
    [The prepared statement of Ambassador Feldman follows:]

              Prepared Statement of Dr. Harvey J. Feldman

    Mr. Chairman, Members of the Committee on Foreign Relations, I am 
grateful for your invitation to testify at this hearing on the 
twentieth anniversary of the Taiwan Relations Act. A long-time 
specialist in US relations with Taiwan, I co-chaired the Task Force at 
the State Department which produced the initial draft of the Act, and 
later represented the Carter administration in discussions with this 
Committee on the revisions which resulted in the Act as we know it 
today. Still later, I served as the American Ambassador to Papua New 
Guinea, and after that the Alternate U.S. Representative to the United 
Nations when Jeane Kirkpatrick was our principal representative there 
in New York. Having retired from the State Department some years ago, I 
am now Senior Fellow in the Heritage Foundation's Asia Studies Center.
    Mr. Chairman, today we take it as a matter of course that despite 
the absence of formal diplomatic relations with the Republic of China 
on Taiwan, nevertheless we can trade, invest, sell defensive weapons 
and enriched uranium for nuclear power generation, and that our office 
in the island republic, the American Institute in Taiwan, though 
unofficial in name, nevertheless can represent the views of the United 
States government and can provide ordinary consular services to our and 
to Taiwan's citizens. But when we shifted diplomatic relations from 
Taipei to Beijing, none of these things were possible for under 
American law, arms can be sold only to friendly governments; sale of 
enriched uranium fuel for nuclear power reactors, as well as Overseas 
Private Investment Corporation guarantees and Export-Import Bank loans 
are restricted to friendly states; and on January 1, 1979 we ceased 
recognizing the Republic of China as a state and its government as a 
government.
    At the time we broke relations with Taiwan there were some 60 
treaties and executive agreements covering everything from trade to 
taxation to air travel. Some supposed authorities had written articles 
claiming that after the switch in recognition all these treaties and 
agreements would apply to the People's Republic of China. Others had 
argued they simply would lapse. Was either view correct?
    As it emerged from the TRA draft prepared at the State Department, 
a totally novel instrument in international life, the American 
Institute in Taiwan emerged. It is a private foundation incorporated in 
the District of Columbia, but funded as a line item in the State 
Department budget with a Board of Directors appointed by the Secretary 
of State. It has a direct reporting relationship with both this 
Committee and House Committee on International Relations. The Institute 
is staffed with government employees, usually from State, Defense, the 
CIA and the Commerce Department, who are nominally on leave from their 
agencies, yet their service with AIT counts toward their pensions and 
they even can receive promotions from their home agencies while serving 
on Taiwan with AIT. By the way, I signed the incorporation papers for 
AIT and paid the incorporation fee.
    With regard to arms sales, OPIC guarantees, sale of enriched 
uranium, Ex-Im loans and the like, we came up with a simple and elegant 
fix: ``Whenever the laws of the United States refer or relate to 
foreign countries, nations, states, governments, or similar entitites, 
such terms shall include and such laws shall apply with respect to 
Taiwan.'' Period. In similar fashion, the draft bill we sent up said 
that unless specifically terminated, all treaties and agreements in 
force on December 31, 1978, will continue in force.
    I was very flattered, Mr. Chairman, when on the occasion of my 
confirmation by this Committee as Ambassador to Papua New Guinea, you 
congratulated me on the work we had done.
    But the State Department bill in fact did not go far enough, for 
given the commitments the Carter administration had made to Beijing, 
the bill said nothing about the security of Taiwan and its people. So 
here the Congress took over. Led by Republicans and Democrats working 
together, in the Senate by Frank Church, Jake Javits, Dick Stone, and 
of course you yourself Mr. Chairman; led in the House by Clem Zablocki, 
Dante Fascell, Ed Derwinski and Lester Wolff, an entirely new kind of 
relationship was created, something unique in international affairs, 
and something that has stood the test of time over these past two 
decades. As it finally emerged, the Taiwan Relations act in reality 
became something like a treaty imposed by the Congress through 
legislative action. Moreover, it is a treaty which has set the terms 
and limitations by which successive administrations have had to abide 
in conducting relations with both Beijing and Taiwan.
    The security assurances written into law by the TRA are familiar of 
course:

   peace and stability in the area are in the political, 
        security and economic interests of the United States and are 
        matters of international concern (emphasis added).
   the United States decision to establish diplomatic relations 
        with the People's Republic of China rests upon the expectation 
        that the future of Taiwan will be determined by peaceful means;
   the United States will make available to Taiwan such defense 
        articles and defense services in such quantity as may be 
        necessary to enable Taiwan to maintain a sufficient self-
        defense capability;
   the President is directed to inform the Congress promptly of 
        any threat to the security of the social or economic system of 
        the people on Taiwan;

    And most important of all, the United States would consider

   any effort to determine the future of Taiwan by other than 
        peaceful means, including boycotts or embargoes, a threat to 
        the peace and security of the Western Pacific and of grave 
        concern to the United States.

    The words ``threat to the peace and security of the Western 
Pacific,'' echo the similar language used in Article VII of the United 
Nations Charter, which deals with international resistance to acts of 
aggression. Taken together with the statement that peace and stability 
in the area are international concerns, it directly contests the PRC 
assertion that whatever it does or does not do with respect to Taiwan 
is purely an internal, domestic concern. Although we have learned quite 
a bit recently about things whispered privately in Beijing by former 
senior government officials, and never disclosed to the public or the 
Congress, the Taiwan Relations Act and its formulations remain the law 
of this land. And as far as I am aware, in official documents the 
United States has never accepted Beijing's contention that Taiwan is 
anything more than one of its provinces. All we have done is to 
acknowledge that Beijing claims there is but one China of which Taiwan 
is a part, while stating no position of our own on the matter.
    Obviously there is a great deal of tension between the clear 
language of the Taiwan Relations Act and the several communiques which 
successive administrations have signed with Beijing, as well as with 
obiter dicta such as President Clinton's three noes statements in 
Shanghai last June. There is an obvious contradiction between the 
section of the TRA dealing with arms sales and the August 17, 1982 
communique language dealing with year-by-year reductions. And of course 
there was a contradiction between that communique and President Bush's 
decision to authorize the sale of F-16s to Taiwan.
    But behind all of this lies an even more deep-seated contradiction, 
stemming from the fact that President Carter not only accepted the PRC 
conditions that in order to establish diplomatic relations we must 
withdraw all U.S. Forces from Taiwan and terminate the Mutual Defense 
Treaty, he also accepted Beijing's demand that we could not have any 
form of official relationship with Taiwan. Had we refused to accept 
that third PRC demand, we would have avoided the tortuous exercise we 
now find ourselves in, having to operate a foreign policy which denies 
that Taiwan is a nation and its government is a government, while both 
American law and manifest reality make clear that it indeed is both.
    This unreality takes its worst form in statements such as President 
Clinton's three noes: the U.S. will not support Taiwan's entry into 
international organizations that make statehood a requirement for 
membership; will not support Taiwan's independence; will not pursue a 
``two Chinas, or one China, one Taiwan policy.'' The administration 
claimed there was nothing new here, but PRC official immediately 
pointed out that Mr. Clinton's statements logically must mean that 
Taiwan is only a province of China and not a state. After all, they 
said, if your President says it lacks the qualifications necessary for 
independence or statehood, and since the U.S. has recognized the PRC as 
the sole legal government of China, the U.S. necessarily must agree 
that Taiwan is a province of the PRC.
    For contrast, let's look at what the TRA says about Taiwan's 
status. Not only does it say that for all purposes of American law 
Taiwan is a state and its government is the government of a friendly 
state, it also says that any attempt to use coercive force against 
Taiwan would be a matter of international as well as American concern. 
Which means that despite Beijing's recent bluster and threat, as far as 
the United States is concerned, using force against Taiwan cannot be 
regarded as a domestic concern of the People's Republic of China.
    But there is more. Section 4(d) of the TRA reads:

          Nothing in this Act may be construed as a basis for 
        supporting the exclusion or expulsion of Taiwan from continued 
        membership in any international financial institution or any 
        other international organization.

    The language is phrased negatively, but the legislative history of 
the Taiwan Relations Act makes very plain that Congress intended 
affirmative U.S. support for Taiwan's continued membership in such 
organizations as the World Bank and the International Monetary Fund. 
Which necessarily must mean that Congress considered Taiwan fully 
qualified to belong to the Bank and Fund and other international 
organizations, despite President Clinton's remarks in Shanghai. In 
fact, let me point out that Taiwan remained a member of the Bank and 
the Fund for nine years after being expelled from the General Assembly, 
and probably would be a member to this day had the United States not 
stopped supporting its membership. The only bar to its membership is 
American and other passivity in the face of Beijing's opposition. 
Ironically, the PRC is the number one borrower from the World Bank. Is 
there another case in which the borrower gets to specify whose money 
the lending bank can take?
    Mr. Chairman, members of the Committee, I believe that had Taiwan 
been a democracy in 1978-79, no American president could have accepted 
the PRC's three conditions and consigned Taiwan to its present weird 
international limbo. But the Republic of China on Taiwan was not a 
democracy at that time. It was a one-party, authoritarian state under 
martial law. That was twenty years ago. In the decades since, Taiwan 
has peacefully transformed itself into a multi-party democracy. Not 
only is its parliament fully representative and directly elected, the 
head of state is also elected directly by the people for the first time 
in all the millennia of Chinese political practice. There are no 
political prisoners. The press and other media are free and vigorous. 
Fiercely contested elections take place almost every year. GDP per 
capita exceeds $13,000--about 15 times what it is in mainland China. 
Taiwan's existence as one of only three democracies in East Asia 
requires a more realistic American policy.
    Of course we want to have useful and cooperative relations with the 
People's Republic of China. And of course we hope the PRC wants to have 
useful and cooperative relations with us. Which is to say, these 
matters should be reciprocal, avoiding the present situation in which 
we are told that to have these useful and cooperative relations, we 
must take account of and act in accordance with Beijing's sensitivities 
and needs--including those relating to Taiwan--but somehow Beijing need 
not take account of American sensitivities and needs--including those 
relating to Taiwan.
    In his excellent book, East and West, former Hong Kong Government 
Christopher Patten points out the Chinese leadership in Beijing ``did 
not require to be led in their negotiations by intellectual titans to 
know that if they pushed hard enough, the British would give''. The 
trouble was that because Britain's bottom line was so often abandoned, 
the Chinese assumed it always would be abandoned.'' Unfortunately, all 
too often in its dealings with the PRC, successive American 
administrations have emulated the British pattern of negotiation.
    Mr. Chairman, members of the Committee, if we are to act in 
accordance with the spirit as well as the letter of the Taiwan 
Relations Act, I believe we should do the following:

   Return to the former policy of saying we take no position on 
        what the final status of Taiwan should be, because this is a 
        matter for negotiation between the two sides. Reiterate that 
        the U.S. can accept any solution that is arrived at peacefully, 
        without coercion of any kind, so long as it is acceptable to 
        the people of Taiwan. In the absence of such an agreement, the 
        status quo must continue, and continue without threats.

   Even though it is a neuralgic point for the PRC, we should 
        continue to press for a renunciation of the use of force 
        against Taiwan. As stated in the TRA, the U.S. decision ``to 
        establish diplomatic relations with the People's Republic of 
        China rests upon the expectation that the future of Taiwan will 
        be determined by peaceful means''; and ``any effort to 
        determine the future of Taiwan by other than peaceful means, 
        including by boycotts and embargoes [would be considered] a 
        threat to the peace and security of the Western Pacific and of 
        grave concern to the United States.''

   Obey the implicit injunction of the TRA to support Taiwan's 
        membership in the international financial institutions, the 
        World Trade Organization, and other international 
        organizations. Beijing's continuing campaign to squeeze Taiwan 
        utterly out of international life, including the work of purely 
        humanitarian organizations as well as technical bodies in field 
        such as telecommunications, aviation, marine transport, and the 
        regulation of intellectual property, cannot be defended and 
        should not be accepted. The United States should cease its 
        passivity and support membership in such organizations as a 
        matter of law, as a matter of realism, and as a step which is 
        in the interest of the proper functioning of those 
        organizations themselves.

    In short, it is time for the Executive branch to recognize, as the 
Congress did in writing the TRA, and as it continues to do in 
resolutions, that Taiwan's existence as a multi-party democracy, and a 
free market economy--matters which were the fruit of so much work and 
so many sacrifices by the people of Taiwan--respond to important U.S. 
interests and must be protected. A policy which takes account only of 
our interests vis-a-vis the PRC, and fails to take account of our 
substantial interests in Taiwan's democracy and its future, cannot be 
considered realistic.

    The Chairman. Thank you very much.
    Mr. Ford.

STATEMENT OF CARL W. FORD, JR., PRESIDENT, FORD AND ASSOCIATES, 
                         WASHINGTON, DC

    Mr. Ford. Thank you, Mr. Chairman. As a former member of 
the committee staff, one who was here at the time of the Taiwan 
Relations Act debate, I consider the opportunity to share my 
views on Taiwan with you a great honor.
    I serve as a consultant on East Asian security affairs for 
a number of defense contractors and the Taiwan Research 
Institute, but I especially look forward to my appearances 
before this committee, as I did when I was still in Government 
at CIA and later DOD.
    The first time I sat in this room and observed the Foreign 
Relations Committee at work was 20 years ago. President Carter 
in December 1978, as you know, had announced normalization of 
relations with the People's Republic of China. Despite 
Beijing's occasional spasms of bellicosity, regional tensions 
have not prevented Taiwan from building a flourishing economy 
and moving from authoritarianism to genuine democracy.
    Despite these notable successes, Taiwan's security is far 
from assured. Indeed, I have grave concerns about China's 
recent military buildup and what it could mean for the United 
States. U.S. security interests in my view are more at risk in 
East Asia today than at any time since the Congress passed the 
TRA 20 years ago.
    Consider these factors.
    Fact 1. We are not dealing with the same China that we did 
in 1979. China is economically stronger, and the PLA is 
considerably more capable of using force against Taiwan than 
when you first wrote the section 3 security guarantees into the 
TRA.
    Fact 2. Blatant appeals to nationalism in its most virulent 
forms play an even greater role in motivating Chinese behavior 
than in 1979. The Jiang regime has publicly committed to 
retaking Taiwan on its watch.
    Fact 3. Taiwan shows no sign of being intimidated by 
Beijing's heavy-handed pressures and military provocation, but 
Taiwan's military deterrent is at risk of obsolescence unless 
the United States promptly provides the qualitative and 
quantitative improvements.
    Fact 4. U.S. policy toward China has never been more in 
disarray, nor has public support for that policy been more in 
question than it is today. The American people increasingly 
reject a strategic partnership with a Communist Chinese regime 
which repeatedly tries to bully Taiwan into submission.
    Taken together, these factors should alert the committee 
that Taiwan's security needs merit your attention. It should be 
clear that Chinese leaders have changed how they think about 
Taiwan militarily, something you will very much need to take 
into account.
    The Pentagon's new landmark report to Congress entitled, 
The Security Situation in the Taiwan Strait, reveals publicly 
what many senior U.S. analysts have been saying privately for 
months, that the PRC strategy is shifting toward a quick strike 
threat to gain superiority over Taiwan. A special concern is 
the incremental growth in Beijing's missile capabilities, most 
notably the improved shorter-range models, the M-9 and the M-
11. Beijing will have an overwhelming advantage in offensive 
missiles in 2005, the report predicted.
    Taken together with recent training exercises, the 
improvements convey an ominous message about the PLA's thinking 
vis-a-vis Taiwan. One of the most revealing passages in the 27-
page report says, China views its growing conventionally armed 
ballistic missiles as a potent weapon to influence Taiwan's 
populace and their leaders. This development should concern us 
all, as it threatens the fundamental U.S. interest in security 
and stability for East Asia.
    China knew even before Washington dispatched air carrier 
groups in 1996 that the U.S. forces must be taken into account 
militarily. Failing to do so endangered both China's power to 
intimidate and its capability to use force. Consequently, the 
PLA appears to have altered its contingency planning from the 
large, slowly developing assault and blockade operations 
against Taiwan, which by their very nature gave the United 
States considerable time to respond, to more intense, quick-
hitting attacks featuring ballistic missiles.
    This scenario is designed to achieve China's objectives 
before the United States could become fully engaged in the 
fighting. Chinese leaders probably believe that the more rapid 
and complete the PLA's initial success, the less the prospect 
that the United States could intervene. Indeed, they may 
consider a quick, decisive action their only real option.
    The evolving military balance, events in the Taiwan Strait, 
such as the quick-strike exercises, and Taipei's reaction to 
these developments, signal China's growing strategic 
credibility. As Beijing military modernizes, and the number of 
missiles targeted against Taiwan increases, so, too, will the 
temptation to try to intimidate the people of democratic 
Taiwan.
    U.S. policy makers must now react. Chinese actions mean 
that Taiwan will need more and better weapons, a distinct 
qualitative edge, including theater missile defenses. The 
alternative is for the United States to risk ceding to Beijing 
a clear military advantage.
    The U.S. also needs to review our own capabilities in the 
region, and the speed with which our forces can respond to any 
future PRC provocation. Time is no longer a luxury that the 
United States can afford to take for granted.
    The best way for the United States and Taiwan to cope with 
these changing realities is to ensure Taiwan maintains an 
effective military deterrent with the qualitative and 
quantitative improvements in defensive weapons systems that are 
urgently required from the United States.
    Successive U.S. administrations have unwisely cramped the 
effectiveness of Taiwan's weapons purchases. Limited 
coordination and communications between senior Taiwanese 
commanders and American counterparts have virtually eliminated 
operational training opportunities for Taiwanese officers.
    Even when a major transaction does go through, as in the 
sale of the F-16 starting in 1992, the impact is muted. The 
United States has refused to sell Taiwan the most potent 
armaments and avionics available for the plane. Though last 
month's Pentagon report noted the PRC's overwhelming advantage 
in submarines, Washington has refused to sell Taiwan undersea 
craft since 1973.
    If this ill-advised policy continues, the PRC-ROC military 
imbalance will grow increasingly dangerous to the security 
interests of the American people. The last thing any U.S. 
President wants is a Hobson's choice between allowing Beijing 
to coerce Taiwan into submission, or sending American forces 
into battle to defend democratic Taiwan and thwart the Chinese 
Communists.
    Twenty years ago, Congress offset the White House 
inclination to short-change Taiwan's security interests. 
Capitol Hill has frequently attempted to curb the same tendency 
in all succeeding administrations. Now, a new vigorous 
assertion of congressional authority is required to prevent the 
security guarantees in the Taiwan Relations Act of 1979 from 
being rendered meaningless.
    Fortunately, simple changes in practice could make dramatic 
improvements. With only slight modifications of the existing 
rules, which would still be well within the terms and 
conditions of unofficial relations, the United States can 
relieve Taiwan's military isolation considerably, improve its 
deterrent posture, and quite likely reduce the chances that 
Americans will become entangled in a military confrontation 
with the PRC.
    To this end, there are three steps the United States should 
take:
    No. 1. Sell Taiwan the weapons and equipment it needs to 
maintain an effective deterrent, a distinctive, qualitative 
edge over the PRC, one that promotes peace and stability in the 
region. The practice of putting Chinese interests ahead of our 
own and Taiwan's security must stop.
    No. 2. Establish an operations and training presence at the 
AIT Office in Taipei. Since rules prohibit a U.S. command 
element on Taiwan, we need a section at AIT that can handle 
those responsibilities so that U.S. forces can effectively 
communicate with Taiwan in a crisis.
    No. 3. Allow more Taiwanese military personnel to visit 
U.S. military schools and installations.
    We should also seek other ways to enhance military contacts 
with Taiwan. Unofficial relations was never intended by the 
Taiwan Relations Act to mean no contact. The United States 
simply has not tried hard enough to make activities other than 
arms sales fit under this rubric. Up to now, we have not done 
the right thing. Not to change our essential way of doing 
business with Taiwan in the future will prove extremely 
dangerous to the security interests of the United States.
    Thank you, Mr. Chairman, for your patience.
    [The prepared statement of Mr. Ford follows:]

                Prepared Statement of Carl W. Ford, Jr.

congress must lean on the white house to maintain balance in the taiwan 
                                 strait
    In this season 20 years ago, Congress responded to a unique Asian 
security challenge with prescience and dispatch. President Carter in 
December, 1978 had announced ``normalization'' of relations with the 
People's Republic of China. Closing that deal required the U.S. to 
sever formal ties with the Republic of China on Taiwan, abandon our 
defense pact with this long-standing ally, and withdraw all U.S. forces 
from the ROC.
    The dilemma was how to preserve Taiwan's security while nurturing 
the new relationship with Beijing. The Carter Administration fixated on 
the latter concern. But a bipartisan Congressional majority served as a 
brake on the Administration's rush to please the PRC at the expense of 
Taiwan's security. With strong leadership by the Senate Foreign 
Relations Committee, Congress voted overwhelmingly to assure that the 
U.S. would make available ``such defense articles and services'' as 
necessary ``to enable Taiwan to maintain a sufficient self-defense 
capability.''
    Faced with veto-proof majorities, a reluctant President Carter 
signed the Taiwan Relations Act (TRA), which became law on April 10, 
1979. For two decades the TRA has served as the foundation for U.S. 
policy, helping to ensure Taiwan maintains a credible military 
deterrent which protects U.S. interests. Despite Beijing's occasional 
spasms of bellicosity, regional tensions have not prevented Taiwan from 
building a flourishing economy and moving from authoritarianism to 
genuine democracy.
    In military terms, however, that foundation was never as strong as 
it seemed because successive Presidents have failed to implement the 
TRA fully. Cracks in the foundation are now becoming dangerous. That 
was confirmed in a Defense Department report to Congress last month. 
The study acknowledged Taiwan's increasing vulnerability on a number of 
fronts. Specifically, the report for the first time publicly detailed 
the PRC's growing arsenal of ballistic missiles. These weapons will 
give the PRC the ability to overwhelm key Taiwan defenses in a 
devastating quick-strike operation.
    At the same time, the Pentagon report perpetuates a misleading 
construct in fashion since TRA's enactment. For reasons having to do 
more with diplomacy than military realities, Washington worked from the 
assumption that the opposing forces were roughly in balance. Taiwan's 
presumed ``qualitative edge'' would offset the PRC's gargantuan 
advantage in numbers. By this reasoning, occasional and selective 
upgrades of Taiwan's defensive weapons would maintain equilibrium.
    This formulation was, at best, misleading 20 years ago and today is 
downright deceptive. Students of the subject knew it then. I joined the 
Foreign Relations Committee staff as a specialist in East Asian affairs 
in 1979, after serving as a China military analyst at the CIA. Insiders 
knew that serious deficiencies existed in Taiwan's military 
establishment. Long before 1979, the U.S. was determined to restrain 
the island's capabilities. Not only were sales of weapons limited, but 
contingency planning envisioned that Americans would direct any 
significant combat operation.
    The result was an array of weaknesses in defense capabilities, 
particularly in Taiwan's air and naval forces, and a leadership with 
little experience in planning its homeland's defense. When the U.S. 
dismantled its Taiwan Defense Command, these deficiencies persisted. 
However, the risks then did not seem acute in the 1980's, at least from 
Washington's perspective. The People's Liberation Army, with its own 
flaws, could not contemplate a major offensive without accepting huge 
losses. Beijing had to assign significant assets to defend against a 
hostile Soviet Union. Also, PRC leaders seemed to assume that an 
isolated Taiwan, bereft of its U.S. military alliance, could be 
manipulated over time into surrender on Beijing's terms.
    These factors changed dramatically in the 1990's. With the Soviet 
Union's collapse, the PRC no longer must allocate great resources to 
that front. Second, the PRC has embarked on an ambitious military 
modernization program that is grinding away whatever ``qualitative 
edge'' Taiwan once enjoyed in critical areas. Third, the takeover of 
Hong Kong and the imminent reversion of Macao leaves only Taiwan as a 
target of the PRC's avid irredentism. Finally, the island's progress in 
economic and political terms has made separation from the dictatorial 
PRC more attractive than ever to the native Taiwanese who now run the 
ROC's democratic government. Beijing has now chosen to concentrate on 
its military card.
    The best way for the U.S. and Taiwan to cope with these changing 
realities is to maintain an effective military deterrent. Successive 
U.S. administrations have cramped the effectiveness of Taiwan's weapons 
purchases, limited coordination and communication between senior 
Taiwanese commanders and American counterparts, and virtually 
eliminated operational training opportunities for Taiwanese officers. 
Even when a major transaction goes through, as in the sale of F-16's 
starting in 1992, the impact is muted. The U.S. has refused to sell 
Taiwan the most potent armaments and avionics available for the plane. 
Though last month's Pentagon report noted the PRC's ``overwhelming 
advantage'' in submarines (66 vessels versus four), Washington has 
refused to sell Taiwan undersea craft since 1973.
    If this ill-advised policy continues, the PRC-ROC military 
imbalance will grow increasingly dangerous. The last thing any U.S. 
President wants is a Hobson's choice between allowing Beijing to coerce 
Taiwan into submission or sending American forces into battle to thwart 
the communists. Twenty years ago Congress offset the White House's 
inclination to shortchange Taiwan's security interests. Capitol Hill 
has frequently attempted to curb the same tendency in succeeding 
administrations. Now a new, vigorous assertion of Congressional 
authority is needed to prevent the Taiwan Relations Act of 1979 from 
becoming meaningless.
    the quick strike: prc's formula to regain strategic credibility
    The unclassified version of the Pentagon's new landmark report to 
Congress entitled ``The Security Situation in the Taiwan Strait'' 
remained corked for nearly a month because some administration 
officials feared that it would affront Beijing. When the document 
surfaced last week, its factual content overwhelmed the attempt of 
insiders to be circumspect. The study reveals what officials apparently 
sought to play down. The PRC's strategy is shifting towards a quick-
strike threat to gain superiority over Taiwan. This change is virtually 
certain to affect Congress' stance on security issues affecting the 
region.
    Of special concern is the incremental growth in Beijing's missile 
capabilities, most notably the improved shorter range models, the M-9 
and M-11. Beijing will have ``an overwhelming advantage in offensive 
missiles . . . in 2005,'' the report predicted. Taken together with 
recent training exercises, the improvements convey an ominous message 
about the PLA's thinking vis-a-vis Taiwan. One of the most revealing 
passages in the 27-page report says: ``. . . China views its growing 
conventionally armed ballistic missiles as a potent weapon to influence 
Taiwan's populace and their leaders.''
    Through the early 1990's, the PLA's exercises suggested an interest 
in the larger generic options, such as an all-out attack or a blockade. 
Since each of these involved considerable risk and potentially heavy 
casualties, many believed that China--except in the most extreme 
circumstances--would not actually initiate hostilities. Rather Beijing 
was thought to be interested in the intimidation value of its training 
activities. Even when the character of these operations changed in the 
mid-1990's, most observers viewed them in the same light, noting their 
value in psychological warfare rather than warfighting terms.
    Recent exercises have indeed had a psychological effect. Just the 
knowledge that the PLA was training nearby caused Taiwan's stock market 
to dip noticeably on several occasions and otherwise fueled popular 
concerns about the island's security. Though there has been no panic, 
such fears are bound to grow. The more credible the PLA's capabilities 
become, the more impact its training activities will have on public 
opinion. This is because intimidation and the use of force share an 
important characteristic: To be effective, they must be backed by real 
military capabilities. China's new exercises demonstrate obvious 
improvement and growth in this area.
    Clearly, the PLA understands that its past threats of an amphibious 
invasion, or even a blockade, are no longer as credible as they once 
were. Ten and 20 years ago, China's leaders may well have believed that 
saber rattling could intimidate Taiwan into accepting Beijing's terms 
for unification. To do otherwise risked a major attack, and even if 
Taiwan should prevail in the battle, casualties could be unacceptably 
high and the economy left in ruin.
    But Taiwan's people proved much tougher and more resilient than 
Beijing assumed. They never lost confidence in their ability to defend 
the island, and as the years passed the idea of China initiating 
hostilities lost credibility. This resulted in part from a better 
appreciation among Taiwanese of the difficulties associated with 
China's use of force. Another factor was Taiwan's acquisition of new 
arms and equipment. Leaders in both Taipei and Beijing also believed 
that the U.S. would not allow Taiwan to be coerced and would intervene 
to tip the scales in Taipei's favor, much as it did in 1996.
    That explains why the PLA changed the nature of its training 
exercises. Its leaders knew even before Washington dispatched aircraft 
carrier groups in 1996 that the U.S. must be taken into account 
militarily. Failing to do so endangered both China's power to 
intimidate and its capability to use force.
    Consequently, the PLA appears to have altered its contingency 
planning from the large, slowly developing assault and blockade 
operations against Taiwan--which by their very nature gave the U.S. 
considerable time to respond--to more intense, quick-hitting attacks 
featuring ballistic missiles. These would be linked with rapid assault 
forces and concentrated firepower. This scenario is designed to achieve 
China's objectives before the U.S. could become fully engaged in the 
fighting. Chinese leaders probably believe that the more rapid and 
complete the PLA's initial success, the less the prospect that the U.S. 
would intervene. Indeed, they may consider a quick, decisive action 
their only real option.
    The evolving military balance, events in the Taiwan Strait (such as 
the quick strike exercises), and Taipei's reaction to these 
developments signal China's growing strategic credibility. As Beijing's 
military modernizes and the number of missiles targeted against Taiwan 
increases, so too will the temptation to try to intimidate the people 
of democratic Taiwan.
    U.S. policy makers must now react. Chinese actions mean that Taiwan 
will need more and better weapons, including theater missile defenses. 
The alternative is for the U.S. to risk ceding to Beijing a clear 
military advantage. The U.S. will also need to review its own 
capabilities in the region, and the speed with which its forces can 
respond to any future PRC provocations. Time is no longer a luxury that 
the U.S. can take for granted.
   america's illogical rules make for dangerous policy in the taiwan 
                                 strait
    Like most nations, Taiwan faces its share of military challenges. 
Indeed, the standard list--for any country--is almost endless. 
Recruiting and retaining good people is an expensive and never ending 
problem for every country, while weapon systems only grow more 
complicated and expensive each year. Little wonder that defense budgets 
remain high during these times of relative peace, and military 
establishments of all sizes and shapes are constantly looking for ways 
to cut corners. Usually this means that combat forces rarely stay at a 
top level of proficiency absent an imminent threat. It costs too much. 
More typically, limits on funding impact those activities most relevant 
to combat capabilities--operations, training and maintenance--first and 
hardest.
    In the case of Taiwan, of course, the island also faces in China a 
formidable potential adversary just across the Taiwan Strait; one so 
large in size and population, that even the United States and Russia 
view its current military power with concern. China's military 
capabilities, which by any measure already dwarf those of its smaller 
neighbors, will become even more modern and intimidating over time, 
especially as its power projection capabilities grow. Taiwan will need 
to run hard and fast just to keep from falling further behind.
    As if these challenges were not enough, Taiwan, in attempting to 
achieve a sufficient defense capability, must also contend with the 
United States, its erstwhile best friend. Most times this has not been 
easy. For despite the legal requirements of the Taiwan Relations Act 
and a long list of defense items sold to Taipei over the past 20 years, 
the United States has purposely saddled Taiwan with a web of silly 
rules and limitations that not only harm the island's ability to defend 
itself, but in the future could also put American military personnel in 
jeopardy.
Military Hardware
    Among these rules are restrictions on arms sales that are both a 
financial burden and militarily unnecessary. For example, there is the 
E-2T (the ``T'' signifies that it is the Taiwan version), a perfectly 
good flying radar station used by many countries, including the U.S. 
Navy, for controlling air defense assets. Apparently fearing China's 
reaction when it learned of the sale and wanting to be able to claim 
that we were not transferring the latest model, the E-2Ts were sold to 
Taiwan on the condition that each contain parts salvaged from aircraft 
no longer in service. No one was fooled by this silly requirement, 
least of all Beijing's military, since it did not affect the aircraft's 
performance. It only increased Taiwan's defense costs.
    But the strange rules haven't just cost money. Most of the rules 
impose restrictions on the level of capability we provided Taiwan as 
well. For example, the first fighter aircraft sold to Taiwan after the 
United States normalized relations with the PRC was the so-called IDF, 
or indigenous fighter program. Worried about China's objections, the 
United States decided against transferring a modern U.S. aircraft, 
opting instead to provide Taiwan with the technology and know-how to 
build its own fighter, though one less capable and not so provocative. 
It was billed as a reasonable compromise between Taiwan's defense needs 
and PRC sensitivities. Unfortunately, it did not turn out that way.
    Costs skyrocketed almost immediately when U.S. government-mandated 
limits and restrictions on performance proved unrealistic, resulting in 
numerous design changes and other costly delays. The search for an 
acceptable engine, given that all the existing U.S. military engines 
had been deemed ``too capable,'' proved especially frustrating and 
expensive. Even when Taiwan worked through these problems, and had 
produced a good little fighter, U.S. rule makers still weren't 
satisfied. They made certain that the aircraft could not adequately 
defend Taiwan against air attacks by seriously limiting both its 
armaments and its avionics. These limitations were so severe that only 
a few years later President Bush, over the objections of the 
bureaucracy, felt it necessary to transfer the F-16 to Taiwan. But U.S. 
officials couldn't resist making the same mistake twice: Bureaucrats 
insisted on selling Taiwan an older version of the aircraft, limiting 
its armaments and avionics as it had with the IDF.
Military-To-Military Contacts And Information Exchange
    Those wishing to minimize contact with Taiwan haven't confined 
themselves just to arms sales. Far worse have been U.S. efforts to 
constrain other military relations with Taiwan, such as training and 
routine operational contacts. Such activities go to the heart of 
maintaining a proficient military establishment. Without them, a 
nation, even one armed to the teeth, can hardly hope to defend itself 
well. A country like Taiwan, which does not yet possess the full range 
of conventional military capabilities, finds itself even more seriously 
hamstrung. The U.S. decision to keep working-level contacts between the 
two militaries to a bare minimum and eliminate almost entirely 
operational interactions of all sorts has seriously undermined Taiwan's 
ability to maintain its combat readiness.
    What's worse, it all seems so unnecessary. As the legislative 
history of the Taiwan Relations Act anticipated 20 years ago:

          The military advisory and training functions performed by the 
        U.S. Government prior to January 1, 1979, can in general 
        continue through other means if both parties show flexibility 
        and imagination. \1\
---------------------------------------------------------------------------
    \1\ Wolff, Lester L. and David L. Simon, eds., Legislative History 
of the Taiwan Relations Act (Jamaica, N.Y.: American Association for 
Chinese Studies, 1982), p. 19.

    Had we followed that advice, both the United States and Taiwan 
would have been better off. The sad fact is that we did not. Those in 
charge apparently decided that, except for arms sales, it was easier to 
ban almost everything military than to deal with China's criticisms. In 
doing so, however, U.S. officials apparently did not worry too much 
about what consequences there might be for the United States. Clearly, 
such decisions have put the United States and its interests at risk.
    The Taiwan Relations Act calls for the United States to help Taiwan 
maintain a sufficient self-defense capability; something as much in our 
interest as Taipei's. First, we hope that adequate defense preparations 
by Taiwan will lessen the prospect for a war with China. Although 
Taiwan's ability to fend for itself does not ensure that the PRC won't 
make threats or launch an attack at some point in the future, it does 
provide an important measure of deterrence. Unless Beijing can 
calculate that its chances of success are high, it is not likely to 
provoke a war. Second, should deterrence fail, we want Taiwan to be 
able to defend itself with as little assistance from the United States 
as possible. Ideally, few, if any, U.S. personnel would be directly 
involved in the fighting. In most cases, the United States' primary 
roles would be those of providing logistic support and acting as 
peacemaker.
    Unfortunately, U.S. decisions since 1979 have produced almost the 
opposite result. The military balance in hardware terms strongly favors 
the People's Republic of China and the proliferation of China's 
missiles in recent years has only made matters worse. Equally 
troubling, Taiwan's forces lack critical training experiences at all 
levels and suffer from serious command control deficiencies--most of 
the United States' doing. As the rest of the world experienced a 
revolution in military thinking, the U.S. limitations imposed in the 
case of Taiwan ensured that Taipei's military would become isolated and 
out of touch with essential knowledge available only from military-to-
military contacts. Performance levels have suffered and commanders and 
troops have lost confidence. The restrictions are so tight that the 
U.S. military cannot communicate directly with Taiwan even for safety 
precautions involved with air and naval transits through the region. 
Consequently, even the slightest provocation, such as PRC training and 
missile exercises, require a major U.S. response. Clearly, in the event 
of a crisis, even more would be expected of Washington, including air 
and sea control responsibilities.
Simple Changes Could Make Dramatic Improvements
    Fortunately, simple changes in practice could make dramatic 
improvements. With only slight modifications of the existing rules, 
which would still be well within the terms and conditions of 
``unofficial relations,'' the United States can relieve Taiwan's 
military isolation considerably, improve its deterrent posture, and 
quite likely reduce the chances that Americans will become entangled in 
a military confrontation with the PRC.
    To this end, there are three steps the United States should take:

          1. Sell Taiwan the weapons and equipment it needs to maintain 
        an effective deterrent--a distinct qualitative edge over the 
        PRC--one that promotes peace and stability in the region. The 
        practice of putting Chinese interests ahead of our own and 
        Taiwan's security must stop.

          2. Establish an operations and training presence at the AIT 
        office in Taipei. Presently, the main military business of the 
        American Institute in Taiwan (the quasi-embassy in Taipei) is 
        arms sales support and attache-type duties. Since rules 
        prohibit a U.S. command element on Taiwan, we need a section at 
        AIT that can handle those responsibilities so that U.S. forces 
        can effectively communicate with Taiwan in a crisis.

        3. Allow more Taiwanese military personnel to visit U.S. 
        military schools and installations. Probably the easiest step, 
        and involves no more than changing the U.S. attitude toward 
        Taiwan's attendance at senior service schools. Instead of 
        constantly looking for ways to limit Taipei's participation, we 
        should bend over backwards to make this sort of training 
        available and ensure that there is robust, ongoing dialogue 
        between U.S. and ROC military officials regarding military 
        doctrine.

    We should also seek other ways to enhance military-to-military 
contacts with Taiwan. Over the longer term, the Pentagon should come up 
with ways in which Taiwan's military can take better advantage of 
training and other contacts that U.S. commands such as CINCPAC have to 
offer. Unofficial relations was never intended by the Taiwan Relations 
Act to mean no contact. The United States simply has not tried hard 
enough to make activities other than arms sales fit under this rubric.
    Obviously, these and other remedies will not solve Taiwan's 
military problems. The potential military threat posed by the PRC is 
much too great for that. This should in no way, however, relieve the 
United States from its responsibility to provide as best it can for 
Taiwan's self-defense capability. Nor should the United States lose 
sight of its own interests in making Taiwan less dependent upon U.S. 
forces during any future crisis. It is in everyone's interest that the 
United States not continue to bury its head in the sand when it comes 
to our military advisory and training responsibilities. Up to now, we 
have not done the right thing. Not to change our essential way of doing 
business with Taiwan in the future would be downright dangerous.
                     the pla gets down to business
    It looks like Beijing's recent decision to take the PLA out of 
commercial enterprises and other industrial activities in China comes 
with several important quids. Not only will the Army be able to give 
its full attention to its main business, military preparations, but the 
government has agreed to increase the funding allocated for defense 
spending by almost 13 percent next year. The implications of the 
change, however, do not stop there. The PLA, in return for its reduced 
role in the economy, will also it seems have a greater say in a number 
of other critical international issues such as Taiwan and the Spratly 
Islands in the South China Sea. Given the military's more hard-line 
position on these sensitive problems the PLA's new focus should worry 
us all.
    Apologists both inside and outside of China quickly tried to 
downplay the importance of the 12.7% boost in defense spending 
announced March 4 by claiming that it would go mostly for ``living 
standards.'' Such statements make for good sound bites, but are 
purposefully misleading. Spokesmen know that personnel and other 
related costs without exception take up the bulk of military budgets 
both east and west. It is a given. What they don't tell you about are 
China's large scale military modernization programs and stepped up 
training activities detailed in the February DoD military balance 
report to the Congress. Across the board the PLA is engaged in a major 
spending effort to upgrade weapons and equipment and improve its 
operational capabilities. According to the report these efforts already 
make a real difference in China's ability to use force, for instance 
the increase in ballistic missiles deployed opposite Taiwan capable of 
a quick strike, and the PLA will only get better between now and 2005. 
That's what this is all about.
    They also don't tell you that China never tells the truth about its 
defense spending anyway. For years experts have considered the publicly 
released figures to be only the tip of the iceberg. While no one can be 
certain, since much of the funding is hidden, many estimate that the 
unclassified budget probably understates real spending by at least a 
third. Moreover, it is in the area of weapons acquisition and training 
that the Chinese are most secretive, at least in part because these are 
the areas the PLA finances with profits from its sale of missiles and 
other weapons to upstanding international citizens such as Iraq, Iran, 
Libya and Syria.
    All in all, I suspect that the PLA General Staff is delighted with 
the new order of things. Most are highly trained professionals glad to 
be rid of the distractions associated with a few bad apples profiting 
from the PLA's involvement in commerce. They can now give their full 
attention to strengthening the PLA with government promises of 
increased official funding. Improvements in military capability are 
likely to follow.
    The General Staff also appears to have gained a greater say in 
other matters as well. China's stepped up military activity in the 
South China Sea, especially in and around the Spratly Islands, has the 
PLA's fingerprints all over it. Always a flash point for expressing 
Chinese nationalism, this area has also been one in which the PLA has 
historically played a special role. Only the military has the 
capability to operate so far from the China mainland and by default is 
in charge of day to day activities. Along with operational control has 
come an apparent greater say in the strategic decision making about the 
Spratlys. It also gives the PLA an opportunity to test out and 
experiment with its new power projection capabilities; ones that are 
especially useful when thinking about potential operations against 
Taiwan.
    It is also likely not a coincidence that these events parallel a 
hardening of PLA attitudes about Taiwan and the military buildup in and 
around the Strait area documented in the DoD report. Military officers 
and other nationalists expressed considerable anger and frustration 
after the U.S. dispatched aircraft carriers to the Taiwan Strait in 
1996. Not only were they surprised by Washington's action, but they 
were embarrassed at their inability to do anything about it. Soon 
after, several vented their anger with American friends telling them 
that it would never happen again and even threatening possible 
retaliation against U.S. cities. Ridding the PLA of its commercial 
entanglements, giving it more say in sensitive international matters, 
and carving out a larger share of the government's budget for military 
programs looks like part of China's response. In the process, Beijing's 
long term intentions, if not its military budget, are become much more 
transparent.

    The Chairman. Thank you, Mr. Ford. I have just been advised 
that there are going to be three votes on the budget bill 
beginning at noon. I do not want to miss any of those, but I 
certainly want to have a little bit of conversation with each 
of you. Dr. Lampton, if you will proceed please, sir.

 STATEMENT OF DR. DAVID M. LAMPTON, DIRECTOR OF CHINA STUDIES, 
 NITZE SCHOOL OF ADVANCED INTERNATIONAL STUDIES, JOHNS HOPKINS 
                   UNIVERSITY, WASHINGTON, DC

    Dr. Lampton. I will try and be very expeditious.
    The Chairman. I do not want to cut you short, because it is 
important that we hear for the record what you have to say.
    Dr. Lampton. Thank you very much, Mr. Chairman.
    In my written testimony I make four points:
    No. 1. The Taiwan Relations Act and the three communiques 
have served American interests well and have simultaneously 
permitted the people of Taiwan to prosper in the last two 
decades.
    No. 2. There are tensions among the Taiwan Relations Act 
and the three communiques, but tinkering with the structure 
that exists is a very dangerous course, not the least for the 
people of Taiwan, about whom I care, and I know you do, Mr. 
Chairman, a great deal.
    No. 3. There are worrisome developments in the Taiwan 
Strait, as well as some hopeful signs.
    No. 4. American policy should continue to be what it has 
been since Secretary Shultz uttered the following words in 
March 1987: ``Our steadfast policy seeks to foster an 
environment in which such developments'' he meant cross-strait 
exchange and cooperation ``can continue to take place.''
    Mr. Chairman, in my written testimony I draw three 
conclusions. First, we need to manage the Taiwan Strait 
relationship with the utmost care, not only out of 
consideration of U.S. interests, but the interests of the 
people of Taiwan and the region, as well.
    Second, the proper management of the Taiwan issue, so-
called, is key to broader peace and stability in East Asia, and 
key to such management is the peaceful resolution of disputes 
across the strait, maintenance of our one China policy, and 
U.S. willingness to accept any outcome peacefully determined by 
the parties themselves.
    And third, because the PRC is a central player in many of 
the world's potential flash points, and Korea and Taiwan are 
simply two of those, productive relations with Beijing are not 
a luxury, they are a necessity.
    Rather than cover all the points in my prepared testimony, 
I only want to concentrate these remarks on one key point. 
Expanding cooperation in the Taiwan Strait is the only way to 
avoid conflict in the long run. This is the policy challenge, 
not tinkering with the structure of arrangements, the TRA and 
the three communiques, that despite the problems have served 
America and the region well for many years, and for which no 
preferable alternative exists.
    Any attempt to legislatively reduce the current ambiguity, 
which I admit does exist, would prove inflammatory to one side 
of the strait or the other, encourage risk-taking by one side 
of the strait or the other, and almost certainly would increase 
the prospect for conflict.
    The United States ought not further complicate matters 
because there already is a drift in the strait toward 
increasing tension. Beijing seems more anxious than in the past 
to move toward what it calls resolution of the cross-strait 
situation. The people of Taiwan show progressively less 
appetite for anything that looks like reunification, and 
Beijing and Taipei are perched on what may be the beginning of 
an arms race.
    While the United States should not become a mediator or 
insert itself into talks, that does not mean that we ought not 
feel able to express positive ideas to both sides through both 
public and private channels. Among such positive ideas might be 
the following.
    It would serve everyone's interest to reduce the chance of 
military incidents and an arms race in the strait. Why don't 
both sides initiate cross-strait discussions about how to avoid 
such incidents? Why don't they consider negotiating an 
agreement whereby missiles would be capped in exchange for 
Taiwan not acquiring TMD and restraint in weapons purchases? Or 
why doesn't Beijing simply declare unilaterally that it will 
cease its strait-area missile buildup in exchange for restraint 
on the other side?
    A unilateral halt to a missile buildup might very well 
reduce the need for Taiwan to acquire a very expensive TMD 
system. Indeed, Taipei has already said as much.
    Why don't both sides consider the ``three links'' in 
exchange for more flexibility in providing a dignified global 
role for Taiwan, whether it is in the World Health 
Organization, the World Health Assembly, the World Trade 
Organization, the World Bank, or the International Monetary 
Fund?
    Frankly, Beijing's strangulation policy is not winning the 
hearts and minds of Taiwan's people. Keeping Taiwan out of 
organizations like WTO that would serve the tangible interests 
of people on Taiwan does not convince the Taiwanese that 
Beijing cares about their welfare.
    Similarly, direct civil air transport across the strait is 
long overdue, and I would like to see Taipei consider this. Why 
don't both sides consider a diplomatic cease-fire in which they 
agree to leave the number of countries recognizing each other 
at current levels? The guerrilla war to buy diplomatic 
recognition of small countries demeans both capitals, is 
expensive, and erodes trust on both sides of the strait.
    The point of the above suggestions is not so much to push 
them specifically as to make a broader point. Developments in 
the Taiwan Strait have their dangers for both parties and for 
the United States, and it is time for some new thinking in the 
Taiwan Strait.
    While the United States should not become a mediator, it 
may well be that some good ideas can emanate from the American 
public and private sectors. In the meantime, Washington ought 
not tinker with the structure of the Taiwan Relations Act and 
the three communiques, documents that, while they are complex 
and difficult to implement, have served us better than any of 
the alternatives.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Lampton follows:]

               Prepared Statement of Dr. David M. Lampton

    Mr. Chairman and Committee Members, I am pleased to be able to 
share my thoughts with you as we approach the Twentieth Anniversary of 
the Taiwan Relations Act (TRA). I wish to make four points: (1) The TRA 
and the Three Communiques have served American interests well and 
simultaneously permitted the people of Taiwan to prosper during the 
last two decades. (2) There are tensions among the TRA and the Three 
Communiques, but tinkering with the structure that exists is a very 
dangerous course, not the least for the people of Taiwan. (3) There are 
worrisome developments in the Taiwan Strait, as well as some hopeful 
signs. And (4), American policy should continue to be what it has been 
since Secretary of State Shultz uttered the following words in March 
1987--``Our steadfast policy seeks to foster an environment in which 
such developments [cross-Strait exchange and cooperation] continue to 
take place.'' \1\
---------------------------------------------------------------------------
    \1\ Norman Kempster, ``Will China Continue Economic Reform Plan?'' 
Los Angeles Times, March 6, 1987, p. 5.
---------------------------------------------------------------------------
    Mr. Chairman, if we ask ourselves where American forces could 
become embroiled in a major conflict any time soon, the locations would 
include the former Yugoslavia, the Middle East, the Korean Peninsula, 
and the Taiwan Strait. From this fact, I draw three conclusions. First, 
we need to manage the Taiwan Strait problem with the utmost care, not 
only out of a consideration of U.S. interests, but the interests of the 
people of Taiwan and the region as well. Second, proper management of 
the Taiwan issue is key to broader peace and stability in East Asia. As 
the TRA made clear twenty years ago when it was passed and signed into 
law: ``Peace and stability in the area are in the political, security, 
and economic interests of the United States, and are matters of 
international concern;--'' [Section 2(b)(2)]. And third, because the 
PRC is a central player in all four potential flash points mentioned 
above (two directly and two by virtue of its role on the UN Security 
Council), productive relations with Beijing are not a luxury, they are 
a necessity.
    Consequently, the current downturn in U.S.-China relations is 
neither in American interests nor those of the people of Taiwan. It is 
not in American interests because the general direction of change in 
China and its international behavior conforms with American interests 
(though there are important areas of friction) and because Beijing 
generally has been minimally (though not always) cooperative as we have 
sought to manage the most dangerous hot spots. Further, the current 
deterioration is not in Taiwan's interests because the more U.S.-China 
ties deteriorate the more hawkish Beijing becomes toward Taipei. 
Therefore, we should be seeking to utilize the forthcoming visit of 
Chinese Premier Zhu Rongji to resolve genuine problems.
The TRA and the Three Joint Communiques Have Together Served America 
        and Taiwan Well
    The April 1979 TRA has been a critical component of what overall 
has been a successful policy with respect to ``Greater China.'' By 
``successful,'' I mean that:
    Taiwan has undergone extraordinary economic growth over the last 
twenty years (per capita GNP in 1978 was US$1,450 and in 1997 it was 
US$13,467); \2\
---------------------------------------------------------------------------
    \2\ 1978 per capita GNP $1,450 (in 1978 dollars) from: Central 
Intelligence Agency, National Basic Intelligence Factbook, January 
1980, p. 221; 1997 per capita GNP $13,467 from: Republic of China 
Yearbook 1998 (Taipei: Government Information Office, 1998, p. 178 
(chart).
---------------------------------------------------------------------------
    The Taiwan political system has moved from its own brand of 
authoritarianism to a multi-party competitive democracy;
    Taiwan continues to have 30,855 students and scholars enrolled in 
U.S. institutions of higher education; \3\
---------------------------------------------------------------------------
    \3\ Institute for International Education, online ``fastfact'' 
(http://www.iie.ort/516img/od98/ffact--02.gif)
---------------------------------------------------------------------------
    U.S.-Taiwan trade has gone up nearly 600 percent (not adjusted for 
inflation) in the 1978-1998 period; \4\ and,
---------------------------------------------------------------------------
    \4\ Total U.S. trade with Taiwan in 1998 was $51.28 billion and 
total U.S. trade with Taiwan in 1978 was $7.512 billion.
---------------------------------------------------------------------------
    Although the security story is complicated, the extensive economic 
connections that now link the two sides of the Strait together 
represents a welcome incentive that works against conflict. In 1999, 
there are about 40,000 Taiwan firms in the PRC with total investment 
commitments in the US$40 billion range--President Lee Teng-hui has 
referred to the PRC as Taiwan's economic ``hinterland.'' Of course, 
there are worrisome signs in the security domain (which I will address 
shortly), but we should not overlook the security gains that have been 
made.
    At the same time that the people of Taiwan, largely by stint of 
their own admirable efforts, have made progress, the U.S.-PRC 
relationship has made important strides forward over the last two 
decades as well, current frictions, difficulties, and conflicts of 
interest aside. In the last twenty years the changes and progress have 
been impressive.
    The number of Chinese students and scholars studying in America 
have gone from nearly zero to nearly 47,000; \5\
---------------------------------------------------------------------------
    \5\ Institute for International Education, online ``fastfact'' 
(http://www.iie.ort/516img/od98/ffact--02.gif)
---------------------------------------------------------------------------
    Two-way trade has gone from US$1.2 billion to $85.4 billion over 
the 1978-1998 period, though I am mindful that the trade deficit with 
China last January exceeded the deficit with Japan \6\ and this year we 
may have a deficit in the vicinity of $60 billion. This, incidentally, 
is why we need a good WTO accession agreement with Beijing in order to 
be assured of improved market access for American farmers and service 
providers, among others;
---------------------------------------------------------------------------
    \6\ Gautam Malkani, ``U.S. sees trade deficit hit $17 bn,'' 
Financial Times, March 19, 1999, p. 5.
---------------------------------------------------------------------------
    Americans now have existing investment in the PRC totaling over 
US$20 billion; \7\
---------------------------------------------------------------------------
    \7\ Tony Walker and Nancy Dunne ``Clinton acts to head off China 
`feeding frenzy' gripping capital,'' Financial Times, March 19, 1999, 
p. 5.
---------------------------------------------------------------------------
    China has joined a great number of international organizations and 
arms control regimes and it has been a constructive member of many 
while we acknowledge the lack of fidelity to some commitments in some 
important human rights and proliferation areas;
    Beijing and Washington have cooperated in various problem areas, 
ranging from the Korean Peninsula to the Sinai desert and Cambodia. I 
don't need to tell this Committee that there are many serious concerns 
as well, in the human rights, proliferation, and trade areas, as well 
as the Taiwan Strait.
    And finally let's not forget the central fact of importance to 
American interests. In the three decades prior to the 1979 
normalization with the PRC, America fought one war directly with the 
PRC in Korea; had two very dangerous crises in the Taiwan Strait (1954 
and 1958); and the United States became involved in the Vietnam War (in 
which there was limited Chinese involvement) in part because of concern 
about Beijing's revolutionary ambitions. In contrast, in the last more 
than two decades since the Shanghai Communique (followed by the 
subsequent two communiques and the TRA) the United States has had one 
limited crisis in the Taiwan Strait (1995-1996) where Washington 
appropriately sent two aircraft carrier battle groups to clarify 
American commitments.
    In sum, the central point is that the existing structure of 
relations has well served all three societies and we should not tinker 
with that structure unless we have compelling evidence that such 
tinkering will improve the situation. This brings me to the character 
of that structure--the TRA and the Three Communiques.
The Current Structure of Peace (the TRA and the Three Communiques) and 
        the Danger of Tinkering
    The TRA and the Three Communiques all reinforce the steadfast U.S. 
position that issues dividing the two sides of the Taiwan Strait should 
be resolved peacefully--that is the core of the U.S. commitment and the 
heart of America's interest. To this end, in the TRA the United States 
made it a matter of U.S. law that America ``will make available to 
Taiwan such defense articles and defense services in such quantity as 
may be necessary to enable Taiwan to maintain sufficient self-defense 
capability'' [Sec. 3(a)] and that the United States will ``maintain the 
capacity'' ``to resist any resort to force or other forms of coercion 
that would jeopardize the security, or the social or economic system, 
of the people on Taiwan.'' [Sec. 2(b)(6)]
    While the U.S. commitment to a peaceful resolution is consistent 
throughout the Three Communiques and the TRA, it also is obvious that 
there are certain tensions among these documents and between these 
documents and changing reality. First, there is the tension that 
derives from the adherence to a one China policy coexisting with the 
TRA commitments mentioned above, and there are tensions that stem from 
the separate and increasingly distinct identity of the people of 
Taiwan. In this vein, there also is the problem of what specific U.S. 
behavior constitutes ``unofficial'' ties to the people of Taiwan.
    With respect to changing identity on Taiwan, whereas in 1972 the 
Shanghai Communique could say, ``The U.S. acknowledges that all Chinese 
on either side of the Taiwan Strait maintain there is but one China and 
that Taiwan is a part of China,'' given the changing identity among 
Taiwan's people and the emergence of a competitive party system on the 
island, it is far from clear that such a statement credibly could be 
made in 1999. Polls conducted in September 1998 and subsequently 
released by the Taiwan Mainland Affairs Council show that only 16.7 
percent of people on Taiwan said ``I am Chinese.''
    Another important area of tension is between the August 1982 
Communique concerning weapon sales to Taiwan in which Washington said, 
``its [U.S.] arms sales to Taiwan will not exceed, either in 
qualitative or in quantitative terms the level of those supplied in 
recent years--,'' and the obsolescence of Taiwan's older weapon 
systems, and the availability of new, more expensive and more capable, 
follow-on systems.
    These inherent tensions among the Three Communiques and the TRA, in 
the context of changes in Taiwan and technology, create problems for 
all three parties. Beijing asserts that certain interaction with Taipei 
violates the one China principle, violates the concept of 
``unofficial'' ties, or that weapon sales to Taiwan exceed the limits 
of 1982. Taiwan, understandably chafes at the limits which current 
policy places on it. And, for its part, the United States can view 
increased PRC military power in the Strait (e.g. exercises like those 
of 1995-1996 or the subsequent gradual increase in missiles in coastal 
China) as creating an environment of tension that is inconsistent with 
a ``peaceful resolution'' or Taiwan's security. Parenthetically, the 
1982 Communique does not obligate the United States to reduce weapon 
sales irrespective of the security situation in the Strait.
    Given these tensions two observations are key: 1) If the risk of 
conflict in the Strait were to decline, and cross-Strait cooperation 
were to increase, then the difficulties in implementing both the TRA 
and the Three Communiques would diminish. Conversely, if Beijing 
employs coercion or Taiwan pursues de jure independence, the strains 
within the policy would mount and the ability to maintain the existent 
structure would erode, probably beyond repair. 2) In light of the 
preceding considerations, all three sides should be seeking to lower 
the temperature in the Strait and find means to increase confidence 
there. Expanding cooperation in the Strait is the only way to avoid 
conflict in the long run. This is the policy challenge-- not tinkering 
with a structure of arrangements that, despite the problems, has served 
America and the region well for twenty years and to which no preferable 
alternative exists. Any attempt to legislatively reduce the current 
ambiguity would prove inflammatory to one side of the Strait or the 
other, encourage risk taking by one side or the other, and almost 
certainly would increase the prospect for conflict.
    Having said that the existent structure has served America and the 
region well, there are some concerns I have concerning the current 
drift of events.
A Possible Drift Toward Conflict in the Strait--Some Worrisome 
        Developments Along with Rays of Hope
    There are some hopeful signs when we look at cross-Strait 
relations:
    Cross-Strait talks were resumed last October with Koo Chen-foo's 
visit to the PRC for dialogue with Wang Daohan and conversation with 
President Jiang Zemin and Vice Premier Qian Qichen. A four-point 
consensus was reached at that time and it is encouraging that both 
sides announced last week that the next round of the Wang-Koo talks 
will occur in Taiwan this coming fall.
    Cross-Strait economic and cultural ties continue to grow, as 
mentioned above.
    Acknowledging these positive developments, however, my recent visit 
to both sides of the Strait for discussions with citizens and leaders 
in both societies leaves me worried about the future. What are some of 
the things that worry me?
    First, there is some, though not conclusive, evidence that Chinese 
policy concerning Taiwan has changed somewhat. Whereas Mao Zedong 
talked about resolving the cross-Strait situation in a hundred years 
and Deng Xiaoping in fifty, the formulation we hear now is ``The Taiwan 
problem cannot remain unresolved indefinitely.'' In my view, there is 
no basis of trust or mutual interest that will allow for anything 
resembling early reunification between the mainland and Taiwan. 
Consequently, any attempt at early resolution will cause more problems 
than it will resolve.
    Second, both sides of the Strait are acquiring military capability 
to prevent what each sees as the worst outcome for itself--de jure 
independence is the worst for Beijing and early reunification the worst 
for Taipei. Consequently, we could see an arms race that leaves 
everyone with less security, obtained at higher cost, subject to 
catastrophic miscalculation. The United States would be caught in the 
middle.
    Third, as the identity of people in Taiwan is becoming more 
separate over time, this leads Beijing to place more emphasis on 
``deterring'' separatism (coercion). This, in turn, simply compounds 
feelings of separation and alienation from the mainland on Taiwan.
    And finally, all of the preceding is reflected in the different 
strategies that Beijing and Taipei are pursuing and which, I believe, 
make agreement in the near-term a very remote possibility. For its 
part, Beijing's strategy is as follows:
    Induce the United States and Japan (and Russia) to make ever 
clearer and more binding commitments to the One China Policy. If this 
can be accomplished, there will be a big power fence built around 
Taiwan that realistically makes de jure independence aspirations 
infeasible;
    Try to drive a wedge between the United States and Japan, 
particularly as it relates to the U.S.-Japan Security Alliance, unless 
Tokyo and Washington specifically exclude Taiwan from the region of 
coverage;
    Over time, unless there is some negotiated understanding with 
Taipei, gradually reduce the number of states that recognize Taipei, 
reaching single digit levels of recognition of Taipei within the next 
few years--what people in Taiwan refer to as ``strangulation.'' In 
1998, Taipei had a net loss of three recognitions (with South Africa, 
Central African Republic, Guinea-Bissau, and Tonga as losses and the 
Marshall Islands as a gain). Taipei picked up Macedonia earlier this 
year, albeit this set off a reaction in Beijing that led to a veto of 
the extension of authorization for UN peacekeeping forces in Macedonia;
    Focus limited PLA modernization on creating the capabilities to 
inflict heavy costs on Taiwan for pursuing an independence course--this 
need not necessarily involve invasion. The destabilization of Taiwan's 
economy is probably sufficient. As well, while it is not possible to 
defeat the U.S. military, raising the costs of any possible U.S. 
intervention may have a deterrent value on Washington, in Beijing's 
view;
    Work to discourage Japan (and certainly Taiwan) from coming under 
TMD coverage (though the combination of North Korean missile 
development and the steady expansion of PRC missiles in the Strait are 
having the opposite effect);
    Make the PRC a progressively more attractive economic partner to 
Taiwan business and demonstrate that the PRC is a reliable engine of 
regional economic growth that Taiwan people need to maintain and 
increase their standard of living; and,
    Promise Taipei preferential policies even when compared to those 
applied to Hong Kong under the wide umbrella of ``One Country, Two 
Systems.''
    For its part, Taipei's strategy appears to be:
    Seek functional talks with Beijing that avoid issues that would 
imply any political subordination to the PRC. Pursue functional talks 
that make progressively clearer the separation of control and delineate 
zones of responsibility;
    Talk about eventual reunification, but fashion preconditions 
(democracy and equalization of wealth) that are sufficiently remote 
that they, in fact, nullify any possibility of ``reunification'' in any 
meaningful time frame;
    Continue to seek expanded breathing space internationally. Even 
when achievements in this regard may be unlikely, proceed with the 
effort because it meets popular expectations and makes it clear to the 
people of Taiwan that Beijing is hostile to their aspirations;
    Use the PRC's limited military modernization (and the steady growth 
in the number of missiles) to justify more weapons purchases, 
particularly those that get the United States progressively more 
entangled in the island's security;
    Keep a vigorous business relationship with the PRC so that Beijing 
will be reticent to forego the benefits of Taiwan investment, but do 
not permit economic dependence on the mainland to become so substantial 
that one's own freedom to maneuver is greatly diminished; and,
    Make it clear to the U.S. Executive Branch that if it goes too far 
in accommodating Beijing's concerns, that Taipei can and will play the 
``Congress Card.''
    The problem for America, therefore, is to recognize the potentially 
dangerous drift in events and to finds ways, consistent with past 
policy, to enhance stability and cooperation across the Strait.
Fostering an Environment Conducive to Peace and Stability across the 
        Strait
    We need to define an achievable, constructive goal. Such a goal is 
to contribute to a dynamic and constructive status quo. Beyond the 
United States maintaining its forward presence and military 
capabilities in East Asia, each side of the Taiwan Strait needs to 
reciprocally reassure the other that it will not seek its maximal goal 
for a long period of time, perhaps twenty-five years. In the case of 
Taiwan, such reassurance could take the form of a no-independence 
pledge and in the case of the PRC it could take the form of a no-use-
of-force pledge. In the meantime, both sides would engage in a set of 
activities to build confidence and increase contacts. In short, the 
immediate goal should be to build a constructive, stable, and dynamic 
status quo. Increased economic contact and interaction appears to be 
the most positive force that is available. Further, the situation 
requires confidence-building measures such as those suggested below.
    While the United States should NOT become a mediator or insert 
itself into talks, that does not mean that we ought to feel unable to 
express positive ideas to both sides through both public and private 
channels. Among such ideas might be the following:
    It would serve everyone's interests to reduce the chance of 
military incidents and an arms race in the Strait. Why don't both sides 
initiate cross-Strait discussions about how to avoid such incidents? 
Why don't they consider negotiating an agreement whereby missiles would 
be capped in exchange for Taiwan not acquiring TMD and restrained 
weapons purchases? Or, why doesn't Beijing simply declare unilaterally 
that it will cease its Strait-area missile buildup in exchange for 
restraint on the other side? A unilateral halt to a missile buildup 
might very well reduce the need for a probably very expensive TMD 
system in Taiwan. Indeed, Taipei has already said as much.\8\
---------------------------------------------------------------------------
    \8\ Associated Press, ``Taipei seeks military cutbacks in 
mainland,'' Hong Kong Standard, March 21, 1999, p. 5.
---------------------------------------------------------------------------
    Why don't both sides consider the ``Three Links'' in exchange for 
more flexibility in providing a dignified global role for Taiwan 
(whether it be the World Health Organization, the World Trade 
Organization, the World Bank, the International Monetary Fund, etc.)? 
This is the kind of policy that would find support in the United 
States. Frankly, Beijing's strangulation policy is not winning the 
hearts and minds of the Taiwan people. Keeping Taiwan out of 
organizations like WTO that would serve the tangible interests of 
people in Taiwan does not convince the Taiwanese that Beijing cares 
about their welfare. Similarly, direct, civil air transportation across 
the Strait is long overdue and I would like to see Taipei seriously 
consider this.
    Why not propose a diplomatic cease-fire in which both sides agree 
to leave the number of countries recognizing each at current levels? 
The guerrilla war to buy the diplomatic recognition of small countries 
demeans both capitals, costs money, and erodes trust on both sides of 
the Strait.
    The point of the above suggestions is not so much to push them 
specifically as to make a broader point. Developments in the Taiwan 
Strait have their dangers for the parties and for the United States and 
it is time for some new thinking on both sides of the Strait. While the 
United States should not become a mediator, it may well be that some 
good ideas can emanate from the American public and private sectors. In 
the meantime, Washington ought not to tinker with the structure of the 
TRA and the Three Communiques, documents that while complex and 
difficult to implement have served us better than any of the 
alternatives.

    The Chairman. Well, I thank you, sir. I thank all three of 
you, and I made a judgment, and I am instructing the staff at 
this moment. I want copies of the remarks of each of you to be 
made available to each of the Senators prior to consideration 
of the bill.
    You have given me several ideas, even for possible 
amendment on my own bill, but this morning has renewed my faith 
in the fact that we have got to do something to make sure that 
Taiwan continues to exist, and I think there are forces in this 
world that do not want Taiwan to exist.
    With that, we will conclude, and I was going to ask--well, 
let me ask you one question. We talked about the three noes, 
no, no, no. You know what I am talking about. Of course, when 
the President said that it created quite a stir, and I believe 
it drew a rebuke from officials of Taiwan.
    What is your understanding--I would just like for you to be 
brief in your response. What was your understanding of the 
question which essentially concerns our policy on Taiwan's 
ultimate status? Mr. Feldman.
    Ambassador Feldman. Mr. Chairman, despite what people may 
have whispered in Beijing, the official policy of the United 
States as contained in the three communiques is that we 
acknowledge the Chinese position that there is but one China, 
of which Taiwan is a part, but we make no statement of our own.
    The word acknowledge is fancy diplomatic speech for, we 
hear what you are saying.
    The Chairman. Yes.
    Ambassador Feldman. And we are not going to contradict you. 
But we have never said anything of our own officially on the 
status of Taiwan. We have always said, the status of Taiwan is 
something for the two sides to work out and we will settle for 
whatever they can work out, as long as it is done by peaceful 
means, as long as it is acceptable to the people on Taiwan.
    Well, when President Clinton said that we will not support 
independence for Taiwan, he was ruling out one option.
    The Chairman. That is right.
    Ambassador Feldman. When he said that we will not support 
Taiwan's membership in any international organization that 
requires Statehood for membership, in effect he is saying, we 
do not regard Taiwan as a State.
    Well, the PRC jumped on this immediately and said, well, if 
they cannot be independent, and if they are not a State, they 
obviously must be a province of China, and since you have 
recognized PRC as the sole legal Government of China, why, they 
are a province of the PRC.
    The Chairman. Very well. Now, Mr. Ford.
    Mr. Ford. Mr. Chairman, I agree, it broke new ground. In 
fact, I think the best way to see that is, to go back to the 
Shanghai communique and the normalization agreement. In those 
two documents, there were usually two clear sections: What the 
Chinese said, and what the United States said. The words of the 
three noes come from the Chinese position in the Shanghai 
communique and the normalization agreement, not the U.S. 
position.
    We have at this point accepted what the Chinese said all 
along, but it was the first time we had said it publicly.
    Dr. Lampton. Mr. Chairman, I heard Stanley Roth earlier say 
there was nothing new, and I do not think that is my 
understanding exactly.
    On the other hand, I do not think we ought to exaggerate 
what is new, either. The way I would describe what the 
difference is, is first the difference you pointed to--it was 
said publicly, that is an important difference, by the 
President. It was not new in the sense that at least two-thirds 
of those three noes had been articulated by Secretary Albright 
and Mr. Berger before, and certainly Henry Kissinger in those 
private conversations in the 1970's that we made reference to 
earlier today.
    I would just conclude by saying that I think the President 
was not very artful, if that is the correct way to put it, in 
his third point, the point relating to international 
organizations.
    I think a more fulsome explication of that would have been 
that the United States indeed supports Taiwan's participation 
in global organizations.
    The Chairman. Exactly.
    Dr. Lampton. That is the key point, and I think rather than 
emphasizing what we do not support, I would have been much 
happier with articulating what we did support.
    So I do not think it is tenable to say nothing is new, but 
I would not go and say it represents this entire new path-
breaking policy.
    Mr. Ford. Mr. Chairman, if I could take just 1 minute, part 
of this gets to one of my basic fundamental problems, and that 
is as several people have talked about, Harvey and others 
today, that there was the initial Taiwan legislation sent to 
the committee by the executive branch. Particularly on the 
security side they didn't have anything, so that the TRA was 
enacted by the Congress because they could not accept the 
original version.
    My interpretation as a person who has been involved for the 
last 20 years on the committee and in the executive branch, is 
that consistently the executive branch has attempted to 
implement policies toward Taiwan based on the original 
legislation, and that they have always been much close to that 
interpretation of what we should do for Taiwan than the TRA.
    In fact, I have in all of these arms sales discussions the 
single most important issue in denying Taiwan weapons systems 
has been how the PRC would react.
    Ambassador Feldman. I want to echo that.
    Mr. Ford. A distant second was protecting American 
technology. The issue of what Taiwan needs, its legitimate 
requirements, was almost irrelevant to the process of deciding 
weapons sales.
    Ambassador Feldman. And I would take it beyond just weapons 
sales, Mr. Chairman. The problem has been for years and years, 
ever since my days as a Taiwan specialist in the State 
Department, is the tendency to cut American policy on the basis 
of what we think is acceptable to the PRC, so you get into this 
preemptive capitulation. We do not even ask them if it is 
acceptable or not. We form our own conclusion about whether 
they are going to tolerate it or not, and if we conclude that 
they are not going to tolerate it, why, we do not do it.
    The Chairman. Great. Now--I am sorry. Go right ahead.
    Mr. Ford. Another specific example of this is found in the 
report that the Defense Department presented to the Congress a 
few weeks ago. It indicated that the best airplane that Taiwan 
has is a Mirage 2000.
    The only place in the world that an F-16 would not be 
considered the best aircraft is Taiwan, and why? Because we 
sold them the aircraft, but none of the weapons systems that 
make it distinctively the most capable aircraft of its type in 
the world, and it is a clear indication of what our policy has 
been and what it has done to Taiwan's deterrence.
    The Chairman. Thank you. I want you to hear my instructions 
to the staff. I want you to begin where I asked a question, and 
put that all down, and perhaps we should let them look at the 
transcript, because I want this to be read by every Senator.
    And gentlemen, thank you very much. Thank you so much. It 
has been an interesting morning for me, and I just appreciate 
you coming so very much. We are in recess.
    [Whereupon, at 11:57 a.m., the committee adjourned.]




                            A P P E N D I X

                              ----------                              


Responses of Assistant Secretary Roth to Questions Submitted by Senator 
                                 Helms

    Question. As per our discussion at the hearing, could you please 
submit for the record a comprehensive compilation of official documents 
or public statements from any previous administration in which it is 
stated that ``we don't support independence for Taiwan,'' as President 
Clinton stated last summer?
    Answer. The position that the U.S. does not support Taiwan 
independence dates back at least to then National Security Advisor 
Henry Kissinger's 1971 visit to China. In support of this, I offer 
three examples of statements that are in the public domain:
    First, during a July 9, 1971, meeting with Premier Zhou Enlai, 
Kissinger stated that there would be no U.S. support for the Taiwan 
independence movement.\1\ Second, during President Nixon's 1972 trip to 
China, he reiterated the same commitment--``We have not and will not 
support any Taiwan independence movement''--during a February 22 
meeting with Premier Zhou.\2\
---------------------------------------------------------------------------
    \1\ Solomon, Richard H., U.S.-PRC Political Negotiations 1967-1984: 
An Annotated Chronology, December 1985, (Declassified version), p. 14.
    \2\ Memorandum of Conversation, Tuesday, February 22, 1972, 2:10 
p.m.-6:00 p.m. (Declassified version), p. 5.
---------------------------------------------------------------------------
    Third, Deputy Secretary Warren Christopher publicly stated this 
position at 1979 Senate Foreign Relations Committee hearings on the 
Taiwan Relations Act. The following is the exchange with Senator Glenn:

          Senator Glenn. We have said that Taiwan is part of China and 
        that the People's Republic of China is the sole legal 
        Government of China. Would we not be locked in with our own 
        statements in this agreement, then, toward influencing against 
        an independent Taiwan, even though it may not be the present, 
        existing Government of Taiwan?
          Mr. Christopher. Yes. We have said that the governments on 
        both sides of the Taiwan Straits believe that there is only one 
        China. So as a matter of logic, we would find it inconsistent 
        to have the Taiwanese authorities declare independence. But I 
        was explaining my comment with respect to the provocative 
        nature, and I think it would be particularly provocative with 
        respect to the People's Republic of China.\3\
---------------------------------------------------------------------------
    \3\ Hearings before the Committee on Foreign Relations, U.S. 
Senate, 96th Congress, First Session on S. 245, Washington, 1979, p. 
46.

    All of these statements establish the consistent U.S. Government 
policy since 1971 on Taiwan independence. This also is reflected in the 
1982 U.S.-China Joint Communique concluded during the Reagan 
Administration, which explicitly states that the United States will not 
---------------------------------------------------------------------------
pursue ``a policy of `two Chinas' or `one China, one Taiwan.' ''

    Question. Section 3(b) of the Taiwan Relations Act states that 
``The President and the Congress shall determine the nature and 
quantity of such defense articles and services based solely upon their 
judgement of the needs of Taiwan.'' How does the Department of State 
interpret this section of law?
    Answer. The relevant sentence from section 3(b) of the Taiwan 
Relations Act (``TRA'' or ``Act'') provides in its entirety that ``The 
President and the Congress shall determine the nature and quantity of 
such defense articles and services based solely upon their judgment of 
the needs of Taiwan, in accordance with the procedures established by 
law.''
    Although the TRA itself specifies no procedures for joint action by 
the Congress and the President, the Executive Branch has for the past 
20 years consistently maintained that section 3(b) was intended to 
ensure Taiwan's continued eligibility to participate in programs under 
laws and procedures generally applicable to arms transactions, and to 
emphasize the coordinate responsibilities of the Congress and the 
Executive Branch regarding the provision of defense articles and 
services to Taiwan.
    In addition to section 3(b), section 14 of the Act provides for 
continuing oversight by the Committee on Foreign Relations, the 
Committee on Foreign Affairs, and other concerned committees of the 
implementation of the Act and United States policies concerning 
security and cooperation in East Asia. This provision contemplates 
continuing consultations between the Executive Branch and the Senate 
Foreign Relations Committee. However, no particular procedure for such 
consultation is set forth; the Act leaves the specific nature of 
interaction between the two branches to be determined in light of 
practical circumstances of particular transactions.
    We believe that this interpretation, together with the flexibility 
that such an approach permits, has well served the security interests 
of the United States, Taiwan, and the entire East Asian region.

    Question. What is the rationale for State Department regulations 
prohibiting military officers above the rank of colonel from traveling 
to Taiwan on official business?
    Answer. The U.S. maintains strong, but unofficial, relations with 
Taiwan.
    This Administration has worked to expand visits to Taiwan while 
keeping within the parameters of our unofficial relationship with 
Taiwan.
    For example, following the 1994 policy review, the Administration 
authorized travel by high-level officials, including cabinet officers, 
from economic and technical agencies.
    However, restrictions remained at the same level for visitors from 
military or national security agencies at or above the position of 
Deputy Assistant Secretary and at the rank of one-star flag officer or 
above. This policy is based on the determination that visits of such 
officials would be inconsistent with maintaining an unofficial 
relationship.
                                 ______
                                 

   Responses of Assistant Secretary Kramer to Questions Submitted by 
                             Senator Helms

    Question. One thing that seems abundantly clear from the recent 
cross-strait report is that Taiwan needs missile defenses. It is also 
abundantly clear that the notion of Taiwan acquiring missile defenses 
severely displeases Beijing. How are we going to confront this dilemma?
    Answer. U.S. provision of defense articles and services to Taiwan 
is consistent with the Taiwan Relations Act and the 1982 U.S.-PRC Joint 
Communique. Taiwan's interest in theater missile defenses is driven by 
China's past actions and its theater missile build-up opposite Taiwan. 
Future Chinese actions can have an influence on U.S. decisions with 
regard to the provision of theater missile defenses to Taiwan. We do 
not preclude the possibility of Taiwan having access to theater missile 
defenses. Our decisions on this will be guided by the same basic 
factors that have shaped our decisions to date on provision of 
defensive capabilities to Taiwan.

    Question. A passage on page 23 of the report asserts that exclusive 
reliance by Taiwan on active missile defenses and associated BM/C31 
will be insufficient to offset China's missile advantage. What are the 
ramifications of this statement? Does this mean Taiwan may need to 
acquire a missile retaliatory capability?
    Answer. Theater missile defense is designed to counter limited 
attacks. The PLA is expected to deploy substantial numbers of ballistic 
missiles which could overcome a limited theater missile defense 
architecture. Assuming two interceptors are dedicated against each 
incoming missile and a 100 percent probability of kill, a PATRIOT-
derived Modified Air Defense System (MADS) battalion theoretically 
could halt a near simultaneous barrage of 48 short range ballistic 
missiles (SRBMs) directed against targets within the battalion's area 
of coverage.\1\ A 100 percent probability of kill, however, is not 
likely. Larger SRBM salvos could ensure at least some ballistic 
missiles reach their targets.
---------------------------------------------------------------------------
    \1\ A MADS battalion will consist of three fire units, each with 
eight launchers and four missile tubes per launcher. With each fire 
unit loaded with 32 interceptors, a battalion would have a total of 96 
ready-to-launch missiles. PATRIOT-derived systems generally use a two 
shot firing doctrine. A MADS battalion may have enough missiles for at 
least one reload.
---------------------------------------------------------------------------
    There are other options for responding to a ballistic missile 
threat other than obtaining a retaliatory missile capability. Passive 
defense, for example, can be particularly effective in reducing 
vulnerabilities and minimizing effects of missile attacks. By examining 
various combinations of theater missiles, warhead accuracy/effects, 
numbers of available missiles, and the targeting process, the 
likelihood and timing of an attack may be predicted and passive 
measures selected for employment before, during, and after a theater 
missile attack. In addition, political steps taken to reduce cross-
strait tensions could decrease the salience of the ballistic missile 
threat.

    Question. The 1982 Communique was premised on China's adherence to 
a peaceful resolution of differences with Taiwan. Mr. Kramer, on page 2 
of your written testimony, you state that the PRC adheres to the 1982 
Communique. Can we truly say that, given that China fired missiles just 
off the coast of Taiwan, and is now, according to your report to 
Congress, deploying huge numbers of new missiles just across from 
Taiwan?
    Answer. PRC policy, as stated in the 1982 Communique, is pursuit of 
peaceful means to resolve the long standing dispute between Taiwan and 
the mainland. The PRC continues to assert its peaceful approach. The 
PRC conducted missile exercises off the coast of Taiwan in July 1995 
and March 1996. In response, the United States dispatched two aircraft 
carrier battle groups to the region to reinforce U.S. interests in a 
peaceful resolution. For now, the PRC appears committed to a cross-
strait dialogue that we hope will lead to a mutually acceptable 
resolution. The most recent round of cross-strait talks took plaze in 
October 1998 in Beijing. A follow-on session is slated for Fall 1999 in 
Taipei. In addition, Taiwan investment on the mainland, currently 
estimated at more than 20 billion U.S. dollars, is rising. Taiwan may 
also lift restrictions on imports from the PRC.

    Question. Why are American military officers above the rank of 
colonel prohibited from going to Taiwan on official business? Could the 
Department of Defense make use of being allowed to have higher-level 
military interaction with Taiwan?
    Answer. The Department of Defense's relationship with Taiwan is 
unofficial in nature. U.S. policy has been effective in ensuring Taiwan 
security for the last 20 years. Senior DoD officials interact with 
their Taiwan military counterparts on a regular basis during unofficial 
visits to the United States. The fundamental policy regarding high 
level visits to Taiwan is promulgated in State Department guidelines on 
relations with Taiwan. We maintain under review higher-level military 
interaction with Taiwan.

    Question. In the Pentagon report, we learn that China has a 65 to 4 
advantage in submarines over Taiwan, including new advanced Russian 
Kilo subs. Yet for years, we have refused to sell submarines to Taiwan. 
Wouldn't additional submarines be useful to Taiwan, at a minimum for 
anti-submarine warfare training purposes?
    Answer. There are various means of performing anti-submarine 
warfare missions. We take very seriously our responsibility under the 
Taiwan Relations Act to provide for Taiwan's adequate defense, 
including an ability to defend against undersea threats. We have 
greatly assisted Taiwan in developing a modern, extensive anti-
submarine warfare capability using the latest sea and air platforms. 
The U.S. has provided to Taiwan through sale of S-70C helicopters, and 
the modernized S-2T ASW aircraft. We are continuing to examine Taiwan's 
ASW requirements, to include the potential role of submarines.

    Question. Could you please tell us your views regarding alleged 
espionage conducted by China at the Army Research Laboratory at 
Aberdeen Proving Ground. Specifically. I am concerned with allegations 
that were made in 1995 that computers at the lab were used to compute 
``ballistic tables'' for Chinese guns and missiles that were ultimately 
fired at Taiwan. I am also concerned with allegations that China may 
have acquired the (Sandia National Laboratory, Hyper-Velocity Impact) 
CTH bomb code. Are you aware of these allegations? What are your views 
on this?
    Answer. We are actively looking into this matter and we will convey 
an answer as soon as we have been able to review the issue in light of 
the Committee's concerns.

                                   - 
