[Senate Hearing 113-458]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 113-458

EVALUATING U.S. POLICY ON TAIWAN ON THE 35TH ANNIVERSARY OF THE TAIWAN 
                          RELATIONS ACT (TRA)

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

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON EAST ASIAN 
                          AND PACIFIC AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 3, 2014

                               __________

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                COMMITTEE ON FOREIGN RELATIONS         

             ROBERT MENENDEZ, New Jersey, Chairman        
BARBARA BOXER, California            BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire        MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware       RON JOHNSON, Wisconsin
RICHARD J. DURBIN, Illinois          JEFF FLAKE, Arizona
TOM UDALL, New Mexico                JOHN McCAIN, Arizona
CHRISTOPHER MURPHY, Connecticut      JOHN BARRASSO, Wyoming
TIM KAINE, Virginia                  RAND PAUL, Kentucky
EDWARD J. MARKEY, Massachusetts
               Daniel E. O'Brien, Staff Director        
        Lester E. Munson III, Republican Staff Director        

                         ------------          

         SUBCOMMITTEE ON EAST ASIAN AND PACIFIC AFFAIRS        

             BENJAMIN L. CARDIN, Maryland, Chairman        

CHRISTOPHER MURPHY, Connecticut      MARCO RUBIO, Florida
BARBARA BOXER, California            RON JOHNSON, Wisconsin
TOM UDALL, New Mexico                JEFF FLAKE, Arizona
EDWARD J. MARKEY, Massachusetts      JOHN McCAIN, Arizona

                              (ii)        

  



















                            C O N T E N T S

                              ----------                              
                                                                   Page

Cardin, Hon. Benjamin L., U.S. Senator from Maryland, opening 
  statement......................................................     1
Denmark, Abraham M., vice president for political and security 
  affairs, the National Bureau of Asian Research, Washington, DC.    18
    Prepared statement...........................................    20
Russel, Daniel R., Assistant Secretary for East Asian and Pacific 
  Affairs, U.S. Department of State, Washington, DC..............     3
    Prepared statement...........................................     5
    Responses to questions submitted for the record by Senator 
      Marco Rubio................................................    34
    Response to question submitted for the record by Senator John 
      Barrasso...................................................    36
Schriver, Randall G., president and chief executive officer, 
  Project 2049 Institute, Arlington, VA..........................    25
    Prepared statement...........................................    26

                                 (iii)

  

 
EVALUATING U.S. POLICY ON TAIWAN ON THE 35TH ANNIVERSARY OF THE TAIWAN 
                          RELATIONS ACT (TRA)

                              ----------                              


                        THURSDAY, APRIL 3, 2014

                               U.S. Senate,
    Subcommittee on East Asian and Pacific Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:01 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Benjamin L. 
Cardin (chairman of the subcommittee) presiding.
    Present: Senators Cardin, Murphy, and Rubio.

         OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 
                   U.S. SENATOR FROM MARYLAND

    Senator Cardin. Well, good morning, and welcome to the 
Subcommittee on East Asian and Pacific Affairs.
    Our hearing today will be to evaluating the U.S. policy on 
Taiwan on the 35th anniversary of the Taiwan Relations Act.
    Let me say from the outset I know that Senator Rubio will 
be joining me shortly. He indicated he may be a few minutes 
late getting here. I know Senator Murphy will also be joining 
me. There is a great deal of interest, I can assure you, in the 
United States Senate and on the Senate Foreign Relations 
Committee on United States-Taiwan relations. It has been some 
time since we have held a hearing. I think it was 1999, the 
last hearing that we held on Taiwan. So this is a particularly 
important hearing.
    I say from the beginning on an apologetic note this is a 
pretty busy time in the United States Senate. As this committee 
is meeting, two other committees that I serve on are holding 
markups on legislation, including the Senate Finance Committee 
and Environment and Public Works Committee. So for the sake of 
the people of Maryland who I represent, I am going to have to 
dodge out of here during the hearing to offer certain 
amendments that are important to not only Marylanders but to 
our country. So I apologize to the witnesses that I will not be 
here for the entire hearing, but I can assure you that the 
importance of this hearing is top on our agenda.
    And I thank all of our witnesses for being here and for 
their participation in this hearing.
    Last month, the subcommittee held a hearing on our 
alliances in Northeast Asia. So today we will be evaluating 
another important part of our Rebalance to Asia, the 
relationship that we have with Taiwan.
    On April 10, 1979, Congress enacted the Taiwan Relations 
Act, a bill designed to help maintain peace, security, and 
stability in the western Pacific and 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 of Taiwan. The act also led to 
the establishment of the American Institute of Taipei. Thirty-
five years later, the framework provided by this legislation 
continues to govern U.S. policy in the region.
    Taiwan has been and remains one of our most important 
partners in Asia. Taiwan has a vibrant democracy, shares common 
values with the United States, boasts an advanced economy, and 
serves as a strong security partner and leader in the region.
    Within this context of shared values, let me just note that 
within our thriving democracy, there will be disagreements and 
there will be differences of opinion among people, as we have 
seen recently in Taiwan. Democracies allow for this kind of 
vigorous political dialogue. Through constructive and peaceful 
discussions with all sides, these differences can be resolved.
    Taiwan is the 12th-largest U.S. trading partner. Thousands 
of people visit the United States from Taiwan each year, 
contributing over $1.2 billion to the U.S. economy in 2012. And 
on a personal note, let me say the relationship between the 
people of Maryland and the people of Taiwan has been very 
strong. The commerce that goes through the Port of Baltimore 
from Taiwan is very important to the economy of our region.
    And President Ma has demonstrated leadership and creativity 
in handling and resolving disputes with Taiwan's neighbors, 
particularly with the historical agreement in 2012 between 
Japan and Taiwan over the fishery resources near the Senkaku 
Islands. This agreement serves as an important model for the 
region and indicates the important role Taiwan can and should 
play on the international stage.
    My colleagues in both the Senate and House have supported a 
role for Taiwan within the international stage. I was pleased 
to cosponsor legislation introduced last year in the Senate to 
further this goal by directing the Department of State to 
develop a strategy to obtain observer status for Taiwan in the 
International Civil Aviation Organization. I hope we see 
positive progress in this area.
    We also see a growing and positive relationship between 
Taiwan and the People's Republic of China over the last 6 
years. Taiwan and the PRC have signed 21 economic or functional 
agreements, including the Economic Cooperation Framework 
Agreement. In February, officials from Taiwan and PRC in charge 
of cross-strait affairs held their first formal meeting since 
1949, opening the doors for further communication. There is 
progress being made for security in that region. The United 
States has long welcomed steps such as these to improve 
relationships and reduce tensions. And we certainly hope cross-
strait relations progress will continue on a positive 
trajectory.
    Although relations have improved, we continue to see an 
expansion of the People's Republic of China's military 
capabilities, which are often aimed at Taiwan. This is 
troubling. In this context, the United States-Taiwan security 
relationship must remain a priority.
    The challenges and opportunities in the region have changed 
since 1979. Nevertheless, the TRA continues to provide a solid 
foundation to guide our policy.
    The United States has an interest in maintaining a 
peaceful, prosperous, and secure East Asia, and recognizing 
this, the Obama administration has made a commitment to 
rebalance toward Asia. The United States relationship with 
Taiwan is a critical piece in this strategy, and as such, it is 
important for the United States Government, both the executive 
and legislative branches, to regularly reaffirm our enduring 
commitment to Taiwan.
    As I mentioned earlier, the last time this committee held a 
hearing on the Taiwan Relations Act was 1999. Today provides an 
important opportunity to assure our partners that the United 
States remains committed to this important relationship.
    So I look forward to hearing from both of our panels today 
as to how the current state of affairs are between Taiwan and 
the United States and how that fits into the Rebalance to Asia 
and security and prosperity within that region.
    We have been joined by Senator Murphy, and as I explained 
earlier, Senator Murphy will take the gavel a little bit later 
on in this hearing. And I thank him for being here and would 
yield if he would like to make some opening comments.
    Senator Murphy. I look forward to hearing from the 
witnesses.
    Senator Cardin. Thank you.
    On our first panel, we are pleased to have Mr. Daniel 
Russel. He is no stranger to this committee. He has appeared 
before our committee on several occasions. The Assistant 
Secretary of State for the Bureau of East Asian and Pacific 
Affairs at the Department of State, Mr. Russel, began his tour 
as Assistant Secretary on July 13, 2013. He previously served 
at the White House as Special Assistant to the President and 
National Security Staff Senior Director for Asian Affairs.
    I know that Secretary Russel is going to be very busy with 
the President's planned trip to Asia coming up shortly. I know 
that he will be very busy planning to make sure that visit is 
as productive as possible in terms of our Rebalance to Asia.
    Secretary Russel, it is a pleasure to have you.
    As is the custom of this committee, all the witnesses' full 
statements will be made part of the record, and you may proceed 
as you wish.

  STATEMENT OF DANIEL R. RUSSEL, ASSISTANT SECRETARY FOR EAST 
     ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Russel. Thank you very much, Mr. Chairman and Senator 
Murphy, for this opportunity to testify on United States-Taiwan 
relations.
    The United States relationship with Taiwan is based on the 
three joint communiques and the Taiwan Relations Act, the TRA, 
which as you noted was signed into law 35 years ago next week.
    The framework that Congress established in the TRA has 
fostered the development and resilience of our relations with 
Taiwan over the past 35 years. The United States-Taiwan 
relationship is grounded in history and shared values and our 
common commitment to democracy and human rights. Taiwan and the 
TRA enjoyed genuine bipartisan support. The Taiwan Caucus in 
the Senate and House contains one-fourth of sitting Senators 
and Representatives, divided about equally by party. And I 
think that is important.
    I am here to report that the United States-Taiwan 
unofficial relations have never been better. Let me give you 
four reasons why.
    First, we share prosperity. Taiwan is now our 12th-largest 
trading partner and has invested almost $8 billion in the 
United States. That creates jobs here.
    Second, we learn from each other. Taiwan is the sixth-
largest sender of students to the United States.
    Third, we each have an interest in promoting and improving 
cross-strait relations. The enduring United States support for 
Taiwan and for its self-defense helps give Taiwan the 
confidence to strengthen its relations with the PRC which, in 
turn, supports regional peace and stability.
    Fourth, we work together. We work together in the 
international community. For example, Taiwan's quick assistance 
to the Philippines after Typhoon Haiyan complemented United 
States relief efforts there.
    Taiwan is one of the world's largest economies. Taiwan is a 
focus market under the Commerce Department's SelectUSA program 
to promote investment in the United States. Consultations 
tomorrow under our Trade and Investment Framework Agreement, 
TIFA talks, offer the prospect of important progress supporting 
United States stakeholders, supporting President Ma's own 
economic reforms, and importantly, supporting the 
diversification of Taiwan's economy.
    Congress created the American Institute in Taiwan, AIT, in 
part to advance these economic ties, as well as cultural ties, 
and this strategy has worked. Taiwan now sends more students to 
the United States than Japan or than Mexico.
    Taiwan also participates in about 60 international 
organizations, as well as hundreds of international 
nongovernment organizations. The United States supports 
Taiwan's membership in international organizations that do not 
require statehood for membership and meaningful participation 
in others. Congress, with strong bipartisan and bicameral 
votes, support Taiwan's participation in the triennial 
International Civil Aviation Organization, the ICAO, assembly 
last year in the resolution that you cosponsored. We welcome 
Taiwan's participation and we support Taiwan's expanded 
participation in the future.
    We also encourage the United Nations, its agencies, and 
other international organizations to increase Taiwan's 
participation in technical or expert meetings.
    And as I said, Taiwan's role as a responsible global player 
is shown by its disaster relief efforts. Taiwan was quick to 
contribute to the initial search in the South China Sea for 
Malaysian Airlines 370 and quickly provided assistance to other 
nations following Typhoon Haiyan. Simply put, Taiwan is a 
reliable partner and a capable friend who contributes to 
regional peace and security.
    Mr. Chairman, the maintenance of peace across the Taiwan 
Strait is crucial to stability and prosperity throughout the 
Asia-Pacific. The Obama administration has notified over 12 
billion dollars' worth of arms sales to Taiwan, a testament to 
how seriously we take our obligation to assist Taiwan in 
maintaining a sufficient self-defense force.
    Beyond arms sales, the United States engages in a wide 
range of important security consultations and exchanges in 
order to assist Taiwan Armed Forces as they maintain, train, 
and equip themselves.
    I am convinced, as I said, that strong United States 
support for Taiwan helps give our friends the confidence to 
strengthen cross-strait relations. We welcome those improved 
relations in trade, travel, science, and other forms of 
cooperation unimaginable a decade ago. They benefit both sides. 
They benefit regional security. They benefit the United States 
relationship with China, and they benefit our unofficial 
relations with Taiwan.
    And to reiterate our long-held position, resolution of 
differences across the strait must be peaceful and without 
coercion in accordance with the wishes of the people on both 
sides.
    So thank you for allowing me to help mark the 35th 
anniversary of the TRA. The United States sees a future of 
increased cooperation and flourishing unofficial relations 
between the people of the United States and the people of 
Taiwan.
    Thank you.
    [The prepared statement of Mr. Russel follows:]

                 Prepared Statement of Daniel R. Russel

                              introduction
    Thank you for inviting me to this special subcommittee meeting on 
Taiwan. Next week is the 35th anniversary of the Taiwan Relations Act 
(TRA). I wish to commend you, Mr. Chairman, for your leadership and 
many years of strong interest on behalf of U.S.-Taiwan relations and 
their role in regional prosperity and stability.
    The unofficial U.S.-Taiwan relationship has never been stronger 
than it is today, and it underscores our firm commitment to the Taiwan 
Relations Act. Strengthening our relations with Taiwan and our 
longstanding friendship with the people on Taiwan remains a key element 
of the U.S. strategic rebalance to the Asia-Pacific. U.S.-Taiwan 
relations are grounded in history, respect for democracy and human 
rights, respect for international rules and norms, a growing economic 
partnership, and enduring security cooperation.
    Taiwan's status today as a top-20 world economy is a testimony to 
the diligence of the people on Taiwan and to the success of the TRA. It 
is a leading player in regional development, conservation, and 
assistance efforts--as it confidently engages the People's Republic of 
China.
    The United States has an abiding interest in peace and stability 
across the strait. Toward that end, the United States supports and 
encourages improvements in cross-strait relations, albeit at a pace 
acceptable to the people on both sides. Strong United States support 
for Taiwan autonomy also helps give our friends in Taiwan the 
confidence to strengthen their cross-strait relations, as we have seen 
in recent years. At the same time, we support Taiwan's effort to 
participate in the international community in a manner befitting a 
large economy and modern society with a great deal to contribute.
                       economic and cultural ties
    The United States substantive and robust unofficial relations with 
Taiwan have developed markedly under the framework of the TRA over the 
past 35 years, allowing us to cooperate in a wide range of mutually 
beneficial areas including energy, the environment, and scientific 
research, to name a few. Over the past 35 years, Taiwan has grown to be 
one of the world's largest economies; today Taiwan is our 12th-largest 
trading partner and a top-10 destination for U.S. agricultural and food 
exports. There also is significant two-way direct investment that spurs 
growth in both of our economies, with over $16 billion of direct 
investment positions by U.S. firms in Taiwan in 2012 and close to $8 
billion of foreign direct investment from Taiwan in the United States 
during the same period.
    Taiwan was the sixth-largest source of international students in 
the United States through the 2012-2013 academic year. On a 
proportional basis, Taiwan sends more students to the United States 
than even mainland China or India. In terms of absolute numbers, Taiwan 
sends more students to the United States than Japan, Mexico, Turkey, 
Brazil, or the U.K. do.
    The Visa Waiver Program (VWP), to which Taiwan was admitted in 
November 2012, has led to increased tourist and business travel from 
Taiwan. Foreign visitors to the United States generate stateside jobs, 
and we are pleased that in the 8 months after Taiwan joined the VWP 
Taiwan travel to the United States increased more than 29 percent.
    We work cooperatively with Taiwan on many issues of importance to 
the region and the international community, to include WHO efforts on 
pandemic prevention, detection and treatment; APEC and WTO efforts to 
expand trade and investment opportunities; and U.N. and NGO efforts to 
promote responsible civil aviation and environmental protection.
    We have a very busy and active agenda with Taiwan to discuss 
substantive areas of cooperation and mutual interests. For example, 
just recently:

   A Commerce Department Deputy Assistant Secretary 
        participated in an APEC Working Group meeting hosted by Taiwan 
        and then worked with the American Institute in Taiwan (AIT) to 
        promote U.S. exports to Taiwan and encourage more business 
        investment in the United States from Taiwan. Taiwan has been 
        identified as a focus market under the SelectUSA program to 
        promote and facilitate foreign direct investment to the United 
        States. A single Taiwan company is now engaged in a $2 billion 
        expansion of its petrochemical facilities in the United States, 
        and promotion of the United States as an investment destination 
        could generate several billion more dollars in Taiwan 
        investment in the coming years.
   One of my State Department colleagues participated in a 
        regional meeting of Fulbright Executive Directors, hosted in 
        Taiwan this year, to promote scholarly exchanges, international 
        education, and people-to-people outreach. Taiwan's mature 
        Fulbright program serves as a model of cultural exchange to the 
        region and the world.
   And another State Department colleague met with AIT and 
        Taiwan authorities to discuss Taiwan's meaningful participation 
        in international organizations and Taiwan's ability to 
        contribute to humanitarian assistance and disaster relief 
        efforts in the region. We were pleased in September 2013 to see 
        Taiwan invited to participate in the General Assembly of the 
        International Civil Aviation Organization (ICAO), and we would 
        like to build on that success in a variety of organizations.

    We are also very active on the economic and commercial front. In 
March 2013, we resumed our engagement with Taiwan under our Trade and 
Investment Framework Agreement (TIFA). Through the TIFA we are 
addressing a number of U.S. and Taiwan trade and investment concerns, 
including in the areas of agriculture, intellectual property rights 
(IPR), investment, pharmaceuticals and medical devices, and technical 
barriers to trade. We have made progress in this forum since its 
resumption last year and look forward to a productive TIFA meeting on 
April 4. We look forward to learning more about Taiwan's economic 
reforms spurred by President Ma's New Year Address.
    The Department of Commerce leads the SelectUSA program that 
promotes business investment in the United States. For our part, we 
encourage U.S. State and local governments to include Taiwan among the 
destinations for their business development missions. Among the factors 
that are luring corporate leaders in Taiwan to take a close look at the 
United States as a manufacturing hub or as an export platform are the 
strong rule of law and protection for intellectual property rights that 
we enjoy in the United States; the research and development 
capabilities of U.S. companies, universities, and laboratories; and the 
price and supply of natural gas in the United States.
    In October 2013, Taiwan sent one of the largest delegations to the 
SelectUSA summit organized by the Department of Commerce. In November, 
Taiwan's former Vice President, Vincent Siew, led an impressive 
delegation of Taiwan CEOs to the United States, with over $2 billion of 
new or ongoing investments in the United States announced during the 
visit. We are now looking at how to regularize these kinds of business 
exchanges.
    The United States remains by far the largest investor in Asia, as 
well as on Taiwan. The number of registered Americans living on Taiwan 
increased 2.7 percent in 2013 to 67,510 people. The United States 
remains one of Taiwan travelers' most popular tourist destinations.
    In 2013 the United States and Taiwan celebrated 20 years of 
environmental cooperation, during which time Taiwan made huge strides 
in reducing pollution and becoming a regional leader in environmental 
best practices. We are working with Taiwan authorities to identify 
productive ways for them to share their experiences and lessons learned 
in this field with countries in the region and beyond.
    In addition, we enjoy ongoing and robust exchanges with Taiwan 
defense and military service leadership personnel.
                             security ties
    Consistent with the Taiwan Relations Act and the United States one 
China policy including the three communiques, the United States makes 
available to Taiwan defense articles and defense services in such 
quantity as may be necessary to enable Taiwan to maintain a sufficient 
self-defense capability. This longstanding policy contributes to the 
maintenance of peace and stability across the Taiwan Strait.
    The TRA states that peace and stability in the Western Pacific area 
``are in the political, security, and economic interests of the United 
States, and are matters of international concern.'' This is as true 
today as it was in 1979, if not more so. It also asserts a U.S. policy 
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 on Taiwan.'' The United 
States is firmly committed to this policy.
    As China's economy and military spending grow, and China continues 
to carry out military deployments and exercises aimed at Taiwan, it is 
more important than ever for Taiwan to invest sufficiently in a 
professional military force that uses asymmetry, innovation, and other 
defensive advantages to deter potential attempts at coercion or 
aggression. For its part, the Obama administration has notified to 
Congress over $12 billion of sales of defensive equipment and materials 
to Taiwan. This is a tangible sign of our determination to assist 
Taiwan in maintaining a sufficient self-defense.
    Our security relations with Taiwan are about much more than arms 
sales. The United States engages in a wide range of consultations and 
exchanges with Taiwan in order to assist Taiwan Armed Forces as they 
seek to maintain, train, and equip a capable, effective self-defense 
capability.
    Taiwan does not formally participate in international coalitions or 
exercises. However, Taiwan uses defensive materials and services 
provided by the United States to enhance its humanitarian assistance 
capacity. Taiwan plays an increasingly significant role in disaster 
relief, such as after the 2008 Sichuan earthquake; after the 2011 
earthquake and tsunami in Japan; after Typhoon Haiyan in November 2013 
in the Philippines and in Palau; and immediately after the 
disappearance last month of Malaysia Air 370 when international 
participants were focusing on searching the South China Sea.
    Our support for Taiwan's security and its defensive needs has given 
Taipei confidence in its engagements with Beijing, leading Taiwan to 
sign an unprecedented number of economic and cultural cross-strait 
agreements. Soon there will be more than 800 direct flights a week 
between Taiwan and the mainland, something unthinkable a decade ago. 
Taiwan's Mainland Affairs Office Director Wang Yu-chi recently traveled 
to the mainland for meetings with his PRC counterpart, Director Zhang 
Zhijun of the PRC's Taiwan Affairs Office. The United States continues 
to support these and other cross-strait dialogues at a pace acceptable 
to people on both sides of the strait, and remains committed to 
supporting Taiwan's ability to engage in such discourse free from 
coercion.
    The United States welcomes Taiwan's efforts to resolve disputes 
peacefully, approach territorial and maritime disputes pragmatically, 
and share resources in these disputed areas. For example, in 2013 
Taiwan reached a fisheries agreement with Japan that allows both sides 
to fish in the East China Sea, and also resolved a fisheries incident 
with the Philippines through consultation. These examples serve as a 
model for the region of Taiwan's ability to peacefully resolve maritime 
issues through diplomatic means.
                     international space for taiwan
    As a top-20 world economy and a WTO and APEC member, Taiwan has a 
strong role to play in the Asia-Pacific region and worldwide. Taiwan 
participates in about 60 international organizations as well as 
hundreds of international NGOs.
    We are pleased that since 2009 Taiwan has been invited each year to 
participate in the World Health Assembly (WHA) as an observer, and we 
expect Taiwan to participate in next month's WHA as well. We think 
Taiwan's status at the WHA also should allow for more meaningful 
participation in the work of the World Health Organization, through 
greater inclusion in technical and expert meetings, including those 
related to the Pandemic Influenza Preparedness Framework (PIP) and the 
International Food Safety Authorities Network (INFOSAN). In September 
2013, Taiwan was invited as a guest to the triennial ICAO Assembly in 
Montreal, and we look forward to Taiwan's expanded participation in 
ICAO. Through a Taiwan NGO, Taiwan also observes and participates in 
the United Nations (U.N.) Framework Convention on Climate Change.
    The United States supports Taiwan's membership in international 
organizations where statehood is not a requirement for membership, and 
we encourage Taiwan's meaningful participation in other organizations. 
U.S. goals for supporting Taiwan's participation include: enabling the 
people on Taiwan to comply with international regulations and safety, 
addressing transborder health issues, facilitating international 
travel, giving and receiving appropriate international assistance and 
advice, and assisting in capacity-building.
    Consistent with this longstanding policy, the State Department 
encourages the U.N., its agencies, and other international 
organizations to increase Taiwan's meaningful participation in 
technical and expert meetings. Taiwan has the resources and expertise 
to play a constructive role in the work of those agencies.
                               conclusion
    AIT and many U.S. departments and agencies have meaningful, 
substantive engagements with Taiwan as part of our strong commercial, 
cultural and other relations. Looking forward, we see increased 
opportunities for cooperation on issues concerning trade, health, 
cultural exchanges, and security, and we remain committed to seizing 
them.
    Mr. Chairman and members of the committee, I thank you again for 
the opportunity to appear today to highlight the strength and 
durability of ties between the people of the United States and the 
people on Taiwan. Taiwan has earned a respected place in the world. 
Thanks to the Taiwan Relations Act, over the past 35 years, the United 
States and Taiwan have enjoyed a firm foundation of friendship that we 
continue to build today.

    Senator Cardin. Well, again, Secretary Russel, thank you 
for your service. Thank you for your testimony.
    The language that you used in regards to the cross-strait 
issues is very similar to the maritime security issues. We want 
these issues resolved, direct discussions among the parties 
involved, peacefully with respect for the rights of all the 
people in the region. So I could not agree with you more.
    I mentioned in my opening statement the agreement reached 
between Taiwan and Japan in regards to fishing rights. Can we 
learn something from the way that Taiwan and Japan handled that 
particular issue that could be helpful in dealing not just with 
the cross-strait issues but dealing with maritime security 
problems in that region?
    Mr. Russel. Yes. Thank you, Mr. Chairman. I agree with you 
that that agreement between Japan and Taiwan on fisheries in 
the East China Sea is very important. We see it, frankly, as a 
model for the peaceful resolution through diplomatic means of 
practical problems relating to resources that derive from 
underlying disputes over maritime claims.
    The existence of territorial claims does not, and should 
not, preclude the ability of claimants to make common cause to 
find peaceful and effective ways to work together and 
particularly to responsibly share and manage the resources in 
the waters of the South China Sea or the East China Sea, 
whether we are talking about marine life and fishing or whether 
we are talking about undersea hydrocarbon, oil and gas.
    This principle, which was also enunciated in President Ma's 
own East Asia Peace and Cooperation Initiative--this principle 
of peaceful resolution is germane to all of the disputes, and 
it is incumbent on all of the claimants to foreswear 
intimidation, coercion, and other nondiplomatic or extra-legal 
means.
    Senator Cardin. Help me understand how we are going to 
reconcile the Trans-Pacific Partnership, TPP, and our economic 
relations with Taiwan and Taiwan's economic relations in the 
region. We all hope that we will be able to reconcile 10 
countries in the Pacific on an agreement. We are including many 
of our major trading partners in the TPP agreement. Taiwan has 
a robust economic relationship with the United States. And I 
think Taiwan has expressed interest in what is going on, as far 
as the TPP is concerned.
    What is the administration's position as it relates to TPP 
and our economic ties with Taiwan and Taiwan's ties with the 
Pacific?
    Mr. Russel. Well, thank you, Mr. Chairman.
    Our long-term priority throughout the entire Asia-Pacific 
region is to help create an environment that is genuinely open 
to U.S. exports of goods and services. We stand for free trade, 
and we are working for free trade.
    In particular, my good friend and colleague, Ambassador 
Mike Froman, and my other colleagues at the U.S. Trade 
Representative are hard at work with 11 of our partners in the 
TPP process in an effort to conclude the current round.
    Now, the first job at hand for us is to successfully 
conclude TPP among the existing 12 members, but it is true, as 
you point out, Mr. Chairman, that Taiwan is an extremely 
important economy in the region and is an important trading 
partner for the United States. And on that basis, we have 
indicated that we welcome Taiwan's interest in the TPP.
    Now, as a practical matter, tomorrow, as I mentioned in my 
testimony, the same colleagues at the U.S. Trade 
Representative's office will be meeting with Taiwan 
representatives under the TIFA talks, the Trade and Investment 
Framework Agreement. I think it is very important that these 
talks have restarted, that this effort is underway. Our 
principal focus is and should be on addressing the outstanding 
issues between the United States and Taiwan through this 
framework. We can, by doing so, build momentum for expanding 
our trade and investment regimes and demonstrating Taiwan's own 
ability to take necessary reform measures on the trade front.
    I would add, if I may, that the United States and Taiwan 
have made great strides also in terms of investment and that 
the active, robust, and effective participation of an 
impressive delegation from Taiwan in the SelectUSA forum, 
hosted by President Obama with Secretary Kerry and Secretary 
Pritzker late last year, opened the door to a hoped-for 
increase in Taiwan investment in the United States.
    Senator Cardin. We talked about the fact that we want 
matters resolved peacefully. We have talked about the fact that 
we want people sitting at the table resolving issues. So Taiwan 
needs to have a seat at the table in international discussions. 
We have strongly supported their ability to participate in 
aviation.
    How do you see the ability of Taiwan to have a meaningful 
role on the international stage to be able to protect the 
rights of the people that live in Taiwan, as well as the 
regional security, economic, and safety issues?
    Mr. Russel. Well, thank you, Mr. Chairman.
    We are convinced that Taiwan has a great deal to contribute 
to the international community. Taiwan has tremendous 
resources. It has tremendous experience and tremendous 
expertise. The world needs Taiwan's help in addressing a 
plethora of global challenges and issues, and consistent with 
the legislation that you cosponsored, but more importantly as a 
function of fundamental United States policy, we have and 
continue strongly to support Taiwan's active participation in 
international organizations for which statehood is not a 
requirement, but active and meaningful roles in other 
organizations as well. And we partner closely with Taiwan in a 
number of areas.
    In terms of organizations, as you know, Taiwan and we were 
successful in enabling its participation in the ICAO meetings 
late last year, and that is an area where we will continue to 
work. There are other organizations as well where we strongly 
advocate for an appropriate role for Taiwan.
    We think that increasing Taiwan's international space also 
affords its people dignity and helps provide it with the 
confidence it needs to engage China in cross-straits relations. 
And we make the case to the Chinese, Mr. Chairman, that it is 
in China's interest as well from our perspective to enable 
Taiwan appropriately to contribute.
    Senator Cardin. Thank you.
    Senator Rubio.
    Senator Rubio. Thank you, Mr. Chairman.
    Thank you for being with us today. We appreciate it very 
much.
    We have read a lot and heard a lot about this rebalance 
toward Asia and we have seen some actions in that regard. Of 
course, we are reevaluating our defense relationship with Japan 
and seeing how we can increase cooperation. They have got some 
internal constitutional issues they have to work through, but 
we have seen that. We have certainly seen a reinvigoration or a 
re-upping of our situation with South Korea and, of course, 
have a free trade agreement with them. And even with the 
Philippines, there is now talk about creating a rotational 
presence in terms of the United States being involved. We know 
they have now gone to arbitration on their claims with regard 
to China. So we have seen activity there.
    Tell us a little bit. What is the role of Taiwan in the 
United States rebalance or pivot toward Asia?
    Mr. Russel. Thank you very much, Senator, for all of your 
work on these issues and for your thoughtful question.
    The Obama administration has placed a high priority on 
strengthening our own official relations with Taiwan as part of 
our overall rebalance to the Asia-Pacific region in part 
because Taiwan shares our values and our commitment to 
democracy, in part because of the important history and ties 
that bind us, but also in part because of the dynamism and 
potential of the Taiwan economy. And therefore, our security 
cooperation, our economic cooperation, our people-to-people and 
other forms of cooperation, including multinational 
cooperation, has continued to grow and we see further room to 
grow.
    One outstanding example has been the role that Taiwan 
played in assisting in the relief efforts in response to Super 
Typhoon Haiyan in the Philippines. Another is the readiness 
with which Taiwan responded to the loss of Malaysian Air Flight 
370 and actively contributed initially to the search and rescue 
efforts.
    We have reached an agreement last year on a visa waiver 
program, a status for Taiwan that has opened the door to 
tourism and the people-to-people exchange that will deepen ties 
and benefit the United States, including through educational 
exchange. The TIFA talks that begin again in Washington 
tomorrow help us strengthen and expand our economic 
relationship, and the former Vice President of Taiwan, Vincent 
Siew, late last year led an extraordinary delegation of top 
CEOs interested in finding ways to expand investment in the 
United States. So I think that the economic connection between 
the United States and Taiwan relates directly to the economic 
underpinnings of our rebalance.
    Senator Rubio. Because I do not want to run out of time, 
let me ask you in specific because in the world everything is 
interrelated. I would venture to guess and, in fact, I am 
pretty sure of the fact that Taiwan has watched with great 
interest what has happened with Crimea where both the economic 
leverage that Russia has on Europe as a whole and in particular 
on Ukraine and, of course, its military abilities in comparison 
to the Ukraine allowed Russia to basically invade and take a 
piece of land away from a neighbor and annex it and basically 
occupy it as they do today. And I would venture to guess that 
the similarities for the Taiwanese is pretty striking to the 
fact that in--for example, even as late as last year, our own 
defense analysis found that the primary purpose behind the 
military investment by China is to prepare for a conflict in 
the Taiwan Strait.
    So what are we doing in that regard to ensure that that 
calculation does not change to the point where China believes 
they can move aggressively on retaking Taiwan without having 
any sort of consequence for it, in essence, their belief that 
they could pretty much replicate what Russia did to Crimea? 
What steps have we taken to ensure that that does not happen, 
that that balance is not unsettled to the point where you are 
actually inviting China to do something like that?
    Mr. Russel. Thank you, Senator.
    First and foremost, the key underpinning of our policy 
rooted in TRA is our opposition to any effort to resolve the 
differences pertaining to Taiwan through intimidation, through 
coercion, or through military force. And maintenance of peace 
and stability in the cross-strait is a top priority.
    That is why the Obama administration, long before the 
crisis in Crimea at the beginning of the President's first 
term, has taken such robust steps to enable Taiwan to maintain 
a sufficient self-defense capability by providing arms of a 
defensive character. The Obama administration has notified over 
$12 billion in arms sales to Taiwan already. And at least as 
important, the United States has intensified our dialogue and 
consultations with Taiwan on defense issues and on defense 
strategy.
    We similarly have a robust dialogue with China. Now, we do 
not, as a matter of policy, ever discuss or consult in advance 
with China regarding weapons sales to Taiwan or possible sales, 
but we do discuss the situation in the strait regularly with 
China and make very clear to them our commitment not only to 
our One China Policy and the three United States-China joint 
communiques but also to the Taiwan Relations Act.
    Senator Rubio. I do not know if we are going to do a second 
round since there are not that many folks here. But let me just 
ask you this, again, because the world is interrelated. If, in 
fact, the United States reaches an agreement with Iran that 
allows Iran to enrich uranium and reprocess plutonium, at that 
point how would we go to Taiwan and say you should never do 
this, however? We allow our enemies and our adversaries to 
enrich and to reprocess, but our friends like you who are 
similarly threatened or feel threatened, I should say, are not 
allowed to provide--how do we go to Taiwan or Korea or Japan 
for that matter and argue to them that they should continue to 
walk away from a nuclear weapons capability or an enrichment 
capability when we are basically--if, in fact, we acquiesce to 
other countries with hostile intentions having that sort of 
capability?
    Mr. Russel. Senator, I do not accept the premise that the 
security of either Taiwan or Japan or Korea would be enhanced 
by an advancement or transformation of their peaceful civil 
nuclear programs into a nuclear weapons program, and I see no 
evidence that the leaders in Taiwan or Japan or Korea are of 
that view either.
    In the case of Taiwan, as I said, we have an extensive 
ongoing set of consultations regarding Taiwan's legitimate 
self-defense needs. It begins with the software. It begins with 
the strategy, and we have significantly advanced our 
discussions about the steps that Taiwan can and should take 
with regard to recruitment, retention, doctrine, asymmetric 
warfare capabilities, and decisions about necessary weapons 
flow from that strategy.
    More broadly, I think that the lesson that our allies, 
Japan and Korea, derive from the Iran experience is that strong 
unity and resolve can compel an unwilling nation to make the 
decision to pursue serious negotiations as the way out. And 
this very much informs our approach and our strategy to North 
Korea which is perhaps the----
    Senator Rubio. By the way, I do not dispute that the 
current leadership in South Korea and Japan and Taiwan do not 
want to pursue a weapons program, but I think that is largely 
built on the security assurances that the United States has 
historically made to all three of those countries over time. 
And I would just say that if, over time, those assurances erode 
either because our own capabilities are eroded through budget 
cuts and other means or because they come to question how 
committed the United States is to actually following through on 
these sorts of things, I think that people's calculations could 
change.
    And that is a concern that I have about the region as a 
whole. I mean, there is a reason why both India and Pakistan 
now have nuclear weapons. There are multiple examples around 
the world where countries decide that they must provide for 
their own security.
    And I point to the situation in Crimea simply because the 
Ukraine possessed the world's third-largest nuclear weapons 
stockpile at the end of the cold war and decided to walk away 
from that on assurances from the United Kingdom, the United 
States, and Russia that that coalition would provide for their 
security. As it turns out, one of the three countries that was 
supposed to provide for their security ended up invading them.
    So I do think that over time this could have an impact on 
the thinking of leaders, and I just think that is important for 
us to keep in mind as we discuss why it is so important for the 
United States to have a robust commitment and capability to 
provide mutual defense of our allies in the region--Taiwan, 
Korea, and Japan. And that was the point I was trying to get 
to. If, in fact, that is ever eroded, in combination with any 
sort of agreement that allows hostile countries to enrich or 
reprocess, it could lead countries to conclude in the future 
that perhaps they are on their own, and if they are on their 
own, then they may need to pursue these sorts of, what they 
would view, insurance policies.
    Mr. Russel. Senator Rubio, I think you are making an 
extraordinarily important point, and I could not agree more 
that the credibility and the sustainability of the U.S. 
commitment that the Asia-Pacific is a strategic priority and 
that our presence, including as a security guarantor, is not in 
question is a paramount objective for U.S. foreign policy and 
for the Obama administration.
    That conviction underlies the President's decision to 
travel later this month to Japan, to Korea, to Malaysia, to the 
Philippines, three treaty allies and a close friend and 
security partner of the United States. We are determined for 
the reasons that you stated and simply for the longer term U.S. 
interest to demonstrate our resolve and the robustness of our 
active engagement and participation both as a security partner 
and as an economic partner.
    Senator Rubio. I have one more question.
    Senator Murphy [presiding]. Yes, sure. Go ahead.
    Senator Rubio. Here is my last question. It is not an 
unreasonable hypothetical. This could have an impact on the 
whole region, but this is a region you oversee in general.
    So as you are aware, the Philippines is currently involved 
in a dispute with China over some territory, and as a result, 
they have taken that case to arbitration before a panel that I 
believe will rule in their favor, or they are hopeful, will. 
The Chinese, of course, have made very strong threats against 
that and what that could mean.
    Do you believe it is possible that at any time in the near 
future we could see China by force take these territories that 
they are disputing now with the Philippines? And if so, if they 
did so, what do you think the United States response would be 
and how would that be viewed by Taiwan and others in the region 
in particular? What impact would that have?
    In fact, let me ask it this way. If, in fact, China 
basically just by force took Scarborough away from the 
Philippines and nothing happened, there was no impact of it? As 
I have heard some say, we are not going to go to war over some 
rocks. How would that impact the thinking in Taiwan and in 
other nations in the region with regard to the United States 
security commitment?
    Mr. Russel. Well, Senator, as your question implies, there 
is no doubt but that the United States allies in the region 
watch carefully how we are dealing with China in areas of 
potential dispute, the Taiwan Straits being one, the East China 
Sea and the South China Sea being others.
    Right now, the South China Sea and the East China Sea have 
heated up, and there is a particular focus by the Chinese who 
are deploying large numbers of Coast Guard vessels to the area 
of the Second Thomas Shoal where the Philippines since 1999 
maintained an outpost and conducting problematic behavior, 
including efforts to interfere with and interdict the routine 
resupply of the small garrison at the outpost.
    Without treading on the treacherous ground of answering a 
hypothetical question per se, let me tell you this. I know that 
the President of the United States and the Obama administration 
is firmly committed to honoring our defense commitments to our 
allies. There should be no doubt about the resolve of the 
United States. We stand by our allies and we stand by our 
commitments.
    That said, there is no reason why the issues pertaining to 
the South China Sea cannot be resolved through peaceful means. 
Diplomacy is the preferred vehicle, and when diplomacy does not 
yield results, states parties to the U.N. Convention on the Law 
of the Sea have the legitimate right to access the existing 
international legal mechanisms. That access, the filing of a 
claim under the tribunal at UNCLOS, occurred last weekend and 
is perhaps the proximate reason why the Chinese are expressing 
their anger and discontent on the sea through what to us 
appears to be intimidating steps.
    The President of the United States met with President Xi 
Jinping of China in the Hague earlier this month. He has had 
something on the order of 17 or 18 meetings with Chinese 
Presidents and Prime Ministers since he took office. To the 
best of my knowledge, in every single meeting, President Obama 
made clear to his Chinese counterparts that the use of force, 
the use of coercion, the threat of force, and other means of 
intimidation are unacceptable as vehicles for advancing China's 
territorial claims. And the President has left the Chinese 
leadership in no doubt of our resolve.
    Now, all that said, Senator, the fact is that there are 
diplomatic steps underway between China and the 10 ASEAN 
countries. There are also important discussions underway among 
the four ASEAN claimants themselves. We are confident that 
there are diplomatic paths to move forward on the disputes 
relating to the South China Sea, and we hope, although we do 
not take a position on the claims, that the net effect of the 
Philippine filing in the tribunal will be to encourage China to 
clarify its own claims in ways that are consistent with 
international law and remove the ambiguity that is 
destabilizing in our view.
    Senator Murphy. Thank you, Senator Rubio.
    I think this is a really important line of questioning, and 
so I want to continue it with you, Mr. Secretary, and ask you 
one of Senator Rubio's questions in just a slightly different 
way. I am filling in for Senator Cardin here, but I normally 
chair the Subcommittee on European Affairs. So I have spent a 
good deal of the last 3 months in Ukraine and thinking about 
Ukraine. And so let me sort of make that connection again here.
    There is a theory that suggests that if Russia gets away 
with this extraterritorial incursion into Crimea without 
consequences and without serious, crippling consequences, more 
likely to be on the economic side than on the military side, 
then that sends a message to other countries that may be 
considering similar extraterritorial action. It may send a 
message to elements within those countries that are trying to 
push for extraterritorial action that you can move on a 
disputed area or on another country without consequence. And 
the country that is most frequently brought up with respect to 
how this psychology may work is clearly China.
    And so you have answered some of these questions, but I 
want to ask you directly about that suggestion that people have 
made, that if Russia effectively gets away with this without 
the United States and Europe delivering a substantial blow to 
Russian interests, do you agree that that sends a message to, 
maybe, not China at-large, but elements within China that may 
be contemplating the kind of action that Senator Rubio is 
talking about with respect to the Philippines or the Senkaku 
Islands or, God forbid, Taiwan that would give them additional 
reason to consider that kind of action given how the next 
several weeks and months play out in Crimea, Ukraine, and 
Russia?
    Mr. Russel. Well, thank you very much, Senator.
    And of course, this is a question that we are looking at 
very carefully.
    For my part, I approach it from the perspective of the 
Assistant Secretary for East Asia and the Pacific, and so I 
will stipulate at the outset that I am no expert on the 
Ukraine, Crimea, or Russia.
    What I can report, Senator, is that the widespread 
perception in the region is one of, in the first instance, 
alarm at Russia's behavior and a deep interest and an intense 
attention on the response taken by the United States and the 
European Union acting in concert to rebuke the action, to 
condemn it, and to begin to impose consequences as a result.
    I would characterize the response broadly within East Asia 
and particularly among the Southeast Asian countries where 
there are contentious territorial claims with China as one that 
has heightened their concern about the possibility of China 
increasingly threatening force or other forms of coercion to 
advance their territorial interests.
    The net effect of this I think is to put more pressure on 
China to demonstrate that it remains committed to the peaceful 
resolution of problems. That is China's asserted position. And 
the tolerance in the region for steps by China that appear to 
presage a more muscular approach has gone down as their alarm 
over Russian action and annexation of Crimea has increased.
    Senator Murphy. I certainly understand what the reaction 
would be from China's neighbors. I guess my question is more 
putting on your China expert hat. What do we know about China's 
interpretation of the events that have taken place and how will 
they interpret the consequences that flow or do not flow to 
Russia moving forward? Or are they just not thinking about it 
in those terms?
    Mr. Russel. Thank you, Senator.
    There is no doubt that China is thinking hard about the 
implications of Russia's annexation of Crimea and the 
international response. Of course, I would have to let the 
Chinese speak for themselves. It is difficult to guess what is 
in their heart of hearts.
    But it is fair to say, Senator, that the extent of Chinese 
interdependence in economic terms with the United States and 
with its Asian neighbors is such that the prospect of the kind 
of incremental retaliatory steps that are gradually being 
imposed on Russia in terms of its banks, in terms of cronies, 
and in other areas should have a chilling effect on anyone in 
China who might contemplate the Crimea annexation as a model.
    Senator Murphy. Let me ask for your thoughts on the 
protests that have erupted in Taiwan with respect to this new 
economic agreement with China. There are reports out today that 
there is a new piece of legislation that would require the 
Cabinet to regularly engage with lawmakers and the public on 
future agreements with China. There are some initial reports 
that the protestors are suggesting that is not enough for them 
to end their occupation of government buildings.
    I would appreciate an update on these protests from the 
State Department's perspective and maybe your take on what this 
says about the broader disagreement within Taiwan about the 
future course of relations with China.
    Mr. Russel. Well, thank you, Senator.
    I mean, in the first instance, what it says is that Taiwan 
is a very robust democracy with a high tolerance for the 
expression of political views. Now, obviously, the United 
States very much hopes that the students and demonstrators will 
use that freedom responsibly, that they will behave in a civil 
and in a peaceful manner and certainly to avoid violence. But 
it is a reflection of a very open society in which debate is 
not only allowed but encouraged.
    There are several issues at play. In the first instance, I 
would say that one issue under contention has to do with the 
mechanism and the procedure by which the cross-strait agreement 
in question, which is an agreement on trade and services, has 
been moved through the Legislative Yuan, through the Taiwan 
Parliament. That is something of a procedural issue.
    There is also undoubtedly a substantive issue at play with 
mixed views within the Taiwan community, as you allude to, to 
the pace and the scope of agreements being reached between 
Taiwan and the PRC.
    As a general matter, we very much welcome and applaud the 
extraordinary progress that has occurred in cross-strait 
relations under the Ma administration. And I should add that 
because it takes two to tango, that on the Beijing side, there 
is real credit due as well. The current Foreign Minister, Wang 
Yi, is a former head of the Taiwan Affairs Office. The current 
head of the Taiwan Affairs Office in Beijing is a good friend 
of ours, former Vice Foreign Minister Zheng Zeguang. There is 
an extremely productive and deep dialogue underway across the 
strait which recently culminated in a visit by the Mainland 
Affairs Office Minister Wang to China, which was an 
extraordinary and historic milestone.
    We do not, however, take a view on any particular 
agreement, and we believe strongly that the pace and the scope 
of movement in cross-strait discussions must be one that is in 
accord with the comfort level and the wishes of the people on 
both sides of the strait.
    Senator Murphy. Just to finish up, I really appreciate the 
way in which you framed the answer to that question. We are, 
obviously, watching these protests closely.
    But it does demonstrate the initial point you made I think 
in the answer to Senator Rubio's first question about Taiwan's 
role with respect to our Rebalance to Asia and that it is a 
nation, maybe uniquely, that shares American values about the 
ability and the right of individuals to take part in 
government, protest their government. And as concerning as it 
may be to read about people occupying government buildings, at 
the same time it is a symbol of the important connection that 
we have with Taiwan regarding their ability to allow folks in 
that part of the world to speak for themselves.
    Senator Rubio.
    Senator Rubio. I just have one final comment. Sorry I 
neglected to ask it. We were having a good conversation about 
the other issues.
    Does the Obama administration remain committed to President 
Reagan's so-called Six Assurances to Taiwan? Is that still our 
position?
    Mr. Russel. Senator, thank you.
    The underpinning of our policy is our One China Policy, the 
three United States-China joint communiques, and the Taiwan 
Relations Act. But the ``Six Assurances'' that you are 
referring to continue to play an important part as an element 
of our approach to Taiwan and the situation across the strait.
    Senator Rubio. All six of them remain the policy of the 
United States?
    Mr. Russel. What I would say, Senator, is that in the 
context of the agreements that I mentioned, what is known as 
the Six Assurances comprise an ongoing element of our approach 
to the Taiwan question.
    Senator Rubio. I guess my concern now is why cannot the 
answer be, yes, we remain committed to all six of them as 
elements of our foreign policy. Why are you unable to say that?
    Mr. Russel. Well, what I am trying to communicate, Senator, 
is that the underpinning of our approach to Taiwan is the One 
China Policy, the three communiques, and the Taiwan Relations 
Act. That having been said, what is known as the Six 
Assurances, which date back to the Reagan administration, as 
you say, are things that we take seriously and remain important 
elements as we formulate practical policies vis-a-vis----
    Senator Rubio. I am concerned about the answer because on a 
number of occasions, after meeting with the President, the 
Chinese have actually misrepresented. In fact, in one instance, 
the Chinese actually said that the United States policy toward 
Taiwan was evolving and changing. I understand you are not the 
decisionmaker about what our policy is, but I must say I am 
concerned that I am unable, from the administration, today to 
get a statement that the Six Assurances--all six--remain things 
we are firmly committed to as opposed to simply things that 
inform us or elements of our policy.
    So I am not wrong then to leave here today and say that all 
Six Assurances remain elements of our policy, but they are no 
longer necessarily the cornerstone of our policy? The 
administration is not prepared to say that we remain committed 
to all six in their totality as understood by President Reagan 
when he enunciated them.
    Mr. Russel. I am not familiar with categorical statements 
of that nature in this or in recent administrations, and I 
think, Senator, that it is wisest to approach the challenges of 
Taiwan based on the agreements and the legislation that I have 
described, but mindful of the important elements that are 
captured in what you refer to as the Six Assurances including, 
for example, principles that we continue to abide by such as 
our unwillingness to engage in any sort of prior consultations 
or discussions with the Chinese regarding arms sales just as an 
example.
    Senator Rubio. All right. So let me just ask this. Does it 
continue to be the policy of the United States that we will 
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 on 
Taiwan? That remains our policy.
    Mr. Russel. Yes, it is.
    Senator Rubio. Thank you.
    Senator Cardin [presiding]. Secretary Russel, thank you 
very much. Again, we appreciate it and have a safe trip to 
Asia.
    Mr. Russel. Thank you very much, Mr. Chairman.
    Senator Cardin. We will now move to our second panel. We 
first have Mr. Abraham Denmark, vice president for Political 
and Security Affairs at the National Bureau of Asian Research. 
Mr. Denmark manages a team of experts and staff to bring 
objective, detailed analysis of geopolitical trends and 
challenges in Asia to the attention of Congress and other 
policymakers.
    He is joined by Mr. Randy Schriver, president and chief 
executive officer of Project 2049 Institute, a nonprofit 
research organization dedicated to the study of security 
trendlines in Asia. He is also a founding partner in the 
Armitage International, LLC and a senior associate at the 
Center for Strategic and International Studies.
    We welcome both of you and we will start with Mr. Denmark. 
And as I have indicated earlier, your full statements will be 
made part of the record, and you may proceed as you wish.

 STATEMENT OF ABRAHAM M. DENMARK, VICE PRESIDENT FOR POLITICAL 
 AND SECURITY AFFAIRS, THE NATIONAL BUREAU OF ASIAN RESEARCH, 
                         WASHINGTON, DC

    Mr. Denmark. Thank you, Mr. Chairman and members of the 
committee, for this opportunity to testify on the important 
issue of United States-Taiwan relations and the 35th 
anniversary of the Taiwan Relations Act. And I should add as a 
resident of Silver Spring, it is especially a pleasure to be 
here today.
    Senator Cardin. That is why you are going first.
    Mr. Denmark. I appreciate it. [Laughter.]
    I would also like to thank the subcommittee for holding a 
hearing on the TRA, the Senate's first in 15 years.
    The National Bureau of Asian Research was founded 25 years 
ago in the memory of Senator Henry M. Jackson. Senator Jackson 
voted in favor of the Taiwan Relations Act in 1979, as did a 
bipartisan group of 85 Senators.
    Since that vote, the TRA has been instrumental in 
preserving the stability in the Taiwan Strait and the rest of 
the region, fostering the growth of a robust democracy, 
enabling the emergence of the world's most innovative 
economies, and sustaining American presence and influence in 
the region. The TRA has also provided the strategic environment 
in which Taiwan and the PRC have been able to pursue stronger 
ties in recent years.
    Relations between the United States and Taiwan are founded 
upon common interests in regional stability, shared commitments 
to the principles of economic and political liberalism, and a 
mutual respect for international law.
    Taiwan was America's 12th-largest trading partner in 2013 
with two-way trade surpassing $63 billion.
    Taiwan is also a major security partner of the United 
States. Since 2009, the executive branch has notified Congress 
of over $12 billion in new defense articles and services for 
Taiwan, making Taiwan one of our top foreign military sales 
customers in Asia and one of the largest in the world.
    In recent years, the TRA has also enabled Taiwan to emerge 
as an important player in regional geopolitics. Taiwan's 
international behavior exemplifies that of a responsible power 
from contributing to international disaster responses in Japan 
and the Philippines to demonstrating a constructive approach to 
addressing maritime disputes through its East China Sea Peace 
Initiative.
    Today relations between Taipei and Beijing are quite 
positive. Since 2008, Taiwan and the PRC have reduced cross-
strait tensions and focused on building economic and cultural 
ties. The results have been quite extraordinary. In 2013, for 
example, cross-strait trade rose to $197 billion.
    Still, despite the cross-strait rapprochement, all is not 
well in the cross-strait relationship. The PRC's investment in 
military capabilities positioned across from Taiwan has 
continued unabated, and Beijing has refused to renounce the use 
of force. The PLA has amassed a force of more than 1,100 
ballistic missiles along the Taiwan Strait as part of a 
layered, multidimensional military 
capability that remains primarily focused on Taiwan-related 
contingencies.
    At the same time, Taiwan's investment in its own military 
capabilities has been stagnant. Taiwan's official defense 
budget for 2013 was $10.5 billion, while in the same year the 
PRC spent more 10 times that of $112 billion. The result has 
been an increasingly unbalanced cross-strait military dynamic. 
To address this imbalance, Taiwan's military has begun to 
pursue innovative asymmetric strategies to deter the PRC.
    The United States and Taiwan should continue to work 
closely with one another to enhance Taiwan's ability to defend 
itself. Moreover, policy coordination on political and military 
issues should also be an important part of the bilateral 
relationship. Taiwan could potentially play a significant role 
in shaping the security environments of both the East and South 
China Seas.
    Further, progress should be made in formalizing a bilateral 
investment agreement with the United States and bringing Taiwan 
into the Trans-Pacific Partnership. This would encourage Taipei 
to make significant progress in the liberalization of its 
economy while also diversifying Taiwan's economic relationships 
and diluting the PRC's ability to coerce Taiwan in a time of 
crisis.
    The future of the cross-strait dynamic is uncertain. How 
Beijing's leaders may react to a DPP electoral victory and will 
ultimately calculate the success of its current engagement 
strategy with Taiwan and how it will weigh that strategy 
against alternatives is unclear.
    To conclude, the Taiwan Relations Act has for 35 years been 
the foundation for a robust relationship between Washington and 
Taipei that has grown to include all elements of national 
power. Preserving and expanding the benefits of the TRA will be 
a necessary element in America's efforts to sustain its power 
and influence in the Asia-Pacific, to maintain regional 
stability, and to promote its interests and valued throughout 
the region.
    Thank you again for inviting me today.
    [The prepared statement of Mr. Denmark follows:]

                Prepared Statement of Abraham M. Denmark

                              introduction
    Mr. Chairman and other members of the subcommittee, thank you for 
the opportunity to testify on the important issue of U.S.-Taiwan 
relations and the 35th anniversary of the Taiwan Relations Act (TRA). I 
would like to thank you, Mr. Chairman, for your leadership and strong 
support for U.S.-Taiwan relations, as well as robust U.S. economic and 
strategic engagement in the Asia-Pacific as we rebalance toward the 
region. As a resident of Silver Spring, it is a special privilege to be 
here with you today. I would also like to thank the subcommittee for 
holding a hearing on the TRA--the Senate's first in 15 years.
    My institution, The National Bureau of Asian Research, was founded 
25 years ago in the memory of Senator Henry M. Jackson. Senator Jackson 
voted in favor of the Taiwan Relations Act in 1979, as did a bipartisan 
group of 85 Senators that included our current Vice President, Bill 
Bradley, Bob Dole, Barry Goldwater, Jessie Helms, Daniel Inouye, Ted 
Kennedy, and Sam Nunn.
    The TRA has enjoyed robust bipartisan support ever since, through 
six administrations. This support naturally flows from the TRA's 
strategic significance to American interests and its value as the 
foundation for U.S. relations with Taiwan--one of our nation's key 
strategic partners in the Asia-Pacific.
                    strategic importance of the tra
    The Taiwan Relations Act was one of the most consequential foreign 
policy acts of Congress during the cold war. It established six 
features of American foreign and national security policy that remain 
highly relevant today, asserting the following U.S. policies:

          1. To preserve and promote extensive, close, and friendly 
        commercial, cultural, and other relations between the people of 
        the United States and the people on Taiwan, as well as the 
        people on the China mainland and all other peoples of the 
        Western Pacific area;
          2. To declare that peace and stability in the area are in the 
        political, security, and economic interests of the United 
        States, and are matters of international concern;
          3. To make clear that the United States decision to establish 
        diplomatic relations with the People's Republic of China [PRC] 
        rests upon the expectation that the future of Taiwan will be 
        determined by peaceful means;
          4. 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;
          5. To provide Taiwan with arms of a defensive character; and
          6. 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 on Taiwan.

    Combined with the three U.S.-PRC Joint Communiques and the ``Six 
Assurances,'' the TRA constitutes the bipartisan foundation for our 
``one China'' policy. America's approach to Taiwan and the PRC has 
proven to be remarkably consistent. We insist that cross-strait 
differences be resolved peacefully and according to the wishes of the 
people on both sides of the strait. We do not support Taiwan 
independence and are opposed to unilateral attempts by either side to 
change the status quo. We welcome efforts on both sides to engage in a 
dialogue that reduces tensions and increases contacts across the 
strait. And we are committed to preserving peace and stability in the 
Taiwan Strait. As part of our commitments under the TRA, we continue to 
provide Taiwan with defensive military systems based on its needs and, 
following our longstanding policy, make decisions about arms sales 
without advance consultation with the PRC.
    It is important to note that, as much as it may try, China cannot 
``reinterpret'' U.S. policies toward Taiwan. As you may recall, after a 
meeting in the Pentagon between Secretary of Defense Chuck Hagel and 
Chinese Minister of Defense General Chang Wanquan in 2013 a Chinese 
military spokesman stated that the United States had agreed to 
establish a joint task force on the issue of arms sales. More recently, 
China's Foreign Ministry misrepresented discussions between President 
Obama and President Xi to suggest the U.S. policy toward Taiwan had 
changed. In both cases, U.S. officials clarified that U.S. policies 
regarding Taiwan had not changed.
    These policies have enabled Taiwan to prosper in every sense of the 
word. The TRA has been instrumental in preserving stability in the 
Taiwan Strait (and, as a result, the region more broadly), fostering 
the growth of a robust democracy as well as one of the world's most 
vibrant cultures and innovative economies, and preserving American 
presence and influence in the region. The TRA has also provided the 
strategic environment in which Taiwan and the PRC have been able to 
nurture stronger political and economic ties in recent years.
    While over the past 35 years the relationship between Taiwan and 
the United States has evolved and deepened, and cross-strait dynamics 
have changed dramatically, the continued relevance and importance of 
the TRA is a testament to the wisdom and foresight of those who wrote 
and approved it in 1979.
                current status of u.s.-taiwan relations
    While some in 1979 worried that the TRA represented the end of 
U.S.-Taiwan relations, the reality has been the opposite. Indeed, since 
1979, U.S.-Taiwan relations have flourished. As the TRA makes 
abundantly clear, the United States has an abiding interest in 
maintaining peace and stability across the Taiwan Strait, values robust 
engagement with Taiwan, and sees a Taiwan that is able to defend itself 
as firmly within American interests.
    Relations between the United States and Taiwan are founded upon 
common interests in regional stability, shared commitments to the 
principles of economic and political liberalism, and a mutual support 
for international law. Taiwan's open politics and its exuberant 
democracy are remarkable, and are regularly put on display through open 
elections and the exercise of an independent judiciary and media. Most 
recently, popular protests in Taiwan against a proposed services 
agreement with the PRC have served both as a reminder of the importance 
of free speech and peaceful assembly, as well as the vital need for the 
rule of law.
    Contacts between the U.S. Government and the governing authorities 
on Taiwan are robust, as senior-level officials from both sides meet 
regularly. Taiwan was America's 12th-largest trading partner in 2013, 
with two-way trade surpassing $63 billion. In October 2013, Taiwan sent 
one of the largest delegations to the SelectUSA summit hosted by the 
Department of Commerce. In November, Taiwan's former Vice President, 
Vincent Siew, led an impressive delegation of Taiwan CEOs to the United 
States, announcing over $2 billion of new or ongoing investments in the 
United States. The economic relationship hit a major milestone in March 
2013 when talks under our Trade and Investment Framework Agreement 
(TIFA) were restarted after a 6-year hiatus. While pork and beef remain 
difficult issues, our bilateral economic relationship encompasses a far 
broader set of industries and services.
    Taiwan is also a major security cooperation partner for the United 
States. Since 2009, the executive branch has notified Congress of over 
$12 billion in new defense articles and services for Taiwan--making 
Taiwan our top foreign military sales customer in Asia and one of the 
largest worldwide. In particular, the United States has worked with 
Taiwan to enhance its ability to conduct humanitarian assistance and 
disaster relief (HA/DR) operations, which has recently been included as 
a core mission of Taiwan's Armed Forces. Taiwan has attended the MAHANI 
PAHILI exercise in Hawaii for the last 5 years, and the Hawaii National 
Guard is expanding its 
HA/DR relationship with Taiwan. Since 1997, the U.S. Air Force has also 
trained Taiwan's F-16 fighter pilots at Luke Air Force Base in Arizona.
    The U.S. policy to rebalance toward the Asia-Pacific has been 
significantly beneficial to Taiwan's sense of security and confidence. 
This policy has reaffirmed America's commitment to sustain its 
influence and power in the region, and has reassured its allies and 
partners in the Asia-Pacific of America's continued presence and 
engagement. Overall, U.S. policy objectives for Taiwan--sustaining its 
ability to defend itself, deepening its economic and political 
engagement with the global economy, and expanding its diplomatic 
space--are fully compatible with Taiwan's own interests.
    In recent years, the TRA has also enabled Taiwan to emerge as an 
important player in regional geopolitics. With its successful 
transition to a democratic form of government and its embrace of 
economic liberalism as a stable path for sustainable development, 
Taiwan has become a model for the entire region. Moreover, its 
international behavior exemplifies that of a responsible stakeholder--
from contributing to international disaster responses in Japan and the 
Philippines to demonstrating a responsible approach to addressing 
maritime disputes through its East China Sea Peace Initiative. This 
initiative has not only demonstrated a roadmap for peaceful engagement, 
it has also enabled Taiwan to responsibly manage maritime incidents 
with Japan and the Philippines.
                current state of cross-strait relations
    Today, relations between Taipei and Beijing are generally very 
positive. Due to the policy decisions of the leadership on both sides, 
Taiwan and the PRC have since 2008 decided to reduce cross-strait 
tensions and focus on building economic and cultural ties. They were 
able to pursue such a rapprochement due to their mutual acceptance of 
the ``1992 Consensus,'' in which both sides recognized that there is 
only one China but agreed to differ on its definition. The results have 
been extraordinary--almost 3 million mainland Chinese visited Taiwan in 
2013, up from just 300,000 in 2008. Cross-strait trade has risen by 
more than 50 percent since 2008, to $197 billion in 2013. Most 
recently, in February 2014, the heads of Taiwan's Mainland Affairs 
Council and China's Taiwan Affairs Office met for talks, representing 
the first formal meeting between ministers in their government 
capacities since the end of the Chinese Civil War in 1949.
    Still, despite this rosy picture, all is not well in the cross-
strait relationship. Beijing initially approved of this approach with 
the expectation that improving cross-strait economic and cultural ties 
would gradually pull Taiwan more closely into the PRC's orbit, thus 
enabling eventual unification. Yet trends have so far not born this 
out--according to polling in December 2013 by Taiwan's Mainland Affairs 
Council, 84.6 percent of the Taiwan people support the status quo for 
either the short or long term, and 51.9 percent see Beijing as hostile 
toward the Taiwan governing authorities. Political support for 
unification, therefore, remains minimal amongst Taiwan's population.
    Moreover, despite significant warming in relations between Taipei 
and Beijing, the PRC's investment in military capabilities positioned 
across from Taiwan has continued unabated, and the People's Liberation 
Army (PLA) has experienced several years of double-digit annual growth 
in its budget. Beijing continues to refuse to renounce the use of force 
to compel unification, and has amassed a force of more than 1,100 
ballistic missiles across the Taiwan Strait as part of a layered, 
multidimensional military capability that remains primarily focused on 
Taiwan-related contingencies.
    Despite the PRC's continued robust investments in the PLA, Taiwan's 
investment in its own military capabilities has been stagnant for 
several years. Taiwan's official defense budget for 2013 was $10.5 
billion, a decrease from the previous year. Taiwan spends 2.1 percent 
of its GDP on defense--far lower than historic levels and even lower 
than the 3 percent pledged by President Ma. Further force reductions 
are on the horizon, as the Ministry of National Defense has announced 
its goal to reduce total forces from 215,000 to between 170,000 and 
190,000 during the period from 2015 through 2019.
    These trends have led to an increasingly unbalanced cross-strait 
military dynamic. While Taiwan's defense budget in 2013 was $10.5 
billion, the PRC (according to the International Institute for 
Strategic Studies) spent 10 times more that year--$112 billion. By way 
of acknowledging that direct competition with the PLA is unfeasible, 
Taiwan's military has begun to pursue innovative, asymmetric strategies 
to deter a possible Chinese effort to invade, coerce, or attack Taiwan.
                  strengthening u.s.-taiwan relations
    The Taiwan Relations Act should, along with the three Joint 
Communiques and the Six Assurances, continue to serve as the foundation 
for future engagement, cooperation, and coordination between the United 
States and Taiwan in the economic, political, and security spheres. 
Such interaction will necessarily be based on the shared interests on 
both sides to more deeply imbed Taiwan into the global economy, to 
build its international space, and to enhance Taiwan's ability to 
defend itself.
    To more deeply imbed Taiwan into the global economy, progress 
should be made in formalizing a bilateral investment agreement with the 
United States and making progress toward bringing Taiwan into the 
Trans-Pacific Partnership (TPP). While participation in TPP would 
require the approval of all members, including the United States, such 
a move would encourage Taipei to make significant progress in the 
liberalization of its economy--a process that, while painful in the 
short-term, would have tremendous benefits for Taiwan over the medium 
and long term. Joining the TPP will not only help Taiwan further 
integrate itself into the regional economy, it will also help keep 
Taiwan's economy globally diversified and competitive. While this is a 
natural economic imperative, it is also a strategic requirement--
diversification will dilute the PRC's ability to economically coerce 
Taiwan in a time of crisis.
    International space is also an important issue for future U.S.-
Taiwan cooperation. As described by Bonnie Glaser of the Center for 
Strategic and International Studies, several opportunities exist for 
Taiwan to expand their meaningful participation 
in organizations focused on civil aviation, climate change, promoting 
regional stability and prosperity, and telecommunications. While energy 
for this expanded profile will need to come from Taipei, Beijing can 
also play an important role in enabling greater space for Taiwan. For 
the United States, progress on this issue will mean working with both 
Taipei and Beijing--as well as other members of key institutions--to 
identify more opportunities for Taiwan to play a constructive role in 
organizations where issues of sovereignty do not apply.
    On security issues, the United States and Taiwan should continue to 
work closely with one another to enhance Taiwan's ability to defend 
itself. Taiwan's recent decision to pursue an indigenous submarine 
capability is a positive development, and American strategists and 
naval experts should work closely with their counterparts in Taiwan to 
identify the capabilities necessary to enhance Taiwan's self-defense. 
Additionally, both sides must recognize that friendship occasionally 
requires the telling of hard truths. In this case, Washington should be 
clear with Taipei that Taiwan's flat defense budget is a persistent 
problem. The budget issue is particularly flummoxing in that both 
President Ma and the opposition Democratic People's Party (DPP) have 
publicly endorsed a defense budget at 3 percent of GDP. If there exists 
broad political support for such a budget level, why has spending 
continued to fall short of this benchmark in the face of a rapidly 
intensifying military challenge from the mainland? Addressing this 
issue should be a top priority for the U.S. and Taiwan defense 
establishments.
    While issues of arms sales and enhanced planning will continue to 
be important in U.S.-Taiwan security relations, policy coordination on 
political-military issues should also be an important part of the 
bilateral relationship. Taiwan can potentially play a significant role 
in shaping the security environments of both the East and South China 
Seas. Beyond setting an example as a responsible regional stakeholder, 
Taiwan can help clarify the PRC's ambiguous claims in the South China 
Sea. As proposed by Jeffrey Bader, the former senior director for East 
Asian affairs on the National Security Council, Taiwan should clarify 
whether its claims in the South China Sea are consistent with 
international law.
    Finally, continued cooperation on defense investments and changes 
to military planning should remain at the center of U.S.-Taiwan 
military relations. Both sides have a profound interest in enhancing 
Taiwan's ability to defend itself, and this is a realizable goal if 
both Washington and Taipei remain committed to pursuing asymmetric and 
innovative military strategies and translating words on a page into 
real-world capabilities.
                 assessing future cross-strait dynamics
    As with any democracy, political power in Taiwan will eventually 
change hands as the result of democratic processes. As former Assistant 
Secretary of State for East Asia and the Pacific Kurt Campbell stated 
in 2011, no single party or leader on Taiwan has a monopoly on 
effective management of cross-strait relations. The United States 
should not take sides in this election and commit to working closely 
with whomever should win future free and fair elections in Taiwan. Yet 
we do have interests in Taiwan and in the cross-strait dynamic, and we 
should make those interests known.
    Given that Taiwan's next Presidential election will be held in 
2016, any prediction about the outcome of that election will be far 
from reliable. Yet the possibility that the DPP may regain power in 
Taiwan is a possibility that requires some consideration. There are 
lingering questions, in Beijing and elsewhere, about the DPP's ability 
to effectively and reliably manage cross-strait relations if and when 
it regains political power in Taipei.
    The DPP's future direction remains unclear. DPP officials have 
recently sought to adjust the Party's approach to cross-strait 
relations, and this process is still ongoing. While the United States 
should refrain from inserting itself into Taiwan's electoral process 
and should continue to encourage and congratulate Taiwan on its 
democratic system of governance, the United States does have an 
interest in seeing that cross-strait stability and communication are 
maintained. This need not be the 1992 Consensus, but rather any 
formulation upon which Beijing and Taipei can continue their peaceful 
engagement.
    China's reaction to a DPP election is also an issue deserving some 
consideration. There were several reports of attempts by China to 
influence past elections, though Beijing has certainly learned the 
lessons of 1996 that attempts at intimidation can backfire. My sense is 
that China will look to sustain cross-strait engagement and 
communication in if the DPP comes back to power, provided that a 
mutually acceptable concept for engagement can be found. Yet how 
Beijing's leaders will ultimately calculate the success of its current 
engagement strategy, and how it will weigh that strategy against 
alternatives, is very unclear.
    While relations between Taiwan and the PRC may have improved since 
2008, the recent protests in Taipei--as well as the largely symbolic 
nature of the first round of direct meetings--signal the domestic 
political limits on the potential for unification and the speed at 
which progress may occur. Since the cross-strait rapprochement has been 
based on pursuing easier issues (economic and cultural engagement) 
before difficult issues (politics and Taiwan's official status), the 
pace of engagement between the two sides may be plateauing.
    While Xi Jinping has publicly stated that China supports Taiwan's 
``social system and lifestyle,'' he has also stated that ``the 
longstanding political division between the two sides will have to be 
eventually resolved step-by-step as it should not be passed on 
generation after generation.'' Beijing's assessment of progress toward 
their goal of unification and Taiwan's continued structural 
unwillingness to change its de facto status will fundamentally define 
cross-strait dynamics over the long term.
                               conclusion
    For 35 years, the Taiwan Relations Act has been the foundation for 
a robust, if unofficial, relationship between Washington and Taipei 
that has grown to include all elements of national power. The human, 
economic, political, and strategic benefits of the TRA have been 
tremendous. Preserving and expanding the benefits of the TRA will 
depend on skilled statecraft from both sides and will be a necessary 
element in America's efforts to sustain its power and influence in the 
Asia-Pacific and to promote economic and political liberalism 
throughout the region.

    Senator Cardin. Thank you.
    Mr. Schriver.

STATEMENT OF RANDALL G. SCHRIVER, PRESIDENT AND CHIEF EXECUTIVE 
         OFFICER, PROJECT 2049 INSTITUTE, ARLINGTON, VA

    Mr. Schriver. Thank you very much, Mr. Chairman, for this 
opportunity and thank you for seating me with a colleague who I 
admire and respect a great deal, Mr. Denmark.
    In the interest of time, I would just like to draw from my 
statement and just make a few observations on cross-strait 
relations, the United States-Taiwan relationship, and maybe 
some recommendations for going forward.
    As I think both Secretary Russel and Mr. Denmark stated, 
the cross-strait relationship has enjoyed a lot of positive 
developments in recent years, and I believe President Ma 
deserves enormous credit for that, the ECFA agreement, the 21 
agreements that have been achieved between the two sides.
    But there are some concerning trends, and I would just make 
note of four trends. And one has already been addressed I think 
quite eloquently and that is the security environment. The 
military buildup opposite Taiwan continues apace. There has 
been no move to reduce the threat posture. In fact, it has 
continued to build despite the political improvements and the 
economic progress the two sides have made.
    I think we are also concerned about Taiwan's need for 
international space and the continuing pressure from Beijing on 
other countries and on international organizations to prevent 
Taiwan from enjoying greater participation in international 
organizations and the international community.
    Number three, I think we should also be concerned about 
these demonstrations, but more broadly what it says about the 
public and their views of the cross-strait relationship right 
now. Having just been in Taiwan last week, former Deputy 
Secretary Armitage and I took a group to Taiwan and had a 
chance to wander through some of these areas. And what is 
really at the core of the protest, I think, is very deep-seated 
anxiety about the future of the cross-strait relationship and 
what that might mean for Taiwan's status. So, yes, the 
proximate cause is this cross-strait service trade agreement 
but I think there is a very deep-seated anxiety, if not 
neuralgia, about where things are going, and that could put a 
brake a bit on future cross-strait progress and that is 
certainly something to be mindful of.
    Then lastly, I think we need to look ahead of the coming 
2016 election and look at China's behavior in the past. As 
Taiwan has held national elections, they in the past have 
conducted provocative missile exercises. They have made 
intimidating gestures and speeches to the public in Taiwan. And 
I think we should expect, particularly with where the polls are 
today, that China will try to put its thumb on the scales and 
influence the outcome of that election. And I think it is in 
our interest to do what we can to ensure that Taiwan has the 
ability to make decisions about its future by itself free of 
coercion to the extent possible.
    Now, I think each of these trends that I mentioned suggest 
a role for the United States to support Taiwan and address 
Taiwan's needs. And I think they fall into several categories.
    I think in the security area, we should be moving forward 
with some of the major weapons systems. I would cite 
submarines, a program that--I was part of the decisionmaking in 
2001 in the Bush administration when we said that Taiwan needed 
these platforms and committed the United States to helping 
Taiwan acquire the platforms. But yet, here we are 13-plus 
years later and there is no program to speak of. And I think 
the requirement has only gotten more strong given China's 
submarine development and other military modernization efforts.
    I think the United States should make a Cabinet-level visit 
to Taiwan. The Clinton administration sent three Cabinet 
Secretaries to Taiwan in 8 years. This administration has sent 
zero, like the administration just before it, the Bush 
administration.
    I think the United States should be more positive and more 
open about Taiwan's interest in TPP. We should be talking about 
a roadmap and the ability of Taiwan to join that organization, 
not just welcome their interest in it. I understand the TIFA 
process is being resumed this week, but we should articulate a 
stronger interest in Taiwan joining that organization and 
provide a clear roadmap for their participation down the line.
    And then finally, on arm sales more generally--I mentioned 
the submarine program in particular. I think this country 
should be committed to Taiwan's defense in a way that we have 
regular congressional notifications. The previous witness from 
the administration's comments notwithstanding about all the 
support we have given to Taiwan's military, it has, in fact, 
been the longest period of gap in congressional notifications 
in the history of the relationship since the Taiwan Relations 
Act was passed, 2\1/2\-plus years since the last congressional 
notification. I think this should be remedied. Taiwan not only 
needs the military systems, they need that show of support from 
the United States.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Schriver follows:]

               Prepared Statement of Randall G. Schriver

    Mr. Chairman and esteemed committee members, I would like to 
express my appreciation for the opportunity to appear before your 
committee to address the landmark legislation that has governed 
relations between the United States and Taiwan for the last 35 years.
    Since its enactment in 1979, the Taiwan Relations Act (TRA) has 
been the foundation upon which the United States and Taiwan have 
maintained their dynamic and enduring ties. For over 35 years, the 
United States has played an important role in ensuring Taiwan's 
security while maintaining constructive relations with the People's 
Republic of China (PRC). Enabled by the TRA, continuity in U.S. policy 
has preserved American credibility within the Asia-Pacific region and 
enabled the island's nascent democracy to flourish. U.S. support for 
Taiwan has served as a visible symbol of U.S. commitment to peace and 
security in the Asia-Pacific region. Taiwan also has an important role 
to play in the comprehensive U.S. Rebalance to Asia that was announced 
in 2011.
                         u.s.-taiwan relations
    Taiwan's continued success as a democracy, free market economy, and 
responsible regional and global actor is a core interest of the United 
States. The United States and Taiwan engage cooperatively over a wide 
range of economic, security, and diplomatic issues. Our strong trade 
relationship alone demonstrates just how important the U.S.-Taiwan 
relationship is for U.S. interests. Taiwan is the United States 12th-
largest trading partner and 16th-largest export market for U.S. goods.
    There are many recent developments in U.S.-Taiwan trade relations 
that are positive. The resumption of the U.S.-Taiwan Trade and 
Investment Framework Agreement (TIFA) discussions, after a prolonged 
hiatus, has the potential to revitalize our trade ties. Taiwan's 
efforts to join the Trans Pacific Partnership (TPP) can also be an 
opportunity for U.S.-Taiwan relations. As an export-oriented economy 
with the world's 21st-largest GDP, Taiwan's membership would 
significantly enhance the trade pact by further integrating Taiwan's 
economy with that of the United States and other partners in the 
region. The TPP is an integral part of the U.S. rebalance and we have 
an important stake in ensuring that Taiwan is a part of it. In 
addition, through a reinvigorated bilateral economic relationship with 
the United States, Taiwan may be able to engage counterparts across the 
Taiwan Strait with greater confidence.
    There is also a growing web of people-to-people exchanges between 
the United States and Taiwan. Taiwan's designation for participation in 
the Visa Waiver Program (VWP) in 2012 led to a significant rise in 
visits between the two countries. Recent visits by three U.S. Deputy 
Assistant Secretaries to Taiwan was an encouraging and refreshing sign 
of U.S. commitment to Taiwan, especially considering the dry-spell of 
high-level U.S. visits to Taiwan. These diplomatic and economic ties 
are augmented by an increasingly robust U.S.-Taiwan military-to-
military relationship. Forging and nurturing these relationships 
between our militaries is not only important for our ability to address 
common challenges, but also reinforcing the security commitments to 
Taiwan that the United States affirmed with passage of the TRA 35 years 
ago.
    While the above-mentioned areas of U.S.-Taiwan relations are 
progressing well, more could be done. Despite closer cross-strait 
engagement, there is understandable consternation in Taipei and around 
the region regarding PRC military modernization and deployments 
opposite Taiwan, particularly in light of the PRC's refusal to renounce 
use of force against Taiwan to resolve differences. Forwarding of the 
Six Assurances under the Reagan administration to Taiwan in 1982 
reinforced language contained in the TRA to provide Taiwan with arms 
according to its defensive needs. It also provided Taiwan with a 
guarantee that we would not hold prior consultations with the PRC 
regarding arms sales to Taiwan. This assurance should remain central to 
U.S. decisionmaking on security assistance to Taiwan. The prolonged 
absence of a congressional notification on Taiwan arms sales could be 
perceived as accommodating Chinese positions and potential reaction to 
a formal announcement, as the People's Liberation Army (PLA) continues 
to develop and deploy capabilities intended to coerce and/or facilitate 
use of force against Taiwan.
    This administration needs bolder and more visible measures to 
fulfill U.S. obligations to Taiwan consistent with notification 
requirements under the Arms Export Control Act. The United States 
should avoid allowing interests in preserving positive atmospherics in 
the China relationship to come at the cost of relations with Taiwan and 
its legitimate defense needs.
    Guided by the TRA and Six Assurances, Taiwan is not simply an 
``issue to manage'' in U.S.-China relations. There are significant 
opportunity costs to treating Taiwan as a subordinate issue in U.S.-
China ties rather than as legitimate government able and willing to 
help resolve a broad range of shared challenges faced by the 
international community. Opportunities for cooperating with Taiwan are 
significant in areas ranging from climate change, disaster response, to 
counterproliferation, In short, Taiwan and its people have intrinsic 
value to the United States and broader international community separate 
from the context of U.S.-China relations. Given the comprehensive goals 
of the U.S. rebalance policy, Taiwan should be seen as a potential 
partner across the full spectrum of activities that support the 
rebalance.
                         cross-strait relations
    Cross-Strait relations have enjoyed positive developments in recent 
years. Since entering office in 2008, President Ma Ying-jeou's 
administration has prioritized the improvement of cross-strait 
relations. Since then, the two sides have established direct commercial 
flights between Taiwan and China, promoted bilateral tourism, and 
signed an Economic Cooperative Framework Agreement (ECFA).
    The most recent breakthrough in cross-strait ties occurred on 
February 11, 2014, when Taiwan and China held their first official 
government-to-government talks since 1949. The meeting was historically 
significant in its own right, particularly because PRC government 
representatives were willing to acknowledge the legitimacy of 
government counterparts from Taiwan and meet on the basis of equality. 
From Beijing's perspective, there may be a greater sense of urgency to 
pressure Taiwan into political talks as the next national election in 
2016 draws closer.
    Despite political and economic gains in cross-strait relations, 
security issues continue to be a contentious issue. Last November, 
Beijing's announced an Air Defense Identification Zone (ADIZ) in the 
East China Sea, which overlapped with those of Taiwan, Japan, and South 
Korea. Two months ago, in response, Taiwan conducted a rescue exercise 
in an area where ADIZs of Taiwan, Japan, and China overlap to challenge 
the legitimacy of China's ADIZ. These events were a prominent reminder 
of the continuing tensions that underlie cross-strait relations.
    Moreover, recent protests in Taipei demonstrate limitations in 
public willingness to further deepen economic links across the Taiwan 
Strait. Irrespective of how the government and students resolve 
disagreements, what these protests reveal is a deep-seated anxiety and 
suspicion on Taiwan toward further integration with the mainland.
    Taiwan's requirement for defense articles and services are driven 
by the nature of the challenge posed by the PLA's continued military 
buildup opposite Taiwan. Buoyed by a 12.2-percent increase in its 
defense budget from the previous year, the PLA continues to modernize 
and expand its military capabilities that could be arrayed against 
Taiwan. As the 2014 Quadrennial Defense Review notes, `` the rapid pace 
and comprehensive scope of China's military modernization continues, 
combined with a relative lack of transparency and openness from China's 
leaders regarding both military capabilities and intentions.''
    Chinese military modernization has yielded significant increases in 
the PLA's power and advantages. According to analysts in the United 
States and Taiwan's Ministry of National Defense, China has more than 
1,500 missiles targeted at Taiwan. The PLA has also developed and 
deployed other military capabilities in areas such as electronic 
warfare, counterspace, advanced fighter aircraft, and undersea warfare. 
Ultimately, Chinese military leaders seek capabilities that could 
support an attempt to physically occupy Taipei should a decision be 
made to do so.
    The PLA is developing the capability to coerce political leaders on 
Taiwan to settle political differences on Beijing's terms, while 
simultaneously attempting to deter, delay, or deny U.S. intervention in 
case of conflict. Barring deeper and broader U.S. support, the dynamic 
balance of military forces across the Taiwan Strait may further 
embolden authorities in Beijing to consider use of force.
                      impact of the 2016 election
    Looking ahead to the 2016 Presidential elections in Taiwan, our 
overriding interest is to see Taiwan complete another free and fair 
election, and to then proceed with the subsequent peaceful transfer of 
power to a new President. The United States should remain neutral on 
the outcome and remain steadfast in our support for furthering shared 
democratic values between the United States and Taiwan. In doing so, we 
would improve upon the approach taken in the lead up to the 2012 
election when the Obama administration took a number of steps that 
provoked suspicions of leaning to one side in the election. The United 
States should not choose sides in Taiwan's Presidential election. 
Rather, it should support processes that help Taiwan deepen the 
resiliency of its own democracy.
    In past election cycles China has taken steps to try to put their 
``thumb on the scales'' and impact the outcome of elections. In March 
1996, China test-fired ballistic missiles in the waters surrounding 
Taiwan in a brazen attempt to intimidate voters. Four years later, 
then-Premier Zhu Rongji infamously used a finger wagging gesture on 
television threatening Taiwanese voters not to reelect then-President 
Chen Shui-bian.
    The PRC's methods of influencing public policies on Taiwan have 
become less overt but in many ways more sophisticated through the use 
of political warfare and other forms of coercive persuasion. We should 
remain vigilant against potential attempts by China to influence the 
democratic process on Taiwan as we approach the 2016 elections.
    No matter which party governs the ROC after the March 2016 
election, we have reason for high confidence that the next leader in 
Taipei will be capable of managing cross-strait relations. Both sides 
of the political spectrum on Taiwan have expanded contacts and dialogue 
with counterparts across the Taiwan Strait and both major parties are 
earnest in establishing policies that will preserve peace across the 
strait. We must hold the Chinese Communist Party to account for any 
actions not conducive to peace and stability after the election on 
Taiwan.
                  areas to strengthen the relationship
    There are several where the United States should seek to strengthen 
ties with Taiwan. First, while we enjoy many benefits of strong U.S.-
Taiwan relations, our default mode has been to keep them low-key and 
quiet. The United States should be open and transparent in its dealings 
with Taiwan, highlighting meetings as routine and normal interactions 
between two legitimate governments.
    Second, the United States needs to raise the level of its 
interactions with Taiwan, including Cabinet-level visits to Taiwan. 
Such visits offer opportunities to be more vocal and demonstrate our 
pride in the strength of our bilateral ties.
    Third, we should fulfill our longstanding commitment to assist 
Taiwan in its acquisition of diesel electric submarines. Options 
include forwarding the congressional notification for a design program 
through Foreign Military Sales channels that has been frozen for over 5 
years; or alternatively, providing a clear roadmap to support U.S. 
defense industry assistance to a Taiwan indigenous submarine program. 
Either way, diesel electric submarines would provide Taiwan with a 
credible and survivable deterrent and therefore is in the best 
interests of the United States.
    Fourth, and independent of the submarine issue, congressional 
notifications under the Arms Export Control Act serve as a visible 
demonstration of U.S. support under the TRA. Therefore, we should be 
intentional about forwarding congressional notifications on a routine 
and frequent basis in support of Taiwan's defense needs. Long gaps 
between congressional notifications create uncertainties in Taiwan, and 
may embolden leaders of the Chinese Communist Party to think they can 
cause coerced solutions to their differences with Taiwan.
    Fifth, consistent with progress made in the TIFA process, the 
United States should endorse Taiwan's candidacy and create a roadmap 
for Taiwan's membership in the TPP.
    Sixth, the United States should continue to support Taiwan's 
meaningful participation in international organizations such as 
International Civil Aviation Organization (ICAO). The United States 
should endorse Taiwan's full membership in ICAO, and should also seek 
creative approaches to increasing Taiwan's international profile in 
other areas.
    Our commemoration of the 35th anniversary of the TRA is an 
excellent opportunity to reflect on current and past successes in U.S.-
Taiwan relations. It is also an opportunity to chart a future path for 
our ties that is grounded in our legal obligations under the TRA to 
provide necessary support to allies and friends in a region where hard-
power still matters. In midst of the U.S. rebalance to the Asia-
Pacific, the U.S.-Taiwan relationship should be leveraged as a 
fundamental component of the U.S. rebalance and not a subissue in U.S.-
China ties. Taiwan possesses intrinsic value as a flourishing 
democracy, an economic powerhouse, and most importantly, a longstanding 
security partner in East Asia.
    I hope the Obama administration and friends in Congress will share 
this outlook. Thank you again Mr. Chairman for the opportunity to 
participate in your hearing today, and to offer these thoughts.

    Senator Cardin. Well, thank you both for your testimony.
    The 35th anniversary of the formal agreement in regards to 
Taiwan--the Taiwan Relations Act--it is pretty specific as to 
our commitments in regards to Taiwan and our strong interest to 
make sure that peaceful relations exist in the region--and on 
the cross-strait issues, that Taiwan has the right of self-
defense and our commitment to help them in self-defense. We 
have the three communiques and then we have President Reagan's 
comments on the assurances.
    Are the fundamental agreements still sound today? This is 
35 years later. There seems to be some hesitation in regards to 
some of the areas that we thought were pretty clear. You point 
out that high-level visits have not taken place as frequently 
if there are arms sale issues. Is there a need for any formal 
changes in your view on the underlying documents that underpin 
the relationship between the United States and Taiwan?
    Mr. Denmark. Thank you, Senator.
    There have been several calls from the academic community 
here in D.C. and around the country for some sorts of changes 
to the Taiwan Relations Act, some saying it needs to be 
weakened, some saying that it needs to be strengthened. In my 
opinion, overall the Taiwan Relations Act is actually very 
sound in that it provides a robust foundation for engagement 
but also gives the administration enough room to maneuver to be 
flexible for existing and emerging contingencies. So overall, 
my assessment is that the Taiwan Relations Act in itself does 
not need to be revised, although the continuing discussion 
between the Congress and the administration, with this 
administration and previously, about the pace of arms sales, 
the size of arms sales, the pace of visits, the pace of 
contacts I think is very welcome in terms of pushing the 
relationship forward.
    But if you look at how this administration has engaged 
Taiwan, I think it has actually been fairly robust. My friend, 
Randy, was very correct in the delay that we have seen, the 
lack of arms sales notifications that we have seen for the last 
2 years, but I would say that a lot of that is because of the 
size of the significant notifications that came for a few years 
before that, leading to very significant notifications of arms 
sales and continued high-level meetings between political 
leadership on both sides, not a visit of a Cabinet Secretary to 
Taiwan yet, but continued regular senior-level meetings between 
the two sides.
    I guess I do not see the visit of a Cabinet-level officer 
to Taiwan as being the litmus test for what constitutes a 
robust relationship. Rather, it is the regular meeting. The 
regular interaction of high-level officials across multiple 
elements of our two governments to me is the more important 
measure of our relationship, and to me the current 
administration has been fairly robust in its engagement.
    Senator Cardin. Let me ask you about United States-China 
relations as it relates to Taiwan. The United States has a 
somewhat complex relationship with China today. They are 
critically important in many of our discussions globally. How 
do you see what the United States does with Taiwan? This has 
been longstanding. Does it have impact on the bilateral 
relationship between China and the United States?
    Mr. Schriver. It certainly can, but my sense is many 
administrations, not just this one, try to overcorrect, 
overcompensate for the perceived reaction that we may get from 
China and place some limitations on what we would do with 
Taiwan. I think if you look at the actual record--we can stick 
with the subject of arms sales. I think if you actually look at 
the reaction, the fallout on the United States-China 
relationship has been consistent, quite predictable and quite 
manageable. So I think that should not really temper what we do 
with Taiwan.
    And I would add on a Cabinet Secretary, I think that has 
been one of the points of reluctance is the fear that that 
particular Cabinet Secretary may not have continuing access to 
China should he or she visit Taiwan. But again, I think the 
past track record does not necessarily support that, and I 
think we should proceed. I obviously have a disagreement. I 
think it is important. We tell every other country it is 
important when our Cabinet Secretaries go. So I think this 
would be a very strong signal to Taiwan particularly in light 
of what they are facing right now in the cross-strait 
relationship.
    Senator Cardin. I think that is very important.
    One of the things I think Senator Rubio and I will agree is 
that President Reagan was pretty definitive with his 
assurances. I personally think China respects that, a clear 
understanding of where the United States is, consistent with 
our historical commitments to the people of Taiwan. So I think 
a clear indication of where we stand helps not just the people 
of Taiwan but also helps in our bilateral relationship with 
China.
    I want to ask one more question before turning it over to 
Senator Rubio, and that came up with Secretary Russel. One of 
the positive impacts of a better relationship between Taiwan 
and China is that Taiwan is a democracy. It is an open society. 
China is struggling on how to deal with more rights for its 
citizens. It has had an inconsistent path toward the type of 
democratic reforms that a country needs to do if it wants to be 
a major player on the world stage. And yet, the recent protests 
in Taiwan raises questions as to how effective Taiwan is in 
dealing with these issues.
    How do you see these protests affecting the view in China 
as to the success of the Taiwan democracy?
    Mr. Schriver. Well, I think in this particular instance, it 
is probably a bit too soon to tell, but I think it is part of 
an overall picture that China is getting. They watch the 
elections. They watch the speeches of losing candidates and are 
amazed that people of wealth and privilege are willing to 
concede defeat and step away from power. They visit in greater 
numbers through tourism. And so they are seeing an awful lot, 
and I cannot help but to think that it is impacting them.
    That said, what we see in China is I think a bit of a 
heavier hand on the Internet, on religious freedom, on human 
rights organizations. So I believe just sort of intuitively 
that the lessons are sinking in and are impacting people in 
China, but it has certainly yet to show up in how the 
authorities in Beijing are governing the PRC.
    Senator Cardin. I am going to turn the gavel over to 
Senator Rubio. As I indicated earlier, we have a markup going 
on in one of the committees I serve on. Senator Rubio, take as 
much time as you want.
    Senator Rubio [presiding]. Thank you.
    And I too have to go to a meeting, but there are a couple 
important questions that I wanted to ask you and Senator Cardin 
just outlined this. I wanted to get back to this topic of the 
Six Assurances under the Reagan administration because I think 
to be clear and unequivocal with regard to that is critically 
important in terms of the message that we send and, quite 
frankly, the balance in the region.
    I asked that question of Secretary Russel a moment ago. You 
were both in the audience and you heard his answer. And I 
wanted to get your impressions after hearing--I tried multiple 
different ways to get someone from the administration to tell 
me that the Six Assurances remain the cornerstone of our policy 
and that we still stand by those assurances. I do not think I 
got that, and I wanted your interpretation of the answer that 
we got with regard to that question.
    Mr. Schriver. I was surprised that it was not a more direct 

response and that it could not be made in the affirmative. 
Certainly when we were in Government, we would have said, 
absolutely yes, and did on many occasions. So I hope the 
administration has the opportunity to clarify that because I 
think the signal that it sends is a reassuring one if our 
friends in Taiwan know that they still apply in their totality 
as your question asked.
    Senator Rubio. Mr. Denmark, did you have a comment?
    Mr. Denmark. Thank you, Senator.
    I think the Six Assurances, as you said, are incredibly 
important in our relationship. I certainly cannot speak for the 
administration. It is my sense that United States policy 
regarding Taiwan, including the Six Assurances, have not 
changed. There were some public comments from other 
administration officials a few weeks ago on this topic, 
specifically after the Chinese Foreign Ministry misreported 
interactions between President Obama and President Xi which 
stated explicitly that United States policy toward Taiwan had 
not changed. And I assume that that is still the guiding 
remarks from the administration.
    Senator Rubio. I would hope that that is the case. I again 
tried on multiple occasions to get a direct answer, a yes or 
no, yes, they remain part of our strategy. And it seems like 
they are elements of our strategy that might inform us 
according to the answer that I got. And I hope we can bring 
some clarity to it because I was surprised by the answer 
myself, and I did not think it was a hard question. I just 
wanted to get it in the record, and unfortunately, we did not 
get the answer we want, which I think actually is 
counterproductive.
    In fact, I think that in China that answer that was given 
here today could potentially be misinterpreted as, in fact, an 
opening of some sort for a change in the United States posture 
toward Taiwan. I am very concerned about the answer that we 
got, and I hope that we can bring some clarity to it over the 
next few days. And I intend to ask that question as well in 
writing of the Secretary of State to get clear assurances that 
that remains a cornerstone of our policy.
    I wanted to ask one more question. Mr. Denmark, this ties 
to your statement, although I would love to hear from both of 
you about it. You talked a little bit about the relations 
between Taipei and Beijing are generally very positive due to 
policy decisions of the leadership of both sides that, since 
2008, decided to reduce the tensions and focus on building 
economic and cultural ties. And you say in your written 
statement that Beijing initially approved of this approach with 
the expectation that improving cross-strait economic and 
cultural ties would gradually pull Taiwan more closely to the 
PRC's orbit, thus enabling eventual unification.
    Yet trends so far have not borne this out given, for 
example, even the events that are going on today with student 
protests regarding potential increased links with China.
    Given that assessment, what impact do both of you think 
that now has on Chinese thinking? In essence, they have allowed 
this little opening to occur under the hopes that this would 
slowly but surely bring Taiwan closer to them until ultimately 
there would be a mutually agreed-to unification. Now they are 
seeing this sort of dynamic internally where people are saying 
we do not want to be closer to China. What impact could that 
have in your mind on how China approaches this relationship 
moving forward?
    Mr. Denmark. Thank you, Senator. It is a fascinating set of 
issues, a very difficult set of questions.
    Overall, my sense is that Beijing remains committed to its 
approach in terms of engaging Taiwan, although with all due 
caveats of anybody's ability outside of Zhongnanhai in Beijing 
to read the thinking and feelings of Chinese senior leadership. 
So with that as a caveat, my sense is that they remain 
committed to engagement because they do see benefits--
political, economic, and strategic benefits--for the 
engagement, but also the counterpart, the alternatives to that 
strategy remain very unclear in terms of if they would be more 
beneficial to China's overall strategy.
    My sense, talking to scholars in China and from what I have 
read coming out of China, is that there is a lot of focus on 
the results of the election in 2016, that there is a lot of 
concern in China that if the DPP were to win power back, that 
Taiwan may revert back to the policies of Chen Shui-bian.
    My sense is that the DPP is actually moving beyond that 
approach, that that would probably not happen again if the DPP 
were to win the next election. The DPP is actually going 
through a process of internally thinking about its own cross-
strait policy, its own approach to these issues, and is working 
on a new formulation. And my sense is that Beijing, should the 
DPP win, would try to find some way to continue to work with 
them to continue this form of engagement.
    As Randy pointed out earlier, I think it is very important 
that there have been reports of the mainland attempting to 
influence elections, and I suspect that this would probably 
continue because they see the importance of the election to 
Taiwan's behavior and how, post-2016, the mainland may 
calculate its options, may calculate the continued 
attractiveness of its engagement strategy I think is one too 
far for anybody to predict, especially outside of Zhongnanhai, 
but also the variables, the calculations are just far too 
complicated at this point to see really how Beijing may react 
to that scenario.
    Mr. Schriver. Thank you, Senator.
    I think China's policies have not changed and probably will 
not for the foreseeable future, but with the trends in Taiwan, 
particularly the public polling about how people feel about 
their eventual status after the current status quo, one wonders 
does Beijing have unlimited patience. I suspect they do not 
because their ultimate objective appears to be getting further 
away. Their ultimate objective is clear. They want unification 
or what they call reunification. The polling suggests that goal 
is getting further away, which is why I think our support for 
Taiwan's security needs remain very relevant even in this era 
when there are improvements in the cross-strait political and 
economic relationship. If Beijing understands its policies are 
not bringing it closer to its ultimate objective, then the 
option of the use of force could become more attractive 
particularly if we are not doing our part in helping Taiwan 
with its defense needs.
    Senator Rubio. First of all, I appreciate both of you being 
here today and thank you for your testimony and thank you for 
your time.
    That is exactly our concern, that any sort of weakening or 
questioning or equivocation on the part of the United States 
stance toward Taiwan, in fact invite miscalculation or 
recalculation on the part of the Chinese. And if people think 
that what is happening in Crimea is complicated, they have no 
idea what any sort of territorial dispute in this part of the 
world would look like. It would be incredibly destabilizing. It 
would have an immediate impact on the way Japan and South Korea 
and other nations portray themselves.
    And I think the two nations right now who feel the most 
immediately threatened by the aggressiveness of the Chinese 
Government--one is the Philippines because they simply do not 
have the capability, and the other is Taiwan. I think that any 
sort of weakening or any sort of confusion about where the 
United States stands and our commitment to this relationship 
invite potential aggressiveness and aggression in a way that 
could end up finding us in a conflict that is much more 
complicated and in fact much more dangerous than even what we 
are seeing around the world today.
    Again, I thank you both for being here and for your time 
and for your testimony.
    The record for this hearing will remain open until the 
close of business Friday. Members and others will be allowed to 
submit stuff for the record or ask questions. And I would just 
ask for your cooperation that if you receive any questions 
between now and Friday, that you would answer them for the 
committee promptly so we can include it in our record.
    And with that, the committee stands adjourned.
    [Whereupon, at 11:22 a.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


    Responses of Assistant Secretary Daniel R. Russel to Questions 
                    Submitted by Senator Marco Rubio

    Question. Is the administration committed to President Reagan's so-
called ``Six Assurances'' to Taiwan?

    Answer. The United States remains firmly committed to the U.S. one-
China policy, the Three Joint Communiques, and our responsibilities 
under the Taiwan Relations Act. The so-called ``Six Assurances'' also 
are an integral part of our overall approach to Taiwan. Taken together, 
these commitments and assurances form the foundation of our relations 
with Taiwan.
    The United States has long maintained that cross-strait differences 
are matters to be resolved peacefully, without the threat or use of 
force, and should be acceptable to the people on both sides of the 
Taiwan Strait. There is no change in our position. Our commitments and 
assurances to Taiwan are firm and long-standing.

    Question. Do you expect a resumption of U.S. Cabinet-level visits 
to Taiwan this year? If so, which ones and when? If not, why?

    Answer. U.S. Environmental Protection Agency (EPA) Administrator 
Gina McCarthy traveled to Taipei April 13-15, 2014, to highlight 20 
years of environmental cooperation between the United States and the 
Taiwan authorities and promote environmental education. The EPA 
Administrator holds a Cabinet-rank position.

    Question. As Taiwan is likely to retire some of its older fighter 
aircraft in the next 5 to 10 years, do you believe that sales of 
advanced aircraft and other weapon systems are an important, next step 
in this commitment?

    Answer. The United States is firmly committed to the policy 
reflected in the Taiwan Relations Act enacted 35 years ago, which forms 
the basis of U.S. security cooperation with Taiwan. The TRA declares 
that it is U.S. policy to provide arms to Taiwan of a defensive 
character and that peace and stability in that area of the world are in 
the United States interest. The United States one-China policy, based 
on the Three Joint Communiques and the Taiwan Relations Act, has been 
consistent for the past 35 years, including six consecutive U.S. 
Presidencies.
    We have a robust dialogue with the Taiwan authorities focused on 
military preparedness, threat perceptions and means to deter perceived 
threats.
    The President and the Congress determine the nature and quantity of 
defense articles and services to sell to Taiwan-based solely upon their 
judgment of the needs of Taiwan. The volume of our arms sales to Taiwan 
is substantial. Consistent with our one-China policy, the Obama 
administration has notified Congress of its intent to sell Taiwan over 
$12 billion worth of new defense articles and services. Such sales 
support both our commitments to Taiwan and our interest in maintaining 
stability across the Taiwan Strait and in the region.
    Signed contracts include an extensive retrofit and modernization of 
Taiwan's 
F-16 fleet, and the sale of Apache attack and Blackhawk transport 
helicopters, Patriot PAC-3 Air and Missile Defense Batteries, P-3C long 
range ocean surveillance and antisubmarine aircraft, Harpoon antiship 
missiles, Osprey-class coastal mine hunters, and a variety of other 
systems, training, upgrades, and advanced weapons and equipment.
    We support Taiwan's efforts to develop innovative and asymmetric 
capabilities to deter coercion or intimidation, and we encourage Taiwan 
to increase its defense budget to a level commensurate with the 
security challenges it confronts. We do not comment on pending or 
potential arms sale requests.

    Question. In 2001, The U.S. Government pledged to support Taiwan in 
its acquisition of diesel electric submarines. Today, it appears more 
and more likely that Taiwan will pursue a domestic submarine program 
with advice and support from foreign defense industry experts.

   Would the administration support U.S. industry working with 
        Taiwan on an indigenous program?
   Is there any reason to think U.S. companies would be denied 
        opportunities to support Taiwan's submarine program?

    Answer. We do not comment on pending or potential arms sale 
requests.
    The U.S. decision about diesel submarines is still under 
consideration. No decision has been made.

    Question. Defense News recently reported that, despite the 
cancellation of the combat avionics programmed extension suite (CAPES), 
Taiwan will be able to progress with radar upgrades for its fleet of F-
16s through savings in the contracting process. While this is good news 
for Taiwan in the short term, it is hard to believe that the long-terms 
costs for the radar and avionics won't spiral out of control without 
the additional 300 U.S. F-16's planned upgrades moving forward that 
would have kept supply chain and life-cycle costs low.

   What options are we providing our partner to ensure that we 
        are fulfilling our commitments under the Taiwan Relations Act?
   Does the Department of Defense support allies and partners 
        exploring competitions for these critical programs, to keep 
        costs down?

    Answer. The Taiwan Relations Act states that it is U.S. policy: 
``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 on 
Taiwan.''
    U.S. Foreign Military Sales regulations state that programs for our 
foreign partners, to include Taiwan, are treated as if the program is 
for a U.S. Military Service. Therefore, all options are explored to 
keep costs down. However, U.S. law prohibits the United States from 
losing any money on such sales programs.
    United States Air Force (USAF) funding for the CAPES program will 
continue through FY 2014. The USAF F-16 program office has determined 
that the lack of USAF participation beyond FY 2014 will not have a 
significant impact on the Taiwan program, and that any additional 
funding required and in commitments to this retrofit program can be 
covered in Taiwan's current Letter of Offer and Acceptance (LOA).
    The CAPES cancellation is expected to have no impact to the 
operational capability of Taiwan's Retrofit Program. Taiwan's F-16 
Retrofit Program continues to execute as planned in terms of 
performance, schedule and cost. While Taiwan will be solely responsible 
for funding the radar development for FY15 and beyond, no additional 
costs to Taiwan beyond the topline dollar figure in the LOA will be 
required.

    Question. There have been suggestions that the easing of tensions 
between Taiwan and China has allowed China's People's Liberation Army 
(PLA) to concentrate on other contingencies such as the East China Sea 
and the South China Sea--and that increasingly a Taiwan scenario is 
less and less a driver for PLA modernization.

   Do you agree with this view?
   Is Taiwan still central to the PLA modernization goals?

    Answer. We continue to carefully monitor China's military 
developments and encourage China to exhibit greater transparency with 
respect to its capabilities and intentions. In the absence of greater 
transparency, it is difficult to understand the motivations and goals 
of the People's Liberation Army (PLA), in particular, China's military 
leaders have not explained what scenarios are current within the PLA's 
contingency planning. We encourage China to use its military 
capabilities in a manner conducive to the maintenance of peace and 
stability in the Asia-Pacific region.
    We urge China to continue its constructive dialogue with the 
authorities on Taiwan, which has led to significant improvements in the 
cross-strait relationship. We welcome the steps authorities on both 
sides of the Taiwan Strait have taken to reduce tensions and improve 
relations. However, China has never renounced the use of force against 
Taiwan and its military deployments across the strait from Taiwan 
continue to produce tension and uncertainty.
    We will continue to encourage China to be transparent about its 
military spending and modernization. As part of that effort, we support 
the continued development of military-to-military relations as a key 
component of the U.S.-China bilateral relationship, characterized by 
sustained and substantive dialogue, a commitment to risk reduction, and 
practical, concrete cooperation in areas of mutual interest.

    Question. What is the administration's view on inviting Taiwan to 
join the Trans-Pacific Partnership negotiations?

    Answer. We welcome Taiwan's interest in the Trans-Pacific 
Partnership (TPP), and we note Taiwan's ongoing efforts to assess its 
readiness to take on the TPP's ambitious commitments. The TPP is open 
to regional economies that can demonstrate this readiness and gain 
consensus support of the current TPP members for them to join. Right 
now, the original 12 TPP members are focused on concluding the 
negotiations of the TPP agreement.
    In the near term, consultations under the Trade and Investment 
Framework Agreement (TIFA) provide a substantive opportunity for Taiwan 
to resolve existing U.S. trade and investment concerns, demonstrate its 
preparations to take on new trade commitments, and set itself on a path 
of liberalization of its economic regime.

    Question. What steps will the administration take to ensure that 
the United States does not interfere in the internal democratic process 
in Taiwan in the runup to the 2016 Presidential elections, especially 
given the unfortunate leak to the Financial Times in 2012 that implied 
that the United States favored one Presidential candidate over the 
other?

    Answer. Free and fair elections are essential to a healthy 
democracy. As in the past, we will refrain from any action likely to be 
perceived as showing favoritism among candidates for elected office on 
Taiwan. Respect for democracy and the practice of democratic elections 
are among the treasured values that the people of the United States 
share with the people on Taiwan. Through American Institute in Taiwan 
(AIT) offices in Taipei, Kaohsiung, and Washington, we will reach out 
to all political parties in Taiwan to learn about candidates and the 
parties' and candidates' prospective policies, conducting such outreach 
in a manner consistent with the unofficial nature of our relations with 
the authorities and people on Taiwan.
                                 ______
                                 

     Response of Assistant Secretary Daniel R. Russel to Question 
                   Submitted by Senator John Barrasso

    Question. During your confirmation hearing, I asked you to commit 
to advocating for the elimination of trade barriers for soda ash and 
other important U.S. industries in the international marketplace.
    In response to my question, you explained, ``If confirmed as 
Assistant Secretary, I will prioritize the East Asian and Pacific (EAP) 
Bureau's promotion of U.S. exports and the facilitation of U.S 
industries' participation in international markets.''
    In addition, you indicated that you were aware that some countries 
have taken actions against the importation of soda ash.
    You responded, ``I will also advocate strongly for U.S. firms and 
industries, encouraging our trading partners' adherence to their 
international trade obligations in providing nondiscriminatory market 
access for our exporters, including those in the soda ash industry.''

   (1) How have you strongly advocated for market access for 
        U.S. exporters in the soda ash industry?
   (2) What specific actions have you taken to address 
        Taiwan's 3.5 percent tariff on imported soda ash?
   (3) What specific actions have you taken to address China's 
        reinstituted 9 percent value added tax (VAT) rebate for soda 
        ash exporters?
   (4) What specific actions have you taken to address Japan's 
        3.3 percent tariff on natural soda ash imports?

    Answer. The State Department's Bureau of East Asian and Pacific 
Affairs is working closely with the office of the United States Trade 
Representative (USTR) to help secure important new market 
opportunities, including soda ash sales, for U.S. exporters.
    On Taiwan, the United States will continue to engage with Taiwan 
authorities to support efforts by U.S. exporters and Taiwan importers 
to petition Taiwan to reduce its soda ash duties, as appropriate.
    Regarding China, we have used bilateral fora--such as the Joint 
Commission on Commerce and Trade and the Strategic and Economic 
Dialogue--to encourage China to open its markets and reduce distorting 
practices such as tariffs, advantageous provisions for its state-owned 
enterprises, direct export subsidies, and VAT reimbursements for 
exporters such as those applied to soda ash exported from China.
    In terms of Japan, the Trans-Pacific Partnership (TPP) will be a 
valuable tool in reducing Japan's tariffs on imports such as soda ash. 
Japan's participation in the TPP negotiations provides an important 
opportunity for many U.S. exporters--including U.S. soda ash 
exporters--to expand their access to the Japanese market.

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