[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
RENEWING ASSURANCES:
STRENGTHENING U.S.-TAIWAN TIES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ASIA AND THE PACIFIC
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
JUNE 15, 2017
__________
Serial No. 115-43
__________
Printed for the use of the Committee on Foreign Affairs
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas KAREN BASS, California
DARRELL E. ISSA, California WILLIAM R. KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID N. CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina AMI BERA, California
MO BROOKS, Alabama LOIS FRANKEL, Florida
PAUL COOK, California TULSI GABBARD, Hawaii
SCOTT PERRY, Pennsylvania JOAQUIN CASTRO, Texas
RON DeSANTIS, Florida ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina BRENDAN F. BOYLE, Pennsylvania
TED S. YOHO, Florida DINA TITUS, Nevada
ADAM KINZINGER, Illinois NORMA J. TORRES, California
LEE M. ZELDIN, New York BRADLEY SCOTT SCHNEIDER, Illinois
DANIEL M. DONOVAN, Jr., New York THOMAS R. SUOZZI, New York
F. JAMES SENSENBRENNER, Jr., ADRIANO ESPAILLAT, New York
Wisconsin TED LIEU, California
ANN WAGNER, Missouri
BRIAN J. MAST, Florida
FRANCIS ROONEY, Florida
BRIAN K. FITZPATRICK, Pennsylvania
THOMAS A. GARRETT, Jr., Virginia
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
------
Subcommittee on Asia and the Pacific
TED S. YOHO, Florida, Chairman
DANA ROHRABACHER, California BRAD SHERMAN, California
STEVE CHABOT, Ohio AMI BERA, California
TOM MARINO, Pennsylvania DINA TITUS, Nevada
MO BROOKS, Alabama GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania THEODORE E. DEUTCH, Florida
ADAM KINZINGER, Illinois TULSI GABBARD, Hawaii
ANN WAGNER, Missouri
C O N T E N T S
----------
Page
WITNESSES
Mr. Rupert J. Hammond-Chambers, president, U.S.-Taiwan Business
Council........................................................ 7
Mr. Dan Blumenthal, director of Asian studies and resident
fellow, American Enterprise Institute.......................... 24
Mr. Russell Hsiao, executive director, Global Taiwan Institute... 30
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Ted S. Yoho, a Representative in Congress from the
State of Florida, and chairman, Subcommittee on Asia and the
Pacific: Prepared statement.................................... 3
Mr. Rupert J. Hammond-Chambers: Prepared statement............... 10
Mr. Dan Blumenthal: Prepared statement........................... 26
Mr. Russell Hsiao: Prepared statement............................ 33
APPENDIX
Hearing notice................................................... 60
Hearing minutes.................................................. 61
Written responses from Mr. Rupert J. Hammond-Chambers and Mr.
Russell Hsiao to questions submitted for the record by the
Honorable Ann Wagner, a Representative in Congress from the
State of Missouri.............................................. 62
RENEWING ASSURANCES: STRENGTHENING U.S.-TAIWAN TIES
----------
THURSDAY, JUNE 15, 2017
House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:45 p.m., in
room 2200 Rayburn House Office Building, Hon. Ted Yoho
(chairman of the subcommittee) presiding.
Mr. Yoho. The subcommittee will come to order. For those of
you that were present and you saw Republicans and Democrats on
both sides, that wasn't dysfunction. That was to show you the
Foreign Affairs Committee is very well united and that was done
purposely, right?
The subcommittee will come to order. Members present will
be permitted to submit written statements to be included in the
official hearing record. Without objection, the hearing record
will remain open for 5 calendar days to allow statements,
questions, and extraneous material for the record subject to
length, limitations, and the rules.
Good afternoon. Taiwan has received significant attention
in Congress since last year--excuse me--has not received
significant attention in Congress since last year. At that
time, the focus was on the campaign and later the victory of
President Tsai Ing-wen, and the mood was optimistic and
celebratory.
Since that time, unfortunately, Taiwan's international
outlook has become increasingly cloudy. Just this week, Panama
severed diplomatic ties with Taiwan and recognized the People's
Republic of China, a gut-wrenching loss for Taiwan's dwindling
diplomatic recognition. Last month, the PRC blocked Taiwan's
delegation from attending the World Health Assembly in Geneva,
the annual gathering of the World Health Organization, despite
the fact that Taiwan has regularly attended the summit and has
been an international force for good in the health space. It is
not only Taiwan's loss, but the world's as diseases know no
borders.
Since President Tsai's election, the PRC has escalated a
global campaign to squeeze Taiwan's international recognition
out of existence. Taiwan's security situation is being
challenged alongside its diplomatic presence. The PRC has
undertaken unprecedented military provocations around Taiwan in
recent months. In November of last year, China flew aircraft
around the perimeter of Taiwan's Air Defense Identification
Zone for the first time. In January, the PRC sailed the
Liaoning, its first aircraft carrier, through the Taiwan
Straits.
These actions, the PRC's increasing global military
ambition, and its belligerence in the East and South China Seas
have contributed to an environment of instability. However, the
United States has not completed an arms sale to Taiwan since
2015, though the Taiwan Relations Act requires the United
States to offer the necessary equipment for Taiwan's self-
defenses capabilities.
Successive administrations have shown a lack of resolve in
executing our defense commitments to Taiwan, emboldening the
PRC which remains uncommitted to a peaceful resolution of
Taiwan's status. Our most recent arms sales was in 2015, and
the prior sales were years apart. Since 2008, sales have been
delayed so that they can be bundled together and their timing
can be manipulated. The arms sales process has become a
political calculation designed to minimize friction with the
PRC. Not only does this concede to Beijing a degree of
influence over our arms sales process, it seems to contravene
President Reagan's assurance that the PRC would not be
consulted on arms sales to Taiwan.
Economic pressure on Taiwan is increasing as well. Taiwan
has long been a developed, high-tech economy, and is especially
dependent on international trade for its prosperity and
economic growth. But the PRC's massive and growing economic
clout grants it the ability to exclude Taiwan from trade
agreements and to use economic pressure to change other
nations' policies toward Taiwan.
It is astonishing to think that the backwards, isolated PRC
of 1979 could someday bring this level of diplomatic, security,
and economic pressure to bear. This geopolitical reality that
was held when we established our One China Policy has changed.
The People's Republic of China is no longer the third party to
a great power competition between the United States and the
Soviet Union. It has become a challenger, seeking to attain
great power status for itself by overturning a peaceful
unipolar order.
Despite this, our One China Policy has remained virtually
unchanged since 1979. It is important for Congress to consider
whether our policies are still serving us well and how we might
improve them. In particular, renewing our assurances to Taiwan
to continue and steadfast U.S. support is especially important.
We have convened this hearing today to work toward these
goals, and I thank the witnesses and I thank my colleagues for
joining me today to help strengthen U.S.-Taiwan ties. And,
without objection, the witness' written statement will be
entered into the hearing, and I now turn to the ranking member
for any remarks he may have.
[The prepared statement of Mr. Yoho follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
----------
Mr. Sherman. Thank you, Mr. Chairman, for holding this
hearing. I was impressed when I met President Tsai when she was
in the opposition when we met in Taipei in 2015, and even more
impressed when she visited the United States in 2016 and came
to my district. Now she is the only female President in the
region.
The United States has a strong interest in supporting the
people of Taiwan and those interests are enshrined in the
Taiwan Relations Act and we need to abide by the six
assurances. Our clear message should be that the United States
does believe in the power of dialogue, but we unequivocally
support the right of the people of Taiwan to determine their
own government through elections.
Taiwan should not be used as a bargaining chip. Our
relationships with China are important, their dealings with
North Korea are important, but we need to stand by the Taiwan
Relations Act for many reasons, including that Taiwan is a
democratic partner.
Freedom House recently upgraded its appraisal of Taiwan's
democracy from 1.5 up to 1, which is their highest rating,
noting not only the success of the 2016 elections, but also
increased freedom in the area of press and academic freedom.
Taiwan respects human rights, LGBT rights, et cetera. Taiwan is
a partner of ours in intelligence and in cybersecurity, and it
is miles ahead of China when it comes to protecting
intellectual property.
The Taiwan Travel Act is important. We should be upgrading,
certainly not downgrading, our relationship with Taiwan. Taiwan
is a country of 23 million people. At many times we have sold
them billions of dollars in arms, but, surprisingly, in spite
of that we do not allow Taiwanese officials to travel to the
United States in any official capacity. Instead, we have this
ruse where they can only come if they are refueling to go to
some Latin American country of far less interest to the
Taiwanese officials than the United States is, and stay in our
country for a day or two during that refueling process.
This is incredibly inconvenient to my colleagues. It is,
however, very convenient for me since the tradition of not only
this but prior Taiwanese Presidents is that when they land in
Los Angeles they come immediately to a Taiwanese hotel in my
district. So I am the only member perhaps that should oppose
the Taiwan Travel Act, but I do indeed support it. That is why
I joined with our colleague, Steve Chabot, introducing it and
it of course expresses the sense of Congress that it should be
U.S. policy to have governmental leaders of Taiwan free to
visit the United States.
The U.S. needs to be an advocate for Taiwanese
participation in international relations whether that be
Interpol, whether that be the World Health Assembly. China's
efforts to degrade Taiwan's participation in these
international organizations is not just outrageous for the 23
million people who should be represented in these
organizations, it is bad for the entire world. The only
beneficiaries are diseases and international criminals.
Taiwan is part of the world and its involvement in these
organizations are necessary for Interpol, the World Health
Assembly, the WHO to achieve its objectives, their various
objectives. As to Lee Ming-Che, who has been arrested in China
for so-called activities endangering national security, she has
not received visitation rights. His condition is questionable
and this is unacceptable.
We look forward to Taiwan diversifying its trade and
economic relationships, not only deepening them with the United
States but also other countries so it is not dependent on
China. We note the new Southbound Policy to engage with South
and Southeast Asia. As far as our own relationship with Taiwan,
we are talking about $85 billion in trade. We do have a trade
deficit but it is a modest one given the size of the
relationship. That is contrasted with the highly lopsided,
almost metastasized relationship we have with China, and I look
forward to seeing what we can do to even, to make that trade
deficit even smaller. With that I yield back.
Mr. Yoho. Thank you, Mr. Sherman. And we had the distinct
pleasure, she stopped in Miami. President Tsai stopped there to
have dinner with us as she was going to refuel with you, so it
was a great moment.
Mr. Sherman. Is that your opposition to the act?
Mr. Yoho. That was bipartisanship.
Mr. Sherman. Bipartisan opposition.
Mr. Yoho. We have been joined by the chairman of the full
committee, Mr. Royce, for a statement.
Mr. Royce. Well, thank you, Chairman Yoho. I appreciate
that and let me just mention also that I appreciate you having
this hearing. I appreciate the markup that preceded this on the
Taiwan Travel Act. I am also a cosponsor of that legislation. I
think by encouraging more visits between the two governments,
including at the highest levels, we are going to further
strengthen the critical U.S.-Taiwan partnership. I think we
share certain commitments--one of them is democracy, another is
human rights, the rule of law--and it is really these values
that serve as the bedrock of this partnership.
And as these members have accompanied me, I will just
mention also that every year I lead a large bipartisan
delegation to Taiwan to highlight the broad and steadfast
relationship that the U.S. has with Taiwan, and this was made
possible by the Taiwan Relations Act of 1979. Taiwan is facing
new challenges as a result of changes in cross-strait and
global dynamics as well, and it is more important than ever to
reassure Taiwan of the U.S. commitment to the relationship.
Unfortunately, just this week, under pressure and with
inducements from Beijing, Panama broke off decades of
diplomatic relations with Taiwan and switched diplomatic
recognition to the People's Republic of China. This decision
from Panamanian President Varela came after Taiwan has,
according to media reports, provided $20 million per year in
foreign aid to Panama, on average. I would hope that Panama,
and all nations, would act to include Taiwan in international
organizations.
I found it particularly concerning that Taiwan was excluded
from this year's World Health Assembly, especially when we
consider that wherever we go internationally after a disaster
we see Taiwanese physicians, doctors, and civil society show up
to assist. Taiwan has contributed to international efforts
obviously to improve global health with financial and technical
assistance, and the Ebola case would just be one of many, many
that have occurred. It is for this reason that Taiwan has been
invited to the World Health Assembly for the past 8 years.
Taiwan's exclusion this year only hurts global health, as our
colleague Congressman Brad Sherman has said. There should have
been no question about Taiwan's participation.
I am a strong advocate for strengthening Taiwan's economic
links to the United States and across Asia. Taiwan, as we all
know, is the tenth largest goods trading partner, and the
seventh largest market for our farmers and ranchers. Taiwanese
companies invest substantially here. Taiwanese companies have
pledged $34 billion in investments into the U.S. in 2017, and
with our shared values of democracy and open markets it is
vital that we continue to grow this economic partnership.
Chairman Yoho understands this and has taken the lead on this
issue by authoring legislation to encourage a deeper trade
relationship between the U.S. and Taiwan, and I am a cosponsor
and supporter of those efforts.
Finally, one of the key provisions of the Taiwan Relations
Act was the commitment from the United States to provide Taiwan
with defensive arms. I remain concerned about successive
administrations' delays in our arms sales notification for
Taiwan. I think this needlessly draws out the arms sales
process. I hope to see regular notifications in the future and
I look forward to the announcement of new sales this year.
Again I thank Chairman Yoho, and I am looking forward to
the witness' testimony.
Mr. Yoho. Chairman Royce, thank you for being here. It is
an honor to have you here. At this moment we are thankful today
to be joined by Mr. Rupert Hammond-Chambers.
Mr. Chabot, did you have something you want to add?
Mr. Chabot. If the chair, because I am more than happy----
Mr. Yoho. No, go ahead, my oversight.
Mr. Chabot. I was just going to say I will associate myself
with the chairman's comments and leave it there so that we can
move on to the witnesses.
Mr. Yoho. Thank you, sir. We are joined today by Mr. Rupert
Hammond-Chambers, president of the U.S.-Taiwan Business
Council; Mr. Dan Blumenthal, director of the Asian Studies and
a resident fellow at the American Enterprise Institute; and Mr.
Russell Hsiao, executive director of the Global Taiwan
Institute. We thank the panel for joining us today and share
their experience and expertise and we look forward to that. You
will have approximately 5 minutes to give your opening
statement. The green light will come on, and then don't forget
to hit the button to turn your mike on. Mr. Chambers, we will
start with you. Thank you.
STATEMENT OF MR. RUPERT J. HAMMOND-CHAMBERS, PRESIDENT, U.S.-
TAIWAN BUSINESS COUNCIL
Mr. Hammond-Chambers. Thank you, Mr. Chairman and Mr.
Chairman, members of the committee, it is an honor to be with
you today. Taiwan remains a critical global partner for the
United States. As noted, it is in fact our tenth largest
trading partner which is extraordinary when you consider the
island has very little in the way of natural resources and 23
million people living on a relatively small island. The economy
surpasses $447 billion in annual GDP and its currency reserves
now surpass $440 billion.
By any measure, Taiwan is a poster-child example of the
success of post-World War II U.S. foreign policy and its
support for the building of flourishing free market
democracies. Taiwan is worthy of significant investment by the
United States, not just to support the island but as a
representation of America's sustained commitment to the region.
Since 2005, however, the U.S.-Taiwan relationship has seen
significant distress. And again, as noted successive
administrations have downgraded the bar of support for the
island in the face of an increasingly aggressive and hegemonic
People's Republic of China. The PRC campaign to undermine
support for Taiwan continues apace, with a focus on linking
China's behavior on non-Taiwan matters, such as North Korea, to
the willingness of the U.S. to curb its support for Taiwan in
areas critical to Taiwan's ongoing peace and security such as
arms sales and expanded trade relations.
As the PRC's economic and military power grows, the United
States is increasingly challenged to assess whether it is
willing to maintain its ongoing interest with Taiwan or if it
will abdicate that leadership role in the hopes of moderating
China's behavior in other areas of national interest. The U.S.-
Taiwan Business Council believes that U.S. trade with Taiwan is
mutually beneficial, despite the consistent trade deficit in
goods in favor of Taiwan that has persisted over the last 30
years.
Taiwan plays a tremendously important role both as a market
for U.S.-made goods, as a manufacturing and innovation partner
for U.S. businesses. You only need to look at your iPhone as an
example of the importance and day-to-day partnership that the
U.S. has with Taiwan. Goods and services trade with Taiwan
along with extensive investments by Taiwan businesses in the
U.S. promotes economic growth here and supports U.S. jobs
across the country and in many industries. The U.S.-Taiwan
Business Council also believes that Taiwan is a well-placed
partner with this administration and this Congress in exploring
and partnering on new bilateral trade initiatives including the
possibility of signing a fair trade agreement.
The Taiwan Relations Act clearly states that the U.S. will
remain obligated to provide Taiwan with arms of a defensive
character as noted already in formal comments.
The U.S. is Taiwan's primary military partner and retains a
close material relationship with the island that covers not
only arms sales, but also cooperation on cyber intelligence,
training, maintenance, and logistics. Past U.S. policy,
particularly under the Obama administration, focused
significant efforts on the expansion of training and exchanges.
While it goes mostly unseen, it does have a material impact on
the island's defense.
In instances where U.S. commitments to Taiwan's defense are
discreetly carried out, there has been stability and ingenuity
in expanding cooperation. However, where the commitment is
overt, such as with arms sales under the Taiwan Relations Act,
there has been significant regression particularly since 2011.
As of June 15, 2017, we have seen only a single sale of arms to
Taiwan, in 2015, since as far back as September the 21, 2011. A
closer inspection of the trend lines shows a material U.S.
commitment in free fall. The Trump administration has been
handed a challenge to assess and deliver on a new range of
commitments for Taiwan's national defense such as new fighters
and diesel-electric submarines.
U.S. strategic interests in the Asia-Pacific remain
inexorably intertwined with our support for Taiwan's economy
and national security. However, this aspirational goal is being
undermined by an orchestrated and coercive PRC policy to weaken
support for Taiwan and to restrict Taiwan's self-determination.
If the U.S. continues to rhetorically say the right things
but materially fails to act, then Taiwan risks being further
marginalized globally and will be forced to interact with China
from a weak position. This is inherently destabilizing. The
present trajectory could lead to a crisis in the Taiwan Strait
triggered by China's determination that the overall trilateral
balance has tipped squarely in its favor and that China would
then act accordingly. Thank you very much.
[The prepared statement of Mr. Hammond-Chambers follows:]
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----------
Mr. Yoho. Thank you, Mr. Chambers.
Mr. Blumenthal?
STATEMENT OF MR. DAN BLUMENTHAL, DIRECTOR OF ASIAN STUDIES AND
RESIDENT FELLOW, AMERICAN ENTERPRISE INSTITUTE
Mr. Blumenthal. Thank you very much, Mr. Chairman and Mr.
Ranking Member. Thank you for inviting me to testify on this
very important issue. I termed my testimony, Taiwan as Partner
and not Taiwan as Problem because I think what is missing in
our policy toward Taiwan is reality and the truth. The reality
is it is in the 21st century versus 1971 and 1972.
The reality is that Taiwan is a thriving democracy, wishing
nothing more than to develop peacefully into more of an
innovative technological powerhouse. It makes no claim on
Chinese territory, it has abandoned the Chinese civil war long
ago, and it poses absolutely no threat to the Chinese people.
To the contrary, it has played a great role in China's economic
boom.
And let's be very clear about what the PRC is doing. It is
making an imperial claim on Taiwan. When we acquiesced in
China's One China Policy--they call it Principle--we basically
said that we are acquiescing in helping China reattain all of
its lost imperial territories. They sit on Xinjiang. They sit
on Tibet. They are having more encroachments on Hong Kong. The
last remaining imperial territory left is Taiwan. Now there may
have been good reason to do so back then, but let's be very
clear this is an imperial claim. The Chinese may say otherwise.
They may say there are issues regarding the civil war, but we
are, in essence, acquiescing to Chinese imperialism.
This is surely an oddity in today's international
relations. In the 21st century we certainly don't see the
United States or other countries acquiescing on imperial
ambitions. Obviously to the Congress' great credit, one of the
finest things it did was pass the Taiwan Relations Act at the
time and adhere to it and make sure the executive branch
adhered to it so that Taiwan wouldn't become completely
swallowed up.
A little history if you will indulge me. Back then China
badly needed an opening with us. They had the Soviet Union on
their border. They wanted to attack Vietnam. I am not so sure
what we got out of that deal. That is for the historians. But I
will ask this question. Are we still getting bad deals with
China? Has anything really changed? When things float up in the
foreign policy sphere about fourth communiques and so forth, we
have to ask ourselves have the three communiques served our
interests? Why in the world would we want a fourth?
We have to actually ask ourselves another question. Is
there any other bilateral relationship governed by joint
statements, communiques, and diplomatic snapshots of the moment
rather than by treaty or anything else? What force do
communiques have in diplomacy? They are a snapshot of the
geopolitical moment. That is history. We are stuck with what we
have today. We probably could have and should have gotten dual
recognition of Taiwan and China in the 1970s like we did with
Germany. Maybe we won't get it today, but there are still many
options that we have to keep increasing Taiwan's autonomy and
well-being.
Quickly, defense. We have all mentioned it. Taiwan could
absolutely do more on its defense budget. But I was a Bush
appointee during the $30 billion arms package to Taiwan. Taiwan
has bought every single item on that package that we offered to
them, besides the submarines, and that is because we have been
playing games with the submarines. They will buy. Their defense
budget will skyrocket if we make things on offer.
But we should go further than just cross-Strait relations.
Taiwan should be an integral part of our first island chain
defense strategy. It is a harder target than the Philippines.
If we sell the right things and engage in the right security
cooperation with Taiwan it will make it harder for China to
break out into the Pacific Ocean with impunity.
Let me skip trade, although it is very important. Let me
just say this in closing. It is the height of fantasy to think
that we can go forward with any building of Asian order without
Taiwan. Taiwan is a claimant in the South China Sea. Taiwan is
a more advanced economy than a lot of the TPP countries that
entered. In fact, from an economic viewpoint it would be easy
to do an FTA with Taiwan. The only thing holding us back is our
reluctance with China.
We can't just sit here and ignore the fact that Taiwan sits
in the middle, geostrategically, between Northeast and
Southeast Asia. We can't have a South China Sea policy without
Taiwan. And conversely, if Taiwan does fall into the hands of
China, it will badly impinge upon our security interest with
respect to the Japan alliance in the Pacific Ocean. So, Taiwan
is, in reality, a partner, a key partner, and there is a lot
more we can do to integrate it into the Asian order because the
reality is it is already part of it. Thank you.
[The prepared statement of Mr. Blumenthal follows:]
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----------
Mr. Yoho. Thank you, Mr. Blumenthal, for those informative
statements, and I look forward to getting into the questions.
Mr. Hsiao?
STATEMENT OF MR. RUSSELL HSIAO, EXECUTIVE DIRECTOR, GLOBAL
TAIWAN INSTITUTE
Mr. Hsiao. Thank you, Chairman Yoho and Ranking Member
Sherman, for inviting me to testify before this subcommittee.
This is truly an honor for me to be a part of this important
and timely proceeding with my copanelists whom I deeply
respect.
It has been over a year now since the subcommittee last
held a hearing on Taiwan. A lot has happened since then. I
would like to point out three clusters of developments for the
subcommittee's considerations. First, President Tsai Ing-wen's
historical election in January 2016 as the government's first
female President sets a positive standard for other democracies
worldwide.
In addition to electing a female head of government,
Taiwan's Supreme Court recently issued a landmark ruling that
invalidates a civil code provision prohibiting same-sex union.
This act further raises Taiwan's profile in the league of
progressive and liberal nations. According to the independent
watchdog organization Freedom House, which monitors freedom and
democracy worldwide, Taiwan ranked third most free in the Asia-
Pacific, only behind Australia and Japan. While no democracy is
perfect, democratization has had a moderating effect on
Taiwan's fractious politics, which is clearly illustrated in
the measured policies of the ruling government, and through the
opposition Nationalist Party's chairperson election last month.
On cross-Strait, political relations between Taipei and
Beijing has cooled as the PRC refuses to deal with the Tsai
administration unless she accepts the so-called 1992 Consensus.
While formal channels of communications between the PRC's
Taiwan Affairs Office and to Taiwan's Mainland Affairs Council
remains shut after Beijing froze dialogue back in June 2016,
functional channels for coordination between different
government agencies remain open. As a Chinese-speaking
democracy, Taiwan has a unique role to play in China's future,
but that role must not come at the expense of the freedom and
democracy that the people of Taiwan have fought for and now
enjoy.
The chilling case of the detained human rights activists,
Lee Ming-che, who has been in detention since March 19th,
throws into sharp relief the impact that China's non-democratic
system has for Taiwan and its people, and also for Hong Kong.
As the 2014 student-led protests in Taiwan and Hong Kong
illustrate, what happens in Taiwan has a demonstration effect
on Hong Kong, and what happens in Taiwan has a demonstration
effect on Taiwan.
Despite Taipei's measured approach to cross-Strait
relations, Beijing fired the first salvo that ignited cross-
Strait tensions only 1 month after Tsai Ing-wen was elected
President.
In February 2016, the PRC resumed diplomatic ties with
Gambia. December 2016, Sao Tome and Principe switched
diplomatic recognition. In January 2017, Nigeria announced that
it was demoting ties with Taiwan by forcing Taipei to move its
representative office from Abuja to Lagos. Panama's
announcement just Tuesday that it had switched diplomatic
recognition to PRC is the latest in a series of escalatory
steps in Beijing's enhanced pressure tactics against Taiwan
that include economic, military, and diplomatic coercion. It
was only a matter of time before Beijing pulled the trigger.
Taiwan's informal ties with countries like the United
States, India, Japan, Australia, and Singapore are now more
important than ever as Beijing squeezes Taiwan's international
and diplomatic space further. Specifically, more efforts need
to be made to upgrade Taiwan's ability to engage the
international community by including Taiwan in not only
bilateral, but also multilateral exchanges to offset Beijing's
coercive full-court press on Taiwan's international space.
As a strategic effort to rebalance its foreign relations
and economy, the Tsai government has reinvigorated a
longstanding policy to diversify its economic outreach which is
currently heavily concentrated on China to the growing markets
in the Indo-Pacific. Through an all-of-government approach,
Taiwan is attempting to forge closer economic links as well as
deepen the people-to-people ties with 18 countries in Southeast
Asia, South Asia, and Australasia. The new plan is also the
natural outgrowth of demographic trends on the island as more
immigrants come to the country and with more children born of
mixed marriages.
And just as the United States looked toward Asia in the
former administration's pivot to rebalance strategy, Taiwan is
also looking south to capitalize on the growing markets as well
as strategic importance of the region.
Against the backdrop of a growing military imbalance in the
Strait, Taiwan has currently embarked on ambitious measures to
strengthen its indigenous defense capabilities and industries.
Taipei just released a new military strategy through its QDR.
As a percentage of total government spending, Taiwan
currently spends up to 15 percent on defense and, in March,
Taiwan's minister of National Defense targeted for military
expenditures to rise to the proverbial 3 percent of GDP. In
this context, it is worth at least asking ourselves why in the
absence of a mutual defense treaty does the U.S. demand that
Taiwan spend an arbitrary 3 percent of its GDP on defense while
expecting less of our other allies and partners.
Second, we now have a new President of the United States,
an unorthodox President, who has not only shown that he will be
not held back by unnecessary diplomatic norms, he has also
demonstrated a willingness to question policy dogmas. As
President-elect, Trump made an important gesture by taking a
congratulatory phone call with the President of Taiwan. For a
conversation that lasted no more than 10 minutes and mainly
involved an exchange of niceties, the blowback was
disproportional and underscores the fragility of the U.S.-
Taiwan relationship.
The administration has identified North Korea's nuclear
program as a primary threat in East Asia. In its efforts to
apply maximum pressure on Pyongyang to denuclearize, President
Trump is clearly attempting to re-enlist the support of the
Beijing to use its leverage over North Korea to stop its
provocations. Interestingly, experts have noted that while
Beijing's leverage over Pyongyang is significant relative to
the United States' and Japan's because the two have little to
none, Beijing's actual leverage over Pyongyang is perhaps very
little. The fact that North Korea has launched 16 missiles in
ten tests so far in 2017 may be evidence of that lack of
leverage. Therefore, any anticipation of what a tradeoff may
bring in terms of actual results must be measured by a dose or
realistic expectation in what China can and is willing to do.
While there is no evidence to indicate that the
administration is considering such a move, I would simply note
this as caution for the administration to avoid entertaining
such a seductive idea that has no legs. With that I will yield.
Thank you.
[The prepared statement of Mr. Hsiao follows:]
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----------
Mr. Yoho. Thank you, gentlemen. I appreciate everybody's
statement and your expertise. And that is what I rely on is
your expertise to help draft policies of where we go. You know,
we know where we come from. We have seen the changes happening
in the Asia-Pacific Theater.
I was at a conference, I think it was a year ago when we
were with a bunch of the generals, and they say we are going
through a tectonic shift in world powers that we have not seen
since World War II. Then if you parallel that or take that into
consideration with what is going on in the Asia-Pacific
Theater, the South China Sea, you see China making
international claims to areas that they have never done this
before. Historically, it has not been done. They are following
the nine-dash lines and they start claiming sovereignty to
areas and start building the islands in those areas,
militarizing those islands.
We were at a hearing probably a year and a half ago with
the Chinese Ambassador and he assured us that the Spratly
Islands and the islands they were building were for peaceful
navigational purposes. We just wrote an editorial about that
giving our opinion on that and that is what it is, an opinion.
But I think we can tell by the actions what China is doing with
the intention of where they are going.
I read Robert Gates' book called Duty, and they were
talking about the Taiwanese sales, and it was the last one that
we had, and they were talking about how we have done this since
1979. China has kind of resisted a little bit, but that last
one they resisted strongly. Our negotiator asked their admiral
what was the big concern, we have done this 1979, and their
response was this, and I think this is very poignant and very
succinct on where their intentions are. The Chinese Ambassador
said, I know you have, but we were weak then, we are strong
now.
From that point forward you look at what they have been
doing since then. They have been isolating Taiwan further and
further. We saw what they did with the WHO. Taiwan researchers
were so critical in the SARS epidemic with the research that
they did that they should be invited regardless of who they
are. I would want them at the table in those negotiations in
those discussions, yet China says no, we want them out of here.
We have seen them do that over and over again as you brought up
what they have done in Africa, and those countries in Africa
have pivoted from them.
We just saw what Panama--so I think the writing is on the
wall with the direction. With them, them being China, building
in the South China Sea and the world stood idly by and allowed
them to become aggressive, if that aggression is not blocked,
if that aggression--I don't want to say even blocked. If it is
not challenged and said no, you can't do this, it is going to
continue is what I see happening. I want to just read something
here. A real pain you guys getting my reading.
A strong and economically prosperous Taiwan is in the
interest of the United States and should be one of our core
pillars of America's support for the island. I think that is
very succinct and very direct on where we should stand and we
should work harder to work with--I don't want to say the
sovereignty of Taiwan, but recognizing Taiwan as who they are
and not cross the bridge or cause trouble with the One China
Policy because they have to deal with it. They are right there
110 miles off that coast.
So my question to you is how do we move forward to protect
the independent nature of that relationship so that Taiwan can
continue to flourish with the development, the economic
prosperity, as Ranking Member Sherman said with the Freedom
House index it was 1.5, now they are 1. I mean they are top of
the scale--so that we don't go backwards? I know China feels
threatened by that.
How do we bring that assurance so that we can continue the
relationship that we have and build upon that? I would hope
China would look at them as a great example of what can happen
without fear.
Mr. Hammond-Chambers?
Mr. Hammond-Chambers. Thank you, sir. Well, a couple of
thoughts for sure. I would certainly state right off the bat
that in my view the Taiwan Relations Act has the scope to
handle the challenge that you have just posed. And that was
really the genius, the vision of the TRA back in 1979, so I
don't believe that there is a requirement to amend what was
conceived back then.
But what we certainly need is more consistency particularly
out of the executive branch on Taiwan policy. That certainly
has undermined efforts particularly over the last 11 to 12
years, successive administrations, the absence of consistency
and the growing pressure of course the Chinese have placed. It
would help at a practical level if there was more consideration
of Taiwan related initiatives separate of consideration of
China.
What might illustrate that point is to point out to the
committee that when you have representatives of the
administration come up and speak to you, you will note that
often the person responsible is responsible for both China and
Taiwan. In my view that immediately puts Taiwan and the
interests of the United States, vis-a-vis Taiwan, on a back
foot, because that person will reflexively consider China when
they consider Taiwan and that is always a larger account than
it is on Taiwan front. So perhaps separating those, making a
case to the executive branch that Taiwan should have more
operating room within the interagency process and within
different departments.
Mr. Yoho. I appreciate that and we are out of time. So I
would love to hear from you two, but maybe if you can submit
that, your thoughts on that to the record. Now we will go to
Ms. Titus from Nevada, for 5 minutes.
Ms. Titus. Thank you, Mr. Chairman, and thank you for
holding this hearing. I am proud to consider myself a good
friend of Taiwan. I represent a number of Taiwanese Americans
in my district in southern Nevada, and I have had the privilege
of visiting Taiwan to see the culture and the history and enjoy
the food and all up close, so I thank you for your hospitality.
Throughout my time here in Congress too I have worked to
strengthen the relationship between Taiwan and the United
States supporting military sales to Taiwan, and Taiwan's
efforts to join international organizations. Something that is
especially relevant to my district is expanding the visa waiver
program so people from Taiwan can visit without having to have
a visa. Last year, we welcomed close to \1/2\ million Taiwanese
visitors and that included about 50,000 to Las Vegas.
As a representative of Las Vegas, and we love visitors.
That is something I would like to ask you about. If you haven't
been to Las Vegas, please come and see us. I just would ask any
members of the panel, first, what do you think that we might be
able to do specifically in promoting tourism, more tourism
between the United States and Taiwan as we look to strengthen
our relations both politically and economically?
Mr. Hammond-Chambers. On the tourism front, as you
correctly pointed out, there is already a significant Taiwan
population here. I think some advertising in Taiwan certainly
would help. I think if the U.S. is looking to raise the number
of Taiwanese visiting the United States, advertising specific
places like Las Vegas, the incoming NFL team that you have. The
Taiwan citizens are voracious followers of American
professional sports teams and Vegas appears to be on a roll in
that regard.
Ms. Titus. So to speak that is right.
Mr. Hammond-Chambers. I think you have hockey and football
arriving imminently and surely basketball and baseball will
follow in time, which is a very exciting time for you. Taiwan
citizens follow American sports and that might be something
worth advertising to them.
Ms. Titus. It is interesting. We have a program, Brand USA,
where we have tried advertising in parts of Europe. Maybe we
need to look at not at cutting that program, which has been
very successful, but expanding it.
Mr. Blumenthal or anybody else?
Mr. Blumenthal. On tourism I think that first of all, going
the other direction, a number of newspapers and magazines have
now claimed or reported that Taiwan is one of the best tourist
destinations for Americans and the top place for expats to live
when they do business. In terms of Taiwanese coming here, I
think Rupert Hammond-Chambers has some good ideas. I think
casinos and Las Vegas are something the people of Taiwan enjoy
and perhaps share that enjoyment if we are looking at people to
people talks between the Chinese and Taiwanese, they share that
enjoyment with their mainland friends. I think they are going
to build some big casinos in Taiwan. I think they are a big
attraction as well, so I think it will always be a place the
Taiwanese want to go.
Mr. Hsiao. Thank you for that question and let me just echo
my colleagues' comments so far. I would also just add that the
United States remains one of the favorite destinations for
Taiwanese people to travel to, I think, and the soft power of
the United States in terms of its appeal to the people of
Taiwan, students, is, I think, not matched by any other country
in the world.
So improving on that I think is, while I think it is
certainly a worthwhile and important goal to strive towards, I
think there is already a high standard there that we are
working on and I think to improve that I think is to deepen
that relationship in a way so that we cultivate emerging
leaders who are going to be future leaders of both the United
States and Taiwan, so that connection is on an even deeper
level. I think programs that would be able to encourage that
would be a vehicle to work towards. Thank you.
Ms. Titus. Maybe even some exchanges with UNLV's School of
Hospitality or that sort of thing. Just real quickly, Mr.
Chairman, I want to go back to a point that you just made, Mr.
Hammond-Chambers. I too share your concern about the mixed
messages coming out of this administration, not just to Taiwan
but to the whole rest of the world. We don't seem to know who
is in charge. Is it the President, is it the Secretary of
State, is it the non-appointed undersecretary? So I think we
should really pay attention to the need to get our foreign
policy in order and not just made from Twitter to Twitter.
Mr. Yoho. The chair will now recognize Mr. Chabot who used
to be the chairman of the Asia-Pacific Subcommittee, and we
thank you, sir.
Mr. Chabot. Thank you very much. So it sounds like this
administration isn't all that different from some previous
administrations, I would note. But in any event, we are both
William and Mary graduates and we actually like each other a
lot and there ought to be more William and Mary graduates in
Congress, I think, don't you?
But in any event, when I first came here two decades ago
and after becoming more and more involved on Taiwanese issues,
along with Dana Rohrabacher and two Democrats we formed the, we
were the founding Members of the Congressional Taiwan Caucus,
and it is one of the largest caucuses and I think one of the
most important caucuses we have here on Capitol Hill.
But when I first came here, China had a couple hundred
missiles aimed directly at Taiwan, now they have 1,600 missiles
aimed at Taiwan. I consider myself to be a very good friend of
Taiwan, but some constructive criticism that I would give is
one of the more frustrating things that I have had. As somebody
who is trying to be a friend on Capitol Hill, one of the
witnesses--I think it was you, Mr. Blumenthal--who mentioned
that the legislature in Taiwan has to get their act together if
we are trying to help them militarily to actually have a
sufficient budget and then move forward with the budget.
You had different parties involved, you had the DPP and you
had, you know, it was a problem. So for years when we were
willing to sell them the weapons they couldn't get their act
together to buy them, then we had an administration that was
less willing to sell the weaponry that they needed.
So I guess my question, and I will go to you, Mr.
Blumenthal, since I think you brought it up, how can we finally
thread that needle and have the decision makers here who want
to supply the weapons, and the Taiwanese leaders who want to
purchase those weapons, how do we do that? And then what are
the specific things that they need?
I mean obviously it is planes and we were trying for
submarines here, but they aren't making anything but nuclear
submarines and that is really not what they need. They tried
France, and the U.S. doesn't make them anymore, a whole range
of things. I think the one I went on that was a World War II-
era submarine. We didn't go out on it but we saw what they had
available.
I will stop rambling and turn it over to you, Mr.
Blumenthal.
Mr. Blumenthal. Sure. I think you are right that we ought
not, as good friends of Taiwan, to let them off the hook
either. I think 3 percent of GDP is not even enough when you
are looking at it. If you look at other national security
states facing that kind of threat, from Singapore to South
Korea to Israel, 3 percent of GDP is actually paltry.
But there is a chicken and an egg problem, because Taiwan,
as painful as it is, Taiwan will buy--it may take a long time--
but they will buy everything we put on offer. So in that $30
billion defense package of 2001, the only thing not bought were
the submarines, and that was more of the games that we were
playing internally because of not wanting to sell diesel
submarines for navy reasons.
So what should we be putting on offer to Taiwan? At this
point, as you correctly mentioned in terms of the missile
threat, the air threat and so much more, things that are
survivable, so some kind of submarine program even if they
built it themselves in Taiwan. There are licenses sitting in
the State Department right now if Taiwan needs to build their
own defense that we can offer help with.
Munitions, stand-off munitions of all kinds, UAVs and
UCAVs, we have got to think much more creatively and
asymmetrically in terms of encouraging shore-based land attack
cruise missiles. We have to think much more creatively about
what can survive the initial onslaughts since missile defense
won't be able to do it anymore. But we ought not let Taiwan off
the hook.
Mr. Chabot. Thank you very much. I appreciate that. Let me,
I have got less than a minute to go so let me just touch on a
couple of things, and if I had had more time I would have gone
into more detail. I am concerned about China using the term
``core interest'' now with reference to Taiwan. The PRC using
that term in reference to Taiwan that is concerning. It is
pronounced Hsiao?
Mr. Hsiao. Hsiao.
Mr. Chabot. Mr. Hsiao, you had kind of raised this issue,
and again I don't have time to go into any great detail about
it. But with North Korea being as great a threat as it has been
for a long time and continues to be maybe even more so now,
well, certainly more so now with the development of
intercontinental ballistic missiles, and depending on China to
help and they have helped virtually nothing up to this point,
there is concern that they think they can use Taiwan then as a
bargaining chip, and that is something that absolutely cannot
happen.
I would strongly urge the relatively new administration not
to let that happen because Beijing will say lots of nice things
and then actually delivering on them that is a very another
thing, and so we should always keep that in mind. And I will
certainly, when I talk to the State Department those are the
types of things that I will bring to their attention. Thank you
very much and I yield back.
Mr. Yoho. Thank you, Mr. Chabot.
Mr. Rohrabacher, you are next.
Mr. Rohrabacher. Mr. Chairman, I am sorry that I was late.
I, actually, you schedule two hearings at the same time you
have got to run back and forth and that is what this is.
I have taken a keen interest in Taiwan. During the Cold
War, Taiwan's help, especially during the Vietnam War, was
instrumental in saving the lives of thousands and thousands of
American military personnel. I was not in the military but on
my way to Vietnam when I was out of the military I did stop in
Taiwan and I was part of an operation that was actually
headquartered in Taiwan to try to defeat the communists in
Vietnam. That is another lifetime ago.
But let me note today, I think all of these years Taiwan
has been a shining example of human rights. That is one of the
reasons that the mainland, the gang in the mainland cannot get
them out of their mind because they know that this is an
example where Chinese people are able to make democracy work
and in working for the benefit of the population. I think
Beijing is a klepto-dictatorship that is no longer a Marxist-
Leninist under anybody's definition of Marx and Lenin.
The people of Taiwan with their free press have been able
to maintain a semblance of honest government. I am not saying
that they are pure because they are not, we know, but the fact
is, Mr. Chairman, Taiwan can show the people of the mainland of
China that there is a better way, and thus again are playing a
very important role in providing for and ensuring that we will
have a peaceful world.
Because unless China in some way reforms out of this clique
that is running Beijing--basically the people in Beijing are
trying to subjugate their own people and they are ripping them
off and they are trying to dominate a huge chunk of the
planet--unless they can get down to what democratic government
is supposed to be, and that is serving the needs of your own
people, there will be a conflict eventually. Taiwan is actually
the way that we can send that notice that that will not be
permitted.
But I do have a question for you and that is--and I have 2
minutes left. Japan, actually they occupied Taiwan. It was
Formosa then for a long time. And how many years was that,
decades was that? Was it 100 years? Was it 50 years? What was
that? Well, for a significant chunk of history, Formosa was
occupied by Japan.
Can Japan play a role now in the security of Taiwan; will
that be accepted? Is that something that is too provocative, or
would the benefits of that--Japan has not played the role that
it should play in the last 50 years because of their penance
for World War II. Well, it is time for Japan to start playing a
major role again. What should that be in relationship to
Taiwan?
Mr. Hammond-Chambers. Thank you for the question. I will be
very quick and then I will hand it over to Dan and Russell.
Certainly on the defense side Japan can discretely partner with
Taiwan in the development of domestic capabilities that Taiwan
seeks to produce itself. Japan has a robust defense industry
community with excellent technologies. I wouldn't expect them
to sell a complete platform or system, but they have many
technologies that Taiwan could partner with and produce
defensive equipment that would help maintain peace and
security.
Mr. Rohrabacher. Very good suggestion.
Mr. Blumenthal. I would say very quickly, a sort of truth
in policy is that there is no defense of Japan and the first
island chain without Taiwan and Prime Minister Abe certainly
knows this and has made for Japan revolutionary changes.
But what we can do--without our leadership it won't go very
far. An integrated first island chain strategy on our part
would harden the Ryukyu Island chain further than Okinawa, and
then have more joint ISR between Taiwan and Japan to be able to
track those PLA task forces that are going into the Pacific.
That is very much in our interest. Japan has the attitude and
aptitude and willingness to do so, but they would need a signal
from us. We can really harden that island chain and cause big
problems for the PLA Navy.
Mr. Hsiao. I completely agree with everything that was just
said. I would just add that it is as much of a political issue
as it is a military one and I think that there are significant
trends, improvements in terms of how Japan is engaging with
Taiwan. For instance, changing its de facto Embassy in Taiwan
from the Interchange Association to the Japan-Taiwan Exchange
Association to having a senior vice minister visit Taiwan
earlier this year.
I think that these trends should be encouraged by the
United States and I think the United States can send a strong
political signal by upgrading the exchanges between the United
States and Taiwan, and the Taiwan Travel Act is one example.
Mr. Rohrabacher. If there is going to be peace in the world
Taiwan and Japan are going to have to play a major role,
because I believe China is one of the antagonists we have got
to deal with or they will deal with us. Thank you very much.
Mr. Yoho. Thank you, Mr. Rohrabacher. And just in time, it
is your turn. I now turn to Mr. Sherman, the ranking member.
Mr. Sherman. Mr. Hammond-Chambers, what steps can we take
to export more to Taiwan?
Mr. Hammond-Chambers. Thank you, Mr. Sherman. I do believe
at the core of that question is an expanded trade relationship
that would come with some sort of agreement on, again,
nomenclature can be played around with of course, but let's for
argument's sake call it fair trade agreement. There are a
number of areas in which Taiwan----
Mr. Sherman. Mr. Hammond.
Mr. Hammond-Chambers. Yes, sir.
Mr. Sherman. I am looking for approaches that will reduce
the trade deficits. So if you are talking about increasing
imports as well as increasing exports, do you have a suggestion
on how we reduce the trade deficit or reach balanced trade?
Mr. Hammond-Chambers. Well, we could certainly sell more
weapons to Taiwan. That would reduce the trade deficit. Our
defense manufacturers are significant----
Mr. Sherman. Many of us have advocated that for national
security rather than economic reasons, but----
Mr. Hammond-Chambers. You did ask.
Mr. Sherman [continuing]. You know, it is--anybody else
have any ideas how we would reduce the trade deficit? I see no
one else on our witness panel anxious to answer that one. We
will move on to the next question which relates to arm sales,
but we will address Mr. Blumenthal and Mr. Hsiao.
What are Taiwan's most pressing needs, and I am asking for
more of a national security rather than a trade balance answer
to this. What are Taiwan's most pressing needs for military
hardware? What arms deals to Taiwan do you think the Trump
administration would go ahead with, and should we sell them F-
35s?
Mr. Blumenthal. We have to look now, given the state of the
cross-Strait balance, at things that are survivable, that are
dispersible, that are mobile, that can be underwater and still
shoot at a landing force, and I think we have to think of
things in terms of what China has done to us which is help
Taiwan build a A2AD network. So----
Mr. Sherman. What network?
Mr. Blumenthal. Anti-access area denial network, the kinds
of things that China has done. So China has been able through
submarines, through integrated air defense, through integrated
C4ISR, through mining, made it very hard for us to operate in
places that we used to be able to operate, denying us the
space. Those are the kinds of things Taiwan can do.
Mr. Sherman. Are there particular weapons systems that
would fit that?
Mr. Blumenthal. Submarines, which they want to build in
Taiwan but we can have a big component of that, and those are
licenses sitting at State right now.
Mr. Sherman. What about the F-35?
Mr. Blumenthal. F-35, I would look at many different
options just because of the expense. You can do a lot of UAVs
and UCAVs, for example, but it is a very expensive platform
obviously.
Mr. Sherman. How confident would we be that the PRC has not
infiltrated somehow Taiwanese defense so that F-35 technology--
--
Mr. Blumenthal. Well, Taiwan has to do a lot better as do a
lot of our allies on security assurance and information
assurance.
Mr. Sherman. So would you be concerned that if we sold an
F-35 that there wouldn't be adequate security?
Mr. Blumenthal. Well, no, because they have broken into our
F-35s here and so----
Mr. Sherman. They already have the plans.
Mr. Blumenthal [continuing]. They already have what they
need.
Mr. Sherman. Why don't we go on to Mr. Hsiao.
Mr. Hsiao. Thank you, Ranking Member.
Mr. Sherman. You are not brightening up my day, Mr.
Blumenthal. Mr. Hsiao.
Mr. Hsiao. On the F-35s I would just say that the Taiwanese
military have assessed that they have a need for the F-35s,
based on exercises that they have conducted on an annual basis,
in order to execute the missions that they assess as necessary
in order to deter the People's Liberation Army. I think any
assessment on Taiwan's defense needs need to be based at least
with a strong consideration of what their defense needs are and
what they assess their defense needs are.
I would also add that different sales such as submarines to
Taiwan also fill a need on the part of Taiwan to be able to
engage China in a manner that targets their weaknesses. So I
think it is well known that one of the weaknesses of the PLA is
in its ASW, which is anti-submarine warfare, and to be able to
have Taiwan be able to possess and be able to operate
submarines within the periphery waters would be necessary for
the missions that it sees to deter Beijing. And then along with
that I would also reinforce Dan and Rupert's comments earlier.
Mr. Sherman. Thank you. I see my time has expired.
Mr. Yoho. We will go to Ms. Wagner.
Mrs. Wagner. Thank you, Mr. Chairman. As we all know, this
week, Panama switched diplomatic relations from Taiwan to
China. China's checkbook diplomacy is a dangerous provocation
to cross-Strait relations, and its cheap tricks in our own
backyard are particularly concerning.
I was impressed with President Trump's call to President
Tsai Ing-wen, and I am adamant that we fully engage with Taiwan
through high level official visits, weapons sales, and pressing
for Taiwan's inclusion in international organizations. Taiwan
will never be a bargaining chip in U.S.-China relations and we
must ensure that the Trump administration provides support to
our important democratic partner in the Asia-Pacific.
Mr. Blumenthal, the Trump administration need not alter its
support of Taiwan or its outreach to our democratic partners in
the country in order to secure China's increased support to
counter the North Korean threat. In fact, bowing to China on
Taiwan will do no favors for any American policy. How can the
new administration prioritize Taiwan's security and democracy
even as the President courts President Xi Jinping's
collaboration on North Korea?
Mr. Blumenthal. Well, thank you very much for your
statement and your question. I think that we have already seen
signs that we are not just going to be trying to cozy up and
get closer to China because of North Korea. I think patience in
the Trump administration is running thin on the North Korea
question with respect to China.
I also look at the recent FONOP or challenge, which in some
ways was a much more aggressive challenge on the South China
Sea than we have done in the past, as a sign that we can walk
and chew gum at the same time. Since we are looking for
reciprocity with China, China does things we don't like all the
time and we still have good relations, we still have
cooperative relations with them.
They have militarized, as was mentioned before. They have
essentially taken the Paracels, they are gone. They are pretty
close to taking the Spratlys if we don't do anything on the
Scarborough reef or the Scarborough Shoal. So the idea that
China can do all kinds of things we don't like and yet seek our
cooperation but we have to cooperate on everything with China
is just false.
Then finally on your Panama point I would raise this. We
always talk about our policy on both sides of the Strait to
maintain the status quo. There is no such thing. China is
constantly changing the status quo. Going forward and forcing a
country or buying off a country to de-recognize Taiwan is a
major change in the status quo. We called Taiwan out on this.
We have to call China out on this as well.
Mrs. Wagner. I agree and it is a provocation.
Mr. Blumenthal and Mr. Hsiao, does the U.S. face unique
challenges in China's checkbook diplomacy targeting Central
America as opposed to China's efforts earlier this year to
obtain diplomatic recognition for--I will try this--Sao Tome
and Principe in West Africa?
Mr. Hsiao. Yes, and thank you for that question. To the
question on Central America and Beijing's coercive strategy to
isolate Taiwan internationally, I think just as Beijing right
now is using a multidimensional strategy to isolate Taiwan, I
think it is important to have a multidimensional strategy to
counter that. I think not only a bilateral mechanism, there
needs to be a multilateral mechanism by which the United States
can help to enhance Taiwan's international space.
I think in this effort, the Global Cooperation and Training
Framework that has been implemented between the United States
and Taiwan since 2015 needs to be enhanced, upgraded, and
adequately resourced in order to ensure that Taiwan can
cooperate with the United States and third-party countries to
help overcome this full-court press that I have described as
Beijing's strategy to pick off Taiwan's allies and also degrade
unofficial relations between Taiwan and other countries.
Mrs. Wagner. Mr. Blumenthal, any comment?
Mr. Blumenthal. Yeah, very short. I think we have a
particular concern with China strategically in Central America
without question, but I think China's main motivation around
the world is to isolate Taiwan. We should pay special attention
to Chinese activities in Central America.
Mrs. Wagner. I believe my time has run out. Mr. Chairman, I
am going to submit the rest of my fantastic questions to this
panel----
Mr. Yoho. And they are.
Mrs. Wagner [continuing]. And they are awfully--for a
written response. I thank our witnesses and I thank the
chairman.
Mr. Yoho. Thank you, Ann. We will go to Mr. Connolly now
from Virginia.
Mr. Connolly. Thank you, Mr. Chairman. It is a pleasure to
be here both in my capacity as a member of the committee and
subcommittee and also co-chair of the Taiwan Caucus. I have had
the privilege of going to Taiwan 23 times since 1988. I was an
Eisenhower Fellow and I have seen extraordinary change. When I
first went to Taiwan in 1988 it was a one-party state. It was
not a functioning democracy and some core freedoms we cherish
and so does Taiwan today were not cherished in 1988. There were
serious restrictions on speech and political organizing, on
dissent and on travel and on investment in the mainland. I have
witnessed over that time period one of the greatest changes in
a nation I have ever witnessed, and I have traveled a lot.
I wonder, Mr. Hsiao, probably when I first went there you
weren't born, but to what would you attribute, and all of you
could comment. Why this profound change? I mean what happened
in Taiwan? Was it something unique to the people of Taiwan or
what was the spark or evolutionary process that led us to this
open democratic society in sharp contrast to the other place?
Mr. Hsiao. Thank you for that very profound question,
Representative. I think there are two factors. There are
internal and external factors. The external factor, I think, is
driven by the loss of recognition, the de-recognition by the
United States to the PRC that pressured the government from the
top down to liberalize, to integrate more Taiwanese into the
political process in order to establish a greater foundation
for legitimate rule.
And then also at the same time and to give credit to the
Taiwanese people who have strove to have a greater freedom and
democracy. I think the United States has played a pivotal role
in supporting that democratic movement in Taiwan in the '80s
and '90s onward. So I would say that it is a confluence of
these factors that really drove Taiwan to become the democratic
example and model that exists now, to the extent now that it
can serve as a model for Southeast Asian countries that are
making similar sort of progressions in their political
developments.
Mr. Connolly. Mr. Hammond-Chambers, I assume that many of
the companies that are members of your Council also operate in
the mainland.
Mr. Hammond-Chambers. That is correct.
Mr. Connolly. And so how does that work? I mean are they
under pressure from Beijing to disinvest in Taiwan or do they
turn a blind eye? Do they welcome it? What is that relationship
like, what kind of pressure are they under, if any?
Mr. Hammond-Chambers. Typically they aren't under any
pressure at all. There are several instances where U.S.
companies have been identified by PRC authorities in an attempt
to be pressured and those typically relate to PRC
interpretation of the company overstepping grounds regarding
Taiwan sovereignty. So perhaps they might have published
something that had Taiwan's official name Republic of China in
it, or in some of the instances where some of our larger
defense companies have interests in the mainland as well they
might have been identified.
I have been the U.S.-Taiwan Business Council for over 20
years. I am not aware of a single instance, however, in which a
U.S. company had a long-term impact on its interests in the
mainland as a consequence of the fact that it is doing business
on Taiwan.
Mr. Connolly. Very interesting. So while Beijing is
pressuring the countries like Panama to switch recognition,
they are not doing the same in the business side.
Mr. Hammond-Chambers. Correct. It is all about the
business, Mr. Connolly.
Mr. Connolly. Yeah. Mr. Blumenthal, and by the way you can
comment on other things as well, but earlier before this
hearing, I know you are aware, we actually approved a bill that
for the first time, well, in a long time, has Congress saying
enough. We are going to address some issues that we have kind
of ceded to the State Department and the White House over many
administrations.
I wonder if you might comment on that because one of the
things that has concerned me, and wear my other hat in the
Taiwan Caucus, is how much at least tacit control we have given
to Beijing in terms of the nature of the relationship with
Taiwan. We have a statute, the Taiwan Relations Act, which came
out of the committee I used to work for that was initiated by
Congress and that is the guiding document about the
relationship. That document commits us to a certain posture
with respect to Taiwan's defense including the sale of
defensive weapons.
I don't know that that statute says the President of Taiwan
can't come to the United States or to Washington, DC, and yet I
remember Presidents of Taiwan calling me kind of on the sly
when they were at an airport so we could talk because there was
no official visit here. I understand a Presidential Head of
State visit is one thing, but I mean putting a bag over your
head and pretending you don't exist is quite another.
So I know that is a long question, but I really am bothered
by how much power we seem to have ceded Beijing on many facets
of the relationship. I am very grateful, Mr. Chairman, that
this subcommittee and hopefully the full committee is taking
some of that back, finally. But I wanted your comment and then
I am done. Thank you.
Mr. Blumenthal. Well, I agree wholeheartedly. I mean, there
are many, many factors involved. There is nothing in these
communiques, which again are simply joint statements between
countries made in the 1980s and 1970s, at a very different time
that says anything about who our President can call or speak to
or visit or meet. That is somehow a mystical paper in the State
Department, somewhere that was written probably 30, 40 years
ago, somebody interpreting what we meant by those communiques.
We may be stuck with those communiques in the One China Policy,
but we are certainly not stuck with China telling us whom we
can meet with. It is so very much in our interests, and in
their interests that we keep an ongoing high level dialogue
with Taiwan for the sake of predictability and stability.
I would finally say that one thing that a lot of people are
looking at now is the level of Chinese propaganda and political
warfare the Chinese Communist Party targeted against the United
States. It is much different than Russia or other rivals, but
it is a huge problem and it has changed the minds of many
people.
They have convinced many important people including
probably policy makers that the communiques say something that
they don't, that we acknowledge that Taiwan is part of China.
We do not. We leave the status to be determined by the two
parties. They have made great headway and it is an active
political warfare campaign. It is not just passive diplomacy or
neglect.
Mr. Connolly. Thank you. And Mr. Chairman, thank you.
Mr. Yoho. Mr. Connolly, I would like to work on some of
this stuff to draft policies that we can direct maybe the State
Department or the administration.
We are going to, if you guys have enough time I would like
to go back to Ranking Member Sherman and then I would like to
end with a couple statements.
Mr. Sherman. Mr. Hammond-Chambers, we have had this
description of how China is on the international stage trying
to hem in, delegitimize Taiwan, but I wonder how that squares
with their economic behavior. Can you describe cross-Strait
investment and cross-Strait trade over the last few years?
Mr. Hammond-Chambers. Yes, Mr. Sherman, it continues to
expand quite frankly. The economic links between the two sides
remain robust, somewhat cooled down since Tsai Ing-wen took
over. But for the most part----
Mr. Sherman. How big is the investment of each country in
assets in the other----
Mr. Hammond-Chambers. The PRC investment in China is
tightly held, so very minimal.
Mr. Sherman. PRC investment in Taiwan?
Mr. Hammond-Chambers. In Taiwan is minimal. There are some
areas that the PRC could invest in but it is quite tightly held
now. Conversely, in China, Taiwan investment is massive and a
lot of it has circumvented regular ways to monitor, so I have
seen numbers ranging from $100 to $250 billion worth of Taiwan
capital invested in China.
Mr. Sherman. And what do we do to persuade the Taiwanese
that putting their investments in a country that may seize them
at any moment may not be as desirable as investing in the 30th
Congressional District of California?
Mr. Hammond-Chambers. Well, I think there are many
Taiwanese who would like to do nothing more than invest $250
billion in your district, sir, but I----
Mr. Sherman. One billion at a time.
Mr. Hammond-Chambers. Okay. But there are many people in
Taiwan including the present Taiwan administration that have
deep concerns about what has transpired over the last 20 years
and have policies such as the Southbound Policy to try and curb
that. However, they have limited control over their businesses
in this regard who have less of an interest in the national
security concerns.
Mr. Sherman. They have a lot of control if they choose to
pass laws, and if they choose to simply do what is politically
popular with the economically important then they have no
power. The idea of creating what could be as high as a $250
billion investment in Beijing creates powerful forces in Taipei
to lobby for the Beijing position.
A failure of a business to conduct such lobbying could
impair the value of their investment or cause their investment
assets to decline in yield or to be treated as favorably. The
prospect of the seizure of those investments should there be
some sort of crisis means that you have very powerful economic
interests that may want to reunify on any basis that protects
those investments. But again the opportunities in the 30th
congressional district are still available. I will go to the
other witnesses. And also in Florida there is some excellent--
--
Mr. Yoho. I am glad you added us in there because your
side--no offense--you are promoting that and she is promoting
the casinos. I am like we need to throw Florida in there.
Mr. Sherman. We will throw Florida in there a little bit,
but once they see the opportunities in the 30th district--let's
see. How can and in what cases is China, well, I guess in every
case China has tried to keep Taiwan out of international
organizations. So the question is, really, is how can Congress
help resist such pressure and what can we do to assist Taiwan
in joining all the international organizations from the World
Health Organization to Civil Aviation to U.N. Framework on
Climate Change, Interpol, et cetera? Mr. Blumenthal, then Mr.
Hsiao.
Mr. Blumenthal. Well, we already very much have the
international legal basis to do so because of the WTO accession
and Taiwan's accession into it. So all the arguments that China
makes against Taiwan's membership particularly in organizations
that don't require statehood, or a recognition of statehood,
are very specious because they agree to the WTO accession
already.
Mr. Sherman. And does WTO require statehood?
Mr. Blumenthal. We negotiated in a way that didn't and so
we have the basis now, the diplomatic and legal framework to
negotiate Taiwan's accession to any international organization
that doesn't require statehood.
Mr. Sherman. So why does China work so hard in their effort
to delegitimize the sovereignty of Taiwan to keep Taiwan out of
organizations' membership in which does not establish
sovereignty?
Mr. Blumenthal. Because there is very little pushback. So
for example, we can have an FTA--we have the basis of an FTA in
international law and diplomatic custom.
Mr. Sherman. You are saying FTA or DA?
Mr. Blumenthal. Yeah, I know. I don't mean to talk about
the trade deficit. We could theoretically have a free trade
agreement, but China pushes back by saying that that would
confer statehood upon Taiwan, a completely specious argument
given----
Mr. Sherman. Especially if the agreement provided for a
reduction in the trade deficit. Let me go on to Mr. Hsiao. What
can Congress do to help Taiwan get into these international
organizations?
Mr. Hsiao. Thank you, Ranking Member. I would just add that
I do think there needs to be a more inclusive approach in
dealing with Taiwan's international space and how the United
States strategize its approach to getting Taiwan into
international organizations. I would add that I think there is
a good existing mechanism through the Global Cooperation and
Training Framework, and I think that it can be expanded to lead
as an example of how Taiwan and the United States can cooperate
with third-party countries in trying to in areas of health
alleviation, in areas of women empowerment, in democratization,
energy, that these are functional areas of cooperation where
people will see, other countries will see the value of Taiwan's
contribution, and any efforts on the part of the PRC to limit
that would just fly in the face of decency of what is necessary
for as Taiwan as a contributing member of the international
community.
Mr. Sherman. I yield back.
Mr. Yoho. Thank you. If you will indulge me just for a few
more minutes, what I have gained and what I have deemed out of
this is we see an aggressive China. We see that they are
continuing this. We are seeing they are putting more pressure
on the international community to exclude Taiwan as a semi-
independent state of their own, a democracy that has been very
successful, very fruitful, and we keep hearing that we need to
partner with China. I think China needs to partner with us and
the rest of the free world.
I say that when we look at our trade, the last report I had
China borrowed, stole, or highjacked over $600 billion of
intellectual property. I don't want a partner like that. We
need to put more pressure--and like you said, Mr. Blumenthal,
the reason they are doing what they are, nobody is standing up.
It is time to stand up because we see the writing on the wall.
If we don't do it now, it will be easier to do it now than to
wait another 5 years because Taiwan will be that much more
isolated. The South China Sea will also be that much more boxed
in, and then the trade that we talk about and the spread of
democracy of our tenth largest trading partner, it will affect
us.
So coming out of this meeting I always like to have action
items. When I read the USTR's recommends that the Trump
administration end the policy of packaging and return to a
regularized process, whereby Taiwan would be treated like other
security assistance partners all the way from the U.S.
accepting letters of request for pricing and availability data
to consulting with notifying Congress of an intention to sell
arms to Taiwan. We have put it into this quagmire or this box
where, yeah, we are doing it but we are kind of hiding it so we
don't want to offend anybody. I think we need to go back to be
bold and just say yeah, we are, because it is in the 1979
agreement.
We have also, as an action item we put in a free trade
agreement that we entered as House Resolution 271 in April 6th
of 2017. I think there is still time for you to get on that
even in the 33rd district of California.
Mr. Sherman. Yeah, as long as we add a provision about
requiring a system to reach balanced trade I will be on it.
Mr. Yoho. I want to touch base on that right now as a
little aside on the trade deficit. It remains large, but Taiwan
has imported larger and larger percentage of imports from the
U.S. over recent years, and by a percentage our deficit has
been cut in half over those years and we are going in the right
way.
But as far as more action items and I think you heard a
resounding theme in here and I agree wholeheartedly with this,
and that theme is Taiwan will not be used as a bargaining chip
and I think China needs to understand that from this point
forward. I think we will stand real strong and we will get the
rest of the countries to do that too.
You know, the freedom of navigation, we need to do more of
those because China has created on their islands, according to
their Ambassador that I talked to, lighthouses on the Spratly
Islands strictly for peaceful navigational purposes. I agree,
and I think we should all utilize that and thank them for that.
The free trade agreement, like I said, we introduced on
April 6th, and letters of support for the importance of the
contributions of the health, worldwide health organizations
that Taiwan has contributed to, and we are sending letters to
support their inclusion in these organizations, and we haven't
had a communique since 1982.
When you read those it is kind of like your parents, well,
yeah, you can go ahead and do that but don't tell your mom or
don't tell anybody you are doing that. I mean that is the way I
read those and I think we need to come out, maybe it is time
for a fourth one that has clarity and purpose so that we can go
into the 21st century with a clear direction, a peaceful
direction, and it is time that we as the United States showed
the leadership in that.
Do you guys have anything that you want to end up with,
maybe 30 seconds apiece? Mr. Hammond-Chambers?
Mr. Hammond-Chambers. Yes, just very quickly, Mr. Chairman,
I would just like to point out on my colleague's point about
information warfare, we had this week we had the switch in
recognition from Panama. One of the challenges that we face is
that the PRC continues to define what our One China Policy is.
Mr. Yoho. Exactly.
Mr. Hammond-Chambers. And it does real, real damage. I
understand Mr. Tillerson was up on the Hill yesterday. He said
the One China Policy. I commend you in saying our One China
Policy, because what the Chinese like to do is they like to
define our One China Policy as their One China Principle. And
regrettably, all too often it shows up in our media.
Mr. Yoho. Right.
Mr. Hammond-Chambers. Two days ago, USA Today, yesterday,
the Washington Post and the Associated Press, the Chinese
definition of the One China Principle as our One China Policy,
so I would certainly encourage you and your committee members,
sir, when you have an opportunity to be very clear about U.S.
policy on that standpoint.
Mr. Yoho. Thank you.
Mr. Blumenthal?
Mr. Blumenthal. Yeah, I agree with all of your suggestions.
I would include in that getting the State Department, Defense
Department, and intelligence agencies to report on China's
active information warfare, political warfare against us in a--
--
Mr. Yoho. Stay tuned, we have a good bill coming out on
that.
Mr. Blumenthal. Good. You know what, I am not as smart as
you guys. You are ahead of me.
Mr. Yoho. It is the guys behind me.
Mr. Blumenthal. But I would caution against a fourth
communique because I think that doesn't include Taiwan and the
Chinese have gotten the better end of the stick on the last
three.
Mr. Yoho. I intend to have it written to where it, you
know, I don't want to say make America great or put America
first, but the only way you can do that is if you help your
partners you are dealing with become very successful too.
Mr. Blumenthal. Right. The greater point I was making is
that we have no other policy, just based on joint statements
made in the Cold War and it is ridiculous.
Mr. Yoho. It is. It is absolutely ridiculous.
Mr. Blumenthal. It does not reflect----
Mr. Yoho. In the 21st century with superpowers.
Mr. Blumenthal. That is right. It doesn't reflect the
geopolitical moment anymore.
Mr. Sherman. I would add one other thing. There is an
Article I to the United States Constitution. It provides for
the ratification of treaties. Nothing that you are describing,
a press release from a President no longer living is not
binding on the people of the United States. The Vienna
Convention on the Law of Treaties, you have got ratified
treaty, you have got legislative executive agreement,
unratified treaty, and then you have got press releases from no
longer living Presidents.
Let me put this another way. A ratified treaty is like a
minister, a groom, a bride, rings. This communique is like five
margaritas at a seedy singles bar----
Mr. Yoho. In California.
Mr. Sherman [continuing]. In California. And let me tell
the chairman that certainly five margaritas at a seedy singles
bar in California is not a binding commitment. Thank God.
Mr. Yoho. Mr. Hsiao, do you have something you want to end
up with?
Mr. Hsiao. Thank you, Chairman. Thank you, Ranking Member.
I think I would just like to close on the need for a greater
clarity on U.S. defense commitments to Taiwan. I say this with
sincerity, that the massive military buildup across the Strait
and China's continued refusal to renounce the use of force
against Taiwan is a threat to the peace and security of the
Western Pacific area.
While the United States had managed to deter Beijing from
taking destructive military action against Taiwan in the last
four decades, I think when China was relatively weak, and I go
to the point that you have made, the premise of China saying
that it was weak then it is stronger now, that we are
approaching dangerously close to where the benefits of this,
the cost outweighs the benefits.
So I think as the PLA grows stronger, a perceived lack of
commitment by the United States to defend Taiwan will further
embolden Beijing to use force to resolve the Taiwan issue.
Thank you.
Mr. Yoho. I think that was very well spoken by all of you,
and I thank you for wrapping it up that way. I liked the levity
of it. I didn't know you had so much levity. That is good to
know. But I appreciate your thoughts, your expertise, and what
you do, and we will move forward with some of the suggestions
you had. Reconsider the fourth communique and maybe consult you
before we go forward.
That pretty much concludes this hearing and we thank
everybody for participating. We thank the crowd for being here.
You guys were great to stay here the whole time in this hot
room. This committee hearing is adjourned.
[Whereupon, at 4:20 p.m., the subcommittee was adjourned.]
A P P E N D I X
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