[Congressional Record Volume 140, Number 148 (Wednesday, November 30, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: November 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
THE COSTS OF OVERLOOKING THE OTHER CHINA
Mr. SIMON. Mr. President, for some time now, United States
relations with Taiwan have lagged far behind the remarkable political
and economic progress that country has made. Taiwan has made great
strides in opening and democratizing its political system; the contrast
between Taipei, with its free elections and free press, and Beijing
could not be more striking. And while China is touted for its booming
economy and seemingly limitless market, fewer people are aware that
Taiwan is now the 20th largest economy in the world, and that last year
its 21 million citizens bought more from the United States that the 1
billion people of China did. Yet from the standpoint of official,
governmental contracts with the United States, Taiwan in many ways
remains a non-person, an outcast.
That is simply wrong. It is wrong from a political standpoint, that a
country which is working hard to measure up to democratic standards
should be treated worse than countries which are openly contemptuous of
those very values. And increasingly, it is wrong from an economic
standpoint. While we keep our distance from Taiwan, other countries
have sent more than 30 Cabinet-level officials to Taipei in the past
3\1/2\ years to promote business interests. Our government's
unwillingness to accord Taipei similar respect puts American business
at a serious disadvantage in the increasingly important Taiwanese
market.
An article in the October 8 National Journal makes very clear the
costs of our overlooking the other China. I request that the article,
``The Other China,'' be printed in the Record.
The article follows:
[From the National Journal, Oct. 8, 1994]
The Other China
(By Dick Kirschten)
The corporate moguls who accompanied Commerce Secretary
Ronald H. Brown to China at the end of August were
essentially stage props for a triumphal series of ceremonial
contract signings. Still, they were delighted that President
Clinton has avoided angering Beijing by declaring that human
rights concerns should not pose a barrier to trade.
When it comes to greasing the skids for deals with Taiwan--
the ``other China''--however, the U.S. business community
wants the White House to be less timid about offending the
rulers of mainland China, formally the People's Republic of
China (PRC).
After the results of a long-awaited Clinton Administration
review of U.S. policy toward Taiwan--formally the Republic of
China (ROC)--were disclosed on Sept. 7, Clinton was roundly
criticized as excessively cautious by business lobbyists and
congressional boosters of trade with Taiwan.
As one of the tigers of the so-called East Asian Economic
Miracle, Taiwan has built up massive foreign-exchange
reserves and has both the desire and capacity to purchase
large quantities of advanced technology for both civilian and
military purposes.
After many profitable years as Taipei's dominant business
partners, American businesses suddenly find themselves
competing for a share of the lucrative Taiwanese market.
``The kind of client-state relationship that we used to have
is gone,'' explained David N. Laux, president of the USA-ROC
Economic Council, a business group that seeks to foster trade
with Taiwan.
Laux, whose council represents scores of Fortune 500 firms,
argues that higher-level contacts by U.S. officials are
needed to nurture the commercial ties that have made Taiwan
the United States sixth-largest trading partner. ``We are not
paying the proper attention to Taiwan that we should for its
economic performance,'' he said in an interview.
Current trade statistics support Laux's argument. Mainland
China may be the world's premier emerging market, but for
now, Taiwan is by far the larger customer for U.S. goods.
American exports to Taiwan last year totaled $16.3 billion,
compared with $8.8 billion to mainland China.
The Taipei government wants more attention, too. ``There is
a growing feeling among the people of Taiwan that they don't
get adequate respect around the world because they are not
recognized as a state by other countries,'' explained Ralph
Clough, a professor of Asian studies at the Johns Hopkins
School of Advanced International Studies. Taiwan has
``functioned in the world community as a de facto sovereign
state for more than 40 years,'' but does not enjoy membership
in the United Nations and many other international
organizations, Clough noted.
After its defeat by the Communists in 1949, the nationalist
Chinese government fled to Taiwan, a 14,000-square-mile
island in the South China Sea, 80 miles from the mainland,
where for decades it held that it was the legitimate
government of China in exile. In recent years, the Taipei
government--while still committed to eventual reunification--
has come to accept the reality that China is governed by
separate political entities.
As Taiwan's political system has become more democratic, an
aggressive opposition party, the Democratic Progressive Party
(DPP), has emerged that pledges to declare independence if it
wins next year's national elections. Citizens born on the
mainland now constitute a shrinking minority, and the
island's population increasingly regards itself as Taiwanese
rather than Chinese.
In the face of growing DPP support, the ruling Kuomintang
(KMT) party--though mindful of Communist China's threats to
go to war to prevent Taiwanese sovereignty--has been forced
to adjust its positions to seek greater international
recognition. Taiwan is now on track for inclusion in the
General Agreement on Tariffs and Trade (GATT) and is seeking
``parallel representation'' in the United Nations, citing
Germany and Korea as precedents for dual U.N. representation.
Taipei, despite rumblings of displeasure from Beijing, is
also courting diplomatic recognition by other sovereign
nations.
But the United States officially recognizes only one China,
and since diplomatic relations were shifted from Taipei to
Beijing in 1979, that has been the PRC. America's ``one
China'' policy, of course, has always been largely a fiction.
Unofficially, America has maintained the closest of economic
and military ties to Taiwan.
Washington's contacts with Taipei are restricted to
relatively low-level officials. Most communication is carried
out through the artifice of an allegedly private entity, the
American Institute in Taiwan (AIT), whose offices in both
countries are staffed by people on leave of absence from the
State Department.
delicate balance
When Lynn B. Pascoe, the director of the AIT's Taipei
office, called on Taiwan's foreign affairs minister on Sept.
7, he became a minor footnote to history. It was the first
time since 1979 that the de facto senior American official in
Taiwan was permitted to make such a visit.
The less-than-earth-shaking diplomatic breakthrough was
occasioned by the Administration's Taiwan policy review,
approved on Labor Day by the President while he was
vacationing on Martha's Vineyard. Indeed, Pascoe's visit to
the Foreign Ministry was to inform Taipei of the changes.
Billed as the first comprehensive review of Taiwan policy
since 1979, the new policy strains to strike a balance
between Taipei's growing desire for higher-level contacts
with U.S. officials and Beijing's demands that America
continue the pretense of not officially recognizing Taiwan as
an entity separate from the rest of China.
The policy review keeps America's one China policy
officially intact and reiterates that the United States does
not back Taiwan's entry into the United Nations. It supports
Taiwan's expected admission to the GATT, however, and says
that Taipei's voice should be heard in other ``appropriate''
international groups, including the new forum on Asia-Pacific
Economic Cooperation.
Visits to the United States by Taiwan's president and other
top leaders are still forbidden, but the new policy
specifically permits such officials to ``transit'' America.
The latter provision responds to the congressional furor in
May when Taiwanese President Lee Teng-hui's airplane made a
refueling stop in Hawaii but was denied permission to stay
overnight.
The key adjustment in the policy is to boost the octane of
Washington's backing of U.S. corporate interests in Taiwan.
The idea, Administration officials say, is not to raise
the diplomatic stakes but rather to facilitate solving
problems and doing business.
The policy sets guidelines based on the somewhat murky
proposition that some government contacts are official but
others are not. No meetings are to occur between senior
officials, whose duties are considered to be primarily
diplomatic, military or political. But officials ``at a
relatively senior level'' whose portfolios involve
commercial, cultural or technical issues will be permitted to
get together.
To promote commercial and cultural ties and to foster a
``sub-Cabinet economic dialogue'' with Taipei, high-level
U.S. officials from economic and technical agencies will now
be permitted to go to Taiwan. Even visits by Cabinet officers
involved with trade or technology appear possible, subject to
case-by-case approval.
Senior Taiwanese officials visiting the United States would
be barred from setting foot in such ``official'' sanctums as
the White House, the Old Executive Office Building, the
Pentagon and the State Department. But a meeting at the
Commerce Department would be OK.
At the same time, State Department officials at the
undersecretary level who have nonpolitical portfolios can now
meet with senior Taiwanese visitors, just so long as they
don't do so in their offices at Foggy Bottom.
Another mini-refinement permits the Taiwanese government
representatives who are stationed in Washington to include
the word ``Taipei'' in the same of their office, which
currently bears the uninformative name of the Coordination
Council for North American Affairs. The new title will be
Taipei Economic and Cultural Representative Office in the
United States.
A delegation of Taiwanese legislators recently passed
through Washington on the way to a rally at the United
Nations, whose agenda committee voted on Sept. 22, at the
urging of the PRC, not to take up the question of
representative for Taiwan. The lawmakers met with State
Department officials on Sept. 21 to register their
disappointment with the Clinton policy review, which Sen.
Parris H. Chang, DPP member, described in an interview as
``retrograde in certain respects.'' Albert Lin, the
information director for Taiwan's Washington outpost, said
his office's new title was selected from a list of acceptable
options but was not his country's first choice.
keeping beijing happy?
Beijing's reaction to the Clinton policy adjustment,
although predictably negative, was perfunctory in tone. A
government spokesman declared that Washington's action
``interferes with the internal affairs of China'' and
``seriously'' violates the three joint communiques that form
the basis of U.S. relations with Communist China. At the same
time, however, the Chinese governments repeated an invitation
to Clinton to come to Beijing for a summit meeting.
Taiwan's government offered lukewarm praise for the modest
changes but complained that they don't go far enough. Its
official response called the policy review ``welcome'' but
added that ``these adjustments have not sufficiently
addressed the needs arising from the close relationship
between the United States and the Republic of China.''
In an interview, American Enterprise Institute for Public
Policy Research director of Asian studies James R. Lilley, a
U.S. ambassador to China during the Bush Administration,
faulted the Clinton team for making too large a deal out of
too small a change. ``There should have been no review in the
first place,'' he said, citing the fact that the Bush
Administration, with no fanfare, had permitted Carla A.
Hills, who then held Cabinet rank as U.S. Trade
Representative, to visit Taiwan in December 1992.
``You just do these things,'' Lilley argued. ``You don't
put it out in the press [as a major policy review] and stick
your tongue out at Beijing.'' Citing Commerce Secretary
Brown's recent trade mission to China, he said that ``Clinton
ought to have Brown do the same thing in Taiwan.''
That would be fine with Laux, whose business council
lobbied the Bush Administration to permit Hills to address
its 1992 conference in Taiwan. In December, the council will
convene again in Taipei and hopes the highlight will be an
appearance by a Clinton Cabinet officer.
Responding to the White House policy review, Laux pointed
out that ``more than 30 Cabinet-level officers from European
and other countries have visited Taiwan in the last three-
and-a-half years to promote the business interests of their
companies.'' He added that despite Beijing's misgivings,
those countries have been able to maintain diplomatic
relations with China. ``The sky has not fallen in on any of
those countries,'' he said.
Acknowledging that during his tenure in government, he was
``part of the process'' that led to America's current China
policy, Laux said, ``I'm not blaming anyone in particular,
but we have unnecessarily put ourselves in a straitjacket''
in terms of trading with Taiwan.
For the ailing U.S. defense industry, Taiwan's prodigious
appetite for armaments is a tempting target. Michael T.
Klare, a military affairs expert at Hampshire College, said
that ``the China-Taiwan nexus probably constitutes the most
vibrant arms market in the world today.'' Despite improved
communications between the two Chinas, he noted, neither has
repudiated historical claims to the territory of the other.
Although the Reagan Administration, in a 1982 communique
with Beijing, agreed to reduce arms sales to Taipei, the 1979
Taiwan Relations Act authorizes U.S. contractors to sell
Taiwan whatever is deemed necessary for its defense. And when
Taipei appeared interested in buying French-built Mirage
fighters, the Bush Administration responded by approving the
1992 sale of 150 U.S.-made F-16 fighters to Taiwan. Delivery
of the advanced fighters is still more than a year away.
Klare, in an interview, noted that military technology
acquired from other countries, including U.S. ships, aircraft
and electronic equipment, is helping Taiwan establish its own
defense manufacturing capacity through ``reverse
engineering.''
Despite the F-16 deal, the American League for Exports and
Security Assistance Inc., a defense industry trade
association, has estimated that restrictions on arms sales to
Taiwan have cost as much as $20 billion in U.S. revenues and
affected more than 400,000 American jobs.
But military technology is not the only commodity that
Taipei is in the market for. Having blossomed into the
world's 20th-largest economy. Taiwan has entered into a
massive six-year infrastructure improvement program to meet
the demands of an increasingly affluent population of 21
million.
The U.S. Commerce Department has said that Taiwan's $235
billion national development plan creates the ``largest
market in the world today for major infrastructure
projects,'' including up to $50 billion worth of foreign
procurement for energy, pollution control, telecommunications
and transportation projects.
Thus far, said William S. Botwick, president of the
American Chamber of Commerce in Taipei, European bidders have
won more than $5 billion in contracts under the Taiwan
development plan, ``four times more than U.S. firms have.''
Botwick, the General Motors Corp.'s managing director in
Taiwan, said that he traveled to Washington twice last year
to urge Administration officials to take bolder steps to
``redress past slights'' and restore ``mutual trust'' to the
U.S.-Taiwan bilateral relationship.
After being upstaged by the highly publicized debate over
extending preferred trading status to mainland China and its
emerging market, Taiwanese interests are clamoring to remind
Washington of their own business relationship and their
government's success in reducing the U.S. trade deficit with
Taiwan, while the deficit with mainland China has been
growing.
The Washington lobbying firm of Cassidy and Associates, and
its public relations affiliate, Powell Tate, recently signed
a three-year, $4.5 million agreement to represent the Taiwan
Research Institute, a private, nonprofit study center with
ties to Taiwan's ruling party. With help from its U.S.
consultants, the Taipei think tank joined the chorus
condemning what it said was the timidity of the Clinton
policy review.
A Powell Tate press release said that ``if the United
States sincerely wishes to recognize the remarkable progress
of democracy in Taiwan, it should treat Taiwan officials with
the respect and consideration it affords representatives of
other democratic nations.''
Taiwan's allies on Capitol Hill also weighted in. Sen. Paul
Simon, D-Ill., said that Clinton passed by a golden
opportunity to significantly revise long-outdated policies
that today ``seem like official pettiness.'' Simon lauded the
development of free elections, multiple political parties and
a free press in Taiwan and expressed dismay that ``we
continue to cuddle up to the mainland government, whose
dictatorship permits none of those.'' Sen Frank H. Murkowski.
R-Alaska, lamented that ``bolder and more-substantive steps''
were not taken. Sen. Hank Brown, R-Colo., alluding to U.S.
willingness to engage North Korea directly, branded the
policy review a ``slap in the face to Taiwan.''
Johns Hopkins Asian expert Clough, however, gave the
Administration credit for maintaining the delicate balancing
act that enables the United States to pursue relations with
both Chinas. ``At best, it's a marginal change in the
management of our policy,'' he said of the Clinton review,
``It's fascinating, the amount of ambiguity that's
required,'' he added.
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