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Date: Thu, 5 Aug 1999

Subject: China Update

TO: Washington State China Relations Council Members & Friends

FROM: Joseph J. Borich, Executive Director

     The following e-mail message, sent by former U.S. Foreign Service officer and China specialist Joe Borich, address directly the topic under discussion in this special section of American Diplomacy. A separate urgent message appeals for help for the victims of the recent earthquake in Taiwan; please give it your generous consideration. The author here provides his estimate of the late-summer state of U.S.-China relations: Ice Beginning to Melt.”—Ed.

Since mid-June, there have been several signs that bilateral relations—which hit close to rock bottom in April/May—may be gradually improving.

  • In mid-June, Undersecretary of State for Political Affairs Thomas Pickering went to Beijing to give Foreign Minister Tang Jiaxuan a detailed, written explanation of the accidental bombing of China’s embassy in Belgrade. The Chinese officially refused to accept the explanation, or the U.S. contention that the bombing was indeed an accident. One of the conditions Beijing had stipulated for resolving the bombing was the U.S. government identify those responsible for targeting the Embassy and punish them. Pickering’s explanation named no names and was silent on the issue of punishment. However, the Chinese side did discuss another of their conditions — compensation — with Pickering, and in a much more positive manner.

  • Following Taiwan President Lee Teng-hui’s statement in mid-July that Taiwan and China had a special “state-to-state relationship” (a formulation angrily rejected by Beijing), Washington dispatched Assistant Secretary of State Stanley Roth and National Security Council Asian Affairs Director Kenneth Lieberthal to Beijing to meet with China’s Foreign Minister Tang Jiaxuan. The talks were publicly described only as “useful.” What that guarded comment meant was that Beijing was reassured the U.S.’s one-China policy remained firmly in place, Lee’s comments notwithstanding. (Roth and Lieberthal also cautioned China against resorting to a military response.) Beijing was no doubt further assured when Washington sent the American Institute in Taiwan’s chairman, Richard Bush, to Taipei to reinforce the U.S. position and also postponed a Pentagon delegation to Taiwan.

  • The Roth-Lieberthal mission also cleared the way for a meeting between Secretary of State Madeleine Albright and Foreign Minister Tang, which took place in Singapore in late July on the margins of the ASEAN Regional Forum. After that meeting, the two sides announced that Presidents Clinton and Jiang would hold a summit meeting during the APEC Leaders Meeting in Auckland next month. Albright and Tang indicated that WTO negotiations would be at or near the top of the agenda when the two leaders met.

  • Also in late July, Commerce Undersecretary for International Trade, David Aaron, went to Beijing to meet with the Minister of Foreign Trade and Economic Cooperation, Shi Guangsheng. Aaron’s mission was to try to re-start the bilateral economic dialog. Minister Shi agreed to reactivation of the Joint Commission on Commerce and Trade and offered to host the next meeting in Beijing this fall.

  • On July 30, Department of State Legal Advisor David Andrews announced in Beijing that China had agreed to a $5.4 million settlement to compensate victims of the Belgrade embassy bombing and their families. Andrews also said that talks will begin next month to settle claims by each side for damage done to their respective diplomatic buildings in May.

  • Probably also helping to soften China’s position were votes taken in both houses of Congress in the second half of July, overwhelmingly rejecting efforts to scuttle Normal Trade Relations status for China. The vote in the House was 260-170, a change of only four votes from 1998. In the Senate, a measure to force a Senate vote on NTR for China was defeated even more resoundingly, 87-12.

The resumption of high level contacts signaled that Beijing is beginning to emerge from its funk engendered by events in April and May — Washington’s rejection of Zhu Rongji’s WTO accession offer; the embassy bombing; and the release of the Cox Report. Still missing for the time being at least are any hints that China is ready to resume other equally important dialogs on international security, military-to-military contacts, and human rights. For that matter, it is still not clear when or if Beijing will be ready to conclude a bilateral agreement on its accession to the WTO.

PROSPECTS FOR WTO

If recent high level meetings and the promise of a summit next month point to a healing of damaged relations, they do not necessarily portend a quick and desirable outcome for U.S.-China negotiations on WTO. When Premier Zhu came to the U.S. in April, he wanted a deal on WTO and threw virtually all of China’s cards on the table (including many that were bound to draw strong resistance in China) in order to get one. Events since then have weakened Zhu’s position and strengthened those of economic and ideological conservatives. Meanwhile, China signed bilateral agreements with Japan and Australia in July. Though details are not known, both agreements are believed to contain fewer concessions than those offered to the U.S. by Zhu.

Although China has denied it would “walk back” any of the terms in Zhu’s offer, it will be politically difficult to sustain them and nearly impossible to offer more to the U.S. Zhu has been attacked vociferously for the offer, and some in the leadership are even questioning the value to China of rushing headlong into the global market. Even those who are not troubled by the ideological shift toward a fully marketized, open economy (and there are many who are) worry about a short-term but substantial increase in China’s already high unemployment and the added strain on social and political stability that would bring. The cleavage between those calling for faster, deeper economic restructuring and those arguing for stability at all cost has no doubt been broadened by the twin challenges of Fanlungong and Lee Teng-hui’s latest push at the one-China envelope. In any event, State Councilor (and former Minister of MOFTEC) Wu Yi felt constrained recently to offer a public reminder that the decision to seek WTO membership was made by no less an authority the Central Committee of the Communist Party.

However, Foreign Minister Tang reportedly said at a press conference in Singapore that China would only meet WTO entry conditions for developing countries. This would appear to contradict Zhu Rongji’s commitment to phase China’s accession to the WTO in the same period of time and to the same level as other major parties to the WTO, including industrialized countries. Adding to the concern, MOFTEC Vice Minister (and China’s chief WTO negotiator) Long Yongtu reportedly said in Beijing in early August he was not confident China could enter the WTO even if negotiations with the U.S. were resumed immediately. He apparently also sought to play down the importance of the WTO, claiming that bilateral—rather than multilateral—relations were the key element to global trade.

Undoubtedly much of the recent Chinese commentary is directly aimed at improving China’s bargaining position should WTO negotiations resume soon. But, these comments could also foreshadow a retreat — and perhaps a substantial one — from Zhu’s sweeping offer last April. China’s leaders are currently on their annual retreat at the seaside resort of Beidaihe, where they are discussing this and other major issues. Their return to Beijing may occasion an authoritative signal on when China will resume WTO negotiations, and how far it is still prepared to go.

TAIWAN-CHINA: “NO SYSTEM, TWO COUNTRIES”?

During a July 10 interview with a German radio service, Taiwan President Lee Teng-hui advocated that Taiwan and the mainland have “at least a special state-to-state relationship,” implying there were two separate, sovereign states of China that should treat each other — and be treated by the rest of the world — on an equal basis. In late July, the chairman of Taiwan’s unofficial Strait Exchange Foundation, Koo Chen-fu, sent to his counterpart organization on the mainland a detailed explanation of Lee’s comment. The explanation reads in part: “In the five decades since the PRC was established in 1949, China has been divided into two parts across the Taiwan Strait and ruled separately by two sovereign states. This has naturally resulted in a divided China characterized by a special relationship across the strait.”

Koo went on to cite the cultural and ethnic bond between the two sides, and the already-established dialog on civil and commercial affairs. Koo continued that the mainland’s one-China policy denied Taiwan’s existence and suggested that China is already unified. From Taiwan’s perspective, he added, “one China” is something for the future since China at present is divided and ruled separately by two equal sovereign states, requiring a special state-to-state relationship with each other. He called for both sides to pursue a unified China in the future by engaging in negotiations on the basis of parity.

Beijing reacted quickly and angrily to Lee’s formulation, and rejected Koo’s explanation. Beijing reminded Taiwan that while it sought reunification by peaceful means, it would resort to force if necessary to quell any Taiwan bid for independence. The U.S. government moved quickly to distance itself from Lee’s statement while warning Beijing against using force. President Clinton publicly reaffirmed the U.S. one-China policy, and conveyed his message personally to President Jiang via telephone. He also called on both sides to continue their dialog and to act with restraint.

Other than lambasting Lee, the PRC thus far has taken no stronger measures to convey its disapproval as it did in 1995, following Lee’s visit to the U.S. The scheduled visit to Taiwan in October of the Chairman of China’s unofficial Association for relations across the Taiwan Strait, Wang Daohan, is on hold pending a “satisfactory” explanation of Lee’s comments. Wang’s visit to Taiwan would be a benchmark in the cross-Strait dialog, and would reciprocate Koo Chen-fu’s visit to the mainland last year.

What inspired Lee’s comments, and why have they stirred a hornet’s nest in Beijing?

Until this decade, Taiwan was governed by a Leninist-style party with mainland origins that regarded Taiwan as a temporary haven until it could regain control of the mainland. The long-term “mission” of the pre-1990 Kuomintang (KMT) Party on Taiwan made it politically plausible, if logically inconsistent, to maintain that there was only one China and that Taiwan was a part of it. The issue of sovereignty never arose; the only question was whether the KMT or the Communists should be ruling all of China. Thus, there was no basis for challenging the statement in the Shanghai Communique (1972), establishing partial relations between the U.S. and China, that: “The U.S. acknowledges the position of Chinese on both sides of the Taiwan Strait that there is only one China and Taiwan is a part of it.” The essence of this statement was repeated without serious challenge in the 1979 Communique establishing full diplomatic relations, and in the 1982 Communique limiting U.S. arms sales to Taiwan.

In 1990, Taiwan held its first-ever popular election of its president. The winner, Taiwan-born Lee Teng-hui, initiated constitutional changes in 1990-91 that strengthened democratic institutions there and abandoned the KMT’s irredentist claims. Lee also formally recognized the legitimacy of Beijing’s rule over the mainland. It was in that same period that the two sides established unofficial organizations to open a channel for direct dialog and negotiations. It was also in this period that Taiwan began to insist that the two sides deal with each other as equals, and that reunification be effected through a three-step process to be concluded only when the two sides had achieved rough economic and political parity. Beijing never accepted these terms, nor any other conditions implying it had less than full sovereignty over Taiwan.

Taiwan’s authorities continue to insist that reunification is their eventual goal, but that in the interim, the mainland and the rest of the world should treat the two sides as separate, equal, and sovereign political entities. To that end, Taiwan over the past several years has tried by numerous means to gain wider and more formal recognition for itself, including: admission to multilateral organizations, especially those that admit only internationally recognized states; highly politicized international travel by its president and premier; and economic assistance and private investment often targeted to maximize political/diplomatic gains. None of these efforts has enjoyed measurable success. It has also tried on various occasions to refine the definition of its relations with the mainland (e.g., Lee’s comments in July) to create as much political space as possible between the two.

Beijing has refused to be moved from its one-China position, and no other country has realigned its China policy based on Taiwan’s definitions. Beijing profoundly distrusts Lee and believes he is seeking nothing less than a complete break from the mainland and international acceptance of Taiwan as a separate and fully independent state.

Whatever Lee’s longer-term intentions, an intractable contradiction exists between Beijing and Taipei regarding Taiwan’s current status. For Beijing, the only issue for consideration is formal resolution of its sovereignty over all of China’s territory, including Taiwan. This is so deeply ingrained in mainland consciousness after nearly two centuries of foreign colonization that it has taken on the trappings of a sacred mission, one that Beijing cannot abandon or negotiate away. Nevertheless, Beijing has promised complete autonomy for a Taiwan reunited with the mainland, including retention of its own armed forces, in exchange for Taiwan’s acceptance of PRC sovereignty. It has also signaled willingness not to force the issue, as long as Taiwan refrains from challenging the mainland’s sovereignty and seeking independence. However, it is precisely there that the fault line is located.

For Taipei, the issue is more complex. Although most (but not all) on Taiwan accept a cultural and linguistic affinity — even a strong bond — among people on both sides of the Strait, they are also painfully conscious of the discrepancies: a population one-sixtieth of the mainland’s; a per capita income 13 times larger than that on the mainland; a thriving, multi-party democracy vs. an autocracy that brooks no political competition. From the perspective of people on Taiwan the mainland presents a huge challenge which they cannot escape. Their great fear is that Taiwan will be swallowed up economically and politically. It will take years or even decades of further development on the mainland before their fears are assuaged. In the meantime, they are perforce consigned to a political and diplomatic “twilight zone,” neither country nor province. From their sense of vulnerability comes political support for maintaining “space” from the mainland which no political party in Taiwan can ignore. On the issue of separate political identities, the question in Taiwan is not yes or no, but how much and for how long.

From the standpoint of the U.S., this contradiction is also complex, and compelling. Acting in our own interests, we helped create the situation that obtains today. For the past 20 years, administrations of both parties have held steadfastly to a one-China policy, according full diplomatic recognition to Beijing while maintaining an unofficial but robust relationship with Taipei. By now our cultural and commercial ties to both sides of the Strait have grown strong. We are uneasy with the contradiction existing between the two sides and would like to see it “fixed” somehow, through our own efforts if all else fails.

At one extreme are those who see Taiwan as “the little engine that could” — an unmitigated political and economic success as measured by U.S. standards, one that deserves our full political and military support even at the expense of relations with the mainland, if necessary. At the other extreme are those who believe the support we are giving Taiwan now has already jeopardized our larger interests in the mainland, and we should thus adopt a “strict constructionist” interpretation of the three joint communiqués, even if this imperils Taiwan’s security.

The only argument for our strange, inelegant, and often disquieting China policy is that it has worked and served U.S. interests very well. On Taiwan, it created the conditions for the maturation of democratic institutions and a market economy. On the mainland, it ended the adversarial relationship between the U.S. and China, giving Beijing the sense of security it needed to unleash the forces of reform and opening. The past two decades mark the longest period of peace and political stability in China in two centuries and a growth of personal freedom and prosperity unrivaled in China’s entire history. In that period, China has also changed from a rogue state promoting world revolution, to a positive stabilizing force in the Asian region.

We may be forced to accept that for the time being that there are no simple, elegant solutions that will serve U.S. interests as well. We should continue to urge both sides to talk and to refrain from provocations. We should also continue to insist to both sides that any resolution must be peaceful. Like it or not, we may have to live with the status quo for some time to come.  

Read Borich September 22 Memo  
Read appeal for Taiwan Earthquake aid  
Return to TOP  


Focus on
CHINA

Minxin Pei asks, Is China Unstable? “China... will face rising instability if the regime fails to undertake significant political reform in the next decade.”

Carl Fritz on China in 1945: One Man's Experience. “My unit was an air service group, and when the war ended members of the unit were widely scattered all over China.”

Ralph D. Sawyer on Chinese Warfare: The Paradox of the Unlearned Lesson. “From any reasonable perspective China’s continuity has been cultural rather than political, its heritage throughout one of incessant conflict as different peoples, states, and popular movements fought to control its populace and resources.”

Thomas D. Grant on Taiwan Trouble. “Taiwan had almost all the traits of a separate state, except that it never claimed to be a separate state.”


 Elsewhere in this issue:

Also by Joe Borich in American Diplomacy:

On U.S. relations with a Changing China:
"
Whether we like China or not, and for better or worse, China will dominate the U.S. foreign policy agenda throughout most if not all of the twenty-first century." (Summer 1998)


Author Joe Borich


Commentary in this issue:

Barry Ryland-Holmes on Waging Peace in Kosovo: "Western intervention, however civilized it may appear, runs the risk of replacing the economic imperialism of the nineteenth century with a cultural imperialism for the twenty-first."

Lawyers Harry Inman and Walter Gary Sharp on Revising the UN Trusteeship System – Will it Work?: "The international community has all the legal authority it needs to solve humanitarian crises and armed conflicts around the world. The real difficulty is gaining a consensus on what should be done and how resources will be provided."


 Elsewhere in this issue:

Joe Borich is Executive Director of the Washington State China Relations Council. He was closely associated with U.S. policy toward China throughout his long career in the U.S. Foreign Service and served as U.S. Consul General in Shanghai during 1994-1997.

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