[Pages S3798-S3801]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

CHINA: WHERE DO WE GO FROM HERE

<bullet> Mrs. FEINSTEIN. Mr. President, I recently delivered a speech
to the World Affairs Council of Los Angeles. I took the opportunity to
lay out some of the areas in which I believe the United States needs to
improve its policy toward the People's Republic of China. I thought my
colleagues would find this speech to be of interest. I ask that the
full text of the speech be printed in the Record.
The speech follows:

China: Where Do We Go From Here?

(Remarks of U.S. Senator Dianne Feinstein to World Affairs Council,
April 11, 1996)

It is a great pleasure to be in the City of Los Angeles.
And it is my honor to be introduced by such a distinguished
resident of this great city.
I'm delighted to be at the World Affairs Council, I've had
the privilege of speaking at the World Affairs Council in San
Francisco on several occasions, but never in this major
capital city, so I'm delighted to be here.
I want to share with you today some candid thoughts that I
have about what I believe to be one of the most important
issues for peace and stability in the world today: The

[[Page S3799]]

current crisis in negotiations on Sino-American relations,
and to discuss for a moment how we can forge a new, and
better, era in this important relationship.
One hundred years from now, I have no doubt that when
historians look back, the remarkable rise of China as a world
power will be considered one of the most important
international events of the latter half of the twentieth
century.
More than the tragic war in Bosnia, more than the unsteady
march toward peace in the Middle East, more even than the
collapse of the Soviet Union, China's ascendence as a great
power--and the content and quality of U.S.-Chinese
relations--will shape the direction of global history in the
Pacific Century.
Following what the Chinese view as a ``century of
humiliation'' at the hands of western imperial powers, and
fifty years of war-lord rivalries, revolution, and economic
stagnation, China today is poised at the brink of a
remarkable renaissance.
For close to two decades the Chinese economy has grown by a
staggering 10% a year. China is now the world's 11th largest
exporter--that's where Japan was in 1980--and moving up fast.
By most estimates, by early in the next century China will
have the world's largest economy.
In a little more than a decade, U.S. trade with China has
grown from some $1.2 billion to over $50 billion per year.
China has emerged as a major presence on the world stage.
It is a shame that we do not have the benefit of the
hindsight that our children and grandchildren will have,
because I believe that most Americans--including many
policymakers--do not understand the magnitude or breadth of
the changes currently underway in China and what they mean
for the future peace and stability of Asia and, yes, the
world.

U.S. Policy Missteps

This fundamental lack of understanding is unfortunate--and
could turn out to be tragic--because how we manage our
relationship with China will have a greater effect on
stability in Asia and peace in the world than nearly anything
else we do.
In recent months U.S.-China relations have reached perhaps
their lowest level since President Nixon's historic trip to
China in 1972. Our relationship is plagued by tensions in
nearly every area in which we interact: a large trade
imbalance; China's failure to curb pirating of U.S.
intellectual property; China's transfers of sensitive
weapons, nuclear materials and technology to Pakistan, Iran,
and others; clashing visions of human rights; most
importantly, U.S. concerns about Taiwan, Hong Kong, and
Tibet, these are perceived as deep threats to Chinese
sovereignty.
This situation is made even more complicated by domestic
politics in both countries.
In the U.S., the relationship between China and the U.S.
has been buffeted by the vicissitudes of a Presidential
election year and provocative Congressional actions. For
example, the recent Department of State Authorization
Conference Bill contains ill-advised policy mandates,
including an invitation for a 1996 visit by Lee Teng-hui to
the U.S. ``with all appropriate courtesies,'' and an
elevation of the Taiwan office in Washington.
In China, the lingering of Deng Xiaoping has prevented, in
a sense, the cementing of new leadership, resulting in
jockeying and in-fighting among China's political hierarchy.
It is difficult for any Chinese leader to take bold action to
improve relations with the United States for fear of being
accused of weakness.
Fundamental to the worsening of relations between our two
countries is the lack of any conceptual framework or long-
term strategy on the part of the U.S. policy with respect to
China--a strategy which sets specific goals for the
relationship five and ten years down the road.
Instead, U.S. policy has been reactive and ``event-
driven,'' responding to whatever happens to be the current
revelation, which generally concerns human rights. This calls
into question our entire relationship with China each time we
lurch from crisis to crisis.
A whole host of events have contributed to the current
downward spiral in our relations: Tiananmen Square, the sale
of F-16's to Taiwan, Congressional opposition to China's bid
for the Olympics, U.S. opposition to the construction of
Three Gorges Dam project, and Taiwan President Lee Teng-hui's
visit to the United States last year.
Each of these events has helped create the current
atmosphere. Let me say a few words about why these events
were so important.
Americans were understandably horrified by the globally-
televised scenes of Chinese tanks advancing on unarmed
civilians at Tiananmen Square in 1989. Unfortunately, those
images have come to color our perception of nearly every
aspect of the U.S. relationship with China. For most
Americans Tiananmen Square is all they know of the China of
today.
In the wake of Tiananmen, the U.S. made a number of policy
decisions that further antagonized China. In 1992, for
example, President Bush, who understands China better than
most Americans, made what, I believe, was an unfortunate
decision to sell 150 F-16 aircraft to Taiwan.
The sale, announced during an election campaign, was made
without strong evidence that Taiwan faced a significantly
enhanced threat from China that made these advanced military
planes necessary. For China, the sale was a violation of the
``One China'' policy which has been the bedrock of Sino-
American relations since 1972.
China put forth an extensive effort to host the Summer
Olympic games in 2000: they built a large stadium, apartments
and several other facilities, and made a strong pitch to the
International Olympic Committee. This was going to be China's
introduction to the world--a moment of great national pride.
But, the U.S. reaction was distinctly negative. The House
of Representatives passed a resolution urging the IOC not to
give the games to Beijing and a majority of U.S. Senators
sent a letter urging denial to the IOC. The IOC decided, by
one vote, to give the games to Sydney, Australia, and, again,
China felt the sting of humiliation.
Another American effort to thwart Chinese development, from
China's perspective, has been our reaction to the Three
Gorges Dam project. This massive undertaking, designed to
generate power for the enormous Chinese market, is considered
a critical step in China's economic development program.
Anyone that has been to Beijing has seen the choking clouds
of high sulfur coal dust and lacking sufficient power for the
basic necessities of life for millions of its people, the
Three Gorges Dam represents an important national priority
for the Chinese. But the United States has criticized the
project, on environmental grounds and last year the
Administration indicated it would oppose multilateral and
U.S. financing of Three Gorges.
The current crisis in U.S.-China relations came to a head
last year with the U.S. decision to allow Taiwanese President
Lee Teng-hui to visit the United States last summer to
receive an honorary degree at Cornell University.
The Administration had told the Chinese--as late as May of
last year--that allowing the visit would be inconsistent with
the United States' longstanding ``One China'' policy.
Congress then voted overwhelmingly--myself included--to allow
this ``private'' visit, and the Administration changed its
policy about the visa.
The Chinese President, Jiang Zemin, learned of the decision
by reading it in the newspaper, as he told me when I visited
him in August. You can imagine what the impact was.
President Lee's visit, although billed as a private visit,
turned out to be much more than that. Members of the Senate
met him, he spoke at Cornell and spoke about opportunity for
representation in the United Nations. Again generating a deep
visceral reaction within the Chinese leadership, not only
within the leadership, and this is what Americans must come
to understand, but within the Chinese people itself. And this
gave rise to a new wave of nationalism among its people. The
Chinese showed their anger by overreaction-- engaging in
missile tests and live ammunition war games in the Taiwan
Straits just prior to the Taiwanese elections.
These provocative and unneccessary actions prompted
President Clinton to place two carrier groups in the
immediate area, sending a clear message that the U.S. would
not tolerate military action against Taiwan.
It is clear that none of us fully understood the depth to
which Taiwan presents a deep and fundamental sovereign
imperative to China. We must understand this if we are to
deal directly with China.
These events, occurring against a background of little
dialogue between our two nations and constant criticisms in
the American press, added to the strain and distance.
The Chinese, for their part, have contributed to the
downward spiral in our relations by failing to carry out
commitments made. For example, China's failure to carry out
last year's Intellectual Property Rights agreement signed
last May has cost American copyright-holders over $2 billion
in 1995, and less than full compliance with nuclear Non-
Proliferation and violations of missile reduction treaties
are areas which have drawn considerable and legitimate U.S.
concern.

The Costs of U.S. Missteps

The consequence of this confused and reactive relationship
is that --precisely at the time when we should be doing
everything we can to strengthen and encourage reform in China
by increasing relations with the West--some in China believe
that the U.S. is intentionally encouraging China's increasing
hardline attitudes with the purpose of pushing China toward
an adversarial posture reminiscent of Cold War years with the
Soviet Union.
As you know, a long, drawn-out leadership struggle has been
going on in China for the past several years as the elderly
Deng Xiaoping has disappeared from public life. Although a
new leadership is in place, competitive forces within that
leadership appear to be growing stronger. Hardline actions
are more prevalent.
For example,
China's provocative war games in the Taiwan Straits leading
up to the Taiwanese election.
China's continued provision of sensitive nuclear and
missile technology to Pakistan.
The increasingly strong rhetoric toward Hong Kong, such as
announcing that the elected Legislative Council will be
dissolved and that Hong Kong civil servants will be required
to take an oath of loyalty to Beijing.
And just last week, when Chinese police tried to stop
fundraising for Chinese orphanages at a dinner attended by
U.S. Ambassador James Sasser and prevented Chinese-American
author Amy Tan from delivering a speech.

[[Page S3800]]

Additionally, U.S. policy has not enabled those within the
Chinese leadership who favor greater cooperation with the
West to advance their program. In my conversations with
President Jiang Zemin and Executive Vice Premier Zhu Rongji,
I have become convinced of their genuine desire to reach out
to the United States and build a much more cooperative
relationship. In fact, Deng Xiaoping himself, empowered Jiang
Zemin to be in charge of American relations and this was
ratified by the 14th People's Congress.
But to do that, they need our help. They need to be able to
engage in a genuine dialogue with U.S. leaders, at the very
highest levels. Our President and the President of China need
to be able to sit and talk face-to-face, and to pick up the
phone and call one another on a regular basis. But they do
not yet have that kind of relationship.
When the Administration decided not to invite President
Jiang Zemin to Washington for a state visit, I believe we
lost a valuable opportunity to give ``face'' and support to a
moderate, pro-Western leader, thereby enabling the Chinese to
see greater value in increased ties and pro-Western views.

Most-Favored Nation Status

In approximately two months, Congress will consider whether
to grant the President's request to renew China's Most-
Favored Nation trading status. I believe this issue will
spark a definitive debate in the Congress on the future of
the United States' China policy.
The political implications of revoking MFN for China are
great, and dangerous. Revoking MFN would be seen, I believe,
as a complete break in U.S.-Chinese cooperation.
For a country such as China, where face and respect are
such central issues, revoking MFN--a trading status the U.S.
grants to all but a handful of rogue nations--would be seen
as tantamount to the United States telling China that we no
longer accept them as a member of the family of nations. More
importantly, thousands of businesses and millions of jobs in
this country and in China who are now dependent on MFN status
would be lost. To deny it would be shooting ourselves in the
foot. Also, our ability to work with the Chinese on other
trade issues, on Asian security, on non-proliferation, on
Taiwan, and on human rights would be severely diminished, if
not incapacitated.

Where Do We Go From Here?

Many of you may be wondering if there is anything we can do
to repair a relationship that many feel has already been
irreparably harmed. As a Chinese proverb goes, ``Laughter
cannot bring back what anger has driven away.'' But there is
another Chinese proverb that is perhaps more relevant--``By
hard work one can succeed in moving two mountains to open a
road.''
First, we must elevate the importance of the relationship
with China. President Clinton, Secretary Christopher and high
officials must become much more directly involved. With
China, in many cases, the messenger is as important as the
message.
Most Americans know little of China and less about the
importance of this relationship. The President must speak to
Americans directly of the importance of this relationship and
make the case for an improved relationship to the American
people. He has not done so thus far. It must be done.
Secondly, Secretary Christopher who has visited China only
once, must devote to this relationship the same time and
energy as he has so effectively applied in the Middle East.
Third, we must realize that despite recent tensions, China
and the United States have many more common interests than is
generally realized, and we must build on those common
interests.
Four areas in which our shared interests outweigh our
differences include: Taiwan, trade, security and nuclear non-
proliferation, and improving the quality of life for people.
Taiwan: The role of the United States in constructing a
relationship between China and Taiwan must, by necessity, be
supportive. We should not attempt to impose a solution on
either party. The United States can, however, provide the
underlying stability for Chinese-Taiwanese cooperation by
continually and publicly reaffirming our commitment to a
``One China'' policy.
We must also continue to encourage China to refrain from
aggressive military actions and rhetoric. The key to a
solution remains peaceful reunification. How and when that
takes place is up to the two parties involved. Our interest
must be to see that peace is maintained, to encourage the two
sides to talk, to be an honest broker.
Both Taiwan and China should be encouraged to restart the
Cross-Strait Initiative that was conducted by China's
Association for Relations across the Taiwan Strait and
Taiwan's Strait Exchange Foundation. This dialogue showed
much promise until it was derailed last summer. Even at the
nadir of relations earlier this year, Chinese Prime Minister
Li Peng renewed President Jiang Zemin's offer from last year
for a Taiwan-China summit. And the Chinese offer to begin
direct air, sea, and postal service with Taiwan can only be
beneficial.
Trade: Trade issues have all too often become flashpoints
in U.S.-China relations, with blame to be shared by both
sides.
This past January, while I was in Beijing, Executive Vice
Premier Zhu Rongji, who is in charge of Central Economic
Planning, told us that, effective this month, China will
lower tariffs by 34% across the board and bring its tariff
rate schedule in line with the average of developing
countries within two years.
Our Trade Representative, Mickey Kantor, told me that he is
now reviewing this proposed schedule. The U.S. should work
with China to increase U.S. exports to China, now growing at
a rate of 17% per year. China states it wants to increase
U.S. exports, and this would lower our trade deficit with
China. The U.S. should also review provisions of our laws
which restrict high value exports.
At the same time, the United States should continue to
insist that China live up to fair trade policies, in
particular, its agreements to protect U.S. intellectual
property rights. For example China must prevent the illegal
production of pirated CDS, CD-ROMs, and Lds.
The best way to accomplish this goal is the development of
joint ventures between U.S. copyright holders and Chinese
manufacturers, which could transform factories from illegal
to legal operations with little job cost. In January, I
presented to both the President, the Executive Vice Premier
and to the Trade Minister, a letter from the Recording
Industries of America containing a proposal that six major
American copyright holders are prepared to enter into such
joint agreements.
As I left China and was in Hong Kong, I noted that a
Chinese representative said, ``but we already have these
joint ventures.'' And that is exactly the key, the joint
ventures are not with the copyright holders, and in order to
carry out the intent of the law the venture must be with the
U.S. copyright holder.
As the world's 11th largest exporter and moving up fast,
China's entry into the World Trade Organization is strongly
in the United States' interests and holds the best promise
for preventing trade disputes from escalating into major
conflicts. Although it will take time, we need to continue to
work with China to help them develop the commercial legal
structure and fair trade policies that are necessary for
their membership in that organization.
Security: It is vital that China be engaged in a new
security partnership, one that is cooperative rather than
confrontational. With more than a fifth of the world's
population, a permanent seat on the United Nations Security
Council, and an arsenal of nuclear weapons and
intercontinental ballistic missiles, isolating China is a
very dangerous course.
Such a partnership suggests that China be encouraged to
become an active and responsible party to international
organizations, treaties, and regimes. As such, China should
be granted an equal say in setting the ``rules of the game.''
The corollary of this, of course, is that China must agree to
abide by those rules.
One area that immediately suggests itself as a testing
ground for this type of partnership is the threat of nuclear
proliferation in South Asia. China was helpful in preventing
nuclear proliferation in North Korea, a situation that still
remains problematic.
It is also clearly in the interests of both China and the
United States to ensure that tensions are de-escalated in the
highly unstable India-Pakistan relationship. Both India and
Pakistan have the ability to launch 10 to 20 kiloton nuclear
devices, that is twice the size of Hiroshima, in a matter of
weeks. Both countries are on China's Southern border, and
both suffer from major internal instability. Acting alongside
other local and regional powers, the United States and China
must work together to de-escalate growing tensions between
these two countries.
Quality of Life: Finally, despite the bad press that China
has received in this country of late regarding human rights,
I believe that here too there is opportunity for progress.
However, to believe that China will change its ways merely to
please America is naive. The real key to change is convincing
China that it is in China's interests to change.
We have tried lecturing China on individual human rights
cases, and have found that method to be unsuccessful. A more
productive approach would be to work with China to develop an
independent judicial system that can guarantee due process
and the rule of law--an area in which China has asked for our
help.
By engaging China in a larger dialogue about good
governance, through exchange programs, assistance in the
drafting of criminal and commercial codes, and in
establishing an independent judiciary with due process of
law, we will do much more to advance the cause of human
rights in China in the long run than through constant
castigation.
Even without our help, China is moving in this direction.
Last month, the National People's Congress enacted
legislation that provides individuals greater protection from
arbitrary punishment by police and government agencies, which
sets stricter standards on government agencies for imposing
fines and fees, and which requires the ruling State Council
to secure the approval of the People's Congress before
declaring martial law.
Evidence of the past twenty years suggests that China is
changing. You must remember back to the 1960's, when 10-15
million people were harmed or lost their lives. When I first
went to China in 1979, it was impossible to have an open
political discussion. People were simply too afraid.
Last month, international journalists openly interviewed
ordinary Chinese citizens

[[Page S3801]]

on the street about their views of the Taiwanese elections.
Some supported the government's response, others did not.
This change should not be underestimated. It is the
unavoidable result of improving conditions and interaction
with the West.
One has but to look back at the Cultural Revolution of 35
years ago to see the contrast and improvement in freedoms, in
the increasing standard of living, wages and savings, and
better education of the people, to know that things are
changing and improving. As Minister of Trade Wu Yi said to
me, ``It isn't easy to go from a China which has been ruled
by man for 5000 years to a China ruled by law.'' And that is
what is happening.
With the Taiwan elections behind us, we now have the
opportunity to move past some of the events that soured Sino-
American relations earlier this year.
To do this, President Clinton must immerse himself fully in
the details of this most delicate and critical of American
relations. In the final analysis, the goal of American policy
must be to encourage China toward a full and active
relationship with the West and to work together toward a
China that is able to take its role as a stable leader of
peace and security in Asia, and an America that can be her
ally.<bullet>

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