[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]





                  THE FUTURE OF U.S.-TAIWAN RELATIONS

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


                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 11, 2016

                               __________

                           Serial No. 114-153

                               __________

        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                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                     MATT SALMON, Arizona Chairman
DANA ROHRABACHER, California         BRAD SHERMAN, California
STEVE CHABOT, Ohio                   AMI BERA, California
TOM MARINO, Pennsylvania             TULSI GABBARD, Hawaii
JEFF DUNCAN, South Carolina          ALAN S. LOWENTHAL, California
MO BROOKS, Alabama                   GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania            GRACE MENG, New York
SCOTT DesJARLAIS, Tennessee




















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Ms. Susan A. Thornton, Deputy Assistant Secretary, Bureau of East 
  Asian and Pacific Affairs, U.S. Department of State............     8
Mr. Randall Schriver, president and chief executive officer, 
  Project 2049 Institute.........................................    24
Ms. Bonnie Glaser, senior adviser for Asia, director of China 
  Power Project, Center for Strategic and International Studies..    32
Shelley Rigger, Ph.D., Brown professor and assistant dean for 
  educational policy, Davidson College...........................    43

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Ms. Susan A. Thornton: Prepared statement........................    10
Mr. Randall Schriver: Prepared statement.........................    27
Ms. Bonnie Glaser: Prepared statement............................    34
Shelley Rigger, Ph.D.: Prepared statement........................    45

                                APPENDIX

Hearing notice...................................................    56
Hearing minutes..................................................    57
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........    58
 
                  THE FUTURE OF U.S.-TAIWAN RELATIONS

                              ----------                              


                      THURSDAY, FEBRUARY 11, 2016

                       House of Representatives,

                 Subcommittee on Asia and the Pacific,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 2 o'clock 
p.m., in room 2200 Rayburn House Office Building, Hon. Matt 
Salmon (chairman of the subcommittee) presiding.
    Mr. Salmon. Subcommittee will come to order.
    First of all and foremost, my heart goes out to Taiwan as 
it deals with the aftermath of the shocking magnitude 6.4 
earthquake on February 6th that claimed 63 lives and injured 
551, and that was in the city of Tainan, where I lived for 7 
months, and I have a really special place in my heart for the 
people of Tainan.
    I am so saddened to hear about the damage that the 
earthquake wreaked and I know I am joined with my colleagues of 
the subcommittee in continuing to support Taiwan in this 
difficult time.
    Today, we celebrate Taiwan's democracy, given its recent 
Presidential and parliamentary elections in January. In this 
regional context, Taiwan's free and fair elections, vibrant 
free market economy and open society have definitely set an 
example for the region and for the world.
    With the Democratic Progressive Party, DPP, victory, the 
party has won its first ever absolute majority in the 
Legislative Yuan which until--which has until now been 
controlled by the Kuomintang, KMT. President-elect Tsai Ing-wen 
will also be Taiwan's first female President and I think that 
is pretty exciting.
    This third peaceful transfer of executive power is an 
indication of the maturation of Taiwan's democracy. The recent 
election presents the United States with more opportunities to 
improve our political security and economic relationship with 
Taiwan.
    We are here to parse out the priorities of President-elects 
Tsai's administration and understand the prospects and 
potential for the U.S., Taiwan and the cross-Strait 
relationships and to discuss how the United States can continue 
to honor our commitments to Taiwan. I look forward to hearing 
from our distinguished witnesses on these important issues.
    The cross-Strait relationship has been relatively stable 
under the sitting Kuomintang President Ma Ying-jeou. President 
Ma took strides to build closer relationships with China, 
especially in trade.
    To his credit, President Ma negotiated the Economic 
Cooperation Framework Agreement, ECFA, with China in 2010 and 
this paved the way for Taiwan's expanded trade ties under 
similar economic cooperation agreements with New Zealand and 
Singapore.
    The suspension on the cross-Strait Trade in Services 
Agreement, TISA, as a result of domestic protests in 2014 may 
have indirectly contributed to China's tightening on further 
trade agreements between Taiwan and other countries.
    With slow economic development, untapped potential due to 
political constraints and heavy reliance on trade, I look 
forward to hearing from our distinguished panels, especially 
our administration witness, about Taiwan's economic and trade 
prospects and how the United States can help Taiwan overcome 
some of these challenges.
    I also worry about the potential for cross-Strait stability 
as China has not hesitated to remind us that it is still 
willing to use military force against Taiwan.
    Of note, China continues to press President-elect Tsai and 
her administration to acknowledge the 1992 consensus, something 
President Ma has adhered to.
    President-elect Tsai will continue to face pressure here, 
given her party's own interpretation of the agreement. Despite 
underscoring her intention to maintain the status quo and 
saying there won't be provocation and there won't be surprises, 
we cannot say the same for China.
    A steady stream of threats toward Taiwan's national 
security are an everyday reality for Taiwan and its people and 
I hope our panelists can shed light on how we can continue to 
support Taiwan's security under the Taiwan Relations Act and 
through increased cooperation.
    I admire outgoing President Ma and all that he was able to 
accomplish for Taiwan. I look forward to seeing how we can 
continue to work with President Tsai for the mutual benefit of 
the United States and Taiwan.
    Members of Congress have always shared a strong interest in 
supporting Taiwan's security and democracy. Having lived there 
for a few years myself while serving a church mission, I am one 
of its big supporters--hopefully, its biggest.
    At a time when Taiwan's presence in the international arena 
is constantly being threatened, at a time when Taiwan's 
security is not insured from coercion and potential attacks, I 
urge our administration to continue to support Taiwan.
    We must prioritize Taiwan's active and meaningful 
participation on the global stage, ensure its self-defense 
capabilities are sufficient and ensure that its economy 
continues to grow vibrantly and compete with other major powers 
in the region.
    Members present today are going to 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 for statements, questions and 
extraneous material subject to the length limitation in the 
rules.
    And I am going to recognize Chairman Royce and then Ranking 
Member Sherman.
    Mr. Royce. Thank you very much, Chairman Salmon.
    And let me first say on behalf of our members here we have 
all visited Tainan and been in Taiwan and our hearts go out to 
the people of Taiwan, to the victims of this earthquake. Fifty-
nine perished so far. Hundreds and hundreds have been injured. 
There is a great knowledge here in the United States in terms 
of how much the Taiwanese go to the rescue with volunteers all 
over the world after international incidents whenever an 
earthquake or some other disaster hits. We saw how quickly the 
authorities, but also how quickly the volunteers, rushed to the 
scene to begin to rescue people.
    So we have traveled--our committee together since I have 
been chairman--has traveled three times down to Taiwan in the 
last 3 years. We visited Kaohsiung and we have visited Tainan, 
as I mentioned, and Taipei, of course, and we are just 
devastated to see the destruction. But the American people 
stand by the Taiwanese people in their time of need and we are 
ready to assist in any way we can.
    Taiwan is one of our most important friends to the U.S. in 
the Asia Pacific and I know that supporting Taiwan is a 
critical issue for members of the Foreign Affairs Committee. As 
chairman, I have made the strengthening of this relationship 
with Taiwan one of the committee's top priorities.
    I want to again congratulate the people of Taiwan for their 
free and fair elections last month. I think the U.S. and Taiwan 
share a very important commitment to democracy, to human 
rights, to the rule of law and these values, I think, serve as 
a bedrock to the U.S.-Taiwan relationship. And I think the 
election demonstrated the strength and vibrancy of Taiwan's 
democracy and their democratic system, hopefully serving as a 
model for other countries in the region.
    Last year, Chairman Salmon joined me, as I said, in the 
delegation where we spent some time in Taipei working to 
strengthen the U.S.-Taiwan relationship. We met with the 
sitting President, Ma. We met with President-elect, Dr. Tsai 
Ing-wen, and as the Taiwan Government changes hands during its 
transition period it is important that the U.S. continues to 
emphasize its steadfast commitment to Taiwan and that the 
players in Taiwan also make responsible decisions that are in 
the best interest of the people of Taiwan.
    A stable and prosperous Taiwan is, of course, in the best 
interests of the United States and that is why I look forward 
to working closely with President-elect Tsai's new government 
to strengthen all aspects of the U.S.-Taiwan bilateral 
relationship. And in particular I have a enthusiasm--I have 
long been an advocate for Taiwan's inclusion into the Trans-
Pacific Partnership. Taiwan's economic security is just as 
important as its physical security, so its inclusion in the 
second round of the agreement will be critical to Taiwan's 
stability. I know that Dr. Tsai will be willing to do the work 
in Taiwan needed to seriously begin a bilateral investment 
agreement with the United States with an eye toward TPP and so 
I encourage the administration to work with the new government 
to create a pathway for Taiwan to be integrated into these 
trade deals.
    I am also committed to upholding the letter and spirit of 
the Taiwan Relations Act, which has underpinned the 
relationship now for 37 years.
    Last year, we worked tirelessly to pressure the 
administration to finally follow through with the arms sales 
that it had promised Taiwan. The sales were finally set in 
motion in December but I remain deeply skeptical about the 
administration's delays that needlessly drag out the arms sales 
process for Taiwan.
    So over the next year both the U.S. and Taiwan will be 
working on these types of issues, and I thank Chairman Salmon 
again--he is among the strongest friends of the Taiwanese 
people--and I also thank Congressman Brad Sherman and the other 
members of this committee for their engagement on the issue of 
Taiwan.
    I look forward to hearing from the witnesses.
    Mr. Salmon. Thank you.
    The chair recognizes the ranking member, Mr. Sherman.
    Mr. Sherman. Chairman, thank you for holding these 
hearings. I know we have a classified briefing for the full 
committee on the same subject as these hearings and then I know 
that we have votes.
    So we will have a limited amount of time here in this room. 
Our hearts go out to the people of Taiwan and I join with your 
statement, the statement of our full committee chair, in 
sympathy for the people of Taiwan where this disaster has cost 
60 lives.
    And as the chairman noted, the people of Taiwan are there 
again and again and again when there is a disaster elsewhere in 
the world.
    While the regime in Beijing is currently engaged in a 
concerted effort to restrict human rights, we look only at 
Taiwan as a country where democracy flourishes, and we will 
once again see the peaceful and democratic transfer of power 
from one party to another.
    The United States has a strong interest in supporting the 
people of Taiwan and those interests are enshrined in the 
Taiwan Relations Act, which is an important statement that the 
U.S. to resolve that the people of Taiwan will be able to 
determine their own fate permanently and peacefully.
    The clear message should be that the United States believes 
in the power of dialogue and we unequivocally support the right 
of the people of Taiwan to determine their own fate.
    In that spirit, Mr. Chairman, I thank you for bringing up 
the Taiwan Naval Support Act and I thank the administration for 
finally delivering the frigging frigates.
    While our commitment to our friends in Taiwan should not be 
doubted, I was very impressed to meet Dr. Tsai when she was in 
opposition on the trip led by Chairman Royce and I am confident 
that the people of Taiwan will rejoice when they inaugurate 
their first woman President and it is a joy that I look forward 
to the American people experiencing just a year later.
    And I know the people of Taiwan will enjoy living under a 
woman President and I know my constituents look forward to that 
joy as well.
    I look forward to hearing how we can help diversify the 
economy of Taiwan so it is less reliant on and dependent on and 
subject to manipulation by the People's Republic of China.
    I support Taiwan joining TPP if that is what the people of 
China want--the people of Taiwan want. What I don't support is 
the United States joining TPP, and I will point out that every 
candidate for President that is able to get more than 3 percent 
of the vote has taken a stance against TPP because they know 
that the American people wouldn't dream of seriously 
considering a candidate that supported this trade pact which 
will hurt the American people so significantly while helping 
the People's Republic of China establish that the rules of 
trade for the world are that currency manipulation is, as my 
people say, kosher.
    It is a tremendous negotiating victory for the People's 
Republic of China to enshrine in the rules of the road that 
their practices of currency manipulation are to be sacrosanct, 
not to mention the fact that the rules of origin are of such 
tremendous assistance to the People's Republic of China.
    Taiwan could play a useful and larger role in international 
organizations, sharing its expertise, sharing its experience.
    The United States needs to continue to advocate broader 
participation for in Taiwan international organizations, 
whether it be those organizations like Interpol, that keep us 
safe from dangerous criminals, and that's why I have 
cosponsored legislation to direct the President to develop a 
strategy to obtain observer status at least for Taiwan and 
Interpol.
    Similarly, I have advocated Taiwan's participation in other 
international organizations. There is no reason why the fine 
points of international sovereignty should get involved in the 
practicality of Taiwan's membership in WHO.
    Even the People's Republic of China has it in their 
interest to stop criminals and stop disease and the practical 
way to do that is to involve Taiwan to the maximum extent in 
the international organizations that are focused on human 
health and international crime.
    So I look forward to hearing from the witnesses here in 
this open setting and to then adjourning for the classified 
briefing.
    And I don't know if anyone else on our side has an opening 
statement. But I hope the chairman would indulge at least one 
member on our side.
    Mr. Salmon. Sure. I think Mr. Chabot has an opening 
statement.
    Mr. Chabot. Thank you, Mr. Chairman, and thank you for 
holding this important hearing. Considering the recent 
elections in Taiwan, I want to commend the subcommittee for 
calling this hearing.
    I met with President-elect Tsai several times in the past, 
both here and in Taiwan, and I congratulate her and the people 
of Taiwan for their continued support of democracy.
    And I want to say that I agree with my colleague, Mr. 
Sherman, which sometimes we agree and sometimes we don't, but I 
certainly agree with his sentiment about how wonderful it is 
that Taiwan has its first woman President.
    As far as here in the U.S., I also share the sentiment of 
having the first woman President sworn in next year except that 
unfortunately----
    Mr. Connolly. Here in the United States?
    Mr. Chabot [continuing]. Because of New Hampshire Tuesday 
evening Carly Fiorina already dropped out. But in any event----
    Mr. Sherman. Hence, there is only one way to achieve the 
goal that you and I both have for the United States.
    Mr. Chabot. And we may both have them this year. You never 
know.
    Mr. Connolly. Gee, Mr. Chairman, I was just about to give 
Mr. Chabot a big hug.
    Mr. Chabot. There you go.
    Mr. Salmon. Yeah. He was talking about a brokered 
convention. I'm sorry.
    Mr. Chabot. But getting back to Taiwan, I would like to 
quickly address the restrictions on high-level visits by high-
ranking Taiwanese officials, something that I have always felt 
was both insulting and counterproductive.
    Years ago, I joined a number of my colleagues and we flew 
to New York City one evening to meet--after votes here to meet 
with then President Chen, who is a great friend of America.
    We had to travel to New York because President Chen was not 
allowed to enter Washington, DC. This is U.S. policy, our own 
self-imposed restrictions, and I have long said that this 
policy is nonsense and should be changed.
    In fact, then Foreign Minister Mark Chen when he was in the 
legislature I had met with him in Washington. He was appointed 
foreign minister and a few weeks later when we were going to 
get together I had to drive to Baltimore to meet with him there 
because he wasn't allowed--since he was one of the four top 
officials wasn't allowed to meet here in Washington, DC. That 
is outrageous. It is an insult to Taiwan and the United States 
should change this immediately.
    I also urge the administration to have direct dialogue with 
the democratically-elected President of Taiwan and, as you all 
know, international diplomacy face-to-face meetings are an 
important component in ensuring a sustainable relationship.
    And finally, I would like to note that I introduced H. Con. 
Res. 88 last fall. This legislation reaffirms that Taiwan 
Relations Act and the six assurances together form the 
cornerstone of U.S. relations with Taiwan. I would urge my 
colleagues to join in that support.
    I yield back. Thank you, Mr. Chairman.
    Mr. Salmon. Thank you. Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    Just real briefly, as a member of the committee and 
subcommittee and also as the co-chair of the Taiwan caucus, 
this is a very important hearing and events in the Strait are 
also very important.
    We all can celebrate free and democratic elections that led 
to the change in government from one party to another and with 
the first female President of Taiwan, both welcome 
developments, and to watch the free transfer of power is a very 
powerful model in the region, one we hope will evolve and be 
replicated.
    I agree with Mr. Chabot that the cornerstone of our 
relationship is the Taiwan Relations Act and the six assurances 
and that act includes interalia, a defensive military support 
posture on the part of the United States, to ensure that peace 
prevails in the Taiwan Straits and that whatever the evolution 
politically it will be a peaceful one, not any other kind of 
kinetic option.
    So these are important hearings. Lots of changes going on 
including, tragically, the earthquake in Tainan and the loss of 
life there, and I am happy to be here and joining in these 
hearings.
    And I thank you, Mr. Chairman, and our ranking member, Mr. 
Sherman, for holding them.
    Mr. Salmon. Thank you.
    Ms. Meng.
    Ms. Meng. Thank you, Chairman Salmon, to our Ranking Member 
Sherman and all our distinguished witnesses who are here today. 
Thank you for attending this important hearing.
    Before I go forward with my remarks, I also want to take a 
moment to acknowledge the earthquake in Taiwan this past 
Saturday.
    It was a terrible tragedy and I know people, not just in 
Taiwan and around the world, but my constituents in New York 
are very concerned as well.
    I know that rescue efforts are ongoing and I too want to 
thank all the volunteers and people who have come forward to 
help.
    Both my colleagues and I will be keeping a close eye on the 
progress.
    The purpose of today's hearing is to assess the future of 
U.S.-Taiwan relations, particularly in light of the January 
16th Presidential elections, and I too want to extend my 
congratulations to Dr. Tsai as the first female President in 
Taiwan.
    I congratulate the people of Taiwan for their steadfast 
adherence to democracy and I look forward to improving our 
robust relationship.
    Thank you, and I yield back.
    Mr. Salmon. Mr. Bera, if you would like to make a quick 
opening statement. You good?
    Mr. Lowenthal, did you want to make a quick statement?
    Mr. Lowenthal. I concur. First, I thank you for being here. 
You know, and I also want to extend my condolences to the 
families of all those that were killed and injured by the 
earthquake. I want to congratulate the people of Taiwan on the 
successful elections.
    It is a welcome example of democracy in a region that at 
the same time has seen a great backsliding on human rights. 
That is not true in terms of Taiwan.
    We have seen the gradual improvement in the relationships 
between the cross-Strait relations.
    I think it is beneficial for the security of all to have 
that stability and I look forward to the hearing today. Thank 
you, and I yield back.
    Mr. Salmon. Thank you very much.
    We are going to go ahead and introduce our first panelist. 
Thank you so much for being here today, Ms. Thornton.
    We are pleased to have Ms. Susan Thornton here today, 
deputy assistant secretary of state in the State Department's 
Bureau of East Asian and Pacific Affairs. And we would like to 
have you give your opening statement and have some questions 
and then we will excuse you and we will seat the next panel.
    You understand the lighting system. Not real complicated. 
When it goes amber you got a minute and when it goes red, most 
of the time people keep talking around here, but you should 
stop.
    Thank you. Ms. Thornton.

STATEMENT OF MS. SUSAN A. THORNTON, DEPUTY ASSISTANT SECRETARY, 
 BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Ms. Thornton. Thank you very much, Mr. Chairman, members of 
the subcommittee for having me here today and giving me the 
opportunity to discuss our very strong relationship with 
Taiwan.
    The story of Taiwan is, of course, an impressive one. 
People on Taiwan have built a prosperous, free and orderly 
society with strong institutions worthy of emulation and envy.
    And before I go any further, I would also like to offer my 
sincere condolences to everyone in Taiwan that was affected by 
the recent earthquake, especially the families of those who 
were injured or lost their lives. The American people stand 
with the people on Taiwan during this difficult time.
    Last month's free and fair elections were yet another 
victory for Taiwan's vibrant democracy. These elections not 
only represent Taiwan's third peaceful transition of 
Presidential power and the first transfer of power in its 
legislature but, as has been already remarked, will also lead 
to the inauguration of Taiwan's first female President.
    In this administration we have worked to strengthen and 
deepen the bonds between the people of the United States and 
Taiwan to build a comprehensive, durable and mutually 
beneficial partnership.
    As one of Taiwan's strongest partners, we are working side 
by side to increase our mutual economic prosperity, tackle 
global challenges and ensure effective security to support 
continued stability and dynamism for Taiwan and the region.
    On trade issues, Taiwan has developed a well-earned 
reputation for having a diversified economy that has built its 
prosperity on the openness of the global trade system.
    Taiwan has grown to become our ninth largest trading 
partner and our seventh largest destination for agricultural 
exports.
    In 2015, our two-way trade in goods with Taiwan reached $66 
billion, up 4\1/2\ percent in just the last 2 years. The United 
States has also moved up to be Taiwan's second largest trading 
partner in the last year.
    Aside from these big business links, people-to-people ties 
between the United States and Taiwan also continue to grow. 
Travel for business and pleasure from Taiwan to the United 
States jumped 35 percent in 2013 alone after Taiwan became a 
member of the U.S. visa waiver program in November 2012.
    The United States remains committed to supporting Taiwan's 
confidence and dignity through increased participation in the 
international community and enhanced security.
    We continue to support Taiwan's membership in organizations 
that do not require statehood and to urge meaningful 
participation in those that do.
    At a time when pressure to squeeze Taiwan out of 
international organizations is growing, we are finding new ways 
for Taiwan to earn the dignity and respect that its 
contributions to global challenges merit.
    These include new innovations such as the establishment of 
our Global Cooperation and Training Framework. The GCTF is a 
vehicle for the United States to help showcase Taiwan's 
strengths and expertise by making it a hub for helping other 
countries to address global and regional concerns.
    At the same time, we remain just as committed to Taiwan's 
meaningful participation in organizations like Interpol, ICAO, 
WHO and the U.N. climate framework.
    We will continue to match Taiwan's growing capacity to 
serve the international community with equally innovative 
approaches to enabling and highlighting Taiwan's contributions.
    On the security front, the United States makes available to 
Taiwan defense articles and services necessary for Taiwan to 
maintain a sufficient self-defense which is consistent with our 
responsibilities under the Taiwan Relations Act.
    During the Obama administration, we have notified Congress 
of over $14 billion in arms sales to Taiwan including a sale of 
$1.83 billion that was notified in December of last year.
    Our efforts at supporting Taiwan's self-defense 
capabilities extend beyond arms sales, however. We also support 
Taiwan's capacity-building efforts through visits, maintenance 
programs, and exchanges.
    Due in part to these stepped-up contacts and strong U.S. 
partnership, Taipei has gained more confidence in its 
engagements with Beijing.
    In recent years, the two sides have pursued constructive 
dialogue to reach agreements on economic and people-to-people 
exchanges that promote peace and stability across the Taiwan 
Strait.
    Last year in November, we welcomed the meeting between 
leaders on both sides of the Taiwan Strait and the historic 
improvement in cross-Strait relations that it symbolized.
    The United States remains committed to our one-China policy 
based on the three joint communiques and the Taiwan Relations 
Act, a policy that has remained consistent over several decades 
and many administrations.
    We will continue to call on both sides of the Strait to 
engage in dialogue on the basis of dignity and respect after 
Taiwan's new administration takes office in May.
    In conclusion, we have developed a vital partnership with 
Taiwan that is filled with many opportunities for cooperation 
in the future.
    We are committed to ensuring that this relationship will 
continue to thrive as we find new ways to deepen our unofficial 
ties.
    The innovative spirit, democratic dynamism and courageous 
vision of the people on Taiwan make us proud to be their friend 
and partner.
    Mr. Chairman and members of the subcommittee, I would like 
to thank you again for inviting me here today and I'm happy to 
answer any questions you may have.
    [The prepared statement of Ms. Thornton follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
                              ----------                              

    Mr. Salmon. Thank you, Ms. Thornton.
    Regarding the recent earthquake, what kind of assistance 
are we planning to offer them as they look to find missing 
people or rebuild?
    Ms. Thornton. Thank you very much, Mr. Chairman, for that 
question.
    We have already in the process of last weekend's earthquake 
received a declaration of the disaster from the authorities on 
Taiwan and have responded to that with a contribution that we 
are making through the Taiwan Red Cross that will go to help 
the families of those affected by the earthquake.
    We have also had a member of our Office of Foreign Disaster 
Assistance regional team fly to Tainan to inspect the work that 
was ongoing and to keep coordination with people in the Taiwan 
authorities to see if there is any additional assistance that 
would be needed.
    So far, the judgment has been made that the Taiwan rescue 
authorities are fully capable of conducting the onsite rescue. 
But we are maintaining close contact with them.
    Mr. Salmon. Thank you.
    In your opening statement at the close, you were 
reaffirming our commitment to the one-China policy as spelled 
out in the three communiques and the Taiwan Relations Act and I 
really appreciate that. I think that is valuable.
    Let me just quote--right after Secretary of State John 
Kerry had his first meeting with his Chinese counterpart, the 
Foreign Minister, after the elections he said this to 
reporters:

        ``Let me just say with respect to one of the issues 
        that the Foreign Minister raised on Taiwan that since 
        they just had an election and a new party has won, the 
        United States does reaffirm the three communiques, 
        which have been the basis of our policy, we remain 
        committed to a one-China policy but we encourage cross-
        Strait dialogue for resolution of that issue.''

    Now, in his comments he didn't mention the Taiwan Relations 
Act, that our one-China policy is not just based on the three 
communiques but also the Taiwan Relations Act.
    As you aptly pointed out, the Taiwan Relations Act states 
that it is U.S. policy to consider any effort to determine the 
future of Taiwan by other than peaceful means a threat to peace 
and security of the Western Pacific area and a grave concern to 
the United States.
    How significant, if at all, do you consider the omission to 
have been and what if any are the implications?
    Ms. Thornton. Thank you very much, Mr. Chairman.
    I would say that Secretary Kerry, in speaking at the press 
conference, if he omitted the mention of the Taiwan Relations 
Act in that construct it was certainly unintentional.
    We, as a matter of constant practice when we are describing 
our one-China policy, always try to pair the adherence to the 
three joint communiques with our strong commitment to the 
Taiwan Relations Act as a cornerstone of our policy and as, 
really, the framework within which we conduct our unofficial 
relationship with Taiwan.
    Of course, it also provides for the establishment of the 
American Institute in Taiwan, which provides for a cadre of 
experts both in Taiwan and here in Washington, to pursue this 
relationship with a laser focus on trying to expand our 
cooperation.
    So I want to assure you that Secretary Kerry's omission, if 
it happened, was completely inadvertent. We have seen President 
Obama, standing next to President Xi at least twice since I've 
been in this job at a press conference, mention the Taiwan 
Relations Act. So I know that it is firmly, you know, part of 
our----
    Mr. Salmon. And we wanted to give you the opportunity to 
make sure that that was part of the package, that that is a 
strong commitment and that is a strong part of our policy.
    After President Tsai got elected, she said that maintaining 
the status quo is her commitment to the people of Taiwan 
regarding the cross-Strait relations and the international 
community and there won't be provocation and there won't be 
surprises.
    Meanwhile, directly after the election, China broadcast 
images of archived live-fired military drills. How confident 
are you, if at all, that the DPP and the Chinese leadership 
have workable communication channels that might help them avoid 
misunderstandings and manage the tensions?
    Ms. Thornton. Thank you very much for that very important 
question.
    As you know, in the lead-up to the elections, the United 
States hosted both of the major Presidential candidates. And in 
that respect we were able to have a very good conversation with 
Dr. Tsai about her plans for her administration, about her 
positions on things like cross-Strait negotiations. And she 
reaffirmed for us that she is committed to continuing the 
status quo, that she understands the obligation to continue to 
pursue a policy that will enable cross-Strait peace and 
stability and that she intends to work with the authorities in 
Beijing to try to continue in the manner under which President 
Ma Ying-jeou has managed to pursue cross-Strait relations.
    We also have been, of course, in touch with Chinese 
officials. As you noted, Secretary Kerry was there just 
recently meeting with the Foreign Minister and also with 
President Xi Jinping.
    The week before that Deputy Secretary Tony Blinken was also 
in China meeting with his counterparts and we had a chance in 
those discussions also to make our very strong desire to see a 
continuation of cross-Strait stability but also cross-Strait 
exchanges continue.
    We, in those exchanges, counselled restraint, creativity, 
flexibility in working with the new administration in Taiwan to 
come up with a basis upon which to continue those negotiations.
    And they indicated that they were looking to see what Dr. 
Tsai was going to propose in that regard. So I am hopeful that 
they will be able to come up with such a basis for continuing 
these exchanges.
    I think there is a will on both sides to do so.
    Mr. Salmon. Thank you.
    Mr. Sherman.
    Mr. Sherman. With the notable exception of our own State 
Department, every foreign ministry I have talked to--almost 
everyone--has said that their number-one goal is trade and 
exports.
    And we have a persistent double digit in billions trade 
deficit with Taiwan. What has the State Department done? What 
have you personally done to create a circumstance where we are 
running a trade surplus with Taiwan, at least one that will--a 
surplus for enough years to the--so that our trade relationship 
this century will be at a balance?
    Ms. Thornton. Thank you very much, Mr. Congressman, for 
that question.
    And I hope that the State Department has not left you with 
the misimpression that we are not serious about promoting 
trade.
    Mr. Sherman. I will relate to you something that happened 
in this subcommittee.
    The person who--I now mention his name to you privately--
probably is the most respected Assistant Ambassador we have had 
in Asia sat there and said that when he was the Ambassador to 
South Korea he helped America by putting out on the lawn, and 
he listed a number of cars that he thought were made in 
America, and one of the cars he was promoting was 99 percent 
made in Germany. It had an American nameplate on it.
    So and this was someone who hadn't made a stupid mistake in 
20 years. Anybody who actually cared about promoting our 
exports would know whether the car they were trying to get 
South Koreans to buy was built in America or just labelled in 
America.
    But when you don't care, you know, things fall through the 
cracks. So yes, indeed, I have a belief that the State--So what 
have you done, when are we going to get a trade surplus with 
Taiwan?
    Ms. Thornton. Thank you. Having many years ago worked on 
auto negotiations with the South Koreans I can well appreciate 
where you are coming from. But turning to Taiwan, one of the--I 
mean, I talked a bit in my opening statement about our focus 
with Taiwan on expanding our economic ties. We work with 
Taiwan----
    Mr. Sherman. Yes. We will point out almost always when I 
talk about the State Department of economic ties, they are 
more--they are as interested in creating more imports as more 
exports and I have had State Department officials testify that 
the trade deficit isn't a problem for American families and 
that in fact expanding imports is just as wonderful as 
expanding exports. So please don't talk about trade ties. Talk 
about exports.
    Ms. Thornton. Okay. I mean, the other thing that the 
Taiwans have been doing in recent years that we have seen is 
significant inbound-to-the-United-States investment, creating a 
lot of U.S. jobs here by building manufacturing plants, by 
creating ties with technology companies in California, et 
cetera.
    But we work on expanding access--market access for U.S. 
exports to Taiwan through our Trade and Investment Framework 
Agreement with Taiwan. This is ongoing intensive dialogue that 
we have to try to----
    Mr. Sherman. So we have this intensive dialogue but we're 
failing every year. Every year we run a trade deficit. Do you 
know why we are failing? Do you think of it as failure? Or is 
it success to run a trade deficit?
    Ms. Thornton. No. I mean, this is a constant ongoing 
problem that we're working on. We are working every year to try 
to break down additional barriers.
    We are working on--for example, this last round in October 
that Deputy USTR Holleyman led in Taiwan we made some progress 
on IPR issues that had been posing market barriers to some U.S. 
exports. We made some progress on pharmaceutical market access 
on financial services access, so----
    Mr. Sherman. I am going to reclaim my time. I mean, we are 
working hard. We are making progress. We are failing every year 
and we do not have a target date that you can reveal as to when 
we will reach a trade balance. We will continue to work hard. 
We will continue to fail.
    What additional weapons assistance has Taiwan requested an 
opportunity to buy in the United States? This is both in the 
interest of preserving the rights of the Taiwanese people.
    I know it is juxtaposed with my question about a trade 
deficit. Doesn't hurt there either. What have they asked for 
that we have not green lighted yet?
    Ms. Thornton. Yes, thank you very much for that question.
    Mr. Sherman. Including what they have asked for informally 
and you have told them not to ask for formally.
    Ms. Thornton. As I mentioned in my statement, we have sold 
over $14 billion worth of arms to Taiwan in this administration 
to date.
    We are, of course, making available to Taiwan those 
articles that are necessary for its self-defense. So we do that 
in closed consultation with the Taiwanese themselves. And try 
to base proposals for sales and requests on things----
    Mr. Sherman. I know all that. Can you answer the question? 
What are they asking for formally or informally?
    Ms. Thornton. Well, we don't comment actually--yeah, I 
mean, I can't really comment on ongoing----
    Mr. Sherman. Will the classified briefing tell me this or 
will the process of not letting me know be consistent both 
for----
    Ms. Thornton. I would be happy try to address in more 
detail in the classified meeting but we don't generally talk 
about things that are under----
    Mr. Sherman. Okay. But how are we doing on the F-16s, the 
mine sweepers? I believe my time has expired. But those are 
the--I got an answer from my staff. I hope to get an answer 
from you. Thank you.
    Mr. Salmon. Mr. Royce--Chairman Royce.
    Mr. Royce. Thank you, Mr. Chairman.
    You know, one of the issues that I have become concerned 
about over time is this issue of the lack of regularity or 
consistency in the discussions between U.S. and Taiwan on the 
Taiwan Relations Act requirements to provide for the articles 
for Taiwan's defense needs. I head the legislation to reaffirm 
the act that passed the House and transferred the four guided 
missile frigates to Taiwan and I have been down on some of 
those frigates, one of them, to see it outfitted and so we are 
moving forward. But there isn't any consistency to this 
dialogue, and under the act I would interpret it as sort of 
requiring that. So I would urge the administration to look at 
that. But there are a couple aspects of this. When you look at 
cyber attacks, no country is more targeted than Taiwan and so 
there is an area also where the United States, I think, has a 
certain responsibility to assist in helping Taiwan deter these 
cyber attacks.
    I just give you an opportunity to comment on that, if you 
want. And then I know on the discussion to support Taiwan's 
indigenous submarine program with the Navy, is there a plan to 
allow the U.S. Navy and defense industries here to support 
Taiwan's indigenous program there?
    Ms. Thornton. Thank you, Mr. Chairman.
    I guess what I would mention with regard to the ongoing 
conversations in the defense area, I mean, we have more than 
doubled the number of sort of working level contacts that we 
have with Taiwan in this space.
    We also have, under the Obama administration and, you know, 
which is coincident, of course, with the administration of Ma 
Ying-jeou in Taiwan we have also increased markedly the number 
of high-level exchanges that we've had back and forth. And on 
the defense sector in particular, I think I would prefer to 
respond to your questions in detail in the closed session.
    But let me assure you that we are working with Taiwan very 
closely on all of the issues that you raise.
    Mr. Royce. And the F-16 issue that Mr. Sherman also raised, 
I think, is also of concern.
    One of the objectives that I think we have all had who have 
looked at Taiwan's economic strength is that its inclusion in 
TPP would allow Taiwan greater diversification in terms of its 
exports of Kaohsiung and Tainan. You know, you see what they 
produce and also would allow for greater imports around the 
Pacific Rim and also, obviously, if Taiwan gets a seat at the 
table for the second round you could also help Taiwan protect 
its long-term interests should we do a trans-Atlantic agreement 
with Europe because then it could be folded in eventually, if 
it's folded into the Pacific Rim.
    I assume the long-term goal here, as I understand it, is an 
agreement with very high standards and a high standard 
agreement serves the interest of the United States. There are 
really two different competing theories on liberalized trade.
    One theory--for those who believe in trade--one theory is 
that you will try to drive policies of free trade and no 
standards. The United States doesn't benefit under that.
    We benefit under the rule of law, the establishment of the 
rule of law. And in Taipei also, Taiwan is advantaged by high 
standard agreement.
    Increasingly, as we travel--and I think we've had four 
trips of our delegation to Asia in the last 3 years--we hear 
this feedback across southeast Asia and east Asia that, you 
know, somebody needs to be pushing this concept to very high 
standards on intellectual property protections and all the 
indigenous innovation, all these issues that we're mutually 
concerned about and that the Europeans are also concerned 
about.
    And if we get a major trans-Atlantic and Pacific Rim 
agreement we will have the ability to enforce that.
    But if Taiwan doesn't have that seat at the table and 
doesn't get to diversify its imports and exports, then I think 
this would be problematic. That is why I keep encouraging our 
administration and the government to move forward on getting 
the base bilateral investment agreement done.
    How do things look on that front?
    Ms. Thornton. Well, thank you very much, Mr. Chairman.
    We do know, of course, that Taiwan has expressed interest 
in joining high standards trade agreements, regional agreements 
in part because it is so good at enforcing and holds itself up 
to a high rule of law standards, also because of the concern 
that they have about diversification of their economy, wanting 
to ensure that they are integrated into the region and also 
that they expand their network of trading partners so they 
don't become overdependent on one particular trading partner, 
and we certainly support that objective, generally, that 
strategic objective that they have.
    As far as sort of our working with them, what we have said 
is that we want to work with them to get them ready to exceed 
to a high standard trade and investment agreement in the future 
and that is what we have been doing for the Trade and 
Investment Framework Agreement is they have already recognized 
that they have certain structural changes that they need to 
make in order to move in that direction. And we have told them 
that we will be happy to help them with that first by working 
on some of the structural and market access barriers that they 
already have that are going to be an impediment to them joining 
these high standards trade agreements, and then further down 
the road helping them to prepare for that.
    Mr. Royce. Thank you, Ms. Thornton.
    Thank you, Mr. Chairman.
    Mr. Salmon. Thank you.
    Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    And let me begin by besides welcoming you, Ms. Thornton, 
agreeing with Chairman Royce. We need a high standard 
liberalized trade regime and I would add, and I know the 
chairman would agree, three more words--enforceable and 
enforced--because only then is free trade credible here at home 
and abroad.
    But in my view, there is no question that our helping to 
set those high standards is far preferable to the alternative 
in the Trans-Pacific Region and I certainly look forward to 
supporting the agreement.
    Taiwan, Ms. Thornton, should it be--if it asks should it be 
incarnated into the TPP? What is the U.S. position? Could you 
speak into the mic a little?
    Ms. Thornton. Yes. So, I mean, our position has been to 
welcome Taiwan's interest in the TPP and, as I mentioned in 
response to the chairman's question, to let them know that they 
have a number of things that they need to do to prepare and get 
ready to accede to a high standards trade agreement and that we 
are willing to work with them on sort of moving ahead on 
reforms that they need to make in order to be ready and make 
themselves an attractive partner for other members in those 
high standards----
    Mr. Connolly. But what I hear you saying is, given its 
status, the U.S. position is not to exclude its potential 
membership in the TPP.
    Ms. Thornton. That is not our position, correct.
    Mr. Connolly. Okay. You would agree that the Taiwan 
Relations Act of 1979 codifies the relationship with Taiwan 
post recognition of China and included in that codification is 
a defensive military support framework, correct?
    U.S. is committed to providing defensive military support, 
correct?
    Ms. Thornton. Well, there is--I mean, it is very clear in 
the TRA but yes, we are committed to providing defensive 
articles to maintain Taiwan's self defense.
    Mr. Connolly. Now, Taiwan has requested, among other items, 
mine sweeping capability, F-16 combat aircraft, diesel 
submarines and frigates, which we are providing.
    How long ago did Taiwan make those defensive military 
requests to the United States Government?
    Ms. Thornton. I am going to have to defer, I think, this to 
the closed session. I am sorry.
    Mr. Connolly. No, it is a matter of public record, Ms. 
Thornton. It is not a matter of closed anything.
    When, for the record, did Taiwan ask for those--that 
equipment? There's nothing classified about it. Been in the 
newspapers. And by the way, that hearing has been cancelled so 
you can't--I'm not going to let you do that. I mean, I wouldn't 
ask you a classified question. It's not classified. Matter of 
public record.
    Ms. Thornton. There are stories in the media about things 
that Taiwan desires to procure from the United States but as 
far as----
    Mr. Connolly. The question was when did they first request 
these equipment--this equipment.
    Ms. Thornton. To my knowledge, some of these things have 
not been requested formally.
    Mr. Connolly. Evasive, Ms. Thornton. Did Taiwan--let's pick 
one. How long ago did Taiwan--because we do know this one--ask 
for diesel submarines?
    Could the clock--Mr. Chairman, could I just ask the 
indulgence of the chair while apparently the witnesses have to 
consult?
    Ms. Thornton. So yes, my assist from the rear says that we 
announced in April 2001 that we were going to cooperate with 
Taiwan on developing a plan for diesel submarines.
    Mr. Connolly. Thank you. Okay. Fifteen years ago. Why has 
it taken 15 years to adjudicate that request, one way or the 
other? Kind of a long time, wouldn't you think?
    Ms. Thornton. It is a long time and we've been working on 
it for 15 years and we're continuing to work on it today.
    Mr. Connolly. Oh, well. We're all reassured, Ms. Thornton.
    Well, let me just say for Members of Congress I think on 
both sides of the aisle it does raise questions about who's 
making U.S. policy and who's writing the answers to legitimate 
defensive military requests from the Government of Taiwan 
pursuant to a statute that you yourself just acknowledged does 
indeed undergird the relationship.
    And included in that statute is a codification of our 
support for defensive military equipment to ensure that 
whatever the ultimate resolution is in the Taiwan Strait is a 
peaceful one and I think you--would you not agree that a 15-
year wait for any answer on any item on that list seems to be 
an awfully long time?
    Ms. Thornton. I certainly agree that it's a long time but 
I'll just say that it is complicated and that I could go into 
more detail in the closed session if we ever have that 
opportunity.
    Mr. Connolly. I appreciate that. But we do understand this 
complication but, you know, the king of Siam used to say it's a 
puzzlement. But 15 years--my goodness.
    Okay. Final question, if I may, Mr. Chairman. What is the 
U.S. position with respect to Taiwan joining, being accepted 
into international organizations? Do we support that bid?
    Ms. Thornton. Yes. We support Taiwan's membership in 
international organizations where statehood is not a 
requirement for membership and we support their active 
participation in organizations where they do require statehood 
for membership.
    Mr. Connolly. Do we support Taiwan's bid to be a member of 
Interpol?
    Ms. Thornton. We support Taiwan's active participation in 
Interpol and we have been working on that.
    Mr. Connolly. Status to be determined?
    Ms. Thornton. Yeah. I mean--yeah.
    Mr. Connolly. Okay. Got it. Because obviously that's one 
that's very practical irrespective of status and we want more 
cooperation.
    Thank you very much. Mr. Chairman, thank you for the time.
    Mr. Salmon. Mr. Chabot.
    Mr. Chabot. Thank you, Mr. Chairman.
    Ms. Thornton, let me follow up on my colleague from the 
Commonwealth of Virginia, Mr. Connolly, on the submarine and 
defense issues in general.
    As a former chairman of this committee and as one of the 
cofounders of congressional Taiwan caucus and a long time 
friend of Taiwan, my recollection is with respect to the 
submarines in particular.
    One of the problems is nobody makes diesel submarines any 
more, that we know. I think there was some talk about maybe the 
French could still do it but that was one of the problems, you 
know, with nuclear submarines.
    But in order--because of the expense, the fact that you 
don't necessarily need nuclear submarines in that part of the 
world, et cetera, that diesel--in fact, I saw the--I guess they 
have a World War II era submarine out there.
    I think it was down at the naval base in Kaohsiung, I 
believe is where I saw that--I've seen a few nodding of heads 
in the audience with folks who know a lot more out this than I 
do.
    But in any event, I know that was one of the problems. But 
here is my question to you about this whole thing. You know, 
the planes and the anti-missile system and the submarines, 
improving the defensive abilities of Taiwan in case the PRC did 
decide to get even more belligerent and hostile than they have 
been over the last couple of decades, it's critical that Taiwan 
does strengthen their military and their defenses.
    But one of the problems--you know, we had a hard time 
getting this stuff through here but when we finally did we ran 
into a roadblock with Taiwan because even though you had a DPP 
President, President Chen Shui-bian, who wanted to move ahead 
with this, you've had KMT who has controlled the legislature, 
you know, since martial law, I believe.
    Is that correct? And Speaker Wong, I think, would try to 
get it through the legislature and just couldn't get it. When 
we weren't willing to act, you know, they wanted it and when we 
finally got around to doing it then they couldn't get it 
through there, and I'm seeing some nods from some of your 
assistant folks here too.
    So is that one of the issues that we face? And then I guess 
the real question is this. We just had a pretty important 
election in Taiwan recently and the DPP now is not only going 
to have the presidency but they're also going to control the 
Legislative Yuan for the first time ever.
    So is there maybe some light at the end of the tunnel in 
actually getting this defense that Taiwan so desperately needs 
and actually make it happen? Do you want to comment on it?
    Ms. Thornton. Thank you. Yeah, no, no. That's an excellent 
comment and thank you for the question.
    You know, we certainly work very closely with the Taiwan 
side to make sure that the capabilities that we're providing 
are augmenting its asymmetric and innovative security approach.
    And so within that we have to look at different systems and 
see which things are going to make the most sense for what 
Taiwan needs.
    It is true that the expenditures that they have to dedicate 
to these capabilities do, you know, have to be factored in on 
the Taiwan side and I'll just note that, you know, $14 billion 
in arms sales over the last several years is a considerable 
amount to absorb and to, you know, to fund through their 
defense budget.
    Of course, Taiwan has also recently gone to an all-
volunteer force, which has also expanded its personnel costs 
and caused it to need to do some restructuring of its budget 
so----
    Mr. Chabot. If I could cut you off there for just a minute. 
I have only got 1 minute left. I had two more things I wanted 
to ask you real quickly. If I could get a quick response.
    Can you think of any other countries that we deal with that 
we bar their top four leaders from coming to our capital, 
Washington, DC?
    Ms. Thornton. I am not sure. But I just want to point out 
on that note that we have actually--you know, we have 
Presidential transits for the safety, dignity, comfort and 
security of the traveler. We had the Vice----
    Mr. Chabot. Right. They can go to--they can go to San 
Francisco, they can go to New York.
    Ms. Thornton [continuing]. Vice Premier in California 
earlier this year.
    Mr. Chabot. President Tsai isn't going to be able to come 
here to Washington, DC, unless we change our policy. Is that 
correct?
    Ms. Thornton. That has been the policy.
    Mr. Chabot. We ought to change our policy.
    And then finally, I got 10 seconds left. President Chen 
Shui-bian was finally released about a year ago on medical 
parole. How is he doing?
    Ms. Thornton. As far as I understand, he's doing well and 
he's still on medical parole as far as I know.
    Mr. Chabot. Thank you very much. I yield back my time.
    Ms. Meng. Ms. Thornton, there is a sense that part of the 
momentum toward President-elect Tsai's election was a response 
to a slowing of Taiwan's economy, particularly with exports and 
imports.
    President-elect Tsai has specifically mentioned plans to 
have a closer economic relationship with the United States.
    However, U.S. businesses in Taiwan report facing inadequate 
or outdated laws, government bureaucracy, inconsistent 
regulatory interpretations and a lack of regulatory 
transparency, et cetera, as barriers to further economic 
development.
    What is your sense of the political will of President-elect 
Tsai and the newly-elected DPP majority in the Legislative Yuan 
to address these issues directly?
    Ms. Thornton. Thank you very much for that question.
    In our conversations with Dr. Tsai and with her team, it is 
my sense that this is an area that she is very well aware of 
that is inhibiting Taiwan's economic potential and that she is 
looking to move as a priority once she takes office to try to 
address.
    And we have been very keen to work with her under--in the 
new administration, again, through our Trade and Investment 
Framework Agreement process which her team is well aware of and 
has been briefed on to try to move forward on some of the 
intractable market access barriers that we've seen in Taiwan 
and also some of these regulatory problems that do create a lot 
of constraints for our businesses and our potential investors.
    Ms. Meng. And my second question on a different topic, our 
relation to the South China Sea. How do recent reports of 
possible joint naval patrols by the U.S. and India in the South 
China Sea work into the U.S.'s priority to de-escalate tensions 
there?
    Ms. Thornton. Yes. I can't really comment on the story 
about the joint patrols between the U.S. and India. As far as I 
am aware, there is no concrete plan in that regard.
    But certainly the U.S. policy for the South China Sea is to 
call on all of the claimants and regional players to try to 
reduce tensions, to preserve freedom of navigation and 
overflight and to try to resolve disputes peacefully and 
conduct themselves in accordance with the rule of law.
    And I don't--so I don't think that there's a--I mean, our 
presence in that part of the world has been longstanding. It's 
a part of our security presence in that region, which has 
helped maintain peace and stability in Asia for--ever since the 
second--end of the second World War and I think we don't see 
any problem with patrols or other things that are in keeping 
with freedom of flight and freedom of navigation.
    Ms. Meng. Thank you. I yield back.
    Mr. Salmon. Thank you, Ms. Meng.
    That will conclude the first panel.
    We will have the second panel be seated. I just also wanted 
to say that we are trying to reschedule the classified briefing 
because we are going to have votes called in about 15 minutes.
    We might just get through the testimony of the second panel 
when we get called for votes. But thank you so much, Ms. 
Thornton, for coming and thank you for all your attention. So 
we'll seat the next panel now.
    I think we'll go ahead and move on with introductions. I 
know we're kind of clearing the room out but we want to make 
sure we get your testimony before we have to go vote.
    We are really pleased to be joined today by three excellent 
panelists. First, Mr. Randall Schriver, president and CEO of 
the Project 2049 Institute; Ms. Bonnie Glaser, good to see you 
again, senior advisor for Asia and director of the China Power 
Project and Center for Strategic and International Studies; and 
Dr. Shelley Rigger, Davidson University's political science 
department.
    We are really grateful for these witnesses joining us today 
to lend their expertise and we'll start with you, Mr. Schriver.

    STATEMENT OF MR. RANDALL SCHRIVER, PRESIDENT AND CHIEF 
           EXECUTIVE OFFICER, PROJECT 2049 INSTITUTE

    Mr. Schriver. Thank you, Mr. Chairman, very much appreciate 
the invitation and I appreciate being seated alongside Dr. 
Rigger and Ms. Glaser, who I have enormous respect for as well.
    I want to join others who express condolences and thoughts 
and prayers. Certainly, it's a difficult time and we wish them 
well in the recovery efforts.
    It's a very timely hearing, as has been noted, due to the 
recent election and I think it's appropriate that we 
acknowledge the significance of this event.
    It's a young democracy. They are under tremendous pressure. 
So just carrying out a free and fair election is something 
worthy of our praise.
    In your instructions you asked me to speak specifically 
about economic and trade issues, which I will do. Before doing 
that I think it's also appropriate to note President Ma and the 
fact that he's coming to the end of his tenure.
    He's been a great friend of the United States, has done a 
terrific job promoting peace and stability in the region, I 
think often not given credit for his South China Sea peace 
initiative--the East China Sea peace initiative.
    So as we move into a new administration we should reflect 
on his accomplishments. Dr. Tsai is somebody who's very 
experienced on trade matters. She herself has been a trade 
negotiator and I think she campaigned on economic reform and 
promoting trade. I think that gives us opportunities that we 
would be very smart to seize upon.
    As mentioned by others, she has a keen interest in joining 
TPP. I'm of the view that we should not only welcome that 
interest but be very clear that we want Taiwan in a second 
round, should there be one, and I hope there is, and that we 
will work with them to identify a clear pathway to entry.
    I listened carefully to the administration statement. We 
welcome their interest. I believe we should welcome more than 
their interest. I think we should work with them to have a 
concrete path to inclusion in TPP.
    I agree with previous comments made about the investment 
environment and the need for a bilateral investment agreement. 
Taiwan is a significant investor in the United States and, of 
course, vice versa.
    That can be strengthened. There are too many barriers still 
in place so we should keep these delegations going but more to 
the point work through the various fora to try to create a 
better environment for mutual investment.
    I think there are other areas of our economic relationship 
that could also be strengthened. I think defense industrial 
cooperation is something we should consider.
    There were, I think, some very good questions about the 
submarine program--why 15 years. Certainly, if Taiwan does 
determine to go the path of an indigenous diesel electric 
submarine, there are opportunities for our industry to get 
involved in that and I think the administration could send 
clear signals that we welcome that kind of defense industrial 
cooperation and it could really give a boost to this program 
and maybe it won't be another 15 years until we see a submarine 
there in Taiwan.
    I think in the S & T area as well this has been one of the 
past areas of success. Taiwan is a very innovative country. 
They are a global leader in patents and, to use an overused 
phrase, there are a lot of win-win opportunities, I think, if 
we really strengthen our S & T cooperation not only in defense 
but beyond that and into that high-tech sector.
    This is all going to unfold under an environment where I 
expect there to be increasing pressure, not only military 
pressure in the missiles that we're all aware of but there are 
rumors that China is preparing for a more coercive path, 
cutting back tours, cutting back flights, et cetera.
    We can do these things irrespective of the positions China 
takes but, of course, it becomes more challenging, at least 
politically and diplomatically, to do that in face of more 
pressure.
    But I think we have to remember to keep the onus on 
Beijing. They are the ones who have a policy that's failing. 
They're the ones that have the military posture opposite 
Taiwan, threatening them and intimating the people there and 
they are the ones that also need to show some flexibility
    So people regard this election as a potential inflection 
point but we need to remember that the real core of the problem 
is Beijing's intransigence and the positions that they're 
taking.
    So just to conclude very briefly, I think there are five 
things. I think TPP in a very clear path is important. I think 
more on bilateral investment to include not only the bilateral 
agreement but the promotion of these delegations. I think on 
the defense side, there is much more that can be done and I 
think several of the systems were mentioned--F-16s, mine 
sweepers. But I have a particular interest in the submarine 
program because I think there's an opportunity for defense 
industrial cooperation. The S & T area is a fourth area I think 
is very promising and then finally in our diplomacy keep some 
balance. This election is one of the reasons we're here 
talking. But if you pull that thread too far some people might 
be oriented toward blaming democracy or blaming Taiwan for the 
instability.
    The problem is in Beijing and we need to keep that in mind 
as we go forward and continue to put our emphasis on their need 
to de-escalate, to demilitarize and to have some flexibility.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Schriver follows:]
    
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    Mr. Salmon. Thank you.
    Ms. Glaser.

   STATEMENT OF MS. BONNIE GLASER, SENIOR ADVISER FOR ASIA, 
   DIRECTOR OF CHINA POWER PROJECT, CENTER FOR STRATEGIC AND 
                     INTERNATIONAL STUDIES

    Ms. Glaser. Thank you, Chairman Salmon, Ranking Member 
Sherman and distinguished members of the committee. I too would 
like to offer my thoughts and prayers to the people of Taiwan 
as they recover from this earthquake.
    The United States has a deep and abiding interest in the 
preservation of Taiwan's security and democracy. The Taiwan 
Relations Act remains an important touchstone for Congress, for 
policy makers and the executive branch and to ensure Taiwan's 
security the U.S. Government must actively seek to use all the 
tools of U.S. policy and implement not only the letter but also 
the spirit and the intentions behind the TRA.
    I have been asked to address my remarks to Taiwan's 
security and the threats to Taiwan's security are numerous and 
they are growing.
    Efforts to sustain the island's economic prosperity which 
is a critically important component of national security are 
facing challenges.
    Taiwan is largely excluded from the Asia Pacific regional 
economic integration process. The U.S. can and should do more 
to advocate for Taiwan's increased participation in 
international organizations and especially those that would 
enhance the safety and welfare of Taiwan's citizens and I 
commend Chairman Salmon for introducing the legislation that 
urges the Obama administration to support Taiwan's efforts to 
obtain observer status in Interpol from which it was expelled 
in 1984.
    Without question the greatest and most direct threat to 
Taiwan's security is, of course, posed by the Chinese military. 
U.S. security assistance including but not limited to arms 
sales to Taiwan is vital to deter China from coercing or 
attacking Taiwan and to enable Taiwan's armed forces to fight 
effectively in all possible contingencies.
    Cooperation with China reviewing presents important 
opportunities for the United States, for example, to reverse 
global warming and prevent nuclear proliferation, and the U.S., 
of course, should seek to work with Beijing to address regional 
and global challenges where possible.
    However, it is harmful to American interests to be so eager 
for Chinese cooperation that it appears willing to sacrifice 
Taiwan for better U.S.-China ties. Such an approach sends the 
wrong signal to Beijing.
    It creates anxiety in Taiwan and it fosters doubt 
throughout the region about America's willingness to withstand 
Chinese pressure in support of its commitments.
    The KMT defeat in the election Tsai Ing-wen created some 
uncertainty about the future of cross-Strait relations. The 
mainland insists that Tsai Ing-wen accept its definition of the 
existing political foundation, which is essentially opposition 
to Taiwan independence and support of the 1992 consensus.
    Tsai Ing-wen has recently defined this existing political 
foundation differently. For her, it includes a historical fact 
of the 1992 talks, the prevailing Republic of China 
constitutional order, the accumulated outcome of more than 20 
years of cross-Strait interaction and importantly democratic 
principles and the will of the Taiwanese people.
    The U.S. Government can play a role, I believe, to help 
narrow the gap between mainland China and Taiwan by encouraging 
each side to provide assurances to the other to assuage their 
respective fears.
    The U.S. should strongly discourage Beijing from using 
coercive measures to pressure Tsai and the DPP to concede to 
its demands.
    Punitive actions by China could compel Tsai Ing-wen to 
respond and perhaps result in a negative spiral that could 
produce a cross-Strait setback and even a crisis.
    Beijing appears to be deliberating how to respond to the 
DPP's return to power in Taiwan. I think the Xi Jinping has not 
yet made a decision. But if he adopts the more coercive and 
even aggressive approach to Taiwan, the U.S. response will be 
widely viewed as an indicator of the credibility of American 
commitments.
    And not only Japan but also countries in Southeast Asia 
would be alarmed if Washington fails to provide to Taiwan in 
the face of Chinese coercion or aggression.
    For more than two decades the U.S. has insisted the 
decisions about Taiwan's future must have the assent of the 
people of Taiwan in a democratic manner and public opinion 
polls show that a majority of the people of Taiwan yes, they 
favor talks with mainland China but dwindling numbers favor 
reunification. In 2015, a record low of 9.1 percent of 
respondents in Taiwan favoured unification either now or in the 
future.
    And this polling data, combined with the outcome of the 
election, suggests that there could be a realignment of 
political forces and attitudes underway in Taiwan and it is 
imperative that the U.S. help Taiwan to preserve the autonomy 
that its people desire and ensure that the differences between 
Taipei and Beijing be managed peacefully.
    Thank you.
    [The prepared statement of Ms. Glaser follows:]
    
    
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    Mr. Salmon. Dr. Rigger.

    STATEMENT OF SHELLEY RIGGER, PH.D., BROWN PROFESSOR AND 
    ASSISTANT DEAN FOR EDUCATIONAL POLICY, DAVIDSON COLLEGE

    Ms. Rigger. Thank you very much for allowing me to be here. 
It's a pleasure to have this opportunity.
    Taiwan's January elections were a watershed in the island's 
democratic development. For the first time, the Kuomintang lost 
control of both branches of the national government.
    The DPP has won national elections only twice before when 
Chen Shui-bian was elected President in 2000 and 2004, and many 
in Washington remember the Chen presidency as a time of 
turbulence.
    Chen began his presidency with efforts to reach out to 
Beijing and to the KMT but both the PRC and the KMT stonewalled 
and he eventually gave up on seeking their cooperation and 
began pursuing an agenda aimed more at pleasing his core 
supporters.
    Nonetheless, the Chen presidency left many voters feeling 
disillusioned and that helped give the KMT's Ma Ying-jeou an 
easy win in 2008.
    Under Ma, the Taiwan Strait has been relatively calm. 
Taiwan has signed almost two dozen economic agreements with the 
PRC while cross-Strait trade, investment and people to people 
flows have increased to unprecedented levels.
    So now that the DPP is about to return to power, people are 
asking whether we are about to enter another era of tension in 
the Taiwan Strait.
    While I understand why these questions are being asked, I 
do not believe we are about to enter an era of confrontation. 
Under Tsai's leadership, the DPP has adopted moderate positions 
that align with the preferences of Taiwan's people.
    Throughout her campaign she made it clear that her goal is 
to preserve the status quo in the Taiwan Strait. She does not 
intend to move Taiwan toward independence but neither does she 
intend to rush headlong into Beijing's embrace, either 
politically or economically.
    So, in short, the January elections affirmed Taiwan's 
democracy and confirmed the fundamental rationality of Taiwan's 
electorate.
    Promoting democracy is a core interest and objective of 
U.S. foreign policy. During the Cold War, Taiwan's Government 
persuaded the U.S. to overlook its authoritarian nature but in 
the '70s and '80s U.S. officials, especially Members of 
Congress, joined with democracy activists in Taiwan to urge the 
KMT-led government to implement democratic reforms. Taiwan's 
democratization was achieved with almost no bloodshed or 
instability, making it an example to other nations.
    Supporting Taiwan's democracy is an important element of 
U.S. policy, therefore, and it is critical that we not confuse 
Taiwan's people's active defense of their democracy with 
trouble making.
    An overwhelming majority of Taiwanese recognize that 
pursuing formal independence is both unnecessary and risky but 
they have no interest in being absorbed into the People's 
Republic of China.
    Their goal is to remain a self-governing democratic entity 
while working toward peaceful and cooperative relations with 
their neighbors on the Chinese mainland.
    These goals, which are represented well now that Tsai has 
been elected the U.S. should redouble its efforts to keep 
channels of communication open.
    U.S. policy precludes Washington from engaging in high-
level official interactions with Taipei, although it seems that 
not everyone in this room thinks that's a good policy.
    But the U.S. is free to choose a less restrictive 
interpretation of its policy. Overly rigid adherence to the 
one-China policy will not serve the U.S. well in a period of 
uncertainty and transition.
    The task for the U.S. in the next few years will be to 
support Taiwan's continued democratic development. Washington 
should recognize and reward the DPP-led government's moderate 
positions and encourage all parties to seek opportunities for 
cooperation and avoid confrontation.
    Given Taipei and Beijing's incompatible goals in some 
areas, a degree of tension is unavoidable. However, attentive 
management can prevent that tension from ripening into 
conflict.
    Thank you very much.
    [The prepared statement of Ms. Rigger follows:]
    
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                              ----------                              

    Mr. Salmon. Thank you.
    When I first came to Congress in the '90s, Warren 
Christopher was the Secretary of State and I remember him 
coming before one of our committees and testifying that our 
policy with China and Taiwan was one of strategic ambiguity.
    I thought that was the stupidest thing I'd ever heard in my 
life, and my understanding is that's still our policy. Is it or 
isn't it? Dr. Rigger, do you want to take a stab at that?
    Ms. Rigger. Sure. Yes, it is our policy and the--I think 
part of the reason it continues to be our policy is that it 
has--whatever its merits on the face of it actually served us 
very well for a long time.
    So it might not be the policy that a political scientist 
would design but I don't recommend government by a political 
scientist. So I think in practice it has allowed the U.S. to 
calibrate its actions and positions toward both the PRC and 
Taiwan in ways that have successfully maintained the balance in 
the Strait.
    Mr. Salmon. But what it's yielded is really idiotic 
policies like when Lee Teng-hui couldn't visit his alma mater 
at Cornell and we had to pass special legislation encouraging 
or allowing him to do so.
    Or Taiwan virtually being kicked out of every international 
body and now we have to try to assert in the name of common 
sense that they be allowed to participate in bodies like 
Interpol when we're all--we want all hands on deck to fight 
international terrorism and international crime and 
trafficking--in human trafficking.
    It just makes sense to have all hands on deck. And why in 
the world would anybody in Taiwan ever want to follow up on 
China's offer of peaceful reunification with a one-China two 
systems when they see how they hoodwink the people of Hong 
Kong?
    Universal suffrage--you know, the folks in Hong Kong 
believe that claptrap that Beijing was throwing at them that, 
you know, it's going to be one-China, two systems when in 
reality the leader of Hong Kong gets picked by Beijing. Why 
would Taiwan ever want to yield to that?
    Ms. Glaser, do you have any thoughts?
    Ms. Glaser. Well, I think that that's exactly the reason 
why the polls show that the people of Taiwan--very few of them 
actually support reunification as they observe Hong Kong, as 
they witness the crackdown on dissent and the squeezing of the 
ability of average people on the mainland just to access 
Internet, to conduct protests, to publish their views.
    I think it's clear that people in Taiwan do not want to be 
part of the mainland and do not support one country, two 
systems.
    Mr. Salmon. Oh, and in Taiwan proselytizing is legal. 
People can share their religious views freely. They have 
freedom of the press.
    You have peaceful transitions from one, you know, party to 
the next in leadership and the President's office and in the 
seat of government, and they see the vast differences when you 
speak about your--with conviction.
    I guess you can believe in something as long as you don't 
really believe it in China and that's--you know, that's the 
problem. If you really believe in something then you're a 
fanatic and you get imprisoned.
    And so, you know, the people of Taiwan watch this stuff 
happening and they're very cautious. Look, I was as concerned 
as anybody with some of the statements that Chen Shui-bian was 
making, you know, later on in his administration.
    But Tsai Ing-wen has said that she intends to promote the 
status quo. She's not trying to upset the apple cart but she's 
made it clear that her first interest and first duty is to the 
people of Taiwan, not to the people on mainland China. I don't 
think that's all that extreme. I think that's just common 
sense.
    And so as they go forward, how can we monitor, you know, in 
our relations with the cross-Strait? What indicators should we 
be monitoring for a sense of how the cross-Strait relationship 
is being handled between China and the DPP, whether or not 
they're going to stonewall her like they did Chen Shui-bian?
    I guess that's one thing we could probably see pretty 
readily. But the other one is what do you expect will happen to 
current formal official contact between the two sides of the 
Strait? Do you think there's going to be any degradation of 
that?
    Ms. Glaser. Thank you, Congressman Salmon.
    I think those are very important questions. As to 
indicators, one of the early indicators we can look at is 
whether the mainland is restricting tourists that are 
travelling to Taiwan. There are already some signs of that. 
This could damage Taiwan's economy and the mainland, of course, 
claims some deniability. They say oh, maybe the people of 
mainland just don't want to go. But we know that this is in 
fact government control.
    I particularly worry about the possibility of Beijing 
trying to steal away some of Taiwan's diplomatic allies. Taiwan 
now has 22 and there are some countries who have indicated a 
desire to shift their diplomatic allegiance.
    So far Beijing has respected this tacit diplomatic truce. 
But I think that this could put pressure on President Tsai once 
she is inaugurated to respond in a negative way that could lead 
to that downward sort of negative spiral that I talked about.
    As for the formal communications, I think that so far 
Beijing has not said publically that they are going to cut 
those off but privately there are some indications that the 
semi-official white glove organizations, SEF and ARATS on both 
sides of the Strait could be suspended and also the 
communications between the Taiwan affairs office and the 
mainland affairs council where they recently set up a hotline 
and those could also be suspended. I think any suspension of 
communication and dialogue channels would be a very negative 
sign.
    Mr. Salmon. I'm just going to close with this and then 
yield to Mr. Sherman. But, you know, a position of strategic 
ambiguity would be when a Member of Congress asks the panelist, 
you know, how do you feel about Taiwan participation in the 
second round of the TPP and the answer coming back, we welcome 
their interest in that, that's a position of strategic 
ambiguity out there in the ozone.
    A strategic clarity statement would be yes, we welcome 
their involvement, their participation--not their interest. But 
we--like you said, Mr. Schriver, would you agree with that?
    Mr. Schriver. Absolutely, and I think that a lot has 
changed since Warren Christopher was secretary of state and I 
think the very positive developments on Taiwan should be 
recognized and rewarded but also the threat posture that China 
poses I think would be served with more clarity when it comes 
to defense commitments and security in a whole host of areas 
including these trade agreements and international 
organizations.
    I think ambiguity maybe had its time and place but more 
clarity is probably appropriate at this juncture.
    Mr. Salmon. Yes, let's just stop parsing words and say what 
we mean.
    Mr. Sherman.
    Mr. Sherman. I'll make a couple of political science 
comments.
    First, in defense of strategic ambiguity, Donald Trump is 
not known for has ambiguity yet he has spoken often in favor of 
not saying what he would do because that gives--would give 
him--a Trump presidency--more leverage in the negotiations.
    The problem with it I find with strategic ambiguity is that 
it means that if you're going to keep the foreign power 
guessing as to what our policy is then you cannot inform the 
American people of what.
    So I think if we had a dictatorship there would be--in the 
United States it would fit with strategic ambiguity and I don't 
know if that's what Mr. Trump has in mind but he doesn't talk 
to me.
    Mr. Salmon. He doesn't talk to me either.
    Mr. Sherman. Also, the second political science comment is 
political scientists live in this world where you figure out 
what is the interest of the country as if this was a game of 
Risk or something where the country was a single entity 
determining its interests.
    My own belief is that countries make foreign policy 
decisions to respond to short-term domestic political needs, 
and right now China needs nationalism to explain why a party 
that is no longer the vanguard of the proletariat should 
continue to rule in the absence of 7\1/2\ percent growth.
    Dr. Rigger, what--putting pressure on Taiwan, is that 
popular with Joe Six-pack in Shanghai?
    Ms. Rigger. It's extremely difficult for us to know what is 
popular with the citizens of the People's Republic of China 
because it is not an open information environment.
    What is more troubling even than that though is that there 
is a certain kind of Joe Six-pack in the mainland who is 
allowed to speak and is allowed to speak loudly and 
perpetually.
    Mr. Sherman. Well, we know that nationalism over the islets 
or rocks or whatever we're going to fight World War III about 
in the South Pacific that's popular nationalism. Is it 
consistent with popular nationalism in China to say we're going 
to be tough on Taiwan or--I mean, you're being tough on Chinese 
people.
    So is a--does it fit with jingoistic popular nationalism in 
China to try to kick Taiwan out of Interpol?
    Ms. Rigger. It does. But it's hard for--it's impossible to 
understand what that really means in terms of China's long-term 
domestic political situation because----
    Mr. Sherman. You need to study political science by running 
for office. There are no long-term political objectives. There 
are short-term political objectives.
    Ms. Rigger. Can I explain though what my logic is? So the 
problem is that in China there are few things that you can say 
out loud and all of them are I hate Japan, we should be more 
aggressive in the South China Sea, Taiwan must be reunified 
with the mainland.
    But we don't know whether people would be saying those 
things as loudly and energetically as they are if they could 
say other things.
    Mr. Sherman. Okay.
    Ms. Rigger. But because they can't say other things, these 
are the things they say.
    Mr. Sherman. What--okay. Ms. Glaser talked a little bit 
about the things China can do to show its displeasure with the 
fact that the Taiwanese people voted for what they consider to 
be the wrong political party.
    Those all seem like little nitpicking. Is there anything 
China might do to Taiwan in the next year that is more 
significant than trying to get a Latin American country to cut 
off diplomatic relations or giving Taiwan the cold shoulder and 
stopping communication with various mainland entities? 
Anything----
    Ms. Rigger. Within the next year, probably not. But those 
small things, especially added together, can have a really 
profound effect on the confidence of Taiwan people and their 
ability to go forward strongly and to advocate for their own 
interests. So they do matter.
    Mr. Sherman. If five Embassies closed in Taipei from 
countries that many Taiwanese could not find on a map would 
that shake confidence?
    Ms. Rigger. Yes, and if ten closed that would be half of 
Taiwan's diplomatic partners in the world.
    Mr. Sherman. Well, that's why I asked about five.
    Ms. Rigger. And that would deeply shake people's 
confidence, absolutely.
    Mr. Sherman. Ah, there are a few islands that are so small 
that they would appreciate even modest aid from Taiwan. New 
Embassies could be opened by countries that are even harder to 
find on a map.
    Okay. What factors do you believe contributed to the DPP 
winning the elections and, just as significantly, the KMT's 
weak showing?
    Ms. Rigger. I think the biggest issues were domestic issues 
for Taiwan. Economic issues--the sense that Taiwan's economy 
can produce aggregate growth at a slow but reasonable rate but 
that it can't produce jobs or the kinds of jobs that Taiwanese 
people are preparing themselves to do as they emerge from 
school and it can't produce the kind of egalitarian 
distribution of income and wealth that Taiwanese have come to 
expect as the fruit of development.
    Mr. Sherman. Sounds like Bernie Sanders won the election.
    Ms. Rigger. Well, I think that the problems that Taiwan 
faces are not Taiwan's alone.
    Mr. Sherman. Okay. And what can the DPP Government and 
Taiwan in general do to lessen its dependence on mainland 
China?
    Ms. Rigger. This is the great task facing Taiwan to figure 
out the answer to this question. The DPP has published lots of 
white papers and statements about what they plan to do. But 
most of those are pretty vague and piecemeal.
    The best thing that Taiwan could do, I think, is to improve 
its accessibility to international trade and investment. Taiwan 
still has a lot of parts of its market and economy that are not 
very open and I think that's really what we are talking about 
when we talk about getting ready for TPP.
    The international business community has been asking a long 
time for Taiwan to open its economy more and I think perhaps 
Taiwan can make some progress there.
    Mr. Sherman. I have gone over time. I don't know if the 
other witnesses have any quick comments.
    Ms. Glaser. I would just make one quick comment and that is 
that the mainland China has a pretty robust toolbox to use to 
pressure Taiwan.
    There's economic tools, there's preferences that they give 
to Taiwan businesses on the mainland, there's fish that they 
buy from southern Taiwan fisherman.
    They can cut all of these. Only two countries have been 
really permitted, and I put that in quotation marks, to 
negotiate bilateral free trade averments with Taiwan.
    That's Singapore and New Zealand, and there are other 
countries that had started informal talks, those who want to 
begin talks, and Beijing has basically shut that down.
    They have diplomatic economic influence directly on Taiwan 
and then indirectly through other countries so--and then, of 
course, there's the whole toolbox of military coercion. So I 
think there's a lot to be concerned about.
    Mr. Schriver. Briefly on that last point, we shouldn't 
forget about the military piece of this because throughout this 
8-year period of peace and stability what has China done on the 
military side?
    They have continued to build up more missiles, more 
capabilities, more training. They have a mock-up of the 
presidential palace that they're exercising against. I mean, 
countries that equip, train, prepare----
    Mr. Sherman. They have a mock-up of Taiwan's presidential 
palace so they can train special forces into how to go in and 
seize the President or something like that?
    Mr. Schriver. Yes, sir.
    Mr. Sherman. Oh. I might point out, if we really cared 
about Taiwan's defense we would just amend the law that 
provided most favoured nation status to China and say this law 
is void if China takes military action against Taiwan, its 
ports and its shipping.
    And some of us tried to do that back when we first gave 
affirmative MFN--that it's not too late. That one--they 
wouldn't need the frigates if we did that.
    Mr. Salmon. I thank the panel. This has been very, very, 
very helpful. Thank you very much.
    One just last question. You had mentioned that there were 
four things and I think we got three. Would the fourth be 
Tibet?
    I mean, are they still--because every time I ever met with 
senior Beijing officials the two things that, you know, was 
like drilling on their teeth without novocaine was Taiwan 
Strait and Tibet. Is that still pretty much the same thing.
    Ms. Rigger. You can say anything you want to about those 
issues and not get in trouble. So if you want to speak out on 
those topics, it's fine.
    Mr. Salmon. Right. Right.
    Well, thank you very much. I really appreciate the panel 
and thank the ranking member. It's been very edifying and I 
want to congratulate the people of Taiwan again on a 
wonderfully successful and peaceful election and transition 
that's about to happen and also let them know that we're with 
you in spirit and in every other way in relationship to 
rebuilding after the earthquake.
    So thank you very much.
    Mr. Sherman. I agree.
    Mr. Salmon. This committee is adjourned.
    [Whereupon, at 4:15 p.m., the subcommittee was adjourned.]

                                     

                                     

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