U.S. Dept. of State - IIP: The United States and China

Text: Sen. Baucus Offers "Contours of a Bipartisan China Policy"
(Cites need for U.S. policy toward Taiwan to evolve)

U.S. policy toward Taiwan needs to evolve to reflect changed global conditions, says U.S. Senator Max Baucus, the highest-ranking Democrat on the Senate Finance Committee.

As an example of this evolution, Baucus said during a February 27 speech at The Nixon Center in Washington, D.C., U.S. government policy should support Taiwan's membership in international organizations where statehood is not a requirement for membership, and "work creatively for Taiwan's involvement when statehood is a requirement."

The Montana Democrat argued in favor of Taiwan's need for "international space," and urged the U.S. government to "recognize and support the positive economic and political developments on Taiwan."

Baucus emphasized that he continues to support the three Communiques and the Taiwan Relations Act, which govern U.S.-Taiwan relations, but he noted that times have changed since they were put into place in the late 1970's and early 1980's.

"Like an old but still functioning car, the structure that has served us so well in the past now requires more and more maintenance every year," Baucus said. "Unlike a car, however, we cannot just jettison the system and replace it with something new tomorrow."

"Policy is not written in stone," he continued. "This system must adapt and evolve. And it must be done with extreme care."

Although U.S. policy toward China and Taiwan may evolve, Baucus stressed that "the American message to Beijing and Taipei is unchanged."

"They must negotiate together to resolve their differences; settlement must be found by peaceful means; and there should be no unilateral steps taken to change the situation," he said.

"To Taiwan, I say that there can be no attempt to change the framework unilaterally," he said. "To Beijing, I say that you should not underestimate American support for the democracy and market economy on Taiwan. You should not try to test American resolve; you will not like the results. To the Congress and the Administration, I say that we must refrain from provocative action. There must be dialogue, and the United States has an important role to play."

Senator Max Baucus
The Contours of a Bipartisan China Policy
The Nixon Center
Washington, DC
February 27, 2001

On July 15, 1987, four decades of martial law ended on Taiwan. Thirteen years later, on March 18, 2000, Chen Shui-bian was inaugurated as the first President of Taiwan representing a party other than the Kuomintang. The government had changed peacefully through the free and democratic choice of the people of Taiwan.

In August of last year, President Chen transited Los Angeles on his way to Central America. A dozen members of Congress planned to attend a reception in his honor. The Clinton Administration strongly urged Chen not to meet with them. Chen had no choice but to capitulate, and the meeting did not take place.

I continue to support the three Communiques and the Taiwan Relations Act. Taiwan, the People's Republic of China, the United States, and the entire Asian region, have all been well-served by this diplomatic structure established by Nixon, Mao, Chiang Kai-shek, and their respective successors. The result has been peace and stability in the region, the development in Taiwan of a prosperous market economy with a thriving democracy, and unprecedented economic development on the mainland.

But, recall that the three Communiques were drafted in 1972, 1979, and 1982. The Taiwan Relations Act was passed in 1979. They dealt with the goals and problems of a different era. The Vietnam War is over. The Soviet Union no longer exists. Taiwan is a democracy with a market economy. China has grown nine percent a year for two decades and is about to join the World Trade Organization (WTO).

Like an old but still functioning car, the structure that has served us so well in the past now requires more and more maintenance every year. Unlike a car, however, we cannot just jettison the system and replace it with something new tomorrow. But policy is not written in stone. This system must adapt and evolve. And it must be done with extreme care.

The challenges we will face this year alone in the PRC-Taiwan-US triangular relationship are daunting. Let me offer a list of some of the major issues I see on the near-term horizon that will have a significant impact on US-PRC-Taiwan relations.

-- First, the Bush Administration must make decisions about arms sales to Taiwan in the spring. Last year, the House of Representatives passed the Taiwan Security Enhancement Act, and it was then bottled up in the Senate. I opposed this legislation as unnecessary, untimely, and provocative. But it was born out of a legitimate frustration with China's arms build-up and a perception that our country was providing insufficient assistance for Taiwan's defense.

-- Second, China and Taiwan will probably join the WTO later this year. Their ensuing bilateral economic relations, as well as Chinese compliance with its obligations, will be important issues.

-- Third, the annual United Nations human rights resolution on China, and whether we will support it or not.

-- Fifth, National Missile Defense and its impact on Chinese nuclear and ballistic missile policy.

-- Sixth, the relationship between Taiwan and US/Japan security relations, especially the US/Japan defense guidelines.

-- Eighth, a possible renewed effort to pass the China Nonproliferation Act introduced last year by Senators Thompson and Torricelli. This proposal would require sanctions against nuclear proliferators and was born out of frustration that the Clinton Administration looked the other way where China was concerned because of perceived diplomatic and political imperatives.

-- Ninth, efforts will be made to pass a new Export Administration Act and establish a new export control regime.

-- And, finally, the likely visit by President Bush to Shanghai in the fall for the APEC meeting, where he will encounter China's top leaders for the first time.

And I am sure that each of you could add to this list of concerns confronting the Administration and the Congress.

In the second volume of his memoirs, Singapore Senior Minister Lee Kuan Yew wrote:

In the next 50 years, the Chinese will have to complete three transitions: from planned to a market economy, from rural to an urban base, from a tightly controlled communist to an open, civic society.

We all hope that these "three transitions" proceed in a way that minimizes the possibility of domestic and international disruption. The reality is, however, that it will be messy, uneven, erratic at times, and potentially dangerous.

A fundamental American goal is to promote democracy and a market economy around the globe, and we expect the result to be an improvement in the quality of life for people, as well as increased stability internationally. Taiwan is one of the major success stories. Today, America's political, security, and moral commitment to the people of Taiwan is strong and enduring. The challenge is to balance that commitment with the reality of how Lee Kuan Yew's prediction for China's future will unfold.

First, security. In the 1982 communique, the United States stated that arms sales to Taiwan should not exceed the qualitative and quantitative levels of recent years. The communique linked this commitment to a pledge by the PRC that there would be peaceful resolution of the Taiwan issue. At the same time, President Reagan said that the United States would help Taiwan maintain the balance of power across the Strait to the extent the PRC increased its military capabilities.

From China's perspective, one of the most serious concerns today is the possibility that the United States will sell to Taiwan destroyers with their Aegis defensive and war-fighting capability, and that we will include Taiwan in a Theater Missile Defense system for North Asia. In a very real sense, China has brought this problem on itself.

Beijing continues to refuse to make a commitment that it will not use military force against Taiwan. Instead, they build up conventional and missile forces along the coast facing Taiwan. Military threats aimed at intimidating Taiwan continue, including the ultimate intimidation of missile tests in 1996. If China were to act in a less provocative way, there would be less pressure in the United States to sell new weaponry. Absent a fundamental change by China, Taiwan will need a modern and sophisticated defense, and the United States will provide it.

But let me add that the true bedrock of Taiwan's security and stability does not lie in military hardware. Taiwan's long-term prospects depend on its continuing development as a robust democracy and a thriving market economy, on its growing economic, cultural, and political contacts with the mainland and others in the region, on the abiding commitment by the United States to a peaceful resolution of the Taiwan question, and on America's ability to help incorporate China into the regional and global economic and political systems.

The American message to Beijing and Taipei is unchanged. They must negotiate together to resolve their differences; settlement must be found by peaceful means; and there should be no unilateral steps taken to change the situation. Let me state my message clearly. To Taiwan, I say that there can be no attempt to change the framework unilaterally. To Beijing, I say that you should not underestimate American support for the democracy and market economy on Taiwan. You should not try to test American resolve; you will not like the results. To the Congress and the Administration, I say that we must refrain from provocative action. There must be dialogue, and the United States has an important role to play.

A final point on security is that we must put arms control on the bilateral agenda with China. Chinese nuclear weapons policies are important to our global arms control goals, as well as to our concerns in the region. That includes developments on the Indian sub-continent and possible future arms developments in Northeast Asia, that is, Japan and Korea. We need to start a dialogue with China now.

Let me turn to economic relationships, which is where I have focused most of my attention over the last decade. I believe that, in general, economic development leads to the creation of a middle class that has power yet has interests that differ from the government. A middle class makes demands on political leaders for greater participation, accountability, openness, honesty, and enforcement of the legal system.

This is one of the major factors that drove me over the last decade to lead the effort for unconditional annual MFN (most favored nation trading status) for China and, ultimately, permanent normal trade relations. The same belief, incidentally, has led me to push for the complete abolition of the embargo on Cuba in an effort to improve the economic condition of the Cuban people and, ultimately, to help them gain their political and economic freedom.

The process, whereby pressure from an emerging middle class helps create political and economic freedom, takes time. It has worked in South Korea. It is a work in progress in Thailand and the Philippines. Singapore has had a prosperous middle class for years, yet only now are we beginning to see signs that the era of authoritarian government is coming to an end. Hong Kong, tragically, is showing signs that it may be moving in the wrong direction, although the situation there is sui generis. There are exceptions to the rule, but, for the most part, it holds over time. Economic development and political development in Taiwan have been inextricably linked. And that linkage underlies the fifty year transition Lee Kuan Yew expects to see in China.

China's membership in the WTO will play an important role in this. However, we must avoid exaggerated expectations about the impact of the WTO on China. We will not see changes overnight. Those fighting to protect the status quo will not disappear the day China joins. But the WTO will strengthen the reformers and provide them with new tools.

Economic reform, the expansion of market forces into more sectors of the Chinese economy, transparency, direct foreign investment, listing of companies on overseas markets -- progress in all these areas will help lead, over time, to the development of a middle class, accountability, and stability in China.

The PNTR (permanent normal trade relations) legislation provides for assistance to help China meet its WTO commitments. But it is not enough. The United States, other developed nations, and the WTO and other multilateral institutions, all need to be more ambitious in helping China develop the infrastructure and the institutions necessary to ensure compliance with WTO obligations.

Once the multilateral negotiations are completed in Geneva with China, Taiwan and Beijing will join the WTO at the same time. This must be done at the same General Council meeting. I appreciate China's assurances to the Clinton Administration that there will be no interference with Taiwan's accession. I want to reiterate the importance of that commitment.

Some of you may be concerned that if China has not joined the WTO by June, we will have to extend NTR (normal trade relations) status to them for another year. I assume that some members of Congress will introduce a motion of disapproval of the President's decision to extend. There will probably be several hours or days of debate in the House. I have no doubt that this motion will be defeated overwhelmingly. I would prefer that we don't have to go through this unnecessary debate, but I don't see it as anything more than a minor problem. Once China accedes, PNTR will take effect.

Let me conclude my discussion today with several specific actions that we should take to recognize and support the positive economic and political developments on Taiwan.

One area is Taiwan's role in the world, that is, Taiwan's need for "international space." The Clinton Administration's Taiwan policy review in the fall of 1994 concluded that the United States would support Taiwan's membership in organizations where statehood was not a prerequisite and that we would also support opportunities for Taiwan's voice to be heard in organizations where its membership is not possible.

This policy then evolved into the third of President Clinton's "three no's" in Shanghai in October, 1997, when he said that "We don't believe that Taiwan should be a member in any organization for which statehood is a requirement."

We should return to the positive and more productive thrust of the 1994 review, that is, support Taiwan when statehood is not a requirement for membership, and work creatively for Taiwan's involvement when statehood is a requirement.

Another area for change relates to visits to Taiwan and to the United States by senior government officials. I mentioned earlier the unfortunate incident where members of Congress could not meet with Chen Shui-bian in Los Angeles. I met him in December in Taipei, as have many other members of Congress. To say I can meet him in Taiwan, but not in the United States, is absurd. Chen Shui-bian is the democratically elected leader of the 22 million people on Taiwan. He should be able to visit the United States and meet with whomever he wants.

Similarly, US Cabinet officers should be able to travel to Taiwan and meet with senior leaders. I believe that the first, and last, such visit was by Carla Hills in the early 1990s, when she was US Trade Representative. China will object, and we must lay the ground work carefully for this policy change. But the decision should be ours to make, not Beijing's.

Mao once said: "Many who have read Marxist books have become renegades from the revolution; whereas illiterate workers often grasp Marxism very well." This philosophy led modern China to one tragedy after another. Today, those "illiterate workers" are voting with their feet and their hard earned money. They are trying to make Lee Kuan Yew's three transitions a reality.

These are some of my concerns and observations as I think about our policy toward China and Taiwan. I would be happy to answer your questions.

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)