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Week of November 2, 1999

Week of November 2, 1999

The U.S. and China This Week

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U.S.-CHINA RELATIONS: Admiral Prueher One Step Closer to Confirmation as Ambassador

SUMMARY:

Retired Admiral Joseph Prueher is still under consideration for the post of Ambassador to China, a post which has been vacant since Ambassador James Sasser left in July. Admiral Prueher met with a warm reception last Thursday when he appeared before the Senate Foreign Relations Committee. Despite his potentially controversial role as Commander in Chief of the Pacific Fleet during the Taiwan Strait Crisis of 1995-96, Admiral Prueher met with Chinese approval in early October, and now awaits only Congressional confirmation of his position.

If he is indeed confirmed as Ambassador, maintaining clear communication and avoiding misunderstanding will be his greatest challenge, Admiral Prueher told the Senate Foreign Relations Committee last week.


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CHINESE POLITICS: Xie Fei Dies at 66

SUMMARY:

Xie Fei, an influential Party leader in Guangdong province throughout the 1990s and a member of the Politburo since 1992, died on October 27. Xinhua news agency did not specify what caused his death. A Party member for 50 years, Xie was famous for urging economic growth in Guangdong, the southern province off of which Hong Kong is located, and for looking to Hong Kong, Taiwan and South Korea as models for his development efforts.


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TAIWAN: Another Earthquake Shakes Taiwan

SUMMARY:

A small earthquake off the eastern coast of Taiwan, with a magnitude of 6.0 on the Richter scale, did not cause serious damage when it hit early this morning. Taiwan is still recovering from the September 21st earthquake which killed more than 2,000 people.


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CHINA-NORTH KOREA RELATIONS: The U.S., China, Japan and South Korean All Seeking Closer Relations with North Korea

SUMMARY:

Following the strategy proposed by U.S. envoy William Perry, the U.S. recently lifted its trade embargo on North Korea in response to an agreement to end missile testing reached after negotiations in Berlin. North Korea has also resumed repatriation to the U.S. of the remains of Korean War soldiers.

The U.S. Chamber of Commerce in Seoul hopes to arrange a trip to explore business opportunities in the North. South Korea is already pursuing possible industrial cooperation projects, and the Japanese government has proposed charter flights between the two countries. North Korea is expected to send a mid-level official to visit both South Korea and the US within the next few months. The fact that just three months ago, North Korea was threatening to test-fire new missiles in the sea near Japan shows just how dramatic this change is.

China also seeks to strengthen its relationship with North Korea. In a speech given from the North Korean embassy in Beijing, Chinese General Fu Quanyou commemorated Chinese-North Korean partnership in the Korean War. The last decade of Chinese economic reform and diplomatic recognition of South Korea were a low point in Chinese-North Korean relations, but in the last 2-3 years China has worked hard to achieve recognition as a regional leader in dialogue concerning North Korea. By maintaining its close relationship with North Korea, China stands to gain both prestige as a regional leader and more foreign investment as it postpones the time when foreign investment shifts to North Korea.

Many western analysts have reasoned that China stands to gain more from a Korean Peninsula which remains divided, and a North Korea which remains relatively closed to the world. A unified Korea, under either Northern or Southern leadership, might be a regional threat to China. A relatively open North Korea would likely draw foreign investors away from China, where they are currently meeting with more frustration, toward a North Korean which offered more concessions to investors. By encouraging North Korea to follow China’s lead, China can continue to receive foreign capital without granting concessions, and keep the situation from changing too suddenly.


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CHINA-INDONESIA RELATIONS: Relations Deepen

SUMMARY:

Indonesian Parliament Chairman Amien Rais noted, after talks with the Chinese Ambassador, that Indonesia would like to establish a mutually beneficial trade relationship prominently featuring technology transfer. Rais also mentioned a new trend in President Wahid’s foreign policy, away from centering on relations with the West and toward placing greater importance on relations with China.

These comments reinforce concerns which made the news in mid-October of a Indonesian-Indian-Chinese (and perhaps Russian) alliance, in opposition to perceived U.S. hegemony in the region. Cancellation of the Australian-Indonesian military cooperation treaty may have encouraged Wahid to consider Indonesian-Chinese military cooperation. While China may not have the technology and hardware that Australia and the U.S. have to offer, it also does not interfere in the domestic or foreign policies of its allies as the U.S. does, making it a more acceptable partner to many less developed nations. Increased cooperation does not necessarily lead to formal diplomatic or military alliance, but should be a concern for the US, perhaps prompting a reexamination of the U.S. policies which are encouraging this response.


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CHINA AND WTO: Running Out of Time

SUMMARY:

The White House seems to be pushing very hard to reach an agreement this month with Chinese officials and negotiators on WTO accession, even if Congress can’t approve the deal until next year. China will not be able to participate in the ‘millennium round?of WTO negotiations in Seattle later this month unless it is a WTO member or its membership is imminent. Both houses of Congress would need to approve a change in the Jackson-Vanick amendment which requires Congress to conduct an annual review of China’s trade status, and is primarily an annual opportunity for certain members of Congress to voice their concerns about the trade defect, the Taiwan issue, or human rights. One possible way for China to enter the WTO would be for the US and China to reach a deal, but for the US to invoke an obscure WTO provision which would keep China from enjoying some of the trade benefits of WTO membership until Congress approved the relationship.

China has yet to conclude agreements with Canada, the European Union and several Latin American countries. The two biggest obstacles to reaching an agreement are in the textile industry, where the U.S. is concerned about protecting domestic production, and in anti-dumping legislation, where the U.S. is the country which most frequently invokes sanctions against nations thought to be dumping in the U.S. market.

China has been pressuring Pakistan, Bangladesh, Cuba, Paraguay, Sri Lanka, and the North African nations President Jiang just visited to support immediate Chinese entrance into the WTO, ahead of Taiwan. Taiwan has already met all the necessary conditions for accession, while China has not. To avoid further tensions in the China-Taiwan relationship, it would be best for China and Taiwan to join the WTO at the same time. However, if China does not join before the November "Millennium Round" of ministerial talks in Seattle, either Taiwan will be forced to wait or China will face the uncomfortable fact that Taiwan may become a WTO member before China. Hong Kong is already a member.


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U.S. BUSINESS IN CHINA: Disney Announces Hong Kong Magic Kingdom

SUMMARY:

Lantau Island, just minutes from Central Hong Kong, will be the site of the second Magic Kingdom in Asia, planned to open in 2005. The Hong Kong government and Walt Disney Co. will jointly invest in a complex planned to include a Disneyland, resort hotels, shops, and restaurants. Lantau Island is already the site of the newly opened Chep Lap Kok Airport.

Coming in the wake of the Asian financial crisis, this $2.75 billion deal is, in the words of Hong Kong Chief Executive Teng Chee-hwa, "the beginning of a new era for Hong Kong." The project is expected to lower Hong Kong’s current 6% unemployment rate and create thousands of jobs building and running the park. A substantial proportion of the anticipated 5-10 million annual visitor are expected to come from mainland China.

Disney already has two overseas theme parks, in Paris and Tokyo.


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CHINA-MACAU RELATIONS: China Abolishes 12 Macau Laws

SUMMARY:

The Standing Committee of the National People’s Congress (NPC) passed a resolution this week abolishing 12 previously exisiting Macau laws which conflict with the new Basic Law of Macau Special Administrative Region. The Basic Law will take effect as of Dec 20, 1999, the day on which Macau changes from a Portuguese colony to a Special Administrative Region of China.


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U.S.-CHINA RELATIONS: Chinese Foreign Ministry Criticizes New U.S. Consul General

SUMMARY:

Last Thursday, Chinese officials criticized the U.S. Consul General Michael Klosson, who took over the position in August, for stating that the U.S. "should play an active role in maintaining Hong Kong’s confidence and prosperity." The Hong Kong branch of China’s Ministry of Foreign Affairs criticized Klosson for making "irresponsible remarks on the internal affairs of the Hong Kong Special Administrative Region." Defined by the Hong Kong Policy Act, the position that an independent judiciary, a free press, rule of law are integral to Hong Kong’s role as an international city was standard U.S. policy toward Hong Kong while it was still a British colony. U.S. policy concerning Hong Kong has not changed since Hong Kong reverted to Chinese rule in 1997.

This criticism reflects a broader disagreement between the U.S. and China over the U.S. role in the Pacific. U.S. policy sees the U.S. as the major stabilizing force in the Pacific, playing a crucial economic and military role. China sees this involvement as interference, bordering on hegemony, and suspects the US of actively working to prevent any Asian nation from becoming strong enough to challenge U.S. authority in the region. This fundamental difference of views underlies many of the problems in U.S.-China relations, making the Taiwan issue, the proposed missile defense system, and other issues impossible to resolve without a change in fundamental policies.

U.S. Undersecretary of State Thomas Pickering met with Chinese Vice Foreign Minister Yang Jiechi and gave a speech to the Foreign Affairs College in Beijing last Thursday in a continuing effort to ease concerned heightened by the May 8 bombing of the Chinese embassy. Pickering was expected to discuss the proposed deployment of the Theater Missile Defense System as a protection for US troops in America and the Pacific, explain continuing American concerns about human rights issues related to the arrests of Falun gong practitioners and of leaders of a would-be pro-democracy party, and other concerns.


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RECENT WASHINGTON EVENTS: ‘We Served with Pride?Premiers

SUMMARY:

The Organization of Chinese Americans (OCA) and Waverly Place Productions cosponsored the premier of ‘We Served With Pride,?a documentary about Chinese Americans who served or contributed to the war effort in World War II. The film combined historical photos and news footage with contemporary interviews to provide an in-depth examination of the war era as a turning point for the Chinese American community. For more information about the film, visit www.weservedwithpride.com or contact OCA’s Washington Headquarters


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RECENT WASHINGTON EVENTS: ‘China on the World Stage: Reexamining Expectations?#060;/h2>

SUMMARY:

The International Research & Exchanges Board (IREX), The National Committee on U.S.-China Relations and China Online sponsored a half-day conference at the National Press Club last Thursday. Presentations and discussion focused on China’s participation in the UN, in international financial institutions, and in regional organizations. A second panel concerned China’s record on compliance with international agreements and China’s provision of international assistance. For more information visit the IREX web site at www.irex.org



The U.S. and China This Week
The U.S. and China This Week

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