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Week of July 14, 2000

Week of July 14, 2000

The U.S. and China This Week


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FOREIGN RELATIONS: Israel Suspends Military Sale to China, Disappoints Chinese Leaders

SUMMARY: As President Bill Clinton hosts Israeli Prime Minister Ehud Barak and Palestinian President Yasser Arafat for the Middle East peace summit at Camp David, he was informed by Ehud about Israelís decision to suspend a $250 million deal to sell "Phalcon" early-warning radar plane technology to China. The Pentagon had sustained strong criticism of the deal which would transfer sensitive military technology ?radar capable of tracking multiple aircraft simultaneously ?to China and potentially endanger U.S. forces should they ever become involved in a military conflict with China. Members of Congress had threatened Israel claiming that current aid ?$2.8 billion annually for military and economic assistance ?could be cut off if the deal was implemented.

Israeli spokesman Baltiansky revealed in a recent statement that Barak had issued a letter to Clinton stating, "Israel is currently unable to continue the Phalcon project due to Israelís joint effort with the United States to achieve an historic decision regarding Israelís vital interests in the region," referring to the current peace talks underway at Camp David. The development is a sign that Israel is seeking to boost prospects for positive results in the talks, which will require U.S. congressional support if a peace deal is to be made between Israel and Palestine. However, Barakís decision does not eliminate the possibility that the sale could occur at a later date.

In response to Israelís decision, China has expressed disappointment. Chinese President Jiang Zemin told visiting U.S. Defense Secretary William Cohen about his dissatisfaction. In addition, Chinese foreign ministry spokesman Zhu Bangzao critisized the U.S. stating, "No other country has the right to interfere in the bilateral cooperation that China has with other countries." In response to Chinese apprehension over the matter, Cohen stated that "This should not be in any way a signal that we are seeking to contain China."


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U.S.-CHINA RELATIONS: Senate Debate on China Sanctions Bill Could Further Delay PNTR Vote

SUMMARY: An ongoing U.S. Senate debate between Democrats and Republicans over legislation that would impose sanctions on China for foreign weapons sales continues to delay the Senate vote on granting permanent normal trade relations (PNTR) status to China, a vote which would place into effect the U.S-China trade agreement signed between the two countries last fall. Introduced by Republican Senator Fred Thompson of Tennessee, the nonproliferation bill is supported by members of Congress who feel the legislation is needed to prevent Beijing from continuing sales of military equipment and weapons to countries like Pakistan, Iraq, and North Korea. Opponents of the bill, namely Senate Democrats, claim passage would create serious backlash from China. Clinton administration officials criticized the bill as "ill-conceived" and undermining of efforts to work with Beijing on nuclear proliferation.

Under increasing pressure from Senate Democrats, White House officials, and business leaders, Senate Majority Leader Trent Lott (R-MS) has indicated that he will try to reach a compromise in the controversial nonproliferation bill, making it less specific to China. This seems to have appeased some of the concerns of opponents, such as Senate Minority Leader Tom Daschle (D-SD), who will be satisfied if the compromise will guarantee a vote on PNTR before the August congressional recess. The nonproliferation bill is considered one of the last major hurdles before the Senate votes on PNTR.


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FOREIGN RELATIONS: Taiwan to Be Kept Off Upcoming G-8 Summit Agenda

SUMMARY: Although cross-strait relations between Taiwan and mainland China are at the top of security concerns in Asia for leaders of the eight countries gathering next week for the G-8 summit in Okinawa, Japan, the issue is expected to be kept off of the agenda. Experts claim that a combination of Chinese lobbying as well as European and Japanese fear of offending China have made Taiwan a subject to avoid. A Japanese professor stated about the host of the conference, "The Japanese government is not interested in making too much noise about the Taiwan issue." Despite the absence of Chinese representatives from the summit, Japan would like to avoid sensitive subjects about its complex relationship with China. Also, Tokyo officials are desperate for a successful summit in order to bolster the currently weak government. Therefore, a more neutral issue has been chosen for the theme of the conference: the information technology revolution.

Many analysts are saying that G-8 countries are missing a perfect opportunity to discuss the vital security issue that has ramifications for many of the members, especially the United States and Japan. A military conflict between Taiwan and mainland China over the ongoing reunification struggles could potentially cause the current U.S. security structure in Asia to unravel and lead to the regionally controversial involvement of the Japanese military.


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CROSS-STRAIT RELATIONS: Taiwanese Legislator Says China Indicating Flexibility on "One China" Interpretation

SUMMARY: Taiwanese Legislator Feng Hu-hsiang of the pro-unification New Party, who is in China as part of a delegation with his party to discuss cross-strait relations, claims that Chinese Vice Premier Qian Qichen indicated willingness to accept different interpretations by both sides on the central issue of the "one China" policy. Feng stated that Chinese leaders are not free to directly express this flexibility over the "one China" policy, but that Qian was indirectly stating it during a recent meeting.

Later this month, delegations from other political parties, including Nationalists and People First Party, will travel to mainland China to continue rapprochement efforts.


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TAIWAN RELATIONS: U.S. Lobbyist Firm Continues Funding Upon DPP Inauguration

SUMMARY: The U.S. lobbyist firm Cassidy & Associates, who received funding from Taiwan Research Institute (TRI) associated with the Nationalist Party, was able to secure a new contract with the Taiwan Studies Institute (TSI) after a transfer of power to opposition leader Chen Shui-bian and his Democratric Progressive Party (DPP). Cassidy & Associates, who used $10 million in TRI funding to lobby for issues such at the Taiwan Security Enhancement Act (TSEA), will continue to push for TSEA and other pro-Taiwan legislation with $2 million from TSI. After the Nationalist Party lost the presidential election this past March, observers of China and the lobbyist industry speculated that Cassidy & Associates would be out of work after the DPP took the reins of power.


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US-CHINA RELATIONS: Cohen in China to Discuss Anti-missile System

SUMMARY: U.S. Defense Secretary William Cohen is in China this week to hold arms control talks. This is Cohenís first visit since January 1998. During his stay, China has been strongly criticizing the US for their planned National Missile Defense (NMD) and Theater Missile Defense (TMD). Foreign Ministry spokesman Sun Yuxi said on Tuesday, "No matter what the United States says, it will not change Chinaís opposition to the anti-missile defense program."

Both Beijing and Moscow have adamantly opposed the anti-missile system fearing it will start another arms race and cause instability in the region. China also fears that TMD may be used to protect Taiwan.

Cohen has stated that no final decisions have been made about the continuation of the NMD, even after another trial failure took place just days beforehand. He told reporters "What I have to do is to await the full report, all of the analysis?So at this point Iím just going to withhold any judgment."

The U.S. also plans to discuss Chinaís alleged missile technology sales to Pakistan. The New York Times said last week that China has increased its shipments of special steels, guidance systems and technical expertise to Pakistan. Both China and Pakistan deny this report.


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INTERNATIONAL: World Bank Rejects Chinaís Resettlement Project

SUMMARY: After long internal debates, the World Bank decided to reject a proposed $40 million resettlement project that would relocate 58,000 poor Chinese farmers in Qinghai Province. Many believe, including the demonstrators outside the World Bank, that China was using the project to place a large number of mostly Han Chinese onto what has been traditionally Tibetan land.

One outstanding criticism has been the World Banks failure to follow its own internal procedures when approving the project. It was reported that it violated its own safeguards by not consulting with the affected group-the Tibetans-about the impact of the relocation.

After the board made it clear that the project would not be financed and proposed further investigation, China withdrew its request and stated it would pursue the project on its own. Chinaís World Bank Representative, Zhu Xian, declared they had had enough and claimed Ďsome nations were using the cover of internal guidelines as a way to inject political control over lending.?J. Kahn).

The exiled Dalai Lama was born in eastern Qinghai and Tibetans claim that area as part of their homeland.


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

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