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Week of November 3, 2000

Week of March 23, 2001

The U.S. and China This Week

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U.S.-CHINA RELATIONS: Visiting Chinese Vice Premier Warns U.S. on Aegis System

SUMMARY: Visiting Chinese Vice Premier Qian Qichen has assailed the idea of America exporting Arleigh destroyers armed with Aegis radar systems to Taiwan. Speaking to reporters at a New York breakfast, Qian said such sales would be a “grave violation?of the 1982 joint arms communiqué negotiated by the U.S. and China which limited the quantity and quality of arms America sends Taiwan. “It would change the essence of the issue from a peaceful approach to bring about unification to ?a military approach,?Qian said. In response to a question as to whether that meant China would take military measures if the sale went through, Qian said “It all depends on the circumstances.?#060;/font>

While Qian also voiced China’s opposition to America’s desire to build a missile defense system, he made it clear that China’s top priority is arms sales to Taiwan. The Aegis radar system can track 100 targets all at once. China fears it could one day be connected to American missile defense systems. The Bush administration is scheduled to make a decision on what arms to sell Taiwan in April.

On March 19, State Department spokesman Richard Boucher reiterated that the U.S. supports a “one-China?policy and
“peaceful resolution acceptable to the people of Taiwan.?But he would not repeat the “three no’s?that President Clinton stated in a visit to China in 1998: no to support for Taiwanese independence, a separate Taiwanese regime or Taiwanese entry into international organizations requiring sovereignty.

Admiral Dennis Blair, senior U.S. military officer in the Pacific, has asked China to take away some of the missiles that lie within range of Taiwan. But China has refused to do so. Qian said the missiles should not be a problem because China’s military is not “aimed at Taiwan as a target.?#060;/font>

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INTERNATIONAL: Chinese Firm Had Sought to Export Fiber-Optic Material to Iraq

SUMMARY: The Chinese company Huawei Technologies, which the U.S. says illegally exported fiber-optic equipment
to Iraq and installed it, had been seeking U.N. approval for more than a year to sell about $34 million of fiber-optics and
related material to Iraq, according to U.N. documents and diplomats. The U.S. says Huawei Technologies improved
Iraq’s air defenses by placing optic cables between Iraqi anti-aircraft batteries, radar stations and command centers.
American planes patrol no-fly zones over northern and southern Iraq. The U.S. and Britain cited the improvement in air
defenses as the main reason for their February 16 bombing of Iraq.

In April and December 1999, Chinese diplomats tried to win U.N. approval for Huawei Technologies to supply Iraq
with “telecommunications equipment and switching systems.?UN sources indicate that at least one of the two proposed
deals involved fiber-optics. The U.S. and Britain demanded information about the proposals, including how the
equipment would be used, and placed “holds?on them. The proposals and the holds are currently pending.

China has asked the U.N. to approve more than 60 contracts to sell telecommunications and transportation equipment
to Iraq. America and Britain have placed holds on 24 of those contracts. Last December, American officials met with
Chinese officials and businessmen to explain what they need to do to get approval for telecommunications deals with
Iraq. A Huawei representative attended the meeting. A State Department official said the U.S. maintained that
fiber-optics “was a higher level of sophistication than we were comfortable with.?According to a State Department
official, the U.S. is wary of telecommunications contracts because of possibilities for using equipment for military
purposes. But some technologies that are not very sophisticated have been approved.

A spokeswoman for China’s mission to the U.N. would not comment on Huawei Technologies but said the Chinese
government will “seriously investigate and prosecute?any firm breaking U.N. sanctions against Iraq. In a breakfast
meeting with reporters in New York, visiting Chinese Vice Premier Qian Qichen said no Chinese company signed a
contract with Iraq or exported fiber-optic material there directly. However, he admitted some equipment was sold to
other countries and was then sent to Iraq. He said individuals who were involved have been “criticized severely?and
“we have recalled those personnel.?amp;nbsp;

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DOMESTIC: Apartment Explsions Kill 108 People in Shijiazhuang

SUMMARY: Explosions in four apartment buildings in the city of Shijiazhuang in the early morning hours of March 17
killed 108 people and injured 38, according to government-run television. The first explosion, the most powerful one,
destroyed a five-story building where at least 30 families resided. The news report said police viewed the explosions as a
“criminal case?and that “criminal elements?were believed to be responsible. Officials said the blasts occurred in
succession between 4:16 a.m. and 5:21 a.m. They also said all four apartment buildings were near cotton mills.

Police were looking for a deaf man with possible gangster links, Jin Ruchao, 41, who was already evading police for the
alleged murder of his girlfriend March 6 in Yunnan province. The Shijiazhuang Daily published a picture of Ruchao
along with a reward for 50,000 yuan ($6000) for information leading to his arrest. The reward was later raised to
100,000 yuan ($12,000). China’s State Council sent Wang Zhongyu, a senior official, to investigate the explosions.
Beijing ordered the local government not to give out information.

Shijiazhuang, the capital of Hebei province, has had its share of difficulties recently. The mayor recently was forced to
abdicate due to a corruption scandal plaguing Hebei province. Thousands of workers are unemployed. And rumors
abound that rival criminal gangs are competing for control of or influence over city services. Last September, five
homemade bombs at department stores or on buses in Shijiazhuang went off, injuring 28 people. Li Yonghui, an
unemployed worker who was accused of theft and blackmail, was executed for the crime but there were rumors that the
bombings were the result of rivalry between criminal gangs vying for control of public transport.

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          DOMESTIC: Doubt Cast on Bombing Suspect

SUMMARY: Although the police did not directly implicate Jin Ruchao, 41, as the likely bomber of the four apartment
buildings March 17 that took the lives of 108 people, a Shijiazhuang police official identified him as the main suspect.
However, the official said the police believe Jin, who is deaf, had help and may have been involved with a gang. Two
Hebei residents, Lai Fengqin and Wang Yishun, were arrested for allegedly selling Jin explosives.

Jin had a room in the worker’s dormitory where the first and most deadly explosion occurred, at the Number 3 Cotton
Mill. His father and stepmother also were reported to live in the building. Meanwhile, his ex-wife and her husband were
reported to live in another of the targeted apartment buildings.  Jin had been fired from the Number 3 Cotton Mill in
1983 for unruly behavior but kept the room.

A local government official said he thought the explosions were the work of laid off workers. “Can one deaf man cause
all four explosions??he asked rhetorically. Between 1998-2000, China laid off 1.4 million textile workers. The Hong
Kong-based Information Centre for Human Rights and Democracy said police were searching for up to eight suspects
and that Jin had no knowledge about explosives. It claimed Jin has been made a scapegoat.

Meanwhile, a security source said a senior member of the Beijing government’s team investigating the bombings is an
intelligence expert from the Army’s General Staff Department. “Preliminary findings have shown the four blasts were
planned and executed by professionals with special training in explosives,?the source maintained. The source said the
central government sent an army investigator partly because angry former soldiers set off bombs in Shaanxi and Sichuan
provinces in recent months.

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U.S.-CHINA RELATIONS: Beijing Fears American Aid to Taiwan

SUMMARY:  Two salient political issues highlight Beijing’s concern over America’s Taiwan policy, which have been
discussed as Chinese Vice Premier Qian Qichen has held meetings with American officials this week. Beijing is worried
that destroyers containing the Aegis radar system could eventually lead to a theater missile defense for Taiwan, which
Beijing considers a renegade province. American specialists say Beijing has about 300 short-range missiles near Taiwan,
and are adding to the total by 50 every year. Beijing fears a missile shield for Taiwan may hinder reunification and
strengthen pro-independence forces on the island.

China is also concerned about a national missile defense (NMD) for America. China has only 18 DF-5 long-range
intercontinental missiles with the capability to reach America. Those missiles contain aging liquid-fuel systems and their
warheads are stored separately. According to an American expert, the Bush administration is not going to “say that it is
the U.S. national interests for China to have a stable deterrent ?that is, that it is in the American interest for China to be
able to incinerate an American city.?

But Beijing fears if America is protected from Chinese missiles, it may be more likely to intervene in a conflict between
Beijing and Taipei. A former Clinton official who discussed NMD with Chinese officials said that they raised the
concern that America with a missile shield would “act without any restraint.?The former official said, “They used the
example of Kosovo. But their real concern was Taiwan.?

The Clinton administration held that NMD was not meant to be directed towards China. Secretary of State Colin Powell
in his Senate confirmation hearing said the same thing. But in a September 1999 speech at the Citadel in Charleston,
South Carolina, then Governor George W. Bush mentioned the need to counter missile threats from rogue states as well
as China. The Bush administration has indicated to China that to prevent the sale of the Aegis system, it should reduce
its missile threat to Taiwan.

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DOMESTIC: Falun Gong Girl Dies in Hospital

SUMMARY: Twelve-year-old Liu Siying, who set herself on fire along with her mother and three other Falun Gong
followers in Tiananmen Square, died March 17 of a congenital heart defect made worse by internal burns, according to
state television. “We did everything we could to revive her heart but we failed,?said a nurse in the Jishuitan Hospital
burns unit. The government had broadcast interviews with Liu, with bandages all over her body, saying that she had
wanted to go to paradise and that she thought the flames would not hurt her.

“This is the perfection of Li Hongzhi,?state television broadcast March 18. “This is the paradise imagined by Liu Siying.
According to doctors, Liu’s external burns were almost healed and skin transplants had been successful. However, her
internal organs, especially her heart, had swollen due to breathing in flames.

Liu’s mother died in the group suicide attempt, while three other Falun Gong followers were injured. Falun Gong
spokespeople say they doubt the five supposed members were really Falun Gong followers because the movement does
not condone suicide.

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U.S.-CHINA RELATIONS: AU Scholar Detained by Beijing

SUMMARY: The Chinese government has detained a Chinese-born scholar affiliated with American University for more
than a month. A Chinese Foreign Ministry spokesman, Sun Yuxi, said Gao Zhan, 40, has confessed to harming state
security and is in good health. Gao was detained along with her husband, Xue Donghua, and five-year-old son, Andrew,
February 11. Xue and Andrew were released March 8 after being held 26 days, Xue said.

Xue, a D.C.-based manager for Electronic Data Systems Corporation, said the Chinese government tried to get him to
implicate his wife in exchange for seeing his son, but he refused. He said he is worried because Gao has heart disease
and other health problems. Gao’s unpaid position at AU began last October and will end in September.

Gao is drawing substantial support in America. The New York-based group Human Rights in China asked President
Bush to push for her release with visiting Chinese Vice Premier Qian Qichen. American University President Benjamin
Ladner said he has sent letters seeking intervention to Bush, Qian, American ambassador to Beijing Joseph W. Prueher
and Chinese ambassador to Washington Yang Jiechi. State Department spokesman Richard Boucher called for Gao’s
immediate release.

Gao and her husband immigrated to the United States in 1989 and are permanent residents. They have applied for
American citizenship, and their son is already a U.S. citizen. An embassy official in Beijing said China failed to abide by
treaty obligations to notify the embassy of Andrew’s detention. But Sun of the Foreign Ministry said Andrew’s parents
did not ask for the embassy to be notified, so China did not break any obligations. He also said Andrew was not
detained, but rather sent to kindergarten.

Gao mostly studies family and women’s issues but has also written about Chinese-Taiwan relations. Her current focus is
women’s issues and economic reforms, American University maintained. Xue said during questioning he was repeatedly
asked about Gao’s work and trips his wife made to Taiwan in 1995 and 1999. Gao’s arrest is the third time in the last
three years that an academic of Chinese birth has been detained by Chinese authorities after returning there from the
United States.

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