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Week of November 3, 2000

Week of June 13, 2001

The U.S. and China This Week

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DOMESTIC: Chinese to Try American on Charges of Spying

SUMMARY: (7/11/01) Li Shaomin, a Chinese-born U.S. citizen, was scheduled to be tried by China on charges of spying for Taiwan on July 14. Although the trial was not to be open to the public, an American diplomat and an interpreter were to be allowed to attend, according to a Chinese Foreign Ministry spokeswoman. Li, a professor of business, has a P.H.D. from Princeton University. He was arrested in February after going from Hong Kong to the mainland; he taught at City University of Hong Kong. He is one of at least six Chinese-born scholars having associations with the U.S. who have been arrested by Chinese authorities for spying over the past year. In a telephone conversation with Chinese President Jiang Zemin on July 4, U.S. President Bush asked that Li and the other scholars be allowed to return home.

China claims Li has confessed to being a spy. As espionage trials usually do not take place in China unless the government is sure of winning, it is likely Li will be convicted. However, because of the publicity his case has received in the U.S., he will likely be deported.

In the last year, many of China’s most outspoken editors have been relieved of their jobs and several publications have been closed. Scholars at the Academy of Social Sciences report being under increased surveillance by the government. The reason for the crackdown is unclear. But in a recently published interview, President Jiang said Western nations used “ideological infiltration?to break up the Soviet Union and that they were attempting to do the same to China.

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DOMESTIC: China Stages Large-Scale War Games

SUMMARY:  (7/11/01) The war games China has staged over the last few weeks have involved a simulated Chinese attack on a Taiwanese island and
intervention by an American aircraft carrier battle group. Articles about the war games in the July issue of International Outlook magazine discuss various
parts of China’s military working in integrated fashion for the first time. The magazine is published by the Shanghai Institute for International Affairs and is
associated with Wang Daohan, who oversees China’s relations with Taiwan.

“What is notable is the size, duration and efforts to combine elements of navy, air force, army and artillery units,?said Bates Gill, an expert on the Chinese
military at the Brookings Institution. Before these exercises, Chinese exercises were performed concurrently but not under unified command. However, Gill
expressed doubt as to whether the exercises contained the degree of integration claimed in International Outlook.

The exercises have occurred over the last few weeks on and around Dongshan Island off China’s southeastern coast. Many analysts say in a war with
Taiwan, China’s first move would be to take one of Taiwan’s outlying islands. Zhang Wannian, China’s top general, was in charge of the exercises.
According to the magazine, a new electronic warfare unit was used for the first time over the Taiwan Strait in coordination with surveillance satellites in the
first stage of the exercises, which dealt with “information warfare.? In the second stage of the exercises, Chinese forces launched a joint navy, infantry and
air force attack on Dongshan Island. In the third stage, Chinese forces simulated a counter-attack against an enemy fleet, obviously representing America,
intervening in the war in the Strait.

The magazine reported the use of various sophisticated weapons in the exercises, including a Russian anti-aircraft missile system like America’s Patriot-1,
two new Sovremenny-class guided-missile destroyers for use against U.S. aircraft carrier battle groups, SU-27 fighter aircraft and Kilo-class submarines.

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DOMESTIC: Taiwan’s Nationalists Put Forth Confederation Option

SUMMARY: (6/29, 7/2. 7/9, 7/12) Taiwan’s main opposition Nationalist Party (KMT) has suggested Taiwan could form a confederation with mainland
China. Lien Chan, head of the KMT, said such an idea “is not the only option, but it is one option.?The proposal was drafted by Su Chi, former chairman
of Taiwan’s Mainland Affairs Council. “Nobody talks about `special state to state?anymore,?Su said, referring to former President Lee Teng-hui’s call in
1999 for Beijing and Taiwan to negotiate on a “special state-to-state?basis. Su said the confederation idea would be discussed at the Nationalist Party’s
annual congress July 29 and 30.

Lee has backed Taiwanese President Chen Shui-bian of the pro-independence Democratic Progressive Party (DPP) and has tacitly approved of a new party
that will ally with the DPP. “It’s very clear Lee Teng-hui and Lien Chan have gone their separate ways,?said political scientist Emile Sheng of Soochow
University. Meanwhile, former Nationalist James Soong, head of the People’s First Party, says he generally agrees with the KMT’s China policy; his party
has jointly supported some candidates with the KMT in provincial elections.

A recent poll found 33% of Taiwanese would be able to accept reunification with China under the type of “one-country, two-system?existing between
Beijing and Hong Kong. That number is up from 23 percent last December. Taiwan’s economy is at its lowest level in 19 years. About 50,000 Taiwanese
companies have invested more than $45 billion in mainland China, and 2001 trade between China and Taiwan was projected in January to total $30 billion.

In the confederation proposal, Taiwan and China would retain separate central governments which would have control over diplomatic, defense and
internal affairs, but would exist “under the same roof.?Beijing and Taipei could then negotiate a more formal integration. In March, Chinese President Jiang
Zemin ruled out a confederation between China and Taiwan. Other Chinese officials have refused to regard Beijing and Taipei as equals.

Taiwanese newspapers reported cabinet Secretary-General Chiou I-jen as maintaining that the Taiwanese government would be willing to let its Mainland
Affairs Council hold direct talks with China’s Taiwan Affairs Office, if China agreed. However, Chiou did not say Taiwan accepted the one-China principle,
which China has said Taiwan must accept for talks to occur.

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