FIRlnGLlne WILLIAM F. BUCKLEY, JR. WINSTON LORD, CHEN CHIEN-JEN, JAMES LILLEY "WOULD CHINA'S HONG KONG FORMULA WORK WITH TAIWAN?"

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2 MR. BUCKLEY: We're looking at US policy toward Taiwan and mainland China, and exploring in the first hour the question, Would China's Hong Kong formula work with Taiwan? As we know, a year ago British sovereignty ended and the Chinese took direct control under a governor-general. Is this formula or any modification of it interesting to the government of Taiwan? To answer that question we have the director-general of the Government Information Office of Taiwan, whose official name is the Republic of China. Dr. Chen Chien-jen was educated in Taipei and at King's College in Cambridge, at the University of Madrid, and at Georgetown. He has practiced diplomacy since He served as deputy minister of foreign affairs until his appointment earlier this year as director-general of government information. To evaluate the question from America we have two distinguished analysts, diplomats, and scholars. Winston Lord was ambassador to China, whose official title is the People's Republic of China. He served President Clinton as assistant secretary of state for East Asia and Pacific Affairs. He has been president of the Council on Foreign Relations and, for President Nixon, director of policy planning for the State Department. James Lilley has served as ambassador to China, ambassador to Korea, and as director of the American Institute in Taiwan. He is currently resident fellow of Asian studies at the American Enterprise Institute and professor at the University of Maryland. Both Mr. Lord and Mr. Lilley are graduates of Yale University. I begin with the first question: Dr. Chen, are you at liberty to discuss the most recent approaches of Peking? DR. CHEN: You are talking about a bilateral relationship-- MR. BUCKLEY: Yes. DR. CHEN: --between the two sides of the straits. Well, as you probably know, there had been no contact before It was initiated by our government. The exchanges between the two sides took place up to now about 10 years. A lot of exchanges have been going on. For example, as far as personnel is concerned, more than 13 million trips have been made by our people to the mainland, about 1

3 250,000 from the mainland to Taiwan. And trade between the two sides reached $25 billion last year, and investment by our people on the mainland reached $37 billion. But that had been going on pretty well until June The PRC somehow decided to discontinue the dialogue between our two sides which had been going on. MR. BUCKLEY: Was that precipitated by the visit of President Lee here to America? DR. CHEN: That's correct. And before that, actually we had 15 times of dialogue between two facade organizations. But because of President Lee's trip, somehow Beijing could not accept it, so they discontinued the dialogue-- MR. BUCKLEY: Well, at that-- DR. CHEN: --and that lasted until April this year. MR. BUCKLEY: At that point were they making concessions which you thought you could live with in a future relationship between you and the mainland? DR. CHEN: Well, up to now the basic policy of Peking has not changed. They have not renounced the use of force against us, they have been still treating us as a subordinate entity, and they have been trying to isolate us, undercutting our position in the international community. So under the circumstances it is very difficult to have very meaningful dialogue between the two sides, but nevertheless, we have been trying very hard, as I said, since And even now we have been trying very hard to see that resumption of dialogue be realized. And as a matter of fact, last month we sent a delegation to Beijing to try to resume the dialogue, but it was not very warmly received, in spite of the fact that Peking has been saying that they would like to see the resumption of dialogue-- MR. BUCKLEY: Well, Mr. Lord-- DR. CHEN: --carried out sometime this year. MR. BUCKLEY: --you wrote towards the end of 1996, if I remember, a rather plaintive question, which was leaked. It was: What is our Asia policy? Now, did you have in mind when you said that, among other 2

4 things, that the United States' position on this possible rapprochement was unfocused? MR. LORD: No. First of all, the memo was back in '94--I won't go into detail on that--and it was a more general question. Six administrations, Republicans and Democrats, ones that Jim has served and ones that I have served, have followed the basic policy on Taiwan, and I think it's still the correct one: namely, strong, vigorous, but unofficial ties with Taiwan and official ones with Beijing. And I was pleased to see Mr. Chen just two days ago in Washington say that despite some difficult moments which we understand for Taiwan in the last 20 years, that our relations with Taiwan have not only survived but they have prospered. So it's been a good policy for Taiwan, with some adjustments obviously, because they've prospered tremendously economically, and their security has been assured. They're now a democracy--the first Chinese election we've seen, showing the Chinese people want freedom, and we've improved relations with Beijing. It is up to Taiwan and Beijing to work out their future. Several administrations think we ought to continue this, ought to leave it to the two of them. The only condition we put on it is it must be done peacefully, and we underscored that point in '96 during the Taiwan missile crisis when we sent two aircraft carrier groups into the Taiwan area to deter China from using force. MR. BUCKLEY: Well, in your opinion, Mr. Chen, has the United States been importunate in its dealings with you? Have they urged you in directions that you want to resist, or are we following Ambassador Lord's counsel in these matters? DR. CHEN: Well, of course, we would love to, say, still have diplomatic ties with the United States. But unfortunately now we do not. But nevertheless I think our bilateral relationship has been progressing quite steadily, and the relationship between the two sides has improved, as I said in my speech day before yesterday. And in spite of that, because of the existence of the PRC and because of the relationship which is also evolving between Washington and Beijing, or Peking, so periodically we have to express our concern, which might directly or indirectly affect our interests. This is what we have been doing in the past. MR. BUCKLEY: Well, let me ask Ambassador Lilley: You wrote recently that America has bungled its policy by trying to accomplish 3

5 too much. Among other things, you thought that the human rights linkage was unsuccessful and bound not to succeed. Were you also critical of inviting President Lee to Cornell? MR. LILLEY: No, I was not. I supported that and so did Secretary Baker. We felt that it was our business who we gave visas to, not the Chinese's business, that he came as a private citizen, he went to his alma mater, he didn't meet any federal officials~-not even a janitor- and he went back. He made a speech that perhaps upset China somewhat, but he used "one China" in that speech. I think you have to realize that the Chinese-- MR. BUCKLEY: Excuse me, if he had met a federal official, that would have been some sort of a red flag with Beijing? MR. LILLEY: Well, let me go back and point out some of the inconsistencies in Beijing's position. President Lee Teng-hui had made a trip in 1994 when he went to four countries that recognized China as the sole legal government of China: Singapore, Indonesia, Thailand, and the Philippines. He met the chief of state in every one of those places, the king of Thailand, the prime minister of Singapore, President Suharto, then in Indonesia, and President Ramos. The Chinese stood by and let it happen. He comes to the United States, he doesn't even meet a janitor in the federal government and they recall the ambassador. That strikes me as rather inconsistent. What are we, some sort of a fourth-rate banana republic that we get pushed around like this? It seems to me that they-- Just now the vice president of Taiwan has gone to Malaysia. He had a motorcade take him in to see Premier Mahathir. He was treated-- He had his foreign minister, he had all these people with him, and the Chinese didn't say boo. MR. LORD: There's a clear double standard here, I agree. MR. BUCKLEY: But you know-- MR. LORD: They only lean on us and, to a certain extent, Japan. MR. LILLEY: Yes, and France, the big ones. MR. LORD: Anyone else they ignore what happens. 4

6 MR. BUCKLEY: Well, you know the axiom, Quod licet Jovi non licet bovi. MR. LORD: Of course. MR. BUCKLEY: Jove-- MR. LORD: Your accent's what threw me off, but-- [laughter] MR. BUCKLEY: Jove can get away with things but cows can't get away with things. But it's the other way around here. They can get away with things that we can't get away with. In any case, did you anticipate that that would be an inflammatory gesture, Dr. Chen? DR. CHEN: No, not at all. MR. BUCKLEY: Did you care? DR. CHEN: Care about what? MR. BUCKLEY: Well, in other words, retroactively, do you wish that you had not been so provocative as to encourage the president? DR. CHEN: No, we have been saying all along that we would like to see China be reunified. But before that happens, for the sake of 21.5 million people on the island, we have to survive, we have to continue to develop ourselves, both domestically and internationally. We cannot live by ourselves in this international community. We have to establish relations with other countries, particularly important countries like the United States. So if we had to do it again, we would certainly do it one more time. MR. BUCKLEY: Well, Mr. Lord, if I understand Dr. Chen, he is saying that there is room here for American initiative. Is this simply excluded? We can't vote to put him in the United Nations. Can we vote to put Taiwan in the World Trade Organization? MR. LORD: Well, first of all, we can't do anything unilaterally. MR. BUCKLEY: Yes. MR. LORD: It requires all the other countries-- 5

7 MR. BUCKLEY: Exert our leadership. MR. LORD: --all of whom are less heroic on the Taiwan issue than we are, I might add. The position of several administrations has been one China, so consistent with that, the United States has not supported Taiwan's admission to the United Nations because it requires statehood. We do support, as a result of a review that we made early in the Clinton administration, trying to get Taiwan into economic and technical organizations where statehood is not required, and even where there is statehood, to let them have a voice. Now if Beijing and Taiwan can work out admission to the UN for Taiwan, we would certainly favor that. Taiwan, with 21 million people and the 14th largest economy in the world really deserves greater international space. I think Beijing has been shortsighted in not letting Taiwan, where its people are feeling proud of their democratic accomplishments and economic accomplishments and want a bigger profile. I think it would be in Beijing's interest to loosen up on that. They are a little bit paranoiac in my opinion. MR. BUCKLEY: Well, are you satisfied that the United States will simply sit it out until a formula is devised that Beijing and Taiwan are agreed upon? DR. CHEN: We certainly would like to see that the United States, a very good and old friend of us, can provide us some assistance, whether by having better relations with other countries or having a more active role in international organizations. You mentioned the United Nations. Let me say this. Because we are not a member of the United Nations our national interests have been directly and indirectly affected adversely by this fact. A very good example is the Montreal Protocol. According to the Montreal Protocol--it's a convention protecting ozone--according to the provision of the Montreal Protocol, if you are not a member of the United Nations, you cannot sign this protocol. But on the other hand, according to the provision of the protocol, if you don't sign it, you are likely to be punished. So this is one of the many examples I can give you. MR. BUCKLEY: Catch 22. DR. CHEN: But of course there are other reasons why we would like to participate in the United Nations, although we know the difficulties involved. It's because ours is a democracy. Our people, more than 80 6

8 percent, want a government to participate in as many international organizations as possible, not only because of the national interests involved, but also the dignity, human rights of our people. We are so much better than most of the countries in the world, yet we have been treated unfairly, unjustly and unreasonably. Those are the very important reasons for our efforts. MR. BUCKLEY: Ambassador Lilley, can you come up with a formula that you could predict would satisfy Beijing and Taiwan that would answer these problems? MR. LILLEY: I was hoping you would ask that question, because the track record is pretty clear on the way we've managed this. Beijing is always inflexible on principle and flexible on tactics. In , Beijing said, We want to be in the Asian Development Bank. Kick Taiwan out like you did in the World Bank. And we said no, we won't; if you want to come in, Taiwan stays. We haggled and bargained for two-and-a-half years, they both sit in the Asian Development Bank today, an official organization. Taiwan had to change its name to Chinese Taipei, the same formula they used for the Olympics. The World Trade Organization, we've got a formula for Taiwan to enter that as the customs territory of Taiwan, Pescadores, and Jinmen and Matsu. Beijing has accepted that. What Beijing says, in a fit of pride, is, We have to go first. But they haven't met the conditions. Taiwan has met about 95 percent of the conditions, could join tomorrow. DR. CHEN: Clearly. MR. LILLEY: Yes, could join very quickly. It seems to me that they should, and this would give Beijing a nudge to be more flexible on the tactical conditions for itself joining it. So I think in terms of the World Bank, which I think is very important--imf with the Asian meltdown. Taiwan belongs in this. They've got $82 billion of foreign exchange. They're part of the solution. But they can't get into it because Beijing freezes them out. Taiwan has proposed that Beijing and Taiwan work together. Beijing has refused. So I just want to point out, from 1980, roughly to-- No, '72 to '80, Taiwan was in the World Bank and was not in the UN. So I think the precedents are there: Asian Development Bank, World Trade Organization, World Bank membership for Taiwan without being in the UN. MR. BUCKLEY: So the statehood business is not critical then. 7

9 MR. LILLEY: Obviously not. MR. BUCKLEY: I mean, not historically. MR. LILLEY: The precedent was established for eight years-- MR. BUCKLEY: Yes. MR. LILLEY: --in the World Bank. So it seems to me with all of the pressures for economic aid and Taiwan being as strong as it is--it buys actually more from us than China does, and it's a very important trading partner. MR. BUCKLEY: Well, Dr. Chen, what kind of leverage do you have on Beijing? What do you have that they want, other than money, patronage? Is there a weapon there that hasn't crystallized available to you-- DR. CHEN: I think what we have-- MR. BUCKLEY: --that would make them resilient? DR. CHEN: --over Beijing is democracy, human rights, freedom. Those are the things perhaps invisible, but nevertheless they are very strong tools and weapons compared with what's going on on the mainland. MR. BUCKLEY: But Ambassador Lilley says that Beijing is inflexible in principle, and their principle is that only the state has rights, not the individual. So why would you predict that they would come around on that? Or is it because in fact Taiwan came around also? DR. CHEN: Oh, you are talking about only international organizations. Well, as Jim pointed out, certain international organizations provide participation more than membership. For example, observer status could be one. We have been applying for observer status in WHO, World Health organization, which is not political whatsoever, but nonetheless we are being rejected because of Beijing. And we have been trying to be observers in some other international organizations. We could not succeed. So I think the point is, it's not because whether we are qualified, it's merely because of political reasons that we are not admitted. 8

10 MR. LORD: Let me say, I think we are all in agreement here, that Taiwan deserves great international space and Beijing has been unreasonable. On your broader question, in terms of Taiwan's advantage and leverage, if you look toward the historical future--if that's not an oxymoron--if you look to the future, I think Taiwan's political system of democracy represents the future for China. And I think they are going to have to move in that direction for no other reason than if they want to keep modernizing their economy in a age of Internet, faxes, computers, and satellites. In terms of other leverage, of course, China is much bigger and it's got a lot of leverage with other countries that want to deal with 1.2 billion people, not 21 million people. But nevertheless, Taiwan, through the efforts of its leadership and its people, has been an economic miracle. It's shown that Chinese and Asians care about freedom as much as Westerners, you know, debunking this theory about so-called Asian values. We've also seen that go down the tubes in Indonesia. And its security's been assured with the United States's help. So the status quo is not bad for Taiwan. They don't have to worry about linking up in some way. That's up for them to decide. They have in effect said--l'll let Mr. Chen speak--that they're looking for an evolution of the political system in the mainland before they want to get more closely linked. So I think Taiwan is, frankly, in a very good position. We've just got to make sure there is no misunderstanding in the straits, keep our powder dry, maintain arms sales to Taiwan, try to improve relations with Beijing- because I think when Beijing has a stake in its ties with the US and with Japan and others, it's less apt to try to ruin those ties by attacking Taiwan--send aircraft carriers when we have to and maintain our forces in the Pacific, and meanwhile let Taiwan and Beijing negotiate. MR. BUCKLEY: Well, if I understand the consensus correctly, Mr. Chen, there is really no need for the United States to take any further initiative at this point since we don't have the kind of leverage that would be necessary to bring Beijing around on these issues. So therefore, are we counseled to simply hang onto the formulas that we have come upon empirically? DR. CHEN: Well, personally, I feel that the policy adopted by the US administration is a sound one, a good one. But on the other hand, I think the United States simply cannot sit here not doing anything, particularly as our countries do have common interests and shared values with the United States. Let's look back on the past decades. 9

11 The United States basically has been very supportive of us in many respects. MR. LILLEY: Can I add something here? I think in terms of the upcoming summit that President Clinton is going to in Beijing, the Chinese have given us very clear signals that Taiwan will be front-andcenter on their agenda, and they have told us, No theater missile defense for Taiwan, we want the three no's included in a joint statement--the three no's being no two Chinas, no Taiwan-China, no independent Taiwan. We want you to curtail arms sales to Taiwan, et cetera, et cetera. They laid out all these conditions. We've said that in the visit in October or November that President Jiang Zemin made to the United States that we have put this behind us and that we've got other things to talk with China about: Pakistan, India, nuclear proliferation into the Middle East, human rights, a whole series of issues--rule of law, implementation of rule of law, environment, energy, these sorts of things. And the Chinese said really we can't talk a bout very much until you satisfy us on Taiwan. MR. BUCKLEY: Yes. MR. LILLEY: It seems to me, so far the administration at least has said, No fourth communique. But on the other things, I think Beijing has a sense that these things are negotiable. And when they smell that, they get tough, as Winston knows well. MR. LORD: Let me add to that. First, Beijing putting the Taiwan issue front-and-center has been true for 20 years. They always do it at every summit. Second, no administration, and I don't believe this one on the forthcoming trip, is going to let that hang us up on the rest of the agenda. Tough as they have been, Jim, I don't think the Chinese are going to be unwilling to talk about Indian nuclear testing, Korea, Asian financial crisis, Cambodia. There's a lot of things we should be talking to them about, and it's in our interests for the president to go to Beijing. It's not in our interests for him to cave on Taiwan, and he won't. The administration, through backgrounders, through reassurances, I would hope, to Mr. Chen this week, has made it clear: no fourth communique, no change in our basic position on Taiwan, we're going to continue to provide arms sales of a defensive nature, going to continue to let the future of the straits be worked out by the two sides. 10

12 MR. BUCKLEY: Of theater weapons, of defensive weapons? MR. LORD: Well, on theater missile defense, I agree with, I think, Jim's position, that that is something we ought to think seriously about giving to Taiwan. I would point out several points here. We should in the sense that it is defensive--missile defense--and the real threat to Taiwan militarily from Beijing does come from their missile capability. Having said that, number one, we have already provided the equivalent of Patriot defense missiles--very limited, but the best we have now--a MAD system, it's called--to Taiwan. We've briefed Taiwan on theater missile defense. We're having a little trouble ourselves--we just had our fifth blow-up over the desert a couple of weeks ago, so we are in the infant stages of developing this, so it's premature. Taiwan hasn't asked to get it yet. And finally, when that situation comes, I think we should talk to them seriously if we have an effective system. Then Taiwan has to judge whether the huge cost of this system is worth it, because it's not going to be airtight against all of Beijing's missiles, and only one missile landing on Taiwan could disrupt their economy, for example. So that's for them to figure out. But in principle, defense for Taiwan we have a moral and legal obligation to provide. MR. LILLEY: I'd just add one thing to that. The Chinese are probably the only country in the world that has used missiles as an aspect of diplomacy and objectives. They did this in the summer of '95 and they did it in March of '96. Even the Russians and North Koreans haven't done that. MR. BUCKLEY: Well, Mr. Chen, are you apprehensive about the forthcoming summit meeting between the president of the United States and Beijing? Is some of what Ambassador Lilley recited, the prospective agenda of Beijing, intimidating? DR. CHEN: Well, let me state the position of my government. We have no objection to the improvement of the relationship between Washington OC and Beijing if it is going to help peace and stability in the region. We are happy and we are pleased to see that happen. But on the other hand, we would like to see that be achieved or accomplished, not at the expense of our interests. I am happy to report that we have been briefed by our friends in the US administration repeatedly that this is not going to be the case. But then we were concerned a bout whether there would be a fourth 11

13 communique, but we were assured that there won't be a fourth communique. Then we were concerned about the three no's. Three no's--that's the position of US government. That is, the United States is not for one China/one Taiwan, two Chinas. The United States is not for Taiwan independence, the United States is not for our membership in the United Nations. We understand that, but we do not like to see that this be the topic of discussion between Washington and Beijing. Up to now, this point is not particularly clear. This is an area we are extremely concerned about. MR. BUCKLEY: Thank-- DR. CHEN: Another aspect also is arms sales. MR. BUCKLEY: Thank you, Mr. Chen; thank you, Ambassador Lilley and Ambassador Lord; ladies and gentlemen. 12