China-U.S. Relations During the 108th Congress

Order Code RL31815 CRS Report for Congress Received through the CRS Web China-U.S. Relations During the 108th Congress Updated January 11, 2005 Kerry Dumbaugh Specialist in Asian Affairs Foreign Affairs, Defense, and Trade Division Congressional Research Service ˜ The Library of Congress China-U.S. Relations During the 108th Congress Summary During the George W. Bush Administration, U.S. and People’s Republic of China (PRC) foreign policy calculations have undergone several changes. President Bush assumed office in January 2001 viewing China as a U.S. “strategic competitor.” The White House faced an early test in April 2001 when a PRC naval aviation jet collided with a U.S. Navy reconnaissance plane over the South China Sea. But after the terrorist attacks of September 11, 2001, U.S. officials came to see Beijing as a potentially helpful ally in the fight against global terrorism, while PRC officials saw the anti-terrorism campaign as a chance to improve relations with Washington and perhaps gain policy concessions on issues important to Beijing, such as on U.S. arms sales to Taiwan. At the same time, the PRC was undergoing a substantial leadership transition to a new generation of younger officials. This, plus the U.S. anti-terrorism agenda, helped lead to a new sense of optimism and stability in the U.S.-China relationship that continued to prevail throughout the 108th Congress. Despite this new stability, sensitivities remained over long-standing bilateral issues. U.S. officials remained supportive of Taiwan’s security and its quest for international recognition, and PRC officials remained firm about reunifying Taiwan under the “one China” policy. The PRC remained suspicious about what it sees as an “encircling” U.S. presence in Asia and wary of U.S. technological advantages and global influence, while the Bush Administration periodically announced sanctions against PRC companies for violations of non-proliferation commitments. The PRC’s early bungling of the SARS health crisis in 2003 posed new challenges for bilateral relations and was an early test for China’s new leadership. The PRC’s first manned space flight on October 15, 2003, raised new questions about the aspirations of China’s space program and its implications for U.S. security. Against this backdrop of renewed bilateral stability and long-standing sensitivities, the 108th Congress passed legislation requiring the United States annually to present a plan in the World Health Organization for Taiwan’s observer status (H.R. 2092, P.L. 108-235) and considered other non-binding measures expressing strong U.S. support for (H.Con.Res. 98, on a free trade agreement; H.Con.Res. 117, expressing U.S. commitment to the Taiwan Relations Act; and H.Con.Res. 340, on support for referenda in Taiwan). When massive demonstrations were held in Hong Kong in 2003 and again in 2004 to protest an onerous antisedition measure that had Beijing’s strong backing, Congress considered measures expressing support for Hong Kong freedom (S.J.Res. 33; H.Res. 667). The attention of Congress and other U.S. officials also focused noticeably on economic and trade disagreements with the PRC beginning in the second half of 2003 — particularly on criticisms that the PRC was undervaluing its currency by maintaining an artificial “peg” to the U.S. dollar, a policy some charged was undermining the competitiveness of U.S. products and contributing to the U.S. trade deficit (H.Res. 414; H.R. 851; S. 1586, S. 1758). Contents Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Background and Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Factors Contributing to Improved U.S.-China Relations . . . . . . . . . . . . . . . 3 Changed U.S. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Anti-Terrorism and Changing Global Priorities . . . . . . . . . . . . . . . . . . 4 Constraints on PRC Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 New Priorities for the U.S. Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Factors That Could Increase Bilateral Tensions . . . . . . . . . . . . . . . . . . . . . 6 Key Issues During the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 U.S. Taiwan Policy and U.S. Arms Sales . . . . . . . . . . . . . . . . . . . . . . . 8 Taiwan and the World Health Organization (WHO) . . . . . . . . . . . . . . . 9 Taiwan-PRC Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 China’s Space Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Human Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Religious Freedom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Separatists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Family Planning/Coercive Abortion . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Social Protest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 SARS (Severe Acute Respiratory Syndrome) . . . . . . . . . . . . . . . . . . . . . . . 16 Avian Flu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Economic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Currency Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 National Security Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 North Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Weapons Proliferation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Tibet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Hong Kong, “Article 23,” and Democratization . . . . . . . . . . . . . . . . . . . . . 20 U.S. Policy Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Engagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Caution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Threat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Major Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 CRS Issue Briefs and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Selected Visits by U.S. and PRC Officials . . . . . . . . . . . . . . . . . . . . . . . . . 33 Appendix II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Selected U.S. Government Reporting Requirements . . . . . . . . . . . . . . . . . . 36 China-U.S. Relations During the 108th Congress Most Recent Developments On December 29, 2004, China’s official news agency, Xinhua, announced that the Standing Committee of the National People’s Congress (NPC) had voted unanimously to consider an anti-secession law, aimed at Taiwan independence advocates, to the full NPC at its March 2005 legislative session. State media also reported that former Party Secretary Jiang Zemin in March 2005 will ask the NPC to accept his resignation as chair of the state Central Military Commission — a largely symbolic position. Jiang stepped down from the power-wielding Party Central Military Commission in September 2004 On December 27, 2004, the PRC published its fifth white paper on national security: “China’s National Defense in 2004.” The paper said that the Taiwan independence movement was the biggest threat to China’s sovereignty and regional peace, and it vowed to prevent Taiwan independence at all costs. The paper also said that strengthening China’s naval warfare and air capabilities were military priorities. On December 11, 2004 , in elections for Taiwan’s legislature, voters returned the opposition, the Nationalist Party (KMT), to a majority despite a strong push by President Chen Shui-bian’s party, the pro-independence Democratic Progressive Party (DPP). Observers believe that the DPP’s failure to gain legislative control lessens the near-term chance of confrontation with Beijing. On December 3, 2004, in its biannual report on global foreign exchange, the U.S. Treasury Department did not find that China met the technical definition of currency manipulation. On October 25, 2004, in a television interview in Beijing, Secretary of State Colin Powell said Taiwan was not a sovereign nation and the United States favored Taiwan’s peaceful reunification with the PRC. Critics charged the statement contradicted standard U.S. policy statements, which have long stressed a peaceful solution on the Taiwan question and have avoided explicitly favoring reunification. State Department officials later said there had been no change in U.S. policy. On September 12, 2004, Hong Kong held elections for its third Legislative Council since the return to PRC rule. Pro-democracy parties won 25 of the 60 seats. From June 23 to June 26, 2004, the PRC hosted the third round of six-party talks on North Korea’s nuclear weapons program. No agreement was reached. CRS-2 Background and Overview Introduction For much of the 1990s, a number of factors combined to ensure that U.S. congressional interest in the People’s Republic of China (PRC) increased year by year. In the years after the 1989 Tiananmen Square crackdown, Members often felt that they were neither consulted nor listened to by the Executive Branch concerning the appropriate direction for U.S. China policy. Without the overriding strategic imperative that the Soviet Union had once provided for comprehensive U.S.-China relations, individual Members began to push for their own more parochial concerns in China policy, such as efforts on behalf of Taiwan, in favor of human rights, or against forced sterilization and abortion. In the later years of the Clinton Administration, when U.S. officials were pursuing a “strategic partnership” with China, some Members became increasingly concerned that the U.S. government was not thinking seriously enough about the PRC as a longer-term threat to U.S. interests, given the PRC’s missile build-up opposite Taiwan and Beijing’s growing nationalism and economic strength. Among other things, Congress in these years enacted more provisions to accommodate Taiwan’s interests, engaged in repeated and protracted efforts to further condition or even withdraw the PRC’s most-favored-nation (MFN) status, held hearings and considered legislation targeting the PRC’s human rights violations, created two commissions to monitor PRC activities, and imposed a host of requirements on the U.S. government to monitor, report on, and restrict certain PRC activities.1 From 2001 on, however, U.S.-China relations improved markedly, and Congress as a whole became less vocal and less legislatively active on issues involving China. Key questions for American policymakers and foreign policy observers during the 108th Congress included: what factors were contributing to improved U.S.-China relations? were these developments the beginning of a long-term trend toward a period of stability and “normalcy” in the relationship? what potential policy developments could once again highlight underlying complications in U.S.-China relations? and what were the policy implications of ongoing and new developments, both domestically and in the broader foreign policy environment, that could affect U.S. interests? This paper addresses these questions, discusses key legislation in the 108th Congress, and provides a chronology of developments and high-level exchanges from January 2003 to December 2004. This report will not be updated after December 2004. For a thorough discussion of U.S.-China relations during the 107th Congress (2001-2002), see CRS Report RL31729, China-U.S. Relations in the 107th Congress: Policy Developments, 20012002, dated January 23, 2003. For further information on other pertinent issues, see the CRS reports and other materials referenced in the footnotes. 1 In the United States, the term “most-favored-nation” (MFN) status has been replaced by the term “normal trading relations” (NTR) status. CRS-3 Factors Contributing to Improved U.S.-China Relations By the beginning of the 108th Congress, U.S. relations with the People’s Republic of China (PRC) had been experiencing a period of unusual stability. The reasons for this cannot be attributed to any resolution of entrenched bilateral policy differences — such as those long held over human rights or on Taiwan’s status — for these differences still exist and are likely to plague the relationship for the foreseeable future. Rather, a number of other factors and policy trends in recent years have combined to make U.S.-PRC relations arguably the smoothest they have been since the aftermath of the Tiananmen Square crackdown in 1989. These trends and factors include: ! the current Bush Administration’s more assertive approach toward China and more supportive views on Taiwan than those followed by previous U.S. Administrations ! dramatic changes in global and in national priorities brought about by the anti-terrorism and anti-Iraq campaigns ! new demands on and trends in the U.S. Congress that have taken precedence over ongoing concerns about the PRC ! the PRC’s own wholesale transition since 2001 to a new generation of leaders bringing their own approach to policy decisions ! the PRC’s growing economic clout and increasingly modulated political influence on the international stage Changed U.S. Policy. The George W. Bush Administration came to office in January 2001 promising a tougher approach toward the PRC than that of any of its predecessors. Seeking to distance themselves from the policies of “engagement” with China favored by American Presidents since 1979, Bush Administration officials promised to broaden the focus of American policy in Asia, concentrate more on Japan and other U.S. allies, deemphasize the importance of Sino-U.S. relations in American foreign policy, and look more favorably on issues affecting Taiwan’s status and security. Even while appearing less solicitous of Beijing’s views, Administration officials have remained open to substantively and symbolically meaningful dialogue with China at the seniormost levels. President Bush, for example, met more often with his PRC counterpart during his first two years in office than other U.S. Presidents did in their entire Administrations. This twin approach continues to characterize much of Administration policy toward both the PRC and Taiwan today.2 Some observers have suggested that this approach has helped reduce Beijing’s 2 The Administration faced an early test of its policies on April 1, 2001, when a Chinese jetfighter collided with a U.S. Navy EP-3 reconnaissance plane over the South China Sea, forcing the U.S. plane to make an emergency landing at a military base on China’s Hainan island. Several CRS reports provide details of this crisis. See, for instance, CRS Report RL31729, China-U.S. Relations in the 107th Congress: Policy Developments, 2001-2002, by Kerry Dumbaugh. CRS-4 leverage over the U.S. policy process, forcing onto the PRC the greater burden in seeking productive U.S.-China relations. Anti-Terrorism and Changing Global Priorities. According to some accounts, the Bush policy apparatus entered office in 2000 with a new foreign policy agenda in mind. Still, the September 11, 2001 terrorist attacks against the United States, the subsequent and ongoing campaign in Iraq, and renewed nuclear ambitions by North Korea have contributed to the changing international priorities of the United States and much of the world. A number of U.S. international relationships have been affected accordingly, including relations with the PRC and with countries important to PRC interests, such as Pakistan. The United States has established cooperation with, and a military presence in, Central Asian countries, with whom the PRC had formed the Shanghai Cooperation Organization in the 1990s. U.S. officials welcomed PRC support for anti-terrorism initiatives, particularly in measures put before the United Nations Security Council, in which the PRC is a permanent member and has veto power. But the Bush White House also showed itself willing to take unilateral U.S. action and maintained that only limited Sino-U.S. cooperation would be possible. Thus, it is not clear to what extent U.S. anti-terrorism goals may have affected the Administration’s PRC policy other than to reinforce the lower profile it had already assigned to U.S.-China relations. Despite the capture of Saddam Hussein and the decapitation of the Iraqi government, ongoing and increasing U.S. government difficulties in Iraq have continued to be the major foreign policy preoccupation for American policymakers. PRC cooperation, or at least acquiescence, in U.S. Iraq initiatives thus has become a collateral U.S. objective. The Bush Administration’s commitments in Iraq have also contributed to a number of fissures in the North Atlantic Treaty Organization (NATO) alliance, whose EU member countries the PRC has assiduously courted in recent years. Finally, North Korea’s nuclear weapons activities have created a crisis on the Korean Peninsula that Administration officials believe enhances the need for PRC cooperation on initiatives involving the North. These new tensions in and possible re-shuffling of international relationships have created a fluid and complex international atmosphere. Although the implications for future U.S.-China relations remain uncertain, some observers have suggested that the uncertainty itself has favored more stable U.S.-China relations by ensuring a degree of caution and nonprovocation in how bilateral policies are crafted. Constraints on PRC Policy. Some believe that a number of developments in the PRC are also factors contributing to smoother U.S.-China relations. Since late 2002, the PRC has undergone a significant transition to a new generation of leaders that many believe are bringing a more open, rule-based, reformist, and internationally engaged approach to PRC policies.3 The new leadership also remains preoccupied 3 At its 16th Party Congress (Nov. 8-14, 2002), the PRC’s Communist Party selected a new Party General Secretary (Hu Jintao), named a new 24-member Politburo and a new ninemember Standing Committee, and made substantive changes to the Party constitution. Further changes in government positions were made during the 10th meeting of the National People’s Congress in March 2003. For more on the leadership transition, see CRS Report RL31661, China’s New Leadership Line-up: Implications for U.S. Policy, by Kerry Dumbaugh. CRS-5 with thorny domestic economic and political problems, including growing fears about the bubble effects of an overheated economy, internal social unrest, greater social and economic demands by labor, growing unemployment, and more assertive public disaffection with official corruption, to name a few. Both the anti-terrorism campaign and initiatives on Iraq also appear to have affected the PRC’s view of U.S.-China relations. In the early months of the campaign, PRC leaders seemed to see anti-terrorism initiatives as an opportunity for closer cooperation with the United States and a way to improve U.S.-China relations.4 In addition, the PRC government has found the U.S. anti-terror campaign a convenience in its own crackdown on dissident Muslim populations in the Xinjiang-Uighur Autonomous Region — crackdowns which it has couched in terms of anti-terrorist activities. New Priorities for the U.S. Congress. For the reasons cited above and more, the U.S. congressional agenda in the Bush Administration has shifted in ways that have had an effect on Congress’s consideration of China issues. For one thing, the September 11 attacks themselves dramatically preempted a serious congressional debate that had been going on for a decade over whether the PRC represented the next serious threat to U.S. security. Since the September 11 attacks, the list of priority items on the congressional agenda have encompassed a host of initiatives relating to U.S. security issues and the anti-terrorism campaign. These have included reorganization of the U.S. Government to create a Department of Homeland Security, U.S. troop deployments in Afghanistan and Iraq, and the potential implications of a nuclear North Korea, to name a few. Unrelated foreign policy issues have had problems competing with these issues. Also, with the disappearance of the annual rancorous congressional debate over renewing the PRC’s normal trade relations (NTR) status, Congress now lacks a legislative vehicle for regularly reexamining the totality of U.S. policy toward China.5 Moreover, the nature of the White House approach toward the PRC and Taiwan has cooled what previously had been a heated congressional policy debate over the direction of U.S. China policy. The Administration’s early willingness to take dramatic steps to ensure Taiwan’s security and support Taiwan’s interests appeared to satisfy the sizeable segment in Congress that has long championed stronger U.S. relations with Taiwan. At the same time, the White House has resumed regular U.S.China summitry and cultivated a cooperative diplomatic and investment climate with China, satisfying the American business community and Members who are responsive to that community’s concerns. Finally, the release of the Final Report of the National Commission on Terrorist Attacks Upon the United States — “The 911 Commission Report” — began to demand significant congressional attention after 4 In the initial days after the September 11 terrorist attacks, PRC President Jiang Zemin offered condolences, promised “unconditional support” in fighting terrorism, and, on September 25, sent a group of PRC counter-terrorism experts for consultations in Washington. In a U.N. Security Council meeting on September 12, the PRC voted in favor of both Resolution 1368, to combat terrorism, and Resolution 1441, on Iraqi compliance. 5 Some have suggested that regular annual reports from the two U.S. China Commissions and other entities could serve as catalysts for debate on the PRC. CRS-6 its release on July 23, 2004. The Commission’s report and its 41 recommendations became the focus of several dozen rare August recess hearings to draft implementing legislation. Factors That Could Increase Bilateral Tensions Despite the smooth U.S.-PRC relationship of recent years, any number of circumstances and events could reenergize tensions in U.S.-China relations and once again alter the bilateral landscape. At the top of everyone’s list of potential problems is the question of Taiwan’s political status — a question that, in light of tensions over Taiwan’s presidential election in March 2004 and its legislative elections on December 11, 2004, has the real potential to lead to U.S.-PRC conflict. American concerns also are likely to dwell on economic issues, especially while the U.S. trade deficit with China soars and criticism continues to focus on the competitive advantages China gains by linking its currency to the U.S. dollar and by failing adequately to pay and protect its labor force. The dynamics of U.S.-China relations also could change if events led Beijing to conclude that the United States had lost significant economic, military, and/or political power in the world, leading PRC leaders to seek to exploit any perceived U.S. weaknesses for their own national advantage. Such events could include a protracted conflict or uncertain outcome in Iraq, a partial collapse or realignment in the NATO alliance, a South Korean demand that U.S. troop strength be cut, an act of North Korean aggression, or a serious U.S. economic decline, among other options. Even absent any of the above problems, a strong argument can be made that, along with its rapidly growing economy, the PRC’s increasing need for energy resources, greater international assertiveness, and ongoing military modernization means that one day its interests and appetites will conflict with those of the United States. Therefore, despite the current stability in U.S.-China relations, too many variables remain to be certain of whether this represents a longer-term trend toward a new relationship or is simply the function of a series of temporary distractions in U.S.-China policy. Major developments continue to occur regularly on issues that traditionally have affected the overall relationship. Monitoring and assessing these developments (and how they are handled by Washington and Beijing) could offer foreign policy watchers important clues about the direction of U.S.-China relations over the longer term. Key Issues During the 108th Congress Taiwan Taiwan remained the most sensitive and complex issue in Sino-U.S. relations. As in the recent past, the political environment in Taiwan remained fluid, unpredictable, and intricately linked with issues involving Taiwan’s international status and relationship with the PRC. In 2000 and 2001, unexpected and unprecedented victories in presidential and legislative elections by Taiwan’s opposition Democratic Progressive Party (DPP) had nearly decimated the Nationalist Party (the KMT), for 50 years the dominant — and for much of that time, the only CRS-7 — political party in Taiwan. As a result, the balance of power in Taiwan continued to teeter precipitously between contending political parties and views. On one side President Chen Shui-bian’s DPP and its ally, the smaller Taiwan Solidarity Union (TSU), espoused policies that pushed the edge of the envelop on the independence question. On the other, a tenuous political coalition cobbled together from the remnants of the KMT — the remaining KMT and the People First Party (PFP) — battled to regain dominance, in large part by rejecting the DPP’s political path as too inflammatory and at least theoretically holding out the prospects for Taiwan’s eventual reunification with the PRC. Many observers saw 2004 as a critical year for Taiwan’s future and for U.S.Taiwan-PRC relations. Among other policy challenges, on March 20, 2004, Taiwan held presidential elections and a controversial, unprecedented referendum on several issues relating to the PRC. Although the referendum was defeated, the incumbent president, Chen Shui-bian, was re-elected by a reed-thin margin of 0.2%. Leaders from the PRC have strongly objected to the pro-independence DPP and to Chen’s reelection, believing that the incumbent’s ultimate aim is to declare Taiwan independence in defiance of long-standing PRC claims that Taiwan is part of China. As Taiwan’s election campaign waxed on, PRC leaders at one point stated they would “pay any price,” including taking military action, to prevent Taiwan independence. Official U.S. views — fully supportive of democratic processes in Taiwan and elsewhere — were tempered by American military commitments to help Taiwan defend itself. U.S. officials remained deeply concerned about provocative actions by either side that might result in U.S. armed conflict with the PRC. Taiwan’s March 20, 2004 election also was accompanied by several unusual last-minute circumstances, including an assassination attempt on the incumbent the previous day and a resulting state-of-emergency declaration that reportedly kept some voters from the polls. These circumstances and the election’s narrow margin of victory prompted the opposition Nationalist Party (KMT) to demand a recount and file a court challenge on the election’s validity. Thus, although the incumbent was sworn into office for a second term on May 20, 2004, questions continue to be raised about his political legitimacy. Finally, on December 11, 2004, Taiwan held elections for its national legislature, where the KMT opposition coalition succeeded in holding onto its slender majority despite a strong push by the DPP to gain legislative control. The prospect of this divided Taiwan government continuing for four more years suggests ongoing policy gridlock, with the KMT-controlled legislature likely to continue to block or greatly amend the DPP administration’s policy initiatives. Faced with this political environment in Taiwan, PRC military and civil leaders throughout the 108th Congress used increasingly heated rhetoric about the possibility of using military force against Taiwan. Until late 2003, U.S. officials had voiced even-handed concerns about the need to maintain stability in the Taiwan Straits, saying that neither side should take provocative actions. But on December 9, 2003, after a meeting with visiting PRC Premier Wen Jiabao, President Bush used unprecedentedly blunt language which singled out Taiwan for special criticism. Appearing with Premier Wen, President Bush said that the United States opposed “any unilateral decision, by either China or Taiwan, to change the status quo....the comments and actions made by the leader of Taiwan indicate he may be willing to make decisions unilaterally that change the status quo, which we oppose.” Shortly CRS-8 after President Bush made his remarks, Taiwan’s President, Chen Shui-bian, was quoted as saying that he supported the status quo with the PRC, and he defended using a referendum as an attempt to prevent war.6 (See “The Referendum Issue” section of this report.) On October 25, 2004, during a visit to Beijing, Secretary of State Colin Powell was quoted in another tough statement, saying that Taiwan was not a sovereign nation and that the United States favored Taiwan’s peaceful reunification with the PRC. Some interpreted the statement as an attempt to issue a further warning to Taiwan to avoid provocative actions, while critics charged that the statement violated long-standing U.S. policy of avoiding any references in favor of reunification. U.S. State Department officials later said that there had been no change in U.S. policy on the Taiwan question. Beijing has long maintained that it has the option to use force should Taiwan declare independence from China. On December 27, 2004, the PRC emphasized this point again in its fifth white paper on national security, entitled “China’s National Defense in 2004.” The paper called the Taiwan independence movement the biggest threat to China’s sovereignty and to regional peace, and it vowed to prevent Taiwan independence at all costs. In addition, PRC officials repeatedly sought to block Taiwan’s efforts to gain greater international recognition, at the same time that officials in Taiwan were maneuvering for more international stature and independent access to multilateral institutions. Since the 1970s, when the United States broke relations with Taiwan in order to normalize relations with Beijing, U.S. policy toward Taiwan has been shaped by the three U.S.-China communiques, the Taiwan Relations Act (P.L. 96-8), and the so-called “Six Assurances.”7 U.S. Taiwan Policy and U.S. Arms Sales. Apart from Secretary Powell’s October 25, 2004 statement and the President’s blunt warning to Taiwan on December 9, 2003, the Bush White House to a notable degree eschewed the traditional U.S. policy of “strategic ambiguity” on Taiwan in favor of policy clarity that placed more emphasis on Taiwan’s interests and less on PRC concerns. The foundation for this emphasis was laid on April 25, 2001, when in an ABC television interview, President Bush responded to a question about the possible U.S. response if Taiwan were attacked by saying that the United States would do”whatever it took” to help Taiwan defend itself. Since the United States has no defense alliance with Taiwan and has never pledged use of American military forces in the island’s defense, the President’s answer caused considerable controversy over whether the United States had changed its policy toward Taiwan’s security or was moving away 6 Wu, Tiffany, “Taiwan Says Vote Still on Despite Bush Warning,” Reuters online, Dec. 10, 2003, [] 7 In addition, other U.S. statements sometimes have been interpreted as changes in nuance in U.S. policy. For example, during his summit visit to China in June 1998, President Clinton made a controversial statement (known as the “three noes” statement) that some interpreted as a change in U.S. policy, resulting in resolutions in the 105th Congress (H.Con.Res. 301 and S.Con.Res. 107) reaffirming U.S. policy toward Taiwan. For details on evolving U.S. policy toward Taiwan, see CRS Issue Brief IB98034, Taiwan: Recent Developments and U.S. Policy Choices, by Kerry Dumbaugh. CRS-9 from its “one-China” statements. Although State Department and White House officials continue to maintain that there has been no change in U.S. policy toward Taiwan and that U.S. policy is consistent with U.S. commitments in the Taiwan Relations Act, subsequent statements and actions by Bush Administration officials have been judged to be more solicitous and supportive of Taiwan than those of previous U.S. Administrations.8 In part, this reflects ongoing Administration assessments that the potential for military conflict over Taiwan is high. (In a report submitted to Congress late in 2001, for instance, the Pentagon identified military conflict with China over Taiwan as one of the “immediate contingencies” for which the United States should size its nuclear strike capabilities.9) In other aspects of its more supportive Taiwan policy, the Bush Administration has undertaken the following steps: ! Approved more robust arms sales to Taiwan, including Kidd-class destroyers, diesel submarines, and P-3C Orion aircraft.10 ! Enhanced military-to-military contacts, including meetings between higher-level officers; cooperation on command, control, and communications; and training assistance.11 ! Approved transit visas for top Taiwan officials to come to the United States, including Taiwan’s President and Vice-President. Taiwan and the World Health Organization (WHO). WHO’s global involvement in investigating and helping to combat the 2003 SARS virus outbreak focused new attention on the fact that Taiwan, which also had SARS cases, was not a member of WHO.12 For eight consecutive years, Taiwan’s application for observer status in the WHO has been defeated — most recently on May 17, 2004, when 133 countries voted against the measure at the annual meeting of the World Health 8 On February 16, 2003, for instance, Deputy Assistant Secretary of State for East Asian Affairs Randall Schriver told a Taiwan-U.S. defense industry conference in Texas that “Our policy [toward Taiwan] has been consistent for more than 20 years... It has not changed. It will not change.” Quoted in English in Asia Pulse, Feb. 17, 2003. 9 Excerpt from the “Nuclear Posture Review,” submitted to Congress on December 31, 2001. For excerpts, see []. 10 See CRS Report RL30957, Taiwan: Major U.S. Arms Sales Since 1990, by Shirley Kan. Despite the U.S. approval of the large arms sales package in April 2001, by the close of the 108th Congress, budget shortfalls and partisan politics had kept Taiwan from acting on the offer. A special defense budget of about $18.2 billion which the Taiwan government proposed in June 2004 had not been approved by the legislature by the close of 2004. 11 At a March 2002 meeting of the U.S.-Taiwan Business Council in Florida, Deputy Defense Secretary Paul Wolfowitz reportedly stated that helping Taiwan more successfully integrate its military forces was as important a U.S. priority as selling it weapons. 12 Taiwan recorded its first SARS death on April 27, 2003. In response, Taiwan announced it would suspend issuing visas to residents of China, Hong Kong, Singapore, and Canada for two weeks, and would quarantine returning Taiwan residents for 10 days. CRS-10 Assembly while 25 voted in favor.13 Opposition from the PRC routinely has blocked Taiwan’s bids on political grounds. PRC officials have argued that since Taiwan is not a state but a part of China it cannot be separately admitted to U.N. entities for which sovereign status is a prerequisite for membership. According to the U.S. Centers for Disease Control and Prevention (CDC), a U.S. CDC team was sent to Taiwan to investigate the SARS outbreak, and that team remained in touch with WHO officials during the crisis. In the face of the SARS crisis, Taiwan authorities were able to argue that it is inhumane for the world to deny the people of Taiwan access to WHO’s substantial medical data and assistance in the event of an outbreak of disease.14 Taiwan authorities maintained that “observer status” in WHO would be an apolitical solution in Taiwan’s case, since other non-sovereign entities, like the Holy See and the Palestine Liberation Organization, have been given such status in WHO. The U.S. Government is on record as supporting Taiwan’s membership in organizations “where state-hood is not an issue,” although the U.S. delegation voted in Taiwan’s favor on the May 17, 2004 observer status vote.15 U.S. Congresses often have sought to gain Taiwan observer status in the WHO. The 107th Congress, for instance, approved two single-instance measures requiring the Secretary of State to seek Taiwan’s observer status at the annual meeting of WHO’s administrative arm, the World Health Assembly (the “Assembly”) — in May 2001 (P.L. 107-10) and again in May 2002 (P.L. 107-158).16 Likewise, the 108th Congress considered and passed similar legislation (P.L. 108-28) requiring such an action at the 2003 annual Assembly meeting.17 In 2004, however, the 108th Congress make this requirement permanent, passing legislation requiring the Secretary of State to seek Taiwan’s observer status at every annual Assembly meeting. (S. 2092, enacted as P.L. 108-235). Taiwan-PRC Contacts. Official talks between China and Taiwan, always problematic, last occurred in October 1998, when Koo Chen-fu, Chairman of Taiwan’s Straits Exchange Foundation (SEF) and Wang Daohan, president of the PRC’s Association for Relations Across the Taiwan Straits (ARATS), held meetings in Shanghai.18 But while official talks have remained stymied, indirect ties and unofficial cross-strait contacts have continued to grow. Even with the official restrictions that the government maintains on investing in and trading with mainland 13 14 The World Health Assembly is the administrative arm of the World Health Organization. Taiwan also had an outbreak of dengue hemorrhagic fever in June 2002. 15 A State Department spokesman, in response to a press question at the State Department press briefing of March 20, 2002. 16 On March 14, 2002, the European Union also adopted a non-binding resolution calling on the WHO to accept observer status for Taiwan. Doc. B5-0132/2002, B5-0138/2002, B50147/2002, B5-0150/2002. 17 Legislation in 2003, H.R. 441/ S. 243, was enacted on May 29, 2003 (P.L. 108-28). Ten days earlier, on May 19, 2003, the World Health Assembly decided not to consider a motion relating to Taiwan during its annual meeting in Geneva. 18 Koo Chen-fu, Taiwan’s chief negotiator, died on January 2, 2005, at age 87. CRS-11 China, Taiwan businesses are increasingly invested across the strait, although the exact figures remain unclear. Taiwan-China trade has also increased dramatically over the past decade. According to one estimate, Taiwan’s total bilateral trade with the PRC rose to $39.7 billion in 2002.19 This increasing economic interconnectedness with the PRC has put special pressure on Taiwan’s DPP government to further accommodate the Taiwan business community by easing restrictions on direct travel and investment to the PRC. Early in January 2001, for instance, President Chen had announced that he would establish direct links between China and Taiwan’s outlying islands of Matsu and Quemoy — the so-called “mini-links” — a small but significant step in the direction of further contacts. Late in 2002, Taiwan’s Mainland Affairs Council (MAC), a cabinet-level office to oversee Taiwan’s relations with the PRC, completed a study to assess the technical features and costs of expanded cross-strait sea and air links. Taiwan politicians throughout much of 2002 debated and eventually approved a proposal to allow Taiwan charter flights to fly, for the first time, to and from the PRC by way of Hong Kong and Macau for the Chinese New Year. In addition, PRC leaders made their own overtures, calling on Taiwan to return to the negotiating table and holding out the possibility for postponing “certain political disputes” in order to resume talks.20 But such accommodations are worrisome to the DPP’s proindependence political base in Taiwan, who believe that further economic ties to the mainland will erode Taiwan’s autonomy and lead to a “hollowing out” of Taiwan’s industrial base.21 Thus, each decision that President Chen makes on Taiwan’s economic links with the PRC represents an uneasy compromise between the concerns of his own political base and the requirements of improving Taiwan’s international economic competitiveness. China’s Space Program On October 15, 2003, the PRC conducted its first manned space flight, becoming only the third country other than the United States and the former Soviet Union to do so. Taking off from the Jiuquan Space Center, the Shenzhou V capsule orbited the earth for 21 hours carrying Lt. Col. Yang Liwei, the PRC’s first “taikonaut.”22 At the end of its voyage, the orbiter made a terrestrial landing in 19 See CRS Report RS20683, Taiwan and the World Trade Organization, by Wayne Morrison; and CRS Report RL31749, Foreign Direct Investment in China, by Dick Nanto and Radha Sinha. 20 Spokesman Zhang Mingqing, on November 28, 2002, quoted in Comments about postponing political disputes were made by PRC President Jiang Zemin during sessions at the 16th Party Congress in early November 2002. 21 For instance, there are reportedly 300,000 Taiwan citizens now living and working in Shanghai. 22 “Taikonaut” is derived from the Chinese word for space. CRS-12 western China.23 According to PRC space scientists, China’s national goal is to launch a “sustained” lunar exploration program by 2010.24 The PRC’s overall goals in space are addressed in a white paper, “China’s Space Activities,” released by the State Council on November 21, 2000.25 Overall authority for the PRC’s space program rests with the China Aerospace Science and Technology Corporation (CASC), an entity the central government created in 1999 to pursue national defense and space programs. Even so, it is the People’s Liberation Army’s (PLA) Second Artillery Corps that ultimately controls the program. Combined with the magnitude of the PRC’s technical achievement in initiating manned flight, the PLA’s leading role in the program is raising concerns for some analysts about the motivations behind and the potential security implications of China’s space program. They see prospects for a U.S.-PRC “space race” reminiscent of the U.S.-Soviet space competition during the Cold War. Further, they suggest that such a competition would establish a more or less inexorable trend toward militarization or even weaponization of space.26 Human Rights The George W. Bush Administration generally shifted away from the broad and generalized approach U.S. Administrations traditionally have followed on human rights in China. The White House approach instead appeared to favor more selective, intense pressure on individual cases involving human rights and on rule of law. During the 108th Congress, the PRC government periodically succumbed to this U.S. pressure and released early from prison political dissidents, usually citing health reasons. On March 4, 2004, for instance, the PRC released on medical parole one of its best-known political prisoners, Wang Youcai, a co-founder of the short-lived China Democracy Party. Days earlier, the PRC released an imprisoned Tibetan nun and announced that the prison sentence of Uighur businesswoman Rebiya Kadeer would be reduced by one year, making her eligible for release in 2006. Other past releases included the December 2002 release of Xu Wenli, co-founder of the China Democracy Party, and the January 2002 release of Ngawang Choephel, a Tibetan scholar. Critics of China’s human rights policies claim that such gestures are infrequent and overshadowed by other human rights troubles. The CongressionalExecutive Commission on China (CECC), a body created by P.L. 106-286 and composed of U.S. Government officials and Members of Congress, maintains a “Political Prisoner Database” on such prisoners in the PRC. The registry can be found on the CECC website []. 23 The October 15, 2003 manned flight was preceded by four unmanned Shenzhou launches: in November 1999, January 2001, March 2002, and December 2002. 24 This goal was articulated by Ouyang Ziyuan, chief scientist for the PRC’s moon exploration program. 25 26 Text at []. One proponent of this view is Joan Johnson-Freese, chair of the Naval War College’s National Security Decision-Making Department, who has written extensively on China’s space program. See, for example, Johnson-Freese, Joan, “‘Houston, We Have a Problem’: China and the Race to Space,” Current History, Sept. 2003, pp. 259-265. CRS-13 Religious Freedom. Members of Congress and American policymakers remain particularly concerned about the extent to which the PRC controls and restricts religious practices. The United States has designated China as a country of particular concern every year since 1999 because of its totalitarian actions to control religious beliefs or practices. In the China section of its annual International Religious Freedom Report released in 2004, the U.S. Department of State alleged that although membership in many religious groups in China was growing rapidly, China’s respect for freedom of religious belief remained poor. The PRC’s State Administration for Religious Affairs (SARA, formerly the Religious Affairs Bureau) continues to require that churches and religious groups register with the government. Unregistered churches — so-called “house churches” — continue to be technically illegal and are often repressed by the government, although the treatment of such groups is selectively applied, varying widely from locality to locality. In January 2004, SARA held a national work conference on religion that emphasized what it saw as negative and destabilizing aspects of religious observance, including cults and the growing circulation of foreign religious materials. The tone of this conference was in marked contrast to a similar conference on religion in 2001 in which then-Party Secretary Jiang Zemin stressed religion’s positive role in society. As they have in the past, Communist Party officials continue now to stress that religious belief is incompatible with Party membership. The PRC government continued to ban and crack down on religious cults such as the Falun Gong and the Three Grades of Servants Church; on unregistered Protestant and Catholic groups such as the South China Church; on Uighur Muslim separatists; and on activist Tibetan Buddhists. The government classifies all such activities as crimes that “disturb the social order.” According to the 2004 International Religious Freedom Report, the United States has made a “concerted effort” to improve religious freedom in China, stressing to PRC leaders that religious observance can benefit rather than damage the country. In December 2003, President Bush spoke to PRC Premier Wen Jiabao and stressed the importance of greater religious tolerance. Several delegations of U.S. officials have traveled to China to discuss religious freedom, including trips to Xinjiang and Tibet. During his October 2004 visit to Beijing, Secretary Colin Powell said that the PRC had responded positively to an American request to discuss restarting the official U.S.-China Human Rights Dialogue that Beijing had suspended in March 2004 because of the U.S. role in introducing a resolution at the annual meeting of the U.N. Conference on Human Rights in Geneva. Separatists. For years, the PRC government also has maintained a repressive crackdown against Tibetans and Muslims, particularly against Uighur separatists in the Xinjiang-Uighur Autonomous Region. After September 11, 2001, PRC officials sought to link their efforts against Uighur separatists with the global anti-terrorism campaign. On October 12, 2001, a PRC Foreign Ministry spokesman said, “We hope that our fight against the East Turkestan [Xinjiang] forces will become a part of the international effort against terrorism.” Although U.S. officials warned that the antiterror campaign should not be used to persecute Uighur separatists or other minorities with political grievances against Beijing, some believe that the U.S. government made a concession to Beijing on August 26, 2002, when it announced that it was CRS-14 placing one small group, the East Turkestan Islamic Movement, on the U.S. list of terrorist groups.27 U.S. policies on Uighurs and on terrorism faced a unique test during the 108th Congress, when it became known that approximately 22 Uighur Muslims were being held by U.S. forces at Guantanamo Bay after having been apprehended during the U.S. strikes against the Taliban in Afghanistan. By May of 2004, international human rights groups were reporting their concerns about the planned release of Uighur prisoners that U.S. forces had decided were of “no intelligence value.” These prisoners, they feared, if repatriated to China, would be executed or imprisoned as terrorists.28 In October 2004, in an interview with the Far Eastern Economic Review, Secretary of State Colin Powell said that U.S. officials were still reviewing the status of the Uighur prisoners because of U.S. fears that returning them to possible persecution in China would “be inconsistent...with our obligations to comply with international law and consistent with [the] Geneva Convention...”29 Later press reports said that a number of U.S. allies had refused requests to accept the prisoners.30 Family Planning/Coercive Abortion. Because of allegations of forced abortions and sterilizations in PRC family planning programs, direct and indirect U.S. funding for coercive family planning practices is prohibited in provisions of several U.S. laws. In addition, legislation in recent years has expanded these restrictions to include U.S. funding for international and multilateral family planning programs, such as the U.N. Population Fund (UNFPA), that have programs in China. In the FY2002 Foreign Operations Appropriations bill (P.L. 107-115), for instance, Congress provided for “not more than” $34 million for UNFPA. The Bush Administration froze those funds in January 2002, asserting that coercion still existed in Chinese counties where UNFPA had programs. Despite a follow-up finding by a State Department assessment team that UNFPA was not supporting coercion in its family planning programs in China, on July 22, 2002, U.S. Secretary of State Colin Powell announced the $34 million would remain withheld.31 Because of this determination, UNFPA had received no U.S. funding for its family planning programs as of March 2003. More recently, section 560 of H.R. 4818, the Foreign Operations Appropriations Act for FY2005, prohibits U.S. funds made available to the U.N. Population Fund (UNFPA) from being used for a country program in China. (The House considered 27 The 107th Congress considered a number of human rights resolutions relating to the PRC. For relevant bills, see the “Legislation” section of this report. 28 James, Ian, “Guantanamo prisoners from China’s Muslim northwest face danger if returned home, human rights groups warn,” Associated Press Newswires, May 28, 2004. 29 Murray Heibert and Susan Lawrence in an interview with Colin Powell, Far Eastern Economic Review, cited in Political Transcripts by Federal Document Clearing House, Oct. 19, 2004. 30 Sevastopulo, Demetri, “U.S. Fails to Find Countries to Take Uighurs,” Financial Times, Oct. 28, 2004, p. 5. 31 For further details, see CRS Issue Brief IB96026, Population Assistance and U.S. Family Programs: Issues for Congress, by Larry Nowels. CRS-15 and passed the measure, amended, on July 15, 2004, by a vote of 365-41.) An identical provision was included in Section 5060 (c) of comparable Senate legislation, S. 2812. The Senate adopted S. 2812 as an amendment in the nature of a substitute to H.R. 4818, passing the latter measure on September 23, 2004. House and Senate passed the Conference Report (H.Rept. 108-792) on November 20, 2004, and the measure was enacted as P.L. 108-447; the prohibition on use in China of U.S. contributions to UNFPA funds is contained in Section 560 (d). While the PRC has maintained its restrictive and at times coercive “one-child” policy for several decades, there were indications in 2004 that the government may be rethinking this policy. Early in the year, China’s new leadership appointed a task force to study the country’s demographic trends and their implications for economic development. In October 2004, reports surfaced that Beijing was considering at least one proposal to eventually scrap the one-child policy because of currently low PRC birth rates and the economic implications this has for supporting China’s huge aging population. It is unclear what effect a revision of the one-child policy would have for current restrictions on U.S. family planning assistance. Social Protest. The wrenching and far-reaching economic reforms that the PRC continues to make have led to increasing disgruntlement among a number of social groups. According to news reports, peasants and farmers in rapidly developing parts of China have had their farmland confiscated by local government and Party officials. Officials then sell the confiscated land for development, sometimes reportedly offering little or no compensation to the peasants from which the land was seized. According to one report, the PRC Ministry of Construction reported that by the end of June 2004, 4,000 groups and more than 18,000 persons had lodged formal petitions and filed court cases over such official “land-grabs.”32 Rising labor unrest, particularly in northern and interior cities, is another particularly troubling issue for Beijing, a regime founded on communist-inspired notions of a workers’ paradise. Increasing labor unrest also has placed greater pressure on the authority and credibility of the All-China Federation of Trade Unions (ACFTU), China’s only legal labor organization.33 Labor unrest and labor conditions in the PRC continue to prompt debates among Members of Congress over competing policy goals. Some Members argue that PRC workers are exploited under economic reforms and that the United States should seek to limit its economic and financial dealings with the PRC until Chinese workers gain full collective bargaining rights. Other Members argue that U.S. investments in the PRC have helped improve workers’ lives and incomes and have contributed to greater public pressure for labor and political reforms. 32 Cody, Edward, “China’s Land Grabs Raise Specter of Popular Unrest; Peasants Resist Developers, Local Officials,” Washington Post, Oct. 5, 2004, p. A1. 33 The ACFTU is controlled by the Communist Party. For background and further details, see CRS Report RL31164, China: Labor Conditions and Unrest, by Thomas Lum. CRS-16 SARS (Severe Acute Respiratory Syndrome) In November and December 2002, China’s Guangdong Province began to see cases involving a mysterious and contagious flulike virus that PRC medical officials referred to as “atypical pneumonia.” Provincial officials took emergency measures, and the PRC government sent medical teams to Guangdong to investigate the outbreak. Still, for months, official Chinese sources downplayed the seriousness and extent of the mysterious illness. The Guangdong Provincial Health Bureau made the first official PRC announcement about the new illness on February 11, 2003, reporting that 5 had died and more than 300 had become sick. On February 12, 2003, the official Xinhua News Agency announced that the mysterious illness had been “brought under control”and that no new cases had been reported in China. This remained the official story from the Chinese government through mid-March 2003, even as the World Health Organization (WHO) issued a global alert on March 12, 2003, following new outbreaks of an “atypical pneumonia” in Vietnam and Hong Kong. With SARS cases continuing to multiply and expand to other countries, including the United States, in April 2003, the PRC began to react to growing criticism over its secretiveness in handling the SARS crisis. On April 18, China’s new Premier, Wen Jiabao, threatened dire consequences for any government official that did not make full and timely disclosure about SARS cases. The real official turnaround in the crisis came on April 20, when PRC leaders fired two senior officials for covering up the extent of the crisis — the first in a series of such firings. Before the end of the outbreak, the number of confirmed SARS cases in Beijing alone passed 1,100, and the central government had placed more than 15,000 people in Beijing under quarantine. By July 2003, the global transmission of SARS had virtually disappeared. On July 15, 2003, the U.S. CDC discontinued the distribution of its Health Alert Notices and lifted the last of its travel advisories, reflecting that no new cases of SARS had appeared in more than 30 days.34 Nevertheless, the international medical community has warned that SARS may duplicate the pattern of other respiratory diseases and may recur seasonally, like the flu.35 Avian Flu By January 2004, it became evident that a serious avian flu outbreak was occurring throughout Asia. Appearing nearly simultaneously in multiple Asian countries, the outbreak of the deadly “H5N1” avian flu virus already had led to 11 human fatalities by January 29, 2004, raising fears that the virus could become a global disaster if it adapted sufficiently to spread through human contact. On January 27, 2004, a WHO official stated that a “staggering” number of birds, both 34 In July 2003, the CDC lifted a series of travel advisories: on July 3, to mainland China other than Beijing; on July 8, to Toronto; July 9, to Hong Kong; on July 11, to Beijing; and on July 15, to Taiwan. 35 For further details, see CRS Report RL32227, SARS, Avian Flu, and Other Challenges for China’s Political, Social, and Economic Transformation, by Kerry Dumbaugh and Wayne Morrison. CRS-17 migratory and domestic, were infected with the virus in at least 10 Asian countries.36 On January 27, 2004, the PRC became the tenth country to acknowledge ongoing outbreaks of avian flu within its borders. PRC officials confirmed three initial outbreaks: flocks of ducks in Guangxi Province; ducks in Hunan Province; and chickens in Hubei Province. Some critics saw the PRC’s initial actions in the avian flu outbreak as a return to the secretive methods used in the early 2003 SARS outbreak in China. As in the 2003 SARS outbreak, they say, PRC officials denied any avian flu outbreak for months despite anecdotal reports to the contrary. On January 29, 2004, an official from a global organization monitoring animal disease outbreaks said that it had been pressing Asian governments since November 2003 for information on reports of avian flu and that it had received no reports from the PRC.37 The first time an avian flu virus is known to have adapted to infect humans occurred in 1997, when an avian flu virus in Hong Kong’s domesticated poultry population for the first time became transmittable directly from infected birds to humans. Eighteen people in Hong Kong contracted avian flu this way, and six died. The Hong Kong government responded aggressively, in three days exterminating its entire poultry population of 1.5 million birds. Isolated outbreaks of human infection from avian flu-infected birds have recurred annually since then. Medical scientists are especially concerned about the 2004 outbreak because they believe its significantly greater scale than previously known outbreaks increases the chance that the virus will mutate to become transmittable by human-to-human contact, greatly increasing its contagion. Although PRC’s Ministry of Agriculture announced it had eradicated all the avian flu cases it had discovered by March 2004, since late June 2004, additional outbreaks of the H5N1 strain have recurred in China, Vietnam, and Thailand, leading some scientists to speculate the avian flu may now be impossible to eradicate in Asia.38 Economic Issues The PRC is now the fourth-largest U.S. trading partner, with total U.S.-China trade in 2002 pegged at $147 billion. Ongoing issues in U.S.-China economic relations include the substantial and growing U.S. trade deficit with China ($102.3 billion in 2002), repeated PRC failures to protect U.S. intellectual property rights (IPR), and the PRC’s continuing restrictive trade practices. As in previous Congresses, Members of the 108th Congress were interested in ensuring that the PRC adhered to its WTO obligations. 36 As of January 29, 2004, infected countries reported by WHO were South Korea, Vietnam, Japan, Taiwan, Thailand, Cambodia, Hong Kong, Laos, Pakistan, China, and Indonesia. 37 Mallet, Victor, “Culture of Secrecy Blamed for Flu’s Spread,” Financial Times, Jan. 29, 2004, p. 13. The information was attributed to Alex Thiermann, an official from the Parisbased World Organization for Animal Health (OIE), of which the PRC is a member. 38 Bradsher, Keith, and Lawrence Altman, “Scientists Fear Avian Flu Cannot Be Quelled,” New York Times, July 8, 2004, p. 8. CRS-18 Currency Valuation. Another issue of particular concern to the 108th Congress involved the PRC’s continued decision to keep the value of its currency low with respect to the dollar. Since 1994, the PRC has pegged its currency, the renminbi (RMB), to the U.S. dollar at a rate of about 8.3 RMB to the dollar. In 2003, many U.S. policymakers concluded that this RMB/dollar peg kept the PRC’s currency artificially undervalued, making PRC exports artificially cheap and making it harder for U.S. producers to compete fairly. U.S. critics of the PRC’s currency peg charged that the PRC unfairly manipulated its currency, and they urged Beijing either to raise the RMB’s value or to make it freely convertible subject to market forces. Members of the 108th Congress introduced legislation (H.R. 3058) to require the U.S. Secretary of the Treasury to analyze the PRC’s exchange rate policies and, depending on the results of that analysis, to impose tariffs on PRC products to offset the price advantage the PRC gains from its currency policies. On December 3, 2004, the U.S. Treasury Department issued its biannual report on global foreign exchange, reporting that no major U.S. trading partner — most notably the PRC — had met the technical definition of currency manipulation. National Security Issues North Korea. Concerns about North Korea’s nuclear program were revitalized on October 4, 2002, when North Korean officials told visiting U.S. officials that the regime was conducting a clandestine uranium enrichment program in technical violation of its pledges under the 1994 U.S.-North Korean Agreed Framework. The United States responded by suspending the energy assistance it had agreed to provide North Korea under the Agreed Framework. The resulting crisis continued to escalate in succeeding years as North Korea withdrew from the Nuclear Non-Proliferation Treaty, restarted its moth-balled nuclear reactor at Yongbyon, and flight-tested a new long-range cruise missile.39 The Bush Administration rejected North Korean demands for bilateral talks to resolve the crisis and instead consented only to sixparty talks involving North and South Korea, the United States, the PRC, Japan, and Russia. By the end of the 108th Congress, three rounds of six-party talks had produced no progress on the North Korea nuclear issue. The ongoing crisis over North Korea’s nuclear weapons program posed and continues to pose dilemmas for PRC policymakers and could have potentially serious consequences for U.S.-China relations. As North Korea’s military ally, the PRC could be drawn into any military conflict involving North Korea — meaning the possibility of U.S.-China military confrontation should U.S. officials decide to bomb the North Korean reactor at Yongbyon to prevent plutonium reprocessing. In addition, since the PRC is North Korea’s principal trade partner, any decision by the international community to impose sweeping economic sanctions against North Korea would appear to require PRC support. Lack of that support would undermine 39 North Korea reportedly tested its new long-range cruise missile on February 24, 2003, and restarted the nuclear reactor at Yongbyon several days later. Kralev, Nicholas, “Beijing Rejects U.S. Approach to Iraq, N. Korea; Powell Raps Human Rights Record,” Washington Times, Feb. 25, 2003, p. A16; Gertz, Bill, “North Korea Tested a Cruise Missile; U.S. Revises View of Monday Firing,” Washington Times, Feb. 27, 2003, p. A4. See also CRS Issue Brief IB98045, Korea: U.S.-Korean Relations Issues for Congress, by Larry Niksch. CRS-19 any sanctions effort and also damage U.S.-China relations. By the same token, collapse of the fragile North Korean regime could have equally unhappy consequences for the PRC, leading to floods of North Korean refugees into China and to the probable advance of U.S. military forces from the South Korean side of the demilitarized zone to the PRC border. PRC officials have repeatedly emphasized that China supports a non-nuclear Korean peninsula. This support is thought to be genuine, since an unpredictable North Korea armed with nuclear weapons could have unpleasant consequences for Beijing — such as the creation of nuclear weapons programs in currently non-nuclear countries like Taiwan, Japan, and South Korea, or an accelerated U.S. commitment for a regional missile defense program, to name only two. But Beijing has stopped short of promising to put further pressure on North Korea and in fact continues to prop up the North Korean regime with supplies of food and fuel and to advocate bilateral U.S.-North Korean dialogue. Weapons Proliferation. For many years, U.S. officials and Members of Congress have been concerned about the PRC’s track record of weapons sales, technology transfers, and nuclear energy assistance to certain countries in the Middle East and South Asia, particularly to Iran and Pakistan. While some U.S. officials have grown more confident that the PRC is changing its proliferation policies, congressional and other critics charge that such confidence is misplaced.40 They point out that for years, reputable sources have reported China to be selling ballistic missiles and technology for weapons of mass destruction (WMD) in the international market, primarily in the Middle East. Although these allegations have always created problems in Sino-U.S. relations, they have taken on new and potentially significant implications given the Administration’s entrenched suspicions about Iraq’s WMD program as well as later disclosures that both Iran and North Korea are actively pursuing nuclear weapons programs. The PRC has had close relationships with all three countries in the past, including sales of military equipment that could threaten U.S. forces in the region and missiles that could enhance a nuclear weapons capability.41 On December 1, 2004, the United States imposed sanctions on four Chinese companies for selling to Iran weapons on the Export Control List. Military Contacts. Once one of the stronger components of the relationship, U.S.-China military relations have never fully recovered after they were suspended following the 1989 Tiananmen Square crackdown. Nevertheless, both countries cautiously resumed military contacts in the 108th Congress, although efforts to re- 40 As reasons for such confidence, some point to the past decade, when the PRC has: 1992 — promised to abide by the Missile Technology Control Regime (MTCR) and acceded to the Nuclear Non-Proliferation Treaty (NPT); 1993 — signed the Chemical Weapons Convention (CWC); 1996 — signed the Comprehensive Test Ban Treaty; and 1997 — joined the Zangger Committee of NPT exporters. 41 Iran, for instance, has purchased from the PRC small numbers of SA-2 surface-to-air missiles, F-7 combat aircraft, fast-attack patrol boats, and C-802 anti-ship cruise missiles. Some Members of Congress have questioned whether Iran’s possession of C-802s violates the Iran-Iraq Arms Non-Proliferation Act of 1992 (50 U.S.C. § 1701), which requires sanctions on countries that sell destabilizing weapons to Iran or Iraq. CRS-20 energize military ties have met with repeated setbacks. A number of high-level talks have been held in 2004 — most notably on July 8, when National Security Advisor Condoleezza Rice held talks in Beijing with her counterparts. The security situation in the Taiwan strait, the PRC missile and military build-up opposite Taiwan, and key global security issues such as North Korea have been the primary subjects of such talks. (See appendix at the end of this report for a list of U.S.-China official talks.) Tibet The political and cultural status of Tibet remains a difficult issue in U.S.-China relations and a matter of debate among U.S. policymakers. Controversy continues over Tibet’s current political status as part of China, the role of the Dalai Lama and his Tibetan government-in-exile, and the impact of Chinese control on Tibetan culture and religious traditions. The U.S. government recognizes Tibet as part of China and has always done so, although some dispute the historical consistency of this U.S. position. But the Dalai Lama, Tibet’s exiled spiritual leader, has long had strong supporters in the U.S. Congress who have continued to pressure the White House to protect Tibetan culture and give Tibet greater status in U.S. law. It was largely because of this congressional pressure that in 1997, U.S. officials created the position of Special Coordinator for Tibetan issues, tasked with the specific mission of helping to promote talks between the Dalai Lama and the PRC government. The current Special Coordinator — Paula Dobriansky, Under Secretary of State for Global Affairs — is the highest-ranking U.S. official to have held this position.42 Although dialogue between the PRC and the Tibetan exile community remains officially stalled (no talks are currently scheduled or planned), a number of developments in 2002-2003 led to speculation about whether there may be new momentum for progress between the two sides. Some observers speculated that the stage may be set for renewed momentum by recent changes in the PRC leadership, particularly the ascendancy of Hu Jintao, the PRC’s new President and Party General Secretary, who spent part of his career stationed in Tibet. In any event, observers watched with interest a number of unusual developments that are outside the scope of what has come to be expected of Beijing’s relations with the Dalai Lama’s representatives. In 2002, the Dalai Lama’s older brother, Gyalo Thondup, accepted a PRC invitation to spend several weeks in Tibet on a private visit. On at least three occasions since then, the PRC government invited to China and to Lhasa (Tibet’s capital) delegations from the Tibetan community led by the Dalai Lama’s special envoy in the United States, Lodi Gyari. Further contacts and developments along these lines would reinforce the view that a quiet dialogue and perhaps compromise may be underway. Hong Kong, “Article 23,” and Democratization Beginning in late summer 2003, controversy grew steadily in Hong Kong over the territory’s ability to implement PRC promises for autonomous self-governance, as provided for in the Basic Law, Hong Kong’s de-facto constitution. Controversy 42 For background and details, see CRS Report RL30983, Tibet, China, and the 107th Congress: Issues for U.S. Policy, by Kerry Dumbaugh. CRS-21 began with the Hong Kong government’s attempt to enact anti-sedition laws, known as the “Article 23” proposals. These ultimately were withdrawn in September 2003, after massive public protests were held to oppose them. The withdrawal was widely seen as a victory for Hong Kong autonomy and a setback for the PRC, which had publicly supported the Article 23 proposals. This controversy was followed in January 2004, by peaceful demonstrations involving tens of thousands of Hong Kong residents in favor of implementing universal suffrage to elect the next Chief Executive in 2007 and the next Legislative Council in 2008. Since the Basic Law is silent on how Hong Kong’s officials are to be chosen beginning in 2007, democracy activists argued that such a rapid pace for political change was permissible under the Law. In his annual policy address on January 7, 2004, Hong Kong’s chief executive, Tung Chee-Hwa, announced that instead of following through on his pledge of 2003 to lay out a timetable for public consultations on democratic reforms in 2007, he was appointing a task force to hold consultations with Beijing on the subject of democratic reform. Immediately following the Tung address, the PRC’s official news agency, Xinhua, announced that Hong Kong must consult Beijing prior to moving forward on any democratic reform development. PRC rhetoric continued to strengthen in subsequent months. On March 1, 2004, PRC leaders published a blacklist of pro-democracy Hong Kong groups, saying they were too anti-China to serve in any future Hong Kong government. The following day, on March 2, 2004, the PRC government warned that if a pro-democracy majority were to take control of Hong Kong’s legislature in elections in September 2004, Hong Kong’s entire political system would collapse. But in April 2004, Beijing dealt Hong Kong’s democratic aspirations a stinging setback by initiating an “interpretation” of the Basic Law to the effect that universal suffrage not only was not allowed as early as 2007, but that Beijing, and not Hong Kong, would determine the proper pace for democratic reforms. On May 8, 2004, Beijing further stated that it would be illegal for Hong Kong’s lawmakers to introduce motions opposing Beijing’s decision in the Hong Kong legislature. Critics maintain that the Beijing decisions have contravened provisions in Hong Kong’s Basic Law leaving decisions on democracy development up to Hong Kong. They pointed out that only changes in selecting the chief executive after 2007 are subject to final approval by Beijing. Under Annex I to the Basic Law, a proposal for full universal suffrage for the legislature need only be sent to Beijing “for the record,” not for approval. Despite widespread public sentiment against the PRC decisions, public disaffection did not appear to translate into significant gains for democracy proponents in Hong Kong’s September 12, 2004 legislative elections, in which half of the 60-seat body was elected by universal suffrage and half by “functional constituencies.”43 Democrats made fewer gains than the party had hoped, winning 25 of the 60 seats. 43 Functional constituencies are constituencies of professional groups — doctors, lawyers, teachers, accountants — each group of which can elect one or more candidates to represent the group’s interests in the legislature. CRS-22 The PRC decisions on Hong Kong have particular relevance for Taiwan, since Beijing has held out the “one country, two systems” approach for Hong Kong as a model for Taiwan’s eventual reunification with mainland China. The current controversy over democratization in Hong Kong also could affect U.S. policy toward Hong Kong, which is set out in the U.S.-Hong Kong Policy Act of 1992 (P.L. 102383). In addition to requiring annual U.S. government reports on Hong Kong’s conditions through 2006, this act allows the United States to treat Hong Kong more leniently than the way it treats the PRC on the condition that Hong Kong remains autonomous. Under the act, the President has the power to halt existing agreements with Hong Kong or take other steps if he determines that Beijing is interfering unduly in Hong Kong’s affairs.44 U.S. Policy Trends The U.S. policy approach of the current Bush Administration toward the PRC appears to have charted a hybrid middle territory, borrowing different aspects from the three different camps into which the U.S. policy community has sorted itself over Sino-U.S. policy in the last 15 years. Those camps are: Engagement. The “engagement” approach toward the PRC, which dominated U.S. policy since the Nixon Administration, including in the George H. W. Bush and William Clinton Administrations. Underlying this approach is a belief that trends in China are moving inexorably in the “right” direction. That is, the PRC is becoming more economically interdependent with the international community and therefore will have a greater stake in pursuing stable international economic relationships. They contrast this behavior favorably with that of disruptive states such as Iraq or North Korea — those who are not part of the international system and who may support the kind of global terrorism that struck the United States on September 11, 2001. Some also believe that growing wealth in the PRC will push Chinese society in directions that will develop a materially better-off, more educated, and cosmopolitan populace that will, over time, press its government for greater political pluralism and democracy. Therefore, according to this view, U.S. policy should seek to work more closely with the PRC in order to encourage these positive long-term trends. Some proponents of the “engagement” approach fear that viewing the PRC as a “threat” is a self-fulfilling prophecy that could promote a number of potentially disastrous policy consequences for U.S. interests. These include a possible breakdown in PRC governance, a fragmentation of the country itself, or the creation of greater Chinese nationalism with a strong anti-American bias. Caution. American proponents of what might be called a “cautious” policy toward the PRC stress that Beijing officials still view the world as a state-centered, 44 A specific intention of the Hong Kong Policy Act was to permit the U.S. government to treat Hong Kong differently from the way it treats the rest of China in U.S. law. Thus, the United States has an extradition treaty with Hong Kong but not with China; maintains a liberalized export control regime with Hong Kong but a restrictive one with China; and gives Hong Kong permanent most-favored-nation (MFN) trade status — or “normal trade relations” as it is now known — but gave that status to China separately upon its accession to the WTO. CRS-23 competitive environment where power is respected and interdependence counts for little. This group sees PRC leaders as determined to use all means at their disposal to increase their nation’s wealth and power. They suggest that PRC leaders may be biding their time and conforming to many international norms as a strategy, until China builds its economic strength and can take more unilateral action. Once it succeeds with economic modernization, this argument holds, Beijing may be less likely to curb its narrow nationalistic or other ambitions because of international constraints or sensitivities. According to this approach, the United States should strengthen its regional alliances and maintain a robust military presence in Asia as a counterweight to the PRC. Threat. A third and more confrontational American approach has been based on the premise that the PRC under its current form of government is inherently a threat to U.S. interests, and that the Chinese political system needs to change dramatically before the United States has any real hope of reaching a constructive relationship with the PRC. According to this approach, Beijing’s communist leaders are inherently incapable of long-term positive ties with the United States. Rather, Beijing seeks to erode U.S. power and arm U.S. enemies in the region. Despite the statements of support for the U.S. anti-terrorism campaign, according to this view, the PRC’s repeated violations of its non-proliferation commitments have actually contributed to strengthening and arming nations that harbor global terrorists. U.S. policy should focus on mechanisms to change the PRC from within while maintaining a vigilant posture to deal with disruptive PRC foreign policy actions in Asian and world affairs. Major Legislation P.L. 108-7 (H.J.Res. 2) Consolidated Appropriations Resolution for FY2003. The law prohibits funds funds for export licenses for satellites of U.S. origin, including commercial satellites and component parts, unless the House and Senate Committees on Appropriations are notified at least 15 days in advance. The law as passed changes the name of the U.S.-China Security Review Commission to the U.S.-China Economic and Security Review Commission and provides the Commission with $1 million for salaries and expenses; prohibits U.S. funds made available for the United Nations Population Fund (UNFPA) from being used in the PRC; and provides that “not less than” $25 million be made available to support democracy, human rights, and rule of law programs in the PRC, Hong Kong, and Tibet. The bill was introduced on January 7, 2003, passed the House by voice vote on January 8, 2003, and passed the Senate, amended, on January 23, 2003 (69-29). A Conference was held on February 10, 11, and 13, 2003, and Conference Report 108-10 was filed on February 13. The House agreed to the Conference Report on February 13 (338-83), as did the Senate (76-20). The bill was signed by the President on February 20, 2003, and became P.L. 108-7. P.L. 108-28 (H.R. 441/S. 243) On Taiwan’s admission as an observer to the World Health Organization (WHO). The bill amends P.L. 107-10 to authorize the United States to endorse and push for Taiwan’s admission as an observer to the WHO at the annual summit of the World Health Assembly in Geneva in May 2003. Introduced on January 29, 2003, and referred to the House International Relations Committee, which marked up the CRS-24 bill on March 5, 2003. On March 11, 2003, the bill was considered under suspension of the rules, passing by a vote of 414-0. On April 9, 2003, the Senate Committee on Foreign Relations favorably reported S. 243, which the Senate passed by unanimous consent on May 1, 2003. That bill was sent to the House International Relations Committee, which was discharged on May 14, 2003, on a motion by Representative Rohrabacher. The House passed the measure on May 14, 2003, and the President signed the bill into law on May 29, 2003. Prior to this, on May 18, 2003, the United States announced it would back Taiwan’s bid for observer status at the WHO Geneva meeting. H.Con.Res. 98 (Ramstad) A resolution expressing the sense of Congress that the United States should negotiate a free trade agreement with Taiwan. Introduced March 18, 2003. Referred to House Ways and Means Committee’s Trade Subcommittee on March 20, 2003. H.Con.Res. 285 (Manzullo) A resolution expressing congressional concern over currency manipulation by foreign governments. In particular, the bill cites the PRC, saying that its continued policy of pegging the yuan to the dollar is a currency manipulation that “violates Article XV (4) of the General Agreement on Tariffs and Trade 1994 (as defined in section 2 of the Uruguay Round Agreements Act), and is unjustifiable and unreasonable, and burdens and restricts United States commerce, under section 301 of the Trade Act of 1974. ...” The measure was introduced on September 17, 2003, and referred to the House Ways and Means Committee. H.Con.Res. 304 (Ros-Lehtinen) A measure addressing the PRC’s oppression of the Falun Gong in the United States and China. Introduced on October 16, 2003, and referred to the House International Relations Committee and the House Judiciary Committee. On October 4, 2004, the House considered the measure under suspension of the rules, passing it by voice vote. The measure was received in the Senate on October 5, 2004. H.Res. 199 (Frank) A measure calling on the PRC immediately and unconditionally to release Dr. Yang Jianli. Introduced April 11, 2003, and referred to the House International Relations Committee’s Asia and Pacific Subcommittee. The subcommittee held mark-up on June 10, 2003, and the full Committee held mark-up and reported the measure on June 12, 2003. The House passed the measure on the suspension calendar on June 25, 2003, by a vote of 412-0. H.Res. 277 (Cox) Expressing support for freedom in Hong Kong. The measure was introduced on June 16, 2003, and referred to the House Committee on International Relations, which marked up and reported the measure on June 17, 2003. The House passed the measure on the suspension calendar on June 26, 2003, by a vote of 426-1. H.Res. 414 (English) Encouraging the PRC to fulfill its WTO commitments and establish monetary and financial market reforms. Introduced on October 28, 2003, and referred to the CRS-25 House Ways and Means Committee. The House considered the bill under suspension of the rules on October 29, 2003, passing it by a vote of 411-1. H.Res. 655 Condemning the 1989 crackdown in Tiananmen Square on the 15th anniversary of the event. Passed the House on the suspension calendar on June 3, 2004, by a vote of 400-1. H.R. 851 (Slaughter) To assess the impact of the North American Free Trade Agreement (NAFTA) and the entry of the PRC into the World Trade Organization (WTO) on U.S. jobs, workers, and the environment. Introduced on February 13, 2003, and referred to the House Ways and Means Committee, Subcommittee on Trade. P.L. 108-447 (H.R. 4818/S. 2812) Foreign Operations, Export Financing, and Related Programs Appropriations Act for FY2005. Introduced July 13, 2004, as an original measure (H.Rept. 108599). Both the House (344-51) and Senate (65-30) agreed to the Conference Report (H.Rept. 108-792) on November 20, 2004. The bill was signed into law on December 8, 2004, as P.L. 108-447. Section 581 of the enacted measure provides $4 million in “Economic Support Fund” assistance to non-governmental organizations carrying out activities in Tibet to preserve cultural traditions and promote sustainable development; and $19 million to support democracy and rule of law activities in China and Hong Kong (Sec. 526). S. 1586 (Schumer) Authorizing a duty of 27.5% on any and all PRC imports to the United States if negotiations on China’s undervalued currency are not successful. Introduced on September 5, 2003, and referred to the Senate Finance Committee. S. 1758 (Voinovich) Requiring the Secretary of the Treasury to analyze and report on the PRC’s exchange rate policies and then impose tariffs on PRC imports equal to the value of the currency manipulation. Introduced on October 20, 2003, and referred to the Senate Finance Committee. (A similar bill, H.R. 3058, was introduced in the House on October 10, 2003 by Representative Phil English and referred to the House Ways and Means Committee.) S. 2092 (Allen) [P.L. 108-235] Requiring the Secretary of State to initiate a plan to obtain observer status for Taiwan in the World Health Organization to be presented each year at the annual World Health Assembly meeting, and requiring the Secretary of State to submit an annual report to Congress by April 1 of each year on the nature and status of this U.S. plan. The new law makes permanent an annual commitment for a U.S. WHO initiative, whereas previous measures had required such initiatives only in the current calendar year. Introduced on February 12, 2004, and passed the Senate, amended, by unanimous consent on May 6, 2004. The House considered and passed the bill by unanimous consent on May 20, 2004. The President signed the bill on June 14, 2004 (118 Stat. 656). CRS-26 Chronology 12/31/04 — The Multi-fiber Arrangement (MFA), the agreement that had maintained textile quotas for decades among World Trade Organization members, expired. Observers have speculated that in the absence of national quotas, much of the world’s textile manufacturing will shift to China. 12/30/04 — Taiwan’s High Court rejected a second KMT opposition lawsuit to overturn the March 2004 presidential elections in Taiwan. 12/29/04 — China’s official news agency, Xinhua, announced that the Standing Committee of the National People’s Congress (NPC) had voted unanimously to submit an anti-secession law, aimed at Taiwan independence advocates, to the full NPC at its March 2005 legislative session. State media also reported that former Party Secretary Jiang Zemin in March 2005 will ask the NPC to accept his resignation as chair of the state Central Military Commission — a largely symbolic position. Jiang stepped down from the power-wielding Party Central Military Commission in September 2004. 12/29/04 — PRC state media reported that China and India had agreed to deepen defense cooperation. The agreement was announced at the conclusion of a week-long visit by India’s army chief, N.C. Vij — the first visit at this level in a decade — and talks with his counterpart, Liang Guanglie, and Defense Minister Cao Gangchuan. 12/27/04 — Russian Defense Minister Sergei Ivanov said that Russia and China had agreed to hold unprecedented joint military exercises in China in 2005. 12/27/04 — The PRC published its fifth white paper on national security, titled “China’s National Defense in 2004.” The paper said that the Taiwan independence movement was the biggest threat to China’s sovereignty and to regional peace, and it vowed to prevent Taiwan independence at all costs. The paper also said that strengthening China’s naval warfare and air capabilities was a military priority. 12/11/04 — Taiwan held legislative elections, returning the opposition KMT party to a majority. 10/25/04 — Secretary of State Colin Powell visited China. 10/05/04 — The Bush Administration announced a new intellectual property initiative, the Strategy Targeting Organized Piracy (STOP), likely to fall most heavily on the PRC. 09/19/04 — Jiang Zemin, former Communist Party Secretary and PRC President, stepped down as head of the military, his last remaining leadership CRS-27 post, completing the transfer of power to Hu Jintao and a younger “fourth generation” of PRC leaders. 09/12/04 — Hong Kong held elections for its third Legislative Council since the return to PRC rule. Pro-democracy parties won 25 of the 60 seats — slightly more than in the 2000 election, but fewer than the parties had hoped. 7/22/04 — The 9/11 Commission issued its report of recommendations. Among many anti-terrorist steps, it urged the United States to encourage the PRC to join the Proliferation Security initiative. 07/19/04 — Dr. Jiang Yanyong, the PLA doctor who publicized the extent of the SARS outbreak in China in 2002-2003 despite PRC denial, was released from 45 days of detention by PRC security officials. 6/23/04 — The PRC began hosting three days of talks in the third round of sixparty talks on North Korea’s nuclear weapons program. No agreement was reached. 06/02/04 — The Washington Times reported that the PRC would hold large-scale military exercises on Dongshan Island, off the PRC coast opposite Taiwan. 05/28/04 — The Pentagon released its latest annual report on PRC military power. Full text at [] 05/16/04 — A PRC spokesman warned that Beijing would “crush” any move Taiwan made toward independence. 05/06/04 — During his stop in Brussels, Premier Wen Jiabao said that China and the EU should develop a “comprehensive strategic partnership.” 05/05/04 — Eight PRC warships sailed through Hong Kong’s Victoria Harbor, the first visible demonstration of the PRC military presence since the 1997 handover of Hong Kong to Chinese sovereignty. 05/04/04 — According to the Asian Wall St. Journal, the PRC signed a deal with Pakistan to help it build a 300-megawatt nuclear power plant, the second plant that Beijing will have helped the country to build. 05/03/04 — PRC Premier Wen Jiabao began an eleven-day trip to European Union (EU) countries, including visits to Germany, Brussels, Italy, Britain, and Ireland. 05/01/04 — The PRC Health Ministry confirmed a sixth case of SARS this year. All of the cases have been traced back to people who worked at the Beijing’s Institute of Virology, which houses the SARS virus. CRS-28 04/22/04 — The Senate Foreign Relations Committee’s East Asian and Pacific Affairs Subcommittee held hearings on “U.S.-China relations: status of reforms in China.” 04/21/04 — The House International Relations Committee held a hearing on the Taiwan Relations Act: the next 25 years. 04/19/04 — In a visit that was not acknowledged by the PRC until it was over, North Korean leader Kim Jong-il began three days of discussions with leaders in Beijing. 04/19/04 — PRC Vice-Premier Wu Yi left China to attend the 15th meeting of the Sino-U.S. Joint Commission on Commerce and Trade. 04/17/04 — As a consequence of decisions at the European Union ministerial meeting, EU ministers told the PRC that the EU would keep in place the arms embargo against China. 04/15/04 — During his three-day visit to China, Vice President Cheney gave a speech at Fudan University in Shanghai. 04/15/04 — Paul Speltz, U.S. Executive Director of the Asian Development Bank, was appointed an economic emissary to the PRC, a new U.S. post created to help encourage the PRC to de-link its currency peg to the U.S. dollar. The appointment was announced by U.S. Secretary of the Treasury John Snow. (AWStJ, April 15, 2004, p. A5) 04/15/04 — The U.N. Commission on Human Rights, at their annual meeting in Geneva, voted in favor of a “take no action” resolution on a U.S.sponsored measure condemning China’s human rights record. 04/13/04 — U.S. Vice President Dick Cheney began a three-day visit to China as part of a larger visit in Asia that also included visits in Japan and South Korea. 04/11/04 — Thousands of Hong Kongers marched through downtown Hong Kong to protest the result of the NPC Standing Committee’s “interpretation” of the pace that the Basic Law sets out for democratization. 04/07/04 — Mr. Qiao Xiaoyang, deputy secretary general of the NPC Standing Committee, arrived in Hong Kong to hold meetings about the recent NPC Standing Committee interpretation of the Basic Law. 04/06/04 — The NPC Standing Committee issued an “interpretation”of Annex I and Annex II, the provisions of Hong Kong’s Basic Law that say changes can be implemented “if necessary” in electing the Chief Executive and the legislature after 2007-2008. CRS-29 04/03/04 — Japan’s Foreign Minister, Yoriko Kawaguchi, began two days of meetings in China with PRC Premier Wen Jiabao, Foreign Minister Li Zhaoxing, and State Councillor Tang Jiaxuan. 04/01/04 — According to the South China Morning Post, a group of local Hong Kong businesses at The Hong Kong Business Community Joint Conference issued a statement saying that Hong Kong would not be ready for universal suffrage in 2007. 03/31/04 — House Energy and Commerce Committee hearing on “U.S.-China Trade: Preparations for the Joint Commission on Commerce and Trade.” 03/30/04 — Hong Kong’s Constitutional Development Task Force met in Beijing with members of the PRC’s National People’s Congress (NPC) Standing Committee. 03/29/04 — The Senate Democratic Policy Committee held a hearing on the findings of an AFL-CIO petition challenging PRC trade abuses. 03/04/04 — The PRC released on medical parole one of its best-known political prisoners, Wang Youcai, a co-founder of the short-lived China Democracy Party. Earlier, the PRC released an imprisoned Tibetan nun and announced a one-year reduction in Uighur businesswoman Rebiya Kadeer’s prison sentence (to 2006). 03/02/04 — The PRC government warned that if a pro-democracy majority took control of Hong Kong’s legislature in September 2004 elections, Hong Kong’s entire political system would collapse. 02/25/04 — According to the State Department’s annual Country Report on Human Rights for 2003, the PRC had been “backsliding” on human rights in the past year. 02/06/04 — PRC Vice-Foreign Minister Zhou Wenzhong said that the PRC wants the United States to put more pressure on Taiwan about the decision to hold a national referendum in March 2004. 02/05/04 — The PRC’s Ministry of Labor and Social Security announced the PRC’s first minimum wage regulations, scheduled to take effect on March 1, 2004. 02/04/04 — The Asian Wall St. Journal warned that the effects of avian flu on the PRC’s poultry industry could result in steep cuts in Chinese soy product imports, 40% of which come from the United States. 02/03/04 — Taiwan’s president, Chen Shui-bian, outlined a “peace and stability framework” for talks between Taiwan and the PRC, to include a demilitarized zone (DMZ). CRS-30 01/30/04 — China’s official news agency reported avian flu outbreaks in poultry in three additional locations: Anhui Province, Shanghai, and Guangdong Province. 01/27/04 — After months of official denials despite unsubstantiated reports that the H5N1 strain of avian flu had hit China, the PRC became the tenth Asian country to acknowledge presence of the virus. 12/09/03 — PRC Premier Wen Jiabao, in his first visit to the United States as premier, met in the White House with President Bush. In remarks after the meeting, President Bush said that the United States opposed “any unilateral decision, by either China or Taiwan, to change the status quo....The comments and actions made by the leader of Taiwan indicate he may be willing to make decisions unilaterally that change the status quo, which we oppose.” 12/03/03 — The Chinese Government published a new White Paper titled “China’s Antiproliferation Policy and Measures.” See full text at [ ]. 12/03/03 — The Asian Wall St. Journal reported that the European Union (EU) was considering lifting the embargo imposed on arms sales to China after the 1989 Tiananmen Square crackdown (p. A2). 12/01/03 — A new PRC policy took effect setting an independent encryption standard for wireless communications in China. After an initial sixmonth grace period, the new standard, which differs from the current global standard, will apply to equipment imported into or sold in China. 11/20/03 — PRC Major General Wang Zaixi was quoted saying that “the use of force may become unavoidable” in dealing with Taiwan. 11/19/03 — Secretary of Commerce Donald Evans announced that in 2004 the United States would impose emergency quotas on imports of Chinese knit fabrics, dressing gowns and robes, and bras. 11/12/03 — A visiting PRC trade delegation announced they would sign agreements worth approximately $2.4 billion to buy aircraft and engines from Boeing and General Electric. 10/15/03 — The PRC launched its first manned spaceflight. Lt. Col. Yang Liwei orbited the earth for 21 hours, returning to land in Inner Mongolia. 10/02/03 — The PRC’s new leadership rescinded a long-standing law that couples wishing to marry first obtain the approval of their employers. 09/11/03 — The Dalai Lama spoke at the Washington National Cathedral. While in Washington, he met with President George W. Bush (September 9) and Secretary of State Colin Powell (September 11). CRS-31 09/05/03 — The Hong Kong government announced it was withdrawing the “Article 23” internal-security proposals. 07/01/03 — Massive public demonstrations were held in Hong Kong to protest the government’s proposed “anti-sedition” laws, required by Hong Kong’s de-facto constitution. 06/11/03 — The Washington Post cited Chinese sources as saying the PRC would reduce the size of the People’s Liberation Army (PLA) over the next five years by 20%, or 500,000 troops. 06/06/03 — A U.S. federal judge issued an injunction prohibiting a Chinese company, Huawei Technologies Ltd., from using software that a U.S. company, Cisco, claimed was a copy of its own patented software. 05/23/03 — The Federal Register noted that the Department of State had imposed a two-year ban on U.S. imports from the PRC’s North China Industries Corporation (NORINCO), having determined it had engaged in missile technology proliferation. The ban was made under the terms of Executive Order No. 12938 of November 14, 1994. 05/16/03 — The U.S. Drug Enforcement Agency announced a successful end to the first joint U.S.-PRC sting operation against international heroinsmuggling. Dubbed “Operation City Lights,” the two-year effort involved agents from China, Hong Kong, and the United States. 05/08/03 — A Department of State spokesman announced that the U.S. Agency for International Development had provided the Chinese Red Cross Society in the PRC with $500,000 in emergency U.S. aid to help combat SARS. 05/07/03 — The U.S. Congressional-Executive Commission on China concluded that the spread of SARS in China had been facilitated by deficiencies in China’s legal system and state control of the press. 04/28/03 — WHO’s representative in China, Henk Bekedam, said in Beijing that even “very basic information” about new SARS cases in the city was still not being made available to WHO investigators. 04/20/03 — The PRC government announced that the Mayor of Beijing, Meng Xuenong, and the Minister of Health, Zhang Wenkang, were being removed from their positions for failing to effectively combat the SARS epidemic. 04/16/03 — WHO Officials said that the Chinese Government still was not doing enough to combat the new SARS virus. To date, over 1,400 cases have appeared in China. CRS-32 04/11/03 — The United States announced it would not sponsor a resolution condemning China’s human rights record at the annual meeting of the U.N. Human Rights Commission in Geneva. 03/16/03 — At the conclusion of the annual session of the PRC’s de-facto legislature, the National People’s Congress, PRC president Jiang Zemin stepped down and Hu Jintao, current Party Secretary, was named as his successor. 02/28/03 — PRC officials released Zhang Qi, a U.S.-based Chinese dissident detained in China for eight months. Ms. Zhang had been arrested with her fiancé, Wang Bingzhang, who was convicted in a PRC court on February 9, 2003, of spying for Taiwan and planning terrorist acts. For Additional Reading CRS Issue Briefs and Reports CRS Issue Brief IB98034. Taiwan: Recent Developments and U.S. Policy Choices. CRS Report RS21770, Taiwan in 2004: Elections, Referenda, and Other Democratic Challenges. CRS Report RL31729. China-U.S. Relations in the 107th Congress: Policy Developments, 2001-2002. CRS Report RL31661. China’s New Leadership Line-up: Implications for U.S. Policy. CRS Report RS21995. U.S.-China Counter-Terrorism Cooperation: Issues for U.S. Policy CRS Report RS21292. Agriculture: U.S.-China Trade Issues. CRS Report RS20876. Collision of U.S. and Chinese Aircraft: Selected Legal Considerations. CRS Report RS20139. China and the World Trade Organization. CRS Report RL30983. Tibet, China, and the 107th Congress. CRS Report RS20476. China’s Xinjiang-Uighur Autonomous Region: Current Developments and U.S. Interests. CRS Report RS20333. China and ‘Falun Gong.’ CRS Report RL31164. China: Labor Conditions and Unrest. CRS-33 Appendix I Selected Visits by U.S. and PRC Officials December 1-3, 2004 — PRC Special Envoy Dai Bingguo, also vice-minister of foreign affairs, met in Washington D.C. with Secretary of State Colin Powell, National Security Advisor Condoleezza Rice, and Secretary of Defense Donald Rumsfeld. He also held talks with Deputy Secretary of State Richard Armitage. October 25, 2004 — U.S. Secretary of State Colin Powell met with PRC officials in Beijing. He engendered controversy during his visit by saying that Taiwan was not a sovereign nation and the United States favored Taiwan’s peaceful reunification with the PRC. State Department officials later said there had been no change in U.S. policy toward Taiwan. July 8, 2004 — National Security Advisor Condoleezza Rice met in Beijing with senior Chinese leaders, including Party Secretary Hu Jintao, Jiang Zemin (CMC Chair), Li Zhaoxing (Foreign Minister), and Tang Jiaxuan (State Councillor). According to press reports, Ms. Rice rejected PRC demands that the United States stop selling weapons to Taiwan, but offered U.S. assistance in establishing a PRCTaiwan dialogue. June 21, 2004 — U.S. Secretary of Commerce Donald L. Evans began a three-day visit to China, visiting Beijing and Harbin. Remarks he made in both cities can be found at the following website: [ evans_speeches.html] May 10, 2004 — John Taylor, U.S. Treasury Under Secretary for International Affairs, left for a six-day trip to China, Japan, and Korea. He was joined for the China portion of the trip (May 10-11) by Ambassador Paul Speltz, new U.S. financial emissary to the PRC. April 19, 2004 — PRC Vice-Premier Wu Yi left China to attend the 15th meeting of the Sino-U.S. Joint Commission on Commerce and Trade, scheduled in Washington DC for April 21, 2004. April 13, 2004 — U.S. Vice President Dick Cheney began a three-day visit to China as part of a larger visit in Asia that also included visits in Japan and South Korea. During a speech he gave in Shanghai, the Vice President said, “if any changes are to occur with respect to the current circumstances in the strait, it should be through negotiation. We oppose unilateral efforts on either side to try to alter the current set of circumstances....” February 16, 2004 — John Bolton, U.S. Under Secretary of State for Arms Control and International Security, in Beijing attended the third round of U.S.-China consultations on non-proliferation and other security issues. February 10, 2004 — U.S. Under Secretary of Defense Douglas Feith began the sixth round of high-level defense consultation talks in Beijing with PRC General CRS-34 Xiong Guangkai. Feith reportedly expressed U.S. concern about the missile build-up opposite Taiwan, saying it was counterproductive to mutual interests. January 28-February 4, 2004 — Deputy Secretary of State Richard Armitage visited the PRC, meeting with Premier Wen Jiabao and Defense Minister Cao Gangchuan, to discuss issues involving North Korea and Taiwan. While there, the Deputy Secretary questioned the motives of Taiwan’s referendum proponents, saying, “As much as we respect Taiwan’s democracy, the referendum...does raise questions.” January 13-14, 2004 — Chairman of the Joint Chiefs of Staff General Richard Myers visited China, the highest-ranking U.S. military officer to do so since 2000. He met with his counterpart, General Liang Guanglie; Defense Minister General Cao Gangchuan; and Central Military Commission Vice-Chairman Guo Boxiong. December 7, 2003 — PRC Premier Wen Jiabao began his first visit to the United States as Premier. On December 9, 2003, he met with President Bush in the White House, discussing Taiwan, North Korea, and trade issues. November 17, 2003 — Deputy U.S. Trade Representative Josette Shiner began a week-long trip to Beijing to discuss intellectual property rights protection. November 4, 2003 — U.S. Under Secretary of State Alan Larson visited China. Larson is Under Secretary of State for Economic, Business, and Agricultural Affairs on the Millennium Challenge Account. October 29, 2003 — Chinese Defense Minister Cao Gangchuan met with Secretary of Defense Donald Rumsfeld at the Pentagon. It was the first U.S. visit of a PRC Defense Minister since Chi Haotian’s visit in 1996. October 26, 2003 — U.S. Secretary of Commerce Don Evans began a three-day trip to China as part of an eight-day mission to Asia, meeting with Premier Wen Jiabao and also addressing the AmCham (American Chamber)-China Corporate Stewardship Forum. October 17, 2003 — President Bush left for Asia to attend the annual summit of the Asia-Pacific Economic Cooperation (APEC) in Bangkok and visit several other Asian countries, although not China. He is expected to meet with PRC leaders at the APEC summit. July 28, 2003 — U.S. Under Secretary of State for International Security and Arms Control John Bolton began a second round of meetings in Beijing on global security issues, including North Korea’s nuclear weapons program and Iran. April 23, 2003 — U.S. Assistant Secretary of State for East Asian Affairs James Kelly completed a first day of talks in China on North Korea’s nuclear weapons program. CRS-35 February 23-24, 2003 — Secretary of State Colin Powell met with PRC leaders in Beijing as part of a trip to China, Japan, and South Korea.45 February 16-20, 2003 — U.S. Trade Representative Robert Zoellick visited China, making stops in Beijing, Chongqing, Shanghai, and Hong Kong. January 21, 2003 — U.S. Under Secretary of State for International Security and Arms Control John Bolton held talks in China on North Korea’s nuclear weapons program. December 16, 2002 — Lorne Craner, U.S. Assistant Secretary of State for Democracy, Human Rights, and Labor, arrived in China for the China Human Rights Dialogue. He and his group also went to the Xinjiang-Uighur Autonomous Region in China’s far northwest. October 25, 2002 — President Bush held a state visit with PRC President Jiang Zemin at the president’s ranch in Crawford, Texas. October 18, 2002 — U.S. Assistant Secretary of State James Kelly arrived in Beijing to discuss issues involving North Korea. October 8-14, 2002 — U.S. Vice-Admiral Paul Gaffney, President of the U.S. National Defense University, led an eight-member team from the U.S. National Defense University for meetings in China. The group met with PRC Defense Minister Chi Haotian in Beijing, then visited Xi’an, Hangzhou, and Shanghai. Gaffney was the most senior U.S. military officer to visit China since the EP-3 incident in April 2001. August 26, 2002 — Deputy Secretary of State Richard Armitage, in Beijing for a series of meetings, announced that the United States was placing the East Turkestan Islamic Movement, a group in China, on a U.S. terrorist list. June 25, 2002 — U.S. Assistant Secretary of Defense for International Security Peter Rodman arrived in Beijing for official talks. February 21-22, 2002 — President Bush visited China, Japan, and South Korea. The visit resulted in no new U.S.-China agreements, nor were any anticipated. 45 In conjunction with Iraq-related meetings of the U.N. Security Council, Secretary Powell also held bilateral talks in New York in 2003 with PRC Foreign Minister Tang Jiaxuan on January 19, February 4, February 24, March 7, and March 14 of 2003. CRS-36 Appendix II Selected U.S. Government Reporting Requirements International Religious Freedom Report, China (annual report) Most recent date: September 15, 2004 Agency: U.S. Department of State, Bureau of Democracy, Human Rights, and Labor Legislative authority: P.L. 105-292, the International Religious Freedom Act (IRFA) of 1998, Section 102(b) Full text: [] U.S. Commission on International Religious Freedom (annual report) Most recent date: May 2004 Agency: U.S. Commission on International Religious Freedom (USCIRF) Legislative authority: P.L. 105-292, the International Religious Freedom Act (IRFA) of 1998, Section 203 Full text: [] Reports on Human Rights Practices, China (annual report) Most recent date: February 25, 2004 Agency: U.S. Department of State, Bureau of Democracy, Human Rights, and Labor Legislative authority: The Foreign Assistance Act of 1961 (FAA), as amended, Sections 116(d) and 502(b); and the Trade Act of 1974, as amended, Section 504 Full text: [] Military Power of the People’s Republic of China (annual report) Most recent date: May 28, 2004 Agency: U.S. Department of Defense Legislative authority: P.L. 106-65, the National Defense Authorization Act for FY2000, Section 1202 Full text: [] Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions (semiannual report) Most recent date: January 1 through June 30, 2003 Agency: Director of Central Intelligence Legislative authority: FY1997 Intelligence Authorization Act, Section 721 Full text: [] CRS-37 International Narcotics Control Strategy Report, 2002 (annual report) Most recent date: March 1, 2004 Agency: U.S. Department of State, Bureau for International Narcotics and Law Enforcement Matters Legislative authority: Section 489 of the Foreign Assistance Act of 1961, as amended (the “FAA,” 22 U.S.C. § 2291); sections 481(d)(2) and 484(c) of the FAA; and section 804 of the Narcotics Control Trade Act of 1974, as amended). Also provides the factual basis for designations in the President’s report to Congress on major drug-transit or major illicit drug producing countries pursuant to P.L. 107-115, the Kenneth M. Ludden Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2002, Section 591 Full text: [] Report to Congress on China’s WTO Compliance (annual report) Most recent date: December 11, 2003 Agency: United States Trade Representative Legislative authority: P.L. 106-186, the U.S.-China Relations Act of 2000, authorizing extension of Permanent Normal Trade Relations to the PRC, Section 421 Full text: [ asset_upload_file425_4313.pdf] Report Monitoring to Congress on Implementation of the 1979 U.S.-PRC Agreement on Cooperation in Science and Technology (biannual report) Most recent date: Pending (extension given past due date of April 1, 2004) Agency: U.S. Department of State, Office of Science and Technology Cooperation Legislative Authority: P.L. 107-314, Bob Stump National Defense Authorization Act Section for FY2003, Section 1207 Full text: Due date April 1. Still Pending Report on Tibet Negotiations (annual report) Most recent date: June 23, 2004 Agency: U.S. Department of State, Bureau of East Asian and Pacific Affairs Legislative Authority: P.L. 107-228, Foreign Relations Authorization Act, 2003, Section 613 Full text: []