U.S. GOVERNMENT PRINTING OFFICE

64–691 CC WASHINGTON : 2000

S. HRG. 106–518

EAST ASIA IN 2000: PROBLEMS AND PROSPECTS

IN THE YEAR OF THE DRAGON

HEARING

BEFORE THE

SUBCOMMITTEE ON EAST ASIAN AND PACIFIC

AFFAIRS

OF THE

COMMITTEE ON FOREIGN RELATIONS

UNITED STATES SENATE

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

FEBRUARY 22, 2000

Printed for the use of the Committee on Foreign Relations

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/senate

COMMITTEE ON FOREIGN RELATIONS

JESSE HELMS, North Carolina, Chairman

RICHARD G. LUGAR, Indiana

CHUCK HAGEL, Nebraska

GORDON H. SMITH, Oregon

ROD GRAMS, Minnesota

SAM BROWNBACK, Kansas

CRAIG THOMAS, Wyoming

JOHN ASHCROFT, Missouri

BILL FRIST, Tennessee

LINCOLN D. CHAFEE, Rhode Island

JOSEPH R. BIDEN, JR., Delaware

PAUL S. SARBANES, Maryland

CHRISTOPHER J. DODD, Connecticut

JOHN F. KERRY, Massachusetts

RUSSELL D. FEINGOLD, Wisconsin

PAUL D. WELLSTONE, Minnesota

BARBARA BOXER, California

ROBERT G. TORRICELLI, New Jersey

STEPHEN E. BIEGUN, Staff Director

EDWIN K. HALL, Minority Staff Director

SUBCOMMITTEE ON EAST ASIAN AND PACIFIC AFFAIRS

CRAIG THOMAS, Wyoming, Chairman

JESSE HELMS, North Carolina

CHUCK HAGEL, Nebraska

GORDON H. SMITH, Oregon

LINCOLN D. CHAFEE, Rhode Island

JOHN F. KERRY, Massachusetts

RUSSELL D. FEINGOLD, Wisconsin

PAUL D. WELLSTONE, Minnesota

ROBERT G. TORRICELLI, New Jersey

(II)

CONTENTS

Page

Roth, Hon. Stanley O., Assistant Secretary of State for East Asian and

Pacific Affairs, Department of State ................................................................... 3

Prepared statement .......................................................................................... 8

Thomas, Hon. Craig, U.S. Senator from Wyoming, opening statement .............. 2

(III)

(1)

EAST ASIA IN 2000: PROBLEMS AND

PROSPECTS IN THE YEAR OF THE DRAGON

TUESDAY, FEBRUARY 22, 2000

U.S. SENATE, SUBCOMMITTEE ON EAST ASIAN

AND PACIFIC AFFAIRS, COMMITTEE ON FOREIGN RELATIONS, Washington, DC.

The subcommittee met, pursuant to notice, at 2:05 p.m., in room

SD–419, Dirksen Senate Office Building, Hon. Craig Thomas,

(chairman of the subcommittee) presiding.

Present: Senators Thomas and Kerry.

Senator THOMAS. I think we will go ahead and begin. They are

still having conference meetings. We will be on the floor soon, so

hopefully we will be joined by other members, but in any event I

thank all of you for being here. The Subcommittee on East Asian

and Pacific Affairs meets to examine U.S. foreign policy priorities

and challenges likely to emerge in East Asia during the coming

year.

We had a joint hearing recently with our counterparts in the

House. However, this is the first subcommittee meeting of the second session, and I believe a fitting topic. We want to talk about

where we think we are going and what looks to be ahead of us this

year, as we enter into a new time. For those of you familiar with

the lunar calendar, of course, the year 2000 is a dragon year.

I became chairman of this subcommittee about—well, 5 years

ago, and pundits then were noting the significance, what many people were predicting is not to be just the 21st century, but also an

Asian century, beginning under the sign of the dragon, the symbol

of Asia.

The regional surge, of course, in East Asia, also economic as well

as political, the economy, tigers of China and Japan and South

Korea, Indonesia, Singapore, Hong Kong, growing by leaps and

bounds at that time, and everyone covered them routinely, suggesting that Japan was going to replace us shortly, was buying up

Hawaii and California, and the economy in China was pushing 12

percent growth rate, a population that topped 2.3 billion and so on.

Hong Kong and Singapore were vying with one another for the

nerve centers of the region, and so it really was a very positive

thing, one that was really growing, even the nations like Vietnam

and China, Communist nations, were looking a little bit at democratic reform.

Today, the picture is a bit different. The economic crisis of 1997,

of course, had something to do with bursting the bubble there. The

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economies were having troublesome times. Political stability was

threatened from time to time. Indonesia and Japan continued to

hobble along some. ASEAN has lost some of its momentum. China’s

growth has slowed, leadership I think fearful that its initial flirtations with reform would weaken the party’s control over the country, and had cracked down on some of its minority groups and so

on.

So given these, it would seem that the Asian century may be off

to a little slower start, a little more shaky start than it appeared

several years ago. This is, of course, not to minimize the role of

Asia in this century, and so we are going to take a look at that

today, and I feel like it still will be one of the most important regions of the world. Clearly, China, and by extension Taiwan, will

be talking about WTO and the normal trade relations.

We will be discussing the Taiwan Security Enhancement Act,

which concerns me some. We are also looking, of course, at continuous crackdowns in China.

So there are a lot of things to look at, and that is really what

we wanted to do, Mr. Secretary, and I am so pleased you are here.

We certainly have the newly independent East Timor, which is

some concern, and about its ability to fend for itself. North Korean

nuclear questions are still out there, even though the Perry report

still remains unsettled, so we have issues in a number of places.

At any rate, that is our chore, that is our job, that is what we are

here for, so we appreciate very much your coming to be with us.

Please share with us your views of where we are and where we

need to go, and hopefully we will have some time for some questions when we finish.

So thank you, Mr. Secretary. Glad to have you here again.

[The prepared statement of Senator Thomas follows:]

OPENING STATEMENT OF SENATOR CRAIG THOMAS

Good morning. Today the Subcommittee on East Asian and Pacific Affairs meets

to examine U.S. foreign policy priorities and challenges likely to emerge in East

Asia in the coming year. Although we had a joint hearing with our House counterparts two weeks ago, this is the Subcommittee’s first hearing of the Second Session

of the 106th Congress and is, I believe, a fitting topic for us to begin with. I will

keep my opening brief, so that we can get to our witness this morning; we have a

lot of ground to cover.

For those of you familiar with the lunar calendar, the year 2000 is a dragon year.

In fact, it is a double dragon year—a rare intersection of the Chinese zodiac with

the duodecimal cycle that happens only once every sixty years. When I became

Chairman of this Subcommittee almost 6 years ago, pundits were noting the significance of what many people were predicting would be not just the 21st Century, but

also the ‘‘Asian Century,’’ beginning under the sign of the dragon—the symbol of

Asia.

The regional surge in East Asia was both economic and political. Asia’s economies,

the Asian Tigers—China, Japan, South Korea, Indonesia, Singapore, Hong Kong—

were growing by leaps and bounds. Magazine covers routinely predicted the demise

of America’s economic preeminence. Japan was going to replace us shortly, and was

buying up Hawaii and California. China’s economy was pushing a 12% per year

growth rate, its population topped 2.3 billion, and it began expanding its military.

Hong Kong and Singapore vied with each other to be the financial nerve centers

of the region. Countries began asserting their own geopolitical interests—a phenomenon best illustrated by the growing importance of ASEAN in settling regional

disputes. And even in communist nations like Vietnam and China, economic growth

began to spur the first stirring of democratic reform.

But today, as we begin that ‘‘Asian Century,’’ the picture is much different. The

economic crisis of 1997 burst the Asian bubble. Economies began to collapse, and

political stability was threatened. Rather than being surpassed, we found ourselves

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saving our former competitors. Economies were gutted; Indonesia’s and Japan’s still

continue to hobble along. ASEAN has lost its forward momentum. In China, growth

has slowed and the leadership, fearful that its initial flirtations with reform would

weaken the party’s control over the country, has cracked down hard on any perceived threats to its monolithic stability—most notably on the Falun Gong movement.

Given these developments, it would seem that the ‘‘Asian Century’’ is off to a bad

start. That is not to minimize the importance Asia will play in this century. I still

firmly believe that, as a region, its importance both politically and economically will

continue to grow; it may just be that it doesn’t happen as fast, or as inexorably,

as some originally thought. As Chairman, I feel that this year, as in the next decades, we will have to face a majority of our foreign relations and economics challenges in this particular region of the world.

Chief among these clearly will be China, and by extension Taiwan. This year we

have China’s accession to the WTO and China PNTR, both of which I support, and

the dubious Taiwan Security Enhancement Act, which I oppose, on our plate. We

also have a Chinese government that is increasingly cracking down on elements

such as ethnic minorities, pro-democracy advocates, and religious groups.

But China is not the only area of concern. There is a nascent democratic government in Jakarta which is still somewhat unstable due both to the country’s economic woes and an increasingly restive military. Nearby, we have a newly-independent East Timor which is still incapable of fending for itself. The North Korean

nuclear question, even in the aftermath of the Perry report, still remains unsettled.

And there are issues in the Philippines, Cambodia, Japan, and even Mongolia that

will continue to require our attention.

I don’t want to go into too much detail; that’s what Secretary Roth is here for

today and I am anxious to hear from him. Suffice it to say that it will be a busy

year for both Congress and the Administration.

STATEMENT OF HON. STANLEY O. ROTH, ASSISTANT SECRETARY OF STATE FOR EAST ASIAN AND PACIFIC AFFAIRS,

DEPARTMENT OF STATE

Mr. ROTH. Thank you, Mr. Chairman. I am glad to be back. Let

me begin by thanking the subcommittee for holding such a

broadbased hearing. The overwhelming number of hearings that I

do are country-specific, or problem-specific, and it does not give the

administration an opportunity to try to lay out a more comprehensive view of what is going on in the region and what the policy is.

Early in the new year it is particularly helpful to have a session

that starts out with the big picture and then continues on to specific issues of concern.

In my testimony, which is rather longer than usual, I have tried

to cover a number of issues, and even so there are many countries

you will find that are not even mentioned at all. I hope you will

not consider it in any way a slight if a country is not mentioned,

and feel free to ask questions on anything that is on your mind.

Interestingly, I start out my testimony on a slightly more optimistic note than your opening statement. My starting point was

not where Asian Pacific region was 5 years ago, or even 3 years

ago, but I compare it to the last 2 years, and it strikes me that one

of the major events now that is different from when I testified a

year ago has been the dramatic economic recovery in Asia. There

is a great deal of optimism in the region that you simply did not

see a year ago. We have had growth rates of almost 10 percent in

Korea, compared to a very negative growth the year before, a

growth rate of 5 percent in Thailand, growth in almost all of the

region.

When you go back and read what people were talking about 2

years ago and a year ago, when people were talking about lost genVerDate 11-SEP-98 09:16 Jun 16, 2000 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6602 64691 SFRELA1 PsN: SFRELA1
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erations, about needing a decade to recover, talking about the social consequences, and the risk of political instability, Asia has

done remarkably well.

Now, this is not really to differ with you and your facts, but really to suggest a different perspective. Yes, Asia is different than it

was before the financial crisis. Clearly, there is more unemployment. There have been more economic losers than winners in these

individual countries.

There is still the possibility that their recovery may not be as

sustained as we would like, and certainly we are not seeing the

kind of pervasive double digit growth rates that have characterized

so much of the nineties. I am not arguing that Asia is back in the

identical sense, but I am arguing that probably the single biggest

change in the region over the last 12 months has been the economic recovery.

Another change, and I will not dwell on it unless you want to

talk about it in the question period, is a rebirth of interest in regional institutions. You may recall last year there was a lot of talk

about ASEAN being dead, about APEC being moribund and, not

surprisingly, when countries were preoccupied with their economic

survival there was less focus on the regional institutions.

But as the countries are coming out of their economic difficulties,

you are seeing a lot more interest once again in these regional institutions and particularly ASEAN, also a rather vibrant meeting

in Manila, the so-called 10 plus 3 meeting last fall, at which there

was quite a bit of discussion about regional architecture and regional problems. They got the leaders of China, Korea, and Japan

to come to the meeting. So you are seeing a rebirth of Asia thinking of itself as a region again, and ASEAN regaining some of its

confidence. So again the wheel is turning, and the mood is quite

different from a year ago.

Having said that, what I would like to do is start my tour of the

region with the alliances that we have. Too often we start with

some of the problems, but I would like to start with some of our

strengths, and let me begin with Japan. It is particularly appropriate, since Foreign Minister Kono was just in Washington over

the weekend and had a series of meetings, including with the Secretary of the State, the President’s national security advisory, and

U.S. Trade Representative.

We covered a wide range of issues, and my basic message here

today is that the U.S.-Japan bilateral relationship is in excellent

shape. On the security side we have made progress, as you know,

on the defense guidelines. We have made progress on joint research

on TMD. We have the possibility of progress on Okinawa base

issues. There is a new Governor on Okinawa, which has helped to

free up the political atmosphere in a way where it is now possible

to try to come to closure on relocating the Futenma Base. And of

course, we have the G–8 summit meeting coming up over the summer, which is a real opportunity for Japan to focus its attention on

Asian issues.

On the foreign policy side of the ledger, cooperation is strong as

well. We have worked very closely with Japan, for example, both

on Indonesia and on East Timor. Japan has been the largest donor

in East Timor, and one of the largest donors to the Indonesian elecVerDate 11-SEP-98 09:16 Jun 16, 2000 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6602 64691 SFRELA1 PsN: SFRELA1
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tion campaign, generally supporting the same goals as the United

States in both places.

Japan, of course, was a major contributor to Asia, particularly

Southeast Asia, throughout the financial crisis. Outside the region

it has been very helpful on some of our issues such as Kosovo and

the Middle East peace process in terms of its financial contribution.

So we have strong cooperation on the security side of the ledger

and on the foreign policy side of the ledger.

Now, I am not suggesting we have no issues. That would be ridiculous. Clearly, we do. Obviously, one of the key issues this year

will be renegotiating the agreement that provides the host nation

support, which is one of the key components of how Japan supports

our continued forward deployment of troops in their country. It

amounts to roughly $41⁄2 billion a year.

This agreement needs to be renegotiated this year, and obviously

we are interested in maintaining this very robust level of support.

It has been crucial—and you would certainly know this better than

I—to maintaining support for the forward deployment of troops in

Asia in the Congress that the Japanese contribution has been so

generous. This is really a strategic issue and not an accounting

issue.

On the economic side of the house, you are familiar with the difficulties of the Japanese economy. Despite huge fiscal stimulus programs, domestic demand remains weak, and the economy has had

several difficult quarters. This was certainly a major contributing

factor to our record bilateral trade deficit in 1999, because Japanese demand for our exports remained depressed even though our

burgeoning economy was having the opposite effect. We continue to

urge Japan to use all tools for domestic-led growth, including fiscal

and monetary policy, deregulation and restructuring, and more

openness to foreign direct investment.

Particular sectors we are concerned about include prospects for

telecommunications liberalization. We are concerned about cutting

telecom interconnection rates. We want to increase competition in

the marketplace.

Let me turn briefly to Korea. This is a major year, marking the

50th anniversary of the duration of the Korean war. Our ties are

probably in the best shape they have been in recent memory. I

have already mentioned the economic recovery. In terms of our policy with respect to North Korea, there is great cooperation between

the ROK and the United States as well as Japan.

You are probably familiar with this horrible acronym, TCOG,

which describes the trilateral process by which the United States,

Japan, and Korea cooperate in formulating policy toward North

Korea. It is a direct outgrowth of the Perry process, and one of the

successes. When you recall where we were roughly a year ago,

when we had concerns about the suspect site, when we had concerns about the possibility of another North Korean missile test,

when we had concerns about the unity of policy between the three

allies, I we have made a whole great deal of progress throughout

the last year.

Now, obviously, the point you made in your opening statement

is correct. The fact that we have made this progress does not mean

it is immutable, and does not mean the problem is fully solved. It

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is not. We are still awaiting the high-level visit from appropriate

North Korean officials to the U.S. We would like to make progress

in the course of that visit on codifying the moratorium that we now

have on the long-range missile test. We would like to get serious

negotiations resumed both on missiles and on weapons of mass destruction.

So there is a lot of work left, and I do not mean to minimize it,

but again, when you look at it from a short term perspective I

think there has been significant progress over the past year. We remain supportive of South Korean policy, which is engagement with

North Korea, and we think that this policy under Kim Dae Jung’s

leadership has opened up prospects for more creative diplomacy.

We will see if we are able to collect the fruits of that policy this

year.

In my statement, I then go through some of our other alliance

relationships. Mr. Chairman, I do not think we should just focus

on Japan and Korea when we talk about allies, and so I reviewed

the Philippines, Australia, and Thailand. In the interest of time I

suggest I will skip over it orally, but we can come back to it in the

question period, as I think I want to make some comments moving

past our alliances to other countries, starting with China.

Obviously, 1999 was a difficult year in U.S.-China relations. I

will not take up the committee’s time with detailed explanations

about what you already know about the WTO process, Zhu Rongji’s

visit, and the accidental bombing of the embassy. I think you are

fully aware of where we are now, that we have reached the agreement on payments with the People’s Republic of China, subject to

congressional appropriations, but that, I think, is helping us to put

that issue behind us. We have now reached a bilateral agreement

on WTO accession, and the President has publicly enunciated on

many different occasions his commitment to secure permanent normal trade relations this year.

Obviously, the next step is to see if China completes its other bilateral agreements during negotiations resuming with Europe,

which will be critical. I cannot give you an exact timetable, much

as I would like to, of when this issue will be ready for congressional

consideration, but we are determined to deal with it as early in the

year as possible.

Too many people, in thinking about the China relationship, will

focus on the negative side. There have been a lot of dire predictions

about the prospects for the relationship in an election year. I would

like to think that we do have opportunities, building on the WTO

agreement, building on the agreement on the embassy bombing

payments, to move the relationship forward, and there have been

some encouraging signs in that regard.

The fact that there has been a resumption of the military-to-military dialog, with them sending a high-level official here, is significant, although I would not want to overstate the specific accomplishments. Deputy Secretary of State Talbott just led a high-powered delegation to China to engage in a wide-ranging strategic dialog on a number of subjects, and they felt that they had good talks

on a wide range of issues.

Not that we closed our differences on everything, but we made

progress, so I think it is possible, despite the coming election, and

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despite the seriousness of the issues, for us to work together with

China on some issues this year to try to keep the relationship on

a stable footing. Obviously, our ability to secure congressional approval for PNTR will be critical to that effort.

I also should make clear I am not trying to minimize in any way

the significant problems that remain in the U.S.-China relationship. For example, just to take the issue of human rights, we obviously have major differences with China. We believe that the situation went backward over the last 12 months, and there has been

a deterioration in the human rights situation, whether it was the

crackdown on Falun Gong, the handling of political dissidents, the

failure to ratify either of the two covenants that have been signed.

It was not a good year for progress, and for that reason the administration has announced very early its decision to cosponsor a

resolution in Geneva at the Human Rights Commission meeting. It

is not that we seek a confrontation with China for the sake of confrontation, but we feel it important that we speak our mind and

call it as we see it on these human rights issues, even as we are

trying to make progress in other arenas.

At this point, Mr. Chairman, in my written statement I turn to

a brief discussion of Taiwan issues. Since my testimony was put to

bed prior to the release of the white paper that came out yesterday,

there is no reference to it in my testimony itself. I think that may

be of the greatest interest, so why don’t I just offer a few comments

now on that subject.

Clearly, the PRC white paper statement, particularly the aspect

stating that an indefinite delay in cross-strait negotiations would

be a reason to use force, is a source of concern to us. We are in

the process of expressing this concern to China, both here through

their Embassy and in Beijing through our Embassy.

The threat of the use of force to resolve the Taiwan question is

contrary to the commitments contained in the communiques that

are the bedrock of U.S. policy, and to developed longstanding positions that issues between the two sides should be resolved peacefully. We have a clear and longstanding position on cross-strait relations, including our insistence on peaceful resolution of differences between the PRC and Taiwan. We support cross-strait dialog as the best way to resolve those differences, and we will continue to adhere to our one-China policy.

We urge the PRC, as well as Taiwan, to refrain from actions or

statements that increase tensions or make dialog more difficult to

achieve, and to take steps that foster dialog, reduce tension, and

promote mutual understanding. Of course, the U.S. has consistently stated that it is up to the PRC and Taiwan to determine what

constitutes a basis for dialog, but again, the key point in U.S. policy is that we have an abiding interest in the peaceful resolution

of differences between the PRC and Taiwan.

Obviously, I would be willing to come back to this in the question

and answer period.

Finally, in my statement I had a long section on Indonesia in

which I talk about the priority which we are according to Indonesia

as one of the Secretary’s four democratic countries we are focusing

on this year. Over the past year much of the attention was, of

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course, on East Timor. I will not dwell on that, since we did hold

a separate hearing on that about a week ago.

But on Indonesia itself I want to emphasize just how much attention and support the administration is putting into this account,

ranging from what you might call public diplomacy, or open support for the regime, inviting President Wahid early in his administration to the White House. We have already had two Cabinet

members out to visit Indonesia, as well as numerous mid-level officials.

We have increased U.S. aid levels, although they are still relatively modest compared to the needs. We have been supporting

the IMF and the World Bank, each of which has resumed disbursements. We have sent out an interagency assessment team, which

is designed to look at our aid programs and see if they need to be

reshaped, restructured, or enlarged to better deal with Indonesia’s

many problems, and we are trying a different concept.

With the relatively modest resources available to us in the foreign aid budget, we are not going to be doing large-scale development projects. Instead, the Secretary is trying to focus on institution-building, strengthening various institutions in Indonesia

where we have a lot of expertise. Whether it is press, the parliament, the local parliament, or civil society, we are trying to see

how we can strengthen institutions, and that is where we are going

to funnel our resources, rather than into the traditional kind of

large-scale development projects. That will be much more the purview of the World Bank, the Asian Development Bank, and the

other multilaterals.

In my statement I list a lot of the positive developments that

have taken place thus far under the new Government. I will not

review them here, but the point I want to make is, there should

not be any expectation, and there certainly never was an expectation by the administration, that the new Government, no matter

how legitimate, was going to be able to solve all of Indonesia’s formidable problems in the first 100 days.

Many of these problems were created under the 30-plus years of

the Suharto regime, and whether it is reviving the economy, changing the balance of power between Java and the other islands, or

resolving the very tough regional issues, like Aceh, whether it is

finishing the refugee business in West Timor, gaining control over

the military, and the issue of civilian supremacy, there is an enormous amount of work remaining to be done in Indonesia. Our point

is, we are in it for the long haul. This is going to be a very important country, with a lot of problems and a lot of issues for us for

the foreseeable future.

Why don’t I stop at that point, Mr. Chairman.

[The prepared statement of Mr. Roth follows:]

PREPARED STATEMENT OF HON. STANLEY O. ROTH

Mr. Chairman, thank you for the opportunity to testify before your subcommittee

this afternoon, and thank you particularly for choosing to begin the legislative year

with an overview of developments in the region. I hope this hearing will establish

a broad framework as we deal with particular issues across the region in the coming

year.

At this time last year, an overview of the region would have been cast in tones

of measured pessimism. The continuing effects of the financial crisis seemed to offer

the inevitable prospect of a long and difficult recovery. Talk of a coming Pacific cenVerDate 11-SEP-98 09:16 Jun 16, 2000 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6621 64691 SFRELA1 PsN: SFRELA1
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tury seemed to be an inconvenient relic of another time. Instead, regional leaders

were pre-occupied with the consequences of economic crisis and the potential for political instability. Some spoke darkly of a lost generation. But that pessimism has

largely disappeared in the wake of the surprising economic recovery in most of the

region. So I thought it would be appropriate, Mr. Chairman, to begin my testimony

with some comment about the regional economy. After that I will briefly review

some salient developments in countries of particular importance to U.S. interests in

the region.

ECONOMIC RECOVERY

This past year has seen a remarkable recovery from the Asian financial crisis. It

was, by any measure, the major regional development of the past year. Two of the

countries worst hit by the crisis—Thailand and the Republic of Korea—posted robust GDP growth figures of five and ten percent respectively. Other countries, including China and the Philippines, also ended the year with higher GDP growth

than had been predicted at the beginning of the year. Inflation was reduced substantially across the region. With returning growth came renewed optimism.

To be sure, we are not back to pre-crisis economic levels. Clearly there are challenges remaining. The financial crisis was a harsh reminder that economies must

be transparent and financial institutions must lend responsibly. Market discipline

and the rule of law must be strengthened to curb the corruption and cronyism that

were responsible, at least in part, for the economic suffering of the recent past.

Some Asian leaders and economists have ruefully suggested that the recovery may

have come too soon, that in some countries the recovery may dissipate the motivation to make reforms that are still required to ensure the long-term health of the

economy.

In addition, workers in a number of countries have yet to regain the standard of

living they had enjoyed during the previous boom times. Even in Korea, the fastest

recovering economy, unemployment is still higher than it was before the crisis.

Where workers have secured new jobs, many are earning less than they did before,

while prices have risen. The social safety nets, which were so clearly and painfully

absent during the financial crisis, have yet to be put in place in a number of countries.

Finally, it should be recognized that there are two wild cards, which could slow

or even derail the regional recovery. If U.S. economic growth should falter or Japan’s economy take a severe downturn, this could significantly reduce markets and

investment sources important to regional recovery.

THE REVIVAL OF REGIONAL INSTITUTIONS

When they faced economic difficulties, countries in the region quite understandably turned inwards. As their economies have revived, there has been an equally

understandable renewal of interest in regional institutions, such as APEC and

ASEAN. To cite just one example, the ASEAN summit in Manila last November was

the occasion for a successful ‘‘ten plus three’’ meeting between ASEAN, China,

Japan and Korea which offered an opportunity for an unstructured dialogue on both

economic and security issues which concern both Northeast and Southeast Asian nations.

ALLIANCE PARTNERSHIPS

With that, let me turn to some of the specific countries and bilateral relationships

that I know are of interest to the Committee. Let me begin with the alliance partnerships, which have been the firm bedrock of U.S. interests in the region since

World War II. And, let me offer an unequivocal assessment: our alliance partnerships have never been stronger, have never been more important than they are

today.

Japan

No relationship is more important to the stability of the Asian Pacific region than

the U.S.-Japan alliance. This statement has become such a mantra that we sometimes skip past it, but we cannot afford to do so for one simple reason: our security

depends on it. Our bilateral security relationship with Japan is as strong as it has

ever been, and our bases in Japan remain fundamental to our strategic presence in

Asia. Japan is host to 47,000 U.S. troops, second only to Germany, and is home to

the only carrier group home ported outside the United States.

We have worked hard with the Obuchi government to strengthen the U.S.-Japan

security alliance. We agreed on revising the Defense Guidelines to enable us to cooperate more effectively in response to a regional crisis. We agreed to fund joint reVerDate 11-SEP-98 09:16 Jun 16, 2000 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6621 64691 SFRELA1 PsN: SFRELA1
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search on Theater Missile Defense (TMD). With the 2000 G–8 Summit scheduled

to take place next July in Okinawa, the Obuchi government has also been working

hard to resolve U.S. basing issues on the island, particularly the relocation of the

Marine Airstation in Futenma. On November 22, Okinawa Governor Inamine announced his support for relocating this base to a less crowded site in northern Okinawa. On December 28 the Japanese cabinet formally approved the Futenma relocation.

The U.S.-Japan cooperation on a range of foreign policy issues remains a key aspect of our partnership. Japan has played a critical role in KEDO. It has agreed

to fund a significant portion of the costs of the light water reactor, which KEDO

will build at Yongbyon in North Korea, and it has joined in cementing a firm resolute trilateral approach with South Korea and the U.S. toward North Korea.

In Southeast Asia, Japan assisted both Thailand and Indonesia in responding to

the Asian Financial Crisis. Japan has also supported the referendum process in

East Timor and helped fund the redevelopment of East Timor and its transition to

nationhood. A Japanese official now serves as the Deputy UNSYG Special Rep for

the UN Transitional Authority in East Timor under De Mello.

Outside the region, Japan has provided political and financial backing for peace

implementation and reconstruction efforts in Kosovo and is a major supporter of the

Middle East Peace Process. In short, Japan’s interests are global in scope, and as

close allies, the U.S. and Japan share many of the same goals and work together

on a broad range of issues.

Let me turn now to issues that we and Japan are working to resolve, but let me

underscore that these issues occur within the context of a strong and vibrant relationship.

On the security side of the ledger, we must complete successfully negotiations

begun earlier this month at the working-level to renew the five-year Special Measures Agreement, one of the two key components of Japan’s Host Nation Support

(HNS) for our troops stationed in Japan.

Japan provides the most generous HNS of our allies, some $4.5 billion. This is

not merely a financial contribution, but, as Amb. Foley noted in an op ed in ‘‘The

Asahi Shimbun’’ last week, it is Japan’s investment in its own security and in the

stability of the region in which it lives and which is essential to its economic wellbeing.

On the economic side, the health of the Japanese economy remains a continuing

concern both for the government of Japan and for its trade and investment partners,

including the United States. Despite continuing fiscal stimulus efforts by the Obuchi

government, domestic demand remains weak, and Japan’s economy continues to

sputter. Japan’s economic malaise was an important factor in our record high bilateral trade deficit in 1999, as Japanese demand for our exports remained depressed,

while our strong economy continued to absorb their imports. We continue to urge

Japan to use all tools for domestic demand-led growth, including fiscal and monetary policy, deregulation and restructuring, and more openness to foreign direct investment. We are particularly concerned about prospects for telecommunications liberalization, which would generate new jobs and business formation in Japan and

opportunities for U.S. firms; in high level negotiations, we are asking Japan to cut

telecom interconnection rates, to increase competition in the marketplace.

The Republic of Korea

Later this year we will begin commemorating the fiftieth anniversary of the Korean War. This anniversary finds our relationship with the Republic of Korea closer

than it has ever been. I discussed earlier Korea’s remarkable economic recovery.

Here I would like to focus on our continued and growing cooperation in managing

the threat posed by North Korea.

Dealing with the threat of North Korean nuclear and missile proliferation is one

of the greatest challenges we face in East Asia. Thanks to the Agreed Framework

and the Korean Energy Development Organization (KEDO), the very dangerous nuclear facilities at Yongbyon are frozen and under international inspections. South

Korea and Japan have both assumed the vast bulk of the cost of the light water

reactor (LWR) project. It is essential that the U.S. continue to fund our contribution

to KEDO for heavy fuel oil. Only then will this freeze remain in place.

However, a year ago, we faced a new crisis: North Korea’s launch of a Taepodong

missile over Japan in August 1998. Intelligence had also indicated that North Korea

might be developing an underground nuclear site in violation of its Agreed Framework obligations. Amb. Chuck Kartman engaged in intense negotiations with North

Korea to gain access to that suspect site to deal with our concerns. As you know,

our determined pursuit of our concerns regarding the underground site resulted in

access to it last year, and confirmation that it did not contain a reactor or nuclear

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processing facility, nor was it suitable to house either one. We will return to the

site again this year.

Over the past year, we undertook a fundamental review of our policy towards the

DPRK. Thanks to the leadership of former Defense Secretary Bill Perry and State

Department Counselor Ambassador Wendy Sherman, we have created a new framework for our approach to North Korea, built upon the principle that the U.S. remains ready to markedly improve its ties with the DPRK, but only as the DPRK

deals with issues of concern to the U.S., particularly in the missile and nuclear

areas.

Significantly, as we pursued the policy initiatives recommended by Dr. Perry,

North Korea agreed to suspend long-range missile testing while we carry on highlevel talks to improve relations with Pyongyang. We have also laid the groundwork

for the visit to Washington by a high-level DPRK official—a visit which we expect

will fix the dates for renewed talks aimed at eliminating the DPRK’s long-range

missile program, and new talks aimed at dealing with our remaining concerns about

their nuclear weapons program.

At every step along the way, we are consulting closely with our ROK allies, as

well as with Japan, building a solid structure of greatly enhanced allied coordination and cooperation. The new policy approach we have developed is the product of

that unprecedentedly close coordination.

None of the progress we have made would have been possible without the visionary leadership of President Kim Dae Jung. Taking office in the midst of Korea’s unprecedented economic crisis, he has not only led Korea through the challenges of

economic recovery and restructuring, he has also undertaken a resolute engagement

policy designed to expand contacts with the DPRK and seek reconciliation with

Pyongyang.

U.S. policy strongly supports and complements ROK efforts to engage North

Korea in a process that holds the hope of reducing tensions, defusing distrust and

misunderstanding, promoting dialogue, and enhancing stability on this troubled peninsula. Ultimately, the problems of peace and security on the Korean Peninsula

must and should be resolved by Koreans.

Pyongyang should be clear that we and our allies are serious in desiring to engage

positively and build new ties. But we and others who seek better ties with the

DPRK are under no illusions. Whether we are able to make further progress on

these issues will depend on the North’s willingness to engage seriously with us and

to honor its commitments, including its Agreed Framework obligations. We have extended a hand of cooperation to Pyongyang. We trust the DPRK will have the wisdom to grasp it.

The Philippines

Our security alliance with the Republic of the Philippines is among our oldest in

the Pacific, and 1999 saw a significant revitalization of this relationship. On June

1, 1999, the Visiting Forces Agreement between the Philippines and the United

States entered into force. Due in no small part to the strong support of Philippine

President Estrada, the VFA has made it possible for us to resume normal militaryto-military contacts, including numerous ship visits and exercises. Last month, our

two countries held the first large-scale joint exercise since 1993, one which involved

over 2,500 U.S. military personnel.

The Philippines has played an important part in the international effort to assist

in East Timor. It provided 750 troops for INTERFET. Now, a Philippine general,

Jaime Los Santos has taken command of the military component of UNTAET.

The Philippine military requires significant modernization, yet faces very real

funding constraints. We have agreed to help assess the Philippines’ defense needs

so that it can plan a cost-effective acquisition and training program over the next

several years. We have already provided a number of excess defense articles, including coastal patrol craft and trucks. For the last two years, we have allocated $1 million in FMF for the Philippines, and we are seeking an increase in FMF to $2 million for FY 01. This will support the Philippines’ need for modern equipment as it

expands its participation in peacekeeping while providing for its external defense

and internal security in the face of an ongoing Communist insurgency.

Australia

Australian-American cooperation is so consistently strong that it is hard for it to

generate the kind of public attention it deserves. Australia has been by our side in

every battlefield from Korea to Desert Storm. This past year, Australia demonstrated once again why it is such a valuable partner and leader in the region.

When violence erupted in East Timor in September, Australia stepped forward to

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organize and provide the bulk of the personnel for the multinational force that was

sent to East Timor under the authorization of the UN Security Council.

By its actions, Australia provided a role model about how nations can take the

lead in responding to crises in their own region. Expressions of support for Australia’s initiative by you, Mr. Chairman, and others in the Congress were much deserved and, I believe, much appreciated.

Thailand

Thailand was the first country to be hit by the Asian Financial Crisis, and the

economic crisis led to a political crisis. One of the strongest democracies in the region, the Thai responded by installing a new government committed to making the

tough economic choices necessary to enable recovery. Over the past two years, the

government of Chuan Likphai has won international praise for its willingness to

press forward with the reforms necessary to ensure renewed growth and greater

prosperity for all Thai.

Prime Minister Chuan has also led his country into a more active role on the

international stage. We are pleased that Thai Deputy Prime Minister Supachai will

succeed Mike Moore as Director General of the WTO in 2002. We have also welcomed Thailand’s participation and leadership in INTERFET for which it provided

the deputy commander. We are looking forward to Thailand hosting the ASEAN Regional Forum and Post-Ministerial Conference Meetings this summer.

OTHER COUNTRIES IN THE REGION

China

To put it simply, U.S.-China relations went through difficult times in 1999. Despite enormous efforts and high expectations on both sides, it proved impossible to

conclude a WTO bilateral agreement at the time of Premier Zhu Rongji’s visit last

April. In May, U.S. planes accidentally bombed the Chinese Embassy in Belgrade;

Chinese demonstrators damaged a number of U.S. diplomatic facilities in China.

The combination of these two events led to increased bilateral tensions and the suspension of much of our engagement efforts.

President Clinton’s meeting with President Jiang in Auckland in September

turned the tide and provided the impetus for the conclusion of the WTO bilateral

on November 15. This was followed by our December 15 agreement on handling

property issues connected with the bombing, helping to close that regrettable chapter. On January 10 of this year, President Clinton announced the Administration’s

determination to win permanent normal trade relations for China, stating the obvious but essential fact: ‘‘Bringing China into the WTO is a win-win decision. It will

protect our prosperity, and it will promote the right kind of change in China.’’ We

look forward to working with the Congress in coming months to make that win-win

a reality.

With bilateral relations on a positive course, we are working to engage China in

a number of areas of fundamental national interest to the United States. Deputy

Secretary of State Strobe Talbott, led an impressive group—including Under Secretary of Defense Slocombe, Vice Chairman of the Joint Chiefs of Staff General Ralston and Deputy National Security Advisor Steinberg—to Beijing last week for a

strategic dialogue with senior Chinese officials. They discussed our respective strategic views of the world, including regional issues such as the Korean peninsula, Indonesia, and the strategic equation in South Asia as well as our concerns over the

proliferation of weapons of mass destruction. While we should not have any illusions

about our differences on some of these subjects, I think it is worth remembering

that China believes its national interests, like our own, are best served by a world

where stability and security are the norm.

We are also carefully resuming our military-military contacts with China, in a

manner consistent with U.S. national interests. It is important that our military

leaders are able to clearly understand one another, avoid potential problems from

lack of communication and be in a position to work together in areas where we have

mutual interests, such as avoiding incidents at sea.

Within this overall context, I should be clear that I am not in any way trying to

minimize the significant problems that remain. Clearly there remain difficulties in

our relationship with China. With regard to human rights, for example, we have

regularly and vigorously expressed our concern with China’s violation of internationally recognized standards of human rights. On January 11, the Administration announced that the United States would sponsor a resolution at the UN Commission

of Human Rights when it meets in Geneva in March. We took this step because of

the clear evidence that China’s human rights record has deteriorated seriously over

the past year.

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At this point, Mr. Chairman, let me offer a few points about Taiwan and crossstrait relations. I want to underscore once more the three principles that underlie

the Administration’s position on cross-strait relations:

• Our ‘‘One China’’ policy is unchanged; • We have an abiding interest that there be a peaceful approach by both sides

to resolving differences; and • We support dialogue as the best way for differences between the two sides to

be resolved.

With that, let me review briefly some other issues regarding Taiwan. First, the

Administration supports Taiwan’s accession to the WTO on its merits, and we hope

both Taiwan and the PRC will accede this year. Second, Taiwan is in the midst of

an open democratic and energetic campaign to select a successor for Li Teng-hui as

president. It is a fascinating and encouraging example of the democratic process at

work. All three candidates have expressed their support for stable cross-strait relations. I hope that whoever wins—and, of course, the PRC’s leaders as well—will set

a high priority on restoring a meaningful cross-strait dialogue. Such a dialogue,

more than any military equipment, is the key to Taiwan’s stability and security.

At the same time, there should be no doubt that the Administration will continue

its faithful implementation of the security, arms sales, and other provisions of the

Taiwan Relations Act. The efforts of some to amend this successful framework for

our unofficial relations with Taiwan are not merely unnecessary, they actually

weaken Taiwan’s security. That is why, Mr. Chairman, like you, the Administration

is strongly opposed to the Taiwan Security Enhancement Act.

Indonesia

As you and I have discussed before, Mr. Chairman, Indonesia is a country of considerable importance to U.S. interests in the Asia Pacific region. The past twelve

months have witnessed a successful transition from an authoritarian regime toward

a pluralistic, representative democracy. Successful parliamentary elections in June

and the selection of President Abdurrahman Wahid in October enabled Indonesia’s

first democratic government to take office since the 1950s.

The new government came into office with the broad-based legitimacy necessary

to begin to confront Indonesia’s daunting economic and political difficulties. No one

ever expected that President Wahid or his new government would be able to resolve

all of Indonesia’s problems in the first 100 days, or even 1000 days.

With that caveat, the Government has made a promising start in a number of areas:

• President Wahid has successfully asserted civilian control of the military. The

suspension of General Wiranto from the cabinet to await possible legal action

for his role in East Timor is only the most dramatic sign of this important

transformation. • Indonesia signed a memorandum of agreement for a new IMF program with the

IMF on January 20, 2000, leading to the release of a new tranche of IMF funding, and coinciding with renewed disbursements from the World Bank. • President Wahid freed virtually all the remaining political prisoners from the

Suharto era by December 1999, a total of 196 prisoners. • In Aceh, the government has initiated a complex negotiating process with some

of the many different factions demanding a new political arrangement for that

troubled province. While the outcome of the process is uncertain, the government deserves considerable credit for seeking to resolve these difficulties

through negotiation rather than repression.

In all of these areas, significant challenges remain ahead, but the crucial first

steps have been taken, and I am convinced that Indonesia’s prospects are positive.

The U.S. has a profound interest in seeing a successful democratic transition in

Indonesia—a fact reflected in the Secretary having identified Indonesia as one of the

world’s four priority emerging democracies. Nor is our commitment merely rhetoric.

The President welcomed President Wahid to the Oval Office shortly after he assumed the Presidency. UN Ambassador Holbrooke and Secretary of the Treasury

Summers have both visited Indonesia since President Wahid took office.

In response to the urgency and importance of the need, U.S. bilateral assistance to Indonesia is being increased to $125 million for FY 2000. The bulk of this assistance will likely be used to help strengthen Indonesia’s nascent democratic institutions. We are awaiting the recommendations of an inter-agency team that visited

Indonesia in January to gauge how this U.S. investment can most effectively accomplish this and other goals. Helping the Indonesians build an effective and just judicial system, promote civil society, spur continued economic reform, and professionalize national and local parliaments will be among our priority concerns.

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Mr. Chairman, I recently had the honor to testify regarding East Timor before

this subcommittee in joint session with its HIRC counterpart, so I will generally

leave any concerns you might have on that subject to question and answer. There

is, however, one issue affecting our future relations with Indonesia, which must be

considered in the context of Indonesia’s actions in East Timor. That is the issue of

accountability for past atrocities. The President suspended U.S. military-to-military

relations with Indonesia last September because of our concern over the actions of

the Indonesian military in East Timor. Subsequently, as you know, the provision of

certain types of military assistance was conditioned by the Leahy language contained in section 589 of the Foreign Operations Appropriation for FY 2000. Until

these conditions can be met, there will remain significant constraints on our ability

to have a full normal relationship with Indonesia.

CONCLUDING REMARKS

In the interest of time, I have not sought to comprehensively cover all of the countries within my jurisdiction, including some that I know are of interest to members

of this Committee. I would be happy in the question and answer period to redress

this selective focus to encompass all of the countries of the Asia Pacific region.

Senator THOMAS. OK, Mr. Secretary. Thank you.

We have been joined by Senator Kerry. Do you have any comment, Senator?

Senator KERRY. Mr. Chairman, thank you very much. Thank you

for holding this hearing. I know we had the joint hearing with the

House the other day, but this is this committee’s first effort to

begin examining our policies in the region, East Asian region in the

year 2000, and I think it is important that we do so on our own.

I was on a trip to the region in December, and I had gotten to

Myanmar and had a very interesting luncheon with Ang San

Suchee and some meetings with the junta there and proceeded to

Bangkok, having stopped in India for the World Economic Forum,

and regrettably the events of the fire in Worcester, Massachusetts

require that I cancel my trip and return, which I regretted enormously, because I had an important meeting with the prime minister on the tribunal and some meetings with President Wahid and

Senior Minister Lee Kwan Yu, who we will receive here, I believe

tomorrow, Mr. Chairman, and whom I look forward to meeting

with again.

So much of the purpose of my trip, which was also to visit East

Timor, and perhaps Aceh, and come back with a better sense of

things personally, had to be postponed, and I regret that. I was

hoping to be able to think about these issues in that context.

I also had the privilege of being invited to speak before the

Woodrow Wilson Institute on China a couple of weeks ago, and we

had a massive snowstorm in the city, and so I did not do that, and

so it seems that my efforts to try to move forward here are—Mother Nature has other notions.

Senator THOMAS. We are delighted you are here today.

Senator KERRY. But let me just say a couple of things, if I may,

because we are gathered here in a very different context, and I

think it is refreshing that we are. The region we are talking about

has been through a huge amount of turmoil in the last few years,

financial, economic turmoil, and I think we ought to feel pretty

good about where we now find ourselves, by and large, and there

is one large caveat there, and I will speak about it in a moment.

But the experience of Thailand and South Korea particularly

where they vigorously embraced the suggestions of the IMF, the

international community, where they undertook banking reforms,

15

where they put in place transparency, accountability, really has resulted in a very significant turn-around markedly ahead of those

other countries that have resisted that, and I think we are beginning to perhaps see some lessons coming out of that that I hope

other countries will note. Obviously, the story is not fully written,

but the strength of the recoupment, if you will, and the general investor confidence that has returned to those economic arenas is not

insignificant.

Japan, on the other hand, I think many of us remain very worried about, and I think in your statement, Mr. Secretary, which I

just read quickly, you reflect that. I mean, you are very diplomatic

about it, as you ought to be and need to be, but the bottom line

is, there are some real fundamentals of deregulation, of market access, of some of the other kinds of structural reforms that other

countries have embraced which Japan still resists, and which I

think does not auger well for the sort of longer-term transition that

Japan faces, and I know there are great tensions in Japanese society between generations about their expectations and how they will

approach these issues.

So I think it bears watching, and we need to cooperate. There is

the summit there coming up, and there are many opportunities for

us to continue to do that, and I know you share that belief.

In Indonesia, I think President Wahid’s approach has generally

been salutary, and I think you appropriately point to the positive

measures that he has taken which, if there is sufficient followthrough with respect to the accountability for the military actions

in Timor, as well as for the process of holding the Suharto years

accountable and so forth, I think augers well, and I think we can

hopefully hold some very fragile threads together and perhaps even

weave a stronger cloth.

Let me speak to the one issue—I was going to talk at great

length, I said a couple of weeks ago, and I will be speaking next

month in New York at the Foreign Relations Council on the subject

of China, and I am not going to go into it all now, but I was a little

disappointed in your comment today. The white paper comments

are unacceptable. There is no other way to pout it, and the United

States has to be very clear in my judgment. There is a clarity that

to some degree has not always been present in our relationship.

It is clumsy. Perhaps that is a charitable word, to suggest that

it is merely clumsy. We know the leaders of China, whom we have

great respect for in many ways, though we disagree with them

deeply in many ways, are usually more strategic, and I think many

of us were surprised by the bluntness and inappropriateness of this

particular challenge.

Now, if it is merely an effort to try to affect the elections in Taiwan in a month, it is not a very shrewd way to do that, and it carries with it far more profound dangers for the longer-term interest

of the United States and China and, indeed, the globe, which expects more from our relationship than this kind of saber-rattling.

It is inappropriate in terms of how it ties the use of force to negotiations, and the negotiating process, and it is inappropriate with

respect to the expectations that it places on arms sales and on our

rights with respect to the Government of Taiwan that we have asserted over a longer period of time.

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I think you are correct, and I do not argue at all with your reassertion of the one China policy, nor even with our hope for negotiations, but where we disagree in the most stringent, urgent sort of

terms, it is very important for China not to misinterpret where we

are in any way whatsoever, not just behind the scenes in diplomatic communication, but in public, a clear and unconfused forum,

and I think the administration has to be absolutely clear and adamant about this, lest it somehow escalate and, more importantly,

lest it give rise to forces in the U.S. Congress that could have a

profoundly negative impact on all the other things we want to try

to achieve in the course of these next months, which are vitally important to our countries.

I would hope China’s leaders would rethink and perhaps rearticulate, as they sometimes do, what they mean in hopes of clarifying for everyone concerned where this might take us, because I

think that it is a most inadvisable and unfortunate statement, with

potential serious implications to America’s own policies over the

course of the next months.

Thank you, Mr. Chairman.

Senator THOMAS. Let me followup on that a little bit. First, let

me say that I agree entirely. And I know it is difficult, but I do

think that we need to articulate more clearly where we are in

terms of our policy so that we understand it and they understand

it.

My question is, do you have any feel for what prompted the timing of this so-called white paper? Would it have been the election,

do you think? Is it the efforts on the Taiwan Security Enhancement

Act? What is your notion as to the timing here, Mr. Secretary?

Mr. ROTH. It is obviously difficult for me to speak on behalf of

the Chinese Government in terms of their exact motives. Clearly

there has been a lot of supposition that this was related to the election. In fact, the most important point is that we have seen a great

increase in the number of statements and the breadth of the statements on Taiwan for a period of time now.

In other words, this is not, in and of itself, out of the blue. There

was a major speech by Vice Premier Qian Qichen on Taiwan that

attracted a lot of attention a couple of weeks ago. Zhu Rongji met

with a prominent group of American businessmen around the

Shanghai conference and had some significant things to say. And

I think what this is is the cumulative impact of the enormous angst

in China itself about the outcome of the election, where they do not

know who is going to emerge.

China obviously has a hard time with democracy, and they are

indicating their concerns that, whatever regime it is had best stick

to the one China policy and come back to the table on the crossstrait dialog. I give you this analysis not by way of agreeing with

it, and please do not associate me with those comments, but I’m

just trying to answer your question as best I can about what might

be motivating them.

The important point from our side is we have been as clear as

we can be—and I am sorry I did not meet your standards, Senator

Kerry—on the absolute priority which we give to peaceful resolution of the issue. Ultimately, we have said, China needs to avoid

provocative actions in the period leading up to the election, and

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needs to avoid trying to interfere in the election. We have called

for restraint on both sides, and, afterwards, for pragmatism on

both sides, in order to get the cross-strait process restarted.

What is very striking to me has been the moderate positions on

the cross-strait issue taken in the Taiwan election campaign. We

have seen remarkable statements. When the DPP party comes out

and the leader says, we will not declare independence unless Taiwan is actually attacked, that is a major change in policy and a

very moderate step.

Last week the KMT candidate came out with a 10-point proposal,

including suggested confidence-building measures for cross-strait

relations. So we are at a moment where all three candidates in Taiwan have been trying to emphasize pragmatic, flexible positions

that could get the two parties back to the negotiating table. We believe that that is the aspect that should be encouraged, and that

Chinese policy should encourage this rather than discourage this

with the type of statements we saw in the white paper yesterday.

Senator THOMAS. Sometimes it is hard to detect whether or not

these statements that are being made are for outside consumption

or whether they are simply expressing the sort of insecurity in

terms of the leadership as some changes occur in China, in terms

of retaining control. How do you react to that?

Mr. ROTH. My guess is that it is both. You cannot go to China

and talk to the senior leaders without seeing how intensely important the Taiwan issue is. I would call it a preoccupation with them,

both in its own terms—meaning cross-strait—and in terms of its

relationship with the United States. In both cases, it dominates the

issues.

At the same time, I think they are looking at the impact that it

might have in Taiwan itself as they approach the March 18 election. So I do not think it is either/or.

Senator THOMAS. Well, I hope we make our position clear. I am

sometimes a little confused by—even the President visited last

time—make it clear and then stay with that. It seems to me that

we ought not be excited about every statement that is made.

On Indonesia, tell me what kind of success you think the new

President is having in terms of repositioning the military into more

of a civilian police role as opposed to as much leadership as they

have exercised in the past and control over government.

Mr. ROTH. There has been significant progress, but I do not want

to overstate it—meaning there is a long way to go. Let me add

some details on that. First of all, President Wahid has started the

process and had quite a bit of success in demonstrating the principle of civilian supremacy. That is a new concept in Indonesia, and

not one that was built into their political structure, where the military was really built into the politics under the so-called dual function policy, and was the key institution at least under Soeharto.

Now you have a position where, by his appointments, whether it

was of a civilian defense minister for the first time in decades,

whether it was the appointment of an admiral to be commander of

the armed forces rather than an army general, the replacement of

some key generals, including the Jakarta command, including in

the intelligence side, with his own people, and of course the confrontation with General Wiranto, which has led to his suspension,

18

all I think is a pretty impressive package, in a total of 4 months,

in terms of reasserting civilian supremacy.

And, interestingly, despite all the talk about coup attempts, we

never saw any evidence that the military was actually contemplating it or that Wiranto was trying to organize it. It was a feared

outcome and one which we warned about very forcefully, publicly

as well as privately, but the good news is they really did not seem

to be planning it. So even within the Indonesian military, there appears to be a recognition that the Wahid Government has tremendous legitimacy and that a coup is not the way to go if they have

problems with the government’s policies.

So, in that sense, they are off to a good start. That does not begin

to deal with the whole dimension of your question, however, which

is, how do you restructure the Indonesian military and the Indonesian police to get them out of politics, to get them playing more

professional military roles, and to separate the police function from

the military function?

They have started down that path, but are not finished, in terms

of separating the police from the military. And they need to expedite that. We will be working to see if we can find ways to help

them with training the police, which is one of the greatest problems they have in maintaining law and order.

Senator THOMAS. Let me just ask this, and I know it is a broad

issue. You mentioned the Perry report. How would you summarize

the Perry report? What did the Secretary suggest that we do, other

than to continue to communicate?

Mr. ROTH. The key point of Secretary Perry’s initiative was to

suggest to the North Koreans when they address our serious concerns, particularly relating to missiles and weapons of mass destruction, than we are prepared to have a different relationship

with them, a relationship that was not fundamentally adversarial,

that was not committed to trying to bring them down. Instead we

are saying, we are prepared to accept, as is the ROK, the existence

of the DPRK as long as it is addressing our concerns on the security side.

It is an effort to try to change the relationship fundamentally

away from the patterns of the past 50 years. We are requiring

them to address our hard core security concerns. In that regard, we

have made some initial progress, particularly the testing moratorium, on long-range missiles. If you think back to last summer,

there was a lot of speculation that there was going to be another

missile test. That has not taken place.

Ambassador Kartman was able to get the agreement in Berlin

that this would not happen. So there has been some initial

progress. It is not all rhetoric. But it is still in an early stage and

we need to try to move on it. That is why we are seeking the highlevel visit, which would be the reciprocal visit by the North Koreans responding to Perry’s earlier visit to the DPRK. In that context, we would hope to make more progress on these security issues

that I just mentioned.

Senator THOMAS. Senator Kerry, would you like to ask some

questions?

Senator KERRY. Thank you, Mr. Chairman.

19

Let me pick up a little bit on China. Mr. Secretary, I certainly

do not want to be in some kind or any kind of contentious exchange

with you. I am not trying to hold up some sort of silly standard or

something or take some senatorial position here that somehow we

have a different view of this.

My point is simply that if our response is merely—and it is interpretive as much as anything perhaps—if our position is, in response to something they do like this, to simply say, well, we hope

for a peaceful resolution, we have said that 100,000 times. I mean

we have always said—that is our policy—we hope for a peaceful

resolution. So there is really no change in tone, tenor or sort of substance of what we are saying. So they come out raising the ante,

at least in my judgment, and other people’s, and our response is

the same: Oh, we hope for a peaceful resolution.

Whereas what I think we should be saying is what I said in my

statement, a more clear calling to account for this unilateral escalation. Now, some might argue that this is not that much of a unilateral escalation. Last time it was missiles; this time it is words.

In 1996, they required us to put two aircraft carriers into the region. And this time they are firing a paragraph right before the

election instead of doing the missiles.

So I suppose someone could turn around and say, hey, it is a

change for the better. The problem is that, if you read the paragraph, it says that if the Taiwan authorities refuse sine die, and

I suppose it is subject to interpretation when that in fact is—the

end of the final negotiations—and that could be years from now,

the peaceful settlement of cross-strait reunification through negotiations, then they will be forced, forced, to adopt all drastic measures, including use of force, to fulfill the great cause of reunification.

I have heard private statements to that effect. I personally, after

discussions with former Secretaries of State and others who have

held your position, I have no doubt that if Taiwan declared independence unilaterally, China would go to war. I have no doubt of

that. And I think the leaders should know that some of us in the

United States believe that indeed a unilateral action by the Taiwanese would probably invite that reaction.

That is one of the reasons why we bend over backward to try to

make certain that no Taiwanese leader could misinterpret our interpretation of that potential or the Chinese interpretation or what

it might do in terms of our role in the region. And that is obviously

quite different, if they were to invite that, from a sort of unilateral

declaration by the Chinese, oh, we’re frustrated over the negotiations, to hell with all of you, we are taking it.

And indeed, there, there is a different level of what our response

might be. And I agree with all of that. But I think we have got to

be, again I say, much more clear about their responsibility for

these kinds of words and these kinds of unilateral departures from

a lot of hard work that has tried to bring the parties together at

this point.

Now, let me ask you, with respect to the region and our current

relationship with Taiwan, does the administration at this point

have any list of quality or quantity of weapons that we believe we

ought to be selling to Taiwan that we are not that might have an

20

1Listings are for notifications of Foreign Military Sales (FMS) cases pursuant to § 36(b) of the

Arms Export Control Act (AECA) and for sales of Excess Defense Articles (EDA) under § 524

of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2000,

and previous.

impact on their security, or do we believe that the current status

is sufficient to ensure Taiwan’s self-defense as specified in the Taiwan Relations Act?

Mr. ROTH. As you probably know, there is an annual process by

which we review, with Taiwan, what their requirements are, and

make our decisions for each year about what we are prepared to

sell. It is not a static process. We never take the position that simply the status quo is adequate.

We look at it in terms of, on the one hand, Chinese military modernization, how their capabilities are changing on one side of the

strait; second, we look at what are the defensive requirements on

the Taiwan side, what is their absorptive capacity, financial capacity. And we have a pretty vigorous process which results, each

year, in decisions on arms sales, which, as you know, are always

protested by the PRC.

But at no point have we ever suggested that we can simply afford to freeze the arms sales given current developments going on.

Senator KERRY. No, I am not asking about freezing. I understand

the fluidity of it. I am just asking about the assessment, as we are

here today in February 2000, what is the assessment?

Mr. ROTH. All I can say in general terms is we have not met and

decided as a government yet on what the specific arms sales package is going to be this year. That is something that happens later

on in the session. But I believe that there are requirements on Taiwan’s side that need to be addressed. And there will be recommendations and you will see additional sales.

Senator KERRY. So are we currently considering sales of additional type and/or quantity that would affect the balance in our

judgment?

Mr. ROTH. I am not quite sure how to answer that question, because each sale is, in and of itself, incremental. I do not think that

we are talking about anything which so dramatically shifts it in

one way or another. Your question seems to imply some dramatic

shift, and I do not think that is the case. We are talking about a

steady process.

If you would like, I can submit for the record a list of the very

significant arms sales over the 7 years of the Clinton administration.

[The following information was provided subsequent to the hearing:]

MAJOR SYSTEMS NOTIFIED/REPORTED TO CONGRESS

FY 1993–2000 1

1993

• C–13OH aircraft (12) • HARPOON anti-ship missiles (38) • Supply Support Arrangement (FMSO II) • Logistic Support Services for 40 leased T–38 Aircraft • Modified Air Defense System (MADS)

1994

• MK–46 MOD 5 torpedoes (150)

21

• MK–41 MOD (Short) Vertical Launch System • KNOX-class frigates (3) (lease to sale) • AN/ALQ–184 ECM pods (80) • MK–45 MOD 2 5′′/54 gun system • Weapons, Ammunition, and Support for 3 leased Frigates

1995

• PHALANX shipboard weapons system (MK–75 gun) • Supply Support Arrangement (FMSO II)

1996

• Improved Mobile Subscriber Equipment (communications) • M60A3TTS tanks (300) • TH–67 training helicopters (30) • STINGER missiles (465) • MK–46 MOD 5(A)S torpedoes (110) • STINGER-RMP missiles (AVENGER)

1997

• HARPOON anti-ship missiles (54) • TOW 2 anti-tank missiles (1,786) • AH–1W Super Cobra helicopters (21) • OH–58D helicopters (13)

1998

• PATHFINDER/SHARPSHOOTER navigation/targeting pods (26)

• Dual mount STINGER missiles (61)

• KNOX-class frigates (2) (sold)

• MK–46 MOD 5(A)S torpedoes (131)

• HARPOON anti-ship missiles (66)

• Chaparral anti-aircraft missiles (50)

• STANDARD SM–1 surface-to-air missiles (100)

• Supply Support Arrangement (FMSO II)

• Pilot training

1999

• CH–47 SD Chinook helicopters (9)

• AGM–114K3 HELLFIRE II missiles (240)

• SINCGARS (5) radios with IEW systems (5)

• E–2T Hawkeye 2000E aircraft (2)

• LSD–38 ANCHORAGE-class landing ship (1)

• Newport-Class Landing Ship Tank (2)

• Supply Support Arrangment (FMSO II)

2000 (through May)

• HAWK anti-aircraft missiles (162)

• Radar modernization: TPS–43 to TPS–75

Senator KERRY. I understand that. I am just trying to understand where we are going from here in the context of this current

standoff.

Mr. ROTH. More of the same I would say, that we will continue

to try to——

Senator KERRY. With respect to China itself, Strobe Talbott has

just visited. I would assume some of the substance of his conversation was, do not do anything to upset the apple cart. Or in fact,

he may have proffered ways in which we could be more helpful in

sort of working through the problems we have. Specifically with respect to that, there has been an increase in arrests, an increase in

the crackdown on religious activities. Those areas where you most

have an ability to stir emotions around the world and in the United

States, they seem to have been the least respectful of recent times.

Can you speak to that a little bit? Can you assess for the committee what insecurities and/or, if they are not, what judgments is

the leadership of China making that in the face of the difficulties

22

we have on permanent status, on other issues—you are familiar

with them all—they would choose to act this way? What is your

judgment about that?

Mr. ROTH. Again, without putting myself in the position of

speaking for the Chinese Government, I will try to offer an explanation. It is not an endorsement of Chinese actions. Clearly, some

of the developments in China over the past year have created a

sense of threat to the leadership.

Obviously the appearance of 10,000 Falun Gong demonstrators—

or ‘‘supporters’’ is a better word—outside the gates of the leadership compound greatly rattled the leadership, particularly the fact

that it was not predicted or known about in advance. This led to

a decision at the very highest levels to pursue what we call a crackdown on Falun Gong, despite enormous international criticism.

I must say it really is one of the more extraordinary issues that

I have worked on. When I went out to China in July, the foreign

minister, who does not always receive me, not only received me but

literally spent 30 minutes talking about Falun Gong, trying to persuade me that it was a cult and a danger and we would do the

same thing.

When President Clinton met President Jiang in Auckland in September, President Jiang spoke about Falun Gong at great length

and gave the President several books laying forth his position. So

this is clearly something that at the highest level has struck a

nerve and therefore led to this crackdown, which, I should say

again, I am by no means justifying. We think it is completely unjustified and represents a suppression of people trying to peacefully

represent their views that pose no security threat whatsoever to

the regime and are not a political movement.

In trying to answer you, again, I am not trying to justify Chinese

behavior. But when you look at the pattern, whether it is the Falun

Gong crackdown, actions taken against the democracy activists,

some of the steps on the house churches, recent steps on Tibet,

there is a general pattern of retrenchment, of pulling inwards, and

of consolidating control. It seems to be internally driven, with that

dominating over the external aspects of the foreign policy costs.

Senator KERRY. I probably have some followup, but, Mr. Chairman, my time is up.

Senator THOMAS. Thank you.

Today’s paper talks of a group called the Blue Team. And, among

other things, in the paper at least, it says that this team of chronic,

frustrated Hill aides says the lack of access to raw intelligence

about China many suspect the administration holds back data that

might put Chinese developments in a more ominous light. How do

you react to that?

Mr. ROTH. They should read the Washington Times.

Really, I am kind of astonished by it. I think that there has been

an incredible amount of information out, both through open sources

and of course through leaks. For example, there has been quite a

bit of discussion of Chinese missile buildup. I really do not think

there has been any repression at all of information.

Senator THOMAS. Another from this says America’s weakness is

the real danger. Again, how do you respond to that?

23

Mr. ROTH. I am tempted to say that that is a better question for

Secretary Cohen, but the reality is, when you look at the trends in

the military budget and some of the things that are being done to

increase readiness, to improve O&M and the like—all things out of

my jurisdiction—I do not find that an acceptable way of characterizing our policy. I also think that we have a pretty good track

record in terms of cross-strait issues about our strength. It is not

that long ago since March 1996, and I think that act still speaks

for itself. So I do not accept that characterization of our own weakness.

Senator THOMAS. What is the plan for the administration with

regard to normal trading relations? I presume that is an element

that is necessary if you want to move forward with WTO or closer

trade relationships.

Mr. ROTH. The difficulty is in determining at what point to

present the legislation to the Congress. The desire has been to get

this done as early in the year as possible, as far away from the

election and the polemics as possible. But at the same time there

has been a very strong desire, for understandable reasons, in the

Congress to see the exact deal. They want to see China concluding

its negotiations with Europe and with several others, and to see

the protocols before voting on something as significant as PNTR.

So there has been a bit of a race between a desire to get the vote

as early as possible and the desire to see the package completed.

The initial wisdom was that the Congress would insist on waiting

until all the t’s have been crossed and all the i’s have been dotted.

Now there is some consideration as to whether there could be a

conditional package. But that is being debated at a higher level in

the White House. I cannot give you a specific plan yet. We are still

in consultation with the Congress.

Senator THOMAS. I see. Malaysia, there seems to be signs that

the prime minister there is beginning to snuff out political opposition by arresting opposition leaders, as was the pattern before.

How do you react to that? Do you think that is a fact? And if so,

what position do we take with respect to that?

Mr. ROTH. Well, it is clearly a fact, regrettably. If we look at the

arrests of people from the opposition party, not to mention the

treatment of Anwar Ibrahim, it is very clear that there has been

a policy now for over a year of crackdown on people that could be

labelled the opposition. And we have been quite open as an administration in deploring this crackdown. Each time we do, we get a

complaint from the Malaysian foreign minister or deputy prime

minister, but I think that is a price we are prepared to pay.

We regret the notion that commenting on the human rights situation in Malaysia is interference in their internal affairs, which is,

of course, what they insist. This time the real shock was the fact

that most people, most Asians that I have talked to about Malaysia, including many of their colleagues in ASEAN, assumed that

once the election was over, once Prime Minister Mahatir had won

reelection and his party had done well, that that would be the occasion for lightening up, for ending any further crackdown and possibly finding a way out with respect to Anwar Ibrahim himself.

Instead, quite unexpectedly, there was an additional crackdown,

with more individuals arrested, and the pursuit of further charges

24

against Mr. Anwar. So this has taken even ASEAN by surprise,

and I think damaged Malaysia’s reputation and image in the region.

Senator THOMAS. A shift a little bit again. If East Timor is to

successfully become an independent country, with 700,000 people,

with no real economic base, apparently not any real guideline as

to how they will establish a democratic government and so on, who

is going to move in there to provide the kind of assistance that apparently they are going to need to make this a successful venture?

Mr. ROTH. First of all, we have to define what is success. I think

East Timor is never going to be a wealthy place, and that we have

many poor island countries throughout the South Pacific and Western Pacific, many with smaller populations than 700,000, if you

look at some of the countries around. So it is not as if one cannot

be an independent country without being prosperous.

My sense is that it is going to take a long time to try to create

some kind of industry in East Timor, whether it is tourism, or

whether it is coffee agriculture, which has started but needs to be

expanded. In the short term, they are going to be very heavily dependent on foreign assistance. I mentioned at the hearing last

week that we are talking about international pledges of over $500

million for the next 2 to 3 years.

That is a lot of money when divided amongst 700,000 people. So

I think there will be significant aid. From the perspective of the

American taxpayer, there is a good distribution. The majority of

this money is coming from others, not from us. Japan is playing a

large role, Portugal, Australia, the international development

banks. And so this is not a burden that is falling primarily or solely

on U.S. shoulders.

But one cannot project that those levels will continue indefinitely

into the future. Timor is going to have to work hard to develop

sources of income. One of the most important that is just being negotiated now is the question of access to revenues from the Timor

Gap oil and gas reserves that may be out there in the waters between Australia and Timor. There had been an agreement between

Indonesia and Australia about these revenues, and now this has to

be renegotiated to reflect East Timor’s independence. That could be

a very significant source in and of itself.

Senator THOMAS. Senator Kerry.

Senator KERRY. Just quickly, and I am not sure you can answer

it, what is your current readout on the Aceh and Irian separatist

efforts?

Mr. ROTH. Aceh is at a slightly more hopeful moment than it was

a couple of months ago, because I believe the government has been

able to create the belief amongst the opposition factions, of which

there are many, that it is prepared to negotiate, unlike all of previous history. So you now have several different processes going on.

While we were in Davos, there were very important negotiations

taking place between a Swiss NGO and two of the armed resistance movements that sent representatives there. And they are trying to work out an agreement for a cease-fire and then humanitarian aid. They did not reach an agreement yet, but they agreed

to meet again. And if it happens, that would be a major breakthrough.

25

There is also an element, through the minister of state for

human rights, Hasballah Saad, who is Acehnese, to negotiate with

the Acehnese, first of all, on a delegation. There are so many different factions—students, armed resistance, religious leaders, businessmen—that Gus Dur says all the time, what is the address?

You tell me I am supposed to negotiate, but with whom? About

what?

So there is an effort, a creative one, to try to come together with

a group that is not determined by the Indonesian Government, but

rather is representative of most players—they may not get unanimity—in Aceh to negotiation. But that has changed the notion

that this will inevitably be fought out on the ground.

So, in that sense, things appear slightly more hopeful. At the

same time, you should be aware that there is still significant fighting taking place in Aceh, that a lot of people are being killed every

week, and that the fighting is in both directions. Partially, it is an

effort by the government to reassert control which had lapsed in

much of Aceh at the end of last year. So there has been a counteroffensive.

Part of it is violence by the GAM, the free Aceh movement,

against the government forces and the police. So there are high levels of violence on each side. I cannot tell you that we are at the

point of a solution, but at least a solution is theoretically possible

now, and the government appears committed to trying to get it.

And more Acehnese seem interested in this than just a few months

ago.

On Irian, the situation is not as far along either respect. The

good news is in terms of the violence, there is some, but not at the

levels in Aceh. In terms of the political demands, Irian leadership

is far more fractious. And so it is not quite on the same front burner as is Aceh.

Nevertheless, it is clear to us that the conceptual solution has to

be the same combination as in Aceh. It is going to have to be some

mix of increased political autonomy, greater control over natural

resources, accountability for human rights abuses of the past,

something that is a comprehensive package that can address

Irianese concerns within the context of remaining with Indonesia

and preserving its territorial integrity.

Senator KERRY. It is probably dangerous to do it, but are there

any kind of hopes? How would you characterize our expectations or

hopes with respect to either Aceh or Irian?

Mr. ROTH. I would say—this makes me sound like a diplomat—

cautiously optimistic. Which is different from where I would have

been under the two previous regimes. But I do think the government wants to settle these. I think the Gus Dur government recognizes the previous behavior is a blot on Indonesia’s record and, furthermore, that if they are going to preserve the country’s territorial

integrity, they have to address some of the concerns. So you do

have the President involved himself. You do have the creation of

a new minister of state for human rights.

Conceptually, they are on the right track. But now the question

is, can they get to closure on two difficult sets of issues?

Senator KERRY. Let me just explain that the chairman is testifying at another committee. He had expected to be testifying a litVerDate 11-SEP-98 09:16 Jun 16, 2000 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6602 64691 SFRELA1 PsN: SFRELA1
26

tle bit later, but they have just called him to go now. So in a rare

display of bad judgment, a Democrat holds power. And I promise

not to abuse it.

My sense is that President Wahid has surprised, pleasantly, that

he has taken steps that were more forceful and more prompt than

one might have anticipated. I think he has shown a sort of clarity

here about some of the things he needs to do to pull it together

that is positive in terms of the international community’s assessment certainly. Would you agree with that?

Mr. ROTH. Absolutely.

Senator KERRY. Would you say also that, at least till this moment, the suspension of General Wiranto and the efforts to perhaps

hold the military accountable are also bona fide and, if there is follow-through, that that could be a very positive step in helping to

restore credibility to the government?

Mr. ROTH. Once again, absolutely. And you have identified the

key point, which is follow-through. As good as the report of the

human rights commission was, that, in and of itself, is not justice

or accountability. It has to be followed through to the next steps.

It is now in the hands of the attorney general, whom I believe you

know personally, Marzuki Darusman, to make recommendations

for prosecution. And then there is the court process.

But I agree with you, it is a very good start. To get a report from

an Indonesian institution that names names, including senior generals, the Governor of the province, and key militia leaders. If you

had sat down to make a list and asked staff to draw up who they

thought should be looked at, those are the names that were in that

report. So that is a very good start.

Senator KERRY. Good. With respect to North Korea and the delegation visiting here next month and the talks that we will have,

can you share with us perhaps what assurances and/or verifiable

actions we might want the North Koreans to take regarding the

missile program, sites of weapons-related technology and support

for terrorism in order to achieve their goal of lifting economic sanctions and treating them differently with respect to the terrorism,

state sponsored terrorism?

Mr. ROTH. What I would really like to do is offer you a classified

briefing so I can give you an exact answer rather than speak

around it in open session. I do not want to preview our tactics with

the North Koreans in a public hearing.

Senator KERRY. Fair enough.

Mr. ROTH. But there is no desire to withhold that information

from you.

Senator KERRY. Fair enough. I understand that. Can you share

at all publicly whether or not the North Korean negotiators are

mindful of U.S. efforts to develop a defense program with respect

to their missile program and how that might bear on missile defense itself and the ABM treaty?

Mr. ROTH. Well, of course, one of the interesting things when you

talk to the North Koreans is they view themselves as the threatened party, not the threatening party. So they always refer to the

predominance of American military power, U.S. nuclear weapons

and the threats we pose to them rather than ever conceding that

any weapon system under development there could possibly be a

27

threat to us. So it is a bit of a dialog that passes each other in the

night.

Nevertheless, we make sure they understand just how important

these issues are to us. While I would not want to bet on how precise their understanding is of the American political system I think

they are getting the message that this issue is hugely important,

not just to the administration but to the Congress and the American people.

Senator KERRY. Is there some effort with respect to China at this

point, which has proven to be a successful interlocutor with respect

to North Korea in the past? It would seem to me they also have

interests in perhaps seeing their acceptance of that reality. And I

wonder if initiatives are underway to try to assist in making that

happen.

Mr. ROTH. We hold regular, extensive and detailed talks with

China making exactly that point. They should have identical interests with us in this regard. They do not want to see missile proliferation or proliferation of weapons of mass destruction. And furthermore, if North Korean programs threaten other countries, that

is going to heighten the pressure for a TMD, if it is in Japan, or

heighten the pressure for NMD in the United States, two things

which China does not want to see. But China cannot insist that

other countries make themselves vulnerable to threats. That is not

an acceptable position.

Senator KERRY. Mr. Secretary, I would just like to say to you I

underscore your own answer to that. As a 16-year veteran here

now, I can remember when we first began on this committee, arms

control was at the height of our concerns, and we were obviously

still in the high throes of the cold war.

We have just reconstituted the arms control observer group

here—under a new name, but nevertheless. Many of the more senior Senators—Carl Levin and John Warner and many others—are

involved in it, and I am pleased to be part of that. And I simply

want to assert that it seems to me this is a very propitious moment

for the administration to raise the visibility level a little bit of

these kinds of efforts.

I think the President has to do it personally. I am going to personally chat with him to do that. I know the stakes are always

high when you do engage in that kind of high profile effort. But

I think, given the stakes with respect to the ABM treaty, the summer decision timing and the current relationship with China, it

seems to me that here is an area of mutual cooperation, that if it

were to be more augmented might produce enormous results for all

of us. And I would encourage every member of the administration

to try to see if we could find creative ways to raise the profile and

energize our nonproliferation efforts and particularly focused on

North Korea, but obviously elsewhere, too.

Mr. ROTH. Fair enough. That was one of the objectives of Strobe

Talbott’s trip, but it is something we do across the board. The Secretary has done it. The President has done it at some of his meetings. But I will relay your advice back, as well.

Senator KERRY. I respect that, and I know that is going on. As

I say, there is always a measured danger of raising the public profile before all the ducks are lined up. On the other hand, when you

28

raise the public profile, sometimes it creates a global impetus that

helps to line the ducks up. And there is always that balancing act;

I understand that. The stakes are high enough now, with the pressures we have internally in the Senate and elsewhere with respect

to large financial and long-term arms control commitments that

may or may not be made, that I think one cannot expend enough

energy in the next few months on this effort, personally.

Is there any area that you wanted to retouch on that either of

us asked about?

Mr. ROTH. Just an area of personal interest to you, where we are

probably going to continue to need your help, which is Cambodia

and the tribunal. Thanks to your initial conversation with Hun Sen

that started the process of getting people focused on a possible compromise, we have been pursuing that diligently and it has been a

roller coaster, up and down.

But the most important recent development is that UN Secretary-General Kofi Annan was in Cambodia. He met with Prime

Minister Hun Sen, and agreed that they would send a team out to

talk. So rather than reaching deadlock or getingt into a battle over

what is acceptable or unacceptable, there is a process which we of

course have encouraged on both sides to try to get this to ‘‘yes’’ and

come up with something that fully respects Cambodian sovereignty

and at the same time fully respects the legitimacy of international

concerns. This has to be not a show process but a genuine judicial

process.

We are not there yet, but, as of today, the process is on the right

track in terms of this team going out.

Senator KERRY. Well, I am very appreciative of that. I know you

have expended energy on it, as has the Secretary General. In my

conversation with the prime minister, he made some mention of

perhaps my being out there in a month or so. And I suggested that

if I thought it could be helpful, I was willing to try to do that.

Mr. ROTH. We may call on you.

Senator KERRY. If it is, I would be happy to try to do that, and

see if we could leverage that. It would be good to get it included.

A final question just very quickly. When we were both in Davos,

there was some conversation with people there about the transition

of Hong Kong and what that might or might not augur with respect to Taiwan ultimately. Do you have any concerns about the

ways in which things have transpired with respect to Hong Kong

since the hand-over? And what would your judgment, just quickly,

be about the status of Hong Kong at this point in time?

Mr. ROTH. Well, let me give you a quick snapshot and give you

a longer answer for the record, because I think it is complex.

[The following response was received subsequent to the hearing:]

Question When we were both in Davos, there was some conversation with people

about the transition of Hong Kong and what that might or might not augur with

respect to Taiwan, ultimately. Do you have any concerns about the ways in which

things have transpired with respect to Hong Kong since the hand-over? What is

your judgment about the status of Hong Kong at this point in time?

Answer. The transition of Hong Kong from British to Chinese control has gone

very well. Before July 1997, many people expressed concerns about freedom of the

press, the ability to conduct business, and the presence of the PLA. On each count,

the record has been quite encouraging. Many of the unique characteristics of Hong

Kong have continued to flourish.

29

While we have some concerns, Hong Kong remains a free place that extends basic

civil liberties to its citizens, defines its identity in terms of being an open international city, and largely continues to make its own decisions in terms of its vision,

identity, and economic interests. Its export control policy and procedures remain

world class—centered on its interest in access to high technology from the industrialized countries in order that Hong Kong can develop into a leading international

information technology center. Bilaterally, we continue to work closely with the

Hong Kong authorities to counter transnational crime, including narcotics trafficking and alien smuggling. We coordinate efforts to block the illegal transshipment

of arms and the proliferation of weapons of mass destruction.

At the same time, there have been some developments that cause concern. The

Hong Kong Government’s request in June for an interpretation of the Basic Law by

the National Peoples Congress in Beijing in order to change the prospective effect

of a particular Hong Kong Court of Final Appeal ruling, no matter how understandable in terms of motivation, raised questions about the authority of Hong Kong’s

highest court—questions that can only be resolved by looking at how subsequent

cases are being handled. The jury is still out. If this use of the interpretation mechanism were truly exceptional, then the impact on Hong Kong’s autonomy could be

negligible. In this regard, I would note that Hong Kong’s particular strength is the

large number of individuals and organizations (such as civic organizations, Legislative Council, the Court of Final Appeal) that speak up about their concerns on a

regular basis and whose voices are fully reported by Hong Kong’s active media.

We have also been disappointed by Beijing’s unwillingness, after our accidental

bombing of the Chinese embassy in Belgrade, to leave Hong Kong out of the vicissitudes of U.S.-PRC relations by suspending for a period approvals for U.S. naval ship

and aircraft visits to Hong Kong. Fortunately, these visits appear to be back on

track now; Hong Kong recently received both the U.S.S. Blue Ridge and the U.S.S.

Stennis carrier task force. Again, further recourse to this sort of action raises questions about Hong Kong’s status as an open, cosmopolitan city.

Overall, we continue to watch developments closely. The United States has a significant interest in Hong Kong’s future stability, prosperity, and democratic development. Like many economies emerging from the Asian financial crisis, Hong Kong

faces challenges on this score.

Mr. ROTH. If you asked me the bottom line, the Hong Kong transition has gone very well. When you look at some of the fears prior

to reversion and the actual situation now, in terms of freedom of

the press, in terms of the ability to do business, in terms of not importing Chinese styles of corruption, in terms of not having a heavy

handed military presence, there are many different indicators that

lots of aspects of Hong Kong have stayed the same.

There are some areas where there has been trouble, particularly

some of the questions of the courts and the question of the applicability of Chinese law to Hong Kong and whether China serves as

a final arbiter on the right of abode, a contentious case. So it has

not been perfect, and I will give you a more detailed answer for the

record, but, in general, it has been good.

Unfortunately, in terms of your specific question, though, it is

largely irrelevant. Taiwan repeatedly insists that it is not interested in Hong Kong as a model, that a one country/two systems is

an irritant, not a solution, and that they do not view themselves

as in any way comparable to what took place in Hong Kong. Therefore they resent the notion that the same formula should be applied to them.

We have suggested to the parties that they try getting beyond

the semantics. It is not a question of one country/two systems, because China has already made it clear that it is prepared to do

some things very differently vis-a-vis Taiwan—for example, in relationship to military forces. So rather than get stuck on the label,

where they are stuck, they should try to come up with pragmatic

solutions. But I suspect that Taiwan is not looking at Hong Kong

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really, much, one way or the other. A very negative situation in

Hong Kong would affect Taiwan, but the positive side of the ledger

does not change their basic view.

Senator KERRY. I think that is good advice. On that, Mr. Secretary, thank you very much for taking time to appear before the

committee. And thank you for your good work.

And would you also pass this along. I think the administration

should be thanked and congratulated for the initiative which you

have asked Bill Perry to follow through on. And he and Wendy

Sherman I think have done a terrific job of helping to steer us in

the right direction there. And hopefully that will bear fruit. He has

been a wonderful communicator with the Congress on all sides, and

we are very appreciative of that initiative.

Thank you. We stand adjourned.

[Whereupon, at 3:15 p.m., the hearing was adjourned.]

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