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48–013 PDF 2008

S. HRG. 110–763 

UNITED STATES–CHINA RELATIONS IN THE ERA 

OF GLOBALIZATION 

HEARING 

BEFORE THE

COMMITTEE ON FOREIGN RELATIONS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

MAY 15, 2008 

Printed for the use of the Committee on Foreign Relations 

( 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

COMMITTEE ON FOREIGN RELATIONS 

JOSEPH R. BIDEN, JR., Delaware, Chairman 

CHRISTOPHER J. DODD, Connecticut 

JOHN F. KERRY, Massachusetts 

RUSSELL D. FEINGOLD, Wisconsin 

BARBARA BOXER, California 

BILL NELSON, Florida 

BARACK OBAMA, Illinois 

ROBERT MENENDEZ, New Jersey 

BENJAMIN L. CARDIN, Maryland 

ROBERT P. CASEY, JR., Pennsylvania 

JIM WEBB, Virginia 

RICHARD G. LUGAR, Indiana 

CHUCK HAGEL, Nebraska 

NORM COLEMAN, Minnesota 

BOB CORKER, Tennessee 

GEORGE V. VOINOVICH, Ohio 

LISA MURKOWSKI, Alaska 

JIM DEMINT, South Carolina 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

ANTONY J. BLINKEN, Staff Director 

KENNETH A. MYERS, JR., Republican Staff Director 

(II)

C O N T E N T S 

Page 

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, opening statement ... 1 

Campbell, Dr. Kurt, chief executive officer, the Center for a New American 

Security, Washington, DC ................................................................................... 37 

Prepared statement .......................................................................................... 41 

Haass, Hon. Richard, president, Council on Foreign Relations, New York, 

NY ......................................................................................................................... 30 

Prepared statement .......................................................................................... 34 

Harding, Dr. Harry, University Professor of International Affairs, The Elliott 

School of International Affairs, George Washington University, Washington, 

DC .......................................................................................................................... 48

Prepared statement .......................................................................................... 51 

Lugar, Hon. Richard G., U.S. Senator from Indiana, opening statement ........... 4 

Negroponte, Hon. John D., Deputy Secretary, Department of State, Washington, DC ............................................................................................................. 6 

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

Responses to questions submitted for the record by Senator Richard 

Lugar .............................................................................................................. 66 

Responses to questions submitted for the record by Senator Barbara 

Boxer .............................................................................................................. 67 

(III)

(1) 

UNITED STATES–CHINA RELATIONS IN THE 

ERA OF GLOBALIZATION 

THURSDAY, MAY 15, 2008 

U.S. SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, DC. 

The committee met, pursuant to notice, at 2:07 p.m., in room 

SD–419, Dirksen Senate Office Building, Hon. Joseph R. Biden, Jr. 

(chairman of the committee) presiding. 

Present: Senators Biden, Kerry, Nelson, Cardin, Lugar, Voinovich, Murkowski, and Isakson. 

OPENING STATEMENT OF HON. JOSEPH R. BIDEN, JR., 

U.S. SENATOR FROM DELAWARE 

The CHAIRMAN. The hearing will please come to order. 

Mr. Secretary, welcome. 

Let me, at the outset of this hearing—I want to express my condolences, as I’m sure every American does, to the people of China, 

who are working to recover from what is a God-awful, devastating 

earthquake. I keep thinking of this in terms of the tragedy that we 

went through in Katrina. And, my gosh, I mean, it’s just—what’s 

happening in China, and, for that matter, in Myanmar and in 

Burma, is just—it’s just staggering. And at least 20,000 people 

were reported to have been killed by the quake that struck western 

China on Monday, and authorities fear the toll could climb higher, 

as many of the missing are feared dead, buried beneath those collapsed buildings. And our hearts go out to the Chinese people. And 

I know—and I hope they know that, as the President and the 

administration and the Congress has said, we stand ready to help 

in any way we can. 

Senators Boxer and Murkowski have drafted a resolution expressing the sympathy of the American people for China during 

this tragedy, and I—I’m sure, with every member of the committee—join them in expressing what I’m sure are going to be a 

unanimous view on the floor of the United States Senate. 

Good afternoon, Mr. Secretary. Today the Foreign Relations 

Committee convenes the first in what will be a series of hearings 

on China. Further hearings will focus on economic relationships, on 

energy and environment, on China’s growing soft power in Asia, 

Africa, and Latin America, and on China’s internal political and 

economic challenges. 

And just last week the Congressional Research Service released 

a comprehensive study commissioned by us, on the Foreign Relations Committee, that takes stock of China’s soft power and its imVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 H:\DOCS\US-CHINA.TXT BETTY
2 

plications for U.S. interests and those of our friends and allies. The 

study, which is available on our Web site, highlights both the challenges and opportunities of China’s reemergence as a great power. 

Let me begin by saying I welcome all the witnesses today, but 

especially the Deputy Secretary of State, John Negroponte, who is 

no stranger to this committee, a leader of the administration’s senior dialogue with China. 

There’s a view in Washington that the United States and 

China—a view held by some—that the United States and China 

are fated to confrontation. In this view, the great struggle of our 

time will be between liberal democracies like the United States and 

autocracies like China and Russia. Some liken this struggle to the 

great ideological battles of the cold war, and they often suggest 

that cold-war remedies are needed to challenge—to meet the challenges of the 21st century. 

But, I believe this view is mistaken. There is a more powerful reality, in my view, that trumps this pessimistic world view. For all 

of China’s emerging power and all of America’s great strength, neither of us can solve the problems we both confront without the 

other. From the spread of weapons to the scarcity of resources, 

from the threats to our planet to the dislocations in our economies, 

we have shared interests, and, on most fundamental issues—even 

as we disagree on other matters, on shared issues we have a profound common interest. 

China and the United States may well be destined for competition, which I believe they are, but nothing dictates that we are 

headed for confrontation, and everything argues that it’s in America’s national interest to forge an affirmative agenda with China. 

But, how do we get there? How do we make the most of the opportunities that are inherent in China’s rise, while addressing the 

challenges that accompany China’s reemergence as a global power? 

The place to start is with—in my view, with intense, sustained, 

high-level engagement between the United States and China across 

every issue area. Through engagement over the past 30 years, 

we’ve built a common interest and managed problem areas before 

they’ve developed into crises. Engagement with China has been a 

successful approach, encouraging fundamental change in the 

world’s most populous nation. But, engagement alone is not 

enough. We must complete the process of integrating China into 

the international system, and push it to adopt laws and policies 

consistent with international norms. 

Two areas, two key areas, merit special attention, in my view: 

Energy and the environment. China’s drive for energy is churning 

global markets and expanding their presence in Africa and elsewhere, and China is now the single largest source of greenhouse 

gases, having overtaken the United States for that dubious distinction. 

Working with our European and Asian friends and our allies to 

convince China to address energy security and environmental challenges should be among the very top foreign policy priorities of the 

next administration. Our approach to China emphasizes integration, but we must be prepared to take China as—we must be prepared if China takes an unexpected radical turn and strives to undermine our vital interests and those of our allies. We not only 

3 

need to reinvigorate our existing alliances, but we also need to 

think about how China should be involved. The six-party talks in 

North Korea demonstrate the benefit of an inclusive approach to 

security challenges in East Asia. 

But, what kind of power is China? Where is it heading? China 

is so big and diverse that most anything I could say about it is 

true—would be true. China is rich; China is very poor. China is 

strong; China is very weak. It’s confident—witness the Olympics; 

and insecure, as evidenced by the response to the Tibetan unrest. 

Over the past 30 years, we’ve witnessed an incredible transformation in China, starting with an almost 10-percent annual economic growth lifting 400 million people out of poverty. In 1978, 

China had 300,000 registered private businesses; today it has 30 

million private companies. China today has 106 billionaires, ranks 

third in the world in gross domestic product after the United States 

and Japan, and is sitting on more than 1.5 trillion in hard currency 

reserves. 

Last year, for the first time since the end of World War II, China 

contributed more to global economic growth than did the United 

States. So, today it’s accurate to call China a rich country. Or is 

it? Because China is also a very poor country. For all its impressive 

growth, China still ranks only 100th in the world in per capita income, about the same as Mali. China still has about 400 million 

people living on about $2 a day. China faces enormous challenges— 

an aging population, a degraded environment, a growing social unrest fueled by income inequities and endemic corruption, just to 

name a few. 

And the security picture is mixed, as well. China’s spending in defense has grown rapidly. It now spends somewhere between $50– 

$100 billion on defense, and it’s working hard to acquire systems 

and capability it needs, in its view, to defend its global interests. 

But, that’s still only 15 percent of what we spend on defense. China’s force-projection capabilities remain quite modest. It has a few 

dozen strategic nuclear weapons, to our thousands. And China 

struggles to attract and retain highly educated soldiers it needs to 

fight a high-tech war under modern conditions. 

The limits of China’s military power were evident during the 

Asia tsunami of December 2004, when it was the United States, in 

partnership with Japan and Australia, who rallied first and were 

able to sustain relief efforts thousands of miles from our shore, in 

China’s backyard. And I could say the same about what’s going on 

right now in China, in dealing with the earthquake. 

So, the picture is mixed. China is, arguably, the worst—the 

world’s first poor great power, a leading and economic and military 

power, but also a nation confronting enormous challenges. 

It presents, in my view, a unique challenge to U.S. policymakers, 

and we need to resist trying to plug China neatly into some coldwar paradigm or a 19th-century world view of great power rivalry. 

To advise us on how we get this vital relationship right—and I 

don’t think anyone knows for certain—I know I don’t—how to build 

on the opportunities and deal with the challenges, the committee 

has called on four very able individuals. We’ll first hear from Deputy Secretary of State John Negroponte. The committee will then 

hear from Dr. Richard Haass, president of the Council on Foreign 

4 

Relations, and Dr. Kurt Campbell, CEO of The Center for New 

American Security, and Dr. Harry Harding, a former dean of the 

Elliott School of International Affairs at G.W., and one of America’s 

leading scholars on China. 

So, I welcome you all. I look forward to this testimony. And I’ll 

end where I began. This will be one of only a series of hearings, 

the opening hearing, which will be more general in its focus than 

others will be. And we’ll have numerous hearings, both at a full 

committee and subcommittee levels, dealing with specific aspects of 

China’s emergence. 

So, I yield now to my colleague, Chairman Lugar. 

OPENING STATEMENT OF HON. RICHARD G. LUGAR, U.S. 

SENATOR FROM INDIANA 

Senator LUGAR. Well, Mr. Chairman, I thank you for calling this 

hearing. 

I welcome back to the committee Secretary Negroponte. 

Today, as we consider policy toward China, we send our very 

special thoughts and prayers, as you have mentioned, to the people 

affected by the devastating earthquake, and we note with sympathy and with high regard the responses of the Chinese Government to meet the needs of the people. 

The United States must come to grips with the incredibly complex set of problems, choices, and opportunities that China represents. Clearly, we have sharp differences with the Beijing government on many issues, including human rights, democratization, 

religious freedom, the protection of intellectual property rights, 

Chinese currency policy, the safety of Chinese consumer products, 

the militarization of space, the status of Tibet, matters related to 

Taiwan, and other issues. Though progress has been made in some 

areas, most of these issues are unlikely to be resolved in the short 

run. 

In recent years, United States-China ties have advanced on several fronts, including military-to-military relations and cooperation 

on antiterror initiatives. Beijing has an integral role hosting the 

six-party talks intended to eliminate North Korea’s nuclear weapons program. And this has been a valuable venue for extended dialogue between our diplomats and Northeast Asian counterparts on 

other items, as well. 

Recently, China and Taiwan are interacting on relevant issues in 

more measured tones. Among other positive steps, I encourage China’s acceptance of Taiwan’s participating as an observer in the upcoming World Health Assembly of the World Health Organization. 

Economically, U.S. exports to China rose by nearly 240 percent 

from 2001 to 2007, significantly more than exports to any of our 

other top 10 trading partners. Yet, we are mindful that the annual 

U.S. trade deficit with China has risen to approximately $256 billion. Many U.S. officials have insisted that China’s currency was 

undervalued in comparison to the United States dollar, making 

Chinese exports to the United States cheaper, and, consequently, 

United States exports to China more expensive. 

Congressional Research Service reports that, ‘‘China is the second largest foreign holder of U.S. Treasury securities, at $487 billion, and, while China’s purchases enable the United States GovVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 H:\DOCS\US-CHINA.TXT BETTY
5 

ernment to finance the budget deficit, helping to keep interest rates 

low in our country, some have raised concerns that China could destabilize the U.S. economy if it decided to suddenly attempt to sell 

off its debt holdings.’’ 

Also, there is concern that China’s establishment of a multibillion sovereign fund may be used to acquire foreign companies, energy companies among them. Beyond your bilateral relationship 

with China, we must recognize that China’s economic emergence is 

a crucial consideration in finding solutions to global energy, climate, and food. 

Unfortunately, the United States debate on contentious issues 

between our two countries is often oversimplified, parsed out in 

sound bites, omitting realities of the broader trade and economic 

interaction. China’s rapid economic growth and industrialization 

are obliterating old ways of thinking about the global economy. We 

celebrate the rise of hundreds of millions of people out of poverty; 

yet, our policies have not yet fully comprehended the consequences 

of that many people eating more meat or driving more cars. China’s economic growth depends upon having adequate supplies of 

energy, and this will lead to increasing scarcity of global energy 

sources and surging greenhouse gas emissions in the absence of 

massive deployment of new technologies, such as clean coal, carbon 

capture and storage, industrial efficiency, alternative fuels, and 

advanced technology vehicles. 

Consider that in 2007 alone, demand for power generation in 

China expanded by a phenomenal 16 percent. This figure followed 

a 14-percent increase in demand for power in 2006. The Chinese 

coal plants that came online in 2006 alone added a net 80 gigawatts of electric generation to the Chinese system, and this amount 

was roughly equal to the entire electrical capacity of Great Britain. 

Vehicle sales in China increased by more than 25 percent in 2006 

as China passed Japan to become the second largest vehicle market 

in the world, behind the United States. The 7.2 million vehicles 

sold in China in 2006 were four and a half times as many as were 

sold just 9 years earlier. 

The resulting demand for transportation fuels has focused the 

Chinese Government on an aggressive global search for reliable oil 

supplies. Technological breakthrough that expand energy supplies 

for billions of people worldwide will be necessary for sustained economic growth. If concerns over climate change are factored into 

policies, the challenge becomes even greater, because serious efforts 

to limit carbon could constrain energy options, particularly the use 

of coal. In the absence of China’s participation in revolutionary 

changes in energy policy, we will be risking multiple hazards for 

the world that could constrain living standards and leave us highly 

vulnerable to economic and political disasters with an almost existential impact. 

I look forward to our discussion today, as the chairman has 

pointed out, at the beginning of a number of constructive hearings 

on China. As—and I asked, and congratulate Chairman Biden that 

he has asked, Secretary Paulson to testify, and we are hopeful that 

the Secretary will come forward in exploring the strategic economic 

dialogue with China as a part of this series. 

I thank the chairman. 

6 

The CHAIRMAN. Thank you very much. 

Thanks for your patience, Mr. Secretary. Welcome, again, and 

the floor is yours. 

STATEMENT OF HON. JOHN D. NEGROPONTE, DEPUTY 

SECRETARY, DEPARTMENT OF STATE, WASHINGTON, DC 

Ambassador NEGROPONTE. Thank you very much, Mr. Chairman, 

Senator Lugar, members of the committee. Thank you for the 

opportunity to speak with you today about United States policy 

toward China. 

Today’s hearing comes at an opportune moment, since I have just 

returned from a 2-day visit to Beijing. While there, I met with senior Chinese Government leaders to discuss issues of bilateral and 

international concern. One of the administration’s major foreign 

policy objectives is to engage with an increasingly influential China 

to affect choices that Chinese leaders make in ways that serves 

global stability and United States interests. 

China is a permanent member of the U.N. Security Council. It 

possesses one of the world’s largest and most dynamic economies. 

It is a nuclear power. And it is the seat of a great civilization. 

United States-China cooperation is in our mutual interest. 

Before addressing three important dimensions of United StatesChina cooperation, I want to express condolences, on behalf of our 

Government, to the Chinese people for the tragic loss of life from 

Monday’s earthquake in Sichuan province. We have transferred 

$500,000 to the International Federation of the Red Cross and are 

exploring ways to make additional assistance available to China 

through public-private partnerships and other means. Our interest 

in the immediate welfare of the Chinese people at such a moment 

is emblematic of our broader commitment to strategic dialogue and 

cooperation with China as a nation. 

Today, I’d like to focus on three vital dimensions of our relations 

with China: Maintaining peace and stability in Asia; motivating 

China’s positive contributions to global stability; and encouraging 

China’s greater respect for human rights and freedom of expression. 

With respect to peace and stability in Asia, we welcome the fact 

that China has repeatedly reassured its neighbors that its rise is 

peaceful and will benefit the entire region. This facilitates our 

efforts to urge China to exercise leadership in addressing regional 

problems, particularly with regard to the Korean Peninsula and 

Burma and in pursuing dialogue with Taiwan. We work closely 

with China on our shared six-party goal of the complete and 

verifiable denuclearization of the Korean Peninsula. China’s leadership as chair and host of the six-party talks has been essential to 

the progress we have made so far. 

We also think the eventual establishment of a framework for 

peace and security in Northeast Asia would be advantageous for 

the region as a whole. Such a framework would complement our 

enduring alliances in Asia. China must, of course, play an important role in any such undertaking. 

Burma is a separate regional challenge. The situation in Burma 

is unstable and unsustainable. We welcome the fact that China has 

pressed the Burmese regime to cooperate with the international 

7 

community in providing humanitarian assistance in the wake of 

Cyclone Nargis. China has also urged meaningful dialogue between 

the Burmese regime and the democratic opposition and ethnic minority groups. We want to work with China more to persuade the 

Burmese regime to move away from its political repression and disastrous economic mismanagement. 

Regarding Taiwan, we are encouraged by news of the initial 

meeting between President Hu Jintao and Taiwan’s Vice-Presidentelect, Vincent Siew. We remain concerned, however, about the 

PRC’s continued military buildup, and have urged the mainland’s 

leaders to show more flexibility in their approach to cross-strait relations. We do not support Taiwan independence. We want crossstrait differences to be resolved peacefully and according to the 

wishes of the people on both sides of the strait. Nobody should 

question our resolve in insisting on such a peaceful process. 

As China becomes more integrated in international economic and 

political institutions, its ability to contribute to global stability, the 

second theme I’d like to address, is growing. Beijing’s traditional 

principle of noninterference is giving way to diplomatic interventions that highlight China’s stated ambition: To be seen as a responsible major power. 

We have welcomed China’s support for a number of U.S. initiatives in the United Nations Security Council. These have included 

sanctions resolutions against North Korea and Iran, and a hybrid 

peacekeeping mission for Darfur. China’s support for these positions would have been hard to imagine several years ago. At the 

same time, we continue to encourage China to take into consideration the full impact of its diplomatic and trade policies, particularly in areas of instability and civil unrest, like Sudan. 

I would like to conclude by speaking about the Chinese Government’s respect for human rights and freedom of expression. Our 

position is clear, grounded in our national values and national experience. We believe the expansion of individual freedoms and 

greater political liberalization is not only the right and just path, 

it is also the best way for China to achieve long-term stability. This 

is especially true as China pursues national modernization that 

will inevitably be accompanied by unpredictable social changes. 

We, therefore, welcome the recent meeting between Chinese officials and representatives of the Dalai Lama. Such dialogue is the 

best hope to address longstanding grievances and promote prosperity in Tibetan areas. And we have urged China to use the Olympics as an opportunity to show greater openness and tolerance, and 

to increase access to information and expand press freedoms. China 

will earn the international respect it seeks by guaranteeing all of 

its citizens’ internationally recognized rights. 

Mr. Chairman, our approach to building cooperation with China 

and influencing the choices its leaders make about its role in the 

world is, as you said earlier, a long-term proposition. China is an 

emerging great power with enormous potential to enhance prospects for peace, stability, prosperity, and human freedom in Asia 

and around the world. In recent years, we have made some 

progress in our relations with China, and I would say that the 

trend lines are positive. But, respect, perseverance, and patience 

will be permanent requirements for both sides as we seek to endow 

8 

our bilateral relationship with greater solidity, depth, and capacity 

for constructive cooperation. 

Thank you, again, for inviting me to testify on this important 

topic, and I would welcome your comments and questions. 

Thank you. 

[The prepared statement of Ambassador Negroponte follows:] 

PREPARED STATEMENT OF HON. JOHN D NEGROPONTE, DEPUTY SECRETARY, 

DEPARTMENT OF STATE, WASHINGTON, DC 

Mr. Chairman, Senator Lugar, and members of the committee, thank you for the 

opportunity to address U.S. policy toward China. 

I just returned from a 2-day visit to Beijing, where I met with senior Chinese Government leaders to discuss issues of bilateral and international concern. Both we in 

the administration and our Chinese interlocutors are keenly aware of the spotlight 

focused on China during these final 3 months before the Olympic Games commence 

in Beijing on August 8. We continue to express our support to the Chinese people 

for a successful Olympic Games. At the same time, we emphasize to Chinese leaders 

the importance of making progress on issues that matter to the American people. 

These issues span the subjects of global security, human rights, the environment 

and trade. In some areas we have been able to develop common approaches with 

the Chinese; in others we remain far apart. That there exist substantial policy differences should come as no surprise, given the two countries’ very different demographic and economic conditions, histories, and political systems. Nonetheless, our 

constant objective is to engage with an increasingly influential China to shape the 

current and future choices that Chinese leaders make in ways that serve global stability and U.S. interests. China is, after all, a permanent member of the U.N. Security Council. It possesses one of the world’s largest and most dynamic economies. 

It is a nuclear power, and it is the seat of a great civilization. United States-China 

strategic cooperation is in our mutual interest. 

I would like to address three dimensions of our engagement with China that are 

central to our relationship: Maintaining peace and stability in Asia; motivating China’s positive contributions to global stability, and encouraging China’s greater respect for human rights and freedom of expression. 

I will not speak about trade, energy, and the environment, other than to say that 

they are key topics of our government’s engagement with the Chinese and that such 

engagement has produced positive results. 

We have discussions with China in over 50 dialogues at all levels. We believe that 

this extensive consultative framework will help us ensure progress in our cooperation with China in the years ahead. 

PEACE AND STABILITY IN ASIA

A major priority in our engagement with China is the maintenance of peace and 

stability in Asia. The United States is a Pacific power, and the stability and economic dynamism of Asia has been essential to the health and growth of our economy 

over the past 20 years. 

While China grows as a regional power, its leaders are at pains to reassure its 

neighbors that its rise is a peaceful one and that a prosperous China will benefit 

the entire region. Beijing also acknowledges the benefits of the U.S. presence and 

recognizes that a diminished U.S. profile would make its neighbors nervous. Our 

task is to challenge China to exercise real leadership in solving problems in the 

region. We encourage China to reach out to its neighbors in a peaceful and constructive way. At the same time, we remain deeply committed to our alliances and maintain an active U.S. security presence in Asia. A robust U.S. presence in Asia, undergirded by our strong alliances, has been a guarantor of the regional stability that 

has created the conditions for Asia’s emergence as a major engine for global economic growth. 

In some areas, China is showing constructive leadership on difficult issues. The 

United States and China recognize that North Korea’s pursuit of nuclear weapons 

would not benefit the long-term security interests of any party, including the citizens of North Korea. We continue to work closely with China on our shared sixparty commitment to achieve the verifiable denuclearization of the Korean Peninsula in a peaceful manner. China’s leadership as chair and host of the six-party 

talks has been essential to the progress we have made in drawing North Korea out 

from isolation and into constructive dialogue, and we rely on China’s active engagement to continue this process. Beijing also joined us in imposing mandatory chapter 

9 

VII sanctions against the DPRK in the U.N. Security Council. Our combined efforts 

benefit international security. 

It makes sense to discuss the issue of Taiwan within the context of peace and stability in Asia. With the inauguration of Ma Ying-jeou on May 20 we will have safely 

navigated a tense period in cross-Strait relations. Our ‘‘one China’’ policy, based 

firmly on the Three Communique ́s and the Taiwan Relations Act, continues to guide 

our approach to cross-Strait relations. We do not support Taiwan independence and 

we are opposed to unilateral attempts by either side to change the status quo. We 

want cross-Strait differences to be resolved peacefully and according to the wishes 

of the people on both sides of the Strait. Nobody should question our resolve in insisting on such a peaceful process. 

We will continue to sell Taiwan defensive arms to maintain the capacity to assist 

in Taiwan’s defense if needed. As you know, this policy fulfills a legal obligation 

under the Taiwan Relations Act. It also supports our belief that a Taiwan confident 

and capable of protecting itself will offer the best prospects for a peaceful resolution 

of cross-Strait differences. 

We continue to express concern about the Mainland’s ongoing military buildup on 

its side of the Strait. We view China’s buildup as unnecessary and counterproductive. The anxiety it breeds on Taiwan encourages proindependence inclinations that the Mainland’s missile deployment purports to deter. Mainland efforts to 

squeeze Taiwan’s diplomatic space also are counterproductive. We do not advocate 

that Taiwan be allowed membership in international organizations when sovereignty is a requirement. But we should be able to find ways to allow Taiwan to 

participate meaningfully in the broad range of international activities. For example, 

Taiwan’s participation in the World Health Organization would give it access to 

vital health information about quickly spreading infectious diseases. That is in 

everyone’s interests. 

Taiwan’s active democracy is an admirable achievement. As the President noted 

after Taiwan’s Presidential election in March, we view Taiwan as a beacon of 

democracy to Asia and the world and are confident that the Presidential election 

in March—and the democratic process it represented—will help advance Taiwan as 

a prosperous, secure, and well-governed society. It now falls to Taiwan and Beijing 

to build the essential foundations for peace and stability by pursuing dialogue 

through all available means and refraining from unilateral steps that would alter 

the cross-Strait situation. In this context, we were encouraged by news of the initial 

meeting between President Hu Jintao and Taiwan’s Vice-President-elect Vincent 

Siew at the Bo’ao Forum in China and other positive cross-Strait developments that 

have taken place since the March election. 

Another regional issue we work on with China is Burma. In the wake of Cyclone 

Nargis, we appreciate China’s willingness to press the Burmese regime to cooperate 

with the international community’s efforts to provide humanitarian assistance to 

the people of Burma. On a broader front, we are trying to persuade our Chinese 

interlocutors that the Burmese regime’s political repression and disastrous economic 

mismanagement have created a situation that is unstable and unsustainable, and 

that continuing such misrule will only result in greater turmoil in the future. While 

we still have work to do on this subject, we note that the Chinese Government has 

publicly urged meaningful dialogue between the Burmese regime and the democratic opposition and ethnic minority groups in that country. Together, the United 

States and China have released two U.N. Security Council Presidential Statements 

on Burma, most recently on May 2. 

ENGAGING A GLOBAL CHINA

Over the past several years, we have explored issues with China that go beyond 

management of our bilateral or even regional relations. This is an innovation and 

represents important progress. In our discussions with the Chinese, we spend an increasing amount of time considering how to improve coordination of our activities 

toward third countries or regions of the world. The United States-China Senior Dialogue, which I lead on the U.S. side, has spawned a series of regional and functional 

subdialogues led by Assistant Secretaries to discuss trends and challenges in every 

region of the world—this includes talks in the critical areas of nonproliferation and 

counterterrorism. 

We are seeing results from such discussions. For example, China has supported 

a number of U.S. initiatives in the United Nations Security Council in recent years, 

including sanctions resolutions against North Korea and Iran. I highlighted our 

positive engagement with Beijing concerning Burma and North Korea above. Let me 

also discuss Sudan and Iran, two additional areas where we have seen some positive 

developments in China’s position: 

10 

Sudan/Darfur 

China’s early Darfur policies were aimed at insulating the Sudanese regime from 

international pressure. In a marked turnaround, China voted in support of U.N. 

Security Council Resolution (UNSCR) 1769 in July 2007. The UNSCR authorized 

the deployment of UNAMID, the hybrid United Nations-African Union mission in 

Darfur, and committed over 300 engineering troops to the mission. We credit this 

change in part to our senior- and working-level consultations with China’s leaders 

and diplomats, in part to the attention paid to the issue by U.S. lawmakers and 

nongovernmental organizations, and in part to China’s increasing sensitivity to the 

negative implications of close ties to problematic regimes. China’s investments in 

Sudan’s energy sector and military trade provide economic and military lifelines to 

the repressive regime in Khartoum, so we continue to highlight the need for the 

Chinese Government to exert pressure commensurate with its influence. Currently, 

we are urging the Chinese Government to augment its previous commitments by 

supplying transport equipment essential to a successful UNAMID mission. 

Iran 

The Chinese Government says that it shares our strategic objective of preventing 

Iran from acquiring a nuclear weapons capability. After participating in lengthy discussions as a member of the P5+1 process, China voted in favor of U.N. Security 

Council Resolutions 1737, 1747, and 1803, applying sanctions on Iranian individuals 

and companies associated with its nuclear weapons and ballistic missile programs. 

Nonetheless, Chinese companies have expanded their trade and investment links 

with Iran, particularly in its oil and gas sector. We believe this expansion undermines international efforts to pressure Iran, and sends the wrong signal to the 

Iranian regime, especially at a time when other oil companies are heeding their governments’ wishes to forgo new investments in Iran. We have told our Chinese interlocutors that China’s expansion of trade relations with destabilizing a regime as 

Iran’s is not in keeping with its aspirations to play the role of responsible global 

stakeholder. We also have made it clear that Chinese entities’ continued sale of conventional weapons to Iran is unacceptable. China understands our position that Iran 

presents a grave international and regional security concern, and that our government reserves the right to apply all multilateral, bilateral, and unilateral measures 

at our disposal to ensure that our concerns are addressed. We reinforce this message at every opportunity. 

ENCOURAGING IMPROVEMENTS IN HUMAN RIGHTS AND FREEDOM OF EXPRESSION

Let me turn now to another important dimension of our engagement with China— 

encouraging the Chinese Government’s respect for human rights and freedom of expression. From our own history, we know that human rights and social stability are 

inseparable. A government that respects the rights of its people secures its own future and a strong future for the nation. In this spirit, we call attention to China’s 

poor human rights record not only because the cause of individual freedom is noble 

and just in its own right, but also because we believe that expansion of individual 

freedoms and greater political liberalization will help China to achieve long-term 

stability to the benefit of the entire world. Stability allows China to continue as a 

global economic engine of growth; it also allows it to contribute to regional and 

global peace and security in the ways I have outlined above. 

In our talks with China, we point to concrete ways in which improvements on 

human rights, religious freedoms, and press freedoms will be a source of stability 

as China continues a national modernization that has been accompanied by wrenching social changes. If religious groups are allowed to operate more freely, they will 

be better able to provide material and spiritual assistance to those segments of the 

population left behind by China’s explosive economic development. Similarly, a free 

press can be a valuable asset in the battle against official corruption. Furthermore, 

an enlightened and tolerant policy that promotes genuine expressions of cultural, 

ethnic, and religious identity by minorities could prevent the kind of unrest and violence that recently erupted in Tibetan areas of China. 

As I testified before the Subcommittee on Asian and Pacific Affairs last month, 

we recognize Tibet as part of the People’s Republic of China, but we have very serious concerns about the recent events, human rights conditions, and limits on religious freedom there. As the President has reiterated on many occasions—most 

recently in his call to Chinese President Hu Jintao on Tuesday of this week—substantive talks between Chinese officials and the Dalai Lama and his envoys are the 

best hope to address longstanding grievances and promote stability and prosperity 

in these Tibetan areas. We were encouraged by the recent meeting between Chinese 

officials and representatives of the Dalai Lama and the subsequent news that a secVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 H:\DOCS\US-CHINA.TXT BETTY
11 

ond meeting will take place soon. At the same time, we urge China to take a close 

look at longstanding policies in Tibetan areas that have created tensions because 

of their impact on Tibetan religion, culture, and livelihoods, to allow unfettered access to Tibet for diplomats and journalists, and to release protestors who expressed 

their views peacefully. 

Finally, as we examine China’s domestic situation, it is worth analyzing Beijing’s 

efforts to respond to some of the challenges that have arisen recently in connection 

with its role as host of the 2008 Olympics. The Chinese Government has exerted 

substantial effort both to rally its population and the international community behind a successful Olympic Games. We have urged China to use the Olympics as an 

opportunity to show greater openness and tolerance, and to increase access to information and expand press freedom. Attempts to clamp down on those who seek to 

use the Olympics to air their legitimate grievances about certain aspects of China’s 

policies will only serve to embolden China’s critics. China will earn the respect and 

admiration it seeks as an emerging great power only by guaranteeing all of its citizens internationally recognized human rights. 

CONCLUSION

If one steps back and views our engagement with China as a moving picture, 

evolving over time, one will see that in the past few years China’s policy postures 

toward governments in North Korea, Sudan, Burma, and Iran have evolved in a 

positive direction. Supporting sanctions against North Korea and Iran, public calls 

for domestic political progress in Burma, and the deployment of peacekeepers to the 

Darfur region of Sudan are major shifts in Chinese foreign policy that suggest 

Beijing is rethinking its hard and fast principal of ‘‘noninterference’’ in the internal 

affairs of states friendly to China, and its argument that sanctions and pressure are 

not effective or appropriate tools in foreign policy. We recognize that there are many 

factors that have contributed to these outcomes, but we believe that our ongoing 

dialogues have played a significant role in bringing about these outcomes. 

Our approach to influencing China’s choices through a strong U.S. military, economic, and political presence in Asia, combined with diplomatic engagement and 

dialogue, is a long-term proposition. It requires perseverance, patience, and firmness, but it seems clear to us that it has been successful and that there are no other 

readily available alternatives that would produce better results for the United 

States and the world. 

The CHAIRMAN. Thank you very much, Mr. Secretary. 

I’m going to be here for the duration, and I’m delighted to yield 

to the Senator from Maryland, because I know he has something 

a little bit later that he has to attend. So, I’d be delighted to—— 

Senator CARDIN. Well—— 

The CHAIRMAN [continuing]. Yield to you. 

Senator CARDIN. Thank you very much, Mr. Chairman. I appreciate that very much. 

Secretary Negroponte, it’s always a pleasure to have you before 

our committee. As you know, I have the deep respect for your commitment to our country and to the relationships with other countries. 

I thank the chairman for his leadership, not only in this hearing, 

but the series of hearings that our committee will be holding on 

Chinese-American relations, which I think is critical to our country. In preparation for today’s hearing I was challenged as to what 

questions to ask, because there are so many. There are so many 

issues out there. And I agree with you that we want to engage 

China. It’s absolutely essential that we engage China, and that 

your thoughts that China will adhere to international norms 

through engagement has me somewhat concerned. And let me 

explain my reasonings. 

Several years ago, it was thought that engaging China through 

the WTO would be the best way to bring about economic reforms 

in that country and to establish a more positive relationship 

12 

between the United States, China, and other trading partners. So, 

we normalize our relations with China and they enter the WTO. 

China today is certainly very far away from the type of level playing field that they should have as it relates to manipulation of currency; as it relates to intellectual property; as it relates to the safety of products that are imported into the United States; and I could 

continue to go through the long list. 

As I hear your testimony, talking about human rights problems 

in China, the list gets longer and longer. In my view, it’s not getting better; it’s getting worse. Yestereday, I met with some individuals in regards to Internet access, including what China has done 

in arresting people who tried to present information to the people 

of China and how reporters are treated. The human rights violations continue to grow and grow. Then you look at what the international community’s attempting to do regarding responsible policies toward climate change. China’s policies are certainly out of 

step with its plans to increase so many more coal-burning plants. 

My question to you is, Why should I be optimistic that constructive engagement will bring about the types of changes in human 

rights, economic and environmental issues? I could mention some 

of the security issues as well, when the record over the past 10 

years would give us little hope that is the case. 

Ambassador NEGROPONTE. Right. Thank you for your question, 

Senator. And I understand what underlies it, and I understand 

some of the concerns and frustrations that make this an open question in many people’s minds. 

The first thing I think I’d say is, I did not make a particularly 

expansive claim with respect to our relationship. I said, we have 

made ‘‘some progress’’ in our relations with China, and then I 

added, ‘‘I would say that the trend lines are positive.’’ And I make 

that statement, I think, in all sincerity. 

And I think you have to ask yourself two questions. You have to 

look—we’re talking, really, about a process, and we’re looking—at 

any particular time, we’ve got a snapshot of the current situation, 

and there’s no question that we confront many of the challenges 

that you describe. But then, one has to look back a number of years 

previously and see what things were like then, and then make 

some judgment as to whether we think the trends are changing, 

and I think there are a number of different areas where you can 

say there have been great improvements. 

Talk about the Chinese economy, I mean literally hundreds of 

millions of Chinese have been lifted out of poverty in recent years 

and have greater opportunities for self-fulfillment and self-realization than they had, say, for example, when I was the Vice Consul 

in Hong Kong in 1960, or when I first went to China with Dr. Kissinger in 1972, when the prospects for individual citizens living in 

that country were very grim, indeed. 

I think the second question—or, answer I would give to you is 

that it’s not only a matter of whether you—what you think of the 

situation inside of China; it’s, How best can we influence it? And 

our conviction is—and I think it’s the right judgment—is that the 

best way to influence China’s behavior is to engage it, and to engage it at every level of our society and government, right from the 

President on down. And we think, through that process of engageVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6602 H:\DOCS\US-CHINA.TXT BETTY
13 

ment and dialogue—and we have multiple dialogues going on with 

the Government of China, including Secretary Paulson’s strategic 

economic dialogue, which engaged China on a whole host of 

issues—and the more, I think, that we do that, I think, the more 

likely we are to get, over time, the kind of responses to the concerns that we express to—the kind of responses that we seek to the 

concerns that we express. 

Senator CARDIN. I agree that the best course is constructive engagement. I have no other alternatives. I think that—— 

Ambassador NEGROPONTE. Right. 

Senator CARDIN [continuing]. That we need to pursue that 

course. I don’t challenge that. 

Let’s just take the economic front for one moment. I know that 

we’ll have Secretary Paulson before us, and this falls under his 

portfolio, not yours. But, when we look at engagement on the currency manipulation issue, I don’t understand why this administration hasn’t taken a tougher view within WTO on the manipulation 

of currency, which to me, is clearly actionable. We’ve been very 

slow to use the tools that we have available. Instead, we say we’ll 

have constructive dialogue. Well, you can have constructive dialogue, but to try to get their attention, I think we should be using 

more aggressive tools. 

My concern, as we continue to talk about this, China continues 

to hold more and more U.S. currency. They hold, I believe, the largest amount of foreign currency of any country. They hold a huge 

portion of American currency, second largest country that holds 

American dollars. We are losing leverage rather than gaining leverage in our constructive engagement with China. It seems to me 

we’d be better off if we used more aggressive tools to get their 

attention. 

Ambassador NEGROPONTE. Again, I mean, as far as a detailed 

reply, I think I’d defer to Secretary Paulson, but what I would say, 

on the currency issue—and I think people can differ as to whether 

the China response has been adequate—but, I would point out 

that, over the past year or so—I think it’s since the summer of 

2007—the renminbi, the Chinese currency, has appreciated by 

some 18 percent. So that has been in the direction that we would 

like to see it go. Whether you think that the upward revaluation 

of their currency by 18 percent is adequate or not is perhaps a matter of debate, but it is a change, and it’s not an insignificant one. 

Senator CARDIN. But, it still doesn’t float. It still very much overvalues the dollar on exchange, still works against United States 

products in China and Chinese products in the United States. 

My point is it seems to me we would make better progress if we 

held China to international trade standards, as they agreed to do 

under the WTO. 

Ambassador NEGROPONTE. The other point I would make in regard to that question is that our imports are now increasing at a 

very rapid rate to China—I mean, our exports—excuse me—our exports have increased something on the order of 20 percent last 

year. They’re now one of our largest tech-support markets. So, I see 

some very hopeful prospects as—for United States exporters in 

China. 

14 

So, I think we may be seeing some change in this trend. While 

we may not be satisfied yet, I do think that the trend is in a positive direction, and it’s more than just—these are more than just 

minor increments. 

Senator CARDIN. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Senator Lugar. 

Senator LUGAR. Well, thank you, Mr. Chairman. 

I want to continue along the line of Senator Cardin’s questioning, 

just to think out loud about the implications of this trade we have 

with China. As you pointed out, Mr. Secretary, it increased rapidly 

last year, and I mentioned in my opening statement, by a rate of 

240 percent from 2001 to 2007, which was significantly greater 

than the exports to any of our other top 10 trading partners. So, 

this is an extremely important part of our exports. 

But, of course, even then, the deficit—in terms of our imports, the trade deficit with China was well over $200 billion again, and 

one can say, ‘‘Well, overall, our exports are $600 or $700 billion.’’ 

As we then come into the second dimension, our domestic deficit, 

which, this year, is running in excess of $400 billion, the question 

is, Who loans us the money? And some of it we borrow among ourselves, but, as is now well known, we are selling bonds abroad, and 

securities, that make it possible for our interest rates to remain 

lower. 

I often get questions from constituents, ‘‘How long can this go 

on?’’ In other words, if you have a domestic deficit of this dimension, and borrowings from wherever, whether from our American 

capital pool, with a savings rate of zero and so forth, or from the 

Chinese, where they have a very magnificent savings rate, for a variety of reasons, what happens if the dollar begins to diminish even 

further with relationship to the euro, or others decide they want 

more of a portfolio with regard to the reserves in which they find 

safety, but, likewise, could also find, maybe, better yield? 

And you must have pondered over the years, as all of us have, 

because there seems to be nothing that’s going to change, for the 

moment, any of these trends. Now, domestically, we could make a 

difference, in terms of our own deficit, but that is unlikely, even in 

most optimistic terms. People talk about 5 years toward balance, 

some say more like 10. But, given wars and problems, supplementals that we’re about to take up, and so forth, we’re going to 

have a large domestic deficit in the foreign side. Perhaps, as you 

point out, our dollar, by diminishing in value, has made it easier 

to export, so we’ve had a little bit of a push there. But, still, a deficit of $600-billion-plus, how can this go along? Or, is this the way 

the world works? In other words, is this a situation in which, 

essentially, the Chinese loan us the money to buy the goods, 

understanding that if they didn’t loan us the money and keep it 

here, that somehow their economic situation would be severely 

disrupted? 

Ambassador NEGROPONTE. Well, you’re taking me a little bit far 

from my customary areas of concentration, here, Senator, so this is 

going to be my opinion. But, I’d say, first of all, I think we have 

to keep matters a little bit in perspective here with regard to China’s spectacular economic growth. It has been phenomenal, there’s 

15 

no question about it. I mean, 10 percent a year, year-in/year-out, 

is—and it looks like that’s going to continue for the foreseeable future—is a very, very impressive record, indeed. But, even with, 

what, four times the population of the United States, they have 

only one-quarter of the national income. I mean, we are still a— 

we’re a $13 trillion economy. China has $3.42 trillion nominal 

GBP. 

Senator LUGAR. That’s very important. 

Ambassador NEGROPONTE. So, I think we have to keep a little 

sense of perspective here. 

Senator LUGAR. Right. 

Ambassador NEGROPONTE. Even with 1.6 trillion dollars’ worth of 

reserves, which they have because of their phenomenal savings 

rate, that $1.6 trillion is about 15 percent of 1 year’s national product for the United States, so it’s not—it’s not an enormous sum. 

I think what you’re going to see happen—I heard complaints, in 

Tokyo and in Seoul, that there’s a shortage of containers for westbound traffic across the Pacific, because exports have experienced— 

our exports have experienced a spike in recent months because of 

the low dollar and the growing economies in the East Asia region. 

So, I think you’re going to see increased United States exports, perhaps some correction in these imbalances to which you refer, 

although, as you know, the imbalances won’t necessarily be one-forone. 

Senator LUGAR. No. 

Ambassador NEGROPONTE. Or country-for-country, they sometimes can be for a region, because, after all, China’s—is supplanting manufacturers from other exporters to the United States, in 

some instances. They’ve picked up some of the Southeast Asian 

manufacturing capacity to export to us. 

The other point I’d make is that, one of these days, China’s going 

to start spending more to attend to its own internal domestic 

needs, which I think is then going to discourage it from accumulating quite the currency surpluses that it’s accumulating now. Hu 

Jintao says that his No. 1 goal is to create a harmonious society, 

and to create—he tells President Bush, whenever he meets him, 

‘‘My No. 1 priority is to create 25 million new jobs a year.’’ Well, 

he’s going to have to start attending—and they, the leadership of 

China—to the social and economic needs of their own people. So, 

I think that over time we can expect them to evolve to a little more 

balanced approach to their own economic development, not totally 

export-driven, but also internally motivated, as well. 

Senator LUGAR. And presumably, that—the thought of the Chinese leadership is more likely to lead to China’s peace with its 

neighbors if it is not sort of preoccupied, but has as its major focus 

this harmony within China and the growth of infrastructure. 

Ambassador NEGROPONTE. Yes, sir. 

Senator LUGAR. Thank you. 

The CHAIRMAN. Thank you very much. 

Mr. Secretary, I appreciate your reference to perspective here, 

because we tend to, all of us in this town and in the community, 

focus on what are, taken in isolation, some splendid numbers. Let 

me talk to you about China’s soft power for a minute. 

16 

There’s been an awful lot of talk about what an advantage the 

Chinese Government has in their foreign assistance programs, 

their investment in other nations, because they don’t get tied down 

with these pesky things like human rights and accountability, like 

we do or the World Bank or other international institutions. And 

you hear stated, ofttimes with alarm, of this significant—at least 

on the surface, significant investment that the Chinese Government, through its government-controlled institutions, are making 

in Africa, in Asia, in Latin America. 

And that’s why I asked for a report to be written by the GAO— 

I mean, excuse me, the Congressional Research Service on the—of 

the Library of Congress. And the title of the report is ‘‘China’s Foreign Policy and Soft Power in South America, Asia, and Africa.’’ 

And when you go through this report, which is—I’d—presumptuous 

of me—I’d recommend it to you. I think it’s a fairly good report, 

and it’s fairly thorough, on just this one issue of the soft power. 

The fact of the matter is that the raw numbers—first of all, we 

don’t know for certain how much is actually being invested by the 

Chinese abroad, but that some of it is significantly overstated. 

‘‘While’’—let me just read from one page—‘‘While China’s trade 

flows have increased dramatically both globally and within Latin 

America, Chinese foreign direct investment abroad, while increasing, has not been as significant. China’s cumulative stock in foreign 

direct investment worldwide amounted to $73.3 billion at the end 

of 2006, just .58 percent of global foreign direct investment stock.’’ 

And it goes on to say, ‘‘Cumulative stock in Chinese foreign direct 

investment with Latin America and the Caribbean rose $4.6 billion 

in 2003, accounting for almost 14 percent of China’s foreign direct 

investment stock worldwide, to $11.5 billion in 2005,’’ et cetera. 

And then it goes on to point out that 96 percent of that investment 

is in the Cayman Islands and in the British Virgin Islands and in 

Bermuda, and that it is—and the three major nations, although 

major sources of foreign direct investment into China, showing the 

possible intention of the Chinese foreign direct investment into 

jurisdictions could be so-called ‘‘roundtripping,’’ whereby Chinese 

investors bring capital back to the country’s foreign capital in order 

to take advantage of preferences given to foreign firms. 

Now, I realize that’s pretty esoteric for anybody listening to this 

outside the room here, but what I’m trying to get at here is that— 

What is your assessment—not in any of that kind of detail—What 

is your assessment of the purpose, intention, and efficacy of what 

we’ve been reading a lot about the last 3 or 4 years, about this significant apparent spike in Chinese foreign investment—we would 

call it—you know, average Americans refer to it as aid to other 

countries—with no strings attached, particularly Latin America? Is 

it real? Is it consequential? Is it competitive? What is its purpose? 

And is it consequential? Are they actually able to project power 

through this mechanism? Is it—how would you—how would you 

characterize it? How would you—— 

Ambassador NEGROPONTE. Well, it strikes me that it’s the behavior of a country that is no longer totally contained within itself, in 

terms of its foreign policies, that it wants to play a role in the 

world. But, I don’t know of anyplace in Latin America where, as 

a result of Chinese investment, that they somehow have gained a 

17 

preponderance of influence or have created some kind of a beachhead, if you will, on the shores of Latin America. And my understanding is that the—as you suggested, Senator, these sums are 

not necessarily that large, although we don’t have a complete handle on the amounts of foreign assistance that China is giving. 

That was one of the issues that I raised when I was in Beijing 

on Monday—I met with the Vice Minister of Commerce—it’s the 

Department in China that handles foreign aid for their government. And we are proposing to them that we have consultations on 

foreign assistance so that there would be more transparency between us as to what our foreign aid policies are, and practices, so 

that we can try, at least, to see if, in certain areas of the world, 

we can coordinate our assistance policies, in the sense of—if we’re 

not giving assistance to a particular country because we don’t want 

to encourage certain kinds of behavior, well, then, it causes us concern if they come right in behind us and give aid to that same 

country and, we feel, undercut the purposes of the United States 

or the international community. 

So, we’d like to start a dialogue with them on this matter. 

The CHAIRMAN. What I’m trying to get at is—and I realize this 

is a very, very broad and not very targeted question, but the debate 

that surrounds this issue is whether or not the purpose of this investment is designed to undercut American influence deliberately 

in—whether it’s Africa or in South Asia or in Latin America. And 

there is a debate—if that is the purpose, the efficacy of their efforts 

thus far. And—but, maybe I should leave that to another moment. 

Let me—— 

Ambassador NEGROPONTE. If I could just add to one thing I said. 

The CHAIRMAN. Yes. 

Ambassador NEGROPONTE. I mean, Western researchers estimate 

somewhere between—that their aid bill, their assistance levels, are 

somewhere between $1.5 and $2 billion annually. Now, we don’t 

know for sure, but if that figure is correct, that level, spread out 

over the world, is not a particularly substantial amount. 

The CHAIRMAN. Yes. Because it’s—well, anyway, I’ll get back to 

that. 

Let me ask one more thing. One of the things that none of us 

have—I shouldn’t say ‘‘none of us’’—I don’t have any quarrel with 

the notion of engaging China, bringing them into, and holding 

them accountable to, international norms. One of the witnesses, 

who will soon testify, who I have great respect for, is—has a 

unique way, I think—at least, in—I don’t want to hurt his reputation, but I think he captures and translates well, for average people, very complicated notions. And he says that our emphasis 

should be on shaping what China does, and not what China is. And 

it—there is a real distinction here, in that—and he says, ‘‘A cooperative United States-China relationship will not just happen. There 

is no invisible hand at work in the world of geopolitics. Still, it’s 

critical that it does come about.’’ 

And the point of my raising that is this. There are a number of 

things that we have engaged China on, and there are a number of 

successes and some failures. And the real—and maybe—you don’t 

have to answer it now, we’ll go back to it—but, the real question 

for me is this: What do we do when this dialogue fails and China 

18 

acts in ways that are contrary to U.S. interests and international 

norms? That’s the place where we seem to get stymied. That’s the 

place where we seem to say—do nothing more than raise a red flag 

and say, ‘‘This is a violation of international norms.’’ They’re violating WTO. They’re acting against our interests. But, there’s 

never—to the extent that I’ve observed—never any consequence to 

it. And that’s what you see, I think, Senator Cardin reacting to. 

That’s what you see an awful lot of Americans reacting to. You 

know, we want them in the deal, but we don’t seem to hold them 

accountable. Is it for fear of—well, I mean, how would you respond 

to that? 

Ambassador NEGROPONTE. Here’s how I’d respond to it. I’d go 

back to the one point I emphasized in my statement is that we 

have made some progress and the trend line is positive. And then 

I’d say, going to your question here, about shaping what they do, 

not what they are, look at the areas where we do really have an 

interest in what they do. The Korean Peninsula, for example, and 

the cooperation there, I think, has been very good and very excellent, and it’s been from the top level on down in our two respective 

governments. So, I would list that as one of the important successes. We’ve worked more closely with them on the question of 

Iran in the Security Council. We’ve had quite a bit of cooperation 

in the Security Council. And, although not fully satisfactory, we’ve 

had some cooperation with them on the situation in Darfur. Just 

to give you three examples. 

There are areas where we think they should do more. Usually, 

I think, the kind of situations you’re referring to have to do with 

human rights, for example, particularly, let’s say, the situation in 

Tibet. And my answer to that question would be, I think one has 

to simply persist—patience and persistence—in pursuing the dialogue at all levels. And in Tibet, we’ve gotten some encouragement, 

I think, from the fact that they have held and now resumed, one 

round of talks with the representatives of the Dalai Lama. 

But, I think, to look at the other side, some kind of criticism or 

boycott the Olympics or something like that, I think—I don’t think 

that that would achieve the desired purpose. I think it runs the 

risk of being counterproductive and could well put at risk other 

equities and other interests we have in our relationship with 

China, given the importance of the country and the breadth of dealings that we have with them. 

The CHAIRMAN. Well, I don’t disagree with you. I think they’re 

more symbolic than the more substantive things I’m talking about 

relating to currency exchange and a whole range of other—— 

Ambassador NEGROPONTE. Right. 

The CHAIRMAN [continuing]. Things that are—that would, in 

other nations, trigger responses on our part, that we do not trigger, 

or we seldom trigger. 

But, at any rate, I’m over my time, and I apologize to my colleagues. 

Governor. 

Senator VOINOVICH. Thank you, Mr. Chairman. 

One of the observations that many people make of our relationship with China is that, in spite of the fact that we have made 

some real progress internationally with China, particularly in the 

19 

Security Council of the United Nations, because China is key to our 

interests there and on the issue of North Korea, that on some of 

the other things that we should be pressing it on, we’ve lightened 

up for fear that we might lose its support. And we’re talking about 

the currency issue, intellectual property rights, human rights, and 

so forth. 

Perhaps we haven’t lightened up on China in these areas as 

much as the public believes, but they do believe it. If you get on 

the telephone and talk with some people in the State of Ohio, they 

are livid about our relationship with China. They feel that China 

is walking all over us, that it is fixing its currency, that it’s violating intellectual property rights, that its human rights record is 

very bad. 

The point I’m making is, Mr. Secretary, that if things are not 

what I perceive them to be, then we’re doing a bad job of conveying 

to the American people the work that we, in fact, are accomplishing 

in some of these areas, or maybe we’re just laying off publicly because we don’t want to get the Chinese angry with us. 

Ambassador NEGROPONTE. The first thing I’d want to say, Senator, is that some of these issues that you mentioned are questions 

of judgment, because—for example, Is an 18-percent year-on-year 

increase in our exports to China enough? We do have a trade imbalance, but it so happens that, at the moment, we’re having— 

China is our fastest growing export market. So, that’s—I consider 

that a positive indicator. 

Senator VOINOVICH. Right, but you and I both know that the reason for it is because our dollar is so weak, perhaps one reason is 

because half of our debt, or more, is owned by foreign countries, 

and people are getting a little bit leery about our financial ability. 

So, that’s happening as a—— 

Ambassador NEGROPONTE. Right. 

Senator VOINOVICH [continuing]. Result of the dollar, more than 

anything else. 

Ambassador NEGROPONTE. They also removed the currency peg 

in July 2005, and the renminbi—their currency—has appreciated 

18 percent. That may not be enough, to some people’s liking, but, 

again, it’s moving in the right direction. 

There are times when we do impose sanctions. We’ve imposed 

sanctions against Chinese trading companies because of nonproliferation activities, where some item, which should have been 

controlled—dual-use item—was exported to North Korea or some 

other market, where we didn’t think it should have gone, and we’ve 

imposed sanctions. The Chinese don’t like that. But, it’s part of our 

dialogue with China. It isn’t all just talk. We will take measures 

when we believe our interests call for them. 

Senator VOINOVICH. Well, I think some people describe our actions with respect to China as us waltzing, but, on occasion, you 

have to step on somebody’s toes, and we’re unwilling to do that. 

The other thing I’d like to say is that, for the last several years 

I have worked on intellectual property rights, and we finally, in the 

Commerce Department, have something called ‘‘STOP!’’ It’s a coordinated effort to deal with intellectual property. And I am very, 

very upset with the administration that we’re not getting the kind 

of support from it to get this legislation passed. This new effort is 

20 

making some real difference—for example, we have been able to 

stops Chinese trading companies that we know are counterfeiting, 

and so forth. But, we’re not getting the support from the administration, and I think that that’s something that you folks ought to 

look into. 

These are the kinds of things that need to be done, that don’t 

seem to be getting done, that are making a difference. So the public 

perception is that we’re losing more than we’re winning. 

And the last thing, Mr. Chairman, is the issue of soft power. 

There’s no question that the Chinese are doing, in public diplomacy, a much better job than the United States of America. International polls, China ranks higher than we do almost anywhere in 

the world. China understands the importance of soft power or public diplomacy. We listened to testimony here a couple of weeks ago 

by Joe Nye and Dick Armitage about something called ‘‘Smart 

Power,’’ and I’d like to know, from your perspective in the State 

Department, what we are doing to increase our soft power and our 

public diplomacy. The one area in which it would make a tremendous amount of difference is greenhouse gases, of which the Chinese have basically said they’re not going to participate. It seems 

to me that we ought, if we’re interested in progress on something 

like that, to engage China to become a partner with us and take 

a leadership role, and not only deal with the problems of the environment, but also deal with something that would show the two of 

us working together on something that’s very important. 

Ambassador NEGROPONTE. Well, I think, on that point, Senator, 

that’s an area that the administration does plan to do more with 

China. A working group has been created, in the context of Secretary Paulson’s economic dialogue with China, to dialogue about 

economic, energy security, and environmental issues. We also have 

the Asia Pacific Partnership, which deals with China on that issue. 

And last, but perhaps most importantly, to your point about getting 

them engaged on greenhouse gases, they got a free pass, as you 

know, in the Kyoto Protocol—they and India and some of these 

other major emitting countries. The President has taken the view, 

and it’s the strong position of the administration, that in any follow-on arrangement in 2012 and beyond, vis-a-vis the Kyoto Protocol, that China and India and countries like that have got to be 

involved. They’ve got to take on obligations, as well, because, if you 

project out to the year 2050, if you don’t get them involved in taking measures of some kind, their growth in emissions is going to 

cancel out or overtake any possible savings in such emissions that 

are made by the rest of the world. So, that is a high priority. 

Senator VOINOVICH. OK. Just one last thing—again, on soft 

power. The Chinese are being smart and responsible citizens, but 

what are we doing to counteract that with our soft power? 

Ambassador NEGROPONTE. I didn’t know about these. I’d have to 

go and look at the figures you’re referring to, in terms of popularity 

or relative receptivity to China. But, I’d say that we essentially 

want to encourage China to play a constructive role in the world, 

and—so that, I think, if anything, we favor increased engagement 

by them, provided that it is done constructively. I don’t think we 

have anything to fear, in terms of our ability to compete with 

China, in terms of how well received we are or how effective our 

21 

programs are. The one part of the world that occurs to me in this 

regard, since they’ve made quite an effort, and so have we, would 

be in the continent of Africa. And my experience, based on my travels to Africa, is that the United States is extremely well received 

there, and there’s nothing—this is not a zero-sum game, and 

there’s nothing incompatible between them having some effective 

programs that make them an appreciated international player in 

the African Continent, and we doing the same. 

Senator VOINOVICH. Well, from what we’ve heard, one area that 

we have really neglected is the area of soft power, that we’ve been 

concentrating on hard power, and one of the reasons why we’re not 

as successful as we should be is that we haven’t paid enough attention to the soft power. It would be interesting to know what this 

administration is going to try to do, before it leaves, to do something about it. 

Thank you. 

The CHAIRMAN. Thank you very much. 

Senator Kerry. 

Senator KERRY. Thank you, Mr. Chairman. 

Let me begin by joining you in expressing our thoughts and condolences to the people of China for the tragedy that has engulfed 

them with this earthquake, the enormous losses that they’ve suffered. And we are certainly, I know, thinking about that, and, obviously, prepared to be helpful in ways that I think are needed. 

Mr. Secretary, in response to what you just said to Senator 

Voinovich, let me just say that, having been involved in this effort 

for some 20 years now with respect to climate change, beginning 

with the first hearings that Senator Gore and I held, back in 1987, 

and going through the Rio Conference to Kyoto and beyond, and 

most recently in Bali, I think it’s fair to say the attitude of the Chinese has changed significantly. I can remember meetings where, 

you know, you’d stare at each other, and there was no real conversation. And now, their Environment Minister has been part of 

their delegation, they are very serious, they understand what’s 

happening to their glaciers, to their agriculture. They are moving, 

in fact, to put stricter standards on automobiles in place than we 

have, faster than we are, and moving on energy intensity, greenhouse-building, and other things. I think it’s fair to say that most 

of those who have been involved in this effort for a long time believe that the United States, which has stayed out of the talks, 

frankly, until recently, and been the biggest scofflaw with respect 

to the Kyoto Agreement, and, moreover, represents 25 percent of 

the world’s greenhouse gases, and has yet to move as authoritatively as Europe, is going to have a hard time, sort of, leading 

on this, unless we, in fact, lead. And we have a chance to do that 

here. So, it’s our hope the administration is going to embrace the 

targets that have been set out, which major corporations in America, ranging from Dow Chemical to DuPont to American Electric 

Power to Florida Power Light, Lehman Brothers, British Petroleum, host of entities, are now embracing. 

And half of our economy has been put under this, voluntarily. 

The RGGI Agreement in New England, the Midwest Agreement, 

and the California, plus four or five, Agreement, so that over half 

of the American economy has already moved, voluntarily, to place 

22 

itself under mandatory reductions, and we have yet to see the administration lead on this. So, our hope is going to be that it will 

in the next days; and I am confident, as is Prime Minister Blair, 

who was here the other day—I met with him on it; he’s working 

this issue diligently, and he is convinced that we have to lead first. 

So, my hope is that we’ll do that, and I’m quite confident that, 

if we do, our market power and our GT-—our WTO-compliant 

weapons will empower us to be able to leverage the behavior we 

want. I’m not going to ask you to comment on that up front, unless 

you want to incorporate it in a subsequent answer, but I would like 

to ask you a couple of questions. 

One, Prime Minister Kevin Rudd ended the United StatesAustralia-Japan-India quadrilateral talks after their first meeting, 

in May, because of the fears, in Beijing, of a sort of encirclement 

strategy. And I wonder if you would comment on what role you 

think the United States ought to play with respect to democracies 

in that part of the world and the ability of democracies to act together without, sort of, being neutered, in a sense, by whatever 

those fears are. Is there a way to build a different security arrangement and a way to leverage different behavior? 

And tied to that is the other side of the coin that has seen China 

now—I think you’ve issued several demarches on this with respect 

to the weapons that have showed up in Iraq, Afghanistan, through 

China, as well as the multimillion-dollar oil and gas deals with 

Iran. So, you have Iranian weapons, you have the multimilliondollar oil and gas deal, and yet, the sanctions issue has not moved 

forward. 

How do you balance these interests that I’ve just described, the, 

sort of, quadrilateral talks, democracy, and then, the other side, 

China’s presence and the need to have them help leverage different 

behavior from Iran? 

Ambassador NEGROPONTE. Well, first of all, we still do have some 

regional consultations amongst the democracies. I mean, Japan, 

Korea, the United States, for example, we have some dialogue at 

various levels. We, of course, I think, most importantly, have our 

alliances with Australia, with Japan, with Korea, and we make 

very clear that they are the cornerstone of our security involvement 

and our security presence in the East Asia Pacific region. 

Senator KERRY. But, why, then, do you think the quadrilateral 

talks stood out in such a way? If we have all those other relationships and they’re a reality, why would the quadrilateral talks be 

this thorn? 

Ambassador NEGROPONTE. Well, I haven’t spoken to Prime Minister Rudd about the fact that he chose to disengage from those 

talks. 

Senator KERRY. Has the Secretary talked to him? 

Ambassador NEGROPONTE. I just can’t recall whether she has or 

not, but I—— 

Senator KERRY. So, the talks ended, and it just didn’t matter? 

Ambassador NEGROPONTE. I—if I can submit a reply for the 

record—— 

Senator KERRY. Sure. That’s OK. That’s fine. 

[The State Department supplied the written response that follows:] 

23 

Assistant Secretary-level officials from the United States, Japan, Australia, and 

India met informally on the sidelines of ASEAN Regional Forum (ARF) Senior Officials Meeting in Manila in May 2007. Officials discussed issues of mutual cooperation such as post-Tsunami disaster relief and counterterrorism. At the time, none 

of the parties viewed that meeting as a formal new grouping or mechanism but 

rather an opportunity to have discussions on an informal basis. The decision to forgo 

pursuing a formal grouping was not the result of concerns that such talks could be 

perceived as aimed at ‘‘encirclement’’ of China. Rather the decision relates more fundamentally to our view that we are already engaged in a number of bilateral and 

multilateral groupings in Asia that achieve our democratic, economic, and security 

goals. 

The Trilateral Strategic Dialogue, in which we have participated since 2002, continues to be the premier venue for the United States and allies Australia and Japan 

to discuss issues of regional and international security concern. Secretary Rice will 

meet her counterparts for the next Trilateral Strategic Dialogue Ministerial in 

Japan in June. 

We recognize that United States relations with India are strong and growing, and 

we value India’s partnership and respect its democratic tradition. The China-India 

relationship has been improving, particularly in the realm of economic and trade 

relations. We encourage this trend. 

Senator KERRY. Talk to me about the Iranian component of it. 

Ambassador NEGROPONTE. I would like to mention something on 

the security front, which is that we are, nonetheless, when we visualized, in the six-party talks—we’ve talked about creating a 

Northeast Asia peace and security mechanism as one of the concepts that might flow from the six-party talks and from restoring 

peace on the Korean Peninsula, because of the absence of any allembracing security mechanism for that part of the world. But, even 

as we move toward that, which we haven’t done yet, but, as we get 

there, we’re going to make clear that it’s not at the expense of the 

alliances that we have in the region, which are all with democracies. 

On Iran and Iraq and the question of weapons reaching—Chinese weapons reaching those countries, just the other day, Monday, 

when I was in Beijing, this was one of the issues I raised, the concern about Chinese weapons, or Chinese-designed weapons, showing up in some of these battle areas, be it Iraq or Afghanistan, and 

expressed our concern. And what my Chinese interlocutors have 

said is that they have scaled way back their sale of conventional 

weapons to Iran. They had had relationships previously where they 

exported these weapons, but they have dialed that back. And, as 

you know, they’ve cooperated with us in the Security Council on 

the three resolutions that have imposed sanctions on Iran for their 

enrichment activities. 

So, I’d say that there’s been quite a bit of cooperation between 

us and them on—— 

Senator KERRY. Was there any watering-down effort on the last 

sanction round? 

Ambassador NEGROPONTE. It was a negotiation, and certainly if 

we had our druthers and could have gotten them to impose—by 

‘‘them,’’ I mean the entire international community—to impose 

more stringent sanctions, we would have welcomed that. But, this 

was a negotiated outcome, and so, I think you could say that it was 

less than the optimal. 

Senator KERRY. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Senator Murkowski. 

Senator MURKOWSKI. Thank you, Mr. Chairman. 

24 

And, Mr. Secretary, welcome. 

Ambassador NEGROPONTE. Thank you. 

Senator MURKOWSKI. I want to ask a couple of questions this 

afternoon about Taiwan. In reviewing your written remarks here, 

you state that, ‘‘We’ll continue to sell Taiwan defensive arms, to 

maintain the capacity to assist their defense, if needed.’’ And I 

would like from you, this afternoon, just kind of a status report on 

where we are with regards to any arms sales to Taiwan. 

I had, back in October of last year, sent a letter to Stephen Hadley, over at NSA, inquiring as to where we were with the sale of 

F–16s to Taiwan. Since the time of that letter, we’ve made several 

different attempts to get a response, and have basically been told 

it’s in the works, but, really, nothing more specific than that. So, 

can you give me some indication as to where we may be with— 

whether it’s the F–16 or any of the other arms sales to Taiwan? 

Ambassador NEGROPONTE. There was an offer, of several years 

ago, of various other types of equipment—now, not the F–16s—a 

package of arms that was offered to Taiwan. And for a number of— 

I think, 2 or 3 years, it was being debated in the Taiwan legislature. And they’ve just recently voted funding and voted to approve 

the purchase of that package. 

Senator MURKOWSKI. Right. 

Ambassador NEGROPONTE. So, that’s the most recent step that 

was taken on that. And there hasn’t been any subsequent step. As 

you know, we’re in the middle of a political—or, they are in the 

middle of a political transition in Taiwan, so we’ll have to await developments there. 

As far as the F–16 is concerned, there are no present plans to 

offer the F–16 to Taiwan, although that is a subject that has been 

under discussion over time. 

Senator MURKOWSKI. So, is it fair to say that there is nothing, 

then, that is out on the table, in terms of specific military equipment or—you mentioned, you know, that the F–16 is not out there 

at this point in time. 

Ambassador NEGROPONTE. It’s not—— 

Senator MURKOWSKI. Is there anything—— 

Ambassador NEGROPONTE. It’s not on offer at this particular 

time. I can give you the details of the package that was offered and 

approved by the Taiwan legislature. 

Senator MURKOWSKI. Well, it was my understanding that there 

were several different defense sales that were kind of moving 

through the process, and recognizing the politics in Taiwan, and 

the politics over here, as well, I was hoping to get a little bit better 

sense of where we were in that process. So, if you can provide us 

with—— 

Ambassador NEGROPONTE. I will. I will, indeed, do that. 

Senator MURKOWSKI. Great. 

And then, one other comment that you have made in your statement, about Taiwan, mentioning finding ways to participate meaningfully with Taiwan for a broader range of international activities, 

and you state, for example, Taiwan’s participation in the World 

Health Organization. I’m assuming that’s reaffirming the United 

States policy toward Taiwan’s WHO observer status. Are we doing 

25 

anything more, other than making statements like this, to encourage involvement or participation in WHO? Where are we with that? 

Ambassador NEGROPONTE. We would—well, just as you correctly 

state, I mean, our policy is to not support their membership in an 

organization which requires statehood, but we think they’re—they 

should be allowed to participate as an observer, particularly in organizations like the WHO, where their participation in matters of 

public health is important, not only to them, but to the international community as a whole. So, we will continue to support 

their becoming observers in the WHO, although, up until now, we 

have met with resistance to that within the organization. 

Senator MURKOWSKI. Thank you, Mr. Chairman. I don’t have any 

further questions. 

Thank you, Secretary. 

The CHAIRMAN. Thank you very much. 

The Senator from Florida, Senator Nelson. 

Senator BILL NELSON. Thank you, Mr. Chairman. 

Mr. Secretary, the Chinese have not been particularly helpful in 

Darfur. So, what degree have you, the State Department, engaged 

senior leadership in China to try to help? 

Ambassador NEGROPONTE. As we were saying earlier, Senator, 

that I represent the United States in our senior dialogue with 

China, which is where we discuss political issues with my counterpart, and it’s one of the issues that is always on the agenda of our 

dialogue. We meet a couple of times a year, we discussed it earlier 

this week, when I was in Beijing. 

Senator BILL NELSON. Give us some examples of the issues that 

you’re raising with them, with regard to Darfur. 

Ambassador NEGROPONTE. Well, first of all, we raised the question—we encourage them to do what they’re doing, which is to participate in the peacekeeping effort there. And, as you perhaps 

know, they’ve got, I think, more than 300 people from their People’s Liberation Army in Darfur, working as engineers to help build 

facilities there. And I think they may be the first country from outside the African Continent to have forces in Darfur. So, that’s a 

good thing. 

We’ve encouraged them to use their influence with Sudan—with 

the Government of Sudan, since they do have some influence with 

the Government of Sudan, to comply with the Darfur Peace Agreement and with the Comprehensive Peace Agreement, and to allow 

better access for the humanitarian workers to Darfur. 

Senator BILL NELSON. Have they been successful? 

Ambassador NEGROPONTE. I think they’ve played a role in conveying messages to the Government of Sudan and urging their 

compliance with the will of the international community. But, have 

they been completely successful? Obviously not, because we’ve not 

gotten as far with respect to the situation in Sudan as we would 

like. 

Senator BILL NELSON. Could they help more? 

Ambassador NEGROPONTE. Could they help more? They certainly 

know how much we would like them to help. 

Senator BILL NELSON. Why don’t you think they do? Since they 

are quite concerned about their image in the world now, with the 

Olympics coming up, and they certainly could exert a lot more inVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6602 H:\DOCS\US-CHINA.TXT BETTY
26 

fluence in Darfur, why don’t, you think, that they do it? Why do 

they hold back? 

Ambassador NEGROPONTE. Well, Senator, they have put their 

own troops into Darfur. I don’t know of any Western country that’s 

done that. 

Senator BILL NELSON. But, they’re pumping oil there, too. 

Ambassador NEGROPONTE. That is true. They’ve invested in the 

Sudanese National Oil Company, but—— 

Senator BILL NELSON. Well, let me ask you about that. Given the 

fact that they’ve made multiple energy deals with a whole bunch 

of African countries, where they exchange infrastructure projects 

for the oil futures, what, from our standpoint, can you tell us are 

our long-term security concerns on this consolidated influence in 

China—of China in Africa? 

Ambassador NEGROPONTE. We were talking earlier, Senator, 

about the extent of their assistance programs, and we don’t have 

a reliable estimate, but the—we have some estimates that it’s 

something on the order of $11⁄2–$2 billion a year, or something like 

that, for—worldwide. So, I think, compared to, let’s say, the level 

of investment of the United States, if you take our PEPFAR program, our direct aid program, what we do for malaria, and our Millennium Challenge program, I think that the Chinese effort pales 

in comparison to the United States efforts in Africa. So, I guess I’m 

not overly concerned about it, although I do think it would be important—and we’ve proposed to China, that we have dialogue with 

them about their assistance programs, so that, for example, in a 

country where we’re not giving assistance, and we have our reasons, and they are giving assistance, and we disagree with them 

doing that, we could at least—in our discussion, get on the table 

what the rationale of each of our respective positions are, and 

hopefully, maybe, move toward at better understanding and a convergence of our views. 

Senator BILL NELSON. Tell me—given the fact that they had a 

successful ASAT test, how has that changed your thinking at the 

State Department—I’m not asking you as the Defense Department—in your planning and strategy toward China? 

Ambassador NEGROPONTE. I was Director of National Intelligence 

when that happened, Senator, and I guess the point that we all 

made at that time—well, first of all, we thought that it was wrong 

for them to have carried out this activity, and, second, to do it 

without any notice whatsoever, since it affects interests of a lot of 

other people; it was a mistake. But, I think it also drives home the 

importance of the transparency with respect to China’s growing 

military power, and importance of dialogue. And I’m happy to tell 

you, or pleased to tell you, that I think the level of dialogue—military dialogue—with China has improved somewhat in the last year 

or two, and there are much more discussions between our respective military and defense leaders than there was previously. And 

I think that’s one of the things we want to see happen. 

Senator BILL NELSON. Have you seen any clue that they have expressed any kind of embarrassment due to the fact that they put 

tens of thousands of pieces of debris up at very high altitude, that 

it will be decades before it degrades back into the Earth’s atmosphere, and therefore, threatens not only our space assets, but other 

27 

nations’, as well? Have you picked up any of that in your diplomatic circles? 

Ambassador NEGROPONTE. I have picked up that this was not 

something that was carried out with extensive prior knowledge of 

the various agencies within the Chinese Government whose interests might have been affected by this shot. 

Senator BILL NELSON. Do you think that the published reports 

that we see, that they intend and are planning for putting a man 

on the moon by 2020, do you think—well, what do you hear about 

that in your circles? 

Ambassador NEGROPONTE. I’m sorry, I don’t know. I should know 

the answer to that question. I do know that our NASA director 

wants to have a dialogue with the Chinese authorities about that, 

and obviously that would be a subject of great interest to him. 

Senator BILL NELSON. And they don’t want to talk to him—— 

Ambassador NEGROPONTE. I don’t know. 

Senator BILL NELSON [continuing]. About that. 

Ambassador NEGROPONTE. I honestly don’t know the answer to 

that question. 

Senator BILL NELSON. They don’t. And yet, it’s clear that they’re 

moving in that direction. And from a standpoint of United States 

diplomatic relations with them, and the balance of power, and holding the high ground, and so forth, that’s something we’ve got to be 

concerned about. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much. 

Senator Isakson. 

Senator ISAKSON. Thank you, Mr. Chairman. 

With regard to both Senator Nelson and Senator Voinovich’s 

comments about soft power in Africa, having been there a couple 

of times and observed where the Chinese are investing, it does appear to me their investments follow their economic interests. 

They’re not necessarily humanitarian investments, but they invest 

where there are resources they want to import. Am I right? 

Ambassador NEGROPONTE. Well, I would have said, with respect 

to the Sudan, I think that’s right. I’m not sure I know the entire 

portfolio of China’s investments in Africa. But, certainly that association has been made, yes. 

Senator ISAKSON. And is it probable that this may be the same 

reason for their involvement in Iran and in their interest again, in 

getting petroleum. 

Ambassador NEGROPONTE. Right, although Iran doesn’t really 

need foreign assistance because of their oil revenues. 

Senator ISAKSON. Well, I think you made a very good point and— 

it’s a point I want to make—we don’t do a very good job, as a country, of tooting our own horn. That’s a Southern expression. I 

thought your example about the Millennium Challenge Corporation, and the example on PEPFAR, what the United States initiatives have accomplished in Africa, are really astounding. And even 

to the extent of AFRICOM, which people perceive as a military 

presence, but, in fact, from everything I’ve seen, about 75 to 80 percent of AFRICOM is humanitarian investment. Such humanitarian 

investment includes drilling wells, building bridges, and helping 

with infrastructure on the continent. So, we don’t, sometimes, tell 

28 

the story about how much we, as a country, really are doing, from 

a humanitarian standpoint and in the best interest of those people. 

I would also appreciate being copied with your correspondence 

that you send to Senator Murkowski with regard to the Taiwanese 

request on the F–16. 

Ambassador NEGROPONTE. Right. 

Senator ISAKSON. I read, in your statement, a very clear statement about the concern of the continued buildup on their side of 

the strait, the mainland side of the strait, and I think that our Taiwan-China policy is clear, and I think the Taiwanese Defense Act, 

or what is it? Where we provide them with assistance to defend 

themselves. 

Ambassador NEGROPONTE. Taiwan Relations Act. 

Senator ISAKSON. Relations, I guess. I am very supportive of 

that. 

You must have gone on the trip with Kissinger and President 

Nixon, the first trip to China. Is that the trip that you were referring to? 

Ambassador NEGROPONTE. No; that was in February 1972. I 

went with Dr. Kissinger in June, 4 months later. 

Senator ISAKSON. So, it was a followup trip. 

Ambassador NEGROPONTE. Yes. 

Senator ISAKSON. Going back to my memory, which gets worse 

and worse the older I get, but thinking back to 1972, it is pretty 

remarkable what that event did, in terms of opening China to the 

world and the world to China. 

Ambassador NEGROPONTE. Absolutely. And when you think of 

the conditions that were evident at that time, everybody riding 

bicycles, and everybody wearing a very similar outfit, the sort of 

Mao tunics, and very low standard of living, and you think of what 

the development that—skyscrapers that you see in Shanghai and 

the developments you see in China today, hardly any room for the 

bicycles anymore, because they’re crowded out by all the vehicle— 

the cars and the trucks. It’s quite an amazing picture. 

Senator ISAKSON. Well, the reason I make the point is, there 

have been some questions raised about China and things they don’t 

do, but it seems to me that when that door opened, the genie was 

let out of the bottle, and the Mao days were quick to fall behind. 

Now China is pretty much engaged all over the world. I think from 

a positive standpoint that we are to benefit in the long run. 

Because their people now have a window to the world, which they 

didn’t prior to that time, and once people see democracy and see 

freedom and free enterprise, as you’re able to do by the Internet, 

telecom, and now with the Olympics coming and the world coming 

to their door, it just continues to put pressure on them, on the 

human rights side. These pressures should bring about all the positive things we’d like to see take place in China. Are we seeing that 

kind of evidence? 

Ambassador NEGROPONTE. I think that’s right. And an example 

that—a point that was made the other day by Stapleton Roy, our 

former Ambassador to China, which I thought was very apt, was 

that if you look at some of the other countries in Asia, like Taiwan 

or South Korea—or Japan, even—that were authoritarian, at times 

in the past, economic growth in each of those cases, and developVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6602 H:\DOCS\US-CHINA.TXT BETTY
29 

ment, brought along with it, eventually, a more democratic way of 

governance. And hopefully we can see that kind of development 

take time—take place over time in China, as well. 

Senator ISAKSON. One last question, back to the Taiwan issue 

and the World Health Organization. Had the earthquake that hit 

Sichuan Province in China hit Taiwan, World Health Organization 

participation and information would have been invaluable to the 

Taiwanese. And I will continue to support what you said you support, and that is to allow Taiwan participation in the World Health 

Organization. I think that is critical for us to do. 

Thank you very much, Mr. Chairman. 

Thank you, Secretary, for being here. 

Ambassador NEGROPONTE. Thank you. 

The CHAIRMAN. Mr. Secretary, thank you. There are a whole lot 

of questions we all have—when we get a chance to talk with you, 

both before this committee, and you’ve always been available to 

each of us when we pick up the phone and call you, and—but, I 

want to emphasize that the—this is just a start, here. We’ll, hopefully, have your colleague Secretary Paulson up here. We’re going 

to have other administration witnesses, as well, who I think are 

agreed that they’ll come and participate. We thank you for taking 

the time. 

I have—I will not—I will not trespass on your time, or the other 

witnesses, right now, but I’m going to submit two or three questions on developmental-aid issues—— 

Ambassador NEGROPONTE. Happy to—— 

Senator ISAKSON [continuing]. That I’d like to—I’d like to ask you 

to follow up on, if you would. 

The CHAIRMAN. And, again, thank you very much for—— 

Ambassador NEGROPONTE. Thank you. 

The CHAIRMAN [continuing]. Your time. 

Ambassador NEGROPONTE. I appreciate the opportunity. 

Thank you. 

The CHAIRMAN. Thank you, John. 

[Pause.] 

The CHAIRMAN. Our next panel is a very distinguished panel. 

And, again, we thank them so much for their taking the time. Dr. 

Richard Haass, president of the Council on Foreign Relations—and 

I’ll put a much longer statement in about his significant accomplishments. Also, Dr. Kurt Campbell, chief executive officer of The 

Center of a New American Security, in Washington, DC, as well as 

Dr. Harry Harding, university professor of international affairs, the 

Elliott School of International Affairs, George Washington University, in Washington, DC. 

Gentlemen, it’s truly a pleasure to have you here. I’ve read each 

of your statements. That’s not to suggest you should shorten them, 

just—they’re first-rate, they’re right on point. And I really mean 

that, I’m not suggesting—because I think part of the purpose of 

this committee is to be sort of a—an educational sounding board 

and forum for those who listen. So, it’s not merely just for us to 

hear what you have to say. So, I welcome you. 

Richard, thanks for coming back so soon. Why don’t we begin 

with you, and then go to Dr. Campbell, and then go to Dr. Harding, 

and in the order in which we’ve been called. 

30 

The floor is yours, Richard. 

STATEMENT OF HON. RICHARD HAASS, PRESIDENT, COUNCIL 

ON FOREIGN RELATIONS, NEW YORK, NY 

Ambassador HAASS. Well, thank you, Mr. Chairman, Senator 

Lugar, Senators. It’s good to be back before this committee, in particular to testify on this subject. You’ve selected an important one. 

Let me also just say how pleased I am to be with these two gentlemen, who are two of this country’s leading experts on Asia. And 

I’m also fortunate enough to count both of them as friends. 

I heard what you said, I will not read my statement. 

The CHAIRMAN. No, no, no, I didn’t mean to suggest that. I—and 

I really didn’t mean to suggest that. 

Ambassador HAASS. OK. 

The CHAIRMAN. Please, go ahead and read your statement, because I think it’s first-rate. I was just—I was just bragging that I 

read them. [Laughter.] 

And that was the only thing I was doing. But—— 

Ambassador HAASS. That’s now in the record. [Laughter.] 

Let me just make clear that I’m speaking for myself here and not 

for the Council on Foreign Relations, although—— 

The CHAIRMAN. No one’s ever spoken for the Council—— 

Ambassador HAASS. Exactly. 

The CHAIRMAN [continuing]. Have they? I’m not—— 

[Laughter.] 

Ambassador HAASS [continuing]. It takes no institutional positions, and I expect a good chunk of its members will disagree with 

what I have to say here today. 

Let me say, at the outset, that I don’t think it’s an exaggeration 

to predict that the United States-China relationship will, more 

than any other, influence international relations in the 21st century. I also think, though, that the basic contours of the 21st 

century are now visible. Let me just give a little bit historical comparison here, if I might. 

The 20th century started out as a multipolar world dominated by 

a few. Then, after World War II, with the weakening of the European powers, and the special constraints placed on Germany and 

Japan, we ended up with a bipolar world dominated by the United 

States and the Soviet Union. Then, after the end of the cold war, 

we ended up with a world uniquely dominated by one country: The 

United States. Now, I would suggest it is a very different world, 

which I have termed ‘‘nonpolar.’’ Essentially, it is a world characterized not by the concentration of power, but by its distribution, 

by its diffusion. We—the United States—will still remain first 

among unequals, but there will be many more independent actors, 

state and nonstate alike, possessing meaningful power, in one form 

or another. 

The signature challenges of this era will be those presented by 

globalization, such as the spread of nuclear materials and weapons 

and associated delivery systems, climate change, protectionism, 

pandemics, drugs, and terrorism. 

It is just worth stating for a moment that this represents a fundamental change from much of modern history, which, as you know 

better than anyone, was shaped by great power competition and 

31 

often great power conflict. This is now a different world, and there 

is an opportunity, because the fact that great power competition 

and conflict is no longer the driving force of international relations 

means that the world has opened up the possibility of meaningful 

cooperation between and among the major powers of this era, including the United States and China. 

Now, what the United States and China choose to make of this 

opportunity to shape the world is a very different question. That 

is the one I want to talk about. 

There are a number of possible futures for the United States and 

China and for their relationship. Two stand out. 

The first would be in—the chairman alluded to it in his opening 

statement—a relationship marked mostly by competition, possibly 

even cold war, which, by the way, if it were to ever come about, 

would lead us to rename this period the ‘‘inter-cold-war era.’’ Worse 

yet, it could be, conceivably, a relationship marked by conflict. At 

the other end of the spectrum, a far more optimistic alternative, 

would be a United States-Chinese relationship that I would call 

‘‘selective partnership,’’ which is just that, a willingness and an 

ability to work together when interests coincide, such as recently 

we saw with North Korea. 

The obvious challenge for American foreign policy, but also Chinese foreign policy, is to steer the relationship toward the more cooperative end of the spectrum, and to manage areas of disagreement so that they do not spill over and preclude partnership and 

cooperation where they are otherwise possible. 

And, given your conversation here just now with Secretary 

Negroponte, I just want to highlight that it is in our interest to try 

to persuade China to see that it is increasingly in China’s selfinterest to work with us. I do not believe that is ‘‘pie in the sky.’’ 

It falls within the realm of possibility. But, we also need to understand cooperation will, on occasion, or more than on occasion, prove 

impossible. We ought to be very, very careful before introducing 

ideas of linkage into the relationship. Just because we can’t cooperate everywhere does not mean we want to eliminate the possibility 

to cooperate where we can. 

So, what is required? Let me begin with what is probably the 

most important functional recommendation, which is regular highlevel consultations. And what I’d say here is, consultations are to 

foreign policy what location is to real estate. It is not everything, 

but it’s a great deal. And the scope of such consultations should 

run the gamut from bilateral political and economic matters to regional and global issues. 

In general, consultations provide a setting to establish rules that 

would shape international relations, and then to go on to design institutions that would buttress those rules. As we heard just before, 

the United States and China have helped themselves by establishing consultative frameworks in the political and economic 

realms, and these should be continued at a high level, as well as 

at a medium level and a working level, by the next administration 

and held as frequently as is productive. 

Bilateral consultations, though, will not be enough. U.S. foreign 

policy should also be geared toward integrating China into regional 

and global efforts meant to structure the 21st century world. It 

32 

would help to expand the G–8 to include China on a permanent 

basis. 

Second, devising a security architecture for Asia, possibly resembling the Organization for Security and Cooperation in Europe and 

what it has done for that part of the world, also deserves serious 

attention. 

A regional body for Asia along these lines, which would involve 

the United States and China, and not exclude either, could complement existing regional mechanisms, as well as United States 

alliances with Japan, Korea, and others. 

As a rule of thumb, China is more likely to support those regional and international arrangements it has had a hand in building than those it is simply being asked to support. 

Let me say one or two things about energy and the environment. 

There are many arguments for reducing, as I know this committee 

has heard from others, demand for oil. Here I’d list the impact on 

price, flows of dollars to producers, and climate change. The United 

States and China happen to share these interests, as well as a 

stake in the growth of supply and the stability of supplier countries. What the two countries also share is a stake in avoiding 

growing competition over access to energy supplies. Such competition could drive up price; or worse, it could bring about, in a worstpossible case, conflict. All this underscores the need for enhanced 

consultations in this area. I would single out three subjects: Climate change, technology development and sharing, and steps to 

promote stability in producing regions. 

One area I would not be so enthusiastic about—— 

The CHAIRMAN. Excuse me, would you repeat those again? Climate change, you said—— 

Ambassador HAASS. Climate change, technology development and 

sharing—for example, in the clean-coal area—— 

The CHAIRMAN. Yeah. 

Ambassador HAASS [continuing]. And we should have a conversation with the Chinese about the stability of oil production areas 

and routes. They, like we, are increasingly dependent on imports. 

And they, like we, are dependent upon open sealanes. And it is— 

coming back to your previous conversation about Iran, one of the 

potential aspects—— 

The CHAIRMAN. Yeah. 

Ambassador HAASS [continuing]. Of that conversation has got to 

be what the consequences of a crisis over Iran and the use of force, 

vis-a-vis Iran, would mean for the price and availability of oil. 

China has a stake in not seeing that scenario come about, just like 

we do. 

Let me raise one question, though, about institutionalization, 

and that would be in the area of creating a league or cluster of 

democracies. There is the reality that the cooperation of nondemocratic states, such as China and Russia, is essential if global challenges are not to overwhelm us. And, on top of that, it’s not obvious 

that the exclusion from such groupings of democracies of countries 

such as China would have the effect of encouraging the evolution 

of democracy and civil society in that country. So, if we are going 

to go ahead, nonetheless, to establish some kind of a league of 

democracies, I would simply suggest that the purpose of such a 

33 

group be limited to democracy promotion, and it not become a 

forum where the full range of foreign policy matters is discussed, 

much less decided. 

Let me return, then, to something you mentioned, Mr. Chairman, 

in your comment, before, about what the principal focus of U.S. foreign policy ought to be toward China. You were kind enough to 

quote from something I said, so I will follow suit. The principal 

focus of U.S. foreign policy toward China should be China’s foreign 

policy. And the reason is simple. Given all the challenges we face 

in this world, the United States does not have the luxury of making its focus what goes on inside China. Nor do we have the wisdom or ability to make China in our image. We do, though, have 

an interest in a stable and peaceful China that is willing and able 

to play a constructive role in the world. And let me be clear here, 

because it is easy to caricature what I just said. This is not an allor-nothing call. There are things we can do that would influence 

what happens inside of China, such as promoting the spread of the 

rule of law, working with the Chinese to increase the transparency 

of all the government does. By doing those things, we would help 

bring about a more open China. But it is a matter of emphasis. 

And foreign policy has got to be a question of emphasis; it has got 

to be a question of priority, and it has got to be a question of tradeoffs. And the emphasis of United States foreign policy should be on 

shaping what China does, and not what China is. 

The United States also needs to be careful not to react to the socalled Chinese threat. China’s economy is large, and growing rapidly, but it does so from a very low base, as Senator Lugar pointed 

out. Moreover, much of its wealth is necessarily absorbed by providing for its population, not for military investment or foreign policy undertakings. And even though it is modernizing its military, 

we’ve also got to keep that in perspective; it spends only roughly 

15 percent or so of what we do on our military. And the bottom line 

is that China is not yet a military competitor, much less a military 

peer. 

Interestingly, I think Chinese leaders understand this, and they 

understand just how much their country requires decades of external stability so that they can continue to focus their energies and 

attention on economic growth and political evolution. China is an 

emerging country, but in no way is it a revolutionary threat to 

world order as we know it. 

Let me just end with one or two things that the Chinese also 

have to think about, because if this relationship is to prosper in 

every sense of the word, it is going to take both sides to manage 

it carefully and manage it well. 

We, alone, cannot bring about a successful United States-Chinese 

relationship. What the Chinese do and say will count just as much. 

They will need, to begin with, to exercise restraint and patience on 

Taiwan. There can be no shortcuts, no use of force. We, at the same 

time, must meet our obligations to assist Taiwan with its defense. 

We can also help by discouraging statements and actions by Taiwan’s leaders that would be viewed as provocative, or worse. 

Let me also discuss one last subject that doesn’t get enough attention: China’s relationship with its own nationalism. It is actually the one development within China that concerns me the most 

34 

and, I believe, casts the greatest potential cloud over China’s future 

and over our bilateral relationship. 

Nationalism could all too easily fill the void within China, all too 

easily fill the political and psychological void in that society. And 

this is dangerous, as history demonstrates that leaders who allow 

or stimulate excess nationalism can all too easily become trapped 

by it. This argues for allowing greater political and religious freedom in China so there are alternative sources of legitimacy and 

allegiance there. Ultimately, there needs to be more to life for the 

Chinese people than simply economic advance. But it is also true 

that this is something that the Chinese will largely have to do by, 

and largely for, themselves. We can and should make our views 

known, but mostly in private, and not as demands or as prerequisites for our willingness to work with China when it is in our 

own self-interest to do so. 

Last, China will need to assume a greater responsibility in world 

affairs. It cannot continue to hide behind its being a developing 

country. China is one of the world’s great powers, and it needs to 

approach specific foreign policy matters, from Zimbabwe and 

Sudan, to proliferation and climate change, not just through the 

narrow prism of what is good for its economy; Chinese leaders also 

need to consider what is good for the world. 

In return, China can expect a greater role in setting the rules 

and building the institutions that will shape the world. In this 

vein, China’s foreign policy analysts and leaders should reconsider 

their view of sovereignty. In the modern world, what happens within borders can affect others. Governments cannot be free to commit 

or allow genocide or harbor terrorists or proliferate weapons of 

mass destruction. With sovereignty comes obligations, as well as 

privileges. 

The United States can help by being sensitive to legitimate Chinese concerns, by consulting frequently, and by working to integrate China into regional and global institutions in a manner befitting a rising power. This is something we can and should do, not 

as a favor to China, but as our favor to ourselves in a era of history 

where Chinese cooperation is essential if globalization is to be managed. 

Thank you. And I look forward to any comments or questions you 

may have. 

[The prepared statement of Ambassador Haass follows:] 

PREPARED STATEMENT OF HON. RICHARD N. HAASS, PRESIDENT, COUNCIL ON

FOREIGN RELATIONS, NEW YORK, NY 

Thank you for this opportunity to testify on United States-China relations in the 

era of globalization. This is a critically important subject. It is no exaggeration to 

predict that the United States-China relationship will, more than any other, influence international relations in the 21st century. 

That said, the basic contours of the new century are already visible. Unlike the 

20th century, which started out as a multipolar world dominated by a few, became, 

after World War II, a bipolar world dominated by two countries, and ended up 

mostly a unipolar reflection of American primacy, the 21st century is nonpolar. Ours 

is a world characterized not by the concentration of power but by its distribution. 

The United States is and will remain first among unequals, but there are and will 

be many more independent actors, state and nonstate alike, possessing meaningful 

power in one form or another than at any other time in modern history. 

But if the structure of today’s world is clear, its character is not. A nonpolar world 

is already a reality, but it is not certain whether it turns out to be the sort of world 

35 

where most people live in peace, enjoy prosperity, and experience freedom. Again, 

the trajectory of the United States-China relationship will help determine how this 

century unfolds. 

The signature challenges of this era will be posed by globalization. Globalization 

is the increasing volume, velocity, and importance of flows within and across borders of people, ideas, greenhouse gases, manufactured goods, dollars, euros, television and radio signals, drugs, guns, e-mails, viruses, and a good deal else. The 

challenges that result from globalization are many, and include the spread of nuclear materials and weapons and associated delivery systems, climate change, impediments to trade and capital movement, pandemics, drugs, and terrorism. 

The notion that challenges derived from globalization will dominate the century 

represents a considerable departure from much of modern history, which more than 

anything else was shaped by great power competition and conflict. But such competition and conflict between and among the great powers of this era—the United 

States, China, India, Russia, Japan, and Europe—is not and need not become the 

defining dynamic of this century. This is a tremendous development, as the United 

States is spared the cost and risk of engaging in such conflicts. 

It is as well an opportunity. The absence of automatic great power competition 

and conflict opens up considerable potential for cooperation among the major powers 

of the era, including between the United States and China. Ideally, this cooperation 

would be centered on those pressing global challenges that no single country can 

manage much less master on its own. What the United States and China choose 

to make of this opportunity to shape the world of the 21st century is a different 

question. 

There are a number of possible futures for the United States and China and the 

relationship between them. Two stand out. The first would be a United States-China 

relationship marked mostly by competition, cold war, or, worst of all, conflict. History suggests this is possible, if only because of the natural tendency for friction to 

arise between the prevailing power of the day and a rising power that could challenge its status. Concerns about this prospect exist in the United States given China’s economic dynamism, its growing military strength, and aspects of Chinese policy, including its stance vis-a-vis Taiwan and its emphasis on securing access to energy and raw materials. Not surprisingly, concerns in China about U.S. intentions 

are no less intense, with many believing that U.S. foreign policy aims to thwart China’s rise and deny China its rightful place in the world. Many also believe that the 

United States regularly and unjustly interferes with what many Chinese see as internal matters, including Taiwan, Tibet, and the nature of China’s political system. 

A far more optimistic and positive alternative is a United States-China relationship that could best be described as selective partnership. This would be fundamentally different from and considerably less than an alliance, something that involves 

a commitment to act together, normally on the most fundamental matters of defense 

and security. Rather, selective partnership is just that: A willingness and ability to 

work together when interests coincide. North Korea is a case in point. The United 

States and China have cooperated to a degree to manage, i.e., place a ceiling on, 

the nuclear problem. This is not the same as solving it. Nor is it to be taken as 

a precedent. Cooperation between the United States and China thus remains limited in frequency and scope; the relationship shares and will likely continue to share 

elements of both competition and cooperation. The obvious challenge for statecraft 

is to steer the relationship toward the cooperative end of the spectrum and to manage areas of disagreement so they do not spill over and preclude partnership and 

cooperation where otherwise possible. We need to work to bring about a bilateral 

relationship in which China increasingly sees it in its own interest to work with 

us—and where both countries eschew linkage on those occasions when cooperation 

proves impossible. 

A cooperative United States-China relationship will not just happen. There is no 

invisible hand at work in the world of geopolitics. Still, it is critical that it does 

come about. The stakes are great. Slowing the spread of nuclear materials; controlling climate change; managing pandemics; maintaining an open world economy: 

these and other challenges will be far less difficult to contend with if the United 

States and China work together. Indeed, it is next to impossible to imagine how 

these challenges could be met if China and the United States fail to cooperate or, 

worse yet, actually work to frustrate collective efforts. 

What then is required? There is no single or simple fix, but one place to start is 

with regular, high-level consultations. Consultations are to foreign policy what location is to real estate: Not everything, but a great deal. Consultations offer an opportunity for officials to share views on emerging and existing challenges and on what 

needs to be done about them. The scope of such exchanges should run the gamut, 

from bilateral political and economic matters to regional and global issues. When 

36 

it comes to global concerns, consultations provide a setting to establish rules that 

would shape international relations and to design institutions for buttressing those 

rules. Consultations have the potential to be the creative exchanges that set the 

stage for successful negotiations. The United States and China have helped themselves by establishing consultative frameworks in the political and economic realms. 

These should be continued at a high level by the next administration and held as 

frequently as is productive. 

It also warrants mention that the time when bilateral economic ties could provide 

ballast and protection for the entire bilateral relationship is largely over. In part 

this is because economic ties themselves have become something of a source of friction given the large bilateral trade imbalance and China’s managed exchange rate. 

The criticism this situation generates is overstated—the trade imbalance would remain high even if China allowed its currency to appreciate, and U.S. exports to 

China are growing rapidly—but the political friction in the United States is real all 

the same. This situation calls not simply for addressing (in the WTO and bilaterally) 

legitimate concerns about China’s economic behavior, but for establishing rules and 

procedures that encourage the flow of Chinese investment into the United States. 

The likelihood of increased friction in the economic realm reinforces the importance of expanding United States-China diplomatic coordination. Bilateral consultations are not enough, however. U.S. foreign policy should also be geared toward integrating China into regional and global efforts meant to structure the 21st century 

world. It would help to expand the G–8 to include China on a permanent basis; better yet would be to transform the grouping into a G–10 (with India also added as 

a regular member) and then to involve medium powers (including such countries as 

South Africa, Brazil, South Korea, Mexico, Indonesia, and Australia) and other state 

and nonstate actors as relevant. Devising a security architecture for Asia, possibly 

resembling in some fashion what the Organization for Security and Cooperation in 

Europe (OSCE) has done for that region, also deserves serious attention. A regional 

body along these lines could complement existing regional mechanisms as well as 

U.S. alliances with Japan, the Republic of Korea, and others. Asian security arrangements that involve both the United States and China are called for if the region’s dynamism is not to prove too much for local governments to manage. All 

things being equal, China is more likely to support those regional and international 

arrangements it has had a hand in building than those it simply is being asked to 

support. 

Energy and the environment merit separate mention. There are many arguments 

for reducing (or at least slowing the rate of increase in) demand for oil, including 

the impact on price, flows of dollars to producers, and climate change. The United 

States and China share these interests as well as a stake in the growth of supply 

and the stability of supplier countries. What the two countries also share is a stake 

in avoiding growing competition over access to energy supplies. This combination of 

overlapping and potentially competing interests underscores the need for enhanced 

consultations in this area, including on climate change, technology development and 

sharing, and steps to promote stability in producing regions. 

The United States should be wary of institutionalizing some sort of league or cluster of democracies. Apart from the difficult and awkward problem of determining 

which states qualify for membership, there is the reality that the cooperation of 

nondemocratic states, including China and Russia among others, is essential if 

global and other challenges are not to overwhelm us. It is also not obvious that exclusion from such a grouping would have the effect of encouraging democratic evolution in the countries that need it most. If such a group is nonetheless established, 

it should be limited to the purpose of encouraging reforms related to promoting democracy and not become a forum where other foreign policy matters are discussed 

and decided. 

The principal focus of U.S. foreign policy toward China should be China’s foreign 

policy. This may be seem obvious, although it is anything but. One contending 

school of thought influencing American foreign policy would emphasize and seek to 

change what goes on inside countries, both as a moral end in itself and for pragmatic ends. This latter contention stems from the assumption that democratic countries are likely to behave better toward their neighbors than authoritarian regimes. 

But given all the challenges we face in a global world, the United States does not 

have the luxury of making its focus what goes on inside China. Nor do we have the 

wisdom or ability to make China in our image. We do, though, have an interest in 

a stable and peaceful China that is willing and able to play a constructive role in 

the world. It is not an all or nothing call—there are things we can do (such as 

spreading the rule of law and working with the Chinese to increase the transparency of what goes on inside the government) to help encourage the emergence 

37 

of a more open China. But there is the matter of emphasis, and the emphasis of 

U.S. policy should be on shaping what China does, not what China is. 

The United States also needs to be careful not to overreact to the ‘‘Chinese 

threat.’’ China’s economy is large and growing rapidly, but it is doing so from a relatively low base. In addition, it is unlikely double-digit growth rates can be sustained. Moreover, China’s enormous population is as much a burden as an asset. 

Much of its wealth will necessarily be absorbed by providing for its population, not 

for military investment or distant undertakings. Similarly, although China is modernizing its military, we should keep its military might in perspective. China spends 

roughly 15 percent of what the United States does on its military. China is not a 

global military competitor, much less a peer. 

Some in the United Sates tend to overstate China’s strength; in my experience, 

few in China do. To the contrary, Chinese leaders understand well just how much 

their country requires decades of external stability so that they can continue to 

focus their attention on economic growth and political reform. China can ill afford 

external distractions that would absorb resources and jeopardize the environment 

that China requires for continued economic growth. China is an emerging country, 

but in no way is it a revolutionary threat to world order as we know it. 

But U.S. policy alone cannot determine the future trajectory of United StatesChina relations. What the Chinese do and say will count just as much. China will 

need to exercise restraint and patience. Taiwan is one such area. There can be no 

shortcuts, no use of force. History must play itself out. The United States must meet 

its obligations to assist Taiwan with its defense. At the same time, the United 

States can help here by discouraging statements and actions by Taiwan’s leaders 

that would be viewed as provocative or worse. But leaders on the mainland must 

not overreact nor be pushed by domestic pressures to take actions that would prove 

destabilizing. 

China’s leaders must also be careful of nationalism. Communism and socialism do 

not command public support as they once did. Materialism and consumerism cannot 

substitute. Political and religious freedoms are severely constrained. Nationalism 

can all too easily fill a void. This is dangerous, as history demonstrates that leaders 

who allow or stimulate excess nationalism can all too easily become trapped by it. 

This argues not simply for keeping nationalism in check, but for allowing greater 

political and religious freedom so there are alternative sources of legitimacy and 

allegiance in the society beyond that of economic advance. This is something that 

the Chinese will largely have to do by and for themselves. The United States can 

and should make its views known, but mostly in private and not as demands or as 

prerequisites for our willingness to work with China when it is in our own self-interest to do so. 

China will need, too, to assume a greater sense of responsibility in world affairs. 

China cannot hide behind its being a developing country. It is one of the world’s 

great powers. China needs to approach specific foreign policy matters ranging from 

Zimbabwe and Sudan to proliferation and climate change not just through a narrow 

prism of what is good for its economy. It also needs to consider what is good for 

the world. In return, China can expect a greater role in setting the rules and building the institutions that will shape the world. In this vein, China’s foreign policy 

analysts and its political leaders should reconsider their absolute view of sovereignty. In the modern world, what happens within borders can affect others. Governments cannot be free to commit or allow genocide or harbor terrorists or proliferate weapons of mass destruction. With sovereignty comes obligations as well as 

privileges. 

Again, the United States can help here, by being sensitive to legitimate Chinese 

concerns, by consulting frequently with Chinese leaders, and by integrating China 

into regional and global institutions in a manner befitting a rising power. This is 

something we do not as a favor to China, but as a favor to ourselves in an era of 

history where Chinese cooperation is essential if globalization is to be managed. 

The CHAIRMAN. Thank you very much. 

Doctor? 

STATEMENT OF DR. KURT CAMPBELL, CHIEF EXECUTIVE 

OFFICER, THE CENTER FOR A NEW AMERICAN SECURITY, 

WASHINGTON, DC 

Dr. CAMPBELL. Thank you very much, Chairman Biden, Senator 

Lugar, other Senators. Thank you for this opportunity. 

38 

As you’ve suggested, we’ve sent in our full comments earlier 

today, and I’ll try to just simply summarize. But, I’d like to, since 

I agree with almost everything that Richard has said and written, 

and the same thing with Harry, I think I’ll focus more on American 

policy and what are some of the challenges that are likely for 

American policymakers to face when it comes to China’s rise. And, 

in that respect, I’ll just make five quick points. 

But, before I do, I also just want to comment and really suggest 

that we all appreciate working with your staffs. You’ve got excellent people who work on these and other issues, and we appreciate 

it, and we appreciate their hard work. 

Five quick points, Chairman Biden, if I can. 

I think, if you ask many people outside of the United States— 

and, indeed, historians, maybe, 10 or 15 years from now—what is 

the key feature of global politics, it might be a surprise. For most 

Americans, certainly those of us who work in Washington, we’d 

say, ‘‘Well, look, it’s the war on terror and Iraq. Clearly, that’s the 

issue that we’ve got our eye on.’’ I think a powerful argument could 

be made, if you go elsewhere, that they would say that the key feature in global politics over the last decade has been the arrival of 

China on the international scene as a great player and a great 

power. And I think that the essential components of that are obviously China’s economic capabilities, its growing commercial might, 

its political muscle, its soft power, as we’ve discussed. 

But, I think, unfortunately, a critical ingredient in that arrival 

has been American preoccupation. If you ask many friends in Asia, 

they will tell you, ‘‘Look, where the United States is right now.’’ 

China’s arrival has basically occurred during a period of somewhat 

of an American vacuum in which we have been missing among 

many of the most critical dialogues and discussions in Asia, and 

that’s going to be—and, I must say, that, unfortunately, is a bipartisan preoccupation, and it’s something that the next President, 

Democrat or Republican, is going to have to confront head on. 

I would also say that we—you focused—I love the report that you 

commissioned, Chairman Biden. My own hunch is that we have 

seen the high point in Chinese soft power, and it’s going to be over 

the last couple of years. But, I think the real interesting questions, 

going forward, are just simple measurements about Chinese power, 

because what Chinese friends in the region and elsewhere are 

starting to appreciate is that, not only does China have soft 

power—and there are limitations to it, associated with Tibet and 

other issues—but, it’s the combination of the two that they have 

wielded. I don’t—you know, this concept of ‘‘smart power,’’ I’m not 

sure—I think that just means diplomacy, I think. But, the truth is 

that the Chinese have been quite effective at merging hard and soft 

power in a way that I think is a real challenge to the United States 

and other friends in the international system. 

So, this first issue, I think we just have to recognize that this is 

a dominant feature in global politics. As Richard and Harry point 

out, it’s not going away, it’s going to dominate global politics over 

the course of the next 50 years. 

Second, since everything—to get attention, if you focus on Asia, 

you’ve got to focus a little bit and link China or Asia to the Middle 

East, I’ll do so now, and I’ll talk about Iraq. I mention in my stateVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6602 H:\DOCS\US-CHINA.TXT BETTY
39 

ment that I think American policymakers face something that I 

would refer to as the ‘‘Siberian dilemma.’’ Now, I, unfortunately, 

spent many years as a Sovietologist, not very good training for very 

much, but you learn a lot of great stories that are wonderful anecdotes that you could apply elsewhere. 

Russian fishermen who live in Siberia, who venture way out onto 

the ice, even in the coldest periods of the year—and because that 

ice has a very high content of salt, it’s still thin very, very far out; 

so when these fishermen go out, they know that that’s where the 

fish are the biggest, they drop their lines in; and, even on the worst 

days, sometimes they’re out there in the middle of the lake; and if 

that ice breaks, they’re, you know, plummeted into the water, and 

they face, immediately, the Siberian dilemma. If they remain in the 

water, call for help, they’ll be dead of hyperthermia in about 10 

minutes; if they pull themselves out on the ice to attempt to climb 

away, they’ll be dead in about 2 minutes, because the ice freezes 

on their body. And so, in typical Russian optimistic sense, that’s 

the ‘‘Siberian dilemma.’’ 

And I would suggest to you that American—it’s really encouraging. It’s a good feature for our discussion. 

The CHAIRMAN. I kinda like that. [Laughter.] 

Dr. CAMPBELL. It’s—we face a version, sort of a sand version of 

the Siberian dilemma, when it comes to Iraq. If we decide to stay 

in and slog it out for the next 10 or 15 years, spending troops and 

treasure, American capital, we will pay a price. And one of the regions who will pay the largest price—and we should be under no 

illusions about that, we should just recognize it up front—is going 

to be in Asia. 

The CHAIRMAN. Yeah. 

Dr. CAMPBELL. However, if we decide, very rapidly, to withdraw, 

pull our forces out, it’s likely to be a mess, and we’ll be able to replace pictures in 1975 of folks, you know, fleeing on helicopters, 

with new pictures of guys getting out of the Embassy with, you 

know, computers and stuff to other waiting helicopters, and the 

consequence there, of course, will be felt in the Middle East. And 

that’s where we talk about it the most. But, the truth is, no region 

is more attentive to the concepts and, sort of, the dimensions of 

American power than Asia is. So, the Siberian dilemma, the challenges that we face in Iraq, will have deep consequences for Asia 

and China. 

Third point, quickly, Mr. Chairman, I want to talk about the 

components of a good American strategy, vis-a-vis China, or at 

least what are—some of the challenges are. And I want to make— 

one thing internally and one thing externally—and I’m going to 

just reflect on my own experience and something that I am struck 

by. I had either the good fortune or the challenge of working in the 

part of the Defense Department and in the Navy that thought more 

about, shall we say, hedging, vis-a-vis China. Others, like our very 

able witness before us, have worked more on the engaging side. I 

counted, and he, I think, used the word ‘‘dialogue’’ over 1,000 

times. Dialogue is very important. It’s also very important to think 

about hedging, as well. 

40 

What I’m concerned by is that these two components, these two 

wings of our policy, even though we talk about it as a coherent 

whole, are not very well integrated. 

The CHAIRMAN. Yeah. 

Dr. CAMPBELL. And I’m struck that, increasingly, you’re able to 

send, sort of, mixed messages, unintended messages. And I will tell 

you that the people I interacted with primarily in China on the 

military side, the hard side, did not think and talk the way Secretary Negroponte did. Likewise, some of the people that I 

worked—in the Defense establishment in the United States in 

China also think about things very differently. 

One of our most important challenges, going ahead, is to try to 

integrate this in a more sophisticated way, because they’re almost 

like two torpedoes on different paths, sort of heading in different 

directions, and they’re not well linked together. 

The second point is one, I agree with you, Chairman, and—— 

The CHAIRMAN. Are they linked in China? 

Dr. CAMPBELL. Better than they are in the United States. But, 

that’s just because they’re a highly centralized government. 

I would also say that I agree with both Richard and you, Mr. 

Chairman, that one of the most important ingredients of a successful policy is to engage the leaders of Beijing intensively. But, the 

truth is, and one thing that’s occasionally lost on American policymakers, is that good China policy isn’t just going to China, it’s 

working in the region, it’s working with our allies in the region and 

reassuring them, engaging them deeply and profoundly, and that 

starts in Japan. We need to rebuild our relationship with South 

Korea. We’ve done a lot in Australia and Singapore and other countries. 

I will say the one area that I—as I listen to Secretary 

Negroponte, that I heard a little wobbliness, was our relationship— 

our security relationship should be with Taiwan. And I think that’s 

important. I personally am—would be someone who would suggest 

that Taiwan will have the confidence to engage with Beijing. We 

want a peaceful process. But, they will only have that confidence 

if they know that we have their back. And so, I think it’s important 

for us to send a signal and a message that we understand that 

they’re living in a difficult neighborhood. That’s the third point. 

Two last points. 

One, climate change. Everything, I think, that has been said 

today is very reassuring, in a recognition that climate change, in 

my view, is going to be the dominant—not environmental issue, the 

dominant national security issue—national security issue over the 

course of the next 30 to 50 years. But, the truth is, when Secretary 

Negroponte said ‘‘unless we get this done by 2050’’—if we don’t get 

this done—start seeing major changes in both United States and 

China policy in the next 10 years, it’s game-over. If you look at the 

most reasonable, conservative predictions about what’s going to 

happen to sea-level rises—let’s say, maybe, a meter over 50 years— 

you have a billion people on the move. It’s a global catastrophe of 

really historic proportions. And so, we don’t have that time. 

And I will say that, generally speaking, we talk about the benefits and possibilities of United States-China collaboration and cooperation—one of the most tragic cooperations, however, that we’ve 

41 

seen over the last 6 or 7 years has been that the United States and 

China have cooperated very aggressively at undermining the 

science of climate change and undermining, really, any international efforts. If you ask me, it’s going to be a race about which 

ultimate inheritance is going to be most damaging from the Bush 

administration, and it’s a race—it’s a close race between Iraq and 

climate change. It’s a big issue, and it’s one that the next administration has to attack, right off the bat. 

Last, you alluded to this in your excellent comments at the outset, both of you, Mr. Chairman and Senator Lugar. The problem for 

China policy is that we, here in this room, and others, can agree 

about how nuanced and subtle a policy it’s going to need to be, but 

the truth is, it’s a very complicated sell to the American people. 

And it’s—and the relationship with China is going to be unlike any 

big relationship we’ve had with a major power in our history. If you 

look at the Soviet Union, it was monochromatic, black and white, 

good/bad. The way that Richard and Harry describe it is much 

more sophisticated than I could, but it’s much—it’s monochromatic, 

we’re going to be having areas where we’re going to cooperate very 

closely, and we’re going to have areas that we’re going to compete. 

I actually think that we can manage that if it’s simply the executive branch doing business, but we all understand that that’s not 

how the U.S. Government works. We work in a very important collaboration with the legislative branch, but we also have to bring 

the American people along. And the thing that has struck me the 

most, of all the discussions that I’ve had with people outside of 

Washington, is not the debate about Iraq, but the debate about 

China. I hear many more concerns about China policy. 

I’ll just end with a quick anecdote. I was fishing in Alaska last 

year with Joe Nye and others, and we were talking with some of 

our guides about China. And our guide was very angry, and he 

said, ‘‘Look, the Chinese are trying to kill my dogs,’’ and he was 

very worried, because the food that we had imported from China— 

obviously, dog food—has poisons laced in it. And we proceeded to 

have a discussion, and the level of knowledge and unhappiness 

across a broad range of issues really struck me. 

It’s not just going to be cobbling together and basically developing a coherent, synthetic policy, it’s going to be bringing the 

American people along that is the real challenge. 

Thank you very much for this opportunity, Mr. Chairman. 

[The prepared statement of Dr. Campbell follows:] 

PREPARED STATEMENT OF DR. KURT CAMPBELL, CHIEF EXECUTIVE OFFICER, THE

CENTER FOR A NEW AMERICAN SECURITY, WASHINGTON, DC 

Chairman Biden, Ranking Member Lugar, distinguished members of the committee, it is an honor to appear before you today to discuss the strategic challenges 

confronting the United States over the course of the next decade and beyond in the 

Asia-Pacific. 

A trip through Asia, even a relatively brief one, reveals some disquieting concerns 

over the current American position in the region. In these waning months of the 

Bush administration, with the country bogged down and preoccupied in Iraq, the 

United States faces an unpalatable choice posed by the ‘‘Siberian dilemma’’ in Iraq. 

Just what is the Siberian dilemma and how does it apply to the unforgiving urban 

battlefields of Iraq? And more to the point, what does this have to do with Asia? 

The fishermen of northernmost Russia go out onto the frozen lakes of Siberia in 

temperatures approaching 60 degrees below zero centigrade to fill their catch. They 

know from experience that the biggest fish congregate at the center of lakes where 

42 

the ice is the thinnest. They slowly make their way out across the ice listening carefully for the telltale signs of cracking. If a fisherman is unlucky enough to fall 

through the ice into the freezing water, he is confronted immediately with what is 

known as the Siberian dilemma. If he pulls himself out of the water onto the ice, 

his body will freeze immediately in the atmosphere and the fisherman will die of 

shock. If, however, he chooses to take his chances in the water, the fisherman will 

inevitably perish of hypothermia. Such is the stark choice presented by the Siberian 

dilemma. 

With sand instead of ice, President Bush faces a kind of Siberian dilemma of his 

own making when it comes to his political and diplomatic efforts with regard to 

Iraq. We are now entering the most consequential phase of the unpopular war, and 

America’s power and prestige (as well as President Bush’s legacy) hang in the 

balance. 

Some of the President’s closest advisers have told him to spend all his waking 

hours on selling an increasingly skeptical American populace on the necessity of 

continuing with the war—a war that many expect to end badly despite all the effort, 

attention, and sacrifices of those engaged in the conflict. Another set of advisers 

argue that the United States must begin to put Iraq in context and focus on other 

issues of importance, such as the drama playing out in Asia and in particular China’s dramatic ascent. If we don’t begin to engage more seriously on other critical 

global issues—these policy wonks claim—the United States risks not only a major 

setback not only in Iraq but on other consequential global playing fields spanning 

Asia, Africa, Latin America, and even Europe. However, through this course of action, the United States risks inadvertently sending the message that it is giving up 

on Iraq at a critical juncture. 

This set of very bad choices approximates a Siberian dilemma for America. To 

date, the administration has chosen fundamentally to stay in the sands of Iraq— 

and basically hope for the best elsewhere. This choice is highlighted by a lack of 

strategic clarity and engagement in Asia. For instance, it was commendable that the 

President managed to make it to the APEC leaders summit in Australia (after a 

detour to Iraq), but unfortunately he chose to depart a day before the meeting concluded and skipped the preceding ASEAN summit for heads of state. On the last 

day of the APEC summit, the chair reserved for the President of the United States 

was conspicuously empty as the powers of the Asia Pacific—China, India, Japan, 

and others—looked on. This is precisely where China has been most apt at filling 

America’s void in the region—by engaging in constant high-level meetings and shaping regional agendas. 

This absence is compounded by the nonattendance in recent years of United 

States officials, including the Secretary of State, at numerous other regionwide sessions like the ASEAN Regional Forum and the most recent round of the AustraliaU.S. Ministerial Consultations. It used to be that the United States needed strong 

bilateral relationships before venturing into the territory of multilateral forums. Increasingly, however, the reverse is true. Active participation in the new multilateral 

structures of Asia is necessary and important for effective management of bilateral 

ties and impending security challenges in the region. 

While the Bush team has made significant progress in broadening and strengthening our bilateral alliances with Australia, Japan, and South Korea and tried 

gamely to develop strategic collaboration with India, the usefulness of these efforts 

has been challenged by a growing perception in Asia that America just does not understand the significance of China’s rise and Asia’s ascent. 

The epicenter of global power is no longer the Atlantic but the Pacific. China’s 

ascent has arguably been one of the most rapid and consequential in history, in 

many ways rivaling or even surpassing the significance of America’s rise in stature 

during the first two decades of the last century. Rarely in history has a rising power 

gained such prominence in the international system at least partially because of the 

actions of—and at the expense of—the dominant power, in this case the United 

States. The arrival of the Pacific century has hastened challenges to American influence and power in the greater Asia-Pacific. 

From India to Australia, Asia, more than any other part of the globe, is defined 

by opportunity: Democracy continues to spread beyond the traditional outposts of 

Japan and South Korea; the continent now accounts for almost 30 percent of global 

GDP; and the world’s most wired and upwardly mobile populations are Asian. Asian 

visitors to the U.S. now often complain about the poor quality of American-wired 

networks when compared with the dramatic innovations of online and mobile communication in Asia. 

Home to more than half the world’s population, Asia is the manufacturing and 

information technology ‘‘engine of the world.’’ Asians are shaping a world that is 

ever more integrated. New regional forums like the East Asia summit and the Boao 

43 

Forum for Asia (an Asian Davos of sorts that brings together the political and economic elites of the region) are reshaping cooperation and fostering deeper ties. For 

instance, this year’s Boao Forum enabled high-level contact between Taiwan’s Vice 

President Vincent Siew and Chinese Premier Hu Jintao. Free trade agreements are 

rapidly integrating Asian economies. Amidst this integration, 21st century Asia is 

rich with innovation. The latest gadgets and most dynamic Internet communities 

exist in Asia, where customers expect cell phones to stream video and conduct financial transactions. Asia is also investing like never before. Asian countries lead the 

world with unprecedented infrastructure projects. With over $3 trillion in foreign 

currency reserves, Asian nations and business are starting to shape global economic 

activity. Indian firms are purchasing industrial giants like Arcelor Steel, as well as 

iconic brands of its once colonial ruler like Jaguar and Range Rover. China, along 

with other Asian financial players, injected billions in capital to help steady American investment banks like Merrill Lynch as the subprime mortgage collapse unfolded. All the while, these nations are developing and industrializing at unprecedented rates. Asia now accounts for over 40 percent of global consumption of steel 

and China is leading the pack by consuming almost half of global concrete. 

Yet Asia is not a theater of peace: Between 15 and 50 people die every day from 

causes tied to conflict, and suspicions rooted in rivalry and nationalism run deep. 

The continent exhibits every traditional and nontraditional challenge of our age: A 

cauldron of religious and ethnic tension; a source of terror and extremism; the 

driver of our insatiable appetite for energy; the place where the most people will 

suffer the adverse effects of global climate change; the primary source of nuclear 

proliferation; and the most likely arena for nuclear conflict. Importantly, resolution 

and management of these challenges will prove increasingly difficult—if not impossible—without strong United States-Chinese cooperation. 

However, even Beijing remains uncertain about how best to manage the still-powerful independence movement in Taiwan. The issue presents an acute dilemma for 

China’s leaders, whose individual and collective legitimacy could be undermined 

either by the ‘‘loss’’ of Taiwan or by the problems that would ensue from a military 

conflict over the island. Chinese authorities perceive a realization of its fears in U.S. 

efforts to promote a cooperative network of regional ballistic missile defense programs, which Beijing fears could lead to a de-facto United States-Australia-JapanROK-Taiwan collective defense alliance. This is a strategic competition that the 

United States can only engage in effectively with an appropriate balance of renewing our soft-power efforts and rebalancing our military commitments to reassure our 

friends and allies and dissuade potential adversaries from taking provocative 

actions. 

SOFT POWER AND TRADE

In order for Chinese leaders to meet their goal of great power status, Beijing has 

embarked upon a global effort to expand its influence and credibility. China is attempting to cultivate its image and attractiveness—perhaps to counter America’s 

monopoly on soft power—for example, by building over 100 Confucius Learning centers from South Korea to Kenya to Argentina. China is also buying other powers’ 

allegiance away from Taiwan; building road, rail, and energy infrastructure through 

Central Asia; and securing exclusive rights to energy throughout Africa and South 

America—most observers agree that this pattern shows a loss of U.S. influence in 

the region to China. 

Even though China has always had a popular cultural following, that following 

is now achieving a global scale. For example, China received its first Nobel Prize 

in Literature—awarded to the controversial poet laureate, Gao Xingjian—in 2000; 

foreign students studying in Chinese universities trebled from 36,000 to over 

110,000 over the past decade; and the rise to stardom of China’s basketball superstar Yao Ming has resulted in China acquiring a sobriquet as basketball’s ‘‘final 

frontier.’’ Beijing is systematically and sophisticatedly increasing global knowledge 

about Chinese culture, philosophy, and language. These examples have become a 

central part of China’s soft power playbook and will be boosted by its hosting of the 

2008 Summer Olympic Games. 

Many of China’s gains in the Asia-Pacific are natural. After all, China is culturally, geographically, and historically the giant of the region. From Africa to South 

America, China is establishing strong bilateral relationships and funding development and economic assistance programs. China’s ‘‘no strings attached’’ foreign assistance policy—referred to as the Beijing consensus—is attractive to many developing nations. These nations view China’s historical struggle with poverty and 

industrialization as both inspirational and an alternative model to the more cumVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6621 H:\DOCS\US-CHINA.TXT BETTY
44 

bersome Western approach to development with its emphasis on democracy and 

market liberalization. 

Nowhere is China’s presence more noticeable than in Southeast Asia, where the 

United States is often notably absent. Even though China’s trade with ASEAN 

countries is less still than the U.S.-ASEAN trade relationship, prospects for China 

overtaking the U.S. are becoming more likely with the ASEAN-China Free Trade 

Agreement. In 2000, two-way ASEAN-U.S. trade totaled over $121 billion; the U.S. 

accounted for over 16 percent of ASEAN’s total trade, the largest single-partner 

component. That same year, $32 billion in trade with China only accounted for 4.3 

percent of the region’s total. By 2005, the most recent year for which ASEAN has 

published statistics, trade with the U.S. rose to nearly $154 billion, a proportion 

equal to that of the other top partner, Japan, at 12.6 percent. Meanwhile, in those 

same 5 years, China more than tripled its trade with the region, to $113 billion, 

a number that now represents 9.3 percent of ASEAN’s total. (The EU runs a close 

third, ahead of China, in 2005: $140.5 billion and 11.5 percent). To illustrate that 

this is indeed a long-term trend, it should be noted that while China’s trade with 

ASEAN increased more than 13-fold between 1993 and 2005, America’s doubled: 

$8.9 billion to $1.13 billion and $75.7 billion to $153 billion, respectively. At that 

rate of change, and absent unforeseen limits on China’s capacity, parity between the 

U.S., Japan, the EU, and China is imminent, and China’s assumption of the crown 

all but preordained. 

There are many success stories of China’s effective public diplomacy through 

Southeast Asia. Perhaps most illustrative is Beijing’s decision to foot the bill for the 

reconstruction of Dili East Timor’s war-ravaged capital that was all but leveled by 

intense fighting between East Timorese and the Indonesian military. East Timor is 

both a natural resource-rich state and an ideal staging ground for China’s intensive 

public diplomacy campaign, one that showcases its benevolent foreign policy. China 

sees East Timor as a strategic investment in its expanding sphere of influence, and 

a potential source of rights to untapped natural resources. PetroChina got the contract rights to conduct seismic tests to determine the volume of oil and natural gas 

in the Timor Gap, potentially valued at $30 billion USD. Australian troops and U.S. 

and United Nations diplomats may have guaranteed Timorese freedom, but China 

provided the inhabitants of the new Presidential palace and the Ministry of Foreign 

Affairs building with resort-like offices. 

All the while, China has been strategically securing mountains of American debt 

and treasury bills (T-bills). Recent reports indicate that China now owns over $388 

billion USD in T-bills, almost 20 percent of the global total. China’s financial stakes 

in the U.S. economy are disconcerting to many, but a major Chinese sell-off of 

T-bills seems unlikely because of the negative consequences it would impose on China’s economy and its image as a rational actor. Furthermore, not only do Chinese 

exports provide affordable products to the American consumer, their possession of 

foreign exchange reserves—estimated at $1.6 trillion in March 2008—helps spur domestic economic growth in the U.S. and fund the U.S. Federal budget deficit. The 

wars in Iraq and Afghanistan are costing the American taxpayers hundreds of billions each year, and China continues to fund those war expenditures. Such dependency on Beijing is a double-edged sword that requires strategic reflection and possible adjustments to economic strategy. 

Even though China has made miraculous gains in the region over the last two 

decades, there are problems on the horizon that could challenge its ascent and 

image. Most pressingly, Beijing needs to responsibly manage tensions and violence 

in Tibet if it wants to ease concerns around the region. The international community continues to challenge Chinese officials to think of the long-term implications 

of its heavy-handed approach to dissent and free expression. In the months leading 

up to the Beijing Olympics nations will continue to pressure China on the Tibet 

issue, but these countries must also understand that if they continue to constantly 

needle China, the chances for a miscalculated decision with disproportionate consequences remains a major concern. 

MILITARY MODERNIZATION

Recent news reports of China building an undersea submarine base seem right 

out of a James Bond movie. China has been mysteriously building and modernizing 

its military forces—presumably to respond to a contingency in the cross-Straits, 

though regional powers such as India and Japan believe otherwise. Anxiety in the 

region is growing as China continues to invest billions advancing in its force projection capabilities. 

According to the Department of Defense’s annual report on China’s military, ‘‘On 

March 4, 2007, Beijing announced a 17.8-percent increase in its military budget . . . 

45 

a 19.47-percent increase from 2006.’’ This figure continues an average annual increase of 15 percent during the past 5 years in China’s military spending, one of 

the few sectors that outpaces the country’s economic growth. Since the late 1990s, 

the Chinese Government has accelerated efforts to modernize and upgrade the People’s Liberation Army (PLA). The lack of transparency regarding Chinese defense 

expenditures obscures matters, but most foreign analysts estimate that the PRC 

spent between $97 billion and $139 billion on military-related spending in 2007 (up 

to three times the official Chinese budget figures of $45 billion, which excludes 

spending on military research and development, nuclear weapons, and major foreign-weapons imports). Despite China’s significant military modernization, they 

have yet to publically articulate a ‘‘grand strategy’’ and continue to pursue 

nonconfrontational policies as laid out in Deng’s ‘‘24 Character Strategy.’’ 

Whatever the true number, U.S.-led military operations in Iraq and the former 

Yugoslavia clearly have inspired the Chinese Government to pursue improved capacities for power projection, precision strikes, and the other attributes associated 

with the latest so-called revolution in military affairs (RMA): For example, the PLA 

has emphasized developing rapid reaction forces capable of deploying beyond China’s borders, and the PLA navy (PLA–N) has been acquiring longer range offensive 

and defense missile systems and a more effective submarine force (which is stealthier and more operationally efficient). Chinese strategists have also sought to develop 

an ‘‘assassin’s mace’’ collection of niche weapons that the PLA can use to exploit 

asymmetrical vulnerabilities in adversary military defenses, such as America’s 

growing dependence on complex information technology. 

Besides allowing the PRC to improve its traditionally weak indigenous defense industry, rapid economic growth has made China a prolific arms importer. Russia has 

been an especially eager seller. Recently acquired Russian weapons systems include 

advanced military aircraft (e.g., Su-27s and Su-30s) and naval systems such as 

Sovremenny-class missile destroyers equipped with SS–N–22 Sunburn antiship missiles, and improved Kilo-class diesel class attack submarines that would enhance a 

Chinese military campaign against Taiwan. According to a recent IISS report, China’s Navy ‘‘has evolved from a purely coastal-defense force into one with growing 

oceanic capabilities, This has enabled it to change the way it views itself, its future 

trajectory and its role in Chinese national security.’’ The PLA–N force includes 74 

principal combatants, 57 attack submarines, 55 medium and heavy amphibious 

ships, and 49 coastal missile patrol craft. In addition, recent reports suggest that 

China is planning to develop a three-carrier battle group posture–a project that the 

PRC could start by decade’s end. Moreover, PLA–N is advancing its ‘‘over the horizon’’ targeting capabilities with new radars, and developing a new SSBN (Jin-class) 

which may soon enter service. 

China is also devoting more resources to manufacturing and deploying advanced 

indigenous weapons systems. The PLA has now fielded the indigenously produced 

DF–31 and DF–31A intercontinental ballistic missiles, which are especially important because their mobility makes them hard to destroy. China’s Air Force modernization programs continue. China’s indigenous J–10 system is now being followed 

up with a supposed fifth generation multirole J–12. These platforms will complement the existing 490 combat aircraft ‘‘within unrefueled operational range of 

Taiwan,’’ as well as the modernization of the FB–7A fighter-bomber. China’s space 

program has resulted in its acquiring new surveillance, communication, and navigation capabilities critical to coordinating military operations against Taiwan or other 

contingencies beyond Chinese territory. China’s successful attempt to destroy an 

aging weather satellite in January 2007, followed by the launch of a lunar module 

in fall 2007, demonstrated a significant jump in China’s antispace assets. 

Although China’s military buildup appears to be primarily motivated by a potential Taiwan contingency, many of its recent acquisitions could facilitate the projection of military power into more distant threats of great importance to the United 

States, including Japan, India, Southeast Asia, and Australia. Some of the missile, 

air, and increasingly mobile ground forces directed at Taiwan could be deployed to 

multiple points on China’s periphery. The soon-to-be-fielded conventional land-attack cruise missiles, which could be deployed on China’s new Type 093 nuclear-powered submarines, will give China a limited but useful global power-projection capability. In addition, Russia is now marketing Tu-22 Backfire and Tu-95 Bear bombers 

to the PLA, which could enable it to conduct air strikes against distant targets in 

Southeast Asia and elsewhere. Many PLA navy commanders still desire the acquisition of an aircraft carrier fleet, a traditional symbol both of global power-projection 

capabilities and great-power status. The Chinese presence in Gwadar, Pakistan, located opposite the vital energy corridors of the Strait of Hormuz, also has a strategic 

dimension. For several years, China has been pursuing a ‘‘string of pearls’’ strategy 

to gain access to major ports from the Persian Gulf to Bangladesh, Cambodia, and 

46 

the South China Sea. China’s neighbors are wary. A career Japanese diplomat recently wrote, ‘‘If China’s military expansion remains nontransparent and continues 

at its current pace, states with interests in East Asia will, at some point, begin to 

perceive China as a security threat. Institutionalized trilateral security dialogue 

among Japan, the United States, and China would be one way to minimize such 

threat perceptions.’’ American involvement is key to such efforts to build trust and 

reduce tension. 

None of these developments is surprising; great powers expect to have strong militaries, and the United States certainly appreciates the logic of this position. But 

great powers often seek to disrupt the status quo with such capabilities. Secretary 

of Defense Robert Gates has taken a conciliatory, though cautious, approach to Chinese military modernization. His visit to China, heralded as a success by many, 

broadened the scope of military-to-military cooperation and established a direct hotline between both nations should a crisis arise. Gates’ remarks at the Forbidden 

City further emphasized the need to develop cooperative relations—a view that is 

consistent with America’s strategic objectives in the region. Gates’ visit and the consistent efforts of the United States Pacific Command to engage China could be the 

first step toward getting more than declarations of China’s intention to be a good 

actor. The U.S. will need to convince PLA leaders that transparency, not uncertainty, will be key to avoiding miscalculation in the future, particularly as the seas 

grow more crowded with more capable naval forces. 

Unfortunately, the Chinese decision to deny harbor to the USS Kitty Hawk on 

Thanksgiving Day 2007, and its refusal to allow shelter to U.S. minesweepers in duress suggest to some that Beijing is beginning to behave provocatively. These incidents, added to the successful direct ascent antisatellite test in January, mass collection of U.S. Treasury bills and, relentless hacking of Pentagon and other U.S. 

computer systems, underscore a potentially adventurous Chinese military policy toward America. Individually, these events are perhaps inconsequential, but in sum, 

they indicate a pattern of change in China’s behavior. 

RECOMMENDATIONS

The concurrent challenges of fighting the war on terror and learning how to live 

with a rising China will require starkly different government efforts and capacities. 

Either one on its own would be daunting, and taken together, may prove overwhelming. The violent struggle with Islamic jihadists is now an inescapable feature 

of American foreign policy, while relations with China involve a complex mix of cooperation and competition but are not necessarily destined to degenerate into open 

hostility. American policymakers must better understand the risks associated with 

a myopic foreign policy focus and better balance commitments from South America 

to the Middle East to Asia. 

Perhaps it will be prudent for American strategists to consider how best to balance and shape these simultaneous challenges. For instance, Chinese cooperation in 

the global war on terrorism should be a main feature of American diplomatic strategy with Beijing, given that the PRC has as much to lose from the jihadists’ success 

as the United States. Southeast Asia is likely to be a major battleground for hearts 

and minds between moderate Muslims and radical Islamic instigators, and China 

has a major stake in seeing the former prevail. 

Moreover, policymakers must articulate a realistic and pragmatic China policy. 

Concerns ranging from consumer safety to worries about significant economic downturn have give trade skeptics in Congress the necessary ammunition to hold up critical free trade agreements and elevated concerns in Beijing. China’s secretive military modernization program and assertive provocations, such as its antisatellite test 

in 2007, have raised tremendous concern amongst conservative foreign policymakers. America’s strategic engagement with China will have to balance between 

trade skeptics and conservative voices that prefer containment and hedging over collaboration and concord. 

Conducting an effective China policy will involve more than just interacting with 

Beijing. America must commit to engaging in bilateral dialogue and cooperation on 

trade-related issues while encouraging Beijing to make the necessary adjustments 

in its export standards, intellectual property rights law—including revaluation of 

the Yuan. More importantly, Beijing and Washington need to develop stronger military-to-military contacts. Secretary Gates’ forward-looking decision to create a hotline between the two countries has been heralded across the Asia-Pacific for reducing risks associated with miscalculation. 

In order for China to be compelled to act as a ‘‘responsible stakeholder’’ it will 

prove increasingly important for policymakers to devise a strategy that is capable 

of ensuring the maintenance of American power and influence in the Asia-Pacific 

47 

for the foreseeable future. It must be embedded within an overall policy toward Asia 

that uses ties with key allies to act as a force multiplier for U.S. interests throughout the region. Such a strategy should include the following elements: 

(1) Reassert American strategic presence 

Clarity from a new administration should come immediately, with strong statements that emphasize Asia’s permanent importance to the United States. The next 

President should focus on the global challenges and prospects for cooperation in the 

Asia-Pacific and communicate a vision of a region that is as integral to U.S. wellbeing as Europe is. A clarifying reference to America’s position on Taiwan must 

complement an articulation of America’s desire to expand bilateral ties with mainland China. This is particularly important in the Asia-Pacific where strategic competition may prove more likely in the coming years as both the ‘‘Middle Kingdom’’ 

and India reemerge as global powers. 

(2) Maintain strong bilateral ties 

A regional plan is only as strong as the bilateral relations underpinning it. While 

it is true that bilateral alliances will increasingly prove less capable of dealing with 

myriad challenges in the region, they will prove indispensible to managing traditional security challenges. The United States must continue to build strong bilateral 

relations with Australia, India, Japan, South Korea, Indonesia, and Taiwan. In particular, Japan will remain the foundation for America’s presence in the Asia-Pacific 

and our cooperation must deepen beyond the successes of the Bush administration. 

(3) Showing up: Get in the game and engage more actively in regional and multilateral forums 

The next National Security Council and Secretaries of State and Defense must not 

only recognize the importance of attending high-level meetings in Asia, but must actively schedule meetings and summits that will further American strategic interests. 

The State Department must enunciate an interagency attendance policy for meetings in the Asia-Pacific, and ensure that an Assistant Secretary or higher is present 

at every meeting. To alleviate the potential strains of such a policy, we recommend 

a reorganization of the authority of the Under Secretary of State for Political Affairs. The U.S. must also encourage trilateral talks at the ministerial level; dialogue 

between the U.S., China, and Japan, or between the U.S., Japan, and ROK could 

prove particularly productive. 

(4) Reexamine military engagement 

The United States must maintain a forward deployed military presence in the region that is both reassuring to friends and a reminder to China that we remain the 

ultimate guarantor of regional peace and stability. Military presence is essential for 

credibly backstopping American alliances and other security commitments in the region. More positively, we should make clear our eagerness to work with all Asian 

countries, including China, in pursuit of common security objectives such as countering terrorism, piracy, and WMD proliferation. Joint peacekeeping operations 

involving China, Japan, South Korea, and other countries could also provide opportunities for expanded security dialogue among the participants. 

(5) Broadening the agenda 

Focusing on traditional security concerns alone may limit the United States ability to pursue a broad spectrum of interests in Asia. The primary focus for Asian nations is not security but economics. Meanwhile, the challenges of global climate 

change and energy competition will become more and more prevalent over time. The 

complex intersection of all these issues will require cooperative international solutions. In particular, America must continue to pursue the establishment of a bilateral United States-China framework for energy conservation and cooperation. 

CONCLUSION

Much of the American approach to foreign policy in the cold-war era was characterized by a degree of bipartisanship. In Senator Vandenburg’s immortal words, bitter divisions often stopped ‘‘at the water’s edge.’’ Bipartisanship has been conspicuously absent in current debates and this internal divisiveness hampers our effectiveness in the formulation and execution of American foreign policy. Given the magnitude of what lies ahead, a concerted effort to rediscover some common ground in 

American politics (at least when it comes to foreign policy) may indeed be one of 

the most important ingredients for a successful foreign policy balancing act. 

China’s rise to a sustained great power status in the global arena is not preordained, nor is it necessary that the United States and China will find themselves 

at loggerheads over Taiwan, increasing trade frictions, regional rivalry in Asia, or 

48 

human rights matters. The United States and China are currently working together 

surprisingly well on a wide array of issues. However, so long as China’s intentions 

and growing capabilities remain unclear, the United States and other nations in the 

region will remain wary. 

The next President, Democrat or Republican, will face tremendous challenges in 

the Asia-Pacific that will increasingly involve China. Establishing a foundation and 

framework for cooperation will prove critical to ensure stability and security in the 

region. 

I once again would like to thank you for the opportunity to testify before this distinguished panel. 

The CHAIRMAN. You make me feel very good that I dropped out 

of the race. [Laughter.] 

Dr. Harding. 

STATEMENT OF DR. HARRY HARDING, UNIVERSITY PROFESSOR OF INTERNATIONAL AFFAIRS, THE ELLIOTT SCHOOL 

OF INTERNATIONAL AFFAIRS, GEORGE WASHINGTON UNIVERSITY, WASHINGTON, DC 

Dr. HARDING. Thank you, Mr. Chairman and Senators. It’s a 

great honor to be with you this afternoon. 

So many interesting things have been said that I’d love to comment on, but let me first summarize my statement for you. 

The CHAIRMAN. Thank you. 

Dr. HARDING. As you know, I was asked to testify about the prospects that China will become a so-called ‘‘responsible stakeholder’’ 

in the international system. And, as you also know, that objective 

was put forward by then-Deputy Secretary of State Bob Zoellick, 

one of John Negroponte’s predecessors, in a speech that he delivered in New York back in September 2005. And, as I look at American policy toward China, I think that concept has joined some others as the central elements of American policy toward China: Our 

policy of engagement—that is, engaging China in a robust dialogue 

on bilateral issues; hedging against the risks inherent in China’s 

uncertain future; and promoting a peaceful evolution of the relationship across the Taiwan Strait. So, it’s not all of United States 

policy toward China, but it’s become a very important part of it. 

I see this concept as an extension and an updating of the earlier 

concept of integrating China into the international order. That policy, in turn, was based on the assumption that our objectives with 

regard to China could be better served, and the predictability of 

China’s international and domestic conduct could be increased, if 

China were brought into the full range of international regimes 

and organizations for which it was qualified, as well as extensively 

integrated into the global economy. There are a lot of examples of 

this policy, but probably the most obvious involves the long, difficult, but ultimately successful negotiations over China’s membership in the World Trade Organization. 

Now, with the support and encouragement of the United States, 

China’s now become a member of virtually all the international regimes for which it’s qualified. And, therefore, the process of integration is basically over—not entirely, but it’s largely completed. 

And so, the issue, as Bob Zoellick rightly suggested, is no longer 

securing China’s membership, but encouraging it to be something 

more, what he called a ‘‘responsible stakeholder.’’ This means not 

only honoring the rules and norms of the system, but also enforcing 

them when others violate them, and assisting those who wish to 

49 

join the system but who lack the capacity to do so. It means, in 

other words, not simply passive membership, but active participation. It means accepting the burdens and responsibilities of being 

a major power with a stake in international peace and stability, 

rather than simply being a free rider on the efforts of others. 

Now, China has reacted to the concept of responsible stakeholding with some ambivalence. On the one hand, it appreciates 

that the United States is thereby seeking a positive relationship 

with China. The concept suggests that we can accept, and even 

welcome, the rise in Chinese power and Beijing’s growing role in 

the world. It certainly is seen by the Chinese as preferable to the 

Bush administration’s earlier idea that China would be a strategic 

competitor of the United States, as was expressed during the campaign of 2000 and in the early months of 2001. 

However, Beijing also perceives, largely correctly, that America’s 

more accommodative posture, as expressed in this concept, is conditional. China will be expected to honor international norms and respect international organizations that it did not create and that it 

may sometimes question. And even more worrying from Beijing’s 

perspective is the prospect that the United States is reserving the 

right to be the judge as to whether Chinese behavior on particular 

issues is sufficiently responsible or not. 

Now, my written statement discusses Beijing’s willingness to 

comply with and enforce some of the most important norms that 

lie at the heart of that community. I won’t go into the details here. 

As you know if you’ve read the statement, I deal with four such 

norms and regimes: Self-determination, development assistance, 

human rights and human security, and nonproliferation. Let me 

summarize my analysis in the following conclusions, and then turn 

to some of the recommendations for U.S. policy. 

My conclusions represent, as is so often the case with China, a 

very complex and very mixed picture. There is always a ‘‘but’’ or 

‘‘on the other hand’’ somewhere in the conclusions. 

First, China has come increasingly to accept a wide range of 

international norms and institutions, including some that it vigorously rejected during the Maoist era. These include the norms restricting the proliferation of weapons of mass destruction, and some 

of the norms governing human rights and human security. But, 

China still defines some of these norms differently than does the 

United States, including those governing human rights and official 

development assistance, and it continues to resist still others, particularly the right of self-determination and the norms governing 

trade and arms other than weapons of mass destruction. 

Second, China believes that the enforcement of norms should be 

constrained by a continuing commitment to the countervailing principle of national sovereignty. That’s the point that Richard made a 

few minutes ago. Thus, for example, it believes that violations of 

human rights are a legitimate concern for the international community only if one or more of three conditions are met: When the 

violations are extraordinarily serious, as in the case of apartheid 

or genocide or severe internal conflict; when the violations of 

human rights have effects that spill across borders and thus 

threaten international peace and stability; or when the government 

of the state in question requests or accepts international action. 

50 

Otherwise, it regards public criticism of a country’s human rights 

record, let alone sanctions to punish human rights abuses, as unwarranted intervention in the country’s internal affairs. 

Third, Beijing is generally slow to impose sanctions on offenders. 

It prefers first to try what it calls a more ‘‘cooperative’’ approach, 

that is, diplomatic dialogue with positive incentives provided alongside the prospect of sanctions. It regards sanctions as a last resort, 

and when sanctions are ultimately necessary, it tends to favor modest and voluntary ones over stringent mandatory ones, and economic sanctions over military intervention. That’s why China 

always seems slow to act, from the American perspective. 

And then, finally, in practice, China does what other countries 

do. It often has other interests, particularly commercial or security 

ties to the governments accused of violating international norms, 

that may sometimes lead it to try to block or moderate the imposition of international sanctions. 

Given this mixed record, how can the United States persuade 

Beijing to be even more responsible than it is now? In my judgment, China is more likely to act responsibly under the following 

circumstances. 

No. 1, when it sees that the norms in question are truly universal, obtaining support from the vast majority of states in both 

the developed and the developing world. This explains China’s 

acceptance of some of the international norms governing human 

rights and nonproliferation. It did so when it realized these were 

not just the preferences of the United States and not just the preferences of the West or developed countries, but, indeed, the preferences of the majority of nations in the world. 

Second, and perhaps most important, when China understands 

that international behavior in accordance with these norms would 

be in keeping with its own interests, and that behavior that violates those norms would pose a potential threat to China’s own 

objectives. This is perhaps an even more important reason why 

China now supports the nuclear nonproliferation regime. 

Third, when China sees that the international organizations that 

enforce the norms are widely regarded as effective and legitimate, 

even if they do not always endorse China’s preferences. This explains Beijing’s increasing willingness to take security issues to the 

U.N. Security Council and to take trade issues to the WTO. 

Fourth, when Beijing knows that it will be isolated from countries whose opinions matter if it obstructs the enforcement of the 

norms. This is the lesson to be drawn from the embarrassment that 

China recently suffered when it tried to transport conventional 

arms to Zimbabwe and found its ship turned away from nation 

after nation in Southern Africa. 

And finally, when China sees that other major powers, including 

the United States, also abide by the norms that they expect China 

to honor. 

In addition, one last point, which I think one of my colleagues 

has already made. As new norms are written—norms are an evolving thing in international affairs, they aren’t carved in stone forever—as new norms are written to meet new challenges, or when 

outmoded ones are revised to meet new circumstances, if Beijing is 

to be regarded as a responsible stakeholder in the international 

51 

system, it should be invited to participate in the norm-drafting 

process, not as a decider, and not with a veto, but as a participant. 

If a major power like China is to be discouraged from being a 

rulebreaker, or even simply a nation that tolerates, passively, 

rulebreaking by others, then it should be treated as a rulemaker, 

and not simply as a ruletaker. 

Thank you very much. 

[The prepared statement of Dr. Harding follows:] 

PREPARED STATEMENT OF DR. HARRY HARDING, UNIVERSITY PROFESSOR OF INTER- NATIONAL AFFAIRS, THE ELLIOTT SCHOOL OF INTERNATIONAL AFFAIRS, THE GEORGE

WASHINGTON UNIVERSITY, WASHINGTON, DC 

I’ve been asked to testify today about the prospects that China will become a ‘‘responsible stakeholder’’ in the international system—the objective of American policy 

defined by then-Deputy Secretary of State Robert Zoellick in a speech he delivered 

to the National Committee on United States-China relations in New York in September 2005. Along with our policies of engaging China in regular and robust negotiations on bilateral issues, hedging against the risks inherent in China’s uncertain 

future, and promoting a peaceful evolution of the relationship across the Taiwan 

Strait, encouraging China to become a ‘‘responsible stakeholder’’ in international affairs has become one of the central elements in present American policy toward 

China. 

THE CONCEPT OF ‘‘RESPONSIBLE STAKEHOLDING’’ 

Our goal of seeing China become a ‘‘responsible stakeholder’’ in the international 

system is an extension and updating of the Clinton administration’s earlier policy 

of integrating China into the international order. The policy of integration reflected 

the assumption that our objectives with regard to China could be better served, and 

the predictability of China’s international and domestic conduct increased, if China 

were brought into the full range of international regimes for which it was qualified, 

as well as extensively integrated into the global economy. The most obvious example 

of this policy was the long, difficult, but ultimately successful negotiations over 

China’s membership in the World Trade Organization. But there are other examples 

as well: Securing Chinese endorsement of the norms that govern nonproliferation 

and human rights, supporting China’s membership in regional economic and security organizations, and even the decision to endorse Beijing’s bid to host this year’s 

Summer Olympic Games. 

But now, China has become a member of virtually all international organizations, 

excepting primarily only those that require members to be developed economies (the 

OECD, the International Energy Agency, and the G–7), plus a few nonproliferation 

regimes (the Missile Technology Control Regime; the Wassenaar Agreement, governing conventional arms and dual-use technologies; and the Australia Group, governing technologies that produce chemical and biological weapons). And, as the levels of trade and capital flows to and from China so amply demonstrates, China has 

certainly become a major participant in the global economy. The process of China’s 

formal integration into the international system has been largely completed. 

The issue now, as Zoellick rightly suggested, is no longer securing China’s membership in the international system, but encouraging it to become a ‘‘responsible 

stakeholder.’’ By this is meant not only honoring the rules and norms of the system, 

but also enforcing the norms when others violate them, and assisting those who 

wish to join the system but lack the capacity to do so. It involves active participation, not simply passive membership. It entails accepting the burdens and responsibilities of being a major power with a stake in international peace and stability, 

rather than being a free rider on the efforts of others. 

China has reacted to the concept of ‘‘responsible stakeholding’’ with some ambivalence. On the one hand, Beijing appreciates that, in calling on it to become a ‘‘responsible stakeholder,’’ the U.S. is seeking a positive relationship with China. The 

concept suggests that the U.S. can accept—and even welcome—the rise of Chinese 

power and Beijing’s growing role in the world if it acts responsibly. The Bush administration’s view of China as a prospective stakeholder in the international system as expressed in 2005 is certainly preferable to its view of China as a strategic 

competitor of the United States as expressed during the early months of the administration’s first term in 2001. 

However, Beijing also perceives, largely correctly, that America’s more accommodative posture is conditional. China will be expected to honor international norms 

52 

and respect international organizations that it did not create and that it may sometimes question. And, even more worrying from Beijing’s perspective, is the prospect 

that the United States is reserving the right to be the judge of whether or not Chinese behavior on particular issues is sufficiently ‘‘responsible.’’ 

CHINA’S CONDUCT AS A RESPONSIBLE STAKEHOLDER

In the short space of time available to me here, I cannot offer a comprehensive 

issue-by-issue or region-by-region assessment of the extent to which China is acting 

as a ‘‘responsible stakeholder’’ in the international community. What I can do is to 

discuss Beijing’s willingness to comply with and enforce four sets of norms that lie 

at the heart of that community. I will not discuss China’s compliance with its obligations to the World Trade Organization, since I understand that will be covered 

in a separate hearing. Rather, I will deal with four other norms and regimes: 

• Self-determination 

• Development assistance 

• Human rights and human security 

• Nonproliferation 

Together, these norms cover most of the specific issues about which the U.S. is 

concerned, from Taiwan to Iran and from North Korea to Sudan. I will discuss the 

norms in the order in which China is willing to accept, uphold, and enforce them, 

from less acceptance to more. 

Self-determination 

Of the four sets of norms under consideration here, the norm of self-determination, most recently invoked by those who support the independence of Kosovo from 

Serbia—is the most worrying to China. Ironically, the norm was a key element in 

Chinese foreign policy in the 1950s, 1960s, and 1970s, when Beijing could apply it 

to support independence for Western colonies in Asia, Africa, and Latin America. 

But today, when there are few colonies left, the concept is primarily applied to parts 

of states that—often for reasons of ethnicity or identity—want independence or 

greater autonomy from the national government that exercises sovereignty over 

them. Beijing is now intent on ensuring that such the principle is not applied to 

Taiwan, Tibet, or other parts of what it regards as Chinese territory. What was once 

praised as a principle when it justified the desire of a people to assert independence 

from colonial rule is now denounced when it can be invoked to justify ‘‘splittism’’ 

against a legitimately constituted nation-state. 

This is not to say that China’s opposition to self-determination is absolute. Beijing 

has accepted the independence of Timor-Leste (East Timor) from Indonesia, as well 

as the independence of the former Soviet Republics from Russia. It may even tolerate the independence of Kosovo from Serbia, particularly if Kosovo refrains from 

recognizing Taiwan or supporting Taiwanese independence. 

But China would prefer that self-determination be applied only when it has obtained the consent (even if nominal) of the national government in question. If Indonesia was willing to permit the independence of East Timor, China will not object. 

But since China will not permit the independence of Taiwan or Tibet, the rest of 

the international community has the right to apply the principle of self-determination in those cases. 

Development aid 

In recent years, China has markedly increased its official development assistance 

(ODA) to the Third World, with a particular focus on providing that aid as part of 

a package that also includes Chinese direct investments in projects to extract energy 

and other natural resources, and often in the transportation infrastructure that can 

facilitate the export of those resources to China. 

China has tried to differentiate its aid from that provided by Western countries 

and the major international financial institutions (particularly the World Bank and 

the IMF) by claiming that its ODA is unconditional—that it does not require that 

the recipient governments meet certain standards of performance in order to receive 

the aid. Strictly speaking, of course, it is inaccurate to describe China’s aid as unconditional. As just noted, much Chinese ODA is tied to commercial projects, even 

if not conditioned on standards of good governance. Still, Beijing presents its aid 

policy as avoiding any temptation to interfere in the recipient country’s internal 

affairs. 

But is this policy sustainable? Already, it is clear that China runs a significant 

international risk by providing large amounts of aid to rogue regimes. As the case 

of China’s attempt to ship small arms to Zimbabwe illustrates, this risk comes not 

just from the U.S. and other Western powers, but from other developing countries 

53 

in the region as well. In addition, Beijing may also run reputational risks at home, 

if its citizens begin to perceive that their national treasure is being misused by corrupt governments because of the absence of conditions on its use, or that foreign 

investment in unstable states encounters unanticipated and unacceptable costs and 

risks. 

Already, there are signs that Beijing may be willing to discuss minimal performance standards for ODA—as well as the concept of corporate social responsibility 

(CSR) as applied to the activities of Chinese companies operating or investing 

abroad. This provides some hope that China will see the advantages of becoming 

more responsible on the issue of development aid. 

Human rights 

China’s position on international human rights has evolved dramatically over the 

last 30 years. It has come to accept the idea that there are universally accepted 

human rights—a departure from the Maoist position that the West’s definition of 

‘‘human rights’’ embodied ‘‘capitalist’’ or ‘‘bourgeois’’ concepts that could not be applied to China, to other socialist states, or even to developing countries. It has even 

begun to accept the proposition that this universal definition of human rights includes political and civil rights as well as economic and social rights, even though 

it has not yet ratified the international convention governing the former. 

Despite Beijing’s growing acceptance of the concept of universal human rights, 

however, there remain significant gaps between its position and that of the United 

States. China continues to insist that human rights, although universal, are not absolute. Their promotion must be weighed, Beijing says, against other considerations, 

particularly political stability and economic development. It also argues that political and civil rights can only be implemented gradually, at higher levels of economic 

development and greater degrees of political stability. There is also the strong possibility that China is trying to develop a new model of politics that it will call ‘‘democratic,’’ but that will not include the elements of pluralism, contestation, and direct 

elections that the U.S. regards as essential parts of the definition of democracy. 

Even more important for our purposes is Beijing’s ambivalent attitude toward 

international enforcement of human rights in countries where they are being violated. China’s present position is that international action through economic sanctions or humanitarian intervention is acceptable under only three conditions: 

• When the violations of human rights are extraordinarily serious, as in the case 

of apartheid, genocide, or severe internal conflict; • When the violations of human rights have effects that spill across borders and 

thus threaten international peace and stability; or • When the government of the state in question requests or accepts international 

action. 

More recently, China has been increasingly willing to subject lesser human rights 

to international criticism or diplomatic representations, as when it urged the Burmese Government to promote the ‘‘normalization’’ of political life or encouraged the 

North Korean Government to engage in economic reform and opening. But, again 

because of concern about its own domestic situation, China is not willing to accept 

the imposition of sanctions, let alone military intervention, in these lesser cases. 

Unless one of the three conditions listed above is met, China regards economic sanctions or humanitarian intervention as an unacceptable violation of the sovereignty 

of the country in question. 

Proliferation 

China has increasingly accepted the international norms governing the proliferation of weapons of mass destruction (WMD), largely because Beijing has come to understand that China’s own interests might well be threatened by such proliferation. 

It remains, however, less supportive of norms that govern the proliferation of other 

weapons systems, including missile technology and conventional arms. And its domestic enforcement of the norms it has accepted, such as those governing the export 

of precursors for chemical and biological weapons, has not always been adequate. 

The main issue, however, is China’s attitude toward the enforcement of nonproliferation norms when they are being violated by other states, particularly those 

such as North Korea and Iran that are seeking to develop nuclear weapons. In general, China has insisted that all states—even those that the U.S. regards as rogue 

states—have the right to undertake civilian nuclear programs, if they are subjected 

to the requisite international safeguards. When violations are suspected, Beijing is 

relatively slow to accept the need for sanctions, preferring to try what it calls a 

more ‘‘cooperative’’ approach—i.e., diplomatic dialogue, with positive incentives provided alongside the prospect of sanctions. It regards sanctions as a last resort—and, 

when sanctions are ultimately necessary, it tends to favor modest and voluntary 

54 

sanctions over stringent and mandatory ones, and economic sanctions over military 

intervention. Of course, China also prefers that decisions to impose sanctions to be 

made by the United Nations, or at least a regional body with universal membership, 

rather than unilaterally by a single nation (particularly the United States), or even 

by a group of nations that it regards as unrepresentative. 

Generalizations 

What do these four sets of international norms tell us about the probability that 

China will become a more ‘‘responsible stakeholder’’ in the present international 

system, as envisioned by current American policy? Let me conclude with the following generalizations: 

• China has come increasingly to accept a wide range of international norms and 

institutions, indulging some that it vigorously rejected during the Maoist era. • But it still defines some of these norms differently than does the U.S., including 

those governing human rights and official development assistance, and continues to resist still others, particularly the right of self-determination and the 

norms governing trade in arms other than weapons of mass destruction. • China believes that the enforcement of norms should be constrained by a continuing commitment to the countervailing principle of national sovereignty. • And, in practice, China often has other interests—particularly commercial or security ties to the governments accused of violating international norms—that 

lead it to try to block or moderate the imposition of international sanctions. • In so doing, Beijing can invoke its general preference for diplomatic initiatives 

over sanctions and for milder sanctions over harsher ones. 

CONCLUSION: WHEN DOES CHINA ENGAGE IN ‘‘RESPONSIBLE STAKEHOLDING’’?

How, then can the U.S. persuade Beijing to be more responsible than it is now? 

China is more likely to act responsibly under the following circumstances: 

• Beijing sees that the norms in question are truly universal, obtaining support 

from the vast majority of states in both the developed and developing worlds. 

This explains China’s acceptance of some of the international norms governing 

human rights and nonproliferation. • China understands that international behavior in accordance with the norms 

would be in keeping with its own interests, and that behavior that violates 

those norms would pose a potential threat to China’s own objectives. This is 

perhaps the major reason why China now supports the nuclear nonproliferation 

regime. • China sees that the international organizations that enforce the norms are 

widely regarded effective and legitimate. This explains China’s increasing willingness to take security issues to the United Nations Security Council and trade 

issues to the WTO. • Beijing knows that it will be isolated from countries whose opinions matter if 

it obstructs the enforcement of the norms. This is the lesson to be drawn from 

the embarrassment China recently suffered when it tried to transport conventional arms to Zimbabwe. • China sees that other major powers, including the United States, also abide by 

the norms that they expect China to honor. 

In addition, as new norms are written, or as outmoded ones are revised, if Beijing 

is to be regarded as a ‘‘responsible stakeholder’’ in the international system, it 

should be invited to participate in the norm drafting process. If a major power like 

China is to be discouraged from being a rule breaker or even simply a nation that 

tolerates rule breaking by others, then it should be treated as a rulemaker, and not 

simply as a ruletaker. 

The CHAIRMAN. Thank you very much, gentlemen, for very good 

testimony. 

Let me begin with you, Dr. Harding. Your—the five conclusions 

you reached—actually, it’s six, the additional norm—the one that 

says ‘‘China understands international behavior in accordance with 

the norms would be in keeping with its own interests,’’ isn’t that 

the underlying rationale why we assume they’re not—why—to 

make them a stakeholder, not a responsible stakeholder, just a 

stakeholder? In other words, as their economy grows, the free flow 

of oil becomes an important thing to them, so, where they may not 

have cooperated 10 years ago in keeping the Strait of Hormuz open 

55 

or the Persian Gulf flowing, we—they may very well be engaged in 

being willing to do that now. Whereas, 15 years ago, the idea of 

dealing with terrorist activity anywhere else in the world would not 

be something they would be inclined to do, the fact that they have 

their own internal problems, they may very well find it in their interest to do it. 

So, is their emergence as an economy that increasingly and 

steadily increases the standard of living for their people, does that, 

in and of itself, bring along some promise, not of lack of competition with us economically, but in accepting some of the norms heretofore unwilling—that were prescribed and written before they got 

to be a player in writing the norms? 

Dr. HARDING. I think that’s an excellent question. I think that 

the key word is, indeed, ‘‘promise.’’ There is a promise, there is a 

hope, there is even a—— 

The CHAIRMAN. Yeah. 

Dr. HARDING [continuing]. Probability. And I think that is exactly the assumption, that China—— 

The CHAIRMAN. But, is it an assumption you operate on as 

you—— 

Dr. HARDING. It’s an assumption that I operate on, that China 

does have a stake in the smooth operation of the international system, it has a stake in peace, and it has a stake in economic prosperity, precisely because it benefits from these things. And I think 

that China increasingly accepts that and understands it. 

However, there is still a gap that they have to overcome. And let 

me simply identify two that I think are relevant here. 

The CHAIRMAN. Please. 

Dr. HARDING. One is that they do have it in their mind that 

these norms and institutions were written or created at a time 

when they were weak, or at a time when they were excluded from 

the international community, or at a time when they excluded 

themselves, as during the Maoist era. And therefore, there is a bit 

of a ‘‘not invented here’’ syndrome, and they have to be persuaded 

that these norms are in the interest of all, including those who did 

not write the rules—— 

The CHAIRMAN. Right. 

Dr. HARDING [continuing]. As well as in the interest of those who 

wrote them. That’s one—— 

The CHAIRMAN. I think that’s a very—— 

Dr. HARDING. A second point is that the Chinese are, I think, 

just beginning to understand the risks that they face as a stakeholder. They concentrate almost obsessively on some, and they tend 

to ignore others. They have been absolutely obsessed with the idea 

that one day a President of the United States might pick up the 

phone, as they see it, and call ExxonMobil and say, ‘‘We’re having 

some problems with China. Cut off their oil.’’ And that leaves—— 

The CHAIRMAN. They don’t know ExxonMobil like we know—— 

Dr. HARDING. I know. Their—— 

The CHAIRMAN [continuing]. ExxonMobil. 

Dr. HARDING [continuing]. Their concern with that risk gives 

them this idea that, if only they could have equity stakes—— 

The CHAIRMAN. If only that were true. 

56 

Dr. HARDING [continuing]. In oil production in places like Sudan 

or in Iran, that they would avoid risk. 

The CHAIRMAN. Yeah. 

Dr. HARDING. Well, by acquiring such equity stakes they may reduce some risks, but they greatly increase others. And I think that 

they are also unaware of the risks of giving unconditional aid in 

Africa. It’s a issue that you’ve been interested in. So, I think that 

they are still in the learning process of understanding the risks 

and threats to the stakes that they have in the international 

system. 

The CHAIRMAN. One of the things I’m grappling with in trying 

to get a sense of what the equation here is—if you assume that the 

status quo, in terms of the political system within China were to 

be sustained and remain for the next 5, 10, 15 years, then it is 

easier to predict—nothing’s easy—it’s easier to predict, for example, the likelihood of acceptance of certain norms based upon the 

view of self-interest and whether they were ready. But, one of the 

things that seems to be—I hope, at least—is likely to fluctuate, as 

well, to change, is the status quo internally. Whether we, in fact, 

impact on it or not, I mean, it’s going to—it is likely to change. And 

one of the things that I think the next—presumptuous of me to— 

one of the things I wonder about—in the calculations—because 

some of this is going to have to be fairly farsighted policy that 

we’re going to engage in here—I mean, we’re going to try to begin 

to implement in a new Democrat or Republican administration—is 

that—what are the odds that the substantial changes you talked 

about, Richard, how the world has changed, like you’ve heard me 

quote Yeats all the time—it’s changed utterly; a terrible beauty’s 

been born here—this is a different—and the change has not 

stopped; I mean, this is in motion—that, although I start off with 

the proposition—I’ll further damage his reputation—of Dr. Haass, 

which is that I’m more concerned about changing their behavior 

than changing their system. But, as their system changes, if it 

changes, that obviously will have impact on their behavior. What 

that will be, I don’t know. 

So, I realize this is a fairly—it’s hard to articulate it, in terms 

of a question—but what do we look at, in terms of the outside 

events, whether they’re a consequence of just inevitable change or 

change that we’ve helped shape, on the makeup of the political system in Beijing—2, 5, 10, 12 years from now? Do you look down the 

road—for example, I look down the road, and I don’t see a Saudi 

royal family, 20 years from now, having the same kind of authority 

and power it has in Saudi now. As the tides of history move, I just 

don’t see that. I mean, just for me, just Joe Biden. 

What do you guys, who really know this—what do you look at, 

what do you anticipate are the likely scenarios based upon assuming a relative stability, continued economic growth, expansion of 

their economy, expansion of their standard of living, on the domestic imperatives within China? Not what policy we should engage in, 

but—am I making any sense, what I’m trying to get at here? So, 

how do you guys, when you think about this, factor that in? What 

we heard today from you—is it basically predicated on ‘‘no substantial change in the status quo’’ internally within the Chinese political apparatus and system? 

57 

Anyway, if you can take a shot at it, I’d—— 

Dr. HARDING. First—yeah. 

The CHAIRMAN [continuing]. Appreciate it. I realize it’s awfully 

broad. 

Dr. HARDING. Right. Well, I think the safest prediction about 

anything is, the status quo is not going to continue for, you know, 

5, 10, 15 years. I see three trends that I would think are very 

highly likely in China. And there’s some good news, and there’s 

some bad news. 

I think the first one has already been alluded to Secretary 

Negroponte, and that is that the Chinese leadership know that 

their development has to become more sustainable in many, many 

different ways. It has to be more environmentally sustainable, it 

has to be more economically sustainable, it has to be more politically sustainable. And I think, in that sense, we’re going to see 

some progressive changes in China’s domestic policy. They’ll be 

slow, they’ll be gradual, but I think that we will see, for example, 

a lower savings rate. That will be translated into a lower trade deficit. We’ll probably see somewhat slower growth. So, I think that 

we’ll see a different Chinese economy in 5, 10, or 15 years than we 

do today. 

Second—and I’ve already touched on this—I don’t think we’re 

going to see democracy in this period of time, but I think we are 

going to see some political reforms that are going to open the system up to greater input from inside the party, from government 

legislatures, even from ordinary citizens. It won’t be pluralistic, it 

won’t be competitive, in terms of a multiparty system, but I think 

that it will be somewhat more responsive to a very wide range of 

interests, some of which will be compatible with the interests of the 

United States, and some will not. 

And that leads to my third trend, and that is that alongside foreign policy nationalism—I think we’re going to see increasing economic nationalism—— 

The CHAIRMAN. Right. 

Dr. HARDING [continuing]. In China. We’re going to see ambitious 

Chinese entrepreneurs and managers saying, ‘‘We want to be national champions for China, we want to be world-class companies, 

and we want the support of our government in helping us compete 

abroad and in restricting the market share of foreign firms inside 

China.’’ And that, of course, is going to pose all kinds of problems 

for the United States. 

Now, that’s if things go relatively smoothly. 

The CHAIRMAN. Right. 

Dr. HARDING. Obviously, we could have a major political or economic crisis that leads to a significant retrogression in Chinese policy, at home and abroad. 

The CHAIRMAN. Well, I want to follow up on this in a second 

round, with your permission, but I just would say that there are 

two factors here that I don’t know how to calculate, but I—I’m of 

the view that they are going to play a major role. 

I think—not just economic nationalism, but I think nationalism 

is likely to be an increasing driver, in terms of domestic Chinese 

politics, and that will impact, I think, on their foreign policy, as 

well. But, that’s another question. 

58 

The second one is, I know this will sound like—classically trite, 

but the Internet. I think it’s going to have a gigantic impact. I don’t 

know what it will be. But, the idea of the ability to continue to 

stifle access to information and control of information is just beyond the capacity. There is inevitability. Now, what is wrought by 

the change, I don’t know, but I’d love to, at another time, to explore 

that with you a little bit. I don’t want to make it more or less than 

it is. But, it really is such a different world, and I don’t know how 

the present regime, or some successor that is recognizable as a successor regime/regimes, are going to be able to deal with this dilemma, which—but, at any rate, that’s—— 

Richard, you wanted to make a comment? 

Ambassador HAASS. Globalization is no more of a choice for 

China than it is for us. It’s a reality for them. 

The CHAIRMAN. Yeah. 

Ambassador HAASS. And it’s one of the things that will change 

the environment in which they’re operating. And what that means, 

to put it bluntly, is that Orwell was wrong. Most of the technological changes are decentralizing. 

The CHAIRMAN. Yeah. 

Ambassador HAASS. And that makes it hard for nation-states, 

and in some ways it makes it a more complicated task, for highly 

centralized nation-states—— 

The CHAIRMAN. Yeah. 

Ambassador HAASS [continuing]. To continue doing business as 

they’ve always done it. 

The CHAIRMAN. Highly centralized states with over a billion 

people. 

Ambassador HAASS. Right. So, one of the dilemmas for China is 

going to have to be, How do they manage to be efficient and effective in a global world with all the things they can’t control with the 

desire to still maintain an awful lot of control, which is obviously 

the raison d’etre of a Communist Party. The word ‘‘dilemma’’ is 

overused, but that’s actually a dilemma. 

Can I say two things on nationalism, very quickly? 

The reason I mentioned it in my statement is that I’m worried 

that the political and intellectual—not ‘‘vacuum,’’ that’s too 

strong—but thinness of Chinese political life is dangerous, and it’s 

one of the reasons that we actually do have a long-term interest 

in encouraging civil society, encouraging greater religious freedom. 

We want this to become, in that sense, a richer society. We don’t 

want nationalism to be the only thing that gets young people out 

of their chairs. That is the biggest reason to promote internal 

change—but, again, to do it gradually, carefully, smart, and from 

the sidelines. 

Second of all, we need to be careful not to do gratuitous things 

that inflame nationalism, and that’s where things like the Olympics debate come in. We’ve really got to ask ourselves, ‘‘What might 

be the benefits of some symbolic action?’’ against, ‘‘What might be 

the deep and long-term and abiding social reaction or consequences?’’ And if we’re right, here in this conversation, when we 

assume that nationalism has the potential to take hold there. 

Already, you see in Chinese chat rooms a real sense that China is 

being denied its rightful place. It reminds me a little bit to use a 

59 

bad historical parallel, of imperial Germany, where it felt it was 

being denied its place in the sun, and that obviously fed nationalist 

ambitions there. I don’t think we want to go down that path, it 

doesn’t mean that we are supine and simply let them do what they 

want to do. 

The CHAIRMAN. Yeah. 

Ambassador HAASS. But, we have to be mindful—coming back to 

something Kurt said, we don’t want to make it more difficult for 

them to manage their domestic politics. It was interesting, if you 

remember, several years ago, in the aftermath of the airplane incident. At the beginning of that incident, the government didn’t mind 

some of the nationalist reaction. My own reading of it was, very 

quickly they got scared. Very quickly, they saw the intensity of it. 

And I think it taught them a powerful lesson, that they had to be 

careful about whipping nationalism up, because it might, in some 

ways, control them, rather than vice versa. 

We have a stake in helping them manage their domestic politics 

so they do not feel compelled to embark on more nationalist foreign 

policies in order to sustain their own domestic status. 

The CHAIRMAN. I’ve gone way over my time. Do you want to 

add—— 

Dr. CAMPBELL. Yes, just very quick—— 

The CHAIRMAN. Do you mind? 

Dr. CAMPBELL. Mr. Chairman, just three points. 

The first, on your question about how to think about China in 

the future, the most important dimension of this, I think, gets back 

to your citing of Richard, ‘‘What is China going to do?’’ as opposed 

to ‘‘what it is.’’ I think the most interesting thing about China’s foreign policy is, despite some of these misgivings about the institutions that were essentially created at the end of the 1940s, and 

then revived in the 1970s, is that, secretly, China wants to join all 

of them. They may gripe and say, ‘‘Well, look, I’m not so sure about 

that.’’ If we came to them and said, ‘‘We’d like you to join the G– 

8, we’d like you to join these institutions,’’ they would get over 

those things very quickly. I believe that fundamentally—Harry 

may not—but I think the truth is that they are, in their hearts, 

joiners. 

What I am concerned by is that, no matter what happens, 

whether China becomes more nationalistic, more powerful, over the 

course of that period of the next 10 or 15 years, I think they’re 

going to be less interested in joining and more interested in creating institutions of their own. So, we have, I think, an interesting 

period that really apt, smart statecraft can take advantage of that. 

First point. 

Second point. You know, the truth is that we talk—we’ve talked 

constantly, this dialogue about us engaging and managing China. 

We should be well aware that they’re also managing and engaging 

us; in fact, I would say, frankly, in many respects, more effectively. 

And they know something about us that we don’t know very much 

about, and that is that we will not go quietly. So, they do everything possible not to make any really rapid movements. The thing 

that was most alarming to them about the antisatellite shot was 

that it happened in the first place, because their message to us is 

that, ‘‘You go ahead, you do this important work in Iraq and 

60 

Afghanistan, and then, in 20 years, you come back and we’ll talk 

about things.’’ They—and so, when they talked about ‘‘peaceful’’— 

they talked, initially, about ‘‘peaceful rise.’’ It was a great concept. 

But then the Chinese leadership realized that we were focusing on 

the second word, not the first one. And so, that was quickly 

changed to ‘‘peaceful development.’’ They don’t want us to start 

worrying about the fact that they’re—you know, we’re—some footsteps back there. And they understand that about us. And we 

should appreciate that. 

The last point, I’m less optimistic about China’s knowledge about 

the threat of nationalism. If I had to say anything about the Internet, is that—it is that it is a—the best analogy is the Three Gorges 

Dam. The Three Gorges Dam did not block the river, it diverted 

it. And I think what they have done quite effectively with the 

Internet is, not blocked everything, but they have diverted many 

things, and much of that diversion has been into the areas of, really, some of the coarsest nationalism imaginable, and they have not 

blocked that. And so, if anything, I think they’ve chosen between 

two evils, between just trying desperately to block everything, 

which they know that they’d fail at, and, instead, practice a much 

more sophisticated—and, say, the allowable areas of critique are of 

the kind of nationalist sort that, frankly, are as worrisome to some 

of our friends in Asia as it is to us. 

The CHAIRMAN. Yeah. 

I’m sorry, Dick. I’ve—we’ve gone, oh, 11 minutes over my time. 

I apologize. 

It’s all their fault. [Laughter.] 

Senator LUGAR. Thank you, Mr. Chairman. 

I want to raise, with all three of you, these predicaments that I 

have, not only listening today, but just generally. Essentially, I’ve 

just heard, today, and in other circles with people who shall remain 

nameless, a discussion of a polar bear and whether the Secretary 

of the Interior should have declared it as an endangered species. 

Now, it gets to climate change, ice floes, ice melting very rapidly, 

with the people involved pointing how wrongheaded the Secretary 

is to do such a thing; that, indeed, there is some ice melting, but 

then it comes back again, and that the polar bear is not threatened, all things considered. 

It’s a manifestation of the fact that, although there is discussion 

in informed circles in our country of climate change and so-called 

scientific evidence and so forth, the fact is that in our public dialogue, even as public officials, quite apart from work with our constituents, this is hardly a majority viewpoint, and the degree of 

skepticism is profound. 

Now, even among people who believe that there is something to 

this, they are not inclined to change the size of their cars or the 

consumption of energy or other things of this variety. In fact, most 

of our time is spent indicating whether or not oil companies are 

gouging or whether ExxonMobil should be censured, and so forth, 

which, you know, is interesting, but probably rather irrelevant to 

this. 

Now, this is our predicament. On the Chinese side, here is a 

country described as one really on the march, in terms of ordinary 

people finally having a chance to buy cars, millions of people movVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6602 H:\DOCS\US-CHINA.TXT BETTY
61 

ing in from the countryside, who, perhaps for the first time, have 

a heated shelter. And so it is not surprising that there’d be a 16- 

percent increase in energy use in a single year. 

Now, Secretary Negroponte sort of assured us that this is a very 

small economy compared to ours, maybe a fourth or a third as 

large, so, in fact, if there is 10 percent real growth, this is on top 

of that kind of a base. Of course, on top of our base, we’re not growing more than 1 percent, or we hope that we’re not in a negative 

quantity in this particular year. And so, there are some who, in 

their papers, will say, in a few decades, China, who already may 

be the second largest economy, will, in fact, be the largest. Maybe 

so, maybe not. 

My point is that the dialogue in China about climate change 

probably is not of the order that we heard today, that if water rises 

a meter, that a billion people are displaced. That would be very 

serious. Now, maybe they’re not people in China, maybe someplace 

else. You know, hypothetically, we can think about that, too. We 

don’t expect that’ll happen in the United States. In other words, 

the thing that I’m concerned about is that, for the moment, it 

would appear to me that both publics, and the United States and 

in China, are concerned with ordinary affairs of their lives. They’re 

trying to get better housing, better transportation, better utilization of their personal resources. 

Now, maybe if the Chinese Government remains more authoritarian, it has the ability to say to its people, ‘‘That may be all well 

and good, but this is where we’re headed. We’re going to curtail 

this or that, or change the effects, and so forth.’’ On the other 

hand, as some of you have suggested, maybe they become a little 

more democratic, or at least, in fact, people have more effective 

decisionmaking on their own, which we would applaud, because we 

believe in respective individual choices. 

But, as in our democracy, taking the climate change issue again, 

this is going to be, quite a debate, with even more people involved 

than would be involved here. And I just don’t see a gelling in these 

two countries of the type of leadership that probably is going to be 

required, so that you move down the trail. It’s not quite so bad as 

the Siberian dilemma that you suggested, Dr. Campbell, immediately for us with regard to Iraq, but, there may be some potentially catastrophic situations unless things are interrupted in the 

process. For example, if the United States and China do not come 

to similar views, along with Russia, with regard to Iran, and for 

some reason military action occurs and there’s disruption of the 

straits, and China’s deprived of energy, we are deprived of energy. 

Europe is deprived of energy, and the whole thing goes haywire because, in the international community, we could not manage, that 

would change things, but not for the better. Here in the United 

States, I’m not sure where our democratic dialogue goes then, quite 

apart from what happens in China. 

Now, offer some scenario, if you can, as to why things might turn 

out better. 

The CHAIRMAN. Please. [Laughter.] 

Senator LUGAR. Richard. 

Ambassador HAASS. The short answer is, you may be right, in 

which case, very quickly, the climate change debate would stop 

62 

focusing on mitigation and would focus on either adaptation or 

geoengineering. And we may get to that point, where whatever we 

do is too little, too late, the effects start to kick in, by which point, 

even if we changed our ways, again, it would not be soon enough 

to avert what was already, if you will, in the pipeline. We may get 

to that point. 

And there’s a whole body of political thinking that thinks we will 

get to that point, simply because open societies have trouble responding in anticipation of consequences. And I’m sure you have 

people all the time who sit up here and talk to you about the tests 

for leadership and all that. I do think, though, both in this country 

and China, the debates have changed markedly in the last couple 

of years. You see it, I assume, every time you go home. All the candidates this time are talking very differently about climate change 

than they were several years back. One is seeing things at the 

state level, at the regional level, at the corporate level. One also 

sees in the world of venture capital a lot going on. There are some 

grounds, if you will, for optimism on what can be done. 

One is seeing some parallels in China. The debate in China 

about climate change today has moved considerably. And one 

doesn’t just get automatic comments that, ‘‘We’re a developing 

country, we’re immune’’—in part because the Chinese are beginning to see the effects of climate change on their own economy and 

their own society, and they are understanding that this is something that will challenge their economic future, which obviously 

challenges their political future. 

Senator LUGAR. What are those effects? 

Ambassador HAASS. You are seeing problems with health, with 

land degradation, with desertification, and so forth, so you’re beginning to see protests. The Chinese understand that they have a 

problem here, and it’s not just a question of what’s going on ‘‘out 

there.’’ Climate change, like all forms of globalization, is not a 

choice. It is beginning to happen. 

For the United States and China, two areas become paramount, 

and they’re actually both areas of potential cooperation. One is 

clean-coal technology. If China is going to go ahead and continue 

to build roughly two coal-powered plants a week, that will overwhelm whatever progress they or others could possibly introduce in 

this realm. Clean-coal technology is not yet there, for us or for 

them. That is obviously an area where, actually, there is a place, 

I would think, for a larger public role, because the investment levels are so high. Engine technology, if China continues to proliferate 

the number of cars, is an area for some potential cooperation. 

There are also things the United States and China could do collectively in the world. A big chunk of the climate change problem, 

a significant piece of it, is deforestation, destruction of forests, 

burning of forests. This ought to be an area that could be separated 

from the rest of the climate change debate. We don’t need to wait 

for ‘‘Son of Kyoto’’ to do this. And this ought to be an area where 

the United States and China could cooperate. We could create an 

international fund to discourage deforestation and to encourage 

other forms of agricultural development. There are things the 

United States and China can and should do in this area, which actually would make a difference. And again, it is one of the reasons 

63 

that, in all the dialogues, this is probably the one issue that we 

want to put on the front burner. 

Senator LUGAR. Well, unfortunately, my time is up. 

The CHAIRMAN. No, no; keep going. 

Senator LUGAR. Essentially, is this the sort of thing in which the 

new President of the United States and the leadership of China 

might decide, on a bilateral situation? Maybe we flatter each other, 

that the two of us can tackle this—but, still, there is such a presumption that if the United States and China do not somehow get 

the coal thing under consideration, just as a starter, that school’s 

out with regard to CO2, that there’s enough of it—of the two of us. 

So, even though Europeans may be engaged in this, and very sensitive to this, they might be delighted if, somehow or other, enlightenment has come, and there is some degree of cooperation. This 

doesn’t omit all the other discussions you might have with China, 

but it might be we could say, ‘‘This is such an existential problem— 

for us, for the world, for everybody else—that let’s leap into this, 

the two of us,’’ and this might be, conceivably, a way that melts 

down some of the other difficulties. 

Ambassador HAASS. There is actually an interesting parallel 

from the trade world. We are trying to negotiate a Doha Round 

agreement. It’s obviously stalled. In the meantime, though, we’re 

trying to do other things in trade—bilateral, FTAs, regional agreements. So, while we’re trying to negotiate a post-Kyoto comprehensive agreement that deals with everything and involves everyone, 

we’ve got to do other things. So, whether it’s bilateral agreements 

dealing with certain specific challenges, like deforestation, or 

maybe having an agreement of just the major emitters of greenhouse gases, we may need to disaggregate the problem and realize 

progress where we can, because if we make it all-or-nothing, that, 

to me, is too big of a role of other dice for the planet. So, I am increasingly interested in ways of essentially deconstructing the climate change challenge. There are specific things the United States 

and China, possibly with Japan, Europe, and India, conceivably, 

where you bring together the major emitters because the top 10 or 

15 emitters are going to determine the future. And the other 150 

countries around the world, or what have you, while important, are 

not going to, ultimately, determine whether we are successful in 

meeting this challenge. So, there is both a strong case, and there’s 

precedent, for groups of countries like the United States and 

China, either alone or with others, to try to tackle parts of this 

problem. 

Senator LUGAR. This has subgroups. Maybe our negotiations can 

make headway if we discuss coal, if we discuss oil, because they’re 

searching for it everyplace on Earth, as we are—but, maybe, at the 

same time, we discuss food. 

The CHAIRMAN. Right. 

Senator LUGAR. At this point, the Chinese have been relatively 

self-sufficient, but now we get rumors that, due to the better-eating 

aspects of China and India, there’s a desire for some new croplands 

in Africa. Even Abu Dhabi is trying to get farmland in Pakistan. 

But, I’m just trying to brainstorm out loud, guided by you today, 

as to the sort of an agenda with which we have a new relationship 

64 

that would be very surprising to the Chinese, to us, to lots of 

people. 

Dr. CAMPBELL. Can I—I know you all have busy lives and need 

to—we need to adjourn, here in a moment, but I will say that, from 

my sense, Senator Lugar, I worked, over the last 2 years, in a dialogue between national security experts and people who are scientists in the climate change arena. I’ve never worked on anything 

that was more worrisome. I think the jury is in. I do not believe 

there is any substantial debate about climate change. There are 

about four or five outliers, all very well financed and supported by 

the petro community. 

I think the reality is, it’s going to be worse than we realize. I 

think there are a number of myths that permeate the American political system about it; one, that there will be just gradual 

changes—climate will change dramatically, perhaps at points in 

the future, that will have major impacts on agriculture, on fishing, 

on sea level, on everything associated with the stability of our planet; that the United States is somehow immune from this. We have 

very long shorelines. Large parts of the United States are at sea 

level. So, I actually think that you’ve got to be careful—you know, 

if you talk like this, people kind of tend to move their chairs away 

from you—— 

[Laughter.] 

Dr. CAMPBELL [continuing]. Because you sound a little bit crazy. 

But, I actually really believe in it, fundamentally, and I think it 

has to be, actually, at the very top of the agenda of the United 

States and China. And, myself, I will do everything possible to 

make sure that that’s the case. 

Senator LUGAR. I would encourage you, in that respect, Doctor, 

to publish, in various ways you can, some of this insight that you 

have gained, because I would say that there is a general idea about 

all this, but there’s not a whole lot of confidence. 

Dr. CAMPBELL. We’ll get you some stuff to your office tomorrow. 

Senator LUGAR. That would be very helpful, just as a starter, 

maybe, for the two of us. 

The CHAIRMAN. Well, I—look, gentlemen, I—you know, this is 

one of the cases I’m going to make a statement that’s going to be 

totally counterintuitive here in Washington—I think the American 

people are way ahead of their leaders. I really think you’re going 

to see such a rapid change in attitude here—I think it’s going to 

be exponential, this change. Maybe it’s just—to be in this business, 

you have to be an optimist, and maybe that’s just a—occupational 

requirement. But, I really—I just sense, as a plain, old politician 

hanging around for 35 years, there’s pace on the ball here. This is 

a very different place. 

Now, are we anywhere near being able to do—I mean, I think 

this is a place where the public’s going to push us. We are all— 

I don’t include my colleague, and I hope not me—but an awful lot 

of skittish people up here because of the major interests, as you 

point out. There are some significant outliers, but there’s also 

significant—like, for example, clean-coal technology; the environmental community is pushing hard against clean-coal technology, 

because they believe, basically, it’s a dirty product, period, but they 

deny the reality there’s 300 years of dirty coal sitting in China. 

65 

And they’re not going to use it? I mean, you know—you know, 

they’re building roughly two plants a week. I mean—so, it’s not 

merely coming from, you know, the recalcitrant folks. It’s coming 

from progressive folks who want only, the silver bullet, the answer 

immediately. 

But, my point is, I’m a helluva lot more optimistic than I was a 

year ago, not because of anything we’ve done here, clearly not because of anything the administration’s even thought about, but because of what I sense out there, whether it’s on Wall Street and 

capital markets or whether or not it’s literally the woman who 

helps me with my mom who lives with me. It is, you know, gone 

through the permafrost. I mean, people are figuring this out. 

But, having said that—and we’ve kept you a long time—I find 

the three of you have, really, a unique ability, beyond—and I mean 

this sincerely, I’m not being a wiseguy—a unique talent, beyond 

your substantive knowledge. You explain complicated notions as 

well or better than any three experts that I have encountered. And 

part of this is translation, here. Part of this is translating to our 

colleagues—who are very smart folks; I’m not suggesting otherwise—but, who don’t have time to concentrate on all of this. 

And I’m going to ask you something—I probably should do it off 

the record—but, in addition to being available to the committee to 

answer—I have five or six questions. I don’t want to make a lot of 

work. 

I want to talk to you, Dr. Campbell, about the whole idea of security architecture for the region and the willingness of China to embrace it or reject it—the whole notion—and one of the candidates 

running is talking about a League of Democracies, but he’s not 

talking about it the way you’re talking about it, as I understand 

it. 

Richard, I want to talk about, to overstate it, Can we stop them 

from killing our dogs and still have a relationship? I mean, I don’t 

find them mutually exclusive. I know it sounds a trite way to say 

it, but, you’re right, that’s how it affects public attitudes here. I 

don’t find them mutually exclusive—the ability to be able to walk 

and chew gum at the same time. I mean, they’ve got to mature and 

grow up, and we’ve got to, as well. 

But, at any rate—so, there’s a bunch of areas I’d like to discuss 

with you. I’d like you to consider the possibility—and it may not 

be possible to get all three of you together at one time, but it would 

be a great idea if you could, for—if the chairman is willing—just 

to get a number of our colleagues together in an informal setting, 

in one of our offices, in my office, and just come in, and we’ll get 

you an agenda ahead of time of the things that we’d like to have 

you talk about, and literally sit there, over a long lunch, and begin 

to have a discussion about some of these things, because, again, 

your greatest ability is your ability to take these complicated notions and, not dumb them down, but to put them in context. 

I think you all underestimate just how good you are at being able 

to do that. And I think there’s nothing more important—now, I 

think the American people are pretty damn smart, and I’m not 

being a solicitous politician; I genuinely mean that. I wouldn’t have 

stayed in this, this long, if I didn’t. But, they’ve got to have it 

translated for them. They have day jobs. And there’s a lot of folks 

66 

in day jobs up here who don’t spend all their time doing this. And 

so, would you all be—if we can work something out—— 

Dr. CAMPBELL. Actually, we’re extremely busy and—— 

[Laughter.] 

Dr. CAMPBELL [continuing]. But we’ll try to figure it out. 

The CHAIRMAN. All right. OK. All right. 

Well, thank you very, very much. And, as I said, I have some 

questions I’m going to submit, with your permission. 

The CHAIRMAN. Thank you for your time and for your input. 

We’re adjourned. 

[Whereupon, at 4:58 p.m., the hearing was adjourned.] 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

RESPONSES OF DEPUTY SECRETARY OF STATE JOHN NEGROPONTE TO QUESTIONS

SUBMITTED FOR THE RECORD BY SENATOR RICHARD LUGAR

Question. Some have expressed concern about Chinese foreign assistance to developing countries because it does not carry similar policy conditions and accountability 

mechanisms tied to foreign aid from the multilateral development banks and other 

donors. How is the administration engaging with the Chinese to harmonize aid 

mechanisms? What is the administration encouraging the Chinese to do specifically? 

Answer. The U.S. Government believes that engaging the Chinese Government in 

a dialogue on foreign assistance is a high priority. Accordingly, and since the Ministry of Commerce is responsible for managing China’s foreign assistance program, 

the Director of Foreign Assistance and USAID Administrator Henrietta Fore, in an 

April 7 meeting with Chinese Vice Minister of Commerce Yi, proposed a high-level 

foreign assistance dialogue. I followed up on this proposal in my May 12 meeting 

with Chinese Vice Minister of Commerce Fu. The Chinese Government has stated 

its support for such a dialogue, which both sides hope would be launched this fall. 

We will be following up with the Chinese Government to schedule an initial round 

at a mutually convenient time. 

In addition, under the auspices of the United States-China Strategic Economic 

Dialogue, the Treasury Department is engaged in discussions with China on debt 

sustainability and on lending by multilateral development banks. 

Our goal for the high-level dialogue is to obtain Chinese understanding and acceptance of the importance of adhering to international best practices in its foreign 

aid and lending programs, especially in the area of assistance transparency. We will 

also discuss how we can work together to implement the Paris Declaration on Aid 

Effectiveness, signed by both countries in March 2005, which aims to increase the 

efficiency and accountability of aid in line with sound development principles determined jointly by donors and recipients. The objective of the Treasury Department’s 

dialogue is to encourage China to factor debt sustainability issues into its decisions 

on loans to developing countries. 

Question. Given that China is the largest borrower from the World Bank, what 

is the World Bank doing to encourage responsible lending and granting from the 

Chinese Government? 

Answer. It is my understanding that the first pillar of the World Bank’s 2006– 

2010 Country Partnership Strategy (CPS) for China focuses on integrating China 

into the world economy. Noting China’s increasing role as a significant provider of 

Official Development Assistance (ODA), the CPS highlights the importance of China 

joining international ODA structures, such as the Organization of Economic Cooperation and Development (OECD)’s Development Assistance Committee and other 

donor coordination regimes. 

The Bank has also begun a dialogue with China as part of its efforts to coordinate 

OECD Export Credit Agencies and emerging market bilateral creditors in connection with its Debt Sustainability Framework and Non-Concessional Borrowing Policy (NCBP). (The Debt Sustainability Framework seeks to identify and mitigate 

potential risks of debt distress among borrower countries, while the NCBP seeks to 

improve creditor coordination and introduce borrower disincentives for unwarranted 

nonconcessional borrowing.) 

On May 21, 2007, the Bank signed a Memorandum of Understanding (MOU) with 

China’s Export-Import (Exim) Bank that calls on both sides to improve informationVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00070 Fmt 6633 Sfmt 6621 H:\DOCS\US-CHINA.TXT BETTY
67 

sharing, facilitate participation in donor coordination mechanisms and frameworks, 

identify projects for cofinancing, collaborate on ensuring sustainable development 

financing through appropriate levels of concessionality, and identify, minimize and 

mitigate adverse environmental and social consequences of development initiatives. 

Question. Chinese companies are playing a growing role in extractive industries 

(such as oil, gas, minerals, and timber) in developing countries. Do Chinese companies operate differently than companies from other countries? If so, how? 

a. Are Chinese companies held to similar antibribery standards that U.S. companies are held to through the Foreign Corrupt Practices Act? 

Answer. Overseas investments by Chinese firms in extractive industries are a 

response to China’s rapid economic growth. Like their OECD counterparts, Chinese 

companies are profit-maximizing corporations whose actions are guided primarily by 

commercial considerations. However, Chinese companies are bound by fewer 

national legal restrictions than companies from OECD countries and are not yet 

party to international agreements on overseas business practices. Many of the Chinese companies engaged in pursuing contracts for extractive products are stateowned or state-operated companies, meaning that the companies receive political 

support from the Chinese Government for their overseas activities, including tied 

development aid, and business decisions may take into account some political goals 

as well as purely commercial factors. 

a. There is no legislation in China that is the equivalent of our Foreign Corrupt 

Practices Act (FCPA). In recognition of China’s importance in global commerce and 

the need to level the playing field by addressing the issue of foreign bribery, the 

U.S. and partners at the OECD are hopeful that China will sign the OECD’s Convention on Combating Bribery of Foreign Public Officials in International Business 

Transactions, which requires legislation making the payment of bribes a criminal 

offense and eliminating tax breaks for bribing foreign officials. The desire to address 

the problem of bribery and corruption is one of the reasons why the OECD has 

called for Enhanced Engagement with countries like China, with the aim of having 

these countries adopt common standards on the way to eventual OECD membership. 

Question. How is the administration engaging with the Chinese Government on 

issues around extractive industry transparency? At what level and through what 

agencies is the engagement? Is the administration encouraging the Chinese Government to support the Extractive Industry Transparency Initiative (EITI)? If so, how? 

Answer. Senior Department of State officials have, on a number of occasions, 

encouraged interlocutors within both China’s Foreign Ministry and the National 

Commission for Development and Reform (NDRC) to consider China’s participation 

in EITI as a ‘‘supporting country.’’ This is the same status that the U.S. holds in 

EITI. Such support by China would reflect China’s growing weight and influence as 

an important investor in the extractive sectors of many developing countries. 

Question. A number of countries are supporting a U.N. General Assembly draft 

resolution in favor of EITI—A/62/L.41. Some have suggested that a U.N. resolution 

encouraging EITI will help pave the way for Chinese and Indian support for the initiative. Given the administration’s support for EITI, does the administration expect 

to support this resolution? Why or why not? 

Answer. The pursuit of transparency is a high-profile foreign policy objective 

which cuts across numerous USG departments and organizations. State participates 

in international and bilateral efforts such as EITI to encourage resource-rich developing countries, as well as countries that invest in them (including China and 

India), to implement transparency throughout the extractive industries value chain. 

Resource revenue transparency contributes to effective use of public resources by 

enabling oversight. It is encouraging to see that other countries, including those who 

have proposed and sponsored the current UNGA draft resolution in favor of EITI 

(A/62/L.41), agree and are willing to encourage increased participation in the initiative. Although the U.S. does not anticipate formally cosponsoring the resolution, we 

have no objections to the current wording, and expect that the administration will 

support it. 

RESPONSES OF DEPUTY SECRETARY OF STATE JOHN NEGROPONTE TO QUESTIONS

SUBMITTED BY SENATOR BARBARA BOXER

Question. On April 23, you appeared before the Senate Foreign Relations Subcommittee on East Asian and Pacific Affairs to discuss the crisis in Tibet. During 

68 

that hearing, we discussed the possibility of working together on an ‘‘action plan’’ 

for Tibet. 

On Friday, May 9, I sent a letter to President Bush with Senator Biden, Senator 

Kerry, and Senator Snowe, which outlined a number of specific actions that we believe the President should take, including visiting Tibet when he travels to the 

Olympic Games later this summer. 

I have put together a slightly more detailed action plan below. Can you please 

respond to your progress made to date on each item? 

• A. Moving Lhasa to the top of the list of cities in China for the next United 

States consulate, accompanied by a statement linking the opening of any further Chinese consulates in the United States to Chinese consent on the Lhasa 

post; • B. Calling for the release of those people detained for peaceful, nonviolent expression of opinion; • C. Demanding that China’s Government allow access by journalists to all areas 

of China and meet its commitments to the International Olympic Committee; • D. Coordinating efforts with European governments and United Nations agencies on getting access for foreign media, independent monitors, and diplomats 

to monitor the humanitarian situation in and around monasteries, and of Tibetans in general; • E. Insisting that Chinese authorities follow international standards of due process during the trials of those arrested since March 10, and allow for independent monitoring of such trials; 

• F. Requesting that the Chinese Government provide a list of those persons 

detained since March 10 and the charges against them; 

• G. Insisting that the Chinese Government end contentious policies, such as ‘‘patriotic education’’ campaigns, that restrict Tibetans’ ability to freely practice 

their religion; 

• H. Amending the fiscal year 2009 budget request to ensure that funding for 

Tibetan language broadcasts on Radio Free Asia and Voice of America is commensurate with the increased hours of service; 

• I. Ensuring that Radio Free Asia and Voice of America be included in the President’s press pool for Olympics; 

• J. Assuring that Tibet will be a topic of substantive discussion at the next meeting of the United States-China Strategic Economic Dialogue; and 

• K. Assuring that the administration will seek results and real progress on 

human rights conditions, including those inside Tibet, during the upcoming 

United States-China bilateral human rights dialogue. 

Answer. Like you, we remain concerned about the March unrest in Tibet and the 

longstanding grievances of China’s Tibetan communities. Thank you for the valuable 

suggestions in your Tibet action plan. We look forward to working with you and 

other Members of Congress as we press China to pursue substantive dialogue with 

the Dalai Lama and his representatives to address policies that impact the Tibetan 

people’s way of life. 

I am pleased to provide a status report on each of the items you raise in your 

action plan: 

A. Lhasa Consulate: As you know, we cover events in the Tibet Autonomous Region (TAR) and Tibetan areas of Sichuan and Yunnan provinces out of our Consulate General in Chengdu, in Sichuan province, where our team includes Tibetanspeaking staff. The Tibetan areas of Qinghai and Gansu provinces are covered 

under Embassy Beijing’s consular district. However, we agree that the United 

States needs to be more widely represented in China, including in the TAR. As we 

discussed during my testimony, in April we officially expressed interest in opening 

U.S. consulates in Lhasa and a number of other cities in China. To date, the Chinese have not responded to our expression of interest. We have followed up on this 

request: I raised the issue with Foreign Minister Yang when I was in China on May 

12, indicating that the request for a consulate in Lhasa was at the top of our list 

of priorities; and, we sent a diplomatic note to China on May 15, placing priority 

on opening a post in Lhasa. We will continue to work on this with the Chinese. 

B. Prisoner Releases: We have repeatedly called on China to release those detained for peaceful, nonviolent expression of opinion. President Bush and Secretary 

Rice have spoken to their Chinese counterparts, Ambassador Randt at our Embassy 

in Beijing has raised the issue repeatedly with high-level officials in the Chinese 

Government, and we have raised it here in Washington. We call on the Chinese authorities to ensure that all individuals detained during the recent unrest are afforded internationally recognized protections of due process and transparent legal 

procedures. Assistant Secretary for Democracy Human Rights and Labor David KraVerDate Nov 24 2008 13:23 Mar 18, 2009 Jkt 000000 PO 00000 Frm 00072 Fmt 6633 Sfmt 6621 H:\DOCS\US-CHINA.TXT BETTY
69 

mer will be raising this issue during our upcoming bilateral human rights dialogue 

with China. 

C. Journalist Access: We call on China to allow domestic and international journalists unfettered access to all areas of recent unrest. I discussed access for journalists personally with Chinese Ambassador Zhou soon after violence broke out in 

Tibet, and we have repeated this request at all levels of the government. As you 

have noted, China’s 2007 temporary regulations granting increased freedom to foreign journalists in advance of the 2008 Olympic Games were a positive step, but 

we share your concerns about the failure to apply these standards fully in all 

Tibetan areas, particularly in light of recent events. We will continue to press Chinese officials to fully implement the regulations, make them permanent, and extend 

similar benefits to Chinese journalists. 

D. Coordination With European Governments and the U.N.: We have been coordinating closely with European Governments and other friends and allies on our approach to events in Tibet. We and the EU made statements at the U.N. Human 

Rights Council urging all sides to refrain from violence and pursue substantive dialogue, and calling for transparency and access. We discussed the situation in Tibet 

with EU officials and others at a human rights forum in Brussels in April, and we 

will remain in touch with our friends in the international community as we press 

for progress on these issues. We, together with the EU and others, continue to press 

the Chinese for access to Tibet for U.N. observers including the U.N. High Commissioner on Human Rights and others. 

E. Due Process for Trials: We agree that we must continue to press China to ensure that all legal and administrative proceedings against persons alleged to have 

participated in violent acts during the recent protests throughout Tibetan areas of 

China are conducted in a manner that is both transparent and consistent with Chinese law and international human rights norms. We have asked for unfettered access to the TAR and other Tibetan areas of China for diplomats so that, among 

other things, they may observe judicial proceedings against Tibetans charged in connection with recent events in Tibetan areas. This is another issue Assistant Secretary for Democracy Human Rights and Labor David Kramer will raise during our 

upcoming bilateral human rights dialogue with China. 

F. List of Detainees: Officers from our Embassy and our Consulate General in 

Chengdu have repeatedly pressed Chinese officials at all levels for information regarding detainees, including individual cases. To date, we have not received a satisfactory response to our requests, although the Chinese Government has recently 

provided information on some cases. Assistant Secretary for Democracy Human 

Rights and Labor Kramer will again request this information during our upcoming 

bilateral human rights dialogue with China. 

G. Amending Contentious Policies: In the Secretary’s first public statement on the 

March protests and on other occasions, we have urged the Chinese Government to 

address policies in Tibetan areas that have created tensions due to their impact on 

important facets of Tibetan life. The Tibetans have asked for increased autonomy 

to govern their own affairs within Tibetan areas, particularly on issues such as education, language, religious practices, and other matters important to the protection 

of Tibet’s unique cultural heritage. We continue to impress upon the Chinese leaders that a new approach on these policies in Tibet is in China’s own interest and 

will serve not only to improve the lives of the Tibetan people, but also to reduce 

tensions and increase stability in the long term. 

H. Broadcasting: We recognize the important role that U.S.-supported Tibetan 

language radio broadcasts played in providing information both inside Tibet and to 

the rest of the world as events unfolded in March and April. Radio Free Asia was 

often first to break stories of protests, even after China imposed a media blackout 

throughout the affected areas. The Broadcasting Board of Governors (BBG)’s current 

broadcast schedule to Tibet has actually increased by 30 percent since March 2008. 

In light of recent events in Tibet, the BBG increased combined Voice of America and 

Radio Free Asia Tibet broadcasting from 86 to 112 hours per week. This ability to 

‘‘surge’’ broadcasting displays the agency’s ability to reevaluate its broadcast requirements when events warrant. The agency will continue to monitor the situation 

in Tibet to ensure that the most effective and appropriate levels of broadcasts are 

reaching the region. 

I. Olympics Press Pool: Voice of America is a part of the President’s radio pool, 

whose members accompany the President on a rotating basis. No official announcement has been made about the makeup of a pool going to the Olympic Games. Regardless, VOA will benefit from the reports of other pool members if they are not 

among the group that travels with the President. In addition, VOA will have six 

or seven journalists accredited to the Games, who will provide detailed coverage of 

the events. Radio Free Asia also has several reporters accredited to the Games. Two 

70 

RFA broadcasters are accredited with the International Olympic Committee. One is 

a Mandarin service broadcaster. The other is with the Tibetan service. RFA is not 

part of the Presidential pool. 

J. Strategic Economic Dialogue: We will continue to raise our concerns about Tibet 

in our bilateral forums with China. Secretary Paulson expressed his concerns about 

the situation in Tibet during his SED preparatory trip to China in early April. I 

discussed Tibet most recently with my interlocutors, including Vice President Xi 

Jinping, in Beijing on May 12, stressing our desire for progress through dialogue 

between Beijing and the Dalai Lama and his representatives. It has also been a subject of my Senior Dialogue discussions with my Chinese counterpart, Dai Bingguo. 

Secretary Rice has spoken with her counterparts frequently about Tibet as well. 

While the focus of the upcoming Strategic Economic Dialogue is our bilateral economic agenda, our delegation will be prepared to discuss Tibet with their Chinese 

counterparts outside of the formal, plenary sessions. 

K. Human Rights Dialogue: Secretary Rice and her Chinese counterparts agreed 

in February to resume our long-stalled bilateral human rights dialogue. We view 

these talks as a valuable opportunity to press for progress on China’s human rights 

record, including in Tibet. We have made clear to the Chinese, both publicly and 

privately, that we expect the dialogue to lead to real progress. 

Question. In your opening statement, you write that you ‘‘appreciate China’s willingness to press the Burmese regime to cooperate with the international community’s efforts to provide humanitarian assistance to the people of Burma.’’ 

Have these overtures by the Chinese Government had any effect whatsoever? 

Because the Burmese generals have refused to allow international aid workers to 

enter the country, the suggestion has been raised that the international community 

should intervene in a humanitarian way without the explicit approval of the junta. 

Have you discussed this option with Chinese officials? 

Answer. The Burmese regime is slowly increasing access to Burma for international aid workers, including doctors from neighboring countries. However, according to recent United Nations assessments, over half of those severely affected 

by Cyclone Nargis still have not received any assistance. 

There is no question that the Burmese regime needs to increase access to affected 

areas for international relief teams and accept outside logistical resources to expand 

and accelerate the humanitarian assistance operation. Our Embassy in Rangoon has 

been in direct contact with Burmese officials about this, and governments and 

NGOs from around the world have all sent similar messages. 

Given China’s unique access to the Burmese regime, we have been urging our 

Chinese interlocutors to use their influence to convince the regime to expand access 

for international relief efforts. We believe that Chinese intercession with the Burmese military was helpful in persuading the Burmese regime to allow in the first 

relief supplies from the U.S. Military’s Pacific Command that reached Rangoon after 

transportation assets were diverted from military exercises in Southeast Asia. 

China has reacted negatively to any suggestion of nonconsensual humanitarian 

intervention in Burma, including during recent discussions of this idea by France 

at the United Nations. 

Question. On May 14, my office was contacted by a mother from California who 

has been unable to contact her son who was traveling with two classmates near 

Chengdu, China, when the earthquake struck. 

I have been told that the U.S. consulate in Chengdu is working hard to locate the 

three Californian students and that additional U.S. personnel arrived from Beijing 

to help in the search efforts. 

Will you look into this case for me to ensure that everything is being done to find 

these missing Californian students? 

Answer. Consulate General Chengdu, working closely with the Chinese and the 

students’ parents, located the three California college students in Maoxian. They are 

uninjured and have food, water, and shelter. We will continue to monitor their condition until they are safely out of the affected area. To date, U.S. consular officers 

have successfully accounted for over 275 American citizens since the earthquake 

struck on May 12. 

Æ