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To help us clarify these issues this afternoon, we will hear testimony from the following witnesses:

Michael Oksenberg, professor of Chinese politics at the University of Michigan, and one of the architects of US-China normalization; Frank Gaffney, director of the Center for Security Policy; Aryeh Neier, executive director of Human Rights Watch; Ye Ning, presently at the Washington College of Law of the American University, and Ke Gang, from the University of Maryland; Richard Gillespie, the vice president of the United States-China Business Council; Peter Handal, president of Victor B. Handal & Brothers, Inc.; and Howard Lewis, representing the National Association of Manufacturers.

Before I turn to our witnesses, let me ask my colleagues if any of them would like to make introductory statements. Mr. Leach.

Mr. LEACH. Thank you, Mr. Chairman. Just very briefly, I would observe that this October will mark the 40th year since the accession to power of the Chinese Communists on the mainland. It's interesting to note that in terms of American political history, 1949 was a time in which the Republicans in the United States Congress were somewhat scathing in their criticism of Democratic policy toward China. In fact, Dean Acheson, our Secretary of State, described it as an "attack of the primitives.”

I would say at this time radically different events are taking place, but it's very impressive that in 1989 the response of the Congress has been largely bipartisan. Aside from differences our particular nuances and degrees of emphasis on particular approaches, the American people have reflected through their elected representatives an impressively consistent attitude on this particular issue. But, as we go forth, these nuances can potentially take the form of differences over policy, which I think the Congress ought to be awfully concerned about.

It is my own personal view that as long as there is basic consensus between the executive and legislative branches the administration policy should be given the benefit of the doubt. But, by the same token, there are a number of aspects where Congress can play a very creative role, in terms of articulation of concerns, as well as in terms of support for Chinese students in this country. But we ought to be very cautious about trying to craft out departures from the policy of the administration that may be described as of a significant variety.

Thank you, Mr. Chairman.
Mr. SOLARZ. Thank you.
Mr. Yatron.

Mr. YATRON. Thank you, Mr. Chairman. I want to commend subcommittee chairmen Solarz and Gejdenson for convening our second joint hearing here today.

Last week we heard from administration witnesses, and today I hope we can gain new insights from a business perspective. The question of economic sanctions against China is as important as military sanctions, which have already been imposed by the President.

Today we will hear from representatives from the human rights, academic, and national security studies communities. We need to assess potential economic repercussions the United States may incur as a result of sanctions and whether unilateral actions will positively affect China's human rights.conduct.

The emergence of the prodemocracy movement and the subsequent crackdown demonstrated that China's economic liberalization policies were not enough to placate the Chinese people. Economic reform must be accompanied by political openness and respect for human rights.

Mr. Chairman, I look forward to hearing from our witnesses.

Mr. SOLARZ. If there are no further comments at the outset-Mr. Roth.

Mr. ROTH. I thank you, Mr. Chairman.

Mr. Chairman, because time is of the essence, what I would like to do is introduce my statement, if I may, and say that I stand with the remarks that I gave before in our last hearing, that I voted for the en bloc amendment as I did many or most of the Members of Congress, with the conviction that we're moving in step with the President's policy.

[The prepared statement of Hon. Sam Gejdenson follows:]

OPENING STATEMENT

REP. SAM GEJDENSON, CHAIRMAN
SUBCOMMITTEE ON INTERNATIONAL ECONOMIC POLICY AND TRADE

U.S.-CHINA RELATIONS
JULY 19,

1989

I AM PLEASED TO JOIN AGAIN WITH CHAIRMEN YATRON AND SOLARZ TO SPONSOR DAY'S HEARING ON U.S.-CHINA RELATIONS. THE VIEWS OF THE PRIVATE SECTOR AND CHINESE STUDENTS IN THE U.S. ARE EXTREMELY IMPORTANT TO DEVELOPING AN EFFECTIVE AND MEANINGFUL U.S. RESPONSE TO THE CHINESE GOVERNMENT'S VIOLENT SUPPRESSION OF THE DEMOCRACY MOVEMENT.

LAST WEEK, THE COMMITTEE HEARD THE ADMINISTRATION'S VIEWS ON THE BEST WAY TO DEAL WITH CHINA IN LIGHT OF RECENT EVENTS. FRANKLY, I WAS VERY DISAPPOINTED BY THE ADMINISTRATION'S LACK OF CANDOR ON ONE OF THE MOST VITAL FOREIGN POLICY ISSUES FACING CONGRESS TODAY. IF THE ADMINISTRATION IS SERIOUS ABOUT WORKING WITH CONGRESS ON THE ISSUE OF CHINA SANCTIONS, IT MUST MUST BE WILLING TO COME BEFORE THIS COMMITTEE AND ENGAGE IN AN ACTIVE AND OPEN DEBATE.

I HOPE THAT TODAY'S WITNESSES CAN HELP THE COMMITTEE IN UNDERSTANDING THE POTENTIAL IMPACT UPON THE CHINESE LEADERSHIP AND CHINESE PEOPLE OF THE VARIOUS POLICY OPTIONS WHICH ARE BEFORE CONGRESS. THESE OPTIONS WILL BE DEALT WITH IN THE CONFERENCES OF THE FOREIGN AID AND STATE DEPARTMENT AUTHORIZATION BILLS, AND ARE ALSO CONTAINED IN A DISCUSSION DRAFT OF LEGISLATION I HAVE PREPARED.

WITHOUT QUESTION, REVOKING CHINA'S MEN STATUS, UNILATERALLY DENYING EXPORT LICENSES FOR GOODS TO THE CHINESE MILITARY AND POLICE, RESTRICTING THE EX-IM BANK'S ACTIVITIES, AND NEGOTIATING TO ROLL BACK THE LEVEL OF TECHNOLOGY ALLOWED TO BE EXPORTED TO CHINA WILL ALL HAVE SOME IMPACT UPON U.S.-CHINA RELATIONS AND THAT NATION'S POLITICAL AND HUMAN RIGHTS SITUATION. WE MUST DETERMINE THE EXTENT OF THIS IMPACT AND THE EFFECTIVENESS OF THESE SANCTIONS.

WHEN LOOKING AT POTENTIAL POLICY OPTIONS, CONGRESS MUST NOT ONLY LOOK AT CHINA BUT ALSO AT THE UNITED STATES. IF THE U.S. IMPOSES ADDITIONAL SANCTIONS UPON CHINA, EITHER UNILATERALLY OR MULTILATERALLY, HOW WILL THAT IMPACT U.S. EXPORTERS AND IMPORTERS? THE INTERESTS OF U.S. FIRMS MUST BE CAREFULLY BALANCED WITH THE NEED TO DEMONSTRATE TO THE CHINESE LEADERSHIP THAT IT IS NOT "BUSINESS AS USUAL.

I LOOK FORWARD TO TODAY'S TESTIMONY AND HOPE TO ENGAGE IN A LIVELY DISCUSSION WITH THE VARIOUS WITNESSES.

Mr. SOLARZ. We will now hear from our witnesses. Why don't we hear first from Mr. Oksenberg. It's good to have you back, Mike. You have a prepared statement and that will be included in the record. I hope you will feel free to summarize your views in five to ten minutes so we can have the maximum amount of time for questioning. Please proceed. STATEMENTS OF MICHEL OKSENBERG, CENTER FOR CHINESE

STUDIES, UNIVERSITY OF MICHIGAN; ARYEH NEIER, EXECU. TIVE DIRECTOR, HUMAN RIGHTS WATCH; AND FRANK J. GAFF. NEY, JR., DIRECTOR, CENTER FOR SECURITY POLICY

STATEMENT OF MICHEL OKSENBERG Mr. OKSENBERG. Thank you, Congressman Solarz, and thank you for giving me the privilege to appear before the committee. I recall at this moment the very constructive role you played at the time of normalization, and I want to identify myself at the outset with the remarks of Congressman Leach about the importance of preserving a bipartisan foreign policy with respect to China.

I am a Democrat. I worked in the Democratic administration. When we embarked upon normalization of relations with China, on the whole, and with some exceptions that you will remember, we worked in a very cooperative fashion and it was a bipartisan effort. Our policy toward China has been successful to date, I think, in no small measure because we have kept it bipartisan. I just very much appreciated the spirit of those remarks.

A political crisis now exists in China. Beijing is under martial law. Believing they had lost control of their capital city, in early June the leaders of China callously ordered heavily armed forces to penetrate and occupy the center of Beijing and, in the inevitable resulting turmoil, untold thousands of unarmed civilians and soldiers were killed and wounded. In subsequent days, the leaders have unleashed the instruments of totalitarian rule in the major cities.

There is much about the current situation that is unknown, but there are three conclusions that are unmistakable. First, there has been a massive failure of governance in China; second, the leaders of China are once again attempting to force their people into an ideological straightjacket; and third, the leaders of China have done immeasurable damage to their stature in world affairs.

This is a setback for American foreign policy and poses a challenge to our Nation. The challenge affects both our principles and our national interests. The challenge to fundamental American values is clear, and with respect to our interests, we have asserted for 17 years that we are served by a secure, modernizing, effectively and humanely governed China that contributes to the peace and stability of the Asia-Pacific region.

But how do we react now to a China whose leaders seem intent on doing damage to themselves and their country? In my time with you, during my oral remarks, I want to address four questions: what are our interests with respect to China, how might we now try to pursue them, and what of the future.

Let me enumerate for you what I think American interests with respect to China include. We expect China to maintain stability in East Asia and to contribute to the global balance of power. This means we count on China to retain a realistic sense of Soviet foreign policy, to sustain peace on the Korean peninsula, to demonstrate patience and seek a peaceful evolution of the Taiwan issue, to abide by its agreement with Britain over the future of Hong Kong, to assist in the solution of the Cambodian problem that will bring peace and independence to that tragic land, to abide by its commitment not to engage in nuclear proliferation, to refrain from destabilizing but lucrative arms sales in the Middle East, and to support arms control measures where China's interests are involved.

That is a long list, indeed. Over the past few years, China's policies in these areas have, on the whole, been constructive. But we cannot take Chinese cooperation for granted. It requires nurturing, consultation, and mutual understanding.

A second major interest beyond the security interest that the United States has, and one that I might add parenthetically I sometimes think we do not pay enough attention to, is that we need Chinese cooperation in addressing problems that transcend national boundaries: dealing with the "greenhouse" and ozone effects, controlling communicable diseases, preventing the growth and marketing of narcotics, halting illegal population migration across national boundaries, limiting population increases, raising enough food and so on. The cooperation of the government of onefourth of humanity is essential for these issues to be addressed.

Third, we have an interest in a humanely governed China and in a China committed to policies of economic and political reform. This is not dictated solely by sentimental, moralistic or humanitarian concerns. Rather, China can either play a responsible role in world affairs, nor address the problems of global interdependence, unless it has a unified effective government, and that government cannot be effective unless it enjoys the support and trust of its people. What those people told us in the moving months of April and May is that they seek greater dignity, they seek a government that is responsive to their opinion, and they seek a role in their governance.

That is why I advocate putting human rights higher on our agenda in China, I will confess, than I did before, because the Chinese people have done so. How the leaders of China treat their own people increasingly will affect the stability of China and its ability to play a constructive role in world affairs.

Finally, we have a commercial interest in China, and I assume that our subsequent speakers will address that. In short, we have a major strategic interest with China. It is a great power that sets it apart from, for example, Bulgaria, Czechoslovakia, or Romania. It is a nuclear power, and it is a nation with which we are unprepared to sustain an adversarial or animosity-ridden relationship. Our strategy toward China since 1971 has been to draw it out of its isolation and to integrate it in the international community. Underlying this strategy was the recognition that the burden of keeping China poor, weak and isolated in world affairs-our strategy of the previous 20 years-had proven too costly. Our calculus was that by building strong links to China strategically, intellectually, commercially and even militarily in this early stage in its rise, we

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