China-U.S. Relations in the 107th Congress: Policy Developments, 2001-2002

Order Code RL31729

CRS Report for Congress

Received through the CRS Web

China-U.S. Relations in the 107th Congress:

Policy Developments, 2001-2002

January 23, 2003

Kerry Dumbaugh

Specialist in Asian Affairs

Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

China-U.S. Relations in the 107th Congress:

Policy Developments, 2001-2002

Summary

In the wake of the September 11, 2001 terrorist attacks against the United States,

U.S. and People’s Republic of China (PRC) foreign policy calculations appeared to

change. The Administration of George W. Bush assumed office in January 2001

viewing China as a U.S. “strategic competitor.” Administration officials faced an

early test in April 2001 when a Chinese naval aviation jet collided with a U.S. Navy

reconnaissance plane over the South China Sea. After September 11, though, U.S.

officials came to see Beijing as a potential ally in the fight against global terrorism,

while PRC officials saw the anti-terrorism campaign as a chance to improve

relations with Washington and perhaps gain policy concessions on issues important

to Beijing, such as on U.S. arms sales to Taiwan. U.S. anti-terror priorities led some

to suggest that cooperation against terrorism could serve as a new strategic

framework for Sino-U.S. relations.

Many, however, saw complexities and pitfalls on this road to cooperation. For

one thing, the PRC’s definitions of what constitutes terrorism are significantly more

expansive than those of the United States and include any political expression of

independence — both violently and peacefully expressed — by Tibetans, Uighur

Muslims, Taiwanese, and others. Since the United States maintained that the antiterror campaign must not be used to persecute these groups, Sino-U.S. cooperation

already faced early limits. Also, U.S. dominance of the anti-terrorism effort made

Washington suddenly appear to be a more threatening competitor for influence in

Central Asia, where Beijing had been making successful political inroads in recent

years, and in Pakistan, with which Beijing has had traditionally close relations.

Moreover, although the anti-terror campaign appeared likely to overshadow

more traditional U.S.-China bilateral problems, it seemed unlikely to eliminate them.

Sensitivities remained over long-standing issues such as China’s abusive record on

human rights issues and on accusations that it routinely violates its non-proliferation

commitments, increasing the possibility that weapons of mass destruction can fall

into the hands of terrorists. The PRC remained suspicious about the accidental

NATO bombing of the Chinese Embassy in Belgrade in 1999, concerned about what

they see as an “encircling” U.S. presence in Asia, and wary of U.S. technological

advantages and global influence. Taiwan remained the most sensitive and potentially

explosive issue in Sino-U.S. relations, with U.S. officials increasingly supportive of

Taiwan’s security and its quest for international space, and PRC officials adamant

about reunifying Taiwan under the “one China” policy.

The 107th Congress was legislatively active on issues involving China, enacting

P.L. 107-10, authorizing the President to seek observer status for Taiwan in the

World Health Assembly, and enacting P.L. 107-228, the Foreign Relations

Authorization Act, containing provisions on China, Taiwan, and Tibet, among others.

The purpose of this report is to provide background for and summarize developments

in U.S.-PRC relations during the 107th Congress. This report will not be updated.

Contents

Uneven Relations Since 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Key Events in Bilateral Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

U.S. Reconnaissance Plane/PRC Fighter Collision . . . . . . . . . . . . . . . . . . . 2

September 11, 2001 Terrorist Attacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

U.S.-China “Summitry” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Human Rights in U.S.-China Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Detention of American Chinese Scholars . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

North Korean Refugees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Religious Freedom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Family Planning/Coercive Abortion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Labor Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

PRC Prisons/Prison Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Labor Unrest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

PRC Olympic Bid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Issues in U.S.-China Security Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

U.S. and PRC Military-related Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

2002 U.S. National Intelligence Estimate . . . . . . . . . . . . . . . . . . . . . . 12

Pentagon 2002 Report on Chinese Military Power . . . . . . . . . . . . . . . 12

“China’s National Defense 2002” White Paper . . . . . . . . . . . . . . . . . . 13

Weapons Proliferation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

North Korea’s Nuclear Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Allegations of Espionage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Economic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

China’s Trade Status: NTR/MFN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

China’s Fragile Banking System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Sovereignty Issues: Taiwan, Tibet, Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . 18

Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

George W. Bush Administration Policy . . . . . . . . . . . . . . . . . . . . . . . 18

Policy Statements by Taiwan’s President Chen . . . . . . . . . . . . . . . . . . 18

U.S. Visits by Taiwan Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Taiwan and the World Health Organization (WHO) . . . . . . . . . . . . . . 19

Political Developments in Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Taiwan-PRC Dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Tibet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

U.S. Policy Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Engagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Caution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Threat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Key 107th Congress Actions and Legislation Relating to China . . . . . . . . . . . . . 25

U.S. Commissions on China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Congressional-Executive Commission on the PRC . . . . . . . . . . . . . . . 25

U.S.-China Security Review Commission . . . . . . . . . . . . . . . . . . . . . . 26

Major Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Selected Additional Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

CRS Issue Briefs and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

List of Tables

Table 1. Congressional Consideration of MFN for China: 1989-1999 . . . . . . . . 17

China-U.S. Relations in the 107th Congress:

Policy Developments, 2001-2002

Uneven Relations Since 1989

Since 1989, U.S. relations with the People’s Republic of China (PRC) have

followed an uneven course, with modest improvements overshadowed by various

recurring difficulties and setbacks. Long-standing bilateral difficulties have included

U.S. problems with the PRC’s worsening human rights record, growing tensions over

the PRC’s southern military build-up opposite Taiwan and Taiwan’s political status,

and continued controversy over allegations of Chinese proliferation of weapons to

unstable regimes. Punctuating these have been periodic crises, including the PRC’s

provocative live-fire missile exercises in the Taiwan Strait in 1995-96, allegations

of Chinese espionage and leaking of U.S. military secrets in 1997-1998, the

accidental NATO bombing of the Chinese Embassy in Belgrade in May 1999, and

the collision of a PRC jet fighter with a U.S. navy reconnaissance plane over the

South China Sea in 2001. All these problems have occurred against a steady

drumbeat of growing mutual suspicion over the perceived security threat that each

poses to the other.

The George H. W. Bush Administration spent its four years from 1989 - 1992

trying to protect U.S.-China relations and field a policy of “engagement” with China

against mounting congressional opposition in the wake of the 1989 Tiananmen

Square crackdown. The Clinton Administration initially adopted a markedly

different position, stating that the United States should use its economic leverage to

promote democracy and change in the PRC. But like his predecessor, President

Clinton also came to favor a policy of “engagement” with China — a policy that

Clinton officials came to call a “strategic partnership.” The overall “engagement”

policies that both the Bush and Clinton Administrations pursued continued to be

criticized by a segment of American observers, including Members of Congress, who

increasingly came to see the PRC as America’s principal long-term security threat.

Upon assuming office in January 2001, the George W. Bush Administration

promised a tougher approach than that of either of his predecessors, describing the

PRC as a “strategic competitor” of the United States. Bush Administration officials

indicated they would broaden the focus of American policy in Asia, concentrating

more on Japan and other U.S. allies and de-emphasizing Sino-U.S. relations. The

Administration faced an early test of its policy on April 1, 2001, when a Chinese jetfighter collided with a U.S. Navy EP-3 reconnaissance plane over the South China

Sea, forcing the U.S. plane to make an emergency landing at a military base on

China’s Hainan island. In a tense stand-off, the PRC held the 24-member U.S. crew

for eleven days and required the U.S. military to dismantle the EP-3 and ship it back

to the United States rather than repair it and fly it back.

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The September 11, 2001 terrorist attacks against the United States appeared to

affect the policy calculus for both Washington and Beijing. The Bush Administration

appeared to see the potential for Sino-U.S. cooperation against global terrorism as a

priority, and U.S. officials down-played other key differences and problems in the

relationship evident during much of 2001. U.S. officials sought PRC anti-terrorism

support with countries in the region and in initiatives put before the United Nations

Security Council, where the PRC is a permanent member. But Bush Administration

officials also suggested that only limited cooperation would be possible, and in the

intervening months since September 11, the President and others in his

Administration continued with a policy approach that appeared tougher toward the

PRC and less solicitous of Beijing’s views.

In response to these tougher Bush Administration initiatives, Beijing took what

many view as a surprisingly low profile. Although PRC leaders were thought to be

wary of the precedents being set by a newly assertive U.S. policy toward Taiwan and

an expanded U.S. presence in Central and South Asia, their statements on these and

other U.S. initiatives remained muted. In fact, some suggest that PRC leaders

appeared anxious to assure smooth Sino-U.S. relations in 2001-2002, going out of

their way to be non-provocative despite greater U.S. assertiveness. It may be that this

low-profile PRC approach was the result of an ongoing leadership transition with

which Beijing was and remains preoccupied.1 From November 8 — 14, 2002, for

instance, the Communist Party held its 16th Party Congress, during which it selected

Hu Jintao as the new Party Secretary, named a new 24-member Politburo and a new

nine-member Standing Committee, and made substantive changes to the Party

Constitution. Some observers have suggested that Beijing’s views toward U.S.

policies may undergo some change once the leadership transition is completed later

in 2003.

Key Events in Bilateral Relations

U.S. Reconnaissance Plane/PRC Fighter Collision

U.S.-China relations faced an early crisis during the George W. Bush

Administration on April 1, 2001, when a U.S. Navy EP-3 reconnaissance plane and

a Chinese F8 jet fighter collided in the air over the South China Sea. The Chinese

fighter was reported to have crashed, and the damaged U.S. plane, accompanied by

the second Chinese fighter, made an emergency landing at a military base on China’s

Hainan island. U.S. officials claimed that standard military procedure calls for the

plane’s crew to destroy sensitive information and technologies prior to landing in

such instances, but it is unclear to what extent the crew was able to do this. The

Chinese military proceeded to hold the 24 U.S. crew members for 11 days and the

plane for a longer period as both sides disputed the facts, questions of international

law, and each other’s obligations.

1

For more on the 16th Party Congress decisions, see CRS Report RL31661, China’s New

Leadership Line-up: Implications for U.S. Policy, by Kerry Dumbaugh.

CRS-3

U.S. officials stated that the EP-3 was conducting a routine solo reconnaissance

mission approximately 50-60 miles off the Chinese coast when it was intercepted and

followed by two F8 Chinese jet fighters. U.S. military officials say that such

reconnaissance missions have been routine for decades, including interception by

Chinese fighters, but that China’s interceptions had grown increasingly aggressive

in 2001, resulting in U.S. diplomatic protests. According to the U.S. account, in this

particular case one of the Chinese fighters swooped under the U.S. plane and then

collided with it, perhaps as the slower-moving U.S. plane was banking to turn. U.S.

officials contend that in such emergency situations, international law allows for the

plane to remain inviolate sovereign territory of the owner country. The United States

asked the Chinese to respect the integrity of the plane and demanded its return as well

as the safe and immediate return of the crew.

While apparently agreeing that the U.S. plane was approximately 50 miles off

the Chinese coast, Chinese officials claimed that the U.S. plane had violated China’s

airspace and caused the accident that resulted in the crash of the F8 Chinese fighter.

They claimed that the plane landed at the Chinese military base without permission,

and they rejected the U.S. assertion that the plane could not be boarded under

international law. Several days after the incident, the Chinese military permitted U.S.

officials to begin sporadic meetings with the plane’s crew members. Going into the

weekend of April 7-8, 2001, Bush Administration officials expressed cautious

optimism that crew members would be released within a few days. But the Chinese

media and high-ranking Chinese officials began insisting on a U.S. apology and

implying that this was a prerequisite for any further discussions about the fate of the

crew and plane. U.S. officials insisted that no apology was warranted because the

collision was purely an accident and the U.S. plane was operating lawfully in

international airspace.

On April 12, 2001, the PRC released the 24 American crew members it had

been holding since April 1, 2001. The crew’s release came after Secretary of State

Colin Powell expressed regret and sorrow over the apparent death of the Chinese F8

pilot which caused the collision, and after the U.S. Ambassador to China, retired

Admiral Joseph Prueher, delivered a letter to Chinese officials which stated that the

U.S. Government was “very sorry” that the U.S. plane entered China’s airspace and

made an emergency landing without receiving a verbal clearance. An account by

Xinhua, an official Chinese media outlet, continued to adhere to China’s line that the

U.S. plane had “rammed” the Chinese jet fighter.

Many observers believed that the heart of the EP-3 stand-off ultimately

concerned the status of the island of Taiwan, which Beijing claims as part of China.

One important function of U.S. military reconnaissance flights off southern China is

presumed to be monitoring the systematic military build-up China has been

conducting on its coast opposite Taiwan. Chinese officials have been critical of U.S.

policy toward Taiwan and vocal in insisting on China’s right to use force against

Taiwan. Initially, many U.S. observers believed that U.S.-China relations would

suffer lasting damage as a result of the EP-3 crisis, perhaps jeopardizing China’s

normal trade relations (NTR) status and its chances of success in its bid to host the

2008 Olympic Games. Ultimately, however, the incident appeared to have no lasting

affect on the bilateral relationship.

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September 11, 2001 Terrorist Attacks

The terrorist attacks of September 11, 2001 against the World Trade Center, the

Pentagon, and the plane that crashed in rural Pennsylvania appeared to alter some of

the policy calculations for both Washington and Beijing. Bush Administration

officials quickly focused on the anti-terrorism campaign as a top U.S. priority in light

of which other U.S. foreign policy objectives, including those associated with SinoU.S. relations, appeared secondary. U.S. officials sought PRC support with countries

in the region and in initiatives put before the United Nations Security Council, where

the PRC is a permanent member and holds veto power. Beijing, for its part, appeared

to see the U.S. anti-terrorism effort as a chance to improve Sino-U.S. relations and

demonstrate that China could be a responsible global player.

The initial prospects for mutual support and cooperation were encouraging. In

a message to President Bush on September 11, 2001, PRC President Jiang Zemin

condemned the terrorist attacks and offered condolences. According to the White

House, in a phone call with President Bush the following day, Jiang promised to

cooperate with the United States to combat terrorism. The PRC also voted with

others in the U.N. Security Council for Resolution 1368 (2001), which among other

things “unequivocally” condemned the terrorist attacks and expressed its “readiness

to take all necessary steps to respond to the terrorist attacks.” On September 20,

Party Secretary Jiang Zemin declared that the PRC offered “unconditional support”

in the anti-terrorism campaign, and the PRC’s foreign minister, Tang Jiaxuan,

reportedly assured President Bush late in September that Beijing would share

intelligence with the United States. On September 24, 2001, a group of counterterrorism experts from the PRC arrived for meetings with their counterparts in

Washington. Many began to speculate that the U.S. anti-terrorism effort could serve

as a new framework for U.S.-China relations.

But in other ways, the PRC sent mixed signals early on about its support for the

anti-terrorism campaign. Strong statements of unconditional support were qualified

by later expressions of concern about U.S. or NATO military action, fault-finding

with U.S. intelligence information, and warnings that civilians should not be targets

of allied military action. Also, the PRC strongly preferred that global anti-terror

efforts be conducted through the auspices of the U.N. Security Council, where it had

a voice, and not purely through a U.S. unilateral effort or a coalition of U.S. allies.

The PRC itself has been the target of bombings, sabotage, and other terrorist

attacks, primarily thought to be committed by small groups of Muslim extremists

(largely Uighurs) based in Xinjiang, in China’s far northwest. For years there have

been unconfirmed reports that some Muslim activists were based in Afghanistan,

receiving training from the Taliban — reports that appeared to gain more credence

late in 2001 when it was revealed that a number of Uighurs from Xinjiang had been

captured in Afghanistan. PRC officials also have strong connections to and influence

with Pakistan, which in the past had aided the Taliban government and which became

a key country in U.S.-led anti-terrorism efforts after September 11th. In addition,

Beijing also is an active member in what is now the Shanghai Cooperative

Organization (SCO), a six-member consortium involving Russia and the Muslim

countries of Uzbekistan, Tajikistan, Kazakstan, and Kyrgyzstan. Part of the group’s

stated goal is to curb fundamentalist terrorist activities in the region.

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But since the September 11 attacks, Bush Administration officials have

appeared to be neither seeking nor expecting significant PRC support for the antiterror campaign. This may be partly for political reasons. In the past, the United

States had warned PRC officials that the anti-terror campaign should not be used to

suppress legitimate political dissent among China’s own Muslim populations. In as

visit to Beijing in December 2001, for instance, the State Department’s top counterterrorism expert, Francis X. Taylor, said that Washington did not believe Muslim

separatists in China who supported an independent East Turkestan were part of the

global anti-terror network. But on August 26, 2002, U.S. Deputy Secretary of State

Richard Armitage announced that the United States had added the East Turkestan

Islamic Movement (ETIM) to its list of terrorist groups. Some European allies

questioned the motivations behind the unexpected U.S. move. The Washington Post,

for instance, quoted one unnamed diplomat as suspicious that the United States was

“doing the Chinese a favor” as a trade-off for PRC support in the U.N. Security

Council for the U.S. campaign against Iraq.2 On August 28, 2002, officials at the

U.S. Embassy in Beijing further announced they had evidence that the ETIM was

plotting a terrorist bombing of the U.S. Embassy in Bishkek, Kyrgyzstan. On

September 11, 2002, the United Nations announced that, at the request of both the

United States and China, it was placing the ETIM on a U.N. list of terrorist

organizations, requiring that all U.N. members freeze the group’s financial assets and

ban its members from entry.

(See CRS Report RS21995, U.S.-China

Counter-Terrorism Cooperation: Issues for U.S. Policy.)

U.S.-China “Summitry”

The United States and China had more senior-level visits and contacts in the

first two years of the George W. Bush Administration than in previous U.S.

Administrations. In October

2001, President Bush had his

first meeting with PRC President

U.S.-PRC State Visits

Jiang Zemin as part of the AsiaGeorge W. Bush Administration

Pacific Economic Cooperation

Pres. Jiang Zemin to U.S. — Oct. 2002

(APEC) Forum Leaders Meeting,

Pres. Bush to PRC — Feb. 2002

Clinton Administration

held in Shanghai. In conjunction

Pres. Clinton to PRC — June 1998

with a visit to Japan and South

Pres. Jiang to U.S. — Oct. 1997

Korea in 2002, President Bush

George H. W. Bush Administration

also visited China, stopping in

Pres. Bush to PRC — Feb. 1989

Reagan Administration

Beijing on February 21-22, 2002.

Pres. Li Xiannian to U.S. — July 1985

As expected, the 2002 visit

Pres. Reagan to PRC — April 1984

resulted in no progress on

Ford Administration*

resolving the “November 2000

Pres. Ford to PRC — Dec. 1975

agreement,” in which the PRC

Nixon Administration*

Pres. Nixon to PRC — Feb. 1972

promised the Clinton

* before U.S.-PRC diplomatic relations were established

Administration that it would stop

making missile sales to unstable

Middle East and South Asia

2

deYoung, Karen, “U.S. and China ask U.N. to list separatists as terror group,” in

Washington Post, September 11, 2002, p. A13.

CRS-6

regimes and would institute an export control regime, and the United States promised

to lift existing restrictions against certain technology exports. On August 25, 2002,

however, Beijing published its “Regulations on Export Control of Missiles, Missilerelated Items, and Technologies — and the Control List.”3 (See CRS Report

RL31555, China and Proliferation of Weapons of Mass Destruction: Policy Issues.)

In April-May 2002, PRC Vice-President Hu Jintao, who just succeeded

President Jiang Zemin as Party Secretary at the 16th Party Congress, made his first

visit to the United States, meeting with President Bush and with a range of other

senior U.S. officials. On October 25, 2002, President Jiang Zemin made a state visit

to the United States, meeting with President Bush at the President’s ranch in

Crawford, Texas. Initially largely symbolic, the meeting became a vehicle for

bilateral consultations on North Korea’s nuclear weapons program and on China’s

support for a U.N. resolution condemning Iraq. (See CRS Report RS21351, SinoU.S. Summit, October 2002.)

Human Rights in U.S.-China Relations

Since the 1989 Tiananmen Square crackdown, the PRC’s human rights abuses

have been among the most visible and recurrent points of contention in Sino-U.S.

relations, and this more or less continued during the 107th Congress. According to the

State Department Report on Human Rights released on March 4, 2002, the PRC’s

human rights record remained poor in 2001.4 The government continued to maintain

strict controls over religious organizations, political discourse, and publications; law

enforcement agencies continued to carry out extrajudicial killings, executions after

summary trials, torture and other cruel punishment; and there continued to be lack

of adequate medical care, arbitrary arrest and detention, judicial corruption, denial

of fair trial, and other arbitrary official interferences with individual privacy and

liberty. The report also cited major flaws and deficiencies in China’s Criminal

Procedure Law. It stressed that the judiciary is not independent, despite

constitutional provisions to the contrary, and that judicial and police corruption is

“endemic” in China. However, the report said there were ongoing government

efforts to correct systemic weaknesses in the legal and judicial systems, that there

was growing public debate in China over the inadequacies in the legal system, and

that an increasing number of citizens were seeking redress through the courts and

making use of the new legal remedies available to them.

But the George W. Bush Administration appeared to shift from the traditionally

broad and generalized U.S. approach on human rights in China in favor of more

selective, intense pressure on individual cases involving human rights and on rule of

law. In 2002 in particular, the PRC government periodically succumbed to heavy

3

4

For full text, see [http://www.china-embassy.org/eng/33977.html]

In response to the 2002 State Department report, on March 11, 2002, the Information

Office of the PRC State Council issued a white paper, “Human Rights Record of the United

States in 2001.”

The full text of the PRC White Paper can be found at

[http://www.china-embassy.org/eng/26488.html].

CRS-7

U.S. pressure and released early from prison a political dissident, usually citing

health reasons. Such releases included the December 2002 release of Xu Wenli, cofounder of the China Democracy Party, and the January 2002 release of Ngawang

Choephel, a Tibetan scholar. But such gestures were infrequent and overshadowed

by other human rights troubles. As in previous U.S. Congresses, Members of the

107th Congress remained both interested in and active on human rights issues with

respect to the PRC.

Detention of American Chinese Scholars

Late in 2000, the PRC Ministry for State Security began arresting and detaining

China-born American citizens and permanent residents who were traveling in or

visiting China, questioning them about their travels and alleging that some were

suspected of espionage. Those who were detained included businessmen, scholars,

writers, and journalists. One of the more well-publicized cases involved the

detention on February 11, 2001, of Ms. Gao Zhan, a researcher at American

University and a permanent U.S. resident. Gao was arrested and charged with

espionage. Detained along with her were Gao’s husband, Xue Donghua, and her fiveyear-old son Andrew, a U.S. citizen. The father and son were held 26 days before

being released. Ms. Gao was convicted of spying on July 24, 2001, sentenced to ten

years in prison, and released two days later on medical parole prior to Secretary of

State Colin Powell’s visit to the PRC. In another notable case, an American citizen,

professor Li Shaomin, was detained on February 25, 2001, and was later arrested,

tried for, and convicted of spying for Taiwan. He also was released just prior to

Secretary Powell’s visit.5

North Korean Refugees

In March 2002, international attention focused on North Korean refugees who

had been living clandestinely in China. In several well-publicized cases, these

refugees had begun rushing into the diplomatic compounds of various foreign

governments in China asking for asylum. Chinese security forces were accused in

some cases of forcing their way into foreign diplomatic compounds to remove them.

On May 8, 2002, Chinese police entered the compound of the Japanese consulate in

Shenyang to remove two North Koreans seeking asylum. On June 13, 2002, South

Korean diplomats scuffled with Chinese police as they hauled away a North Korean

refugee seeking asylum. After a stand-off of several weeks, during which PRC

officials demanded that the refugees be handed over to Chinese security forces,

Beijing reversed its decision on June 23, 2002, and allowed 26 North Koreans living

in various foreign diplomatic compounds to leave the country.

In the past, the PRC had largely ignored the large number of North Koreans

illegally living in China, cracking down only periodically. But the new activism of

5

Representative Chris Smith and Senator Robert Torricelli introduced resolutions in 2001

(H.Res. 160 and S.Res. 128) calling on the PRC government to immediately and

unconditionally release all detained American scholars of Chinese ancestry. H.Res. 160

passed the House on June 25, 2001 (379-0); S.Res. 128 passed the Senate on July 24, 2001,

by unanimous consent.

CRS-8

the North Korean refugee population in 2001-2002 involved complexities that

concerned China, a number of other governments, the United Nations, and the

international community. The United States and the governments whose diplomatic

offices were involved (Canada, Japan, and South Korea) protested the Chinese forced

intrusions into foreign diplomatic compounds as blatant violations of the Vienna

Convention. Chinese officials countered that the North Koreans were not covered

under the Vienna Convention because they were fleeing economic hardships and not

political repression, that Beijing has had long-standing refugee repatriation

agreements with North Korea which it must honor, and that Chinese security officials

had permission to enter the foreign government compounds.6 Although the North

Korean refugee issue was not a high foreign policy priority for the Bush White House

in 2001-2002, it did receive action in the 107th Congress.7

Religious Freedom

Membership data on religious organizations in the PRC suggested that the

number of religious adherents in China continued to grow in 2001-2002, despite

rigorous restrictions on religious practice put into place in 1994. Among other

things, PRC restrictions continued to prohibit evangelical activities and required all

religious groups to register with the Religious Affairs Bureau (RAB). Registration

has required religious groups to reveal the names and addresses of members, their

contacts in China and abroad, and details about leadership activities and finances.

Churches and other religious institutions seen conducting public services in large

Chinese cities have been among these “registered,” and therefore legal, groups.

Groups whose members have refused to register with the RAB are known as

“unofficial” or “house” churches.

During the 107th Congress, the PRC intensified further the campaign against

these independent religious groups that it had begun in 1999, when American news

accounts began to give wide coverage to reports that the government was arresting

religious practitioners and giving them harsh jail sentences. On July 22, 1999, for

instance, the government outlawed Falun Gong, a spiritual movement in China said

to combine Buddhist and Taoist meditation practices with a series of exercises. The

November 6, 1999 People’s Daily suggested that Falun Gong presented the greatest

danger to the nation that had ever existed in its 50-year history. In the intervening

years, the government continued to arrest Falun Gong leaders, impose harsh prison

sentences, and close the sect’s facilities. As a consequence of Falun Gong, the

National People’s Congress on October 30, 1999, adopted a resolution outlawing

religious sects and cults in China, but without defining what a cult or a sect was. In

extraordinary displays of public dissent, Falun Gong practitioners periodically cut

into regional cable television networks and broadcast pro-Falun Gong programs in

2001-2002. On September 25, 2002, for instance, the group hacked into the PRC’s

6

For further details, see CRS Issue Brief IB98045, Korea: U.S.-Korea Relations — Issues

for Congress, by Larry Niksch.

7

In August 2001, Representative Edward Royce introduced H.Con.Res. 213, expressing the

sense of Congress in protest to the PRC’s seizure and repatriation of North Korean refugees.

The measure passed the House on June 11, 2002 (409-0) and was referred to the Senate,

which took no action.

CRS-9

premier national TV satellite system, broadcasting segments of pro-Falun Gong

materials across the country.

During the 107th Congress, Beijing also objected to the activities of Falun Gong

in the United States, where the group has a growing presence and visibility.8 A few

PRC officials at times chastised U.S. visitors for what they saw as a worrisome U.S.

tolerance of the group’s activities on American soil, saying that the group was a

danger not only to the PRC government, but potentially also to the U.S. government.

Partly in response to the Falun Gong group, the PRC established a central

government entity — the “Office for Preventing and Handling Cults.” Although

observers believed this measure targeted the Falun Gong, many feared it may come

to include Christian churches and other more mainstream groups in the future.9

PRC officials also suppressed religious activities and nationalistic sentiments

among ethnic minorities, particularly in Buddhist Tibet and in the Xinjiang-Uighur

Autonomous Region, heavily Muslim. Amnesty International issued a report in April

1999 which accused the PRC government of “gross violations of human rights” in

Xinjiang, including widespread use of torture, lengthy prison sentences, and

executions. In August 1999, during the visit of an American congressional staff

delegation to Xinjiang, a wealthy, well known Uighur businesswoman, Rebiya

Kadeer, was arrested by PRC security forces on her way to a meeting with a

delegation member. On February 20, 2002, 84 Members of Congress signed a letter

to President Bush urging that he seek Kadeer’s release during his official visit.

After September 11, 2001, PRC officials sought to link their ongoing crackdown

against Uighur and other Muslim separatists in Xinjiang with the global antiterrorism campaign. On October 12, 2001, a PRC Foreign Ministry spokesman said,

“We hope that our fight against the East Turkestan [Xinjiang] forces will become a

part of the international effort against terrorism.” Although U.S. officials warned that

the anti-terror campaign should not be used to persecute Uighur separatists or other

minorities with political grievances against Beijing, some believed that the U.S.

government appeared to make a concession to Beijing on August 26, 2002, when it

announced that it was placing one small group, the East Turkestan Islamic

Movement, on the U.S. list of terrorist groups.10

Family Planning/Coercive Abortion

Bitter controversies in U.S. family planning assistance have surrounded the

PRC’s population programs. Abortion, and the degree to which coercive abortions

and sterilizations occur in the PRC’s family planning programs, has been a prominent

issue in these debates. PRC officials have routinely denied that coercion is an

authorized part of national family planning programs, but they have acknowledged

8

Falun Gong’s founder and leader, Li Hongzhi, is said to have sought refuge at an

undisclosed location in the United States after fleeing from the PRC.

9

For further details, see CRS Report RS20333, China and ‘Falun Gong,’ by Thomas Lum.

10

The 107th Congress considered a number of human rights resolutions relating to the PRC.

For relevant bills, see the “Legislation” section of this report.

CRS-10

that some provincial and local officials have pursued coercive policies. Direct U.S.

funding for coercive family planning practices is prohibited in provisions of several

U.S. laws, as is indirect U.S. support for coercive family planning. In addition,

legislation in recent years has expanded these restrictions to include U.S. funding for

international and multilateral family planning programs, such as the U.N. Population

Fund (UNFPA), that have programs in China. In the FY2002 Foreign Operations

Appropriations bill (P.L. 107-115), for instance, Congress provided for “not more

than” $34 million for UNFPA. The Bush Administration froze those funds in

January 2002, asserting coercion still existed in Chinese counties where UNFPA had

programs. Despite a follow-up finding by a State Department assessment team that

UNFPA was not supporting coercion in its family planning programs in China, on

July 22, 2002, U.S. Secretary of State Colin Powell announced that the $34 would

remain withheld.11

Labor Issues

PRC Prisons/Prison Labor. For years, PRC prisons have been criticized

for their conditions, treatment of prisoners, and stringent work requirements. For

Members of Congress, a key issue has been the extent to which products made by

prisoners are exported to the U.S. market. Prison labor imports have been a violation

of U.S. customs law since 1890 under the McKinley Tariff Act [19 U.S.C., section

1307]; criminal penalties also apply under 18 U.S.C., section 1761 and 1762.

Although the 107th Congress was not active on the subject of PRC prison labor

imports, the U.S.-China Security Review Commission (USCC), in its July 2002

report to Congress, recommended that Congress improve the enforcement of the

prohibition against prison labor imports from the PRC.12 The USCC recommended

that private American companies be required to certify that their imported products

are not made by forced labor, and further recommended that Congress establish a

“corporate code of conduct” for U.S. businesses operating in the PRC.

Labor Unrest. Economic reforms and more stress on making state-owned

enterprises profitable led to rising labor unrest in China during the 107th Congress.

In 2002, laid-off and unemployed workers estimated to number in the tens of

thousands demonstrated to protest job losses, insufficient severance pay, local

corruption, and local government decisions to shut-down, sell-off, or privatize

unprofitable state-owned factories. Worker unrest is a particularly troubling issue for

Beijing, a regime founded on communist-inspired notions of a workers’ paradise.

Increasing labor unrest also placed greater pressure on the authority and credibility

of the All-China Federation of Trade Unions (ACFTU), China’s only legal labor

organization.13

11

For further details, see CRS Issue Brief IB96026, Population Assistance and U.S. Family

Programs: Issues for Congress, by Larry Nowels.

12

13

The USCC report was issued pursuant to P.L. 106-398 (October 30, 2000).

The ACFTU is controlled by the Communist Party. For background and further details,

see CRS Report RL31164, China: Labor Conditions and Unrest.

CRS-11

In the late 1990s, the PRC government had signed two key human rights

agreements: the U.N. Covenant on Economic, Social and Cultural Rights (October

27, 1997) and the International Covenant on Civil and Political Rights (March 12,

1998). On February 28, 2001, the PRC government announced that it would ratify

the former, with qualifications. The U.N. Covenant on Economic, Social, and

Cultural Rights, which requires signatory countries to ensure their citizens have

access to food, medical care, housing, and education, also requires countries to

guarantee workers the right to strike and form labor unions. In ratifying the

agreement, China appeared to equivocate on the labor provision, saying it would deal

with such issues “in line with relevant provisions” of the Chinese constitution.14

Labor unrest and labor conditions in the PRC routinely prompt a debate in

Congress over competing policy goals. In this debate, some Members argue that

PRC workers are exploited under economic reforms and that the United States should

seek to limit its economic and financial dealings with the PRC until Chinese workers

gain full collective bargaining rights. Other Members argue that U.S. investments

in the PRC have helped improve workers’ lies and incomes and have contributed to

greater public pressure for labor and political reforms.

The Congressional-Executive Commission on the People’s Republic of China

(CEEC), which the 106th Congress created to monitor human rights and labor

conditions in China, issued its first report to the 107th Congress in September 2002.15

Among its recommendations on worker rights and conditions, the CEEC included

recommendations that Congress expand U.S. assistance to legal clinics in the PRC

seeking to expand worker rights; that the U.S. and PRC seek to establish a

collaborative relationship between government and business to expand worker rights;

that the U.S. Secretary of Labor make discussion of labor issue with the PRC a higher

priority; and that Congress seek to fund programs to improve worker rights and safety

at the enterprise level in the PRC.16

PRC Olympic Bid

In July 2001, the International Olympic Committee elected Beijing as the host

city of the 2008 Olympic Games — the PRC’s first successful Olympic bid. The

107th Congress considered, but did not vote on, non-binding resolutions saying that

the PRC should not be allowed to host the 2008 Olympics until it had released all

political prisoners and taken other steps to improve its human rights record. An

unsuccessful PRC bid in 1993 to host the 2000 Olympic Games had been blamed on

legislation the House passed that year opposing the PRC’s bid (H.Res. 188).

14

On April 29, 2002, the PRC State Council Information Office issued a white paper,

“Labor and Social Security in China.”

The document is at

[http://www.china-embassy.org/eng/29539.html].

15

The CEEC was created under P.L. 106-286.

16

Full text of the CEEC report is at [http://www.cecc.gov].

CRS-12

Issues in U.S.-China Security Relations

Once one of the stronger linchpins of the relationship, U.S.-China military

relations have never fully recovered after they were suspended following the 1989

Tiananmen Square crackdown. Both countries cautiously agreed to resume military

contacts after a Sino-U.S. summit in October 1997, and announced they had agreed

on a Military Maritime Consultative Agreement (MMCA) meant to reduce the

chance of accidents or misunderstandings at sea. But efforts to re-energize military

ties since then have met with repeated setbacks.

In March 2001, a U.S. guided missile cruiser made a goodwill port call to

Shanghai. But on April 1, 2001, a PRC F8 fighter collided with a U.S. Navy EP-3

reconnaissance plane over the South China Sea, resulting in the death of the Chinese

pilot and the forced emergency landing on Hainan island by the American plane. In

May 2001, a statement attributed to Defense Secretary Donald H. Rumsfeld

announced that the United States was suspending military exchange programs with

the PRC military until further notice. Hours later, however, a Pentagon spokesman

said the statement was a mistake and that the Pentagon would review and approve

future U.S.-China military contacts on a case-by-case basis. In June 2002, Peter

Rodman, U.S. Assistant Secretary of Defense for International Security Affairs, held

talks with senior Chinese diplomats and military officials in Beijing, including Xiong

Guangkai, China’s Deputy Chief of Staff, Chi Haotian, China’s Defense Minister,

and Li Zhaoxing, Vice Foreign Minister.17

U.S. and PRC Military-related Reports

2002 U.S. National Intelligence Estimate. On January 9, 2002, the CIA

issued an unclassified summary of its latest National Intelligence Estimate (NIE),

Foreign Missile Developments and the Ballistic Missile Threat Through 2015.

According to the unclassified report, the PRC is expected to up to 100 long-range

nuclear missiles, many on mobile launchers, targeted at the United States by 2015.

Currently, the PRC has about 20 fixed silos containing nuclear-armed missiles

capable of reaching the United States. The report asserts that the PRC is upgrading

its missile forces out of concern that a U.S. missile defense system, if developed and

deployed, could effectively neutralize its current nuclear deterrent.

Pentagon 2002 Report on Chinese Military Power. On July 12, 2002,

the Pentagon released its “Annual Report on the Military Power of the People’s

Republic of China,” mandated by Congress in Section 1202 of the National Defense

Authorization Act for FY2000, P.L. 106-65. Among the conclusions in the 52-page

report were: that the Pentagon sees a new emphasis on military modernization

decisions that appear aimed at Taiwan; that Chinese defense spending is significantly

higher than the $20 billion that the Chinese government lists as its official defense

budget; and that annual military spending by Beijing could increase significantly by

2020.

The full text of the Pentagon’s report can be found at the website

[http://www.defenselink.mil/news/Jul2002/d20020712china.pdf].

17

For background and further details, see CRS Report 97-931, China: Ballistic and Cruise

Missiles, by Shirley Kan.

CRS-13

“China’s National Defense 2002” White Paper. On December 9, 2002,

the PRC published its fourth national security white paper, entitled “China’s National

Defense in 2002.”18 In assessing the international situation, the white paper states

that “Rapid and drastic changes are taking place in the military field around the

world, and a new serious disequilibrium has occurred in the balance of military

power.” But in a number of ways, the tone of the new National Defense paper is

more general and less critical of the United States than its third national security

white paper, issued in October 2000. For instance, while the third national defense

paper attributed a number of negative global developments specifically to the United

States, the fourth National Defense paper does not, keeping its discussion of negative

global trends general.19 Similarly, while the Taiwan-related language of the 2000

National Defense paper refers specifically to U.S. arms sales to Taiwan, references

to Taiwan in the new 2002 National Defense paper refer only to arms sales by “a

handful of countries,” with no U.S. mention. The 2002 Nation Defense paper also

emphasizes the continuing growth of global economic interdependence.20

Weapons Proliferation

Even before September 11, a key security issue for the United States was the

PRC’s track record of weapons sales, technology transfers, and nuclear energy

assistance, particularly to Iran and Pakistan. Officials in the Clinton Administration

suggested that China was reassessing its weapons sales policies. As reasons, they

cite that the PRC: (1992) promised to abide by the Missile Technology Control

Regime (MTCR) and acceded to the Nuclear Non-Proliferation Treaty (NPT); (1993)

signed the Chemical Weapons Convention (CWC); (1996) signed the Comprehensive

Test Ban Treaty; and (1997) joined the Zangger Committee of NPT exporters.

Critics in the 107th Congress and before, however, charged that confidence in

China’s non-proliferation policies is misplaced. They pointed out that for years,

reputable sources have reported China to be selling ballistic missiles and technology

for weapons of mass destruction in the international market, primarily in the Middle

East. Although these allegations have always created problems in Sino-U.S. relations,

the issue became more serious in light of a number of developments, including

nuclear weapons tests conducted by Pakistan in May 1998; the prospect that weapons

of mass destruction (WMD) are being developed by Iraq and Iran, with whom the

PRC has had arms sales relationships; and in light of North Korean assertions in

2002 that it was developing nuclear weapons of its own, possibly with PRC

assistance. Some U.S. observers are concerned particularly about the security of

possible caches of WMD in Pakistan, Iraq, and North Korea, afraid that they may be

18

See text at [http://www.china.org.cn/e-white/20021209/index.htm].

19

The third National Defense report, for instance, attributes “new negative developments

in the security situation” in the region to, among other things, a stronger U.S. military

presence in the region, continued sale of weapons to Taiwan and consideration of the

Taiwan Security Enhancement Act by the 106th Congress, consideration of theater missile

defense (TMD) development, and revision of the U.S.-Japan Defense Cooperation

Guidelines. The only specific U.S. mention in the fourth National Defense report is in

reference to the September 11 terrorist attacks.

20

See text at [http://english.people.com.cn/features/ndpaper2002/nd.html].

CRS-14

vulnerable to theft or purchase by radical Muslims associated with Osama bin Laden

and other terrorist groups. Iran also has purchased PRC weapons, including small

numbers of SA-2 surface-to-air missiles, F-7 combat aircraft, fast-attack patrol boats,

and C-802 anti-ship cruise missiles. Some Members of Congress have questioned

whether Iran’s possession of C-802’s violates the Iran-Iraq Arms Non-Proliferation

Act of 1992 (U.S.C. 1701), which requires sanctions on countries that sell

destabilizing weapons to Iran or Iraq.21

North Korea’s Nuclear Program

On October 4, 2002, North Korea told visiting U.S. officials that it was

conducting a clandestine uranium enrichment program to produce nuclear weapons,

a technical violation of its pledges under the 1994 U.S.-North Korean Agreed

Framework in exchange for U.S. energy assistance. The North Korean

announcement precipitated the second nuclear-related crisis on the Korean peninsula

in a decade, one that continued to escalate as the year ended. The United States

responded by suspending its energy assistance under the Agreed Framework.

As North Korea’s only ally, the PRC is a crucial factor in any international effort

to mitigate North Korean policies and behavior. President Bush is widely thought

to have sought PRC support for addressing the North Korean issue at Crawford ranch

summit meeting with Jiang Zemin in October 2002. At the end of the summit

meeting and on a number of occasions since then, PRC officials have emphasized

that China had long supported a non-nuclear Korean peninsula, but Beijing stopped

short of promising further pressure on the North Korean regime.

The PRC has a number of competing policy conflicts in terms of North Korea

that raise especially thorny challenges for leaders in Beijing and that make the PRC

a potentially important but uncertain partner in U.S. policy efforts on the Korean

peninsula. PRC support for a non-nuclear North Korea is thought to be genuine,

since an unpredictable North Korean regime armed with nuclear weapons could spur

a regional nuclear arms race among non-nuclear powers along China’s periphery,

such as Taiwan, Japan, and South Korea. In addition, international response to

aggression by a desperate, nuclear-armed North Korea could prompt assistance to

Pyongyang by the PRC, the only country with a mutual defense treaty with North

Korea. The PRC therefore has ample cause to seek to curb North Korean nuclear

aspirations and to contain its difficult ally. But collapse of the fragile North Korean

regime could have equally unhappy consequences for the PRC, leading to floods of

North Korean refugees into China and to the possible advance of U.S. military forces

from South Korea to the southern PRC border. Such scenarios tend to convince PRC

leaders to continue propping up the North Korea regime.

Allegations of Espionage

In the late 1990s, U.S. media sources began reporting on investigations into a

number of cases of alleged PRC espionage against the United States dating back to

21

For background and further details, see CRS Report RL31555, China and Proliferation

of Weapons of Mass Destruction and Missiles: Policy Issues, by Shirley Kan.

CRS-15

the 1980s. The most serious case involved China’s alleged acquisition of significant

information about the W-88, the most advanced miniaturized U.S. nuclear warhead,

as a result of serious security breaches at the Los Alamos nuclear science lab between

1984 and 1988. PRC officials denied the allegations.

While no charges of similar import arose during 2001-2002, some congressional

sources in the 107th Congress noted periodically surfacing reports suggesting that

officials of the PRC had collected and were continuing to collect sensitive

technological information from U.S. sources. In August 2001, FBI agents arrested

an American intelligence analyst at Dulles Airport, later charging him with trying to

sell classified documents to China, Libya, and Iraq. His trial begins in 2003, and if

convicted, he could face the death penalty. In periodic hearings through 2001-2002,

the USCC (U.S.-China Security Review Commission) also examined what it said

were recurring allegations of PRC interests in sensitive U.S. technologies. In its July

2002 report, the USCC recommended to the 107th Congress that it require an annual

classified assessment of these activities. In addition, based on recommendations by

the USCC, the 107th Congress enacted language requiring the U.S. Department of

State to produce a biannual report, beginning in 2004, which would assess and

monitor a broad range of U.S.-China science and technology cooperation conducted

under the U.S.-PRC Science and Technology Cooperation Agreement of 1979.22

Economic Issues

The PRC is one of the world’s fastest growing economies, and trade analysts

have agreed that its potential as a market will increase significantly in the future.

Issues involving trade with China have factored heavily into past U.S. policy debates.

Between 1991 and 1996, U.S. exports to China increased by 90.5%, while U.S.

imports from China surged by 171.4%. The U.S. trade deficit with China surged

accordingly, from a $17.8 billion deficit in 1989 to an estimated $142.1 billion deficit

in 2002. During the 107th Congress, on September 17, 2001, member nations of the

World Trade Organization (WTO) voted to accept the PRC for membership. The

PRC formally joined the WTO on December 11, 2001. Its WTO membership

commitments require the PRC to make significant changes in its trade and tariff

regimes by eliminating tariff and non-tariff barriers on many goods and services

With the PRC as a new WTO member, Members of the 107th Congress were

especially interested in assuring that the PRC adhered to its WTO obligations. In

legislation passed by the 106th Congress, the U.S. Trade Representative (USTR) was

required to begin monitoring the PRC’s compliance with its WTO obligations, and

to issue an annual report to Congress offering that assessment. The 107th Congress

received the USTR’s first such report in December 2002, in which the PRC was

judged to have made significant progress in many areas with major problems in some

22

Section 204 in H.R. 3338 (P.L. 107-117), the Department of Defense Appropriations Act

for FY2002.

CRS-16

other areas, primarily in protection for intellectual property rights, and improving the

transparency of its trade laws.23

China’s Trade Status: NTR/MFN

During the 107th Congress, the divisive issue of annually renewing the PRC’s

trade status finally came to an end. Each year since 1990, Congress had faced the

contentious decision on whether, and under what conditions, to renew normal trade

relations (NTR) status with the PRC for another year. This exercise occurred

because under U.S. law, China’s NTR status was temporary, and the President had

to recommend its renewal each year by June 3. Although the 106th Congress had

enacted a bill which granted permanent NTR to China and eliminated the annual

renewal process, permanent NTR would only take effect once China had joined the

WTO.24 Since this did not happen until late in 2001, President Bush on June 1, 2001,

was compelled to recommend another temporary extension of China’s NTR status

for one year in order for it to continue uninterrupted. The 2001 vote on NTR marked

the end of an eleven-year congressional battle over the PRC’s overall trade status.

A synopsis of congressional consideration of the MFN/NTR issue follows in Table

1.25

China’s Fragile Banking System

In the late 1990s, concerns arose about the ultimate prospects for China’s fragile

banking and financial systems. According to leading authorities on China’s

economy, official Chinese statistics by the end of the 20th century showed that a

staggering 22% of the total lending of Chinese banks was judged to be in nonperforming loans, primarily loans to insolvent state enterprises. By comparison, in

South Korea, which averted financial collapse during the 1997 Asian financial crisis

only with a record $60 billion international bailout, the percentage of non-performing

loans to total bank loans was just over 6%. While China’s economic situation in

2001-2002 had a number of mitigating factors — primarily a high savings rate (42%),

a sizeable inflow of foreign direct investment, and insulations against currency

speculators — many were concerned that a financial crisis similar to South Korea’s

in an economy the size of China’s could have a significant global impact. In

addition, the banking sector’s non-performing loans made it more difficult during the

time frame for China to make the investments in infrastructure, energy production,

and environmental improvements to fuel the rate of economic growth China needs

in order to keep pace with its demographic requirements.

23

For further details, see CRS Report RS20139, China and the World Trade Organization,

by Wayne Morrison.

24

The 106th Congress enacted H.R. 4444 (P.L. 106-286), a bill to grant permanent NTR to

China. The President signed the bill into law on October 10, 2000.

25

For further details, see CRS Issue Brief IB91121, China-U.S. Trade Issues, by Wayne

Morrison.

CRS-17

Table 1. Congressional Consideration of MFN for China: 1989-1999

Year

Disapproval

Res.

Final Status

Alternate bills

Final Status

1989

None

—

None

—

1990

H.J.Res. 647

Passed House 10/18 (247-174)

H.R. 4939

Passed House 10/28 (384-30)

1991

H.J.Res. 263

Passed House 7/10 (223-204)

Senate Postponed 7/18,

Unanimous Consent

H.R. 2212

Passed House 7/10 (313-112)

S.J.Res. 153

Senate Postponed 7/18,

Unanimous Consent

S. 1367

Passed H.R. 2212 in lieu 7/18 (55-44)

H.J.Res. 502

Passed House 7/21 (258-135)

H.R. 2212

Conference Report H.Rept. 102-392 passed Senate 2/25 (59-39)

Vetoed by President 3/2

House override vote 3/11 (357-61)

Senate override vote 3/18 (60-38) - veto sustained

H.R. 5318

Passed House 7/21 (339-62)

Senate amended with text of S. 2808,

passed by voice vote, 9/14

House passed Senate version 9/22, voice

vote

1992

S. 2808

Conference Report H.Rept. 102-392 passed House 11/27

(409-21)

H.R. 5318 vetoed by President, 9/28

House override vote 9/30 (345-74)

Senate override vote 10/1 (59-40) - veto sustained

1993

H.J.Res. 208

House rejected 6/8 (105-318)

H.R. 1835

S. 806

No action

1994

H.J.Res. 373

House rejected 8/9 (75-356)

H.R. 4590

Amended to impose no conditions, then passed House 6/8 (280-152)

1995

H.J.Res. 96

House tabled 7/20 (321-107)

H.R. 2058

Passed House 7/20 (416-10)

S.J.Res. 37

—

H.J.Res. 182

House rejected 6/27 (141-286)

H.Res. 461

Passed House 6/27 (411-7)

S.J.Res. 56

—

H.J.Res. 79

House rejected 6/24 (173-259)

S.J.Res. 31

S.Amdt. 890*

—

Senate rejected 7/16 (22-77)

1998

H.J.Res. 121

House rejected 7/22 (166-264)

—

—

1999

H.J.Res. 57

House rejected 7/27 (170-260)

__

__

S.J.Res. 27

Senate rejected motion to

discharge committee 7/20 (12-87)

—

—

H.J.Res. 103

House rejected 7/18 (147-281)

H.R. 4444

House passed 5/24 (237-197)

—

—

S. 2277

Senate passed H.R. 4444 on 9/19 (85-13)

Signed by President on October 10, 2000, as P.L. 106-286,

giving China Permanent NTR upon accession to WTO

H.J.Res. 50

House rejected 7/18 (169-259)

—

—

—

1996

1997

2000

2001

—

—

*(S.Amdt. 890 expressed the sense of the Senate that China’s MFN status should be revoked. It was

offered as non-binding language to S. 955, the FY98 Foreign Operations Appropriations bill.)

CRS-18

Sovereignty Issues: Taiwan, Tibet, Hong Kong

Taiwan

Taiwan remains the most sensitive and complex issue in Sino-U.S. relations.

Beijing has not foresworn the use of force should Taiwan declare independence from

China, and Chinese officials repeatedly block Taiwan’s efforts to gain greater

international recognition. At the same time, officials in Taiwan are maneuvering for

more international stature and for independent access to multilateral institutions.

Since the 1970s, when the United States broke relations with Taiwan in order to

normalize relations with Beijing, U.S. policy toward Taiwan has been shaped by the

three U.S.-China communiques and the Taiwan Relations Act (P.L. 96-8).26

George W. Bush Administration Policy. In 2001-2002, many observers

saw the Bush Administration as having abandoned the long-standing U.S. policy of

“strategic ambiguity” on Taiwan in favor of policy clarity that placed more emphasis

on Taiwan’s interests and less on PRC concerns. On April 25, 2001, for instance, in

an ABC television interview, President Bush responded to a question about the

possible U.S. response if Taiwan were attacked by saying that the United States

would do”whatever it took” to help Taiwan defend itself. Since the United States has

no defense alliance with Taiwan and has never pledged use of American military

forces in the island’s defense, the President’s answer caused considerable controversy

over whether the United States had changed its policy toward Taiwan’s security or

was moving away from its “one-China” statements. Although State Department and

White House officials, including President Bush, later insisted that there had been no

change in U.S. policy toward Taiwan, saying that the President’s April 25 statement

was consistent with U.S. commitments in the Taiwan Relations Act, subsequent

statements and actions by Bush Administration officials during the 107th Congress

were judged to be more solicitous and supportive of Taiwan than those of previous

U.S. Administrations.

Policy Statements by Taiwan’s President Chen. Like his predecessor

before him, Taiwan’s sitting President, Chen Shui-bian, made some controversial

statements during the 107th Congress which suggested to Beijing that Taiwan was

edging closer to aspirations of independence. There are few if any subjects on which

PRC leaders are more united and vocal than their long-held insistence that Taiwan

26

In addition, other U.S. statements sometimes have been interpreted as changes in nuance

in U.S. policy. For example, during his summit visit to China in June 1998, President

Clinton made a controversial statement that some interpreted as a change in U.S. policy,

resulting in resolutions in the 105th Congress (H.Con.Res. 301 and S.Con.Res. 107)

reaffirming U.S. policy toward Taiwan. According to a White House transcript at the time,

the President said: “I had a chance to reiterate our Taiwan policy, which is that we don’t

support independence for Taiwan, or two China’s, or one Taiwan-one China. And we don’t

believe that Taiwan should be a member in any organization for which statehood is a

requirement. So I think we have a consistent policy.” For background information and

details, see CRS Issue Brief IB98034, Taiwan: Recent Developments and U.S. Policy

Choices, by Kerry Dumbaugh; and CRS Report RL30341, China/Taiwan: Evolution of the

“One China” Policy, by Shirley Kan.

CRS-19

is part of China and not a separate country. President Chen’s statements, then, raised

the temperature in U.S.-Taiwan-China relations and, over the longer-term, could have

global policy implications. On July 21, 2002, Chen said that if Beijing continued to

reject Taiwan’s overtures for discussions, Taiwan “would not rule out going our own

way,” a comment taken as a reference to independence. On August 3, 2002, in a

televised speech in Tokyo to the World Association of Taiwanese Associations, Chen

expanded by describing the situation across the Taiwan Strait as “one side, one

country,” and also suggested that he supported a national referendum in Taiwan on

Taiwan’s future — a possibility that Beijing has opposed vigorously. Critics in

Beijing said that this violated Chen’s inaugural day pledge (made on May 20, 2000)

not to hold a referendum if China did not intend military force against Taiwan.

U.S. Visits by Taiwan Officials. In the absence of official U.S. ties with

Taiwan, PRC officials argue that no high-level officials of the Taiwan government

should be received in the United States. Mindful of PRC sensitivities on this issue,

U.S. officials for years remained unwilling to issue visas to senior Taiwan officials

for U.S. visits. This changed dramatically on May 22, 1995, when President Clinton,

bowing to substantial congressional pressure, decided to allow Taiwan President Lee

Teng-hui to make a visit to the United States, but in his capacity as a private citizen,

not as an official representing Taiwan. In contrast to previous Administrations, the

George W. Bush Administration has been more accommodating in granting limited

visits to senior Taiwan officials. In 2001, Taiwan’s new President, Chen Shui-bian,

was allowed transit stops in New York City and Houston on his way to and from

Latin America. Taiwan’s Vice-President, Annette Lu, was accorded a similar transit

stop in New York in early January 2002. From March 9 -12, 2002, U.S. officials

permitted Taiwan’s Defense Minister, Tang Yao-ming, to attend a defense

conference in Florida. While here, Minister Tang met with U.S. Deputy Secretary

of Defense Paul Wolfowitz and U.S. Assistant Secretary of State James Kelly.

Taiwan and the World Health Organization (WHO). For a number of

years, Taiwan has sought observer status in U.N.-affiliated organizations, primarily

the World Health Organization (WHO), as part of its effort to expand its international

space and recognition. The PRC routinely has blocked Taiwan’s bids on political

grounds, arguing that since Taiwan is not a state, but a part of China, it cannot be

separately admitted to U.N. entities, for which sovereign status is a pre-requisite for

membership. Taiwan authorities have argued that it is inhumane for the international

community to deny the people of Taiwan access to WHO’s substantial medical data

and assistance in the event of an outbreak of disease, as in June 2002, when a Taiwan

city suffered a major outbreak of dengue hemorrhagic fever. Taiwan authorities also

say that “observer status” would be an apolitical solution, since other non-sovereign

entities, like the Holy See and the Palestine Liberation Organization, have been given

such status in WHO. The U.S. Government is on record as supporting Taiwan’s

membership in organizations “where state-hood is not an issue.27 In the past, some

Members of Congress have had problems with what they view as the sclerotic nature

of this U.S. support.

27

A State Department spokesman, in response to a press question at the State Department

press briefing of March 20, 2002.

CRS-20

In 2001 and 2002, for the fifth and sixth years in a row, Taiwan again applied

for WHO observer status.28 The 107th Congress sought to energize U.S. support for

this effort by enacting P.L. 107-10, authorizing the Secretary of State to seek

Taiwan’s observer status in the WHO at the organization’s annual meeting, known

as the World Health Assembly, in May 2001, and again at the annual meeting in May

2002 (P.L. 107-158).29 In each case, the PRC was able to prevent the issue from

coming to a full vote. Neither attempt succeeded.

Political Developments in Taiwan. Taiwan’s political scene saw dramatic

changes that could have far-reaching future implications for U.S. policy. In elections

on December 1, 2001, Taiwan’s Nationalist Party (the KMT) lost its legislative

majority for the first time in 50 years, dropping from 123 seats to 68. This left the

largest bloc in the legislature, 87 seats, in the hands of President Chen’s Democratic

Progressive Party (DPP), a pro-independence party that Beijing finds highly

objectionable. Until the December 2001 elections, President Chen’s and the DPP’s

policy initiatives had been largely blocked by the Nationalist-controlled body. But

contrary to expectations, the 2001 legislative elections did not appear to translate into

more legislative support for President Chen’s policy agenda. Instead, non-DPP

minority parties were able to unite in a tenuous coalition that wielded substantial

influence over Taiwan’s political agenda throughout 2002.30 The uncertainty and

fluidity in Taiwan’s political scene put extra pressure on Congress and on American

policymakers, forcing them at times to chose between supporting Taiwan’s

democratic values and self-defense and broader strategic goals in which Washington

sought PRC support. To many observers, both the Bush Administration and the 107th

Congress appeared to tilt more frequently in the direction of Taiwan than did

previous American governments. Still, U.S. officials publicly appeared to distance

themselves from President Chen’s more controversial comments on Taiwan’s status

in future Taiwan-PRC talks.

Taiwan-PRC Dialogue. Official talks between China and Taiwan, always

problematic, last occurred in October 1998, when Koo Chen-fu, Chairman of

Taiwan’s Straits Exchange Foundation (SEF) and Wang Daohan, president of

China’s Association for Relations Across the Taiwan Straits (ARATS), held

meetings in Shanghai. At that meeting, the two agreed to resume regular discussions

and arrange a reciprocal visit to Taiwan by Mr. Wang. Progress toward further talks

halted, however, in July 1999 because of controversial statements by Taiwan’s thenpresident, Lee Teng-hui, that future cross-strait talks should be conducted on a

“special state-to-state basis.” Beijing protested this statement vehemently as a radical

departure from Taiwan’s former embrace of a “one China” policy.

28

Taiwan has been able to join some international organizations for which sovereign status

is not a pre-requisite, such as the Asia-Pacific Economic Cooperation (APEC) and the

International Olympic Committee (IOC).

29

On March 14, 2002, the European Union also adopted a non-binding resolution calling on

the WHO to accept observer status for Taiwan. Doc.:B5-0132/2002, B5-0138/2002, B50147/2002, B5-0150/2002.

30

For background and details, see CRS Report RS21093, Taiwan’s December 2001

Election Results, by Kerry Dumbaugh.

CRS-21

During 2001-2002, the Taiwan government sent uncertain and at times

conflicting messages on their views about Taiwan’s political status. Among other

things, for instance, early in January 2001, President Chen announced that he would

establish direct links between China and Taiwan’s outlying islands of Matsu and

Quemoy — the so-called “mini-links” — a small but significant step in the direction

of further contacts. Late in 2002, Taiwan’s Mainland Affairs Council (MAC), a

cabinet-level office to oversee Taiwan’s relations with the PRC, completed a study

to assess the technical features and costs of expanded cross-strait sea and air links,

and Taiwan politicians throughout much of 2002 debated and eventually approved

a proposal to allow, for the first time, Taiwan charter flights to fly to and from the

PRC by way of Hong Kong and Macau for the Chinese New Year — a proposal on

which the PRC offered its cooperation. In addition, PRC leaders made their own

overtures, calling on Taiwan to return to the negotiating table and holding out the

possibility for postponing “certain political disputes” in order to resume talks.31

These gestures, however, were tempered by the periodic statements from Taiwan’s

politicians noted above, and by the PRC’s continued military build-up in south China

opposite Taiwan.

While official talks remained stymied, cross-strait contacts during the 107th

Congress occurred increasingly between mainland and Taiwan business

representatives, and in June 2002, three delegations of Taiwan legislators visited

Beijing for talks. Taiwan’s increasing economic interconnectedness with the PRC

appeared to be putting special pressure on Taiwan policymakers, as did the Taiwan

business community, to make further accommodations to ease restrictions on direct

travel and investment.

Tibet

The U.S. government recognizes Tibet as part of China and has always done so,

although some dispute the historical consistency of this U.S. position. Since

normalization of relations with the PRC in 1979, both Republican and Democratic

U.S. Administrations have sought to minimize areas of potential tension with Beijing

on sensitive topics, such as on the question of Tibet’s political status. But the Dalai

Lama, Tibet’s exiled spiritual leader, has long had strong supporters in the U.S.

Congress who have continued to pressure the White House to protect Tibetan culture

and give Tibet greater status in U.S. law. Because of this congressional and other

pressure, Presidents George H. W. Bush (Sr.), Bill Clinton, and George W. Bush

each met with the Dalai Lama in the United States — meetings that were deliberately

kept low-key but which nevertheless offended Chinese leaders. Prompted by

congressional efforts the Clinton White House on October 31, 1997, announced it

would designate a Special Coordinator for Tibetan issues within the State

Department, a primary function of which would be to encourage dialogue between

Beijing and the Dalai Lama.

31

Spokesman Zhang Mingqing, on November 28, 2002, quoted in CNN.com. Comments

about postponing political disputes were made by PRC President Jiang Zemin during

sessions at the 16th Party Congress in early November 2002.

CRS-22

Congressional interest in Tibet during the 107th Congress remained strong. The

incoming George W. Bush Administration in 2001 announced that it would retain the

position of Special Coordinator for Tibetan issues within the State Department, and

named to the post Paula Dobriansky, Under Secretary of State for Global Affairs, to

date the highest-ranking U.S. official to hold that position. In addition to including

a number of provisions on Tibet in The Foreign Relations Authorization Act of

FY2002/2003 (P.L. 107-228), the 107th Congress considered legislation to support

the aspirations of the Tibetan people to safeguard their own culture and identity (H.R.

1779), as well as various resolutions relating to human rights in Tibet and PRC

dialogue with the Dalai Lama.32

Hong Kong

After the smooth transfer of Hong Kong’s sovereignty from British to Chinese

(July 1, 1997), Hong Kong began to face unique political challenges that it had not

encountered when the territory was a sovereign British colony. Having been granted

“a high degree of autonomy” from Beijing for self-governance, Hong Kong’s

policymakers themselves have had to deal with issues as wide-ranging as social

welfare programs, housing, industrial competitiveness, and education, all of which

have been subject to an increasingly diverse public debate. Hong Kong officials at

times have been criticized as insufficiently vigilant in protecting Hong Kong’s

interests against encroachment, real or imagined, by Beijing. During the 107th

Congress, a series of unpopular government decisions in Hong Kong contributed to

increased public criticism and disaffection. As a result, spirited debate in Hong Kong

focused on a number of issues:

!

Proposed “anti-sedition” laws. Article 23 of Hong Kong’s

constitution, the “Basic Law,” requires the government to enact laws

to prohibit acts of “treason, succession, sedition,” or “theft of state

secrets,” although it does not specify a timetable or deadline for such

laws. After a five-year hiatus, the Hong Kong government issued a

proposal for an anti-sedition law in October 2002 and opened the

issue for public commentary, with legislative action expected early

in 2003. Many fear such a law will make it easier for Beijing to

pressure Hong Kong to crack down on politically innocent acts,

eroding Hong Kong’s current favorable human rights environment.

!

Government “accountability.” Hong Kong’s Chief Executive is

not elected by universal suffrage and its civil service are career

employees with lifetime contracts.33 This led many to charge that

32

For background and details, see CRS Report RL30983, Tibet, China, and the 107th

Congress: Issues for U.S. Policy.

33

Hong Kong’s Basic Law lays out procedures for selecting the Chief Executive for the first

two five-year terms of that position, through 2007. The Basic Law says nothing specific

about selecting the Chief Executive after 2007, saying only that “The ultimate aim is the

selection of the Chief Executive by universal suffrage upon nomination by a broadly

representative nominating committee...” (The Basic Law of the Hong Kong Special

(continued...)

CRS-23

the post-1997 government was politically accountable neither to the

public nor to other government agencies. The government attempted

to address this issue in mid-2002 by appointing a new tier of noncivil-service “ministers” to head government departments — a defacto “cabinet” for the chief executive which ostensibly owes him

political allegiance.

The new ministerial system remains

controversial.

!

Hong Kong/Beijing Relations. Prior to 1997, Hong Kong thought

that its interests would best be served by insulating it as much as

possible from the PRC, including assuring the integrity of the Hong

Kong border, protecting Hong Kong from PRC labor migration, and

maintaining a separate currency and financial system. But by the

107th Congress, a growing view in Hong Kong was that these

protections were increasingly artificial, that they were hampering

trade and other contacts, and that Hong Kong may be losing business

opportunities in the PRC to less constrained global competitors.

Pressure quietly built throughout 2001-2002 for easing travel and

other restrictions along the Hong Kong-China border.

Current U.S. policy toward Hong Kong is set out in the U.S.-Hong Kong Policy

Act of 1992 (P.L. 102-383). In addition to have required an annual U.S. government

report on Hong Kong’s conditions through March 2000, this Act allows the United

States to treat Hong Kong differently from the way it treats China, predicated upon

an autonomous Hong Kong. Under the Act, the President has the power to halt

agreements or take other steps if he determines that Beijing is interfering unduly in

Hong Kong’s affairs.34 The 107th Congress amended the U.S. Hong Kong Policy Act

to extend the annual reporting requirement through March 2006.35 In addition, on

February 7, 2002, the House Task Force on Hong Kong’s Transition, created at the

behest of Speaker Newt Gingrich in 1997, filed its ninth report assessing conditions

in Hong Kong following the transition to PRC sovereignty.36

33

(...continued)

Administrative Region of the PRC, Chapter IV, Article 45.)

34

A specific intention of the Hong Kong Policy Act was to permit the U.S. government to

treat Hong Kong differently from the way it treats the rest of China in U.S. law. Thus, the

United States has an extradition treaty with Hong Kong but not with China; maintains a

liberalized export control regime with Hong Kong but a restrictive one with China; and

gives Hong Kong permanent most-favored-nation (MFN) trade status — or “normal trade

relations” as it is now known — but gave that status to China separately upon its accession

to the WTO.

35

Section 586, Foreign Operations Appropriations Act for FY2002, P.L. 107-115.

36

The full test can be found at [http://www.house.gov/bereuter/press.htm].

CRS-24

U.S. Policy Trends

During the 107th Congress, the Bush Administration de-emphasized U.S.-China

relations, broadened the focus of U.S. policy in Asia, and notably increased and

clarified U.S. support for Taiwan. While it remained receptive to Sino-U.S. dialogue,

the Bush White House appeared willing to ignore the views of the PRC — and

occasionally of U.S. allies — in pursuit of U.S. interests. This more assertive policy

approach was a departure from previous U.S. Administrations, which had favored

policies of engagement with the PRC and ambiguity toward Taiwan.

After the tensions over the collision of U.S. and Chinese military aircraft early

in 2001, Beijing responded to this U.S. approach with a marked reduction of antiAmerican rhetoric. While the PRC continued to object to U.S. arms sales to Taiwan,

visas for Taiwan officials, and sanctions on PRC companies, its objections were

reticent and appeared crafted to avoid disrupting U.S.-PRC relations. As a result,

PRC and U.S. officials were able to meet and cooperate on various matters in 20012002, even in the midst of continuing real differences on Taiwan, human rights, and

other issues. Some credited this notable improvement in U.S.-PRC relations with the

more assertive policy approach of the Bush Administration. By remaining open to

bilateral dialogue but lowering the priority it gave to U.S.-China relations, they

argued, the White House reduced the leverage Beijing had over the U.S. policy

process and forced Beijing to be more proactive in seeking a productive relationship

with the United States. But others attributed the improvement in relations to a

variety of factors. While the U.S. approach may be one, they say, others include the

international re-alignments brought about by the anti-terror campaign and the effort

to disarm Iraq, the ongoing generational leadership transition in China, mutual PRCU.S. interests in a non-nuclear and stable Korean Peninsula, and an increasing PRC

focus on its considerable domestic economic and social challenges.

In any event, many observers say that the purposeful pragmatism behind the

U.S. approach in 2001-2002 has lowered the temperature in what had become a

heated American political debate since 1989 over the direction of U.S. China policy.

According to these observers, the current approach appears to have charted an uneasy

middle territory between the three different camps into which the U.S. policy

community had sorted itself over Sino-U.S. policy after the Tiananmen Square

crackdown. Those camps are engagement, caution, and threat, described below.

Engagement. The “engagement” approach toward the PRC, which dominated

U.S. policy since the Nixon Administration, including in the George H. W. Bush and

William Clinton Administrations. Underlying this approach is a belief that trends in

China are moving inexorably in the “right” direction. That is, the PRC is becoming

more economically interdependent with the international community and therefore

will have a greater stake in pursuing stable international economic relationships.

They contrast this behavior favorably with that of disruptive states such as Iraq or

Afghanistan — those who are not part of the international system and who may

support the kind of global terrorism that struck the United States on September 11,

2001. Some also believe that greater wealth in the PRC will push Chinese society

in directions that will develop a materially better-off, more educated, and

cosmopolitan populace that will, over time, press its government for greater political

CRS-25

pluralism and democracy. Therefore, according to this view, U.S. policy should seek

to work more closely with the PRC in order to encourage these positive long-term

trends. Some proponents of the “engagement” approach fear that viewing the PRC

as a “threat” is a self-fulfilling prophecy that could promote a possible breakup of

the PRC, with potentially disastrous policy consequences for U.S. interests.

Caution. American proponents of what might be called a “cautious” policy

toward the PRC stress that Beijing officials still view the world as a state-centered,

competitive environment where power is respected and interdependence counts for

little. This group sees PRC leaders as determined to use all means at their disposal

to increase their nation’s wealth and power. They suggest that PRC leaders may be

biding their time and conforming to many international norms as a strategy, until

China builds its economic strength and can take more unilateral action. Once it

succeeds with economic modernization, this argument holds, Beijing will be less

likely to curb its narrow nationalistic or other ambitions because of international

constraints or sensitivities.

Threat. A third and more confrontational American approach has been based

on the premise that the PRC under its current form of government is inherently a

threat to U.S. interests, and that the Chinese political system needs to change

dramatically before the United States has any real hope of reaching a constructive

relationship with the PRC. According to this approach, Beijing’s communist leaders

are inherently incapable of long-term positive ties with the United States. Rather,

Beijing seeks to erode U.S. power and arm U.S. enemies in the region. Despite the

statements of support for the U.S. anti-terrorism campaign, according to this view,

the PRC’s repeated violations of its non-proliferation commitments have actually

contributed to strengthening and arming nations that harbor global terrorists. U.S.

policy should focus on mechanisms to change the PRC from within while

maintaining a vigilant posture to deal with disruptive PRC foreign policy actions in

Asian and world affairs.

Key 107th Congress Actions and Legislation

Relating to China

U.S. Commissions on China

In the year 2000, the 106th Congress mandated the establishment of two

commissions which would begin to focus on various aspects of U.S.-China relations.

Both commissions held hearings, conducted investigations, and issued their first

reports during the 107th Congress. The Commissions are:

Congressional-Executive Commission on the PRC. In what some

considered a compromise in legislation ending the annual review of China’s trade

status and giving the PRC permanent normal trade relations (P.L. 106-286), the 106th

Congress amended the bill to create a permanent body — the CongressionalExecutive Commission on the People’s Republic of China (CECC) — to monitor

human rights in the PRC. Including both House and Senate Members as well as

presidential appointees, the CECC chairmanship rotates between the Senate (odd-

CRS-26

numbered Congress) and the House (even-numbered Congress). Initial members

included (Senate): Max Baucus (Co-Chair), Carl Levin, Dianne Feinstein, Byron

Dorgan, Evan Bayh, Chuck Hagel, Bob Smith, Gordon Smith, Sam Brownback, and

Tim Hutchinson; and (House): Doug Bereuter (Co-chair), Jim Leach, David Dreier,

Frank Wolf, Joe Pitts, Sander Levin, Marci Kaptur, Nancy Pelosi, and Jim Davis.

Presidential appointees include Paula Dobriansky (Under Secretary of State for

Global Affairs), Lorne Craner (Deputy Assistant Secretary of State for Human Rights

and Labor), Jim Kelly (Deputy Assistant Secretary of State for East Asia and the

Pacific), Grant Aldonas (Undersecretary of Commerce for International Trade), and

D. Cameron Findlay (Deputy Secretary of Labor).

For a variety of reasons in the 107th Congress, including the September 11

terrorist attacks, this commission got off to a slow start. It did no business in 2001,

and filed its first report on October 2, 2002. Among other actions, the CECC by late

2002 was in the process of developing a web-based “Victims Registry Page,”

ultimately designed to access information about political prisoners and other victims

in the PRC. When completed, according to the Commission, the page will be

accessible through the CECC website.37

U.S.-China Security Review Commission. Often referring to itself as the

U.S.-China Commission (USCC), this 12-member body was established in 2000

under the Floyd D. Spence National Defense Authorization Act FY2001 (P.L. 106398) to review the security implications of U.S. economic and trade ties with the

PRC. Commissioners are private citizens appointed by the House and Senate. On

July 15, 2002, with one dissenting opinion, the Commission submitted its first

mandated annual report to Congress in both classified and unclassified format. The

209-page unclassified report, entitled “The National Security Implications of the

Economic Relationship Between the United States and China,” assesses various

aspects of the U.S.-China relationship and offers more than 40 recommendations for

Congress and U.S. policymakers to remedy what it sees as the deficiencies and

weaknesses in the U.S. policy approach toward China.38 A list of the CSCC’s 12

members can be found on the group’s website.

Major Legislation

P.L. 107-10 (H.R. 428)

Legislation authorizing the President to initiate a plan to endorse and obtain

observer status for Taiwan at the annual week-long summit of the World Health

Assembly in May 2001 in Geneva, Switzerland. Introduced on February 6, 2001, and

referred to the House Committee on International Relations, which marked it up on

March 28, 2001. The House passed the bill on April 24, 2001, by a vote of 407-0.

The Senate passed the bill by unanimous consent, with an amendment, on May 9,

2001. The House agreed to the Senate amendment on May 15, 2001, by a vote of

415-0, and the measure was cleared for the President’s signature. It became Public

Law 107-10 on May 28, 2001.

37

The CECC official website is at [http://www.cecc.gov/].

38

The USCC website is at [http://www.uscc.gov/].

CRS-27

P.L. 107-115 (H.R. 2506)

Appropriations for foreign operations, export financing, and related programs

for FY2002. Section 526(a) of the Act provided $10 million to support democracy

programs and human rights in the PRC. Section 576 of the Act prohibited funds for

a program in the PRC by the United Nations Population Fund (UNFPA). Reported

by the House Appropriations Committee as an original measure on July 17, 2001

(H.Rept. 107-142). The House passed it on July 24, 2001, by vote of 381-46.

Referred to Senate Appropriations Committee, which reported it favorably, with an

amendment, on September 4, 2001 (S.Rept. 107-58). Senate passed it, amended, on

October 24, 2001 (96-2). Conference held on November 14, 2001. Conference

report filed on December 19, 2001 (H.Rept. 107-345). House agreed to the

conference report the same day (357-66). Senate agreed to the conference report on

December 20, 2001, by unanimous consent. President signed the bill on January 10,

2002.

P.L. 107-158 (H.R. 2739)

Legislation amending P.L. 107-10 to authorize the President to initiate a plan

to endorse and obtain observer status for Taiwan at the annual week-long summit of

the World Health Assembly in May 2002. Introduced on August 2, 2001, and

referred to the House Committee on International Relations, which ordered it

reported on November 28, 2001. The House passed the bill by voice vote December

12, 2001. The Senate passed the bill by unanimous consent without amendment on

March 19, 2002. The President signed the bill on April 4, 2002.

H.R. 1779/S. 852 (Lantos/Feinstein)

The Tibetan Policy Act of 2001. Introduced in the Senate and House on May

9, 2001, the bills reaffirm the view that Tibet is an illegally occupied country,

establish semi-annual reporting requirements on the status of Chinese negotiations

with the Dalai Lama, and establishes certain U.S. policies with respect to

international lending to projects in Tibet. The bill was referred to the House

Committee on International Relations and the Senate Committee on Foreign

Relations. Provisions of S. 852 were later incorporated into the State Department

Authorizations Act, P.L. 107-228 (see below).

P.L. 107-228 (H.R. 1646/S. 1401/S. 1803)

The Foreign Relations Authorization Act of FY2002/2003. P.L. 107-228

contains a number of China provisions. The more substantive deal with U.S. policy

and practices toward Tibet and Taiwan. The “Tibetan Policy Act of 2002” begins at

Section 611, Subtitle B, with provisions similar to, though not as extensive as, the

Tibetan Policy Act of 2001 (H.R. 1779 and S. 852, above). The law’s provisions

include opening a U.S. consular office in Lhasa; Tibetan language training for U.S.

foreign service officers; expansion of the responsibilities of the CongressionalExecutive Commission on the People’s Republic of China (CECPRC) to include

monitoring and reporting on the status of dialogue between the Chinese government

and the Dalai Lama; support in international organizations for economic development

on the Tibetan Plateau; and $500,000 in each of fiscal years 2002 and 2003 for

exchange programs between the United States and the people of Tibet. These

provisions are similar to provisions in The Tibetan Policy Act of 2001 (H.R. 1779

and S. 852, above.) The law allows the Secretary of State to detail a State

Department employee to the American Institute in Taiwan (AIT) while remaining on

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the U.S. government payroll, if he determines that such a detail is in the U.S. national

interest. The law also provides that for the purposes of U.S. arms sales, Taiwan

should be treated as the equivalent of a major non-NATO ally. It also requires the

President to consult with Congress on various sales of defense articles and equipment

to Taiwan. The original Senate version, S. 1401, contained substantially similar

provisions on China and Tibet as the House-passed bill. On May 1, 2002, the Senate

Foreign Relations Committee was discharged from further consideration of the

House version, H.R. 1646. The same day, the full Senate took up the bill and, by

unanimous consent, passed as an amendment the text of S. 1803, the Security

Assistance Act of 2001, which had been introduced by Senator Biden on December

11, 2001, and which the Senate had passed by unanimous consent on December 20,

2001 (S.Rept. 107-122.) Conference Report 107-671 was filed on September 23,

2002. The House agreed to the report by voice vote on September 25, 2002, and the

Senate by unanimous consent on September 26, 2002.

P.L. 107-314 (H.R. 4546/S. 2514)

The Bob Stump National Defense Authorization Act for FY2003. Section 1207

of the enacted bill was entitled the “Monitoring of the Implementation of the 1979

Agreement Between the United States and China on Cooperation in Science and

Technology.” Section 1207 of P.L. 107-314 requires the Secretary of State to

monitor activities under the U.S.-China science & technology (S & T) agreement

(formally known as the “Agreement Between the Government of the United States

of America and the government of the People’s Republic of China on Cooperation

in Science and Technology,” signed on January 31, 1979), keep an accurate

accounting of all protocols under the agreement, coordinate U.S. Government

activities under the agreement, and ensure that all U.S. laws governing sensitive

technology are followed. The provision also requires the Secretary to submit to

Congress a report in both classified and unclassified form by April 1 in every evennumbered year. H.R. 4546 was introduced on April 23, 2002; reported amended by

the Armed Services Committee on May 3, 2002 (H.Rept. 107-436) and on May 6,

2002 (H.Rept. 107-436 Part II); and passed the House on May 10, 2002, by a vote of

359-58. The Senate passed the bill by unanimous consent with an amendment on

June 27, 2002. The Conference Report (H.Rept. 107-772) was filed on November

12, 2002, passed the House by voice vote on the same day, and passed the Senate by

voice vote on November 13, 2002. The President signed the bill as Public Law 107314 on December 2, 2002.

Selected Additional Legislation

Human Rights

H.Con.Res. 68 — Condemning the PRC for its poor human rights record.

H.Con.Res. 73, S.Con.Res. 27 — Sense of Congress that 2008 Olympic Games

should not be held in Beijing until the PRC releases all political prisoners.

H.Con.Res. 188, H.Con.Res. 447 — Sense of Congress that the PRC stop

persecuting Falun Gong members.

H.Con.Res. 213, S.Con.Res. 114 — Sense of Congress that the PRC stop

repatriating North Korean refugees to face torture, imprisonment, and

execution.

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H.Res. 56, S.Res. 22 — Support for U.S. Government’s solicitation of a

resolution at 57th U.N. Human Rights Commission condemning PRC

human rights record.

H.Res. 160, S.Res. 128 — Calling on PRC to release Li Shaomin and other

American-Chinese scholars detained in China.

H.R. 2030, H.R. 2530 — Prohibiting visas for any PRC physician seeking U.S.

training in organ transplantation (H.R. 2030), or who supports harvesting

and transplanting organs of executed PRC prisoners (H.R. 2530)

Taiwan

H.Con.Res. 67 — Sense of Congress that U.S. should reconfirm commitments

to Taiwan Relations Act.

H.Con.Res. 221 — Sense of Congress that future of Taiwan should be resolved

peacefully and with consent of Taiwan people.

Tibet

H.Res. 137 — Sense of House that Dalai Lama’s exiled government are the

legitimate representatives of Tibet.

H.Res. 410, S.Res. 252 — Sense of House on human rights violations in Tibet.

H.Res. 476 — Sense of House regarding several individuals held as prisoners

of conscience by PRC government for pro-Tibetan activities.

Economics and Trade

H.J.Res. 50 — Disapproving extension of normal trade relations (NTR) to PRC.

H.Con.Res. 485 — Requesting U.S. Government to urge PRC to resolve claims

of U.S. citizens holding PRC bonds on which the government defaulted.

H.Res. 557 — Expressing support for protecting certain U.S. industries against

unfair PRC trade practices.

H.R. 457 — Establish a transitional adjustment assistance program for U.S.

workers injured by NTR extension to PRC.

H.R. 1467 — Withdraw NTR from the PRC.

H.R. 1497 — Revoke extension of NTR to PRC.

S. 1372 — Barring access of PRC enterprises to U.S. capital markets.

U.S.-PRC Military Aircraft Collision

H.Con.Res. 96 — Sense of Congress that PRC should release immediately the

24 detained U.S. crew members.

H.Con.Res. 106 — Commending U.S. military crew for outstanding

performance of duty.

H.R. 2507, H.Amdt. 177 to H.R. 2500 — Prohibit U.S. Government payment

to PRC for reimbursement of costs associated with U.S. military aircraft

forced landing.

S.Res. 66 — Sense of Senate regarding release of 24 U.S. crew members.

S.Res. 80 — Resolution honoring “Whidbey 24” crew members for

performance of their duties.

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S.Res. 81 — Commending U.S. mission in PRC for efforts on behalf of 24

detained U.S. crew members.

Chronology

11/08/02 —

The 16th Party Congress began, ultimately resulting in the selection

of a new 24-member Politburo, a new 9-member Standing

Committee, and a new Party Secretary, Hu Jintao, who replaced

former Party Secretary Jiang Zemin.

09/23/02 —

A PRC Navy contingent of two ships completed a four-month

deployment marking the first world tour made by the Chinese Navy.

09/20/02 —

Chinese officials freed AIDs activist Wan Yanhai.

08/26/02 —

U.S. Deputy Secretary of State Armitage announced the United States

was placing the East Turkestan Islamic Movement on a list of

terrorist groups.

08/25/02 —

Beijing published new missile-related export control regulations.

06/23/02 —

Chinese officials allowed 26 North Korean refugees to leave China.

04/30/02 —

Vice-Premier Hu Jintao began his first official visit to the United

States.

03/04/02 —

The U.S. State Department issued its annual report on human rights

violations, saying that China’s human rights record “remained poor.”

02/21/02 —

President Bush visited China, Japan, and South Korea.

01/01/02 —

China received permanent normal trade relations from the United

States as specified in P.L. 106-246.

12/11/01 —

The PRC formally joined the World Trade Organization.

09/11/01 —

Terrorists hijacked four U.S. commercial airliners and crashed them

into the World Trade Center, the Pentagon, and in rural Pennsylvania.

Senior PRC officials expressed their sympathy, condolences, and

qualified support.

09/05/01 —

According to the Washington Times, Secretary of Defense Rumsfeld

said in congressional testimony that reports alleging that the United

States had agreed to China’s continued nuclear weapons building

were false.

08/23/01 —

U.S.-China missile talks began in Beijing on allegations that the PRC

had violated its non-proliferation pledges.

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07/13/01 —

Beijing won the right to host the 2008 Olympic Games.

06/04/01 —

Defense Secretary Rumsfeld told journalists that the United States

was resuming military contacts with the PRC, suspended since the

EP-3 incident.

04/24/01 —

President Bush authorized a major sale of defense articles and

services to Taiwan, including diesel-powered submarines, antisubmarine aircraft, and destroyers. The Aegis combat system was

not authorized for sale.

04/18/01 —

At the annual meeting of the U.N. Commission on Human Rights, the

Commission voted 23-17, (12 abstentions) in favor of a PRC “no

action” motion on a resolution to condemn China’s human rights

practices.

04/12/01 —

China released 24 American EP-3 crew members held since April 1,

2001.

04/03/01 —

Chinese officials charged visiting American University professor Ms.

Gao Zhan with espionage, having arrested her on February 11, 2001.

04/01/01 —

A PRC F8 fighter collided with a U.S. Navy EP-3 reconnaissance

plane over the South China Sea. The EP-3 made an emergency

landing on Hainan island.

02/28/01 —

China ratified, with qualifications, the International Covenant on

Economic, Social, and Cultural Rights, a U.N. agreement it signed on

October 27, 1997.

02/16/01 —

U.S. and British warplanes bombed a fiber-optic network in Iraq on

February 16, 2001, which reports allege to have been sold and

installed by a Chinese firm, the Huawei Technologies Co.

02/11/01 —

Chinese authorities detained a Chinese scholar working at American

University, Ms. Gao Zhan, and her husband and five-year-old son.

01/29/01 —

The U.S. Trade and Development Agency (TDA) announced it was

reopening its grant assistance program in China, suspended since

1989, based on a presidential “national interest” waiver on January

13, 2001.

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For Additional Reading

CRS Issue Briefs and Reports

CRS Issue Brief IB98034. Taiwan: Recent Developments and U.S. Policy Choices.

CRS Report RL31661. China’s New Leadership Line-up: Implications for U.S.

Policy.

CRS Report RS21351. Sino-U.S. Summit, October 2002.

CRS Report RS21292. Agriculture: U.S.-China Trade Issues.

CRS Report RS20876. Collision of U.S. and Chinese Aircraft: Selected Legal

Considerations.

CRS Report RS20139. China and the World Trade Organization.

CRS Report RL30983. Tibet, China, and the 107th Congress.

CRS Report RS20476. China’s Xinjiang-Uighur Autonomous Region: Current

Developments and U.S. Interests.

CRS Report RS20333. China and ‘Falun Gong.’

CRS Report RL30341. China/Taiwan: Evolution of the ‘One-China’ Policy — Key

Statements from Washington, Beijing, and Taipei.

CRS Report RL31164. China: Labor Conditions and Unrest.