Mr. Chairman, Members of the Committee, I welcome the opportunity to appear before you today to discuss one of the United States' most urgent and central policy issues in Asia. It is also one of the most difficult. I commend you for addressing these questions at this time.
My testimony will discuss the present security situation in the Taiwan Strait area. I will begin by addressing the issue that is of immediate concern to all of us: the current PRC military exercises near Taiwan. Then, I will explain why the policy of the United States serves the interest of all parties concerned in maintaining peace and stability. I will describe the dangers to our interests which would result from conflict in the area. And I will urge that we -- both the Administration and Congress -- move cautiously and cooperatively to maintain the successful balance that successive Administrations have achieved. Precipitate actions by any of the interested parties could have unintended consequences that might exacerbate the situation.
In the decades since a series of crises threatened to embroil the U.S. in the Taiwan Strait in the late 1950s, peace and stability have prevailed as a result of wise policies on all sides. However, since the visit of Lee Teng-hui to the U.S. last summer, tough political rhetoric in Beijing and a series of military exercises by the People's Liberation Army have combined to increase tension in the region.
The Administration has responded to large-scale military exercises in the Taiwan Strait by the PRC with a very clear message: these activities are provocative and dangerous. We have reminded the PRC that U.S. law -- the Taiwan Relations Act -- explicitly declares any effort to determine the future of Taiwan by other than peaceful means to be of grave concern to the United States. Peaceful resolution of the Taiwan question is also a premise of our three joint communiques with the PRC. During the past several weeks the President and his advisors have expressed our strong concerns in a number of private and public messages. Last week, all our top national security officials met with a senior PRC official and urged his government to exercise restraint and caution. We have made clear that any military attack on Taiwan would have grave consequences. We also have taken a number of prudent, precautionary steps -- including certain naval deployments in international waters near Taiwan -- to underscore our interests, deter the use of force and prevent any miscalculation. We have been closely consulting with other countries in the region, many of whom have expressed their own concerns directly to Beijing.
Despite our concerns, we have not concluded that there is any imminent threat to Taiwan. The PRC wishes to influence Taiwan's presidential election, and more fundamentally, to restrain Taiwan's international activities. The PRC does not in our judgment intend to take direct military action against Taiwan. We understand the Taiwan authorities have reached the same conclusion. While the PRC is bent on intimidation and psychological warfare, they know that resorting to force would severely damage their own interests. Nonetheless, their recent actions clearly carry the risk of accidents or miscalculation that could lead to escalation. We have underlined to Beijing that, whatever its intentions, its provocative moves are risky indeed.
PRC authorities have stated publicly, as well as to us in diplomatic exchanges, that there is no change in their intention to seek a peaceful resolution of the Taiwan question. They have not, however, ruled out the use of force in certain circumstances. We believe that Beijing leaders fully understand our views and our policies.
Although neither Taiwan nor the PRC wants a military confrontation, there is a danger that misunderstandings and strong emotions on both sides could lead to a further increase in tensions and even unanticipated conflict. Democratic development in Taiwan has permitted the free expression by a portion of the Taiwan populace of a desire for a separate Taiwan identity -- a desire largely suppressed under the previous political leadership in Taiwan.
Recent PRC demonstrations of military strength are designed to send a message to the Taiwan authorities to curb what the PRC regards as efforts to establish an independent Taiwan. Recent Taiwan policies, including last June's private visit to the U.S. by President Lee Teng-hui, have been interpreted by the PRC as a step toward independence. The Chinese position, acknowledged by us, is that Taiwan is a part of China, and the PRC interprets these developments in Taiwan as a challenge to the acceptance of a "one China" policy by Taipei. Beijing's leaders are especially sensitive on this issue, which involves questions of sovereignty and national integrity.
While urging restraint by Beijing, we have also made clear to Taiwan's leaders that restraint is in their interest. We oppose provocation by either side. We strongly urge both sides to resume their high level dialogue.
The people on Taiwan and their leaders have reacted calmly and with restraint to the rise in tensions. For example, the premier, Lien Chan, who is also Lee Teng-hui's vice presidential running mate, announced that Taiwan's military will maintain a state of alert, but he urged the public to remain calm. He reaffirmed that Taiwan's presidential election will proceed as scheduled on March 23. He reiterated that Lee Teng-hui's administration "is adamant in its pursuit of national reunification and strong opposition to Taiwan independence. . . the outcome of this election will not alter our government's steadfast pursuit of national reunification." For his part, Lee Teng-hui continues to reiterate his commitment to reunification in his speeches on the campaign trail.
Let me take a moment to congratulate the people of Taiwan on their upcoming elections. Since martial law ended less than ten years ago, the people of Taiwan and their leaders have achieved a democratic "miracle" that matches their economic miracle of the past decades.
Taiwan's economic minister has stated that he expects the current tensions will not significantly affect Taiwan's trade. We agree that Taiwan's economy remains very strong. Statistics show that Taiwan's exports this January and February increased almost 15 percent over the same period last year. Moreover, Taiwan's trade with the PRC in 1995 increased more than 25 percent over the previous year. As the American Chamber of Commerce in Taipei has noted, "Taipei and Beijing maintain a stronger, more economically mature relationship than the political rhetoric suggests." The Chamber also finds that "the current political tensions can be managed by the two sides themselves and that the U.S. Government should encourage mutual restraint and a resumption of dialogue" -- as we have, in fact, been doing.
On the other hand, heightened tensions have already had some impact on Taiwan's economy and caused minor inconveniences to air and sea traffic in the area. If tensions are prolonged or escalated, there surely would be a serious impact, not only on cross-Strait economic cooperation, but on the region's economy as well.
The people of Taiwan are clearly concerned by the PRC's heavy-handed attempts to influence their behavior. There is some evidence of this concern in fluctuations in the stock market and suggestions of some capital outflow. But all things considered, these provocative exercises are being taken in stride.
Overall, the international community in Taiwan is also reacting calmly to the PRC's actions. Many American citizens have come to the American Institute in Taiwan asking for advice on their security. The United States Government takes its responsibilities regarding the welfare and safety of American citizens overseas with the utmost seriousness. As always, AIT has welcomed those Americans who wished to register their presence in Taiwan. American citizens have also been told that we have no evidence that the PRC has the intention to attack Taiwan. This view is shared by the Taiwan authorities.
United States' Policy
It is vital to keep in mind U.S. interests both with respect to the Taiwan issue and in our relations with the PRC.
Our fundamental interest on the Taiwan question is that peace and stability be maintained and that the PRC and Taiwan work out their differences peacefully. At the same time, we will strictly avoid interfering as the two sides pursue peaceful resolution of differences.
The Taiwan Relations Act (TRA) of 1979 forms the legal basis of U.S. policy regarding the security of Taiwan. Its premise is that an adequate defense in Taiwan is conducive to maintaining peace and security while differences remain between Taiwan and the PRC. Section 2(b) states:
It is the policy of the United States to consider any effort to determine the future of Taiwan by other than peaceful means, including by boycotts or embargoes, a threat to the peace and security of the Western Pacific area and of grave concern to the United States; to provide Taiwan with arms of a defensive character; and to maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.
Section 3 of the TRA also provides that the "United States will make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability." It further directs the President to inform the Congress promptly of any threat to the security or the social or economic system of the people on Taiwan and any danger to the interests of the United States arising therefrom. The President and the Congress shall determine, in accordance with constitutional processes, appropriate action by the United States in response to any such danger.
However serious, the present situation does not constitute a threat to Taiwan of the magnitude contemplated by the drafters of the TRA. The PRC pressure against Taiwan to date does not add up to a "threat to the security or the social or economic system" of Taiwan.
It is our understanding that the Taiwan authorities agree that the present exercises constitute an attempt to influence Taiwan's behavior and its upcoming elections, rather than an attempt to threaten Taiwan's security.
We will continue to carefully monitor the situation. We have testified before the Congress and informally consulted with many Members and their staff. We will continue to work closely with you. If warranted by circumstances, we will act under section 3(c) of the TRA in close consultation with the Congress.
Overall U.S. China policy, including toward the Taiwan question, is expressed in the three joint communiques with the PRC as follows: -- The United States recognizes the Government of the PRC as "the sole legal Government of China." -- The U.S. acknowledges the Chinese position that "there is but one China and Taiwan is part of China." In 1982, the U.S. assured the PRC that it has no intention of pursuing a policy of "two Chinas" or "one China, one Taiwan." -- Within this context, the people of the U.S. will maintain cultural, commercial and other unofficial relations with the people of Taiwan. -- The U.S. has consistently held that resolution of the Taiwan issue is a matter to be worked out peacefully by the Chinese themselves.
I reiterate the above passages from the TRA and the joint communiques because they precisely express the governing principles of our policy. They serve U.S. interests today just as well as they have in past decades. They have been followed by successive administrations of both political parties.
Let me now call attention to an aspect of the August 17, 1982, Joint Communique between the United States and the People's Republic of China that is extremely important to Taiwan's security. In this document, the PRC stated that its "fundamental policy" is "to strive for a peaceful resolution to the Taiwan question." Based on that PRC assurance, the United States Government made reciprocal statements concerning our arms sales to Taiwan -- that we would not increase the quantity or quality of arms and, in fact, intend gradually to reduce these sales. At the time the Joint Communique was issued, we made it clear that our intentions were premised on the PRC's continued adherence to its fundamental policy of striving for peaceful reunification with Taiwan. Our judgment is that the PRC has not changed this policy, and we have abided by our commitments.
Taken as a whole, our China policy has been unequivocally successful in obtaining our fundamental objective for the security of Taiwan -- peace and stability in the Taiwan Strait. Along with the earlier U.S.-PRC communiques, the TRA and the 1982 communique have been complementary elements. The TRA has provided for our continued support for Taiwan's self-defense capability, while the 1982 communique forms the basis for our understanding with the PRC that any resolution of the differences between Taiwan and the mainland must be achieved peacefully. U.S. arms sales to Taiwan have been consistent with these documents. We will continue to provide for Taiwan's legitimate self-defense needs.
Taiwan's weapons systems are not offensive in character, but constitute a credible deterrent to military action. With the addition of several new defensive systems purchased or leased from the U.S. in the past few years, Taiwan's self-defense capability will be as strong as at any time since 1949. Those systems include various types of military aircraft, ships, and air-defense and anti-ship missiles. In addition, the U.S. has provided significant technical support for Taiwan's own production of the Indigenous Defense Fighter and PERRY-class frigates. We believe that Taiwan's basic inventory of equipment will be sufficient to deter significant military actions against Taiwan.
While our arms sales policy aims to enhance Taiwan's self-defense capability, it also seeks to reinforce regional stability. We will not provide Taiwan with capabilities that might provoke an arms race with the PRC or other countries in the region. Indeed, decisions on the release of arms made without consideration of the long-term impact both on the situation in the Taiwan Strait and on the region as a whole would be both dangerous and irresponsible. Any transfer of a complicated modern weapon system generally requires years of lead time before the capability is fully in place. Each new system, moreover, demands a U.S. commitment for continuing support in order to remain effective.
If armed conflict were actually to break out in the Taiwan Strait, the impact on Taiwan, the PRC and the region would be devastating. The PRC has enjoyed positive relationships with the United States and other industrialized countries that have allowed it to carry out the program of reform and opening to the outside world that has propelled the PRC's economic modernization. Taiwan capital -- over $20 billion -- has fueled PRC economic progress, large numbers of Taiwan residents have visited the PRC, and the mainland has become one of Taiwan's largest export markets.
All of these achievements, as well as prospects for a smooth Hong Kong transition, would be immediately put at risk in the event of conflict in the Strait. If such a conflict were precipitated by Beijing there would be severe damage to a wide range of PRC interests, political and diplomatic as well as economic. The entire Sino-American relationship would be put at risk. China's ties with Japan and all its other Asian neighbors would suffer grievously. So would its overall international standing.
Conflict would also be costly to the United States and to our friends and allies in the region. Hostilities between the PRC and Taiwan, however limited in scale or scope, would have a destabilizing effect and constrict the commerce which is the economic life-blood of the region. It would force their neighbors to re-evaluate their own defense policies, possibly fueling an arms race with unforeseeable consequences. It would seriously affect the tens of thousands of Americans who live and work in Taiwan and the PRC.
What would the U.S. do if commitments to peaceful settlement appeared to weaken, if hostilities appeared likely, if there appeared to be a threat to Taiwan's security or economic and social system? The Administration would immediately meet its obligations under the TRA to consult with the Congress on an appropriate response. The nature of our response would of course depend on the circumstances leading to a breakdown in relations across the Strait. But I hardly need remind this committee that the people of the United States feel strongly about the ability of the people of Taiwan to enjoy a peaceful future. This sentiment must not be underestimated. We have conveyed it to Beijing in unmistakable fashion through our statements and our actions.
Some have questioned the Administration's policy of not setting out in advance the details of our response to the use of force against Taiwan. Providing such details would be very unwise. Significantly, during the 1979 consideration of the TRA, Congress determined that we should not make an advance commitment to respond in a specific manner. As the House of Representatives observed in its report on the TRA, "What would be appropriate action, including possible use of force in Taiwan's defense, would depend on the specific circumstances. The committee does not attempt to specify in advance what the particular circumstances or response might be." Agreeing with this prudent policy, the Senate report noted that no mutual security treaty to which the U.S. was a party requires the U.S. automatically to introduce armed forces into hostilities. We should take careful account of this sound counsel from those who drafted the TRA.
We have stated that grave consequences would flow from a use of force against Taiwan, and we have spelled out our determination to see that the future of Taiwan is worked out in a peaceful manner. We cannot and should not be more precise in advance about hypothetical scenarios.
I am confident our message is clear. A resort to force with respect to Taiwan would directly involve American national interests and would carry grave risks. There should be no ambiguity about our posture in Beijing, Taipei or anywhere else.
Our policy must be consistent, and must encourage both sides to find a peaceful and durable solution. We will continue to make clear this position to the PRC and to Taiwan. We have used and will continue to use all of our channels, including our military-to-military relationship with the PRC, to communicate our concerns directly to Chinese civilian and military leaders. We have consulted extensively with other countries with interests in the region. They too have counseled Beijing to show restraint.
On our side, we must also avoid unwarranted actions that could add to tensions. We should maintain our present prudent and effective policy of arms sales, within the framework of the TRA and the three joint communiques. We have an enormous stake in preserving stability in Asia and maintaining a productive relationship with the PRC. We will continue to engage the Chinese Government on issues of mutual interest and encourage the PRC's positive participation in the international community. We seek engagement, not confrontation, but this effort must be reciprocated by the PRC. We have also told the Taiwan authorities that we expect them to avoid any actions that put at risk the interests of all parties concerned. In recent days we have reaffirmed these themes to both parties. The United States strongly opposes both aggression and provocation.
It is critical to recognize that the U.S. does not unilaterally have the capability to impose a solution which would guarantee peace and stability in the Taiwan Strait. A lasting peace requires Taiwan and the PRC eventually to find a common framework for addressing their relationship. Both sides need to avoid provocative political or military actions that have the potential to destabilize the situation. They must together actively seek ways to address their differences peacefully. This is the only long-term guarantee of Taiwan's security. It is also a necessary element in guaranteeing long-term peace and stability in East Asia.
Only the resumption of positive dialogue directly between Beijing and Taipei can lead to a peaceful and lasting settlement. We understand that the Taiwan authorities are prepared to resume cross-Strait talks. The PRC has also indicated its willingness to expand ties with Taiwan in a number of areas as long as the Taiwan authorities continue to embrace the principle of "one China." We hope the two sides will agree as soon as possible to take up again the dialogue that was suspended last June.
As we forthrightly seek to maintain peace and stability in the Taiwan Strait, we must also remember that our national interests are served by a constructive relationship with Beijing. The PRC is a nuclear power, a Perm-5 UN Security Council member, and a major player on issues like Korea, Cambodia, and arms control. It is also central to the solution of a host of global problems such as environmental degradation, narcotics trafficking and refugees. The PRC is the fastest growing economy in the world, supporting one-fifth of all humankind. Not only has its development dramatically altered the economic lives of its people for the better, but its success or failure will have enormous consequences for us and everyone else. As I indicated before, a constructive U.S.-PRC relationship is a fundamental element in Taiwan's security and well-being.
Mr. Chairman, six administrations of both parties have understood that comprehensive engagement with Beijing, not confrontation, isolation, or containment, represents the best way both to promote our interests and to encourage a positive and constructive PRC role with the world. This policy has served the interests of the United States, the PRC, Taiwan, and regional security and prosperity. It has enabled us to pursue engagement with China and strong, unofficial ties with Taiwan. It has enabled Taiwan's people and leaders to maintain their security, produce one of the world's economic miracles, and consolidate the democracy so richly symbolized in next weeks's elections.
We intend to pursue the course I have outlined in this statement. We call on Beijing and Taipei to exercise restraint and resume the dialogue that will lead toward a peaceful resolution of the issues between them. And we urge bipartisan support in the Congress that will send a strong signal of American purpose and resolve. We will work closely with you towards this goal.
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