Get documents about "TAIWANCHINA RECENT ECONOMIC_ POLITICAL_ AND MILITARY DEVELOPMENTS
Document Sample
TAIWANCHINA: RECENT ECONOMIC,
POLITICAL, AND MILITARY DEVELOPMENTS
ACROSS THE STRAIT, AND IMPLICATIONS FOR
THE UNITED STATES
HEARING
BEFORE THE
U.S.CHINA ECONOMIC AND SECURITY
REVIEW COMMISSION
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
_________
March 18, 2010
_________
Printed for use of the
Un i t ed St a t esCh in a E con om i c a n d Secur i t y Re vi e w Com m i ssi on
Ava i l a bl e vi a t h e Wor l d Wi de Web: www. us cc. g ov
UNITED STATESCHINA ECONOMIC AND SECURITY REVIEW COMMISSION
W AS H INGT ON : AP R IL 2 0 1 0
U.S.CHIN A ECO NOMIC AND SEC URIT Y REVIEW COMMISSION
DANIEL M. SLANE, Chairman
CAROLYN BARTHOLOME W, Vice Chai rman
Co mmissio ners:
DANIEL BLUMENTHAL Hon. WI LLI AM A. REINSCH
PETER T.R. BROOKES DENNIS C. SHEA
ROBIN CLEVE LAND PETER VIDENIEKS
JEFFREY FIEDLER MICHAE L R. WESSEL
Hon. PATRI CK A. MULLOY LARRY M. WORT ZEL
MICHAE L R. DANIS, Executi ve Di rect or
KAT HLEEN J. MICHELS, Associat e Director
The Commission was created on October 30, 2000 by the Floyd D. Spence National
Defense Authorization Act for 2001 § 1238, Public Law No. 106398, 114 STAT.
1654A334 (2000) (codified at 22 U.S.C.§ 7002 (2001), as amended by the Treasury and
General Government Appropriations Act for 2002 § 645 (regarding employment status of
staff) & § 648 (regarding changing annual report due date from March to June), Public
Law No. 10767, 115 STAT. 514 (Nov. 12, 2001); as amended by Division P of the
"Consolidated Appropriations Resolution, 2003," Pub L. No. 1087 (Feb. 20, 2003)
(regarding Commission name change, terms of Commissioners, and responsibilities of
Commission); as amended by Public Law No. 109108 (H.R. 2862) (Nov. 22, 2005)
(regarding responsibilities of Commission and applicability of FACA); as amended by
Division J of the “Consolidated Appropriations Act, 2008,” Public Law No. 110161
(December 26, 2007) (regarding responsibilities of the Commission, and changing the
Annual Report due date from June to December).
The Co mmissio n’s full chart er is available at www.uscc.go v.
ii
March 31, 2010
The Honorable ROBERT C. BYRD
President Pro Tempore of the Senate, Washington, D.C. 20510
The Honorable NANCY PELOSI
Speaker of the House of Representatives, Washington, D.C. 20515
DEAR SENATOR BYRD AND SPEAKER PELOSI:
We are pleased to transmit the record of our March 18, 2010 public hearing on “TaiwanChina: Recent
Economic, Political, and Military Developments across the Strait, and Implications for the United States.”
The Floyd D. Spence National Defense Authorization Act (amended by Pub. L. No. 109108, section
635(a)) provides the basis for this hearing.
The Commission received opening testimony from Senator Sherrod Brown (DOH), Congressman
Lincoln DiazBalart (RFL), and Congressman Phil Gingrey (RGA). Each Member of Congress provided
important perspectives on how the United States should react to recent developments in the TaiwanChina
relationship.
Representatives from the Executive Branch provided the Commission with the Obama Administration’s
perspective. Deputy Assistant Secretary of State for East Asian and Pacific Affairs David B. Shear testified
that while the United States supports the remarkable progress in the crossStrait relationship over the past
two years, Washington remains “opposed to unilateral attempts by either side to change the status quo.”
The United States, he said, continues to have “a strong security interest in doing all that [it] can to create an
environment conducive to a peaceful and noncoercive resolution of issues between [Taiwan and China].”
Deputy Assistant Secretary of Defense for Asian and Pacific Security Affairs Michael Schiffer told the
Commission that it appears “Beijing’s longterm strategy is to use political, diplomatic, economic, and
cultural levers to pursue unification with Taiwan, while building a credible military threat to attack the
island if events are moving in what Beijing sees as the wrong direction.”
Expert witnesses described to the Commission recent developments in the military and security situation
across the Taiwan Strait. Mr. Mark Stokes, Executive Director of the Project 2049 Institute, stated that
despite improvements in other areas of the relationship, Beijing’s “refusal to renounce the use of force” to
resolve the Taiwan situation is the greatest challenge to the crossStrait relationship. Mr. David A.
Shlapak, Senior International Policy Analyst at The RAND Corporation, told the Commission that China’s
military modernization, especially its “growing arsenal of surfacetosurface missiles and increasingly
modern air force” are causing the crossStrait military balance to tilt further in Beijing’s favor. Dr. Albert
S. Willner, Director of the China Security Affairs Group at CNA, described current and planned military
modernization efforts of the Taiwan government, as well as key challenges Taiwan faces in attempting to
strengthen its national defense capabilities.
Panelists agreed that while the growing economic integration between China and Taiwan is an important
development in the crossStrait relationship, it should be accompanied by a similar growth in U.S.Taiwan
economic ties. Dr. Merritt T. (‘Terry’) Cooke, founder of GC3 Strategy Inc., observed that economic
interdependence across the Taiwan Strait could benefit regional stability, but only when balanced by a
strong U.S.Taiwan economic relationship. Mr. Rupert HammondChambers, President of the U.S.Taiwan
Business Council, similarly pointed out that ensuring strong trade relations between the United States and
Taiwan is the best way to balance strengthening economic relationship between Taiwan and China. Dr.
Scott L. Kastner, Associate Professor in the Department of Government and
iii
Politics at the University of Maryland, testified that the United States should remain vigilant in regards to
regional security, since greater crossStrait economic integration could fail to reduce the chance for conflict
between Taiwan and China.
Witnesses agreed that although recent progress in the crossStrait relationship has occurred, the United
States still has a role to play in ensuring that any remaining problems do not disrupt regional stability. Mr.
Randall G. Schriver, President and CEO of the Project 2049 Institute, maintained that the United States
needs to continue to support Taiwan in its dealings with China and urge Beijing to renounce the use of
force against Taiwan. Dr. Shelley Rigger, Brown Professor of Political Science at Davidson College, stated
that the United States should continue to help “Taiwan to remain strong and confident” without “appearing
to [pull] Taiwan away from [China].” According to Dr. Richard C. Bush III, Director of the Center for
Northeast Asian Policy Studies at The Brookings Institution, the two ways the United States can best help
Taiwan are to ensure Taiwan’s military capabilities and to strengthen U.S.Taiwan economic and trade ties.
Thank you for your consideration of this summary of the Commission’s hearing. We note that the
prepared statements submitted by the witnesses are now available on the Commission’s website at
www.uscc.gov. The full transcript of the hearing will be available shortly.
Members of the Commission are also available to provide more detailed briefings. We hope these
materials will be helpful to the Congress as it continues its assessment of U.S.China relations and their
impact on U.S. security. Per statutory mandate, the Commission will examine in greater depth these and
other issues in its Annual Report that will be submitted to Congress in November 2010. If you have any
questions or concerns, please have your staff contact Jonathan Weston, the Commission's Congressional
Liaison, at (202) 6241487.
Sincerely yours,
Daniel Slane Carolyn Bartholomew
Chairman Vice Chairman
cc: Members of Congress and Congressional Staff
iv
CONTENTS
_____
THURSDAY, MARCH 18, 2010
TAIWANCHINA: RECENT ECONOMIC, POLITICAL, AND MILITARY
DEVELOPMENTS ACROSS THE STRAIT, AND IMPLICATIONS FOR THE
UNITED STATES
Opening remarks of Commissioner Patrick A. Mulloy (Hearing Cochair)……… 6
Opening remarks of Commissioner Larry M. Wortzel (Hearing Cochair)………. 7
PANEL I: CONGRESSIONAL PERSPECTIVES
Statement of Lincoln DiazBalart, a U.S. Congressman from the State of Florida.. 2
Prepared statement………………………………………………………………. 3
Statement of Sherrod Brown, a U.S. Senator from the State of Ohio……………. 9
Panel I: Discussion, Questions and Answers…………………………………….. 5, 12
PANEL II: ADMINISTRATION PERSPECTIVES
Statement of Mr. David B. Shear, Deputy Assistant Secretary of State for East
Asian and Pacific Affairs, U.S. Department of State, Washington, DC…………. 13
Prepared statement………………………………………………………………. 17
Statement of Mr. Michael Schiffer, Deputy Assistant Secretary of Defense, Asian
and Pacific Security Affairs, U.S. Department of Defense, Washington, DC…….. 20
Prepared statement………………………………………………………………. 24
Panel II: Discussion, Questions and Answers……………………………………. 28
PANEL III: MILITARY ASPECTS
Statement of Mr. Mark Stokes, Executive Director, Project 2049 Institute, Arlington,
Virginia……………………………………………………………………………. 42
Prepared statement………………………………………………………………. 43
Statement of Mr. David A. Shlapak, Senior International Policy Analyst, The
RAND Corporation, Pittsburgh, Pennsylvania……………………………………. 48
Prepared statement………………………………………………………………. 51
Statement of Dr. Albert S. Willner, Director, China Security Affairs Group, CNA,
Alexandria, Virginia………………………………………………………………. 51
Prepared statement………………………………………………………………. 53
Panel III: Discussion, Questions and Answers ………………………………….... 54
v
PANEL IV: ECONOMIC ASPECTS
Statement of Dr. Merritt T. Cooke, CEO, GC3 Strategy, Inc., Bryn Mawr,
Pennsylvania…………………………………………………………………….. 67
Prepared statement……………………………………………………………… 69
Statement of Mr. Rupert HammondChambers, President, U.S.Taiwan Business
Council, Arlington, Virginia………………………………………………………. 70
Prepared statement………………………………………………………………. 72
Statement of Dr. Scott L. Kastner, Associate Professor, Department of Government
and Politics, University of Maryland, College Park, Maryland…………………….72
Prepared statement………………………………………………………………. 75
Panel IV: Discussion, Questions and Answers……………………………………. 79
PANEL V: POLITICAL ASPECTS
Statement of Mr. Randall G. Schriver, President and CEO, Project 2049 Institute,
Arlington, Virginia………………………………………………………………… 93
Prepared statement……………………………………………………………… 96
Statement of Dr. Shelley Rigger, Brown Professor of Political Science, Davidson
College, Davidson, North Carolina……………………………………………… 100
Prepared statement……………………………………………………………… 102
Statement of Dr. Richard C. Bush III, Director, Center for Northeast Asian Policy
Studies, The Brookings Institution, Washington, DC…………………………….. 106
Prepared statement……………………………………………………………….. 109
Panel V: Discussion, Questions and Answers…………………………………….. 114
ADDI T I ON AL M AT E RI AL S UP P LI E D FO R T HE RE CO RD
Statement of Phil Gingrey, a U.S. Congressman from the State of Georgia……. 126
vi
TAIWANCHINA: RECENT ECONOMIC,
POLITICAL AND MILITARY DEVELOPMENTS
ACROSS THE STRAIT, AND IMPLICATIONS FOR
THE UNITED STATES
_________
TH URS DAY, M ARCH 1 8, 2010
U. S . CHI NA E CONOMI C AND S E CURI T Y RE VI E W COMMI S S I ON
Washi ng t on, D. C.
T he Co mmissio n met in Ro o m 562, Dir ksen S enat e Office
Build ing , Washingt o n, D. C. at 9: 02 a. m. , Chair man Daniel M. S lane, and
Co mmissio ner s P at r ick A. Mu llo y and Lar r y M. Wo r t zel ( Hear ing
Co chair s) , pr esid ing.
PANEL I: CO NG RES S IO NAL PERS PECTIVES
HE ARI NG CO CHAI R WORT ZE L: Go o d mo r ning . I n o ur fir st
p anel t his mo r ning , we'll hear fr o m sever al member s o f Co ngr ess.
T o d ay we'll be jo ined by S enat o r S her r o d Br o wn fr o m Ohio , and t he
fir st speaker will be Co ngr essman Linco ln Diaz Balar t fr o m Flo r id a.
Unfo r t unat ely, Co ngr essman Gingr ey fr o m Geo r gia will no t be able t o
at t end.
Co ng r essman Linco ln Diaz Balar t has r epr esent ed t he 21 st
Dist r ict o f Flo r id a since 1992. He's cu r r ent ly a senio r member o f t he
Ho u se Ru les Co mmit t ee and t he Ranking Member o f t he S u bco mmit t ee
o n Legislat ive and Bu dg et P r o cess. He is also Co Chair man o f t he
Flo r id a Co ng r essio nal Delegat io n, Chair man o f t he Co ngr essio nal
Hispanic Lead er ship I nst it ut e, and a Co Chair o f t he Co ngr essio nal
Cau cu s o n T aiwan.
Co ng r essman, we'r e delight ed t o have yo u her e. T hank yo u ver y
mu ch.
S TATEM ENT O F LINCO LN DIAZ B ALART
A U. S . CO NG RES S M AN FRO M TH E S TATE O F FLO RIDA
MR. DI AZ BALART : T hank yo u ver y much, Co mmissio ner
Chair man. I t 's a p leasu r e t o be wit h all o f yo u, and I t hank yo u fo r yo u r
wo r k t hat 's mo st imp o r t ant , and it 's a pr ivileg e t o be her e t his mo r ning
wit h yo u t o spend just a few minut es o n t his cr it ical, cr it ical issue.
I was p r ivileged t o visit t he Republic o f China, T aiwan, in Apr il
o f last year t o co mmemo r at e t he 3 0t h anniver sar y o f t he T aiwan
Relat io ns Act , which is, as yo u kno w, t he co r ner st o ne o f U. S . T aiwan
Relat io ns. T he T aiwan Relat io ns Act makes clear ho w impo r t ant , ho w
d ear , t he secu r it y o f T aiwan is t o t he Co ng r ess o f t he Unit ed S t at es, and
t o t he peo ple o f t he Unit ed S t at es t hus, and it has been a key fact o r in
p r event ing milit ar y ag gr essio n against T aiwan.
I was pleased when t he Obama administ r at io n anno unced p lans t o
sell weap o ns, specifically ant i missile syst ems, helico pt er s,
minesweep ing ships and co mmunicat io ns equip ment t o T aiwan.
Ho wever , we believe we mu st never fo r g et t hat T aiwan's t o p p r io r it y
r emains t he pu r chase o f mo d er n air cr aft .
T he U. S . China E co no mic and S ecu r it y Review Co mmissio n's
2 0 09 r epo r t t o Co ngr ess, explains t he t hr eat t o T aiwan's abilit y t o live
fr ee o f t hr eat and co er cio n po sed by t he P RC's incr easing milit ar y
capabilit ies.
S pecifically, in r eg ar d t o air capabilit ies, t he US CC r epo r t st at es
I t hink it 's impo r t ant t o r eit er at e it :
T he su ccess o f seizing air super io r it y is cr it ical in det er mining t he
o u t co me o f any lar g e scale use o f fo r ce against T aiwan. Over t he year s,
T aiwan's air capabilit ies r elat ive t o China's have begun t o shr ink.
And lat er t he r epo r t says:
I n co nt r ast t o t he g r o wing size and qualit y o f t he P LA's fight er
fo r ce, T aiwan has no t su bst ant ially u pgr ad ed it s fight er fo r ce in t he past
d ecad e and may no t do so in t he near fut ur e. Alt ho ug h T aiwan
r eq uest ed t he sale o f 66 F 16 C/ D fig ht er s fr o m t he Unit ed S t at es, t hese
air cr aft wer e no t par t o f t he Bush administ r at io n's Oct o ber 200 8
no t ificat io n t o Co ng r ess o f U. S . ar ms sales t o T aiwan. Alt ho ugh t hese
fig ht er s ar e st ill desir ed by T aiwan, it is unclear whet her t he Obama
ad minist r at io n will sell t hese o r o t her mo der n air cr aft t o T aiwan.
T he Janu ar y 21 , 20 10, U. S . Defense I nt elligence Ag ency r epo r t
fu r t her und er sco r es t he impo r t ance o f t hese fight er s t o T aiwan's secur it y
wit h it s co nclusio n t hat T aiwan's air defense is sho wing incr easing
vulner abilit y d ue t o it s aging fight er s in co nt r ast t o t he P RC's r ap idly
incr easing milit ar y capabilit ies.
As T aiwan's fight er s ag e, mainland China co nt inues t o fo r t ify it s
milit ar y p o st u r e and d evo t e incr easing p r o po r t io ns o f it s GDP t o
mo der nizing it s weap o ns while co nt inu ing t o aim, as yo u k no w, o ver a
t ho u sand missiles d ir ect ly at T aiwan.
2
S ince 20 06, t he Legislat ive Yu an has bud get ed billio ns o f d o llar s
fo r t he pur chase o f addit io nal mo d er n F 16s t o bo o st T aiwan's air
d efense cap abilit ies. Meanwhile, t he p r o d uct io n line o f F 16s is
schedu led t o clo se o ver t he upco ming year t o mak e way fo r mo r e
ad vanced fight er s.
S o t he t ime t o pr o vide t ho se fight er s, t he mo der n F 16s, is no w.
T he milit ar y and st r at egic imper at ives fo r T aiwan ar e r eal. I f we fail t o
sho w t he necessar y r eso lve, it wo uld mean missing a significant
o p p o r t unit y t o ensur e peace and secu r it y in t he Asia P acific r eg io n,
which is a vit al U. S . int er est .
I n addit io n t o being ir r espo nsible, I believe it makes no sense t o
co nt inu e t o deny T aiwan mo der n fight er air cr aft . Mainland China is
g o ing t o pr o t est anyway. I n fact , by pr o t est ing so vo cifer o u sly t o t he
weap o ns sale anno u ncement o f Januar y 29 o f t his year , t he Co mmunist
Chinese ar e seeking t o pr essu r e t he Unit ed S t at es int o no t selling
ad vanced fight er planes at all t o T aiwan.
I 'd also lik e t o add r ess ano t her issue o f ut mo st impo r t ance t o t he
p eo p le o f T aiwan. By p ar t icip at ing in int er nat io nal o r ganizat io ns,
T aiwan has wo r k ed d ilig ent ly t o co mbat t he int er nat io nal iso lat io n t hat
Co mmu nist China has t r ied t o imp o se o n it by bullying and t hr eat ening
int er nat io nal o r ganizat io ns and T aiwan's allies.
I have o ft en sp o ken in sup po r t o f T aiwan's p ar t icipat io n in
int er nat io nal o r g anizat io ns, such as t he Wo r ld Healt h Or ganizat io n, and
we in Co ngr ess mu st suppo r t T aiwan in it s cur r ent at t emp t s t o
p ar t icipat e in t he U. N. Fr amewo r k Co nvent io n o n Climat e Chang e and
t he I nt er nat io nal Civilian Aviat io n Or ganizat io n.
Finally, d ist inguished Co mmissio ner s, T aiwan has achieved , as yo u
k no w, ext r ao r d inar y eco no mic su ccess as a flo ur ishing mar ket based
eco no my and has o ne o f t he highest st and ar ds o f living in t he wo r ld .
But t he U. S . T aiwan fr iendship r est s o n much mo r e t han shar ed
eco no mic int er est s o r t r ade. Ou r fr iendship st ems fr o m a shar ed
co mmit ment t o t he fu nd ament al ideals o f t he r ules o f law and fr eedo m,
as well as o pp o sit io n t o t o t alit ar ianism.
We in t he U. S . Co ngr ess must co nt inue t o suppo r t o u r fr iend and
ally T aiwan in all o f it s cr it ical p ur suit s.
I t hank yo u fo r yo ur at t ent io n and ag ain r eit er at e my
co mmendat io n fo r yo ur har d wo r k .
[ T he st at ement fo llo ws: ]
Prep a red S t a t emen t of Li n coln Di az B alart
A U. S . Con gressman from t h e S t at e o f Flo ri d a
I was privileged to visit the Republic of China (Taiwan) in April of last year to commemorate the
th
30 Anniversary of the Taiwan Relations Act, the cornerstone of U.S.Taiwan relations. The Taiwan
Relations Act makes clear how dear the security of Taiwan is to the Congress and the people of the United
3
States, and it has been a key factor in preventing military aggression against Taiwan.
I was pleased when the Obama Administration announced its plan to sell weapons totaling about
$6.4 billion in antimissile systems, helicopters, minesweeping ships and communications equipment to
Taiwan. However, we must not forget that Taiwan’s top priority remains the purchase of F16 C/D
fighters. The U.S.China Economic and Security Review Commission’s 2009 Report to Congress
explains the threat to Taiwan’s ability to live free of threat and coercion posed by the PRC’s increasing
military capabilities in the face of Taiwan’s waning capabilities. Specifically in regard to air capabilities,
the USCC Report states:
The success of seizing air superiority is critical in determining the outcome of any largescale use
of force against Taiwan. Over the years, Taiwan’s air capabilities relative to China’s have begun
to shrink (p24142).
And later:
In contrast to the growing size and quality of the PLA’s fighter force, Taiwan has not
substantially upgraded its fighter force in the past decade and may not do so in the near future.
Although Taiwan requested the sale of sixtysix F16 C/D fighters from the United States, these
aircraft were not part of the Bush Administration’s October 2008 notification to Congress of U.S.
arms sales to Taiwan. Although these fighters are still desired by Taiwan, it is unclear whether
the Obama Administration will agree to sell these, or other, modern aircraft to Taiwan (p242).
The January 21, 2010 U.S. Defense Intelligence Agency report further underscores the importance of
these fighters to Taiwan’s security with its conclusion that Taiwan's air defense is showing increasing
vulnerability due to its aging fighters in contrast to the PRC’s rapidly increasing military capabilities.
As Taiwan’s fighters age, Mainland China continues to fortify its military posture and devote increasing
proportions of its GDP to modernizing its weapons while continuing to aim over a thousand missiles
directly at Taiwan.
Since 2006, Taiwan’s Legislative Yuan has budgeted billions of dollars for the purchase of
additional F16s to boost Taiwan’s air defense capabilities. Meanwhile, the production line of F16s is
scheduled to close over the upcoming year to make way for the more advanced F35 fighter.
The time to provide these fighters is now. The military and strategic imperatives for Taiwan are
real and urgent. If we fail to show the necessary resolve, it would mean missing a significant opportunity
to ensure peace and security in the AsiaPacific region – a vital U.S. interest.
In addition to being irresponsible, it makes no sense to continue to deny Taiwan modern fighter
aircraft. Mainland China will protest anyway. In fact, by protesting so vociferously to the weapons sale
announcement on January 29, 2010, the Communist Chinese are seeking to pressure the United States
into not selling advanced fighter planes.
I would also like to address another issue of utmost importance to the people of Taiwan. By
4
participating in international organizations, Taiwan has worked diligently to combat the international
isolation that Communist China has tried to impose on it by bullying and threatening international
organizations and Taiwan’s allies. I have often spoken in support of Taiwan’s participation in
international organizations such as the World Health Organization, and we in the U.S. Congress must
support Taiwan in its current attempts to participate in the United Nations Framework Convention on
Climate Change and the International Civil Aviation Organization.
Taiwan has achieved marked economic successes such as a flourishing marketbased economy
and one of the highest standards of living in the world, but the U.S.Taiwan friendship rests on much
more than shared economic interests or trade. Our friendship stems from a shared commitment to the
fundamental ideals of the Rule of Law and freedom, and opposition to totalitarianism. We in the U.S.
Congress must continue to support our friend and ally Taiwan in its most critical pursuits.
Pan el I: Di scu ssi o n , Q u est i on s an d An swers
HE ARI NG CO CHAI R WORT ZE L: T hank yo u, sir . I do n't kno w
ho w yo u r t ime is, Co ng r essman Diaz Balar t , bu t wo u ld yo u have t ime
fo r any q uest io ns?
MR. DI AZ BALART : Yes. Yes, I have a few minut es, sir .
HE ARI NG CO CHAI R WORT ZE L: I 'll st ar t if I may. One o f t he
co ncer ns t hat I 've seen, at least in po licy cir cles, abo ut advanced fight er
air cr aft is t hat t hey have a t endency t o su ppo r t o ffensive o per at io ns.
Do yo u t hink t hat so me st at ement fr o m T aiwan, a new st at ement abo ut
t he defensive nat u r e o f it s milit ar y do ct r ine, wo u ld help t he climat e in
Washingt o n t o su ppo r t t he sale o f advanced fight er air cr aft ?
MR. DI AZ BALART : T hat 's a go o d q uest io n. I t hink it cer t ainly
sho u ld be evident t o anybo d y who 's an o bser ver o f t he sit uat io n, t hat
t he d esigns and p o st ur e o f T aiwan ar e defensive, t he go als o f T aiwan
ar e defensive, and t hat t he r ealit y t hat we'r e facing no w is a mainland
China t hat is po int ing o ver a t ho usand missiles at t he island.
I t hink t hat quest io ns such as t hat , since I have such u lt imat e
r espect fo r t he int er nal d ecisio n making pr o cess o f t hat demo cr acy,
t ho se decisio ns o bvio usly ar e u p t o T aiwan. I t hink it is evident
eno u g h, ho wever , t hat t heir designs, t heir go als, ar e clear ly defensive in
nat ur e.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u.
COMMI S S I ONE R BLUME NT HAL: T hank yo u ver y mu ch,
Co ngr essman.
I t hink successive administ r at io ns, bo t h P r esident Bush in his
lat t er year s and P r esident Obama, have denied no t o nly t he F 16 C/ D
sales but also accept ing a let t er o f r equ est t o even evaluat e t he F 1 6
C/ D sales, and no w we have an assessment sent t o yo u and t he Co ngr ess
5
by t he Depar t ment o f Defense, t hat sho ws a clear milit ar y and defense
r eq uir ement , which is what we'r e supp o sed t o be making t hese decisio ns
based upo n.
T her e's a t wo fo ld qu est io n. One is what do yo u t hink is ho lding
back su ccessive administ r at io ns fr o m selling r equ ir ed milit ar y equip ment
as we'r e su ppo sed t o do under t he T aiwan Relat io ns Act ?
T he o t her t hing is have yo u ever seen o r have yo u ever asked fo r a
r isk assessment o f what it wo u ld mean t o U. S . fo r ces if we didn't g o
t hr o u gh wit h t he sale o f F 16 C/ Ds?
MR. DI AZ BALART : Wit h r egar d t o t he fir st quest io n, I 'm no t
g o ing t o speculat e as t o t he decisio ns o f t his o r o t her ad minist r at io ns. I
t hink and t hat 's why I st ar t ed o ff by t alking abo u t t he T aiwan Relat io ns
Act as t he co r ner st o ne o f o ur po licy t he law in t he Unit ed S t at es
r eq uir es t hat weapo ns be o ffer ed t o T aiwan t o mak e cer t ain t hat it can
live wit ho ut t he t hr eat o f co er cio n.
T hat 's what I want t o st r ess. I t hink Co ngr ess needs t o be
st r essing co nt inuo usly, r eminding, in it s o ver sight cap acit y becau se, as
yo u k no w, t he t wo fundament al r o les o f Co ngr ess ar e leg islat ing and
o ver sight in it s o ver sight cap acit y, must r emind t he administ r at io n t hat
t he law r eq u ir es t hat a sufficient d efensive po st ur e be able t o be
maint ained , cer t ainly t he Unit ed S t at es o ffer t he weapo ns so t hat a
su fficient defense po st ur e can be maint ained, a cr edible defense po st ur e
can be maint ained by T aiwan. S o I 'm no t go ing t o speculat e.
Wit h r eg ar d t o yo u r seco nd quest io n, it 's an excellent po int , and I
will be act ing o n it , pu r su ant t o no t yo ur sug gest io n bu t yo ur having
br o ug ht it o u t , t hat it 's impo r t ant t hat we kno w t he effect and p o ssible
co nsequ ences o n o ur fo r ces o f t he o ngo ing milit ar y evo lving sit uat io n.
HE ARI NG CO CHAI R WORT ZE L: S ir , t hank yo u ver y much fo r
yo u r t ime
MR. DI AZ BALART : T hank yo u ver y much. I t 's been my
p r ivileg e.
HE ARI NG CO CHAI R WORT ZE L: and yo ur willingness t o be
her e and yo u r leader ship o n t his issu e.
MR. DI AZ BALART : All r ight . T hank yo u all. T hank yo u ver y
mu ch. T hank yo u . Bye bye.
O PENING REM ARK S O F CO M M IS S IO NER PATRICK A. M ULLO Y
H EARING CO CH AIR
HE ARI NG CO CHAI R MULLOY: We want t o t hank t he
Co ngr essman fo r being her e. We'r e go ing t o st ar t o ur o p ening
st at ement s no w, and t hen t her e might be a sho r t p er io d befo r e S enat o r
S her r o d Br o wn ar r ives.
Co ng r essman Ging r ey was planning t o be her e, bu t his sched ule
no w will no t p er mit him t o be her e. S o we'll d o t he o pening st at ement s,
and t hen we mig ht t ak e a sho r t br eak .
6
Go o d mo r ning and welco me t o t his year 's t hir d hear ing o f t he
U. S . China E co no mic and S ecur it y Review Co mmissio n. T o day's
hear ing will addr ess r ecent develo p ment s and fut ur e t r ends in t he cr o ss
S t r ait r elat io nship, and what t hese develo p ment s and t r ends may mean
fo r t he Unit ed S t at es o f Amer ica.
S ince t he Chinese Co mmunist P ar t y came t o p o wer in Oct o ber
1 9 49 , T aiwan has been a key fact o r in U. S . China r elat io ns. Our
Go ver nment r eco g nized t he no n Co mmunist go ver nment o f T aiwan as
t he legit imat e go ver nment o f all o f China fo r o ver a qu ar t er o f a
cent u r y. I n 19 79 , when Washingt o n fo r mally est ablished diplo mat ic
r elat io ns wit h t he P eo ple's Republic o f China, Co ngr ess passed t he
T aiwan Relat io ns Act t o go ver n o ur r elat io ns wit h T aiwan.
T he May 20 08 inau gur at io n o f T aiwan's P r esident Ma br o u ght
so me significant d evelo pment s in t he cr o ss S t r ait r elat io nship. Dir ect
sea, air , and mail links bet ween t he t wo have no w been o fficially
est ablished . Cr o ss S t r ait t r ade co nt inues t o exp and , and China is no w
T aiwan's lar g est t r ading p ar t ner .
T r ad e bet ween China and T aiwan will pr o bably fur t her expand if
t hey sign t he E co no mic Co o p er at io n Fr amewo r k Agr eement which is
no w being neg o t iat ed . T aiwan is t he lar gest fo r eign invest o r in China.
T hese and o t her cr o ss S t r ait develo pment s will affect t he Unit ed S t at es
and it s r elat io nship wit h bo t h China and T aiwan.
We'r e ver y pr ivileged t o have a number o f exper t s fr o m t he
ad minist r at io n, academia and pr ivat e o r g anizat io ns who will app ear her e
t o d ay and will help u s g et a bet t er under st anding o f t he implicat io ns o f
t hese develo pment s.
I n par t icular , we'r e pleased t o have member s o f Co ngr ess,
Co ngr essman Balar t and S enat o r S her r o d Br o wn who is g o ing t o be
her e.
We'r e also p r ivileged t hat we'r e g o ing t o have David S hear , t he
Dep ut y Assist ant S ecr et ar y o f S t at e fo r E ast Asia and P acific Affair s,
and Mr . Michael S chiffer , Dep ut y Assist ant S ecr et ar y o f Defense, who
ar e g o ing t o pr esent t he Obama administ r at io n's per sp ect ive o n t he
var io us issues t hat t he Co mmissio n is pr o bing t o day.
I 'm no w t u r ning t he hear ing o ver t o my est eemed co chair ,
Co mmissio ner Wo r t zel, fo r his o pening st at ement .
O PENING REM ARK S O F CO M M IS S IO NER LARRY M . W O RTZEL
H EARING CO CH AIR
HE ARI NG CO CHAI R WORT ZE L: T hank yo u, Co mmissio ner
Mu llo y, and I want t o t hank t he wit nesses t hat will be her e t o day in
ad vance t o help us under st and t he r ecent d evelo pment s acr o ss t he
T aiwan S t r ait .
I n ju st a few sho r t year s, aspect s o f t he r elat io nship bet ween
T aiwan and mainland China have changed no t iceably. Official and
7
u no fficial meet ing s bet ween r epr esent at ives fr o m t he t wo g o ver nment s
o ccur wit h so me r egular it y.
T aipei and Beijing have signed d o zens o f acco r ds o n var io us
issu es r anging fr o m financial secur it y co o per at io n t o fo o d safet y. And
we saw examples o f t hat last year when we wer e in Xiamen dur ing t he
visit t o China.
P r esid ent Ma has changed t he r het o r ic o n t he r elat io nship bet ween
China and T aiwan, and all o f t his has played a par t in impr o ving cr o ss
S t r ait r elat io ns.
Yet p r o blems r emain. China co nt inu es t o blo ck what is g ener ally
k no wn as "T aiwan's sear ch fo r int er nat io nal space. " And by t his, I do n't
mean dip lo mat ic r eco gnit io n fo r T aiwan; r at her t his r efer s t o T aiwan's
p ar t icipat io n in int er nat io nal bo dies wher e de jur e st at eho o d is no t a
p r er eq uisit e.
I t 's u nclear whet her t he imp r o vement in t he cr o ss S t r ait
r elat io nship is du r able and co uld sur vive a change in leader ship in eit her
sid e o f t he T aiwan S t r ait . What 's cer t ain, ho wever , is t hat t her e is no
su bst ant ial pr o gr ess o n r edu cing milit ar y t ensio ns bet ween t he t wo
sid es. T he t hr eat fr o m China t o T aiwan has no t r edu ced , and t he
milit ar y balance co nt inues t o t ip in t he mainland's favo r as Beijing
fu r t her develo p s it s milit ar y cap abilit ies.
I t r emains t o be seen ho w far T aiwan will mo ve t o mo d er nize it s
o wn milit ar y and ad dr ess t he shift ing milit ar y balance. Cer t ainly,
effo r t s ar e being made.
T her efo r e, t o d ay, t he Co mmissio n will examine t he cur r ent cr o ss
S t r ait milit ar y sit uat io n and fut ur e t r ends. We'll lo o k at t he eco no mic
r elat io nship bet ween T aiwan and t he mainland; we'll assess t he
d evelo p ing p o lit ical asp ect s o f cr o ss S t r ait r elat io ns.
Ou r majo r fo cus, o f co ur se, is co nsist ent wit h o ur legislat ive
mandat e and is t o exp lo r e what t hese d evelo pment s mean fo r t he Unit ed
S t at es and r eg io nal st abilit y.
I want t o t hank all o f yo u fo r par t icipat ing . I also want t o t hank
t he S enat e Co mmit t ee o n Rules and Administ r at io n fo r let t ing us use
t his g r eat hear ing r o o m and o ur excellent st aff t hat did a g r eat jo b in
p r epar ing t he hear ing.
We'll no w br eak fo r abo ut eight minut es, I ho p e, unt il S enat o r
Br o wn co mes in, and please do n't wand er t o o far fr o m t he ar ea because
when he co mes in, we st ar t .
[ Wher eupo n, a sho r t r ecess was t aken. ]
PANEL I: CO NG RES S IO NAL PERS PECTIVES ( CO NTINUED)
HE ARI NG CO CHAI R MULLOY: S enat o r , t hank yo u.
S enat o r S her r o d Br o wn r epr esent ed Ohio 's 13 t h Dist r ict in t he
Ho u se o f Repr esent at ives fr o m 19 93 u nt il 2 006. Dur ing his t ime in t he
Ho u se, he was a fo unding member o f t he Co ngr essio nal Cau cus o n
8
T aiwan.
I n 20 07, he was elect ed t o t he Unit ed S t at es S enat e. S enat o r
Br o wn is cu r r ent ly t he Chair man o f t he S enat e Banking Co mmit t ee
S u bco mmit t ee o n E co no mic P o licy and a member o f t he S enat e T aiwan
Cau cu s. He is a st r o ng ad vo cat e o f t he int er est s o f wo r king peo ple o f
o u r nat io n, and he's been a gr eat fr iend and sup po r t er o f t his
Co mmissio n. We'r e ho no r ed t o have him t est ify t o day.
T hank yo u, S enat o r , fo r being her e.
S TATEM ENT O F S H ERRO D B RO WN
A U. S . S ENATO R FRO M TH E S TATE O F O H IO
S E NAT OR BROWN: T hank yo u , Co mmissio ner Mullo y, and
Co mmissio ner Wo r t zel, and all o f yo u, t hank s.
I t 's a p leasu r e t o be back in fr o nt o f yo u, and t hank s fo r yo ur
ser vice o n incr easingly impo r t ant issues t hat o ur co unt r y faces in t er ms
o f nat io nal secu r it y, in t er ms o f eco no mic secur it y. T hese issues get
mo r e int er est ing, mo r e co mplicat ed , and mo r e cr u cial t o o ur nat io nal
int er est s just abo u t ever y year .
I co mmend t his Co mmissio n, fir st o f all, fo r t ack ling t he t o ug h
issu e o f t he Unit ed S t at es' r elat io nship wit h bo t h China and T aiwan and
t he int er act io n t hat way. T his hear ing is no t o nly t imely bu t vit al t o
u nd er st anding t he r o le o f t he U. S . in t he T aiwan S t r ait s.
E ven befo r e ser ving in Co ngr ess in t he Ho use and t he S enat e, t he
r o le o f t he U. S . in t he T aiwan S t r ait has been a per so nal int er est t o me.
T he p er so nal int er est became mo r e a pr o fessio nal p r er o gat ive because
o f T aiwanese Amer ican co nst it uent s in my o ld co ngr essio nal dist r ict and
in my st at e.
T aiwan's mir acle, it s t r ansit io n fr o m mar t ial law t o demo cr acy, as
q u ickly as t hey did , is, I wo n't say effo r t lessly, but as smo o t hly in many
ways as t hey d id, and wit h t he eco no mic vit alit y t hat t hat island nat io n
was able t o g ener at e, was no t hing sho r t o f a mir acle.
I t 's o ne o f t he gr eat achievement s o f t he 20t h cent ur y, yet it 's
o ft en o ver lo o k ed. P eo ple r eally do n't k no w mu ch abo ut what happened .
I r emember wat ching t he inaug ur at io n fr o m P r esident Lee t o P r esid ent
Chen S hu i bian, and t hat 's r eally o ne o f t he hallmar ks o f a demo cr acy,
being able t o swit ch, t o have a peacefu l t r ansit io n o f a chief execut ive,
g o ing fr o m o ne po lit ical par t y t o ano t her , and t o do it as smo o t hly as
t he T aiwanese did.
T hat 's why t he U. S . r o le in t he T aiwan S t r ait , I t hink, is so
imp o r t ant . I t 's in o ur nat io nal secur it y int er est s no t t o t ake o ur
at t ent io n away fr o m China's pr esence ar o und t he wo r ld.
S enat o r Du r bin and I wer e just in E ast Afr ica in fo ur co unt r ies
which ar e imp o r t ant t o o u r nat io nal int er est s and ar e fo ur co unt r ies t hat
face so me o f t he biggest challenges o f any in t he wo r ld S udan,
E t hio p ia, T anzania, and Co ng o and we saw beginning, no t just
9
beg inning, but a hug e Chinese pr esence in t ho se fo u r co unt r ies in ways
t hat fr ank ly g o t o u r at t ent io n.
When yo u lo o k at China's p r esence ar o und t he wo r ld , fr o m t hese
massive invest ment s in unst able Afr ican co unt r ies, t o engag ing in
p r edat o r y t r ade p r act ices, abo ut which we ar e so familiar , just pick ing
t he newsp aper u p ever yd ay fr o m t he Wall S t r eet Jo u r nal o r any o t her
p aper , t o at t emp t ing t o mo no p o lize t he T aiwan S t r ait , all o f t hese ar e
cr u cial issues fo r us.
T he U. S . must be clear as a go ver nment and as a p eo p le t hat
fr eed o m and demo cr acy fo r m t he pat h t o lo ng t er m eco no mic st abilit y
and pr o sper it y fo r T aiwan and all nat io ns aspir ing fo r independence and
au t o no my and self go ver nment . T ho se who fight fo r t ho se p r incip les
sho u ld kno w t hat t hey will be suppo r t ed by t he Unit ed S t at es.
T he U. S . sho uld n't t ur n it s back t o human r ig ht s like fr eedo m o f
t he p r ess, fr eedo m o f speech, fr eed o m o f r elig io n. We must enco u r age
and fo st er t ho se who wish t o live fr ee o f o ppr essive r egimes no mat t er
wher e t hey live, no mat t er ho w difficu lt t he challenge.
Fo r t he p eo p le o f T aiwan, we sho uld r eco gnize it s o wn hist o r y
and we sho uld r eco gnize it s cu lt ur al id ent it y. T her efo r e, we must view
t he issu es bet ween T aiwan and China in t he co nt ext o f a diplo mat ic
r elat io nship bet ween t wo so ver eign nat io ns. As T aiwan's clo sest ally
and st r o ng est sup p o r t er o n it s r o ad t o demo cr acy, t he U. S . sho uld
co nt inu e t o p lay a leading r o le in T aiwan S t r ait r elat io ns.
T aiwan has shaken t he t ent acles o f mar t ial law t o have fr ee and
d emo cr at ic elect io ns. I t has st r o ng envir o nment al and labo r t ies,
so met hing fo r which t his co mmit t ee has spo k en o ut and st o o d fo r
fo r ever , r eally since t he cr eat io n o f t his Co mmissio n.
T aiwan plays by t he r ules. I t sho uld be r ewar ded, t her efo r e, and
enco u r aged. T hat is simply no t happ ening. T aiwan, as yo u k no w, is no t
a member o f t he Unit ed Nat io ns. T aiwan is no t a member o f t he Wo r ld
Healt h Or ganizat io n. I t d o esn't even have o bser ver st at us at t he Wo r ld
Healt h Or ganizat io n. T his is despit e t he fact t hat it 's a wo r ld lead er in
med ical r esear ch. I t 's fo r med a healt h car e syst em t hat ser ves vir t ually
all o f it s peo ple, all in t he last decade o r so .
I t 's a nat io n t hat when t her e ar e nat io nal cat ast r o phes, weat her
cat ast r o phes, nat u r al d isast er s ar o und t he wo r ld, T aiwan is o ft en o ne o f
t he fir st co u nt r ies t o send in well t r ained medical per so nnel and
assist ance.
T his, no t being par t o f t he WHO, has happened despit e t he
co ncer ns o f all nat io ns t hat disease fr o m S ARS t o H1N1 t o so mu ch else
fr eely affect s peo p le, r eg ar dless o f geo g r ap hy o r gender , age and
nat io nalit y.
I r emember a ver y damaging ear t hqu ake in T aiwan, back, I
believe, in S ept ember o f 1 99 9, when t he wo r ld assist ance had t o await
su pp o r t and ack no wled gement fr o m Beijing befo r e we co uld go int o
T aiwan. Nat io ns o f t he wo r ld had t o get t he P eo ple's Republic o f
10
China's agr eement , ackno wledg ement o f an ag r eement befo r e t hey co uld
act u ally g o in and help T aiwan dir ect ly. T hat simp ly mak es no sense fo r
human r ight s, no sense fo r t he human co nd it io n in any way we lo o k at
t hat .
T aiwan's leader s ar e no t , as yo u kno w, affo r ded fr ee and o pen
t r avel t o t he U. S . T he U. S . do es no t have an ambassado r t o T aiwan
d esp it e t he fact it 's o ne o f o u r lar g est t r ading par t ner s. No r d o es
T aiwan, as yo u kno w, have an ambassad o r t o t he U. S .
23 millio n p lus T aiwanese have no r epr esent at io n, no p r esence in
o u r nat io n, fo und ed o n t he ver y values t hat we ackno wledge, t hat we
have fo ug ht fo r , t hat t hey aspir e t o . T hese injust ices must be co r r ect ed .
T aiwan's demo cr acy is yo ung, it 's st ill gr o wing, bu t we can't let it
r ever t back t o ways o f t he p ast .
What is t he co st o f g iving up fr eedo ms and so ver eignt y in an
effo r t t o benefit eco no mically fr o m China? Many in T aiwan have
exp r essed majo r r eser vat io ns wit h t he so called "E co no mic Co o per at io n
Fr amewo r k Agr eement . " T his agr eement co u ld alt er T aiwan's eco no my
fo r decad es, fur t her blu r r ing t he lines o f nat io nalit y and ident it y,
eco no mic independence and eco no mic d ependence.
E CFA neg o t iat io ns sho uld no t keep it s o wn p eo p le and t r ading
p ar t ner s in t he d ar k. I 've lo ng o p po sed U. S . t r ade agr eement s t hat wer e
neg o t iat ed t o give t o o mu ch away wit h t o o lit t le in r et ur n. But as
fr u st r at ing as it 's been, as wr o ng headed as I t hink fr ee t r ade
ag r eement s like NAFT A and CAFT A ar e, and sever al o f yo u o n t his
Co mmissio n have sp o ken o ut and been leader s in fo r mulat ing t he
int ellect ual fr amewo r k ar o u nd o p po sit io n t o t hese agr eement s, t he
p r o cess in t he Unit ed S t at es, at least , has been o p en and su bject t o
co ng r essio nal ap p r o val.
T he Obama ad minist r at io n must u r g e t he T aiwanese go ver nment t o
be p r u dent , t o mak e t he neg o t iat io ns co mp let ely t r ansp ar ent , and t o t ake
t he inp ut fr o m t he pu blic and fr o m ind ust r ies. T hat 's what demo cr acies
d o .
China may have o ver whelmingly milit ar y, diplo mat ic and eco no mic
p o wer o ver T aiwan, t his co unt r y o f 23 millio n, ver sus a co unt r y o f 1. 3
billio n no w, but China lacks t he mo st p o wer ful fo r ce available t o any
nat io n, and t hat is t he p o wer o ver t he human sp ir it o f t he T aiwanese
p eo p le.
Unit ed S t at es mu st always sid e wit h t ho se who enco u r age
d emo cr acy and fr eedo m and p eace. S pr eading demo cr acy and fr eedo m is
so met hing o ur nat io n has made par t o f o u r mo r al fabr ic and hallmar k
and fo cus o f o u r nat io nal st r at egy.
Ou r r o le in t he T aiwan S t r ait sho u ld ensur e t hat China emulat es
t he d emo cr at ic values o f T aiwan, no t vice ver sa, wher e we allo w T aiwan
t o emu lat e o ppr essive valu es o f China. T he p o licy o f t he Unit ed S t at es
sho u ld be "One China, One T ibet , One T aiwan. " T hat 's t he message we
sho u ld send t he wo r ld .
11
T hank yo u.
Pan el I: Di scu ssi o n , Q u est i on s an d An swers
HE ARI NG CO CHAI R MULLOY: T hank yo u , S enat o r .
I kno w ho w busy yo u r schedu le is. Do yo u want t o t ake any
q u est io ns if p eo p le have any?
S E NAT OR BROWN: I 'm willing. I always am wit h yo u, bu t I
k no w yo ur sched ule is also bu sy so it 's up t o yo u.
HE ARI NG CO CHAI R MULLOY: I f any o f t he Co mmissio ner s
have any qu est io ns fo r t he S enat o r , he can t ake t hem. Yes.
COMMI S S I ONE R BLUME NT HAL: T hank yo u fo r t hat excellent
and I t hink inspir ing t est imo ny. I t 's r eally t er r ific.
As yo u kno w, a co up le o f t he issues t hat t he administ r at io n faces
no w inclu de t he sale o r po t ent ial sale o f t he F 16 C/ Ds t o T aiwan, as
well as so me o t her issues t hat yo u ment io ned o n int er nat io nal space.
We've seen and been pr o vided wit h a Do D assessment o n t he
r eq uir ement s fo r bet t er air defense fo r T aiwan, and t he r equir ement
seems clear , but I 'm wo nder ing if yo u've ever seen anyt hing like a r isk
assessment t o U. S . fo r ces sho u ld we no t go fo r war d wit h t he sale t o
T aiwan o f F 16 C/ Ds o r , so met hing co nt r ar y, t he impr o vement t o t he
U. S . st r at eg ic p o st u r e o r milit ar y p o st ur e if we do go fo r war d wit h t he
sale o f F 16 C/ Ds?
S E NAT OR BROWN: Co mmissio ner Blu ment hal, t hank yo u.
I 've no t seen t he classified assessment , and I co uldn't co mment , I
g u ess, if I had, but I have t ho ug ht a lo t abo u t t his, and I t hink t hat t he
P r esident mad e t he r ight d ecisio n. I t hink t his is illust r at ive o f much o f
Amer ican T aiwanese r elat io ns and much o f Amer ican China r elat io ns,
t hat almo st what ever a pr esid ent cho o ses t o do t o no t co mbat o r even
co nfr o nt China, bu t t o eng age wit h China, if it 's no t exact ly what t he
Chinese want , t he fur o r o ver it is fair ly amazing t o me each t ime.
I g uess I lo o k at t he Chinese r eact io n t o t hat as o ne o f t wo t hings
p ar t icu lar ly t hat t he Obama ad minist r at io n has do ne t hat 's r ecent ly
ang er ed t he Chinese, t he F 16 sale and t he meet ing wit h Dalai Lama,
and I just find it int r igu ing, but I also find it wo r r iso me because d o es
t hat mean t hat we do n't "co nfr o nt , " is pr o bably t he r ig ht wo r d I 'm
cho o sing my wo r ds car efully co nfr o nt t he Chinese o n t he issue o f
cu r r ency, which is in t hat sense bigger t han all o f t hese issu es, at least
big ger t o t he aver ag e Amer ican?
I t hink it kind o f beg s t he q uest io n; t hat 's no t a dir ect answer t o
yo u r qu est io n. I d o n't k no w t he answer p r ecisely, bu t I t hink t hat t he
ad minist r at io n, unfo r t u nat ely, because o f China's bellico sit y I 've always
want ed t o u se t hat wo r d in a co ngr essio nal hear ing I lear ned it in
co lleg e because o f China's bellico sit y o n dar n near ever yt hing , o ur
P r esident seems a bit r est r ict ed o n ho w many t imes he can do anyt hing
t hat wo u ld be seen as co nfr o nt at io nal t o war ds t he Chinese.
12
I n t hat sense, I t hink o ur r elat io nship bilat er ally wit h China is
u niqu e t o China, p er io d , but it 's so met hing t hat we sho uldn't co wer . We
sho u ldn't co wer as a r esu lt o f t hat bilat er al r elat io nship.
HE ARI NG CO CHAI R MULLOY: I sho u ld no t e t hat t he
Co mmissio n in set t ing u p t o d ay's hear ing ask ed t he US T R t o co me in t o
t alk abo u t t he E CFA and t heir views o n t hat . We have S t at e her e and
we have Do D her e, but unfo r t u nat ely t he US T R was unable t o at t end.
S E NAT OR BROWN: Well, it 's a t iny lit t le o ffice, Co mmissio ner
Mu llo y.
HE ARI NG CO CHAI R MULLOY: Any o t her qu est io ns fo r t he
S enat o r ? S enat o r , t hank yo u so mu ch fo r yo u r st at ement and fo r being
her e.
S E NAT OR BROWN: T hank s fo r yo ur ser vice, all o f yo u .
T hank s. T hanks fo r yo u r quest io ns.
PANEL II: ADM INIS TRATIO N PERS PECTIVES
HE ARI NG CO CHAI R MULLOY: On t his panel we'r e go ing t o
hear fr o m t he Administ r at io n's per spect ive, and we'r e delig ht ed t o
welco me David S hear . T hank yo u fo r being her e again. We appr eciat e
yo u r help t o t his Co mmissio n. He's t he Deput y Assist ant S ecr et ar y o f
S t at e fo r E ast Asian and P acific Affair s.
We also welco me Michael S chiffer , who is t he Depu t y Assist ant
S ecr et ar y o f Defense fo r E ast Asian and P acific S ecu r it y Affair s.
We have mo r e co mment s t o int r o d uce t hem abo ut t heir
t r emendo u s backg r o und and t heir ser vice t o t he co unt r y o ver a number
o f year s, bu t I wo n't go int o all t hat . I welco me t hem.
I will no t e fo r t he r eco r d t hat we did invit e US T R t o app ear
t o d ay. T hey r ecent ly lo st t heir Assist ant US T R fo r China Affair s, who
left his po sit io n, and t hey'r e sho r t st affed r ight no w so t hey wer e u nable
t o be her e, but I want ed t o put t hat o n t he r eco r d t hat we did invit e
t hem.
T hank yo u, and Mr . S hear , if yo u'll st ar t .
S TATEM ENT O F DAVID B . S H EAR, DEPUTY AS S IS TANT
S ECRETARY O F S TATE FO R EAS T AS IAN AND PACIFIC
AFFAIRS , U. S . DEPARTM ENT O F S TATE, WAS H ING TO N, DC
MR. S HE AR: T hank yo u ver y much, Co mmissio ner Mullo y,
Co mmissio ner Wo r t zel, Chair man S lane. T hank yo u ver y mu ch fo r t he
o p p o r t unit y t o appear befo r e t he Co mmissio n t o d ay.
As yo u may have hear d , t he Lo s Angeles Do dger s and t heir t wo
T aiwan bo r n player s have just finished a hu gely su ccessful exhibit io n
ser ies in T aiwan in which t he Do dger s and t he lo cal all st ar s sp lit t he
ser ies. Back ho me, t he fat e o f o u r Washingt o n Nat io nals depends in
p ar t o n t he r et ur n t o fo r m o f T aiwan bo r n pit cher Wang Chien ming ,
13
who wo n 19 g ames fo r t he Yankees o nly t wo year s ago .
T he fact t hat t he U. S . and T aiwan ar e int er act ing at t his level
d emo nst r at es in a small bu t t elling way t he st r o ng, unshakable t ies
bet ween o u r t wo p eo ples.
Fo r mo r e t han 40 year s, t he Unit ed S t at es’ "o ne China" p o licy
based o n t he t hr ee U. S . China Jo int Co mmuniq ués and t he T aiwan
Relat io ns Act has g uided o u r r elat io ns wit h T aiwan and t he P eo p le's
Rep u blic o f China.
We d o no t su p po r t T aiwan independence. We ar e o pp o sed t o
u nilat er al at t empt s by eit her side t o change t he st at us q uo . We insist
t hat cr o ss S t r ait d iffer ences be r eso lved peacefu lly and acco r d ing t o t he
wishes o f t he p eo p le o n bo t h sides o f t he S t r ait .
Ou r p o licy has help ed pr o pel T aiwan's pr o sper it y and demo cr at ic
d evelo p ment while at t he same t ime allo wing us t o nu r t ur e co nst r uct ive
r elat io ns wit h t he P RC. Our appr o ach spanning eight ad minist r at io ns
has help ed cr eat e an envir o nment co nducive t o pr o mo t ing peo ple t o
p eo p le exchanges, exp anding cr o ss S t r ait t r ade and invest ment , and
enhancing p r o sp ect s fo r t he peaceful r eso lu t io n o f cr o ss S t r ait
d iffer ences.
Co nt inued pr o g r ess in cr o ss S t r ait r elat io ns is cr it ically impo r t ant
t o t he secur it y and p r o sper it y o f t he ent ir e r egio n and is t her efo r e o f
vit al nat io nal int er est t o t he Unit ed S t at es.
Wit h r eg ar d t o r ecent cr o ss S t r ait develo pment s, we have
wit nessed r emar k able p r o gr ess in cr o ss S t r ait r elat io ns in t he near ly t wo
year s since T aiwan P r esident Ma Ying jeo u t o o k o ffice. I n his inaugur al
ad dr ess, P r esid ent Ma called o n t he P RC "t o seize t his hist o r ic
o p p o r t unit y t o achieve peace and co pr o sper it y. " He pledg ed t hat t her e
wo u ld be "no r eunificat io n, no independ ence, and no war " d ur ing his
t enur e.
At t he end o f 20 0 8, P RC P r esident Hu Jint ao r esp o nd ed wit h a
sp eech in which, amo ng o t her t hing s, he called fo r t he co nclu sio n o f an
ag r eement o n eco no mic co o per at io n, pr o po sed t hat t he t wo sides
d iscuss what he called "pr o per and r easo nable" ar r angement s fo r
T aiwan's par t icipat io n in int er nat io nal o r g anizat io ns, and r aised t he
p r o spect o f a mechanism t o enhance mut ual milit ar y t r ust , o r what we
mig ht call co nfid ence and secu r it y bu ilding mechanisms.
Fo llo wing P r esid ent Hu's speech, t he P RC dr o pp ed o bject io ns t o
T aiwan's par t icip at io n as an o bser ver t o t he May 20 09 Wo r ld Healt h
Assembly, which is t he sup r eme d ecisio n making bo dy o f t he Wo r ld
Healt h Or ganizat io n.
T his expansio n o f T aiwan's int er nat io nal space co incid ed wit h a
d ip lo mat ic t r uce in which T aiwan and t he P RC have fo r t he fir st t ime
ceased co mpet ing fo r diplo mat ic r eco gnit io n. I n 2008 , semi o fficial
t alk s bet ween T aiwan and t he P RC r esu med . T he t wo sid es agr eed in
br o ad t er ms t o discu ss t he r elat ively easy, pr imar ily eco no mic issues
fir st , r eser ving mo r e d ifficult po lit ical issu es fo r lat er .
14
As a r esult o f t alks in 20 08 and 20 09, t he t wo sides est ablished
d ir ect scheduled flight s, pr o vid ed fo r dir ect shipping and p o st al
ser vices, est ablished a fr amewo r k fo r financial co o per at io n and
invest ment , and ag r eed t o incr ease t o ur ism and enhanced law
enfo r cement co o per at io n. We expect t he t wo sides will nego t iat e an
E co no mic Co o p er at io n Fr amewo r k Agr eement t his year .
E nt husiasm fo r pr o gr ess in t he cr o ss S t r ait d ialo gue has been
t emp er ed by caut io n and debat e o n bo t h sid es o f t he S t r ait . S o me
mainlander s fear t hat t he T aiwan side will p o ck et P RC decisio ns no w
and elect fut ur e leader s who ar e less flexible t han t he cur r ent T aiwan
ad minist r at io n. T he T aiwan public, while suppo r t ive o f act io ns t o
enhance cr o ss S t r ait st abilit y, is caut io us o f mo ves t hat co uld be seen t o
co mp r o mise T aiwan's so ver eignt y, which r emains an emo t io nally
char g ed issue o n bo t h sides.
As p eo p le o n bo t h sides o f t he S t r ait co nsider fu t ur e eco no mic
st ep s, st r o ng co ncer ns r emain o n bo t h sid es o f t he P acific abo ut P RC
milit ar y mo d er nizat io n and dep lo yment s. T he P RC r efuses t o r eno unce
t he use o f fo r ce r eg ar ding T aiwan. P RC leader s have st at ed in explicit
t er ms t hat Beijing co nsider s T aiwan's fut ur e a co r e nat io nal int er est ,
and t hat t he P RC wo uld t ake milit ar y act io n in t he event T aiwan wer e t o
fo r mally declar e ind ep endence o r t o t ak e st ep s t o ir r evo cably blo ck
u nificat io n.
T he P RC's unnecessar y and co unt er pr o duct ive milit ar y build u p
acr o ss t he S t r ait co nt inues unabat ed wit h est imat es o f mo r e t han 1, 100
missiles po int ed in T aiwan's dir ect io n. T hese and o t her d eplo yment s
acr o ss fr o m T aiwan dilu t e Beijing 's st at ed d evo t io n t o t he peacefu l
handling o f cr o ss S t r ait r elat io ns.
Let 's lo o k br iefly at t he U. S . r o le in cr o ss S t r ait engag ement . As
I st at ed at t he o ut set , o ur "o ne China" po licy is based o n t he t hr ee Jo int
Co mmu niqu és and t he T aiwan Relat io ns Act . We ar e also guided by t he
u nd er st anding t hat we will neit her seek t o mediat e bet ween t he P RC and
T aiwan no r will we exer t pr essu r e o n T aiwan t o co me t o t he bar gaining
t able.
While t he Unit ed S t at es is no t a dir ect par t icip ant in t he disput e
bet ween t he P RC and T aiwan, we have a st r o ng int er est in do ing all we
can t o cr eat e an envir o nment co ndu cive t o a peaceful and no n co er cive
r eso lu t io n o f t he issu es bet ween t hem. T his ad minist r at io n welco mes
t he incr eased st abilit y in t he S t r ait and t he up sur g e in T aiwan P RC
eco no mic, cu lt u r al and p eo ple t o peo ple co nt act s. T hese co nt act s help
fu r t her peace, st abilit y and pr o sper it y in t he ent ir e E ast Asia r eg io n.
We app laud t he co u r age sho wn by P r esident Ma in r est o r ing U. S .
t r u st and r ever sing t he d et er io r at io n in cr o ss S t r ait r elat io ns. We
sho u ld no t be alar med by mainland T aiwan r appr o chement as so meho w
d et r iment al t o U. S . int er est s, as lo ng as decisio ns ar e made fr ee fr o m
co er cio n.
Fu t u r e st abilit y in t he S t r ait will d ep end o n an o pen dialo gu e
15
bet ween T aiwan and t he P RC, fr ee o f fo r ce and int imidat io n and
co nsist ent wit h T aiwan's flo ur ishing d emo cr acy. I n o r d er t o engage
p r o d uct ively wit h t he mainland at a pace and sco pe t hat is po lit ically
su pp o r t able by it s p eo p le, T aiwan need s t o be co nfident in it s r o le in t he
int er nat io nal co mmu nit y, it s abilit y t o defend it self and p r o t ect it s
p eo p le, and it s p lace in t he glo bal eco no my.
T he Unit ed S t at es has a co nst r uct ive r o le t o play in each o f t hese
t hr ee key ar eas. P ar t ly because o f U. S . effo r t s, T aiwan is a member and
fu ll par t icipant in k ey bo dies su ch as t he Wo r ld T r ade Or g anizat io n, t he
Asian Develo p ment Bank , and AP E C. We believe t hat T aiwan sho uld
also meaningfully par t icip at e in o r ganizat io ns wher e it canno t be a
member .
T aiwan must be co nfident t hat it has t he physical capacit y t o
r esist int imidat io n and co er cio n in o r der t o engage fu lly wit h t he
mainland. We will st and by o ur co mmit ment t o pr o vide T aiwan wit h
d efense ar t icles and ser vices in such quant it y as may be necessar y t o
enable T aiwan t o maint ain a sufficient self defense capabilit y.
Ou r decisio n t o no t ify Co ngr ess o n Januar y 2 9 o f ar ms sales t o
T aiwan wo r t h $ 6. 4 billio n co nt inues a po licy t hat has been fo llo wed by
su ccessive administ r at io ns fo r mo r e t han 30 year s. T his decisio n was a
t angible example o f o ur co mmit ment t o meet t he o bligat io ns sp elled o ut
in t he T aiwan Relat io ns Act .
T aiwan P r esident Ma has made it clear t hat T aiwan desir es t o
st r eng t hen it s eco no mic t ies wit h t he Unit ed S t at es and o t her t r ade
p ar t ner s at t he same t ime t hat it p ur sues eco no mic ag r eement s wit h t he
mainland, su ch as t he p r o p o sed cr o ss S t r ait E co no mic Co o per at io n
Fr amewo r k Agr eement .
T he Unit ed S t at es is t he lar gest fo r eig n invest o r in T aiwan, and
T aiwan is o ur t ent h lar g est t r ading par t ner , lar g er t han I t aly, I ndia o r
Br azil. I n any r o bu st t r ad ing r elat io nship, t her e is so me fr ict io n, and
u nfo r t unat ely we have faced so me challeng es o ver beef expo r t s t o
T aiwan in t he p ast sever al year s. We wo uld like t o r einvigo r at e t he
U. S . T aiwan eco no mic agend a t hr o u gh o ur Bilat er al T r ade and
I nvest ment Fr amewo r k Agr eement pr o cess, r ed uce t r ade bar r ier s and
incr ease U. S . T aiwan t r ade and invest ment t ies.
Ho w t he evo lving r elat io nship bet ween T aiwan and t he P RC
d evelo p s d ep ends o n t he will o f t he leader ship and t he peo ple o n bo t h
sid es o f t he S t r ait . T he sco p e o f fut u r e eco no mic and po lit ical
int er act io n will be d et er mined in co njunct io n wit h T aiwan's well
est ablished , t hr iving d emo cr at ic pr o cesses.
As I no t ed pr evio usly, bo t h sides agr eed t o add r ess t he so called
"easy" issu es fir st , p r imar ily in t he r ealm o f eco no mic and cult ur al
exchang es. T he t wo sides have yet t o face t he mo r e d ifficult p o lit ical
and milit ar y issu es. We ar e never t heless enco ur ag ed by pr o g r ess t o dat e
and co nfident t hat o ur lo ng st anding ap pr o ach t o t he T aiwan S t r ait will
enhance p r o spect s fo r fur t her st ep s t o peacefully manage t his
16
co mp licat ed r elat io nship.
T hanks ag ain fo r t he o pp o r t unit y t o t est ify t o day o n t his
imp o r t ant t o pic, and I lo o k fo r war d t o yo ur quest io ns.
[ T he st at ement fo llo ws: ]
Prep ared S t at emen t of Davi d B . S h ear, Dep u t y Assi st an t S ecret a ry
o f S t at e for Ea st Asi an an d Paci fi c Affai rs, U. S . Dep art men t o f
S t a t e, Wash i n gt on , DC
Commissioner Molloy, Commissioner Wortzel, and members of the Commission, thank you for inviting
me to appear before you today. I appreciate the opportunity to discuss recent economic, political, and
military developments across the Taiwan Strait and review the implications of those developments for the
United States.
Before I begin my formal remarks, I would like to let those of you who may not have heard know
that the Los Angeles Dodgers, with their two Taiwanborn players, pitcher Kuo Hongchih and shortstop
Hu Chinlong, have just finished a hugely successful exhibition series in Taiwan in which the Dodgers
and the local allstars split the series. Back home, the fate of our Washington Nationals depends in part
on the return to form of Taiwan pitcher Wang Chienming, who won 19 games for the Yankees only two
years ago. I think the fact that the U.S. and Taiwan are interacting at this level demonstrates, in a small
but telling way, the strong, unshakable ties between our two peoples.
For more than thirty years, the United States' "one China" policy based on the three U.S.–China
Joint Communiqués and the Taiwan Relations Act has guided our relations with Taiwan and the People's
Republic of China. We do not support Taiwan independence. We are opposed to unilateral attempts by
either side to change the status quo. We insist that crossStrait differences be resolved peacefully and
according to the wishes of the people on both sides of the Strait. We also welcome active efforts on both
sides to engage in a dialogue that reduces tensions and increases contacts of all kinds across the Strait.
Our policy has helped propel Taiwan's prosperity and democratic development while at the same
time it has allowed us to nurture constructive relations with the PRC. We believe that our approach,
spanning eight administrations, has helped create an environment conducive to promoting peopleto
people exchanges, expanding crossStrait trade and investment, and enhancing prospects for the peaceful
resolution of crossStrait differences. Continued progress in crossStrait relations is critically important to
the security and prosperity of the entire region and is therefore a vital national interest of the United
States.
Recent CrossStrait Developments
We have witnessed remarkable progress in crossStrait relations in the nearly two years since
Taiwan President Ma Yingjeou took office. Before commenting on what this progress means for the
United States, allow me to chronicle some benchmarks over the last two years. Soon after his March 2008
election, President Ma dispatched Vice Presidentelect Vincent Siew to meet PRC President Hu Jintao at
the April 2008 Boao Forum in Hainan, and later that month President Hu met with Taiwan’s honorary
KMT chairman Lien Chan in Beijing. In his inaugural address, President Ma called on the PRC “to seize
this historic opportunity to achieve peace and coprosperity.” He pledged that there would be “no
reunification, no independence, and no war” during his tenure. President Ma also proposed that talks
with the PRC resume on the basis of the “1992 consensus,” by which both sides agree that there is only
one China but essentially agree to disagree on what the term “one China” means.
At the end of 2008 President Hu responded with a speech in which, among other things, he
called for the conclusion of an agreement on economic cooperation; proposed that the two sides discuss
“proper and reasonable” arrangements for Taiwan’s participation in international organizations; and
raised the prospect of a mechanism to enhance mutual military trust, or what we might call confidence
and security building mechanisms (CSBMs). Following President Hu’s speech, the PRC dropped
objections to Taiwan's participation in the World Health Organization's (WHO) International Health
Regulations, which allows the WHO to disseminate healthrelated information directly to Taiwan
17
authorities instead of having to go though the PRC government. In May of 2009 Taiwan was invited to
participate as an observer in that year's annual meeting of the World Health Assembly, the WHO’s
executive body.
This expansion in Taiwan’s “international space” coincided with a “diplomatic truce” in which
Taiwan and the PRC have for the time being ceased competing for diplomatic recognition from the 23
countries with which Taiwan has formal diplomatic relations.
These developments helped evoke the generally positive atmosphere surrounding the resumption
of semiofficial talks between Taiwan’s Straits Exchange Foundation (SEF) and the PRC’s Association for
Relations Across the Taiwan Strait (ARATS). The two sides agreed in broad terms to address the easy,
primarily economic issues first, reserving more difficult, political issues for later. SEF and ARATS met in
June and November of 2008 and in April and December of 2009, concluding numerous agreements
designed to promote closer economic and social ties.
As a result of the talks, the two sides established direct, scheduled flights; provided for direct
shipping and postal services, established a framework for financial cooperation and investment; and
agreed to increased tourism and enhanced law enforcement cooperation. Last year, nearly one million
mainlanders visited Taiwan. The two sides are now linked by 270 direct flights per week. The PRC is
Taiwan's largest trading partner with crossStrait trade totaling close to $110 billion in 2009, according to
Taiwan statistics. We expect that the two sides will sign an Economic Cooperation Framework
Agreement (ECFA) sometime this year, with the next round of talks scheduled for the end of this month.
Enthusiasm for progress in crossStrait dialogue has been tempered by caution and debate on
both sides of the Strait. Some mainlanders fear that the Taiwan side will pocket PRC decisions now and
elect future leaders who are less flexible than the current Taiwan administration. The PRC leadership no
doubt also must weigh with caution Taiwanrelated decisions that could become controversial in the run
up to the Communist Party succession in 2012. Nevertheless, in a press conference this week, Chinese
Premier Wen Jiabao stated that the PRC is willing to let the people of Taiwan "benefit more" than the
PRC from a proposed ECFA agreement via tariff concessions and an "early harvest" of tariff cuts. Wen
said he believes crossStrait problems will eventually be solved and that he has a strong wish to visit
Taiwan someday.
The Taiwan public, while supportive of actions that enhance crossStrait stability, is cautious of
moves that could be seen to compromise Taiwan’s sovereignty, which remains an emotionally charged
issue on both sides. Opponents of crossStrait progress in Taiwan took to the streets to demonstrate
against PRC ARATS chief Chen Yunlin when he visited Taiwan in November 2008 and again in
December 2009.
As people on both sides of the Strait consider future economic steps, strong concerns remain on
both sides of the Pacific about PRC military modernization and deployments. The PRC refuses to
renounce the use of force regarding Taiwan. PRC leaders have stated in explicit terms that Beijing
considers Taiwan’s future a "core" national interest and the PRC would take military action in the event
Taiwan were to formally declare independence or to block steps that would irrevocably block unification.
The PRC’s unnecessary and counterproductive military buildup across the Strait continues unabated, with
estimates of more than 1,100 missiles pointed in Taiwan's direction. Although tensions have substantially
abated, and there is no reason that Beijing would prefer to use force against Taiwan, these and other
deployments across from Taiwan dilute Beijing’s stated devotion to the peaceful handling of crossStrait
relations.
The U.S. Role in CrossStrait Engagement
As stated above, our "one China" policy is based on the three U.S.PRC Joint Communiqués and
the Taiwan Relations Act. We are also guided by the understanding that we will neither seek to mediate
between the PRC and Taiwan, nor will we exert pressure on Taiwan to come to the bargaining table.
While the United States is not a direct participant in the dispute between the PRC and Taiwan, we have a
strong security interest in doing all that we can to create an environment conducive to a peaceful and non
coercive resolution of issues between them.
This Administration therefore welcomes the increased stability in the Strait and the upsurge in
TaiwanPRC economic, cultural, and peopletopeople contacts. The many billions of dollars that Taiwan
18
companies have invested in the mainland have played an important role in the PRC's economic
performance over the last decade. Taiwan's trade, investment and other economic ties with the PRC are
helping the island recover from the past year's economic downturn, and a solid recovery is expected in
2010. Enhanced cultural, economic and people to people contacts help further peace, stability and
prosperity in the East Asian region.
We applaud the courage shown by President Ma in restoring U.S. trust and reversing the
deterioration in crossStrait relations that took place during the years prior to his inauguration. We
should not be alarmed by MainlandTaiwan rapprochement as somehow detrimental to U.S. interests, as
long as decisions are made free from coercion.
Future stability in the Strait will depend on open dialogue between Taiwan and the PRC, free of
force and intimidation and consistent with Taiwan's flourishing democracy. In order to engage
productively with the mainland at a pace and scope that is politically supportable by its people, Taiwan
needs to be confident in its role in the international community, its ability to defend itself and protect its
people, and its place in the global economy. The United States has a constructive role to play in each of
these three key areas.
Taiwan's role in the international community
The United States is a strong, consistent supporter of Taiwan's meaningful participation in
international organizations. We frequently make our views on this topic clear to all members of the
international community, including the PRC. Partly because of U.S. efforts, Taiwan is a member and full
participant in key bodies such as the World Trade Organization, the Asian Development Bank and APEC.
We believe that Taiwan should also be able to participate in organizations where it cannot be a member,
such as the World Health Organization, the International Civil Aviation Organization and other important
international bodies whose activities have a direct impact on the people of Taiwan. We were gratified
that after more than a decade of efforts, Taiwan was able to attend last year's World Health Assembly as
an observer. We hope Taiwan will be invited again this year and in the future.
Military to Military Engagement With Taiwan
Taiwan must be confident that it has the physical capacity to resist intimidation and coercion in
order to engage fully with the mainland. The provision by the United States of carefully selected defense
articles and services to Taiwan, consistent with the Taiwan Relations Act (TRA) and based on a prudent
assessment of Taiwan's defensive requirements, has bolstered that capacity. We will continue to stand by
our commitment to provide Taiwan with defense articles and defense services in such quantity as may be
necessary to enable Taiwan to maintain a sufficient selfdefense capability. Our decision to notify
Congress on January 29 of the approval of arms sales to Taiwan worth $6.4 billion continues a policy that
has been followed by successive Administrations for more than 30 years. This decision was a tangible
example of our commitment to meet the obligations spelled out in the TRA.
The excellent working relationships we have with Taiwan were further cemented in August 2009
when the U.S. was able to respond quickly to Taiwan's requests for assistance following Typhoon
Morakot. Through USAID, we released emergency assistance funds to the Taiwan Red Cross to help deal
with the crisis. PACOM dispatched heavy lift helicopters to Taiwan to engage in relief work and sent
several loads of needed relief materials. These actions again demonstrated our lasting friendship with the
people of Taiwan and our willingness to lend a hand when Taiwan needed our help.
While we continue to bolster Taiwan’s confidence, we also express to the PRC our strong
concern over continued lack of transparency in its military modernization and its rapid buildup across the
Strait.
Expanding U.S.Taiwan Economic Ties
Finally, closer economic relations are clearly in the interest of both the United States and Taiwan.
Taiwan President Ma has made it clear that Taiwan desires to strengthen its economic ties with the
United States and other trade partners at the same time as it pursues economic agreements with the
mainland, such as the proposed crossStrait Economic Cooperation Framework Agreement. The
Administration has the same goal. We would like to reinvigorate the U.S.Taiwan economic agenda,
reduce trade barriers and increase U.S.Taiwan trade and investment ties.
Taiwan is one of our most important trade and investment partners. The United States is the
largest foreign investor in Taiwan with cumulative direct investments of over $21 billion. Taiwan is our
19
th
10 largest trading partner, larger than Italy, India or Brazil, with trade amounting to over $46 billion last
year. We hope bilateral trade can grow substantially in 2010 as both the United States and Taiwan
recover from last year's economic downturn.
The United States and Taiwan signed a Trade and Investment Framework Agreement (TIFA) in
1994. The TIFA is our main channel for bilateral trade consultations. Through the TIFA we have been
able to resolve many difficult trade issues and deepen our economic cooperation. We have had many
successes, including our work together in the area of enforcement of intellectual property rights, where
Taiwan has made great strides.
In any robust trade relationship there will be some friction, and unfortunately, in recent months
we have faced some significant challenges over beef. But the Administration remains committed to
making progress on this and other important trade issues, revitalizing our TIFA process, and exploring
new initiatives to expand our bilateral economic relationship.
The Future
How the evolving relationship between Taiwan and the PRC develops depends on the will of the
leadership and the people on both sides of the Strait. The scope of future economic and political
interaction will be determined in conjunction with Taiwan's wellestablished, thriving democratic
processes.
As I mentioned above, both sides agreed to begin talks by addressing the easy issues first. These
tend to be in the realm of economic and cultural exchanges, although I expect that the negotiation to
conclude an ECFA will be a challenge on both sides. The two sides have yet to face the more difficult,
political and military issues. We are nevertheless encouraged by progress to date, and confident that our
longstanding approach to the Taiwan Strait will enhance the prospects for further steps to peacefully
manage this complicated relationship.
Thank you for the opportunity to testify today on this important topic. I look forward to your
questions.
HE ARI NG CO CHAI R MULLOY: T hank yo u , Mr . S hear .
Mr . S chiffer .
S TATEM ENT O F M ICH AEL S CH IFFER, DEPUTY AS S IS TANT
S ECRETARY O F DEFENS E FO R AS IAN AND PACIFIC S ECURITY,
U. S . DEPARTM ENT O F DEFENS E
W AS H ING TO N, DC
MR. S CHI FFE R: T hank yo u, Mr . Chair man, Madam Vice
Chair man, member s o f t he Co mmissio n. I 'd like t o t hank yo u also fo r
t he o p po r t unit y also t o ap pear befo r e yo u t o day.
I will fo cus my r emar k s o n t he milit ar y dimensio n o f t he cr o ss
S t r ait r elat io nship and t he imp licat io ns fo r t he Unit ed S t at es. T he
balance in t he T aiwan S t r ait is a cr it ically impo r t ant t o pic t hat has a
st r o ng bear ing o n o u r endur ing int er est s in and co mmit ment t o peace
and secu r it y in t he Asia P acific r egio n, and I co mmend t he Co mmissio n
fo r it s co nt inu ed int er est in t hese mat t er s.
T he Obama administ r at io n is fir mly co mmit t ed t o o ur o ne China
p o licy based o n t he t hr ee Jo int U. S . China Co mmuniq ués and t he T aiwan
Relat io ns Act .
T his is a po licy t hat has endu r ed acr o ss eight administ r at io ns,
t r anscend ed p o lit ical par t ies, and has ser ved as a co r ner st o ne o f o ur
20
ap pr o ach t o Asia fo r o ver t hr ee decades. P r esident Obama was ver y
clear o n t his po int d ur ing his t r ip t o China last No vember in saying t hat
we will no t chang e t his po licy and t his app r o ach.
Wit hin t he Depar t ment o f Defense, we have a special
r espo nsibilit y t o mo nit o r China's milit ar y d evelo pment s. Under t he
T aiwan Relat io ns Act , we ar e char ged wit h maint aining t he cap acit y o f
t he Unit ed S t at es t o r esist any r eso r t t o fo r ce o r o t her fo r ms o f
co er cio n t hat wo uld jeo par dize t he secur it y o r t he so cial o r eco no mic
syst em o f t he peo ple o f T aiwan.
We ar e also char g ed wit h making available t o T aiwan defense
ar t icles and ser vices in such q uant it y as may be necessar y t o enable
T aiwan t o maint ain a sufficient self defense capabilit y. We t ak e t hese
o blig at io ns ver y ser io u sly.
As I kno w member s o f t his Co mmissio n ar e awar e, t he P eo ple's
Rep u blic o f China is pu r su ing a lo ng t er m co mpr ehensive t r ansfo r mat io n
o f it s ar med fo r ces fr o m a mass ar my d esigned fo r at t r it io n war far e o n
it s o wn t er r it o r y t o o ne capable o f fight ing and winning sho r t d ur at io n,
hig h int ensit y co nflict alo ng it s per ip her y against high t ech ad ver sar ies.
T he pace and sco pe o f China's milit ar y mo d er nizat io n and
d evelo p ment has incr eased in r ecent year s. Ho wever , t he t r anspar ency
and o p enness wit h which Beijing is pur suing t his build up co nt inues t o
lag . Alt ho u g h we assess t hat China's abilit y t o sust ain milit ar y po wer at
a dist ance r emains limit ed, it s ar med fo r ces co nt inue t o d evelo p and
field ad vanced milit ar y t echno lo gies t o supp o r t ant i access and ar ea
d enial st r at eg ies, as well as t ho se fo r nuclear , space, and cyber war far e.
T hese develo p ment s ar e changing t he r egio nal balance o f po wer
and may have implicat io ns beyo nd t he Asia P acific r eg io n as well.
Regar d ing T aiwan, o ur assessment is t hat it appear s t hat Beijing's
lo ng t er m st r at egy is t o use po lit ical, diplo mat ic, eco no mic and cu lt u r al
lever s t o pu r su e unificat io n wit h T aiwan, while bu ild ing a cr edible
milit ar y t hr eat t o at t ack t he island if event s ar e mo ving in what Beijing
co nsid er s t o be t he wr o ng d ir ect io n.
Beijing app ear s pr epar ed t o defer t he use o f fo r ce fo r as lo ng as it
believes lo ng t er m u nificat io n r emains po ssible. Ho wever , it fir mly
believes t hat a cr edible t hr eat is essent ial t o maint ain co ndit io ns fo r
p o lit ical pr o gr ess, and in t his r egar d we co nt inue t o see t he milit ar y
balance as shift ing in Beijing’s favo r . .
I n t his r eg ar d, we co nt inu e t o see t he milit ar y balance acr o ss t he
S t r ait as shift ing in Beijing's favo r . T his unr elent ing milit ar y build u p
has co nt inu ed ir r espect ive o f t he r ecent r ed uct io ns in t ensio ns acr o ss
t he S t r ait due t o P r esident Ma's init iat ives.
I n assessing t he cr o ss S t r ait milit ar y balance, it 's impo r t ant t o
co nsid er bo t h Beijing's cap abilit ies t o co nduct o ffensive o per at io ns as
well as T aiwan's defensive capabilit ies.
I n t er ms o f Beijing's capacit y fo r o ffensive o per at io ns in t he
T aiwan S t r ait r eg io n, we co nt inue t o see t he majo r it y o f t he P LA's
21
ad vanced eq u ipment being deplo yed t o t he milit ar y r egio ns o pp o sit e
T aiwan. I n t his co nt ext , Beijing co nt inues t o field advanced sur face
co mbat ant s and submar ines t o incr ease it s capabilit ies fo r ant i sur face
and ant i air war far e in t he wat er s sur r o u nding T aiwan.
S imilar ly, advanced fig ht er air cr aft and int egr at ed air defense
syst ems dep lo yed t o bases and gar r iso ns in co ast al r egio ns incr ease
Beijing's abilit y t o gain air su per io r it y o ver t he T aiwan S t r ait and t o
co nd u ct o ffensive co unt er air and land at t ack missio ns ag ainst T aiwan
fo r ces and cr it ical infr ast r uct u r e.
Beijing has also deplo yed o ver 1, 000 sho r t r ange ballist ic missiles
and a gr o wing number o f lo ng r ange land at t ack cr u ise missiles t o
g ar r iso ns o pp o sit e t he island t o enable st and o ff at t acks wit h p r ecisio n
o r near pr ecisio n accur acy.
T hese capabilit ies ar e being sup plement ed by gr o wing capabilit y
fo r asymmet r ic war far e, includ ing special o per at io ns fo r ces, space and
co u nt er sp ace syst ems, and co mp ut er net wo r k o per at io ns.
I n r esp o nse t o t hese chang ing dynamics in t he T aiwan S t r ait , t he
au t ho r it ies o n T aiwan have u nd er t ak en a ser ies o f r efo r ms designed t o
imp r o ve t he island's capacit y t o d et er and defend against an at t ack by
t he mainland.
T hese includ e invest ment s t o har d en infr ast r uct ur e, build u p war
r eser ve st o cks, and imp r o ve t he ind ust r ial base, jo int o per at io n
capabilit ies, cr isis r espo nse mechanisms, and t he o fficer and no n
co mmissio ned o fficer co r ps.
T hese impr o vement s o n t he who le have r einfo r ced t he nat ur al
ad vant ages o f island d efense.
I n a sig nificant mo ve last year , T aiwan became t he fir st milit ar y
o u t sid e t he Unit ed S t at es t o publish a Quadr ennial Defense Review, o r
QDR. T aiwan's QDR, as well as T aiwan's Defense Whit e P aper , o ut line
a r o ad map o f invest ment s fo r t he fut ur e, par t icular ly in t he ar ea o f
o r g anizat io nal r efo r ms, fo r ce st r uct u r e adjust ment s, t r ansit io ning t o an
all vo lunt eer fo r ce, and ad vancing jo int o per at io ns acr o ss t he sp ect r u m
o f d efense o per at io ns.
T his appr o ach t r anscend s t r adit io nal ser vice r ivalr ies t o develo p
an int egr at ed fo r ce t hat t ak es advant age o f T aiwan's st r engt hs and uses
inno vat ive app r o aches as fo r ce mult iplier s.
T he incr easing so phist icat io n o f t he t hr eat t o T aiwan po sed by t he
fo r ces ar r ayed acr o ss it fr o m t he mainland calls fo r gr eat er at t ent io n and
co nsid er at io n o f asymmet r ic co ncept s and t echno lo gies t o maximize
T aiwan's endur ing st r engt hs and advant ages. Last ing secu r it y canno t be
achieved simply by pu r chasing advanced har d war e.
Deplo ying maneuver able weapo n syst ems, t aking fu ll ad vant age o f
T aiwan's geo gr aphical ad vant ages and mak ing u se o f camo uflage ar e
ways T aiwan can deg r ade P RC t ar get ing. Fur t her mo r e, incr eased
har d ening o f T aiwan's defense infr ast r uct ur e will make it mo r e co st ly
fo r t he P RC t o at t ack it .
22
T hese and o t her asymmet r ic ap pr o aches can ser ve t o co mplicat e
t he P RC decisio n calculus and enhance d et er r ence o f co nflict .
As S ecr et ar y Gat es has st at ed , "Amer ican engagement in Asia
r emains a t o p pr io r it y fo r us. Our alliances and par t ner ships ar e
st r o nger and o ur r elat io nships ar e always mat ur ing and evo lving t o
r eflect chang ing t imes. Far fr o m fr o zen in a Co ld War par adigm, o ur
p r esence in Asia is designed t o meet o u r mut ual challenges in t he 21 st
cent u r y. "
I n t his co nt ext , U. S . po licy wit h r esp ect t o T aiwan is a subset o f
o u r lar g er p o licy wit hin t he Asia P acific r egio n, which is r o o t ed in o ur
net wo r k o f alliances and par t ner ships co mbined wit h a fo r ce pr esence
t hat is d esigned t o enable r espo nses t o a var iet y o f co nt ing encies,
whet her t hey ar e nat ur al o r manmade.
As st at ed at t he beginning o f t his t est imo ny, t he Unit ed S t at es is
co mmit t ed t o fulfilling it s o blig at io ns und er t he T aiwan Relat io ns Act ,
and o n Januar y 29 , t he Obama ad minist r at io n anno u nced it s int ent t o
sell T aiwan $ 6. 4 billio n wo r t h o f defensive ar t icles and ser vices. T his
d ecisio n was based so lely o n o ur jud gment o f T aiwan's defensive need s.
Fo llo wing t he Mar ch 2008 elect io ns o n T aiwan, t he secur it y
sit u at io n in t he T aiwan S t r ait ent er ed a per io d o f r elaxed t ensio ns.
Bo t h Beijing and T aipei have embar k ed o n a pr o gr am o f cr o ss S t r ait
exchang es int ended t o exp and t r ade and o t her eco no mic link s as well as
p eo p le t o peo ple co nt act s. T he Unit ed S t at es welco mes t hese t r ends as
t hey co nt r ibu t e t o a gr eat er and mo r e dur able st abilit y in a r egio n t hat
has a hist o r y o f vo lat ilit y.
Desp it e t hese po sit ive develo pment s, ho wever , Beijing's sust ained
invest ment in an incr easing ly capable ar med fo r ce acr o ss fr o m T aiwan
co nt inu es t o shift t he milit ar y balance in it s favo r .
T he lo ng st anding U. S . po licy, as enshr ined in t he T aiwan
Relat io ns Act , co nt inues t o play an impo r t ant r o le in maint aining
st abilit y and det er r ence o f co nflict in t he T aiwan S t r ait by
d emo nst r at ing t o Beijing t hat it canno t achieve it s unificat io n go als by
co er cio n o r fo r ce.
We t ak e o u r r esp o nsibilit ies in t his r esp ect ser io u sly. A T aiwan
t hat is st r o ng, co nfid ent and fr ee fr o m t hr eat s o f int imidat io n, in o ur
view, is a T aiwan t hat is best p o st ur ed t o discuss and adher e t o
what ever fut ur e ar r ang ement s t he t wo sides o f t he T aiwan S t r ait may
p eaceably agr ee o n.
I n fact , t his p o licy ser ves as an impo r t ant enabler o f imp r o vement s
in t he cr o ss S t r ait r elat io nship becau se it helps t o cr eat e t he co ndit io ns
wit hin which t he t wo sides can engage in peacefu l dialo gue.
Mo r eo ver , t he pr eser vat io n o f peace and st abilit y in t he T aiwan
S t r ait is fu ndament al t o o ur lar ger int er est o f pr o mo t ing peace and
p r o sper it y in t he Asia P acific r egio n at lar g e.
I n co nt r ast , a T aiwan t hat is vulner able, iso lat ed, and under t hr eat
wo u ld no t be in a po sit io n t o r eliably d iscuss it s fu t u r e wit h t he
23
mainland and may invit e t he ver y ag gr essio n we wo uld seek t o det er ,
jeo p ar dizing o ur int er est s in r egio nal peace and pr o sp er it y.
T he Depar t ment o f Defense will co nt inue t o mo nit o r milit ar y
t r ends in t he T aiwan S t r ait and is co mmit t ed t o wo r king wit h t he
au t ho r it ies o n T aiwan as t hey pur sue d efense r efo r m and mo der nizat io n
t o impr o ve t he island's abilit y t o d efend it self against an at t ack fr o m t he
mainland.
Or g anizat io nal r efo r ms, jo int o p er at io ns, har dening and lo ng t er m
acqu isit io n management ar e all sig nificant st eps t hat will enhance
T aiwan's secur it y o ver t he lo ng t er m. As t his pr o cess mo ves fo r war d ,
t he ad minist r at io n is eq ually co mmit t ed, and co nsist ent wit h t he T aiwan
Relat io ns Act , t o co nsu lt wit h Co ng r ess appr o pr iat ely if and when we
mo ve fo r war d wit h ad dit io nal sup po r t and assist ance t o T aiwan.
Mr . Chair man, Madam Vice Chair man, member s o f t he
Co mmissio n, I wo uld like t o t hank yo u fo r t he o p po r t unit y t o ap pear
befo r e yo u t o day, and I lo o k fo r war d t o any quest io ns yo u may have.
[ T he st at ement fo llo ws: ]
Prep ared S t a t emen t o f M i ch ael S ch i ffer, Dep u t y Assi st an t S ecret a ry
o f Defen se for Asi an an d Paci fi c S ecu ri t y, U. S . Dep art men t o f
Defen se, Wash i n gt on , DC
Mr. Chairman, Madame Vice Chairman, and Members of the Commission, I would like to thank you for
the opportunity to appear before you today to offer testimony from the Administration on recent economic,
political, and military developments in the Taiwan Strait and their implications for the United States. I
will focus my remarks on the military dimensions. From our perspective at Defense, the balance in the
Taiwan Strait is a critically important topic that has a strong bearing on our enduring interests in and
commitments to peace and stability in the AsiaPacific region, and I commend the Commission’s
continued interest in these matters.
The Obama Administration is firmly committed to our OneChina policy based on the three joint U.S.
China communiqués and the Taiwan Relations Act. This is a policy that has endured across eight
Administrations, transcended political parties, and has served as a cornerstone of our approach to Asia for
over three decades. President Obama was very clear on this point during his trip to China last November
in saying that we will not change this policy and approach.
Within the Department of Defense we have a special responsibility to monitor China’s military
developments and deter conflict. And, under the Taiwan Relations Act, not only are we charged with
maintaining 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 of Taiwan, we are also
charged with working with our interagency partners to make available to Taiwan defense articles and
services in such quantity as may be necessary to enable Taiwan to maintain a sufficient selfdefense
capability.
We take this responsibility seriously. A Taiwan that is strong, confident, and free from threats or
intimidation, in our view, would be best postured to discuss and adhere to whatever future arrangements
the two sides of the Taiwan Strait may peaceably agree upon. In fact, this policy serves as an important
enabler of improvements in the crossStrait relationship because it helps to create the conditions within
which the two sides can engage in peaceful dialogue. Moreover, the preservation of peace and stability in
the Taiwan Strait is fundamental to our larger interests of promoting peace and prosperity in the Asia
24
Pacific writ large. In contrast, a Taiwan that is vulnerable, isolated, and under threat would not be in a
position to reliably discuss its future with the mainland and may invite the very aggression we would seek
to deter, jeopardizing our interests in regional peace and prosperity.
Assessing the Military Balance
The Secretary of Defense is required to report to Congress annually his assessment of military and security
developments involving the People’s Republic of China. An important part of this assessment involves our
perspectives on Beijing’s strategy toward Taiwan, the military capabilities China is deploying opposite the
island, and any challenges to Taiwan’s operational capabilities for deterrence. Although we are in the
process of finalizing and coordinating this document, the core trends with respect to the military balance
across the Strait that have persisted in recent years remain unchanged.
The People’s Republic of China is pursuing a longterm comprehensive transformation of its armed forces
from a mass army designed for attrition warfare on its own territory to one capable of fighting and
winning short duration, high intensity conflict along its periphery against high tech adversaries. The pace
and scope of China’s military developments has increased in recent years; however, the transparency and
openness with which Beijing is pursuing this buildup continues to lag. Although we assess that China’s
ability to sustain military power at a distance remains limited, its armed forces continue to develop and
field advanced military technologies to support antiaccess and area denial strategies, as well as those for
nuclear, space, and cyber warfare. These developments are changing regional military balances and have
implications beyond the AsiaPacific region.
As the People’s Liberation Army’s (PLA) modernization has progressed, the improved capabilities have
given Beijing’s military and civilian leaders increased confidence in surveying the broader strategic
landscape for applications of military force in defense of the PRC’s expanding interests. However, even as
the PLA explores new roles and mission sets that go beyond immediate territorial considerations, we
believe that the primary focus of the PLA buildup remains oriented on preparing for contingencies in the
Taiwan Strait.
It appears that Beijing’s longterm strategy is to use political, diplomatic, economic, and cultural levers to
pursue unification with Taiwan, while building a credible military threat to attack the island if events are
moving in what Beijing sees as the wrong direction. Beijing appears prepared to defer the use of force for
as long as it believes longterm unification remains possible. However, it firmly believes that a credible
threat is essential to maintain conditions for political progress, and in this regard we continue to see the
military balance as shifting in Beijing’s favor. This unrelenting military buildup continues irrespective of
the reductions in tensions due to President Ma’s crossStrait initiatives. In assessing the crossStrait
military balance, it is important to consider Beijing’s capabilities to conduct offensive operations and
Taiwan’s defensive military capability.
In terms of Beijing’s capacity for offensive operations in the Taiwan Strait region, we continue to see the
majority of the PLA’s advanced equipment being deployed to the military regions opposite Taiwan. In this
context, Beijing continues to field advanced surface combatants and submarines to increase its capabilities
for antisurface and antiair warfare in the waters surrounding Taiwan. Similarly, advanced fighter
aircraft and integrated air defense systems deployed to bases and garrisons in the coastal regions increase
Beijing’s ability to gain air superiority over the Taiwan Strait, and conduct offensive counterair and land
attack missions against Taiwan forces and critical infrastructure. Beijing has also deployed over 1,000
short range ballistic missiles and growing numbers of longrange land attack cruise missiles to garrisons
opposite the island to enable standoff attacks with precision or nearprecision accuracy. These capabilities
are being supplemented by a growing capability for asymmetric warfare, including special operations
forces, space and counterspace systems, and computer network operations.
We have limited insights into Beijing’s actual contingency planning for military operations in the Taiwan
25
Strait, but based on observed capability investments, we believe that if the mainland were to elect to use
military force against Taiwan, the PLA would be tasked to rapidly degrade Taiwan’s will to resist while
simultaneously dealing with any third party intervention on Taiwan’s behalf in a crisis. As a part of this
effort, the PLA is building the military capability to execute multiple courses of action in any future
Taiwan Strait crisis. Courses of action could include:
Quarantine or Blockade. Traditional maritime quarantine or blockade operations would have the greatest
impact on Taiwan, at least in the nearterm. However, the PLA Navy would have great difficulty imposing
and probably today could not enforce either in the face of resistance or outside intervention. In response,
the PLA has discussed in military academic literature potential lower cost alternatives such as air
blockades, missile attacks, and mining to obstruct harbors and approaches. Beijing could also attempt the
equivalent of a blockade by declaring exercise or missile closure areas in the approaches to ports, to
achieve the effect of a blockade by diverting merchant traffic. In any of these cases, however, there is risk
that Beijing would underestimate the degree to which any attempt to limit maritime traffic to and from
Taiwan would trigger countervailing international pressure and military escalation.
Limited Force or Coercive Options. Beijing may also consider a variety of disruptive, punitive, or lethal
military actions in a limited campaign against Taiwan, likely in conjunction with overt and clandestine
economic and political activities. Such a campaign could include computer network or limited kinetic
attacks, including by special operations forces, against Taiwan’s political, military, and economic
infrastructure to induce fear on Taiwan and degrade the populace’s confidence in the Taiwan leadership.
Air and Missile Campaign. Beijing may also consider limited ballistic and cruise missile attacks against
air defense systems, including air bases, radar sites, missiles, space assets, and communications facilities.
These attacks could support a campaign to degrade Taiwan’s defenses, neutralize Taiwan’s military and
political leadership, and possibly break the Taiwan people’s will to fight.
Amphibious Invasion. The PLA today is capable of accomplishing various amphibious operations short of
a fullscale invasion of Taiwan. With few overt military preparations beyond routine training, the PLA
could launch an invasion of small Taiwanheld islands such as the Pratas, or Itu Aba. An invasion of a
mediumsized, defended offshore island, such as Mazu or Jinmen is also within the PLA’s capabilities.
Such an invasion would demonstrate military capability and political resolve, and achieve tangible
territorial gain while showing some measure of restraint. However, this kind of operation includes
significant, if not prohibitive, political risk because it could galvanize the Taiwan populace and generate
international opposition.
In terms of a larger scale amphibious operation, the most prominent among the PLA’s options is a Joint
Island Landing Campaign, which envisions coordinated, interlocking campaigns for logistics, air and
naval support, and electronic warfare. The objective would be to break through or circumvent shore
defenses, establish or build a beachhead, transport personnel and materiel to designated landing sites in
the north or south of Taiwan’s western coastline, and launch attacks to split, seize, and occupy key targets
and/or the entire island. Success would depend upon air and sea supremacy, rapid buildup and
sustainment of supplies on shore, and uninterrupted support. An invasion of Taiwan would strain the
untested PLA and almost certainly invite international intervention. These stresses, combined with
attrition and the complexity of urban warfare and counterinsurgency (assuming a successful landing and
breakout), make amphibious invasion of Taiwan a significant political and military risk for China.
Taiwan’s Defense Priorities
In response to these changing dynamics in the Taiwan Strait, the authorities on Taiwan have undertaken a
series of reforms designed to improve the island’s capacity to deter and defend against an attack by the
mainland. These include investments to harden infrastructure, build up war reserve stocks, and improve
the industrial base, joint operations capabilities, crisis response mechanisms, and the officer and non
26
commissioned officer corps. These improvements, on the whole, have reinforced the natural advantages of
island defense.
In a significant move last year, Taiwan became the first military outside of the United States to publish a
Quadrennial Defense Review (QDR). Taiwan’s QDR, as well as Taiwan’s Defense White Paper, outlines a
road map of investments for the future, particularly in the areas of: organizational reforms, force structure
adjustments, transitioning to an all volunteer force, and advancing joint operations across the spectrum of
defensive operations. This approach transcends traditional service rivalries to develop an integrated force
that takes advantage of Taiwan’s strengths and uses innovative approaches as force multipliers.
With respect to the personnel reforms, President Ma’s commitment to transition to an all volunteer force
is a monumental undertaking, involving organizational adjustments in personnel recruitment, troop
training, logistics preparations, benefits and rights, mobilization mechanisms and retirement plans. At the
conclusion of this process by 2014, Taiwan envisions an elite, professional force capable of undertaking
major readiness and combat missions.
Taiwan also has begun to implement a long range acquisition planning and management process designed
to ensure an efficient procurement process that delivers real joint military capability. By developing this
approach, Taiwan will be able to prioritize investments in its domestic defense industries and forecast a
better plan for future acquisitions from external sources – which is particularly challenging for Taiwan
given that its unique political status yields few options for foreign sources of defense technologies and
weapons systems.
In addition to organizational and process reforms to optimize Taiwan’s acquisition process, the increasing
sophistication of the threat to Taiwan posed by the forces arrayed across from it on the mainland calls for
greater attention and consideration of asymmetric concepts and technologies to maximize Taiwan’s
enduring strengths and advantages. Lasting security cannot be achieved simply by purchasing advanced
hardware. Deploying maneuverable weapons systems, taking full advantage of Taiwan’s geographical
advantages, and making use of camouflage are ways Taiwan can degrade PRC targeting. Furthermore,
increased hardening of Taiwan’s defense infrastructure will make it more costly for the PRC to attack it.
These and other asymmetric approaches can serve to complicate the PRC decisioncalculus and enhance
deterrence of conflict.
The Role of U.S. Policy
As Secretary Gates has stated, “American engagement in Asia remains a top priority for us. Our alliances
and partnerships are stronger, and our relationships are always maturing and evolving to reflect changing
times. Far from frozen in a Cold War paradigm, our presence in Asia is designed to meet our mutual
challenges in the 21st century.” In this context, U.S. policy with respect to Taiwan is a subset of our larger
policy within the AsiaPacific region, which is rooted in our network of alliances and partnerships
combined with a force presence that is designed to enable responses to a variety of contingencies, whether
they are natural or manmade.
As stated at the beginning of this testimony, the United States is committed to fulfilling its obligations
under the Taiwan Relations Act, and on January 29, the Obama Administration announced its intent to
sell Taiwan $6.4B worth of defense article and services. This decision was based solely on our judgment
of Taiwan’s defense needs:
· 60 UH60 Blackhawk Utility Helicopters. Utility helicopters fill an immediate need for Taiwan’s
military to respond to humanitarian assistance and disaster relief operations. In wartime, the UH
60 would provide essential mobility capabilities to move troops and equipment around the island.
27
· 2 PAC3 firing units, one training unit, and 114 missiles. Delivering this system completes
Taiwan’s request for upgraded PAC3 missile defense systems. These systems will be integrated
into Taiwan’s missile defense grid.
· Technical support for Taiwan’s C4ISR system. This support will help Taiwan develop improved
battlefield awareness through an integrated air, sea, and ground defense picture.
· 2 OSPREYclass minehunters. Minehunting vessels will enable Taiwan to keep key ports and
shipping lanes open in the event of blockade by mining.
· 12 Harpoon telemetry missiles. These training missiles will improve Taiwan’s ability to meet
current and future threats of hostile surface ship operations.
However, the extent of our obligation does not end with arms sales. As part of our defense and security
assistance to Taiwan, we are constantly engaged is evaluating, assessing and reviewing Taiwan’s defense
needs, and in this regard, we continue to work with our partners on Taiwan to advise and assist their
modernization efforts. The Department of Defense leads strategic level discussions with the Taiwan
Ministry of National Defense on defense modernization, PACOM leads operational and strategic level
discussions with the Taiwan Ministry of National Defense, and PACOM’s component commands lead
tactical level discussions with their counterpart services to improve Taiwan’s defensive capability.
Conclusion
Following the March 2008 elections on Taiwan, the security situation in the Taiwan Strait entered a
period of relaxing tensions. Both Beijing and Taipei have embarked on a program of crossStrait
exchanges intended to expand trade and other economic links, as well as peopletopeople contacts. The
United States welcomes these trends as they contribute to a greater and more durable stability in a region
that has a history of volatility. Despite these positive developments, however, Beijing’s sustained
investment in an increasingly capable armed force across from Taiwan continues to shift the military
balance in its favor.
In light of these dynamics, longstanding U.S. policy, as enshrined in the Taiwan Relations Act, continues
to play an important role in maintaining stability and deterrence of conflict in the Taiwan Strait by
demonstrating to Beijing that it cannot achieve its unification goals by coercion and force.
The Department of Defense will continue to monitor military trends in the Taiwan Strait and is committed
to working with the authorities on Taiwan as they pursue defense reform and modernization to improve
the island’s ability to defend against an attack from the mainland. Organizational reforms, joint
operations, hardening, and long term acquisition management are all significant steps that will enhance
Taiwan’s security over the longterm. As this process moves forward, this Administration is equally
committed, and consistent with the Taiwan Relations Act, to consult with Congress appropriately if and
when we move forward with additional support and assistance to Taiwan.
Mr. Chairman, Madame Vice Chairman, and Members of the Commission, I would like to thank you for
opportunity to appear before you today.
PANEL II: Di scu ssi on , Q u est i on s an d An swers
HE ARI NG CO CHAI R MULLOY: T hank yo u , Mr . S chiffer .
We'r e go ing t o have five minut e qu est io n per io ds, and since we
have a lo t o f Co mmissio ner s wit h quest io ns, we'll t o t r y and st ick wit h
28
t his t ime fr ame. S o , fir st , Co mmissio ner Blu ment hal.
COMMI S S I ONE R BLUME NT HAL: T hank yo u bo t h fo r yo ur
ser vice.
I k no w yo ur d ep ar t ment s ar e do ing gr eat t hings o n t his issue. I t 's
mu ch easier t o be in my po sit io n and lo b har d q uest io ns t han it is t o be
in yo u r po sit io n and mak e po licy, but no net heless I will t ake my
p o sit io n and lo b har d q uest io ns. I ho pe t hey'r e no t t o o har d .
I have t wo fo r Mr . S hear and o ne fo r Mr . S chiffer . T he fir st is, I
t hink it makes a lo t o f sense t hat we'r e fo r basically a p o licy o f p eacefu l
r eso lu t io n wit ho ut , well, fr ee fr o m co er cio n. But t her e seems t o be an
inco nsist ency in yo ur t est imo ny because yo u said we'r e no t fo r
ind ep endence but we'r e fo r peaceful r eso lut io n t hat t he t wo sides decide
u p o n.
S o wo u ld we be fo r a peaceful nego t iat ed independence?
MR. S HE AR: We do no t su ppo r t T aiwan ind ep end ence. Our o ne
China p o licy is based o n t he t hr ee Co mmuniq ués and t he T aiwan
Relat io ns Act .
COMMI S S I ONE R BLUME NT HAL: But even if t hey nego t iat ed
p eacefully? Becau se t hat 's inco nsist ent wit h a peacefu l r eso lut io n t hat
t he t wo sides co me t o .
MR. S HE AR: Well, t he ult imat e r eso lut io n o f issu es acr o ss t he
T aiwan S t r ait will be bet ween t he T aiwan peo ple and t he peo ple o n t he
mainland.
COMMI S S I ONE R BLUME NT HAL: S o ho w can we r emo ve
MR. S HE AR: We'll leave it t o t hem.
COMMI S S I ONE R BLUME NT HAL: When yo u say we'r e no t fo r
ind ep endence t o beg in wit h, ho w can yo u t hen say t hat we'r e fo r
p eaceful r eso lu t io n and what t he t wo d ecid e o n because t hen we'r e
r emo ving an o p t io n? I f t he t wo sides decide, lik e so many o t her s who
have had t er r it o r ial dispu t es, t o a peacefully nego t iat ed ind ependence,
co mmo nwealt h, o r so met hing like t hat , we'd be against t hat ?
MR. S HE AR: I und er st and t he lo gic o f yo ur po sit io n, bu t t he fact
is t hat t he po licy, as I have st at ed it , has wo r ked fo r 30 year s. I t has
maint ained peace and st abilit y. I t 's helped maint ain peace and st abilit y
acr o ss t he T aiwan S t r ait , and I t hink it will co nt inue t o do so in t he
fu t u r e. Ho w t he issues acr o ss t he T aiwan S t r ait ar e r eso lved ar e
u lt imat ely up t o t he peo ple o n bo t h sides o f t he S t r ait .
COMMI S S I ONE R BLUME NT HAL: S o we can sur mise t hat
what ever t hey co me u p wit h, we'll su ppo r t it if it 's peacefu l.
T he o t her q u est io n I had is fo r bo t h o f yo u, and t hen a quest io n
fo r Mr . S chiffer . One is can we r eally say t hat t hey'r e nego t iat ing even
no w fr ee fr o m co er cio n when yo u bo t h t est ified abo ut t he co nt inued
u nabat ed milit ar y bu ild up acr o ss t he S t r ait ? Ar en't t hey st ill, even
t o d ay, neg o t iat ing wit h a gun p o int ed against t heir head in t he case o f
T aiwan?
MR. S HE AR: I f I may, I t hink it 's a mat t er o f co nfidence, and
29
lead er s o n T aiwan t ell u s it 's a mat t er o f co nfidence, and t hat co nt inu ed
U. S . sup p o r t fo r T aiwan as well as co nt inued U. S . ar ms sales help give
t hem t he co nfid ence t o eng ag e wit h t he mainland, and I t hink t hat 's t he
fu ndament al issu e her e, co nfidence.
COMMI S S I ONE R BLUME NT HAL: Do we ever pr ess t he
mainland t o it 's har d t o nego t iat e in co nfidence, ju st as a gener al
mat t er , I t hink, if t he o t her sid e has no t r eno unced t he use o f fo r ce
ag ainst yo u . Do we ever push t he Chinese t o r eno unce t he u se o f fo r ce
and nego t iat e in co nfidence and t ake d o wn it s milit ar y fo r ces so t hey
co u ld act ually nego t iat e fr ee o f co er cio n?
MR. S HE AR: We have expr essed o ur co ncer n wit h r egar d t o t he
Chinese milit ar y t he P RC milit ar y bu ild up o n t heir side o f t he S t r ait
r ep eat ed ly, and o ur ap pr o ach t o issu es o n t he T aiwan S t r ait fo r o ver 30
year s no w has been o n t he basis o f p eaceful r eso lut io n.
COMMI S S I ONE R BLUME NT HAL: But is it bo t h o f yo ur
assessment s t hat t hey ar e no w nego t iat ing fr ee o f co er cio n?
MR. S CHI FFE R: I guess I wo uld go o ff t he st at ement t hat
P r esident Ma mad e aft er t he anno uncement o f o ur ar ms sale packag e o n
Janu ar y 29 , wher e he st at ed t hat he was t hankful fo r t he packag e and
t hat it did pr o vid e him wit h t he co nfidence t hat he feels t hat he need ed
t o be able t o eng ag e in d iscussio ns acr o ss t he S t r ait .
T his is o bvio u sly an issu e t hat we have t o pay clo se and
co nt inu ing at t ent io n t o , and as t he milit ar y balance acr o ss t he S t r ait
chang es it 's, as yo u k no w, a ver y d ynamic balance we have t o make
su r e t hat we ar e do ing o u r ut mo st t o assur e t hat T aiwan can co nt inu e t o
have t he co nfidence t hat it need s t o be able t o eng age wit h t he
mainland.
COMMI S S I ONE R BLUME NT HAL: Ho w mu ch t ime do I have
left ?
HE ARI NG CO CHAI R MULLOY: 20 seco nd s.
COMMI S S I ONE R BLUME NT HAL: 2 0 seco nds. Okay. I wo uld
ju st ask in my last 2 0 seco nd s if t her e's any way we can get so me kind
o f u nclassified, o r classified, I suppo se, r isk assessment t o U. S . fo r ces
if T aiwan d o es no t have t he adequ at e air capabilit y t o d efend it s o wn
air sp ace?
T hank yo u ver y much fo r yo ur answer s.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
Co mmissio ner S hea.
COMMI S S I ONE R S HE A: My qu est io n wo n't be as t o u gh as
Dan's, bu t I 'll ask it . Lat er t o d ay, we'r e go ing t o hear fr o m P r o fesso r
S helley Rigger fr o m David so n Co lleg e, and she wr it es t he fo llo wing :
"T he Unit ed S t at es and T aiwan have lo ng shar ed t he po sit io n t hat
wit ho ut r o bu st milit ar y defenses, T aip ei will lack t he co nfid ence t o
neg o t iat e wit h Beijing. Fo r t hat r easo n, imp r o ving eco no mic and
p o lit ical r elat io ns acr o ss t he S t r ait no t o nly is co nsist ent wit h co nt inu ed
ar ms sales bu t d ep ends o n" depends o n "co nt inued ar ms sales. I n
30
ad dit io n, a shar p change in t he milit ar y balance in t he S t r ait wo uld
d est abilize t he r eg io n. I nst abilit y is no t co nducive t o bet t er r elat io ns. "
Do yo u ag r ee wit h t hat st at ement ?
MR. S CHI FFE R: I believe, as I put it in my st at ement , we view
t he ar ms sales as a necessar y enabler t hat allo ws fo r t hese po sit ive
d evelo p ment s t o go fo r war d . S o br o ad ly speak ing, yes.
MR. S HE AR: Yes.
COMMI S S I ONE R S HE A: Okay. S o yo u feel t hat in o r der fo r
T aiwan t o engag e wit h t he P RC o n eco no mic, cu lt ur al, even po lit ical
mat t er s, t hey need t o have t he secur it y t hat gr o ws o ut o f a st r o ng
milit ar y defense p o st ur e vis à vis t he P RC? I s t hat co r r ect ?
MR. S HE AR: T hat is co r r ect .
COMMI S S I ONE R S HE A: I n o ur r ep o r t last year , we had a
sect io n o ut lining t he var io u s fo r ces o f T aiwan ver sus t he var io us fo r ces
o f t he P RC, and it d o esn't lo o k like a ver y fair balance. Do yo u t hink
we'r e at t he po int wher e t he balance is so shift ing t o war ds t he P RC t hat
we'r e r isk ing having inst abilit y in t he r egio n?
MR. S CHI FFE R: T his is a qu est io n t hat , as yo u kno w, we ar e
co nst ant ly g r appling wit h at t he Depar t ment o f Defense. And we ar e
co nst ant ly assessing and r eassessing acr o ss ever y single p o ssible
d imensio n t he nat ur e o f t he shift ing balance o f fo r ces and what 's
necessar y t o assur e t hat T aiwan has t he go o d s, t he ser vices, and t he
capabilit ies t hat it needs t o be able t o d efend it self and t o d et er at t ack
by China.
I t 's no t , as yo u kno w, a simple q uest io n t o answer because t her e
ar e cir cu mst ances in which asymmet r ic T aiwan cap abilit ies pr o vide it
t he abilit y t o effect ively det er and d efend. Given t he nat ur e o f t he
Chinese milit ar y build up , given t he nat ur e o f t he island o f T aiwan, it s
d emo g r ap hic co nst r aint s, t he p hysical co nst r aint s t hat it 's under , we'r e
never go ing t o have a symmet r ic balance
COMMI S S I ONE R S HE A: Right .
MR. S CHI FFE R: acr o ss t he S t r ait . S o t he quest io n is making
su r e t hat T aiwan has a sufficient capabilit y t o be able t o det er and
d efend , and t hat 's what we seek t o do .
COMMI S S I ONE R S HE A: Well, help me under st and ho w yo u
g r app le wit h t his issue? I 've never wo r ked at t he Defense Dep ar t ment ,
but I imagine if I wer e wo r king at t he Defense Depar t ment , I wo uld say
T aiwan need s mo r e, mo r e milit ar y, mo r e secur it y, but what o t her fact o r s
g o int o a decisio n whet her t o accep t , fo r example, t he let t er o f r equest
o n t he F 16 s?
What ar e t he o t her t hings t hat yo u co nsider when making t ho se
t yp es o f decisio ns?
MR. S CHI FFE R: Well, I will answer t hat in t he F 16 so r t o f
co nt ext a lit t le bit mo r e, mo r e sp ecifically, because I t hink it 's a go o d
case st u dy. I d o n't t hink t her e is any quest io n t hat T aiwan faces a
challenge t o it s d o minance o f it s air sp ace. I t hink t hat 's no t news.
31
T hat 's been a sit u at io n t hat 's exist ed fo r quit e awhile and which we've
been co ncer ned wit h fo r q uit e awhile.
Bu t t he q uest io n t hen beco mes what 's t he r ight answer t o t hat , t o
t hat qu est io n? What 's t he r ight answer t o t hat challenge? And
answer ing t hat q u est io n and wish it wer e simple r equ ir es lo o king at a
who le r ang e o f capabilit ies. I t 's no t just what plat fo r m t hey have; it 's
also a qu est io n o f do t hey have r u nway r epair kit s; do t hey have
har d ened hang ar s?
I f we'r e g o ing t o ship a bunch o f planes o ver t o T aiwan t hat t hey
can't act ually ever use in co mbat because t his is a "but fo r t he nail t he
ho r sesho e was lo st , " "bu t fo r t he ho r sesho e, t he k ingd o m was lo st " so r t
o f sit u at io n t hat d o esn't necessar ily mak e sense.
I f t her e ar e o t her pr io r it ies t hat T aiwan also has t o pay at t ent io n
t o t hat wo u ld beco me u nbalanced by co ncent r at ing t o o much in o ne ar ea
t hat wo uld cr eat e o t her vulner abilit ies, eit her equ al o r gr eat er , t hat
T aiwan wo uld have t o face, and t hat we wo uld have t o co mpensat e fo r ,
we need t o figu r e o u t ho w t o best p r io r it ize all o f t hese challeng es, and
so o n and so fo r t h.
I t 's ver y, ver y co mplicat ed set o f quest io ns, as I said, t hat cut
acr o ss a number o f d iffer ent d imensio ns as we assess t he t hr eat and
challenges t hat T aiwan faces, t he needs t hat t hey have, t o be able t o
co u nt er t ho se challeng es and t o be able t o have co nfidence in t heir
abilit y t o do so , and t ho se ar e t he so r t s o f qu est io ns t hat we ar e
co nst ant ly cycling t hr o ug h int er nally, discussing wit h t he aut ho r it ies o n
T aiwan, so t hat we can get a bet t er sense o f t heir view o f t he issues and
wo r k ing t o t r y t o co me up wit h t he r ig ht set o f answer s.
HE ARI NG CO CHAI R MULLOY: T hank yo u , Mr . S chiffer .
Co mmissio ner Fied ler .
COMMI S S I ONE R FI E DLE R: T hank yo u.
Act ually I t ho u ght t hat bo t h yo ur t est imo nies wer e a ver y clear
st at ement o f U. S . int er est s, and in t he case o f Mr . S chiffer o n t he
d efense sid e, p er haps t he clear est t hat I 've hear d.
And I no t e o ne new t hing, and t hat is yo ur explicit discussio n o f
asymmet r ic co u nt er t o China, in a d efense sense, which has no t been
p ar t o f t he discu ssio n excep t fo r t he asymmet r ic st r at egy China emplo ys,
access denial, in t he p ast , and I t hink I agr ee wit h yo u mo r e t han a lit t le
t hat it 's no t simply a quest io n o f F 16s; it 's a q uest io n o f maybe ho w
many, fo r what pu r po se, and in co mbinat io n wit h what else?
S o I 'm mo r e enco ur aged by t he asymmet r ic discussio n and less
d isco ur aged by t he fact t hat we haven't been selling t hem t he F 16s.
T hat 's ju st a per so nal so r t o f o p inio n.
On t he co er cio n side, I was a lit t le mo r e disappo int ed I was
hap p y aft er yo u r t est imo ny, and t hen a lit t le mo r e d isappo int ed in
r espo nse t o Dan's qu est io n o n t he co er cive at mo spher e, but I d o
u nd er st and t hat yo u all have dip lo mat ic r o les. But I t hink we sho uld be
clear t hat , and I t hink o ne o f yo u st at ed o r bo t h o f yo u, t hat t he Chinese
32
believe t hat t hey need t he milit ar y cap abilit y t o co nt inue nego t iat io ns.
Do yo u believe t hat 's because t hey fear t hat t he DP P co uld win
ag ain so o n and t her efo r e sq uand er away what t hey believe is t heir
ad vant age in nego t iat ing wit h t he Ma ad minist r at io n?
MR. S HE AR: As I said in my st at ement , I t hink so me peo p le o n
t he P RC sid e d o fear t hat t he cu r r ent administ r at io n o n T aiwan may
p o ck et so me co ncessio ns made by t he P RC, and t hen T aiwan wo uld elect
less flexible leader s in t he fut u r e. I t hink t he Chinese, t her e ar e Chinese
who ar e ver y co ncer ned abo ut t hat . I t hink o ne r easo n fo r t he
d eplo yment s o n t he P RC sid e is t hat t hey wish t o det er a declar at io n o f
T aiwan ind ependence.
COMMI S S I ONE R FI E DLE R: I 'm go ing t o igno r e t he seco nd
p o int , t he declar at io n o f independence, because t hat may be t he r ed flag
in fr o nt o f t he bu ll, but it 's much mo r e gener ically pr o blemat ic, i. e. , t he
Chinese ar e afr aid o f demo cr acy in T aiwan.
I t 's no t ju st a co nt r ast necessar ily bet ween t he DP P and t he KMT .
I t 's also a co ncer n t hat ano t her KMT leader wo uldn't be as willing t o
neg o t iat e as P r esident Ma has been.
T hat seems t o be lik e an endless pr o blem. T he Chinese ar e never
g o ing t o be co mp let ely o r even p ar t ially co mfo r t able wit h demo cr acy.
T hat 's mo st cer t ainly t he case o n t he mainland. S o I do n't see an end t o
t hat p r o blem, and t her efo r e t he defensive issu es co me t o fo r e vis à vis
t he Unit ed S t at es and o ur p o licy.
Just t o p ut t he co er cive at mo sp her ics int o human co nt ext , and I
u nd er st and why yo u mig ht no t be able t o t alk number s because o f
classificat io ns, but China unleashing a co mbinat io n missile ar t iller y
bar r ag e o n t he small island o f T aiwan wit h a co ncent r at ed p o pulat io n,
d esp it e yo u r co mment abo ut pr ecisio n weapo nr y, has t o invo lve t he lo ss
o f inno cent life.
Have we ever d o ne any est imat es whet her t hat is minimal,
su bst ant ial, if yo u d o n't want t o use nu mber s?
MR. S CHI FFE R: We have lo o ked at a number o f scenar io s, and
wit ho ut being able t o g o int o any d et ails her e as I 'm sur e yo u can
imag ine, d ep ending u po n t he nat u r e o f t he so r t o f Chinese st r ike t hat
o ne wo uld imag ine and what weapo ns ar e used, ho w many, when, and
wher e, yo u have, t her e's a wid e var iet y o f p o ssible o ut co mes in t er ms o f
t he d amage assessment .
COMMI S S I ONE R FI E DLE R: Wid e and invo lving significant lo ss
o f life?
MR. S CHI FFE R: Again, dep ending upo n exact ly what t he
scenar io is t hat yo u 'r e lo o king at , t her e's a wide var iet y o f o ut co mes.
COMMI S S I ONE R FI E DLE R: Ho w mu ch t ime do I have?
HE ARI NG CO CHAI R MULLOY: T en seco nds.
COMMI S S I ONE R FI E DLE R: Okay. I yield back t o Mr . Mu llo y.
HE ARI NG CO CHAI R MULLOY: T hank yo u, Co mmissio ner
Fiedler .
33
Co mmissio ner Wo r t zel.
HE ARI NG CO CHAI R WORT ZE L: Well, t hank yo u bo t h fo r
ap pear ing and fo r t he clear explanat io ns o f U. S . po licy and o bligat io ns
u nd er t he T aiwan Relat io ns Act in yo ur st at ement s. T hat 's ver y helpful.
Mr . S chiffer , o n p ag e t hr ee o f yo ur wr it t en t est imo ny, yo u ar g u e
t hat t r adit io nal mar it ime quar ant ine o r blo ckade o per at io ns wo u ld have
t he g r eat est imp act o n T aiwan in t he near t er m.
I n t he p ast , t he Republic o f China has so ught t o acquir e
su bmar ines t o meet t hat t hr eat . U. S . ar ms sales have significant ly
st r eng t hened T aiwan's ant i submar ine war far e capabilit ies.
Wher e do we st and t o d ay o n T aiwan's st at ed need fo r su bmar ines?
MR. S CHI FFE R: T hat 's a mat t er t hat we'r e co nt inuing t o assess
and lo o k at .
HE ARI NG CO CHAI R WORT ZE L: I yield my t ime.
HE ARI NG CO CHAI R MULLOY: T hank yo u, Co mmissio ner
Wo r t zel.
Co mmissio ner Videniek s.
COMMI S S I ONE R VI DE NI E KS : Go o d mo r ning, gent lemen. I 've
hear d t he sales pack age ment io ned , $6 . 4 billio n. T he defense bu dget is
$ 9 . 3 billio n. Ho w ar e t hey go ing t o pay fo r it ? Ho w was t he number
d evelo p ed ? I n t hat $6. 4 billio n, ar e t he t hr ee P at r io t missiles at almo st
a billio n bu ck s apiece— includ ed? Who develo ped t his packag e and ho w
r ealist ic is it ?
MR. S CHI FFE R: Well, as yo u k no w, t his was an ar ms sales
p ack ag e t hat was develo p ed based up o n t he r equest t hat T aiwan had p ut
befo r e us and o u r assessment o f t heir d efense need s.
COMMI S S I ONE R VI DE NI E KS : Ho w much o f it is har dwar e and
ho w mu ch is su ppo r t ?
MR. S CHI FFE R: I can g et yo u t he exact br eakdo wn because in
so me o f t he cat ego r ies, t her e is har dwar e and su ppo r t ar e wr app ed
t o g et her , bu t cer t ainly when it co mes t o t hings like t he Blackhawk
helico pt er s, t he P AC 3 fir ing unit s, t he OS P RE Y class mine hunt er s and
t he Har p o o n t elemet r y missiles, I mean t hat 's har d war e, but t her e is
su pp o r t t hat 's asso ciat ed wit h
COMMI S S I ONE R VI DE NI E KS : Who is g o ing t o pr o vide t r aining
and wher e?
MR. S CHI FFE R: We have, as yo u kno w, a r at her r o bu st
r elat io nship wit h T aiwan t o pr o vide t hem wit h appr o pr iat e t r aining and
su pp o r t .
COMMI S S I ONE R VI DE NI E KS : Ar e t hese peo ple, if t hey'r e
Amer icans, ar e t hey in har m's way?
MR. S CHI FFE R: We cer t ainly do n't t hink so . I sup po se t hat all
d epend s o n ho w yo u co nsider "in har m's way, " but we cer t ainly do n't
t hink so .
COMMI S S I ONE R VI DE NI E KS : Ar e yo u fr ee t o say
ap pr o ximat ely ho w many unifo r med o r o t her peo ple t her e ar e o n t he
34
island no w per fo r ming t r aining and o t her suppo r t ser vices?
MR. S CHI FFE R: No t in t his set t ing .
COMMI S S I ONE R VI DE NI E KS : One mo r e quest io n, sir . Yo u
q u o t ed o r at least r efer r ed t o t he T aiwan Relat io ns Act and said t hat
p ar t o f it is a vit al int er est t o t he U. S . My u nder st and ing is t hat "vit al"
means t hat we may go t o war if a vit al ar ea wer e t hr eat ened.
Co u ld maybe bo t h o f yo u co mment o n which par t o f t he T aiwan
Relat io ns Act po ses a vit al co nsider at io n t o t he Unit ed S t at es?
MR. S HE AR: I f I r ecall co r r ect ly, t he T aiwan Relat io ns Act
st at es t hat secur it y and st abilit y in t he West er n P acific is o f gr eat
imp o r t ance t o t he U. S . I do n't r emember t he exact wo r ds, whet her it
says "vit al" impo r t ance o r no t .
COMMI S S I ONE R VI DE NI E KS : I t hink t his mo r ning yo u used t he
wo r d "vit al. "
MR. S HE AR: T he T aiwan Relat io ns Act r eco g nizes t he
imp o r t ance o f secu r it y and st abilit y in t he West er n P acific, and it st at es
t hat t he U. S . go ver nment wo uld view wit h gr ave co ncer n t he incidence
o f vio lence in t he S t r ait .
COMMI S S I ONE R VI DE NI E KS : Under st o o d. But as far as t he
amo u nt s invo lved, t he $6. 4 billio n and t he, t o me what appear s t o be
r at her few, t hr ee missiles at almo st $ 900 millio n ap iece, helico pt er s at
$ 5 0 millio n ap iece, is t his an equ ipment co st o r is it a co mbined co st o f
eq uipment p lus supp o r t ? And ho w lo ng a per io d o f t ime will t his
p ack ag e, t his pr o gr am, sp an, and ho w ar e t hey go ing t o pay fo r it ?
MR. S CHI FFE R: As I said, I will be able t o pr o vide yo u t he
br eak do wns, if yo u wish, fo r each element o f t he har d war e package and
t hen t he su ppo r t element and br eak t hat d o wn fo r yo u.
COMMI S S I ONE R VI DE NI E KS : We wo uld ap pr eciat e t hat .
MR. S CHI FFE R: As yo u kno w, wit h many o f t hese syst ems t hat
we p r o vide t o T aiwan, t hese can be mult i year packages, and we ar e
r ig ht no w at t he ear ly st ages, having no t ified Co ngr ess o f o ur int ent io ns
t o o ffer t hese syst ems t o T aiwan, o f no w ent er ing int o t he pr o cess o f
d iscussing wit h T aiwan t he co nt r act s and t he pr o cess by which t hey will
t hen be p ur chasing t ho se
COMMI S S I ONE R VI DE NI E KS : T hank yo u. I f yo u co u ld pr o vid e
t hat t o t he lead er ship, we'd app r eciat e it ver y much. T hank yo u.
MR. S CHI FFE R: Happy t o do so .
HE ARI NG CO CHAI R MULLOY: T hank yo u .
Lar r y, yo u had so met hing yo u want ed t o get int o t he r eco r d.
HE ARI NG CO CHAI R WORT ZE L: I 'm go ing t o help yo u o u t ,
Dave. I 'm go ing t o quo t e fr o m t hat par agr ap h o f t he T aiwan Relat io ns
Act , and t hen I 'll g et o u t o f t he way:
"I t is t he po licy o f t he Unit ed S t at es t o co nsid er any effo r t t o
d et er mine t he fu t u r e o f T aiwan by o t her t han peaceful means, inclu ding
by bo yco t t s o r embar g o es, a t hr eat t o t he peace and secur it y o f t he
West er n P acific and o f gr ave co ncer n t o t he Unit ed S t at es. "
35
HE ARI NG CO CHAI R MULLOY: T hank yo u fo r t hat
clar ificat io n. T hat 's in t he r eco r d .
No w, Chair man S lane.
CHAI RMAN S LANE : T hanks t o bo t h o f yo u fo r t aking t he t ime
t o ap pear befo r e u s t o d ay.
I have a q uest io n fo r Mr . S hear . Can yo u give u s an up dat e o n
t he ext r adit io n t r eat y?
MR. S HE AR: We'r e lo o king at t he po ssibilit y o f an ext r adit io n
ag r eement wit h T aiwan. We have no t yet finished t ho se deliber at io ns,
and when we do , we will get back t o T aiwan wit h a r espo nse.
Bu t cer t ainly enhanced legal co o per at io n bet ween T aiwan and t he
Unit ed S t at es is ver y impo r t ant , and we believe t hat t his issue is a g o o d
ind icat io n o f t he impo r t ance we place o n co o per at io n as a who le wit h
T aiwan.
CHAI RMAN S LANE : One o f o ur r espo nsibilit ies is t o mak e
r eco mmend at io ns t o Co ng r ess. I s t her e anyt hing t hat Co ngr ess can d o
t o help yo u mo ve t his fo r war d?
MR. S HE AR: We'll have t o g et back t o t he Co mmissio n o n t hat
as o u r lo o k at t his po ssibilit y pr o g r esses.
CHAI RMAN S LANE : T hank yo u .
HE ARI NG CO CHAI R MULLOY: I s t hat it ?
CHAI RMAN S LANE : Yes.
HE ARI NG CO CHAI R MULLOY: Co mmissio ner Wessel.
COMMI S S I ONE R WE S S E L: T hank yo u bo t h fo r being her e. I 'm
su r e yo u have many d emands o n yo u r t ime so ap pr eciat e all o f yo ur
t ime.
Let me ask a quest io n r elat ed t o t he co mmit ment s and t he
langu age t hat Co mmissio ner Wo r t zel r ead just a mo ment ago r eg ar ding
t he act ivit ies t he U. S . might engage in.
China has enhanced it s capabilit ies o f d enial and det er r ence, and
clear ly bo t h in a har dwar e sense, as well as we've seen wit h cyber
incur sio ns o ver t he last sever al year s, pr esumably t ar get ing lo gist ical
su pp o r t o r ho w t hey mig ht at t ack lo gist ical su ppo r t , et cet er a, in t he
event ualit y t hat t her e mig ht be so me co nflict o r desir e o f t he U. S . t o
have fo r ce pr o ject io n t o sho w it s int er est in t he ar ea.
Can yo u co mment o n incr easing Chinese capabilit ies in t er ms o f
t ar g et ing, denial, d et er r ence, and ho w t he U. S . is r esp o nd ing ,
r eco gnizing t her e has been so me minimizat io n o f mil t o mil co nt act s,
but what ar e we d o ing abo ut t heir enhanced capabilit ies and ho w d o we
r espo nd t o t hem? E it her wit ness, but Mr . S chiffer , t his is pr o bably
mo r e in yo ur bailiwick .
MR. S CHI FFE R: S ur e, and let me ju st pr o vide yo u wit h o ne
examp le in t he cyber ar ea t hat yo u had ment io ned. Our 20 09 r epo r t t o
Co ngr ess, as yo u 'r e awar e, discussed China's use o f co mp ut er net wo r ks
as bo t h a t o o l fo r int elligence but also as a po t ent ial asymmet r ic
weap o n.
36
T he S ecr et ar y o f Defense has ap pr o ved t he est ablishment o f a su b
u nified co mmand , t he U. S . Cyber Co mmand, in June 2009, t o bet t er
fo cu s milit ar y cyber space o per at io ns, including t he defense o f o ur o wn
d epar t ment 's info r mat io n net wo r ks, and also t o be able t o pr o vid e us
wit h t he app r o pr iat e sub unified co mmand t o fo cu s o n t he milit ar y
asp ect s o f cyber sp ace, o f t he cyber space do main.
We view t ho se as abso lut ely cr it ical fo r U. S . milit ar y co mmand
and co nt r o l and t he co nduct o f o p er at io ns and o bvio usly cr it ical in any
p o t ent ial co nflict t hat we wo u ld envisage wit h an adver sar y t hat
p o ssesses cyber abilit y and t he abilit y t o use cyber as an asymmet r ic
weap o n.
We ar e d o ing o u r u t mo st t o develo p t he capabilit ies t hat we need
t o be able t o defend and pr o t ect o ur selves and o u r par t ner s in t he cyber
d o main.
COMMI S S I ONE R WE S S E L: I believe it was last year in o ur
hear ing o n naval mo der nizat io n t hat we lear ned o f incr eased cap abilit ies
by t he Chinese t o det er U. S . naval fo r ces, lo nger r ange t ar get ing, mo r e
accu r at e t ar g et ing, et cet er a, t hat wo uld pr esumably seek t o have us,
o u r fo r ces, at a g r eat er d ist ance and t her efo r e less able t o r espo nd.
I have no t r ead t he mo st r ecent QDR has Do D lo o ked at t hat
sp ecifically, and have t her e been any d iscussio ns wit h t he Chinese abo u t
co ncer ns abo ut specific t ar get ing o r cap abilit ies o f U. S . fo r ces?
MR. S CHI FFE R: We ar e incr easingly co ncer ned abo u t t he ar ea
d enial and ant i access capabilit ies t hat China app ear s t o be develo p ing ,
and we ar e p ar t icu lar ly co ncer ned abo ut t he lack o f t r ansp ar ency t hat
acco mpanies t his ar ea as wit h o t her ar eas o f China's milit ar y
mo der nizat io n effo r t s.
We have made a nu mber o f effo r t s t o engage wit h o ur Chinese
fr iend s t o d iscu ss t hese issues and t o enco ur age t hem t o eng age wit h us
in o u r mut ual int er est s in a gr eat er deg r ee o f t r anspar ency so t hat we
can bet t er u nder st and what t hey ar e d o ing and t her efo r e avo id any
p o ssibilit y o f miscalculat io n o r misappr ehensio n do wn t he line.
I can t ell yo u t hat t her e's been so me success, we've go t t en so me
t r act io n, bu t o bvio u sly no wher e near as mu ch as we ho p e, and t his is an
ar ea wher e we'r e g o ing t o co nt inue t o wo r k and co nt inue t o pr ess t he
Chinese t o see if we can develo p a bet t er set o f co mmunicat io ns and
exchang es in t his ar ea.
COMMI S S I ONE R WE S S E L: T hank yo u.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
Co mmissio ner Cleveland.
COMMI S S I ONE R CLE VE LAND: I have a sho r t quest io n. T he
T aiwan Relat io ns Act says t hat wit h r egar d t o d efense ar t icles and
ser vices, any decisio n t o make t ho se available t o T aiwan sho uld be
based so lely up o n t heir jud gment o f t he needs o f T aiwan.
Co u ld yo u int er p r et t hat clau se fo r me?
MR. S HE AR: I t means what it says. I t means t hat o ur decisio ns
37
ar e based o n an assessment o f T aiwan defense needs t hat ar e made in
co nsu lt at io n wit h t he T aiwan sid e.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
I have a qu est io n. T his g o es t o Mr . S chiffer 's t est imo ny o n pag e
t wo and t he q uest io n is fo r Mr . S hear and t hen Mr . S chiffer t o
co mment :
"I t ap pear s Beijing's lo ng t er m st r at egy is t o use po lit ical,
d ip lo mat ic, eco no mic and cult ur al lever s t o pur sue u nificat io n wit h
T aiwan, while build ing a cr ed ible milit ar y t hr eat t o at t ack t he island if
event s ar e mo ving in what Beijing sees as t he wr o ng dir ect io n. "
T aiwan alr ead y a has much mo r e t r ade wit h China t han t hey d o
wit h us. T hey have mo r e invest ment wit h China t han t hey do wit h us.
T his will pr o bably fur t her incr ease t hat . Do es t he Unit ed S t at es favo r
t his E co no mic Co o p er at io n Fr amewo r k Agr eement ?
MR. S HE AR: I n g ener al t er ms, we haven't seen ho w t he E CFA is
g o ing t o lo o k , and we have no t yet had t he chance t o det er mine ho w it
may affect o u r eco no mic r elat io nship wit h T aiwan, so I 'm go ing t o
wit hho ld judg ment o n t he E CFA fo r t he mo ment , bu t I wo uld like t o say
t hat in gener al t er ms we welco me exp and ed eco no mic co o per at io n
bet ween T aiwan and China.
HE ARI NG CO CHAI R MULLOY: As a fo llo w up t o t hat , what
wo u ld yo u t hink if T aiwan and China ent er ed an agr eement t hat T aiwan
says we'r e no t g o ing t o mo ve t o war ds u nificat io n? We'll do a 5 0 year
ag r eement ; we wo n't mo ve t o war ds unificat io n fo r 50 year s, and yo u
p r o mise t hat yo u wo n't invad e u s fo r 50 year s, and we'll see wher e
t hing s ar e aft er 5 0 year s. Do yo u t hink so met hing like t hat wo uld be
u seful t o ease t ensio ns t her e?
MR. S HE AR: I t hink t hat 's pr et t y hypo t het ical, and I 'm r eluct ant
t o co mment dir ect ly o n it , but I will say t hat it is up t o t he peo ple o n
bo t h sides o f t he S t r ait , and I expect t hat sho u ld pr o gr ess be made in
cr o ss S t r ait r elat io ns t hat it will be mad e o n t he basis o f st r o ng
su pp o r t fr o m t he peo ple o f T aiwan as a who le.
HE ARI NG CO CHAI R MULLOY: Mr . S chiffer , do yo u have
anyt hing yo u want t o add?
MR. S CHI FFE R: No , no t hing t o ad d.
HE ARI NG CO CHAI R MULLOY: Okay. Alt ho ugh we'r e no w at
t he t ime when we sho uld let yo u fello ws go , do yo u have a few mo r e
minu t es? T her e ar e a co uple o f Co mmissio ner s who have fo llo w u p
q u est io ns; if we g ive t hem t wo minut e fo llo w up quest io ns, t hat might
be u seful.
Co mmissio ner Blument hal.
COMMI S S I ONE R BLUME NT HAL: S ur e. T he st at ement is t o
bo t h o f yo u . Mr . S hear , I did no t mean t o put yo u o n t he spo t . T his
inco nsist ency has been pu zzling me since I ser ved in go ver nment , and
we even had peo ple in t he Bush ad minist r at io n say we wo u ld g o ahead
and o pp o se T aiwan indep endence.
38
I gu ess my po int is, is if we want a peaceful r eso lu t io n, we have
t o keep all o pt io ns and flexibilit y o n t he t able and no t be inco nsist ent
abo u t any o ne o f t ho se o p t io ns. T his has been a lo ng st anding lo gical
inco nsist ency t hat I t hink fo r eclo ses flexibilit y.
Bu t my fo llo w up q uest io n is o n t he quest io n o f t he F 16 C/ Ds
and so me o f t he t hings yo u said, Mr . S chiffer , r efer r ing t o t he
su r vivabilit y and so fo r t h, it seems lik e we'r e ho ld ing T aiwan t o a higher
st and ar d t han o u r o wn Air Fo r ce. Kadena and Guam ar e no t any mo r e
o r less har dened, fr o m my und er st anding, u nless t hings have chang ed ,
t han T aiwan is. Yet we co nt inue t o have an Air Fo r ce deplo yed in t ho se
p laces.
I wo nder why we d o n't have a p o licy t hat says because o f t he
clear r eq uir ement t hat says we'r e go ing t o har d en t ho se places, help
T aiwan har d en t ho se places and sell t hem t he weapo ns t hey need, ju st as
we'r e go ing t o har den o u r o wn bases, which ar e no t any mo r e har d ened?
MR. S CHI FFE R: I t hink we'r e paying an awfu l lo t o f at t ent io n t o
t hat exact set o f q uest io ns r eg ar d ing o ur bases in t he r eg io n as well, and
t hat 's an issue t hat we'r e gr app ling wit h t her e also .
I d idn't want t o sugg est in my st at ement , and I ho pe no o ne t o o k
it as su ch, a decisio n o ne way o r ano t her o n t his issue. I was ju st
mer ely t r ying t o sket ch o ut t hat it 's a mu ch mo r e, get t ing t o t he r ight
answer o n t he qu est io n o f ho w we assur e t hat T aiwan is able t o maint ain
su fficient d o minance o f it s air sp ace is a mu ch mo r e co mplicat ed
q u est io n t han just so r t o f a simp le, o kay, her e's we have t his challeng e
so t his p ar t icu lar syst em in and o f it self, by it self, is t he answer .
And as we g r apple wit h t his quest io n o f what t he r ight answer is
t o assur e t hat T aiwan has sufficient co nt r o l o f it s air space, we'r e cycling
t hr o u gh a who le r ange o f int er co nnect ed quest io ns. T hat 's all I was
su gg est ing .
COMMI S S I ONE R BLUME NT HAL: T hank yo u. T hank yo u, bo t h.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
Co mmissio ner S hea.
COMMI S S I ONE R S HE A: I also want t o t hank yo u bo t h fo r being
her e.
I 've just g o t t hr ee q uick quest io ns. I t 's my u nder st and ing under
t he T aiwan Relat io ns Act , t he Unit ed S t at es is no t r equir ed t o int er vene
milit ar ily in t he event o f a co nflict bet ween T aiwan and t he P RC. I s
t hat co r r ect ?
MR. S HE AR: T hat is co r r ect .
COMMI S S I ONE R S HE A: Okay. Do yo u t hink t he pr o spect o f
t he U. S . I t hink t his is called "st r at egic ambigu it y" t he pr o spect o r t he
p o ssibilit y o f U. S . milit ar y int er vent io n in t he T aiwan S t r ait s enhances
t he secu r it y o f T aiwan?
MR. S HE AR: I t hink it do es.
COMMI S S I ONE R S HE A: Ok ay. Mr . S chiffer , do yo u agr ee?
MR. S CHI FFE R: Yes, I wo uld agr ee wit h t hat .
39
COMMI S S I ONE R S HE A: Go ing back t o t he issue Co mmissio ner
Wessel r aised I 've been hear ing/ r eading abo ut t his ant i ship ballist ic
missile t hat 's go ing t o deny po t ent ially access o f t he U. S . milit ar y int o
t he r egio n. I f t he P RC wer e t o t est and deplo y such a weapo n, ho w
wo u ld t hat impact yo ur analysis o f T aiwan's defensive milit ar y needs?
MR. S CHI FFE R: We wo uld have t o t ak e it int o acco unt if and
when it happ ened and , yet , ag ain, I mean t hese ar e pr ecisely t he so r t s o f
q u est io ns t hat we ar e co nst ant ly assessing as we t r y t o det er mine bo t h
what o ur needs ar e t o assur e t hat U. S . fo r ces have t he capabilit ies t hat
t hey need , t he po st u r e t hat t hey need , t he pr esence t hey need , in t he
r eg io n, t o be able t o co nt inu e t o under wr it e peace and st abilit y in t he
Asia P acific r egio n as we have successfully fo r 60 year s no w, as well as
what t he implicat io ns o f any o f t hese develo pment s ar e fo r o ur allies and
fo r o u r p ar t ner s in t he r egio n.
COMMI S S I ONE R S HE A: Ok ay. T hank yo u.
HE ARI NG CO CHAI R MULLOY: Co mmissio ner Fiedler .
COMMI S S I ONE R FI E DLE R: Ju st a quick qu est io n o n China's
r eact io n t o t his package and t heir t hr eat s o f r et aliat io n ag ainst U. S .
co mp anies.
Do yo u , as t he go ver nment , co nsider t hat t o be ser io u s o r ju st a
new fo r m o f whining abo ut o u r po licy?
MR. S HE AR: I n gener al t er ms, t he Chinese r eact io n t o t he
no t ificat io n did no t exceed o u r expect at io ns, no r did it exceed what t he
Chinese have d o ne in t he p ast except fo r t he t hr eat o f sanct io ns o n U. S .
fir ms invo lved in t he ar ms sale.
T he Chinese have no t as far as I k no w t he Chinese have no t
imp lement ed t hat t hr eat . T hey have no t yet imp o sed any sanct io ns o n
U. S . fir ms.
COMMI S S I ONE R FI E DLE R: S o , t her efo r e, am I r ight t o assu me
t hat we t ak e t his t hr eat ser io usly, ar e mo nit o r ing it , and t hat if it
o ccur s, t hat it pr esent s a fair ly sig nificant p r o blem in U. S . China
r elat io ns? "I t " being a explicit , alt ho ug h we saw half o f u s believe t hat
t hey have t he mo r e so phist icat ed use o f p o lit ical t hr eat s fo r eco no mic
g ain, but , in t his case, it wo uld be a blat ant differ ence in t heir po licy o f
d ealing wit h us.
MR. S HE AR: We'r e cer t ainly wat ching t he sit u at io n ver y clo sely.
We t o o k st r o ng no t e o f what t he Chinese said, and we wo u ld view wit h
co ncer n any implement at io n o f t he t hr eat .
COMMI S S I ONE R FI E DLE R: T hank yo u.
HE ARI NG CO CHAI R MULLOY: I want t o t hank bo t h o ur
wit nesses, and we want t o t hank S t at e and Do D fo r being so helpful t o
t his Co mmissio n o ver t he year s.
We'r e g o ing t o t ake a seven minut e br eak, and t hen we'll co me
back wit h o u r next p anel.
T hank yo u, again, gent lemen.
[ Wher eupo n, a sho r t r ecess was t aken. ]
40
PANEL III: M ILITARY AS PECTS
HE ARI NG CO CHAI R WORT ZE L: I f yo u t ake yo ur seat s, we'll
g et st ar t ed. I n t his next panel we'll examine t he cr o ss S t r ait milit ar y
balance and what it means fo r t he Unit ed S t at es.
We'r e jo ined by t hr ee exper t wit nesses t o help us explo r e t he
t o p ic, and we'r e delight ed t o have t hem.
Ou r fir st speaker will be Mar k S t o kes. He's E xecut ive Dir ect o r o f
t he P r o ject 204 9 I nst it ut e, a no npr o fit t hink t ank t hat fo cuses o n fut ur e
secu r it y assessment s o f E ast Asia.
He was t he fo und er and P r esid ent o f Quant um P acific E nt er pr ises
and Vice P r esident and T aiwan Co unt r y Manager fo r Rayt heo n
I nt er nat io nal. He is a 20 year Air Fo r ce vet er an and has ser ved as T eam
Chief and S enio r Co unt r y Dir ect o r fo r China, T aiwan and Mo ngo lia in
t he Office o f t he S ecr et ar y o f Defense fo r I nt er nat io nal S ecur it y Affair s,
and as air at t aché in China.
Ou r next speak er will be David S hlapak. He's a S enio r
I nt er nat io nal P o licy Analyst at t he RAND Co r po r at io n. Beg inning in
t he lat e 199 0 s, S hlapak help ed wr it e a nu mber o f st udies o n t he
st r at eg ic challeng es pr esent ed by China's r ise.
He has also p ublished o n t he milit ar y and st r at egic asp ect s o f t he
China T aiwan co nfr o nt at io n and t he S ino U. S . secur it y r elat io nship ,
inclu d ing co au t ho r ing last year 's st ud y, "A Quest io n o f Balance:
P o lit ical Co nt ext and Milit ar y Aspect s o f t he China T aiwan Disput e. "
T he final sp eak er is Dr . Alber t Willner . Al is Dir ect o r o f t he
China S ecur it y Affair s Gr o up at t he no np r o fit r esear ch inst it u t e, CNA.
P r io r t o CNA, he was Asso ciat e Dean at Geo r gia Gwinnet t Co llege
wher e he r esear ched Chinese defense p o licy, China T aiwan secur it y
issu es, and U. S . China milit ar y r elat io ns.
He's a r et ir ed U. S . Ar my Co lo nel, and in 200 5, Dr . Willner was
t he fir st act ive du t y U. S . Defense At t aché equivalent assig ned t o
T aiwan since 1979 . He was in char ge o f r epr esent ing t he U. S .
Dep ar t ment o f Defense int er est s in su ppo r t ing U. S . P acific Co mmand
init iat ives. He ho lds a P h. D. in Fo r eig n Affair s fr o m t he Univer sit y o f
Vir g inia.
We t hank yo u all fo r being her e t o get her t o day. We'll st ar t wit h
Mr . S t o k es, and it 's seven minut es.
S TATEM ENT O F M R. M ARK S TO K ES , EXECUTIVE DIRECTO R
PRO JECT 20 49 INS TITUTE, ARLING TO N, VIRG INIA
MR. S T OKE S : T hank yo u , sir .
I app r eciat e t he o pp o r t unit y t o appear her e befo r e t his est eemed
g r o u p and aside co lleag ues her e.
41
T o be able t o st ick wit hin t hat par t icular limit at io n, I 'll keep my
r emar k s limit ed t o fo ur p o int s, and t he fir st po int being I kno w it 's been
d iscussed alr eady, bu t it 's useful, as a r emind er , t o po int o u t t he basis
o f U. S . p o licy wit h r eg ar d t o T aiwan and t he basis fo r U. S . r elat io ns
wit h t he P eo p le's Repu blic o f China, and t hat basis lies wit hin t he
T aiwan Relat io ns Act .
What 's useful t o highlight is t he emp hasis o n peaceful r eso lut io n
o f p o lit ical differ ences bet ween t he t wo sides o f t he T aiwan S t r ait .
What 's impo r t ant her e is t hat o ne o f t he fundament al o bst acles, o r at
least fr o m Beijing's per spect ive, o bst acles t o U. S . P RC r elat io ns has t o
d o wit h t he d efinit io n o f what peaceful r eso lut io n is.
Beijing d o es a ver y g o o d jo b at cast ing blame o n t he Unit ed S t at es
fo r it s ar ms sales, but t he r ealit y is t he U. S . defines a peacefu l
r eso lu t io n in t er ms o f t he nat u r e o f t he milit ar y challenge, and milit ar y
t hr eat t hat t he P RC p o ses t o T aiwan, wher eas, t he P RC has a d iffer ent
int er p r et at io n.
S o I ju st want t o t hr o w t hat o ut , t hat t he U. S . r equ ir ement t o
p r o vide fo r T aiwan's d efense and sell necessar y defense ar t icles and
ser vices is based u po n t he T aiwan Relat io ns Act .
A seco nd po int . T he P RC, despit e imp r o vement s in cr o ss S t r ait
r elat io ns and deepening and br o adening eco no mic int er depend ence, has
yet t o r eno unce use o f fo r ce t o r eso lve it s differ ences wit h T aiwan, as
well as effect a visible and t angible r edu ct io n in it s milit ar y po st ur e
o p p o sit e T aiwan.
T aiwan faces a sig nificant challenge t o day, as d o es t he Unit ed
S t at es. Cent r al t o t he challenge, I wo uld ar gue, ar e t he five br igades o f
sho r t r ange ballist ic missiles, missiles subo r dinat e t o t he S eco nd
Ar t iller y, t hat ar e deplo yed in so ut heast China o pp o sit e T aiwan.
I t canno t be o ver st at ed t hat t his is r eally t he pr o blem. T her e
wo u ld be an eq uilibr iu m if it wer en't fo r t hese ballist ic missiles, bu t t his
is t he k ey po int .
T he t hir d issu e t o ad dr ess ar e fundament al differ ences in
ap pr o aching T aiwan's r eq uir ement s, and t hese depend upo n t he scenar io
in which yo u lo o k at t he po t ent ial fo r P RC use o f fo r ce, o ne being
co er cive at t he lo wer end o f t he spect r u m, and o ne being, fo r lack o f a
bet t er t er m, annihilat ive, usually in t he fo r m o f an amp hibio us invasio n,
wit h t he differ ences being a who le r ange o f o pt io ns in bet ween.
Mo st st ud ies and mo st analyses ar e do ne wit hin t he co nt ext o f an
annihilat ive t ype scenar io , an amphibio us invasio n. S o I wo uld like t o
mak e t hat po int and ad dr ess quest io ns lat er .
T he fo ur t h and last po int , I believe t he Obama administ r at io n and
Dep ar t ment o f Defense is do ing well and co nt inuing a t r adit io n o ver
su ccessive administ r at io ns in pr o vid ing fo r T aiwan's defense.
T her e is st ill a lo t mo r e t o be do ne. I n my view, t he mo st
imp o r t ant pr io r it y fo r T aiwan is in t he ar ea o f C4I S R, Co mmand ,
Co nt r o l, Co mmunicat io ns, Co mp ut er s, I nt ellig ence S ur veillance and
42
Reco nnaissance. T he r easo n why t his is so fundament al, yet o ft en
fo r go t t en, t o u se an analo g y like o xygen, o xyg en is so fundament al, but
it 's o nly r ealized ho w impo r t ant it is o nce yo u lo se it .
T he C4I S R is cr it ical fo r T aiwan's d efense, all t he way fr o m
co mmunicat io ns t hat ar e sur vivable, t o co mmand and co nt r o l syst ems,
and all t he way t o senso r s, being able t o see t hr eat s ar o u nd yo u, and it 's
no t ju st fo r milit ar y, but it 's also fo r disast er r espo nse and a who le
r ang e o f o t her emer g encies.
Air defenses ar e cr it ical. As an Air Fo r ce o fficer , I 'd be r emiss in
no t p o int ing o u t t hat when it co mes t o milit ar y co nflict , co nt r o l o f t he
air is key, and it go es all t he way fr o m a limit ed use o f fo r ce lik e we
saw in t he 19 96 missile exer cises, 1 999 flight s o ver t he T aiwan S t r ait ,
all t he way t o a denial t ype o f scenar io . And so t his is a key pr io r it y.
S ea denial is also k ey. S ubmar ines have a useful r o le and ar e a
leg it imat e r eq u ir ement . And all t he way t o gr o und fo r ces.
S o wit h t hat , I will wr ap up my r emar ks and leave it o pen t o
q u est io ns. T hank yo u, sir .
[ T he st at ement fo llo ws: ]
Prep ared S t a t emen t o f M r. M ark S t okes, Execu t i ve Di rect o r, Proj ect
20 49 In st i t u t e, Arli n gt on , Vi rgi n i a
Mr. Chairman, thank you for the opportunity to participate in today’s hearing on a topic that is important
to U.S. interests in peace and stability in the AsiaPacific region. It is an honor to testify here today.
A proper starting point is a brief review of the Taiwan Relations Act (TRA). The TRA highlights the
U.S. expectation that Taiwan’s future will be determined by peaceful means, considers nonpeaceful
solutions a challenge to regional peace and security, provides the basis for U.S. provision of arms of
defensive character, and the need to maintain the capacity of the United States to resist any resort to force
or other forms of coercion that jeopardize the security, or social or economic system of Taiwan.
At the same time, healthy and constructive relations between the United States and People’s Republic of
China (PRC) are important and founded upon understandings outlined in the three Joint Communiqués.
An important yet often overlooked aspect of these understandings is an assumption of Beijing’s
commitment to a peaceful approach to resolving its political differences with Taiwan. However,
fundamental differences exist over what constitutes a peaceful approach. Beijing views its military
posture as ensuring a peaceful approach in part by deterring what it perceives as moves on Taiwan toward
de jure independence. However, successive U.S. administrations have defined a peaceful approach in
terms of the nature of the PRC military posture arrayed against toward Taiwan. As a result, U.S. sales of
defense articles and services in accordance with the TRA are driven by the nature of the military
challenge that the PRC poses to Taiwan.
In addition, it is worth noting up front that the military dimension of crossStrait relations is only one
aspect of a broader dynamic that contains elements of both cooperation and competition. Subsequent
panels today will address growing economic interdependencies. Despite unfavorable odds, Taiwan has
not only flourished but has played a central yet often unacknowledged role in a gradual liberalization of
the PRC since initiation of its farreaching economic reforms. Over the past 25 years, Taiwan has become
a hidden yet major factor behind China's economic reforms and rapid exportdriven growth that has been
essential for domestic stability, modernization, and potential gradual political liberalization. These
reforms, facilitated by a massive infusion of capital and expertise from Taiwan, have increased the
population’s standard of living, literacy, and relative level of personal freedom.
43
Economic interdependence has the dual effect of discouraging moves that challenge fundamental PRC
interests with regards to perceived moves toward de jure independence on the one hand, while furthering
the peaceful transformation of China on the other. As economic ties have grown, Beijing appears to be
softening its approach to dealing with Taiwan while at the same time continuing to advance its ability to
exercise military force. Paradoxically, despite the PRC’s ability to impose its will upon Taiwan through
military means, the costs of doing so are rising at an exponential rate. Nonmilitary factors, such as
growing economic interdependence, may increasingly dampen moves on either side of the Taiwan Strait
to adopt policies that challenge fundamental interests of the other.
Perhaps the greatest challenge to crossStrait relations continues to be the PRC’s refusal to renounce use
of force to resolve its political differences with Taiwan. However, renunciation of use of force by itself is
not enough. An end to the state of hostility between the two sides of the Taiwan Strait would require a
tangible decrease in the nature of the military threat that Chinese authorities and the military force under
their control pose to the people on Taiwan and their democratically elected leadership. Overall trends in
crossStrait relations makes continued reliance on implicit or explicit use of military force increasingly
outdated and even counterproductive.
Taiwan’s influence in China likely will continue well into the future. Guided by the Taiwan Relations
Act, a strong defense has enabled Taiwan to withstand PRC coercion, foster democratic institutions, and
given Taiwan and its people the confidence needed for the deepening and broadening of crossStrait
economic and cultural interactions. In short, there is no logical disconnect between efforts to improve
crossStrait economic and political relations, Taiwan’s desire for a strong defense, and procurement of
defense articles from the United States.
Trends in PRC Military Capabilities
The PRC is steadily broadening its military options that could be exercised against Taiwan, including the
ability to use force at reduced cost in terms of lives, equipment, and overall effects on the country’s longer
term development goals. Investment priorities include increasingly accurate and lethal theater ballistic
and land attack cruise missiles; development and acquisition of multirole fighters; development of stand
off and escort jammers; and ground force assets such as attack helicopters and special operations forces.
At the same time, Beijing is investing in advanced command, control, communications, and intelligence
systems and is increasing emphasis on training, including increased use of simulation.
Beyond simply developing a broader range of military options that could be applied against Taiwan, the
PRC also is focused on developing the means to deny or complicate the ability or willingness of the United
States to intervene in response to PRC use of force around its periphery. Evolving capabilities include
extended range conventional precision strike assets that could be used to suppress U.S. operations from
forward bases in Japan, from U.S. aircraft battle groups operating in the Western Pacific, and perhaps
over the next five to 10 years from U.S. bases on Guam.
Aerospace power will become an increasingly powerful instrument of PRC coercion as the range and
number of PLA strike aviation assets increase, land attack cruise missiles are fielded, their inventory of
increasingly lethal and accurate theater ballistic missiles expands, and sophisticated electronic attack
assets are deployed. Aerospace power likely will dominate any conflict in the Taiwan Strait and could
shape its ultimate outcome. PLA planners may perceive that an aerospace campaign, involving the
integrated application of theater missiles, electronic warfare, and strike aviation assets, offers the PRC
political leadership with quick, decisive political results, perhaps more so than other options, such as
gradual escalation involving a series of island seizures or slow strangulation through a maritime blockade.
Balance and Assumptions
With the foregoing in mind, a relative erosion of Taiwan’s military capabilities could create opportunities
and incentives for Beijing’s political and military leadership to assume greater risk in crossStrait
relations, including resorting to force to resolve political differences. The crossStrait security situation
often is viewed within the context of a military balance. However, PLA capabilities should be judged
against specific political objectives in a given scenario and assessed in light of Taiwan’s vulnerabilities, as
well as assumptions upon which U.S. decisions in fulfilling TRA obligations are made.
44
Evaluating basic assumptions may serve as a useful starting point. Assumptions are an important
foundation for the deliberate and force planning process and in assessing Taiwan’s required capabilities.
At least two assumptions may be most relevant: 1) independent defense vs. external intervention; and 2)
coercive courses of action vs. annihilative/invasion.
To begin with, should Taiwan assume U.S. intervention as the basis for strategic and operational
planning? If there is a high degree of certainty of external assistance, such as that found in a formal
alliance, then this likely would lead to a different set of priorities in the force planning and acquisition
process. While there is good reason to hope and plan for potential ad hoc coalition operations with
intervening U.S. forces, the TRA is no substitute for a mutual defense treaty. In the absence of a formal
alliance commitment, prudence seems to suggest that independent defense should serve as a formal
planning assumption and the basis upon which U.S. policy decisions with regard to release of defense
articles.
A second fundamental assumption relates to possible PRC courses of action. If one judges Taiwan’s
requirements on a worstcase, least likely course of action, then the conclusions reached could be different
from judgments based on more likely coercive courses of action. Within this context, assessments of the
capabilities required for sufficient selfdefense can be inherently subjective.
At its most basic level, debates could surround whether most likely courses of action could be coercive in
nature, or annihilative through a full scale invasion. An amphibious invasion is the least likely yet most
dangerous scenario and the basis upon which most assessments of Taiwan’s requirements are made. It is
easier to evaluate military balances when political, psychological, economic, and factors are removed.
However, annihilation involving the physical occupation of Taiwan is the least likely course of action.
PRC decision makers could resort to coercive uses of force, short of a full scale invasion, in order to
achieve limited political objectives. Coercive strategies could include a demonstrations of force as seen in
the 1995/1996 missile exercises, 1999 flights in the Taiwan, or in the future a blockade intended to
pressure decision makers in Taiwan to assent to Chinese demands, strategic paralysis involving attacks
against the islands critical infrastructure, limited missile strikes, flights around the island, just to name a
few.
A coercive campaign could be geared toward inflicting sufficient pain or instilling fear in order to coerce
Taiwan’s leadership to agree to negotiations on Beijing’s terms, a timetable for unification, immediate
political integration, or other political goals. Military coercion succeeds when the adversary gives in
while it still has the power to resist and is different from brute force, an action that involves annihilation
and total destruction.
Prominent PLA political analysts believe coercive approaches offer the optimal solution to minimize
negative international repercussions in the wake of using force against Taiwan to achieve limited political
objectives. According to one PLA observer, a full scale military assault is “the largest scale and most
violent military operation that hopes to achieve unification in one stroke and will be the most likely
operation to cause the most serious U.S. military intervention.” While confident China could prevail in a
determined attempt to occupy the island, even in the face of limited U.S. military intervention, observers
believe that the likelihood of a new Cold War in the AsiaPacific region would be the costly consequence
of a brute force, annihilative solution. Such a situation would imperil China’s broader national goals and
may be unnecessary to achieve more limited political goals.
PRC leaders may believe that Taiwan’s central leadership has a low threshold for pain and would
acquiesce shortly after limited strikes. However, others do seem to believe that coercive measures such as
a blockade or occupation of a few offshore islands leaves too much to “luck” since the Taiwan
leadership’s threshold is difficult to calculate.
Regardless, a couple of examples may help in illustrate the differences between coercive and annihilative
scenarios in the context of U.S. security assistance. First, as the PRC began its short range ballistic
missile (SRBM) buildup opposite Taiwan well over a decade ago, Chinese interlocutors vehemently
protested the potential sale of systems, such as PATRIOT PAC3, which could undercut the coercive
utility of the SRBMs. PRC interlocutors made it clear that the military utility of these systems in a full
scale military confrontation was not a concern. Missile defenses can be saturated or exhausted in fairly
short order through a combination of multiaxis strikes, maneuvering reentry vehicles, exhaustion or
saturation through large scale salvos, and a range of other missile defense countermeasures. However,
45
what made these systems egregious is that they weakened the coercive utility of China’s growing arsenal
and increasingly accurate and lethal ballistic missiles, limited the menu of coercive courses of action
available to PRC political and military leaders, and ostensibly signified a deepening of the bilateral
relationship between Taiwan and the U.S.
On the other hand, the PRC has long viewed U.S. support for Taiwan’s acquisition of submarines as
another red line, yet for different reasons. Submarines are viewed as having significant military utility
due to their inherent ability to survive a crippling first strike, potential ability to complicate surface
operations in an amphibious invasion scenario, and possible challenges to PRC strategic sea lines of
communication should a conflict escalate beyond the immediate vicinity of Taiwan. Yet they also most
likely could signify a broadening or deepening of operational linkages between the US and Taiwan.
When viewed within a coercive context, Beijing is at war with Taiwan every day. Use of force goes along
a continuum from "deterrence warfare," perhaps best demonstrated by Beijing's deployment opposite
Taiwan of five Second Artillery SRBM brigades under the People’s Liberation Army Second Artillery, all
the way to annihilation. In between are a range of coercive scenarios involving limited applications of
force to achieve limited political objectives. The 1995/1996 missile tests and 1999 flight activity in the
Taiwan Strait are examples of use of force at the lower end of the violence spectrum. An amphibious
invasion is the least likely scenario, but there are a range of more likely coercive courses of action far
short of annihilation. Despite Beijing's arguments to the contrary, "deterrence warfare" is hardly a
peaceful approach to resolving differences with Taiwan.
Taiwan’s Defense Requirements: How Much is Enough and Toward What End?
Taiwan faces perhaps the most daunting security challenges in the world. Under significant pressure, the
armed forces of the Republic of China (ROC) are transforming into a worldclass military and the Obama
administration, and Department of Defense (DoD) in particular, should be commended for efforts to date.
In order to meet the evolving challenges, a set of fundamental capabilities may be worth considering,
with a special emphasis on cost effective solutions that could address a broad spectrum of coercive and
annihilative challenges. The effectiveness of one capability over another depends upon the effects that
policymakers are seeking. If planning for a worst case scenario, then raising the costs to the PRC of using
military force by denying it success in occupying and pacifying the island becomes critical. A discussion
of possible solutions could be broken down into the following capabilities:
· Upgrading the island’s ability to ensure situational awareness and assured ability to communicate
in the most stressing of scenarios;
· Denying the PRC command of the skies in the Taiwan area of operations;
· Ensuring sea lines of communication remain open; and
· Denying the PRC the ability to take and hold Taiwan.
C4ISR. One of the most fundamental requirements in any emergency situation is a survivable national
command and control system that with sufficient warning of impeding dangers and a survivable
information infrastructure that could function in the most stressing of emergencies. Taiwan has powerful
incentives to field one of the most advanced and networked emergency management C4ISR systems in the
world. Whether military or civilian, responses to all hazards require maximal situational awareness and
the means to react efficiently and effectively to prevent a further deterioration of the situation. Perhaps
best exemplifying Taiwan’s position at the cusp of the information revolution is the recent introduction of
one of the world’s most sophisticated advanced tactical data link networks. The number of participants in
the network today remains limited. However, assuming proper training and cultural adjustments can be
managed, the gradual expansion of the advanced data link network will solidify Taiwan’s position at the
leading edge of the networkcentric information revolution.
However, there is more that could be done to leverage C4ISR for its defense. Enhancements to its
command and control system, especially in the area of antisubmarine warfare (ASW) and maritime
domain awareness, would better prepare the island’s civil and military leadership for a range of
emergency situations. Other investments could be worth considering, such as advanced voice
46
communication technologies and dualuse space systems (including electrooptical and synthetic aperture
radar (SAR) remote sensing and broadband communication satellites), could prove invaluable to PRC use
of force, as well as disaster warning, recovery, and response. These capabilities also may satisfy
verification requirements in any future crossStrait arms control regime.
Air Defenses. Denying the PRC unimpeded access to skies over the Taiwan Strait and Taiwan proper is a
fundamental requirement. While it may be difficult to sustain operations indefinitely in an annihilative
scenario, air and air/missile defense assets may be critical in resolving a conflict in its early stages and
help defend the sovereignty of the skies over Taiwan. In a protracted resistance, it may be within
Taiwan’s ability to hold PLA pilots at risk for an extended period of time. Among the basic requirements
include effective early warning and survivable surveillance networks and air battle management systems;
an integrated approach to defending against medium and short range ballistic missiles, land attack cruise
missiles, antiradiation missiles, unmanned aerial vehicles, and other airbreathing threats.
If viewed from an annihilative perspective, and the goal is to deny the PRC uncontested air superiority,
sea control, and ability to insert a sizable force onto Taiwan proper, then a multirole manned platform
able to conduct multiple missions is needed: close air support missions in support of the Army, maritime
interdiction missions in support of the Navy, and extended range air defense against opposing fighters and
other air assets. The fourth mission is more sensitive: deep interdiction against critical nodes within the
theater operational system.
Maintaining the current size of Taiwan’s fighter fleet, consisting of roughly 400 fighters, is important.
The fleet of 60 F5E/F fighters that Taiwan acquired during the Reagan administration is nearing the end
of its useful service life and sustaining four different airframes is a significant logistical burden.
When matching these requirements against the need to take off and land using limited amount of runway,
then an optimal solution could be a very short take off and landing airframe. However, possible options
likely wouldn’t enter the operational force for an extended period of time. From this perspective,
Taiwan’s desire to procure additional F16s is understandable. The airframe already exists in the
ROCAF’s operational inventory, and additional F16s to replace other airframes could reduce the
logistical burden. A followon procurement of F16s could serve as a bridge pending the availability of
very short take off and landing airframes, or reduction of the PRC’s military posture arrayed against
Taiwan. While Taiwan’s current ability to rapidly repair runways is substantial and its bunkers housing
aircraft are significant, more likely could be done to ensure continuity of air base operations.
Denial of Sea Control. An integrated maritime surveillance network that could detect activity out into the
open ocean appears to be a valid requirement. Such a network could not only support military operations,
but also could be invaluable for a broad range of other missions, including border control, disaster
warning, countertrafficking, and scientific research. Among the range of options include undersea and
coastal surveillance, a network of low probability of intercept coastal surveillance radars, and unmanned
aerial vehicles. Taiwan’s acquisition within the last few years of fast attack boats also appears to be a step
in the right direction. The boats, with a lower radar cross section than larger frigates and destroyers, are
able to operate with more flexibility in coastal waters. Taiwan has a valid requirement for diesel electric
submarines that not only would undercut the coercive value of the PRC’s growing naval capabilities, but
also contribute toward countering an amphibious invasion.
Counter Invasion. The goal in a counteramphibious landing campaign logically would be to identify
and target command and control nodes, negate as many amphibious landing ships as possible, and attrit
invading forces to the maximum extent, preferably as far from shore as possible. In order to reduce the
size of attacking forces, joint maritime interdiction is key. In theory, assuming sufficient munitions, an
impenetrable coastline could be an ultimate deterrent. In addition to new generation attack helicopters
and antiship cruise missiles, also worth examining could be artillery or multiple rocketlaunched shells
with dual purpose improved conventional munitions (DPICM) or other submunitions.
Concluding Remarks
A full scale military conflict between the two sides of the Taiwan Strait would be disaster, not only for
Taiwan and the PRC, but for the United States and the world as a whole. As the economies of the two
sides of the Taiwan Strait become increasingly integrated, the chances for armed conflict, in effect a form
of mutually assured economic destruction, are likely to diminish. However, the PRC’s refusal to renounce
47
use of force against Taiwan to resolve political differences and reduce its military posture arrayed against
the island remains an obstacle to peace and stability in the region. Given the evolving asymmetries in
military capabilities, innovative means must be found to raise the costs for PRC of force, regardless of how
integrated the two economies become.
Thank you.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u, Mr . S t o kes.
Mr . S hlap ak.
S TATEM ENT O F M R. DAVID A. S H LAPAK
S ENIO R INTERNATIO NAL PO LICY ANALYS T, TH E RAND
CO RPO RATIO N, PITTS B URG H , PENNS YLVANIA
MR. S HLAP AK: Go o d mo r ning. I wo uld like t o t hank t he
Co mmissio n fo r t he o pp o r t u nit y t o t est ify. I t 's an ho no r t o be her e.
I t seems p ar ad o xical t o d iscuss a po t ent ial China T aiwan co nflict
when r elat io ns bet ween t he t wo ar e smo o t her flo wing t o d ay t han t hey
have been in year s.
We kno w, ho wever , t hat p o lit ical t ides can change almo st
o ver night , while it t ak es year s t o r ed r ess a milit ar y balance go ne awr y.
S o p r udent d efense planner s and st r at egist s in t he Unit ed S t at es and
T aiwan mu st t her efo r e r emain at t ent ive t o t he changing cr o ss S t r ait
balance.
Fo r 2 0 year s, China has wo r ked t o t r ansfo r m t he P eo ple's
Liber at io n Ar my int o a mo der n fo r ce capable o f effect ive o per at io ns o n
a co nt emp o r ar y bat t lefield . While it is impo r t ant no t t o o ver st at e it s
p r o g r ess, China's milit ar y has st eadily impr o ved mo r e o r less acr o ss t he
bo ar d . T he r esult t o day is a cr o ss S t r ait milit ar y balance t hat is t ilt ed
incr easingly in China's favo r .
T his mo der nizat io n effo r t ap pear s t o have t wo pr imar y and
int er lo ck ing aims: enhancing China's abilit y t o t ake o ffensive act io n
ag ainst T aiwan while pr event ing effect ive U. S . int er vent io n.
A k ey t o achieving bo t h t hese go als is a syner gy bet ween China's
g r o wing ar senal o f sur face t o sur face missiles and it s incr easing ly
mo der n air fo r ce.
China has fielded o ver 1, 0 00 sho r t r ange ballist ic missiles and
ad ds abo u t 10 0 t o it s invent o r y ever y year . T he lat est ver sio n o f t he
missiles o ffer g r eat er r ang es, impr o ved accur acy, and a wider var iet y o f
co nvent io nal paylo ad s, and may inco r po r at e feat ur es such as deco ys and
maneu ver ing war head s t o help d efeat ant i missile defenses.
A pr ime t ar get fo r t hese missiles wo uld lik ely be T aiwan's milit ar y
air bases. T he P LA co u ld seek t o cr ipp le T aiwan's Air Fo r ce by
at t ack ing t he r u nways and p ar ked air cr aft at t hese inst allat io ns.
T o at t ack a r unway, China wo u ld emplo y missiles wit h
su bmu nit io n p aylo ads o p t imized t o cr eat e cr at er s in t he sur face. I f
eno u g h cr at er s ar e pr o d uced, t he r unway beco mes unu sable. Civil
48
eng ineer t eams wo uld wo r k t o r epair t he d amage, bu t t he sheer number
o f po t ho les t hat co u ld be cr eat ed, and China's abilit y t o r eat t ack bases,
co u ld keep mo st o r all o f T aiwan's Air Fo r ce o ut o f act io n fo r ho ur s t o
d ays.
S ince no t all o f T aiwan's co mbat air cr aft can be acco mmo d at ed in
har d ened shelt er s, so me ar e t ypically par ked o u t side. T hese wo uld be
st r u ck wit h a d iffer ent kind o f submunit io n war head, o ne o pt imized t o
d est r o y any war planes t hat mig ht be exp o sed o n t he r amps.
Ou r analysis co nclud ed t hat bet ween 90 and 2 50 missiles wo uld
enable China t o cut ever y r unway at T aiwan's t en main fight er bases and
d amage o r d est r o y vir t u ally ever y u nshelt er ed air cr aft fo und t her e.
T he at t ack wo u ld decimat e T aiwan's abilit y t o defend it self
ag ainst fo llo w o n st r ik es co nduct ed by manned air cr aft deliver ing
p r ecisio n gu id ed mu nit io ns ag ainst a wide var iet y o f t ar get s, including
har d ened air cr aft shelt er s.
China's abilit y t o inflict such a k no cko ut blo w t o T aiwan's Air
Fo r ce has incr eased in r ecent year s as t he P LA Air Fo r ce has added
mo der n air cr aft and t he asso ciat ed weapo ns t o it s ar senal. T hese jet s ar e
co mp ar able t o fo u r t h g ener at io n U. S . fig ht er s like t he F 15, F 16, and
F/ A 1 8. Only t he F 22 and in t he fu t u r e p er haps t he F 35 will r et ain a
sig nificant ed ge o ver China's newer fig ht er s, and even t hey co u ld be
o ver whelmed by t he nu mber s o f air cr aft t hat China co uld emplo y.
Wer e T aiwan's Air Fo r ce supp r essed, t he U. S . wo u ld face a
d ifficult , p er haps impo ssible, t ask t r ying t o p r o t ect T aiwan's air space o n
it s o wn. U. S . Air Fo r ce fight er s lack well sit uat ed bases fr o m which t o
o p er at e. Bases t hat ar e clo se t o T aiwan, like Kadena in Japan, ar e
t hr eat ened by Chinese missiles, while t ho se safer fr o m at t acks su ch as
And er sen in Guam ar e a lo ng way fr o m t he fight .
U. S . Navy air cr aft car r ier s wo uld lik ewise face limit at io ns.
Absent a lo ng pr e war war ning per io d, o nly a few car r ier s, p er haps o nly
o ne o r t wo , wo uld be o n scene at t he st ar t o f t he co nflict . T he
r elat ively small nu mber o f U. S . fig ht er s t hat wo uld be available in t hese
cir cu mst ances wo uld face an uphill st r ug gle against t he mo r e nu mer o us
at t ack er s.
Ou r analysis indicat es t hat ad ding 5 0 new fight er s t o T aiwan's Air
Fo r ce mig ht impr o ve o ut co mes, bu t r esult s depend st r o ng ly o n t he
island 's air bases r emaining o per at io nal.
A new F 16 C t hat canno t fly becau se r u nways ar e clo sed o r o ne
t hat has been dest r o yed while p ar ked o n t he t ar mac o ffer s no advant age
o ver o lder mo del fig ht er s.
T her e ar e imp o r t ant imp r o vement s t hat co uld enhance T aiwan's
abilit y t o fly and fight . Air bases co u ld be fur t her har d ened o r T aiwan's
Air Fo r ce co u ld seek t o acqu ir e sho r t t ake o ff ver t ical land ing fight er s
lik e t he F 35 B t hat r equ ir e a much sho r t er st r et ch o f r unway fr o m which
t o o p er at e. T aiwan co u ld also p r o cur e ad dit io nal mo bile sur face t o air
missiles mak ing it har der fo r China t o fully suppr ess it s air defenses.
49
E ach o f t hese so lu t io ns wo uld be expensive and o nly a par t ial
so lu t io n t o t he p r o blems co nfr o nt ing T aiwan. I mplement ing all t hr ee
o p t io ns mig ht be mo r e r o bust , bu t wo uld likely be p r o hibit ively co st ly
and t ake year s t o acco mplish.
Over all, t he d iffer ence bet ween yest er day's cr o ss S t r ait balance
and t o d ay's is, aft er decad es o f o ffset t ing t he mainland's quant it at ive
su per io r it y by explo it ing decisive qu alit at ive advant ages, T aiwan and
t he Unit ed S t at es have seen it s qu alit at ive ed ges er o de while t he
numer ical hand icap per sist s.
T his det er io r at ing cr o ss S t r ait milit ar y balance has t wo impo r t ant
imp licat io ns fo r t he Unit ed S t at es. One is mo r e immediat e; o ne is
lo ng er t er m.
T he jo b o f d efend ing T aiwan is get t ing har der . Fo r t he fir st t ime
since t he Co ld War , t he Unit ed S t at es faces a p o t ent ial challenger t hat
can co mpet e wit h it in ever y r elevant d imensio n o f war far e: in t he air ,
o n and und er t he sea, in space, and alo ng t he info r mat io n fr o nt ier .
P LA mo d er nizat io n do es no t bo d e well fo r fut ur e st abilit y acr o ss
t he T aiwan S t r ait , and t her e appear t o be no quick, easy o r inexpensive
ways o ut .
I n t he lo nger t er m, t he Unit ed S t at es and T aiwan may co nfr o nt a
fu ndament al st r at egic d ilemma, o ne inher ent in t he geo gr ap hy o f t he
sit u at io n. T aiwan lies o nly a few hundr ed miles fr o m t he mainland .
T aip ei meanwhile is near ly 1, 50 0 naut ical miles fr o m t he near est U. S .
t er r it o r y, Gu am; near ly 4 , 40 0 naut ical miles fr o m Ho no lulu; and abo u t
5 , 6 0 0 nau t ical miles fr o m t he west co ast o f t he Unit ed S t at es.
T his g eo g r ap hic asymmet r y co mbined wit h t he limit ed ar r ay o f
fo r war d basing o pt io ns fo r U. S . fo r ces and China's gr o wing abilit y t o
effect ively at t ack bo t h t ho se fo r ces and t heir bases call int o quest io n
Washingt o n's abilit y t o cr edibly ser ve as gu ar ant o r o f T aiwan secur it y
ind efinit ely.
A China t hat is co nvent io nally pr edo minant alo ng t he E ast Asian
lit t o r al co u ld p o se a d ir ect , d ifficult , br o ad , and end ur ing challenge t o
t he U. S . p o sit io n in t he r eg io n. As wit h almo st ever y issue t o uching o n
S ino U. S . r elat io ns, t his is all a q uest io n o f balance.
T he U. S . and it s allies mu st co nt inue t o pu r su e a st r at egy t hat
simu lt aneo usly hed g es ag ainst China's g r o wing milit ar y po wer while
eng ag ing and enmeshing Beijing in net wo r ks o f po lit ical, eco no mic and
human t ies t hat may event ually r ender milit ar y p o wer anachr o nist ic.
T o d ay's T aiwan dilemma r aises an impo r t ant geo po lit ical quest io n:
what r o le sho uld and can t he U. S . seek t o play in t he E ast Asian
landscape t hat inclu des an eco no mically vibr ant , milit ar ily po wer ful,
p o lit ically u nified and self co nfident China?
Lo o k at T aiwan and beyo nd, what is t he new eq uilibr ium in E ast
Asia, and ho w can t he fo r ces at wo r k t her e be managed so as t o cr eat e
an eq uilibr iu m t o ler able t o t he Unit ed S t at es? T hat is t he ult imat e
q u est io n o f balance po sed by t he gr o wing imbalance o f milit ar y po wer
50
acr o ss t he T aiwan S t r ait .
I t hank yo u again fo r invit ing me t o speak.
[ T he st at ement fo llo ws: ] 1
HE ARI NG CO CHAI R WORT ZE L: T hank yo u.
S TATEM ENT O F DR. ALB ERT S . WILLNER
DIRECTO R, CH INA S ECURITY AFFAIRS G RO UP, CNA,
ALEXANDRIA, VIRG INIA
DR. WI LLNE R: Mr . Chair man, Mr . Vice Chair man,
Co mmissio ner s, t hank yo u fo r invit ing me t o appear her e t o day t o
d iscu ss impo r t ant , planned changes in T aiwan's defense po st ur e. I t is an
ho no r fo r me t o be her e t o t est ify t o day.
Wit h t he publicat io n o f t wo key do cument s last year , t he
Qu ad r ennial Defense Review and t he Nat io nal Defense Repo r t , T aiwan
has fo r mally laid o ut an ambit io us agenda o f change t o it s defense
p o st u r e dur ing t he next few year s.
Fo r budget ar y, po lit ical, and bur eaucr at ic r easo ns, ho wever , many
o f t he pr o po sed changes ar e unlikely t o t ake place exact ly as planned .
My t est imo ny t o day will fo cus o n majo r ar eas o f change int r o duced and
lay o u t so me o f t he key challenges and implicat io ns fo r T aiwan.
T aiwan's fir st ever QDR, published in Mar ch 2009, pr o duced a
d efense assessment and helps explain what t he cur r ent administ r at io n is
d o ing . I t s key pr o po sals ar e as fo llo ws:
S t r eamline T aiwan's defense o r ganizat io n by co nso lidat ing
Defense and Jo int S t affs and milit ar y ser vices t o impr o ve acco unt abilit y
and fo cus o n ser vice specialt ies;
Reduce t he t o t al st at ut o r y ar med fo r ce st r uct ur e fr o m 275, 000 t o
2 1 5 , 0 00 by t he end o f 2014;
Reduce t he number o f senio r level gener al flag o fficer s. T he go al
is t o make cut s o f t his number fr o m 387 t o so mewher e slight ly abo ve
2 0 0 p lus; and
Reduce t he high r at io o f senio r o fficer s t o per so nnel do wn fr o m
almo st t wo per cent t o . 7 per cent ;
I ncr ease t he number o f civilian defense o fficials in MND, in par t
t o g et o fficer s assigned t her e back t o t he field, and t o build up civilian
d efense exper t ise;
Wo r k t o war ds a vo lunt eer fo r ce by co nt inuing t o r educe t he
co nscr ipt per io d, cur r ent ly o ne year , and develo p means t o r ecr uit and
r et ain o fficer s and enlist ed fo r t he lo ng t er m.
Addit io nal t r ansfo r mat io n o bject ives fo cus o n impr o ving fo r ce
p lanning and ar mament s develo pment mechanisms. I n addit io n, jo int
1
Click here to read the prepared statement of Mr. David
Shlapak
51
o p er at io ns, human r eso u r ces, and expanding effo r t s wit h civilian
ind ust r y and lo cal go ver nment s r eceive mo r e at t ent io n in t he do cument .
T he 200 9 Nat io nal Defense Rep o r t , r eleased in Oct o ber o f last
year , exp ands o n t he QDR's pr o p o sed d efense p o st ur e, addr esses cur r ent
MND challeng es, and it makes so me impo r t ant r evisio ns.
T he mo st significant g o al is t o build a fo r ce built o n vo lunt eer s.
T he co st o f t r ansit io ning t o t he act ive fo r ce wit hin five year s will
r eq uir e funding and r eso u r ces no t yet pr o vided by t he Leg islat ive Yu an
in t he defense bu dg et .
Disast er p r event io n and r elief have also been int r o du ced in t he
NDR as a new co r e ar med fo r ces missio n. T he co st s o f t aking o n t his
missio n and it s su pp o r t r eq uir ement s have yet t o be adequ at ely
ad dr essed as well.
Finally, t he NDR makes no t es o f t he effo r t s o f T aiwan t o init iat e
p eace and seek o ut co nfidence bu ilding measur es t o supp o r t t he
g o ver nment 's cr o ss S t r ait effo r t s at seeking co mp r o mise and keep ing t he
p eace, no t ing t hat it s go al is, q uo t e, "lo wer ing t he pr o babilit y o f
accident al pr o vo cat io n o f war . "
Ho w t his chang e will act ually affect T aiwan's d efense po st ur e and
st r at eg y st ill r emains t o be seen.
T he changes p r o p o sed ar e likely t o enco unt er significant
challenges, and it 's t o t hat I t ur n no w.
Fir st , t her e is t he quest io n o f whet her t he po lit ical will and
fu nding exist s t o see t hese changes t hr o u gh? P r esident Ma's init iat ives
acr o ss t he S t r ait ar e chang ing t he secur it y envir o nment , which is likely
t o have a co r r espo nding effect o n t he defense p o st ur e. Mult ip le
d o mest ic po lit ical challenges t o Ma wit hin his o wn p ar t y, wit h t he LY,
and by t he pu blic co uld well weaken his co mmit ment t o see t he changes
t hr o u gh.
A chang e in t hr eat per cep t io ns co uld lead t o a co mmensur at e
chang e in t he willing ness o f pu blic o r t heir r epr esent at ives t o sup po r t
need ed defense r efo r ms.
S eco nd, co nt inued r edu ct io ns in defense spending will clear ly
affect fu ll implement at io n o f t hese changes. Debat es wit hin t he LY,
bet ween t he LY and t he execut ive br anch, and p ar t y p o sit io ning in t he
lead u p t o elect io ns lat er t his year , and o n, ar e likely t o imp act o n
sp ending p lans.
T her e app ear s t o have been a significant do wnt ur n in civil milit ar y
r elat io ns which co uld imp act sig nificant ly o n QDR and NDR
imp lement at io n.
T her e ar e indicat io ns t hat MND is no t being kept in t he lo o p
abo u t o ngo ing cr o ss S t r ait dialo g ue and secur it y impact s, t hat Nat io nal
S ecu r it y Co u ncil and MND r elat io ns ar e st r ained, and t hat Ma and his
ad viso r s ar e d ismissive o f MND advice and per spect ives.
At issu e is no t o bedience t o civilian co nt r o l, but t he neg at ive
imp act t hat civil milit ar y t ensio ns ar e likely having in ad dr essing cr it ical
52
and needed defense r efo r ms and, even mo r e significant ly, po t ent ially
cau sing damage t o ensur ing go o d and r eliable co mmunicat io ns,
co o r d inat io n and co nt r o l especially in t ime o f cr isis.
Recent pay fo r pr o mo t io n scandals, independent pr o secut o r
invest igat io ns o f T aiwan defense co nt r act o r s, milit ar y accident s, and
o t her challenges have all fur t her st r essed t he milit ar y's r elat io nship wit h
t he P r esident and o t her s, affect ing mo r ale and diver t ing needed
at t ent io n o f senio r o fficials t o t he day t o day business o f r unning t he
milit ar y and wo r king o n t hese new defense init iat ives.
As T aiwan t r ansit io ns t o a vo lunt eer milit ar y, fundament al cho ices
will have t o be made abo ut ho w t o develo p a new cult ur e wit h
incent ives designed t o br ing o n bo ar d t he r ight kind o f so ldier s and keep
t hem in fo r t he lo ng t er m.
Recr uit ment and r et ent io n effo r t s will have t o addr ess ser vice t o
nat io n, a challenge, par t icu lar ly amo ng many o f t he yo ung peo ple who
see lit t le incent ive o r significant secur it y t hr eat s r equir ing t heir
co mmit ment .
T he need t o develo p civilian defense exper t ise is an impo r t ant
p r o p o sal and, if implement ed, wo uld po t ent ially cr eat e a r eser vo ir o f
civilians who deeply under st and and wo r k defense issues day t o day and
ar e in go ver nment fo r t he lo ng t er m.
Alt ho ugh it will t ake year s t o fully implement , mo vement s t o war d s
est ablishing a civilian defense bur eaucr acy is cr it ical t o enhancing
influ ence and br o adening under st anding o f defense challenges facing
T aiwan.
Finally, in o r der t o be successful, t he defense po st ur e changes will
need t o be augment ed by a vigo r o us and per suasive campaign t o fur t her
ed u cat e t he public abo ut t he t hr eat s t hat co nt inue t o face T aiwan.
E ven as cr o ss S t r ait impr o vement s ar e t aking place, it is
imp o r t ant t hat t he T aiwan go ver nment cr edibly co nt inue t o ar t iculat e
why a cr edible defense po st ur e r emains par amo unt . T aiwan has alr ead y
t ak en a significant st ep by o ut lining in it s QDR and NDR what needs t o
be d o ne t o st ay r elevant , successfully adapt t o t he changing do mest ic
sit u at io n, and meet t he emer ging r egio nal envir o nment .
I n do ing so , it has o ut lined impo r t ant changes t hat will help t he
g o ver nment , it s milit ar y, and it s peo ple t o t r ansit io n t o t he new
r ealit ies. Har d cho ices will have t o be made and r eso ur ces applied. I f
t ho se co mmit ment s ar e made and seen t hr o ugh, T aiwan's defense po st ur e
and it s cr it ical r o le in helping keep t he peace and st abilit y will be well
ser ved.
T hank yo u ver y much, and I lo o k fo r war d t o yo ur quest io ns.
[ T he st at ement fo llo ws: ] 2
2
Click here to read the prep ared st at emen t of Dr. Alb ert S .
W i lln er
53
PANEL III: Di scu ssi o n , Q u est i on s an d An swers
HE ARI NG CO CHAI R WORT ZE L: T hank yo u. T he t hr ee o f yo u
d id a su per b jo b in co ver ing differ ent aspect s o f t he defense equ at io n. I
d o n't t hink we co uld have asked fo r a bet t er co ver age o f t he wat er fr o nt .
We'r e have five minut es fo r each Co mmissio ner ’s quest io ns, and
t he fir st Co mmissio ner is Co mmissio ner Blument hal.
COMMI S S I ONE R BLUME NT HAL: Yes. T hank yo u all ver y
mu ch fo r excellent t est imo ny.
I 'd lik e t o ask a quest io n r egar d ing so me o f yo ur t est imo ny, Mr .
S hlap ak, and t hen a br o ad er qu est io n, I t hink, fo r ever yo ne.
T he fir st is I u nder st and well t he pr o blems T aiwan faces in having
a su r vivable Air Fo r ce, bu t , as I asked in t he pr evio us p anel, I t hink we
face t he same p r o blems wit h o ur fo r war d deplo yed Air Fo r ce, and o ur
answer is no t let 's no t have an Air Fo r ce; o ur answer is let 's have an Air
Fo r ce t hat can sur vive.
S o yo u made so me r eco mmendat io ns, I t hink, fo r T aiwan t o have,
ho w T aiwan co uld have a sur vivable Air Fo r ce. I was wo nder ing if yo u
co u ld pr o vid e an answer o n a p ackag e t he U. S . can co me up wit h su ch
t hat T aiwan has basically t he administ r at io n has co me up wit h a r epo r t
saying t hey cer t ainly need t he new air cr aft becau se t hey have an aging
fleet ho w t o make t hat mo r e su r vivable? And wo uld t hat mir r o r so me
o f t he t hings we need t o d o at o ur o wn bases?
My mo r e g ener al q uest io n is Co mmissio ner Fiedler br o u ght t his
u p in t he last p anel but it 's t his no t io n, and yo u make r efer ence t o it ,
Mr . S hlap ak, t hat t he Chinese say t hey need a milit ar y in o r der t o make
su r e t hat if t he next par t y co mes int o po wer in T aiwan, t hey can mak e
su r e t hat it do esn't declar e ind ependence.
Bu t so meho w it seems like fr o m t he panel we saw last t ime, we'r e
accep t ing t hat as so meho w ju st ified, and Co mmissio ner Fiedler made t he
p o int t hat , in fact , t hey'r e no t happy wit h demo cr at ic change in T aiwan.
I s it t r u e, and t his is fo r all o f yo u, is it , so meho w, why wo uldn't
we say t o t he Chinese t his is no t t he way we do t hings; we do no t
r eso lve issues t hr o u gh t he u se o f fo r ce; r eno u nce t he use o f fo r ce;
accep t t hat ano t her p ar t y will co me int o po wer ?
T his is no t so meho w go ing t o wo r k it s way int o t he Amer ican
blo o d st r eam t o say, yes, we under st and yo u need a milit ar y so t hat if
ano t her p ar t y co mes t o po wer , yo u can co er ce t hem int o no t co ming int o
p o wer o r yo u can co er ce t hem eit her way.
And so t hat 's a br o ad er quest io n fo r t he who le panel.
MR. S HLAP AK: Let me addr ess yo u r fir st qu est io n. Mar k t alked
abo u t t he key r o le o f t he ballist ic and land at t ack cr uise missiles in
T aiwan's defensive p r o blems, and ind eed we believe t hat t ho se ar e r eal
g ame changer s.
T he abilit y t o use accur at e weap o ns wit h so phist icat ed war heads,
54
inclu d ing su bmu nit io n war heads, cr eat es a t hr eat t hat yo u can har d en
ag ainst it t o so me ext ent , but at so me level it beco mes a r ace bet ween
ho w fast t hey can bu ild missiles and ho w clever we can be at pr o t ect ing
t he t hings we d o n't want t hem t o dest r o y.
Yo u can build har dened shells fo r air cr aft . I t 's har d so met imes t o
fu r t her har den a r unway, it being made o ut o f co ncr et e t o begin wit h.
S o even if t he air cr aft su r vive, t he r isk o f being t r apped o n t he gr o und
is no n t r ivial. S o , yes, t her e ar e t hings t hey co uld do .
I 'm co ncer ned, ho wever , t hat in t he lo ng r u n, we'r e o n t he wr o ng
sid e o f t he exchange r at e t her e.
COMMI S S I ONE R BLUME NT HAL: Ho w abo ut Mr . S t o k es o r
so meo ne else o n t he br o ader qu est io n I just r aised ?
MR. S T OKE S : On t he br o ader q uest io n o f t he P RC's po licy o f
no t r eno u ncing use o f fo r ce and maint aining a ver y, fo r lack o f a bet t er
t er m, so mewhat o f a bellico se milit ar y p o st ur e against T aiwan?
COMMI S S I ONE R BLUME NT HAL: And o ur accept ance so meho w
t hat t his is we und er st and t hat t hey need t o d o t his in case ano t her
d emo cr at ic par t y is elect ed.
MR. S T OKE S : I t hink t he milit ar y po st ur e, in gener al, and t his is
t he way P RC t ends t o fr ame it , is a d et er r ence fo r ce. I t 's a fo r m o f
d et er r ence war far e int end ed t o , what t hey view, is t o det er , sp lit us, t o
d et er T aiwan ind ep endence ad vo cat es.
I n my per so nal o pinio n, t o d ay, t he P RC's milit ar y po licy wit h
r eg ar d s t o T aiwan is no t o nly unnecessar y but is co unt er pr o duct ive.
One quest io n, do t hey even need t o have t his milit ar y po st ur e
anymo r e? Wit h t he t wo sides being as int er dependent as t hey ar e
eco no mically, bo t h sid es, in my view, wo uld have a ver y, ver y difficu lt
t ime having a su dden shift in po licy eit her way.
No w, in 20 1 2, if t her e's ano t her par t y t hat co mes int o play in
T aiwan, I t hink it wo u ld st ill be ext r emely limit ed in it s abilit y t o be
able t o shift it s o wn p o licies vis à vis China.
And so I t hink what 's under est imat ed , it s abilit y t o be able t o in
o t her wo r d s, it has o t her lever ag es o t her t han milit ar y, and t o me, I ju st
d o n't u nd er st and why t hey wo u ldn't t ake act ive measur es t o be able t o
r eno u nce u se o f fo r ce as well as r ed uce t heir milit ar y po st u r e.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u.
I f we get a seco nd r o und, yo u might want t o r eaddr ess.
Co mmissio ner Wessel.
COMMI S S I ONE R WE S S E L: T hank yo u , gent lemen, fo r being
her e.
I have t wo q u est io ns, which if we co uld st ar t wit h Mr . S hlap ak
and t hen have t he o t her s co mment .
Fir st , I asked a q u est io n o f a pr evio u s p anelist , Mr . S chiffer ,
abo u t U. S . cap abilit ies. Mo st o f t he discussio n has been abo ut what ar e
T aiwanese capabilit ies, bu t if wit h changing d ynamics and capabilit ies o f
t he Chinese, what is yo ur view o n what t he U. S . may need t o do t o
55
minimize t he d et er r ence and cap abilit ies o f t he Chinese vis à vis o ur
abilit y t o co me t o t he aid o f T aiwan if t hat sho u ld beco me necessar y?
Fir st q uest io n.
T he seco nd is, is it yo ur assessment t hat t he acquisit io n o f F 1 6
C/ D o r , lat er o n, po t ent ially F 35s, wo uld t hat make a subst ant ial
d iffer ence in t he air p o wer balance bet ween T aiwan and t he Chinese, and
in what ways?
MR. S HLAP AK: Let me t ake yo ur seco nd q uest io n fir st . Our
analysis su g gest s t hat t he F 16 C/ D wo u ld su bst ant ially impr o ve t he
sit u at io n as lo ng as t hey ar e based at facilit ies t hat can st ay o pen, t hat
d o n't get shut d o wn fo r su bst ant ial p er io ds o f t ime. S o t hat 's t he
d ilemma t hat T aiwan faces and t hat we face in jud ging t hat .
Yo u'r e abso lut ely r ig ht , t hat t he r isk t o o ur o wn fo r ces in t he
West er n P acific, in t he event o f a co nflict , is gr o wing. We've lo o ked at
Kad ena and Gu am and all so r t s o f o pt io ns. T her e ar e t hings t hat can be
d o ne, bu t as wit h t he case wit h T aiwan, it co mes do wn t o t hem building
missiles and us p o ur ing co ncr et e, and who can d o what fast er .
S o I t hink t hat t he challenge t her e is t o co nt inue r aising t he co st
o f ent r y, if yo u will, fo r China, so t hat t hey'r e no t mak ing a cho ice
bet ween st ar t ing a lit t le t iny war and no war . T hey face a cho ice o f
st ar t ing a r eally big war and a lit t le war , and t hat , I t hink, is ho w yo u
can alt er t he det er r ence dynamic in o ur favo r .
COMMI S S I ONE R WE S S E L: Okay. Ot her wit nesses?
MR. S T OKE S : I t end t o view t he ut ilit y o f F 16s in a slig ht ly
d iffer ent manner . I ag r ee wit h ever yt hing t hat Mr . S hlapak ment io ned .
But o ne is assu ming a wo r st case scenar io when yo u lo o k at t he massive
salvo s o f sho r t r ange ballist ic missiles t hat fr ankly anyt hing o n T aiwan
t hat is no t har d ened it wo uld r ender anyt hing vu lner able basically wit h
so me except io ns.
And , t o me, a fu ll scale annihilat ive scenar io invo lving massive
salvo s o f ballist ic missiles is o ne st ep do wn o n t he spect r u m o f vio lence
fr o m a nuclear st r ike. I n o t her wo r d s, yo u hear many peo ple saying
what do we d o t o maint ain T aiwan's d efense in t he face o f a nuclear
t yp e o f scenar io ? Full scale amphibio us invasio n, t o me, is no t t he mo st
lik ely scenar io fo r u se o f fo r ce against T aiwan.
T he mo st likely scenar io is o ne t hat is limit ed use o f fo r ce t o
achieve limit ed p o lit ical o bject ive. Wit hin t his co nt ext , lo o king at
cr o ss S t r ait co mpet it io ns being inher ent ly p o lit ical in nat ur e wit h
milit ar y being a su bset , t he value o f F 16s cer t ainly has milit ar y value,
but mo r e t han t hat , it ser ves as a viable demo nst r at io n o f T aiwan's
r eso lve t o be able t o r esist P RC co er cio n.
S ame t hing wit h P AC 3, P at r io t P AC 3, yo u can make t he same
ar g ument . P at r io t P AC 3 wo uld be a speed bump in t er ms o f a massive
P RC ballist ic missile st r ike. Bu t t he valu e o f P AC 3 r eally lies in it s
abilit y t o be able t o under cu t t he ut ilit y o f t ho se ballist ic missiles t hat
ar e ar r ayed against T aiwan. I t 's mo r e so r t o f a co nfidence, a
56
p sycho lo gical ed g e.
S o I wo uld t end t o put F 16s in t er ms o f a st r o ng ar g ument so r t
o f in t hat so r t o f fr ame.
COMMI S S I ONE R WE S S E L: Dr . Willner .
DR. WI LLNE R: No t hing.
COMMI S S I ONE R WE S S E L: T hank yo u.
HE ARI NG CO CHAI R WORT ZE L: Dr . Willner , Mr . S t o kes
d iscussed C4I S R. Can yo u addr ess advant ages t hat mig ht accr ue t o
T aiwan's defense cap acit y if C4 I S R r eceived a higher p r io r it y fr o m t he
Leg islat ive Yuan and t he Minist r y o f Defense? T he pr o cur ement and
inst allat io n o f t hese by T aiwan seems t o be piecemeal, which impedes
co o p er at ive t ar get ed engagement , and o bvio usly, Mr . S t o kes, yo u may
have a co mment o n t hat also .
Mr . S hlap ak, just ho w safe is Guam fr o m China's lo nger r ange
missiles? And in t hat o r der .
DR. WI LLNE R: Co mmissio ner Wo r t zel, t hank yo u fo r yo ur
q u est io n.
Obvio usly, I fo cu sed mo st o f my t est imo ny her e t o d ay o n QDR
and so me o f t he t hings t hey wer e do ing wit h t he Nat io nal Defense
Rep o r t , but my exp er ience bo t h o n island and since o bvio usly wo uld
heavily suppo r t an incr eased pr io r it y fo r C4I S R. I t hink it go es t o t he
co r e o f t heir abilit y t o manage at a macr o and micr o level, and I t hink
t hat t his is wo r r iso me.
I t hink o ne o f t he issues t hat is o ut t her e wit h t he Nat io nal
Defense Repo r t and t he QDR is t hat t her e ar e lo t s o f bud get it ems
imp lied in t ho se t wo do cument s and it may be at t he expense o f so me
o t her need ed milit ar y develo pment s t hat ar e o ng o ing .
MR. S T OKE S : On t he subject o f C4I S R, no quest io n, t o me, it 's
similar t o an ind ivid ual's co gnit ive syst em. Yo u can't live wit ho ut it .
And t o give T aiwan cr edit , and t his go es back all t he way t o t he
p r evio us ad minist r at io n, Lee T eng hu i administ r at io n, p r evio us
ad minist r at io n, and t hen t he Ma ad minist r at io n, t hey've do ne act ually
r eally well.
What 's g o ne unno t iced is o per at io nal cap abilit y, what 's called P o
S heng , which is t heir advanced t act ical dig it al dat a links, t hat went
fo r war d in December . T his is a r evo lut io nar y chang e. T he who le fo r ce
is no t equ ipp ed wit h it , but t his is a r evo lut io nar y change in lo o k ing at
it fr o m a do ct r inal p er spect ive in t er ms o f net wo r k cent r ic war far e
wher e yo u empo wer war fig ht er s at lo wer levels, fo r example, whet her
it 's yo u r t ank dr iver s o r whet her it 's yo ur air plane pilo t s, be able t o
emp o wer t hem t o be able t o synchr o nize o p er at io ns wit ho ut init ially
even if yo u 'r e cut fr o m t he t o p , yo u can st ill co ndu ct au t o no mo us
o p er at io ns.
T her e's a lo t mo r e t hat T aiwan can do , and T aiwan has t he
p o t ent ial t o field o ne o f t he mo st advanced C4I S R net wo r ks in t he field .
I can give d et ails if int er est ed, but I 'll ho ld it at t hat .
57
MR. S HLAP AK: I n t er ms o f Guam's safet y, I t hink t o day we
wo u ld assess it as being fair ly safe. T he Chinese have no t develo p ed
and deplo yed t he so r t s o f weapo ns t hat wo u ld be necessar y t o launch
t he k ind o f at t acks o n Guam t hat we see po ssible in T aiwan o r o n
Ok inawa.
T her e's no t hing pr event ing t hat we can see t her e's no t hing
p r event ing China fr o m d evelo ping and d eplo ying eno u gh lo nger r ange
missiles, whet her I RBMs o r submar ine launched land at t ack cr uise
missiles, t hat co u ld br ing Guam und er su bst ant ial t hr eat . T hat 's in t he
fu t u r e. We d o n't see t hem do ing it .
T her e ar e so me challenges t o t heir acco mp lishing it t hat t hey
d id n't enco unt er wit h t he sho r t r ange missiles, but in t er ms o f
t echno lo g y, if t hey'r e willing t o make t he invest ment s, t hey co uld
cer t ainly make t he sit u at io n much mo r e wo r r iso me fo r Guam.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u.
Co mmissio ner Vid eniek s.
COMMI S S I ONE R VI DE NI E KS : Go o d mo r ning, gent lemen.
T he fir st quest io n is kind o f a br ief o ne. I t 's t o Dr . Willner . E ven
t ho u gh T aiwan's d efense budg et is r o u ghly $9 . 3 billio n, and half o f it
g o es t o p er so nnel co st s, yo u 'r e saying at t his po int t hat t hey st ill have
no t begu n t o fu nd, have no t begu n t o fund t he vo lunt ar y aspect o f t he
ar med fo r ces even t ho u gh half o f t heir milit ar y budg et is d evo t ed t o
p er so nnel co st s?
And a g ener al quest io n is when we lo o k at t he co mp ar at ive
effect iveness o f t he fo r ces, ar e we lo o k ing at t he t heat er co ncent r at io n
o f fo r ces? Because and I do n't k no w what p o r t io n o f t heir milit ar y t he
P RC has co ncent r at ed acr o ss t he S t r ait , but I co uld see wher e o t her
milit ar y do n't even co me int o t he co nsid er at io n.
And t hen, ho w wo uld , since t her e ar e 1, 100 missiles co ncent r at ed
acr o ss t he S t r ait , and po ssibly t he Air Fo r ce co uld be incap acit at ed by
d amaging t he air fields, ho w wo uld a pr eempt ive st r ike by T aiwan o n
P RC t o t r y t o g et t ho se missiles o u t o f t he way be viewed by t he U. S .
and by t he T RA? T hat 's t o all t hr ee.
DR. WI LLNE R: Well, t o yo ur fir st q uest io n, Co mmissio ner , t he
issu e o f d efense bu dg et , t heir being eno u gh mo ney fo r p er so nnel, I t hink
p ar t o f t he challenge is o ne o f t he same challeng es we enco u nt er ed in
t he '7 0s go ing t o an all vo lunt eer fo r ce, is t hat t her e ar e sp ikes in t er ms
o f t hat init ial t r ansit io n, and I t hink t hat was under est imat ed.
I t hink t her e's a lo t mo r e mo ney t hat go es int o easing so me p eo p le
o u t , bo nu ses, t ho se kinds o f t hing s, in t r ansit io ning t he fo r ce. I t hink
t hat also pr o bably u nder played o r under est imat ed in t er ms o f budget ing
fo r p er so nnel is t he amo unt o f mo ney t hat it t akes t o r ecr u it and r et ain
fo r t he lo ng t er m fo lks t hat ar e co ming in vo lunt ar ily. T her e's issues
r elat ed t o family sup p o r t .
COMMI S S I ONE R VI DE NI E KS : Ar e yo u saying, sir , t hat is
so met hing which will be r eflect ed in fu t u r e bu dget s, and t his o ne do esn't
58
even t o uch o n it ?
DR. WI LLNE R: Well, t hat 's what we ho pe, but I t hink t hat t her e
is u nder st and ing r eally o n bo t h t he par t o f defense o fficials and t he
civilian o fficials t hat t her e wer e co st s t hat wer e no t fully t ak en int o
acco u nt as t hey planned t he bud get s t o suppo r t bo t h t he NDR and QDR
p r o p o sals.
COMMI S S I ONE R VI DE NI E KS : T hank yo u.
On t he o t her qu est io n, t heat er , pr eempt ive st r ikes, and maybe t he
ser io u sness o f T aiwan’s t hr ee p er cent o f GDP milit ar y bu dg et as a
ser io u s at t emp t t o self defense?
MR. S HLAP AK: On t he issue o f what fo r ces China will br ing t o
bear , in o u r wo r k , we assembled a co u ple o f differ ent fo r ces
r ep r esent ing d iffer ent assump t io ns abo ut who , what , wher e. I n bo t h
cases, t hey wer e br o adly co nsist ent wit h t hings yo u see in t he Do D's
annual r epo r t and so fo r t h.
Regar d ing so me so r t o f p r eempt io n against China o n t he p ar t o f
T aiwan, I canno t speak at all t o what t he at t it ud e o f t he U. S .
g o ver nment wo uld be t o t hat . Oper at io nally, I wo uld have t o be
co nvinced t hat it wo u ldn't be a flea bit ing an elephant .
T hese missile lau ncher s ar e mo bile. I f t hey ar e disper sed, t hey'r e
ver y har d t o get . I f yo u r emember , 199 1, in t he deser t
COMMI S S I ONE R VI DE NI E KS : All t ho se t ho usand missiles ar e
mo bile. I und er st and t heir nu clear fo r ces ar e.
MR. S HLAP AK: Right , r ight . T he st r at egic nuclear fo r ce at t his
t ime is fixed , but t he sho r t r ange missiles, I believe, ar e all mo bile. I 'm
lo o king ar o u nd fo r co nfir mat io n. Obvio usly, if t hey'r e sit t ing in t heir
st o r ag e facilit ies, t hey'd be mo r e vulner able, bu t pr esumably any st at e o f
t ensio n sufficient ly hig h fo r t he idea o f pr eemp t io n t o per co lat e t o t he
t o p o f T aiwan's lead er ship echelo n wo uld be o ne in which t he Chinese
wo u ld have been lik ely t o have flushed t ho se lau ncher s and made t hem
ver y, ver y, ver y sur vivable.
COMMI S S I ONE R VI DE NI E KS : P lease.
MR. S T OKE S : S ir , o n t wo o f t he issues, fir st , o n t he all
vo lu nt eer fo r ce, o ne wo uld need t o ask a fu ndament al q uest io n o f what
mak es peo ple jo in t he milit ar y? Financial incent ives, in my view, ar e
o nly o ne asp ect in t er ms o f r ecr u it ing and r et aining peo ple.
One aspect t hat 's fo r g o t t en ver y o ft en is t he at t r act iveness o f
having a milit ar y t hat 's r espect ed and has mo der n equipment . No w,
simp ly, fo r k ids, it 's kind o f co o l t o go o ut and fly an F 16. I t may no t
be t hat co o l t o be able t o go and fly an F 5. S o t her e's a co nnect io n
bet ween t hat .
T he 5 0 per cent in t er ms o f t he co st s, t hat will be wo r ked d o wn.
T her e will be so r t o f differ ences in t he bucket .
Yo u ment io ned t he t en billio n, and if t hat 's eno ugh. My view, in
t er ms o f t hr ee per cent GDP , is t her e's an o pp o r t unit y co st . I f yo u
incr ease t he milit ar y bu dg et , yo u 'r e go ing t o t ake away o t her t hings t hat
59
ar e r eally impo r t ant fo r T aiwan, whet her it 's all t he way fr o m so cial
welfar e, t o invest ment int o science and t echno lo gy.
COMMI S S I ONE R VI DE NI E KS : But is it basically a ho pe fo r a
lar g er war ?
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner Videniek s,
we've r un o u t o f t ime o n t his o ne.
MR. S T OKE S : T he last p o int o n pr eempt io n, just t o make t he
p o int , t hat t he S eco nd Ar t iller y Fo r ces o pp o sit e T aiwan, yes, o f co ur se,
t he launcher s ar e mo bile. Ho wever , in ever y syst em, if yo u lo o k at t he
S eco nd Ar t iller y as a syst em, it is a syst em, and ever y syst em has sing le
p o int s o f vu lner abilit y.
COMMI S S I ONE R VI DE NI E KS : T hank yo u.
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner Fied ler .
COMMI S S I ONE R FI E DLE R: T wo set s o f quest io ns. One,
co ncep t u al, and o ne much mo r e specific, a har d war e quest io n.
Bu t , fir st , t he who le d iscussio n we had ear lier abo ut limit ed war
and t his, t hat , and we'r e all t alking har d war e, bu t let 's t alk po lit ics o f it
because in t he end t he d ecisio n t o go t o war is always in so me measur e
p o lit ical.
Do es anybo dy believe t hat it is r easo nable t o co nsider t hat
Chinese mo t ivat io n vis à vis T aiwan co nt ains so me significant element
o f p lanning, t hat if t her e is int er nal inst abilit y in t he co unt r y, t hat it is a
u seful d iver sio n? At t hat po int , t he po lit ical dip lo mat ic calcu lus
chang es dr amat ically, i. e. , if we have a sur vival pr o blem d o mest ically,
we d o n't much car e what anybo dy t hinks wo r ldwide. I s t hat a scenar io
t hat p eo p le game o ut ? I s it r easo nable? I s it a co nsider at io n o r ar e we
d isco unt ing t hat ?
I kno w t he g o ver nment wo uldn't answer t hat qu est io n so I didn't
bo t her t o ask t hem.
MR. S T OKE S : I can addr ess t hat at a p o lit ical level. Yes, sir , o f
co u r se, it is a po ssible scenar io .
COMMI S S I ONE R FI E DLE R: I s it r easo nable?
MR. S T OKE S : I f I wer e in Beijing, I wo uld say it is no t
r easo nable, and t he r easo n is yo u can cause yo ur self a lo t mo r e
p r o blems by cau sing p r o blems wit h T aiwan t han yo u wo u ld if yo u t o o k
t hat ap pr o ach.
COMMI S S I ONE R FI E DLE R: Yes, but yo u also said ear lier , yo u
d id n't und er st and why t hey didn't
MR. S T OKE S : Reno unce use o f fo r ce.
COMMI S S I ONE R FI E DLE R: yes. S o I t ho ug ht t hat was naive.
S o
MR. S T OKE S : Well, t o me, it 's a wo r t hwhile o bject ive. T her e
have been p o lls t hat r eflect a significant par t o f China's po p ulat io n t hat
act u ally wo u ld lik e t o see t hat happ en, but it is a p o ssible scenar io . No
q u est io n. T he u se o f an ext er nal diver sio n is cer t ainly a p o ssible
scenar io .
60
COMMI S S I ONE R FI E DLE R: Anybo dy else? Yo u disag r ee wit h
him? All t hr ee?
Yo u t hen mad e r efer ence t o limit ed war far e fo r limit ed o bject ives.
I n t he cur r ent co nt ext , can yo u co nceive o f t hat being r ealist ic, i. e. ,
t hat t hey t hink t hat t hey can dr o p any o r dnance o n T aiwan and no t have
a majo r int er nat io nal p r o blem?
MR. S T OKE S : T he sho r t answer t o yo ur qu est io n is t her e wo uld
be majo r int er nat io nal pr o blems if t her e's a kinet ic so lu t io n invo lved .
Ho wever , wo uld t he int er vent io n be as sever e as if yo u wo uld
have a majo r amphibio u s invasio n? I n o t her wo r ds, t her e's
COMMI S S I ONE R FI E DLE R: No , I under st and t he differ ence.
Yo u 'r e t alking t he differ ence bet ween lo bbing missiles and p u t t ing
p eo p le o n t he gr o u nd.
MR. S T OKE S : And lar ge scale d eat hs and blo o d shed. I n o t her
wo r d s, t he r eact io n, I t hink t her e wo u ld be a calculat io n
COMMI S S I ONE R FI E DLE R: I t ell yo u what I 'm g et t ing at . I 'm
g et t ing less at t he Chinese willingness t o do t hat as so r t o f wo r ld and
t he Unit ed S t at es', o ur o wn g o ver nment 's, r eact io n t o such an event ,
when we ar e less t han ag gr essive, in my view, abo ut co nfr o nt ing t hem
o n what I p er ceive t o be abso lu t ely mino r issues o f pr o t o co l, like
meet ing t he Dalai Lama in t he Oval Office o r t he o ffice next d o o r , o r let
him g o o u t t he fr o nt d o o r o r t he back do o r .
I f we'r e so co ncer ned abo ut t hat kind o f st uff, I 'm ver y fr ight ened
abo u t t he r eact io n t o limit ed incu r sio ns, if yo u will.
And so t he quest io n beco mes her e, and t his is all in t he end a
p o lit ical, and I u nder st and it 's gaming o ut what ar e p o ssibilit ies, but
t hese ar e all t hing s, I mean if t hey t ho ught t hat t hey co u ld get away
wit h so met hing limit ed , I 'd be ver y fr ig ht ened abo ut o ur r espo nse.
MR. S HLAP AK: Just a quick r espo nse. I t hink t hat t her e ar e t wo
t hing s t o bear in mind her e. T he fir st is I do n't kno w o f many p eo p le
who have st udied China who wo uld say t hat China is it ching t o g o t o
war , is it ching t o dr o p weapo ns o n T aiwan. I t hink, cer t ainly my belief
is, t hat u se o f fo r ce against T aiwan is abso lu t ely t he last r eso r t fo r
t hem, pr ecisely fo r t he r easo ns t hat yo u expr ess.
T he co nsequences o ut side t he bat t lefield, t he co nsequ ences t o
t heir eco no my, and so fo r t h, wo uld be sever e. As t o ho w likely we
wo u ld be t o int er vene, it co u ld d epend so mewhat o n what pr o vo ked t he
Chinese. I f it was a clear and ver y dr amat ic br eaching o f o ne o f t heir
d eclar ed r ed lines ver sus so met hing abo ut who 's using what do o r o n t he
p r esid ent ial p alace, I t hink it 's p o ssible t hat t he r eact io n mig ht be
d iffer ent .
Bu t I t hink absent a mo r e t ho r o ugh under st anding o f t he exact
cir cu mst ances, it 's har d t o mak e a pr edict io n o ne way o r t he o t her .
COMMI S S I ONE R FI E DLE R: T hank yo u.
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner Mu llo y.
HE ARI NG CO CHAI R MULLOY: T hank yo u , Mr . Chair man. I
61
want t o t hank all o f yo u fo r being her e.
Mr . S hlap ak, I r eally lik ed yo ur t est imo ny becau se I t ho u ght it
was such a br o ad gaug e lo o k at t his who le t hing . I r emember t he Cuban
missile cr isis so I app r eciat ed t he po int yo u made t her e.
On p ag e fo ur , yo u t alk abo ut t he differ ence bet ween t he cr o ss
S t r ait balance t en t o 2 0 year s ago and say it 's subst ant ial t he differ ence
is su bst ant ial. And yo u say aft er d ecad es o f o ffset t ing t he mainland 's
q u ant it at ive su p er io r it y by explo it ing d ecisive qualit at ive ad vant ag es,
t hese qualit at ive edges ar e er o ding while t he numer ical handicap
p er sist s.
S o I t hink t hat means t hat we had hig her t ech weapo n, and co uld
co u nt er t he lo wer t ech weapo ns o f China.
Have t he Unit ed S t at es' po licies, eco no mic and t r ad e po licies and
invest ment po licies and t ech t r ansfer po licies, t o war d China o ver t he
last t en year s co nt r ibu t ed t o t his er o sio n o f o ur abilit y t o defend T aiwan
if we cho se t o d o t hat ?
MR. S HLAP AK: I 'm no t r eally qualified t o t alk abo ut t r ade
p o licy o r t echno lo gy t r ansfer p o licy so I 'd lik e t o t ake a pass o n t hat .
T he er o sio n has had many so ur ces. China fo r t he last almo st 2 0
year s no w has been buying billio ns o f d o llar s o f fr o nt line equipment
fr o m Russia, and pr o bably t echno lo g y t r ansfer fr o m t her e is far mo r e
imp o r t ant t han any impact it mig ht have had fr o m t he Unit ed S t at es, but
I 'm no t r eally equ ipped t o judge what t hat impact was.
HE ARI NG CO CHAI R MULLOY: Do eit her o f t he o t her
wit nesses want t o co mment o n t hat ?
MR. S T OKE S : I do n't have a g o o d handle o n U. S . t ech t r ansfer
p o licy. Ho wever , inst inct ively, I wo uld say t hat when t he P eo p le's
Rep u blic o f China, when t heir defense ind ust r y, whet her it 's t he sp ace
and missile indu st r y o r aviat io n ind ust r y o r ship building ind ust r y, has a
t echno lo g ical pr o blem, in o t her wo r d s, t her e's a bo t t leneck t hat exist s,
my view is t hat t hey ar e ver y adep t at finding ways t o o ver co me t hat
p ar t icu lar t echno lo gical bo t t leneck , whet her it 's t echno lo gy fr o m t he
Unit ed S t at es o r fo r mer S o viet Unio n, o r a r ange o f all o t her so u r ces.
S o whet her o r no t t his is a r eflect io n o f U. S . t ech t r ansfer p o licy
o r if it 's t he Chinese gr o wing basically, t he glo bal nat u r e o f t echno lo g y
d iffu sio n, whet her t hat 's mo r e o f a fact o r t han it is any sp ecific aspect
o f U. S . p o licy per se.
HE ARI NG CO CHAI R MULLOY: No w, o n t he eco no mic
ag r eement , do yo u g uys fo llo w t he eco no mic agr eement t hat 's being
d iscussed bet ween T aiwan and China? Anybo d y fo llo wing t hat ? No .
Ok ay.
Mr . S t o kes, yo u'r e no t
MR. S T OKE S : No t in det ail.
HE ARI NG CO CHAI R MULLOY: Okay. I 'll save my quest io n
t hen o n t hat fo r t he next panel.
T hank yo u ver y much.
62
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner S hea.
COMMI S S I ONE R S HE A: I want t o t hank yo u all fo r yo u r ver y,
ver y int er est ing t est imo ny.
I guess t he fir st quest io n I have is fo r Mr . S t o k es, and t hen t he
seco nd o ne fo r Dr . Willner , and , Mr . S hlapak, just jump in if yo u feel
t he u r ge.
Fo llo wing u p o n Co mmissio ner Fiedler 's po int , Mr . S t o kes, yo u
said t hat it was inexplicable t hat China wo uld be co nt inuing t o have a
t ho u sand plu s missiles t ar g et ed o n T aiwan. I was wo nder ing if yo u
co u ld give us a lit t le bit o f insig ht int o t he dynamic wit hin China, wit hin
t he Chinese lead er ship? I s t he milit ar y calling t he sho t s her e? I s it t he
civilian leader ship ?
Ar e t her e any t ensio ns wit h t he civilian leader ship ? Or is t he
civilian leader ship calling t he sho t s? Or do yo u have any insight int o
t hat ? T hat 's t he fir st quest io n.
And , t hen, Dr . Willner , wit h r espect t o T aiwan, yo u hint ed t hat
t her e was so me t ensio n bet ween t he Minist r y o f Nat io nal Defense and
t he Nat io nal S ecur it y Co u ncil, t he civilian lead er ship, t he secur it y
lead er ship, in T aiwan. I was wo nder ing if yo u co u ld flesh t hat o ut ?
And has t he exp anded missio n o f d isast er r elief fo r t he T aiwanese
milit ar y, has t hat been well r eceived? I f yo u co uld co mment o n t hat as
well.
MR. S T OKE S : I co uld say I 'm no t in a po sit io n t o speculat e;
ho wever , I 'm no t g o ing t o say t hat .
COMMI S S I ONE R S HE A: S peculat e.
MR. S T OKE S : I 'm go ing t o sp eculat e. I lo ve sp eculat io n. I n
g ener al, t her e is t he st at ed r easo n abo ut t he r efusal t o r eno unce use o f
fo r ce o r wit hd r aw t he five missile br ig ades o p po sit e T aiwan, but t her e's
a who le r ange o f dynamics t hat pr o bably exist in China t hat may no t be
d iffer ent fr o m o t her co u nt r ies ar o und t he wo r ld.
Yo u need a t hr eat . S cenar io based planning. P eo ple like t o get
away fr o m scenar io based planning and go t o cap abilit ies based
p lanning , but yo u need a t hr eat , and T aiwan is a go o d whip ping bo y.
I t 's a gr eat o ne.
Yo u can bu ild up yo ur milit ar y in a way t hat so r t o f channels
at t ent io n o n t o o ne p ar t icu lar issue, and yo u'r e no t go ing t o have,
t heo r et ically, p eo p le t hat alar med , fo r example. What bet t er way t o d o
it ? Because fr ankly, t he capabilit ies yo u'r e br inging against T aiwan
co u ld be ar r ayed against Japan. I t do esn't t ake t hat much o f a leap t o
t ak e t ho se S RBMs, ext end t he r ange, and t hen use t ho se same
capabilit ies. But having T aiwan as so r t o f at t he fo cus o f t hat t hr eat is
nice and co nvenient .
S eco ndly, t he o t her issue, and ag ain t his is keep ing wit h t he same
t heme, a lo t o f t he changes t hat o ccu r r ed in t er ms o f t he milit ar y
p o st u r e o ppo sit e T aiwan o ccur r ed in 199 1 r ight when t he availabilit y
r ig ht when t he S o viet t hr eat went away.
63
S o when yo u st ar t ed having t hat bu ild up t hat o ccur r ed in '91, and
so in o r der t o maint ain t hat fo cus, yo u had T aiwan, yo u r o ll o ut t he
u sual su spect , and let 's co u nt er T aiwan independence, when act ually use
o f milit ar y fo r ce do esn’t do anyt hing t o d et er . On T aiwan, I t hink
t hey'r e o blivio u s t o it , but anyway.
COMMI S S I ONE R S HE A: T hank yo u.
Dr . Willner .
DR. WI LLNE R: T o yo ur fir st qu est io n, Co mmissio ner , abo ut
d iffer ences bet ween MND and NS C, I t hink t her e ar e t hr ee issues at
p lay: per so nalit y based issues, cult u r al based issues, and p o licy based
d iffer ences.
I t hink per so nalit y, I t hink t her e wer e so me, cer t ainly wit h S u Chi
and t he MND lead er ship , I t hink t her e was so me fr ict io n t her e t hat was
ver y p er so nalit y based, and I t hink t her e was a co nso lid at io n wit hin t he
NS C t o wo r k so me t hings so met imes t o t he exclusio n o f MND t hat
caused so me per so nalit y fr ict io ns.
I t hink t her e wer e cult ur al differ ences, and I t hink t his is an issu e
t hat wo uld be, maybe no t r eso lved, bu t t hat wo uld go a lo ng way in
d evelo p ing civilian defense exp er t ise fo r t he lo ng t er m. Fo lk s t hat st ay
in, t hat under st and t he issues t hat deal wit h t he milit ar y, t hat haven't
necessar ily been in t he milit ar y, go a lo ng way in advancing T aiwan's
int er est s. S o I t hink t her e ar e so me cult ur al issues t her e in t er ms o f
u nd er st anding o f each o t her ’s cult ur e.
And I t hink p o licy has played a r o le in t his, and t hat is p o licy
d iffer ences o r at least co ncer n o n t he par t o f t he civilian side o f t he
ho use and NS C t hat MND was less t han supp o r t ive o r per haps slo w
r o lling so me o f t he chang es expect ed by Ma, and t hat was a r eflect io n o f
so me o f t he t hat was played o ut in so me o f t his maybe no t co nflict bu t
cer t ainly so me o f t hese t ensio ns.
I n t er ms o f whet her t he expanded missio n o n disast er r elief has
been well r eceived, it has been well r eceived. Act ually, t her e's been an
o ngo ing mo ve o ver t he past sever al year s t o mo ve in t hat dir ect io n.
I t hink t hat t his also plays t o t he co ncer ns t hat t he Legislat ive
Yu an and t he p eo p le have abo ut whet her t he milit ar y can no t o nly
su pp o r t d efending T aiwan against ext er nal t hr eat s, bu t is r eady t o
r espo nd when t her e ar e int er nal challenges as well.
I t hink T ypho o n Mo r ako t last year o pened t he windo w o n so me
sig nificant challeng es t hat t he milit ar y has, t hat T aiwan has in dealing
wit h t hese, and I t hink t hat is what gener at ed , in p ar t , t his push t o make
su r e t hat d isast er r elief was a co r e missio n o f t he milit ar y, and I t hink
it 's been well r eceived .
I t hink I wo u ld just add t hat o ne o f t he pr o blems is t hat when an
ear t hq uak e o r t ypho o n hit s, t hat sig nificant amo u nt s o f t he d efense
bud g et , O&M, is r ealigned t o supp o r t t hat . And t her e was a lo t o f
mo ney p ulled o u t t o supp o r t t he t ypho o n r espo nse, and I gu ess t hat
cr eat es ad d it io nal challeng es in t er ms o f t heir d ay t o day sup po r t fo r
64
o t her init iat ives.
COMMI S S I ONE R S HE A: T hank yo u.
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner Cleveland.
COMMI S S I ONE R CLE VE LAND: Dr . Willner , I was int er est ed in
yo u r t est imo ny. Yo u said t hat in a discussio n abo ut t he t r ansit io n t o t he
vo lu nt ar y milit ar y t hat vo lunt eer milit ar y t hat yo u ng peo ple see lit t le
incent ive o r significant secur it y t hr eat s r eq uir ing t heir co mmit ment .
I was int er est ed in yo ur co mment , Mr . S t o kes, in t alking abo ut
China, t hat t her e has t o be a t hr eat .
S o I 'd like t o ask all o f yo u , do yo u t hink t hat t he T aiwanese
p eo p le per ceive a clear and pr esent danger o r a t hr eat ? T he seco nd p ar t
o f t he qu est io n pr o bably apo cr yphal in t his co nt ext bu t do yo u t hink
we co nst ant ly t alk abo u t t he need fo r ad dit io nal milit ar y asset s do yo u
t hink t hat t hey wo uld act ually be used ?
MR. S T OKE S : I haven't , in t er ms o f T aiwan t aking po lls t her e,
but I t hink t her e's a co nsensu s, and it 's r eflect ed in t he sust enance o f
t he d efense bu dget , a co nsensus t hat a st r o ng defense is r equir ed amo ng
T aiwan's g ener al po pu lat io n.
Yo u will see so me co mp laint s o r so me o pinio n lead er s co ming o u t
st r o ngly in favo r o f a r edu ct io n, fo r examp le, o f t he milit ar y budget , but
it 's no t t hat differ ent fr o m what we have her e in t he U. S . I n o t her
wo r d s, so yo u do see sup po r t fo r sust ained levels o f defense spending.
COMMI S S I ONE R CLE VE LAND: I do n't lik e t o eq uat e defense
sp ending wit h a p er cep t io n o f nat io nal secur it y int er est s. I do no t
believe t hat t hey ar e syno nymo u s. S o if yo u co uld separ at e defense
sp ending and t alk mo r e abo ut what yo u see as pu blic per cep t io n o f t he
t hr eat , I t hink t hat 's r eally what I 'm mo r e fo cu sed o n.
MR. S T OKE S : I n t he gener al p o pulace, a t hr eat fr o m t he P RC,
milit ar y t hr eat , t hey see t he ballist ic missiles o bvio usly. E ver y cit izen
o n T aiwan lives wit hin seven minu t es o f dest r uct io n, and t hey k no w
t hat .
DR. WI LLNE R: I wo uld ad d t o t hat a co uple o f t hing s. I t hink in
t er ms o f yo ung p eo p le, my exper ience t her e was T aiwan is at t r act ing
so me gr eat yo ung peo ple t o it s milit ar y fo r ce. I t hink t her e is, t he
yo u ng lieu t enant s and t he capt ains t hat I r an int o and so me o f t he junio r
ser geant s, esp ecially, ver y impr essive. T hey've g o t t heir eye o n t he ball,
and t hey'r e do ing what it t ak es in an u nlimit ed envir o nment t o suppo r t
T aiwan's defense.
I t hink t he pu blic p er cept io n o f t hr eat is mixed . I t hink t hat , as
Mr . S t o kes po int ed o ut , t hat t her e ar e lo t s o f o t her issu es co mpet ing fo r
d efense d o llar s. I t hink t her e ar e lo t s o f t hings pu lling yo u ng peo ple in
o t her dir ect io ns, o bvio u sly, lo t s o f go o d business o p po r t unit ies, t ho se
t yp es o f t hings, and t hat 's imp act ing cer t ainly o n yo ung peo ple want ing
t o g o in.
T hat 's o ne o f t he r easo ns I hig hlight ed in my t est imo ny t hat I
t hink it 's incumbent o n t he T aiwan g o ver nment , MND, t o seek o ut ways
65
t o make sur e t hey'r e ar t icu lat ing t hat t he d efense po st u r e r eflect s a
ser io u s t hr eat t o T aiwan t hat co nt inu es t o be o ut t her e, and t her e ar e
lo t s o f t hings go ing o n, such as o pening up bases, int r o ducing yo ung
p eo p le t o what 's available t o t hem in t he milit ar y, and I t hink t his
t r ansit io n t o t he vo lunt eer fo r ce will o nly enhance t hat .
COMMI S S I ONE R CLE VE LAND: T he seco nd par t o f t he
q u est io n, do yo u t hink t hey'll use t he asset s t hat t hey have secur ed?
MR. S T OKE S : T he T aiwan defense est ablishment ? Yes, ma'am.
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner Fiedler , I 'll
g ive yo u t wo minut es fo r a fo llo w up.
COMMI S S I ONE R FI E DLE R: I just have a quick har dwar e
q u est io n. S o we say t her e's anywher e bet ween 1, 1 00 and 1 , 200 missiles
p o int ed at T aiwan. T hat 's no t t heir ar senal, so ho w many d o t hey have
available, t hey co uld r u n in, near by, r esupply, o r do t hey just t hink t hat
t he 1, 100 o r 1, 200 at t he mo ment is all t hey need t o acco mplish t heir
o bject ives? What kind o f pr o blem ar e we facing o ver if t hey do n't
achieve t heir end s wit h t he fir st bar r age o r t he fir st t en bar r ages?
MR. S HLAP AK: I t hink t hat all o f t heir d ep lo yed sho r t r ange
ballist ic missiles ar e, in fact , ar r ayed in t he r egio ns o ppo sit e T aiwan.
I 'm no t awar e o f t heir being act ive dut y br igades elsewher e.
COMMI S S I ONE R FI E DLE R: S o ho w many sit t ing ar o und u n
d eplo yed do t hey have t hat t hey co u ld r esup ply wit h?
MR. S HLAP AK: Well, t hey have a much smaller number o f
lau ncher s t han t hey have missiles so t hat 1, 1 00, 1, 200 number includes a
su bst ant ial nu mber o f r elo ads fo r t heir launcher s, maybe a t hr ee t o o ne
o r fo u r t o o ne r at io o f missiles t o lau ncher s.
COMMI S S I ONE R FI E DLE R: S o t he 1 , 100 includ es t he r epeat ed
lau nch
MR. S HLAP AK: T hat 's co r r ect , yes.
COMMI S S I ONE R FI E DLE R: Okay. T hank yo u.
HE ARI NG CO CHAI R WORT ZE L: Gent lemen, t hank yo u fo r
helping us und er st and t his. We appr eciat e yo ur t ime and yo ur t est imo ny
ver y mu ch. I t 's been enlight ening .
We'r e go ing t o br eak no w unt il 12: 4 5.
[ Wher eupo n, at 12: 00 no o n, t he hear ing r ecessed, t o r eco nvene at
1 2 : 5 0 p. m. ]
A F T E R N O O N S E S S I O N
PANEL IV: ECO NO M IC AS PECTS
HE ARI NG CO CHAI R MULLOY: Welco me back. I n t his p anel,
we'r e go ing t o examine t he eco no mic develo pment s in t he cr o ss S t r ait
r elat io nship and t heir imp licat io ns fo r t he Unit ed S t at es. We'r e ver y
fo r t u nat e t o have t hr ee t o p exper t s o n t his mat t er befo r e t he
Co mmissio n, and we'r e g r at eful t o t hem fo r accept ing o ur invit at io n t o
66
be her e.
Ou r fir st speak er is Dr . Mer r it t ( T er r y) Co o k e, and he's t he
fo u nder and CE O o f GC3 S t r at egy. I fir st met T er r y dur ing his 15 year
car eer wit h t he U. S . Fo r eign Co mmer cial S er vice. Dur ing t hat car eer ,
he wo r k ed at U. S . missio ns in Ber lin, S hanghai, T aipei, T o kyo , and as
t he U. S . g o ver nment 's S enio r Co mmer cial Rep r esent at ive in T aiwan.
Ou r next sp eaker , Rup er t Hammo nd Chamber s. Ruper t , we'r e glad
t o have yo u back. He t est ified at t he Co mmissio n's ver y fir st hear ing o n
Ju ne 1 4, 2 0 01. We welco me yo u back .
He's been t he P r esident o f t he U. S . T aiwan Business Co uncil since
2 0 00 . Over t he year s, he's wo r ked t o develo p t he Co uncil's r o le as a
st r at eg ic par t ner t o it s member s wit h t he go al o f po sit io ning t he Co uncil
as lead er in empo wer ing Amer ican co mp anies in Asia.
Ou r final panelist is Dr . S co t t Kast ner . He's an Asso ciat e
P r o fesso r at t he Depar t ment o f Go ver nment and P o lit ics at t he
Univer sit y o f Mar yland.
I n 2 00 5 20 06 , he was a Visit ing Resear ch Fello w in t he P r incet o n
Har var d China and t he Wo r ld P r o gr am.
I n 200 7 20 08 , he was a China S ecur it y Fello w at t he I nst it ut e fo r
Nat io nal and S t r at eg ic S t u dies o f t he Nat io nal Defense Univer sit y.
We welco me all t hr ee o f yo u, and why do n't we st ar t wit h Dr .
Co o k e, and t hen go acr o ss.
S TATEM ENT O F DR. M ERRITT T. CO O K E, CEO , G C3
S TRATEG Y, INC. , B RYN M AWR, PENNS YLVANIA
DR. COOKE : T hank yo u ver y much, Co mmissio ner Mu llo y.
I t 's a gr eat p leasur e fo r me t o make my fo ur t h app ear ance befo r e
t his Co mmissio n. T he co mmer cial and eco no mic r elat io nship acr o ss t he
S t r ait o f T aiwan has evo lved dr amat ically since I fir st gave t est imo ny o n
t hat issue in August 2 00 1, and I co mmend t he Co mmissio n fo r it s
co nt inu ed fo cu s o n t his co mplex but highly significant dynamic.
As I 've co nsist ent ly t est ified , t he gr o wing eco no mic and
co mmer cial int er depend ence bet ween T aiwan and China has gr eat
sig nificance fo r t he p r o sp er it y and st abilit y o f t he Asia P acific r eg io n.
T he U. S . st ake in t his dynamic is hug e. U. S . pr o sper it y and jo bs
d epend d ir ect ly upo n act ive engag ement in t his r egio n o f t he wo r ld
enjo ying t he mo st r o bust cu r r ent gr o wt h and t he best lo ng t er m
p r o spect s fo r high r at es o f fut ur e gr o wt h.
U. S . secur it y also d epends dir ect ly o n maint aining t he st abilit y o f
t he r egio n and fur t her advancing t he pr o sper it y which supp o r t s t hat
st abilit y. While it 's far fr o m Main S t r eet , t he S t r ait o f T aiwan is a
fu lcr u m fo r vit al U. S . int er est s. T his Co mmissio n plays a vit al r o le in
helping illu minat e t he eco no mic dynamics behind t he head lines in t he
r eg io n.
As we meet , t he t r iangular secur it y r elat io nship bet ween t he
67
Unit ed S t at es, China and T aiwan is again u nder so me st r ain. I n
p ar t icu lar , t he st r ain in t he U. S . China leg o f t he t r iangle has been
mar k ed o ver t ly, as t his gr o up was lo o king at ver y clo sely t his mo r ning ,
by a ser ies o f p o lit ical event s o ver r ecent mo nt hs: t he P r esid ent 's
meet ing wit h t he Dalai Lama; t he T aiwan ar ms sale pack age; China's
p er ceived int r ansigence China's int r ansig ence excuse me as o t her
U. N. S ecur it y Co uncil member s have mo ved t o war d sanct io ning I r an fo r
it s nu clear pr o gr am; and t he per ceived sp o iler r o le t hat China played in
t he COP 1 5 climat e change t alks in Co penhagen; as well as, finally, t he
g o ver nment al par r y and t hr ust o ver Go o gle's disclo sur e o f o r chest r at ed
hack ing int o it s ser ver s.
T he U. S . r elat io nship wit h T aiwan d esp it e an o ver all impr o vement
u nd er t he administ r at io n o f P r esident Ma has no t been wit ho ut it s o wn
r ecent difficult ies. Mo st significant has been t he int er r upt io n in
mo ment u m t o war d s impr o ving t r ade and invest ment t ies as a r esult o f
leg islat io n ado p t ed in T aiwan in December .
Meanwhile, t he imp r o vement o f T aiwan China eco no mic and
co mmer cial r elat io ns has been bo t h st eady and st r o ng, and pr o spect s ar e
g o o d fo r co nclu sio n o f an E co no mic Co o per at io n Fr amewo r k Ag r eement
by Ju ne o f t his year .
T he o ver t mar ker s fo r t hese shift ing t ensio ns wit hin t he st r at egic
r elat io nship , t he eco no mic t r iangu lar r elat io nship, have been po lit ical
event s, as just ment io ned, bu t t he t ect o nic fo r ces det er mining t hese
su r face event s have been lar gely eco no mic and , in par t icular , t he glo bal
eco no mic r ecessio n st ar t ing in S ept ember 2 008 has shar p ly acceler at ed
p r essu r es lo ng at play affect ing each leg o f t he secur it y t r iangle.
As I 've wr it t en int o my st at ement , and I will no t t ak e t he
Co mmissio n's t ime r ig ht no w, I include t he sho r t analysis o f t he
eco no mic st at u s o f each leg o f t he t r iang ular r elat io nship, and wit h
China and T aiwan, it is clear ly t he st o r y o f t he dr amat ic pr o g r ess o f t he
E CFA nego t iat io ns and t he pr eceding Financial Ag r eement .
Wit h China and t he U. S . , it 's essent ially t he fact t hat t he impact o f
t he glo bal r ecessio n seems t o have fallen mo r e heavily o n E ur o p e, and
t he st r ains t her e ar e ver y o ver t . I t has cr eat ed a gr eat deal o f challenge
and d iscu ssio n, as far as t he U. S . and China eco no mic r elat io n, and I 'm
su r e it do es co nt inu e fo r t he year ahead, t ho ugh, o n balance, t he
eco no mic and co mmer cial t ies do r emain no t t o o badly affect ed .
And t hen wit h t he U. S . and T aiwan, it 's lar gely a d iscussio n o f
p er haps a so mewhat po lit ical imp asse t hat has t o do wit h t he difficult ies
o ver t he beef leg islat io n, st ar t ing in December ; t he fact t hat t he Obama
ad minist r at io n and t he execut ive br anch has yet t o co mp let ely, clear ly
and co nvincing ly define it s int er nat io nal t r ade po st ur e; and t hen t he fact
t hat in t his br anch o f t he go ver nment , t her e ar e also so me st r o ng and
d ivid ed o pinio ns; and t hat t hat at so me level ho lds t he vit alit y o f t he
U. S . and T aiwan r elat io nship ho st age.
Whet her it 's due t o t he t echnical issu es o f beef, o r t he br o ader
68
issu es o f t he par t y base o f t he administ r at io n t hat 's cur r ent ly in po wer ,
o r t u g s o f war bet ween t he co ngr essio nal and t he execut ive br anch, t he
eco no mic vit alit y o f t he U. S . T aiwan t r iangle is so mewhat held up by
t ho se t hings.
S o , in co nclusio n, I will simply per haps r espo nd t o so me o f t he
sp ecific po int s t hat wer e r aised in t he let t er o f invit at io n t o me, and I
invit e Co mmissio ner Mullo y o r Wo r t zel t o cut me o ff at any po int when
my t ime sho uld I co nt inue int o so me o f t his?
HE ARI NG CO CHAI R MULLOY: No , keep go ing. Yo u've go t a
lit t le t ime left .
DR. COOKE : Okay. Go o d. What is T aiwan's po sit io n in t he
Wo r ld T r ade Or ganizat io n? Gener ally, China r efuses t o deal dir ect ly
wit h T aiwan wit hin t he WT O fo r mat , and fr o m a U. S . po licy
p er sp ect ive, t his is r egr et t able since all WT O member s have t he r ight t o
ent er int o FT A discussio ns under WT O auspices, and t he cur r ent E CFA
neg o t iat io ns bet ween China and T aiwan ar e t aking place o ut side o f WT O
au sp ices lar gely due t o China's r efusal t o deal dir ect ly wit h T aiwan
wit hin t he exist ing WT O st r uct ur e.
Ho w is t he r ecent ly implement ed China AS E AN FT A affect ing
T aiwan? I t put s, acco r ding t o my analysis, co nsider able pr essur e o n
T aiwan's t r adit io nal indust r ies such as pet r o leum, aut o par t s, and
machiner y, since co mpet ing impo r t s fr o m AS E AN member co unt r ies ar e
able t o ent er t he mainland at a r educed t ar iff r at e, put t ing t he T aiwan
su p p lier s at a disadvant age.
T his is no t so much o f an issue wit h t he I T glo bal supply chain
wher e T aiwan has t r adit io nally had a ver y st r o ng po sit io n pr ecisely
becau se t hat supply chain is so well int egr at ed int o t he mainland
eco no my and because t ar iffs ar e alr eady lo w.
Ho w likely is clo ser eco no mic int egr at io n bet ween mainland China
and T aiwan t o lead t o po lit ical int egr at io n? I 'll leave t hat quest io n t o
t he p o lit ical panelist s in t o day's hear ing o t her t han t o r emar k t hat t he
q u est io n o f t he r amificat io ns o f eco no mic int egr at io n has always been
vig o r o usly co nt est ed by T aiwan's po lit ical act o r s, and t hat T aiwan's
p u blic o pinio n has demo nst r at ed r emar kably co nsist ent dispo sit io n t o
p u r su e t he benefit s o f eco no mic int egr at io n while r esist ing any
co nco mit ant pr essur es t o war ds po lit ical int egr at io n.
[ T he st at ement fo llo ws: ] 3
HE ARI NG CO CHAI R MULLOY: T hank yo u. T hank yo u ver y
mu ch fo r t hat . Yo ur full st at ement will be in t he r eco r d o f t he hear ing
and will be up o n o ur Web sit e.
Mr . Hammo nd Chamber s.
3
Click here to read the prepared st at emen t of Dr. M erri t t T.
Co o ke
69
S TATEM ENT O F M R. RUPERT H AM M O ND CH AM B ERS ,
PRES IDENT
U. S . TAIW AN B US INES S CO UNCIL, ARLING TO N, VIRG INIA
MR. HAMMOND CHAMBE RS : T hank yo u , Co mmissio ner
Wo r t zel and Co mmissio ner Mullo y.
I t is ind eed my ho no r t o r et u r n t o t he U. S . China Co mmissio n t o
t est ify t o day, and , as yo u no t ed, in t he fir st o p po r t unit y I had, we also
wer e in t he pr esence o f Jim Lilley, r ecent ly d epar t ed and gr eat ly missed ,
so mebo d y who p layed an impo r t ant r o le in guiding many o f t he po licies
t hat o ur co u nt r y has used t o pr o ject it s int er est s int o t he r egio n and
influ ence many o f us in ho w we t hink abo ut China and o ur co unt r y's
r elat io nship wit h China.
I 'm go ing t o keep it ver y br ief, as Mar k S t o kes did in a pr evio us
p anel, and just p o int yo u t o t he answer s, t he r espo nses, I sho uld say, I
g ave in my fo r mal submissio n t o t he Co mmissio n.
Bu t ver y q u ickly, ju st t o t o u ch o n t he cent r al issu es r ight no w in
t he co mmer cial r elat io nship bet ween t he Unit ed S t at es and T aiwan and
China. T aiwan and China, r ig ht no w t he nar r at ive is do minat ed by t he
E co no mic Co o per at io n Fr amewo r k Agr eement , o r E CFA. E CFA
d o minat es t he r elat io nship bet ween T aiwan and China as a plat fo r m fo r
d eliber at io n o ver , fir st , t he no r malizat io n o f t he eco no mic r elat io nship
bet ween t he t wo , and t hen t he liber alizat io n o f t he r elat io nship bet ween
t he t wo , using t he fr amewo r k t hat China and AS E AN u sed in AS E AN
P lu s 1, wher e yo u have a fr amewo r k , yo u have what t he T aiwanese call
an "ear ly har vest , " an init ial set o f liber alizing ar eas, and t hen a
calend ar fo r t he fo llo wing sever al year s, let 's say, in which o t her ar eas
ar e liber alized.
E CFA is t he mo st imp o r t ant issue in T aiwan's do mest ic nar r at ive,
d o mest ic po lit ical nar r at ive at t his t ime. I t co mplet ely d o minat es t he
d iscussio n bet ween t he g o ver nment and t he o ppo sit io n par t ies. T he
p r incipal o pp o sit io n p ar t y, t he Demo cr at ic P r o gr essive P ar t y, o pp o ses
E CFA. S o me o f t he r easo ns fo r it s o p po sit io n, in t he Co uncil's view
anyway, ar e no t clear ly t hr ashed o u t , and cer t ainly wit hin T aiwan, it 's
d ifficult t o g r asp fu lly t he differ ences o f o pinio n. I f no t E CFA, t hen
what ?
Bu t anyway, no t io nally, t he Ma go ver nment is fo cu sed o n passag e
o f t he E CFA at t he next S t r ait s E xchange Fo undat io n ARAT S meet ing
in t he May Ju ne t ime fr ame. And t hat will be a big mo ment fo r t he
r elat io nship bet ween T aiwan and China. I t will cer t ainly r eceive a gr eat
d eal o f co ver ag e, and I t hink it will also be a mo ment in which
co mment at o r s ask a legit imat e q uest io n: ho w is Amer ica go ing t o
r espo nd?
What is an appr o p r iat e Amer ican r espo nse t o t his r appr o chement ,
t his eco no mic r ap pr o chement , bet ween T aiwan and China?
As T er r y t o uched o n, t he T r ade and I nvest ment Fr amewo r k
70
Ag r eement , o r T I FA, is at t his t ime anyway Amer ica's p r incipal plat fo r m
fo r engag ing T aiwan in any discussio ns o n t r ad e issues o r t r ad e
liber alizat io n mat t er s.
T he T I FA has fo r t he seco nd t ime in a decade been fr o zen, t his
t ime o ver t he issue o f beef. I n t he Co uncil's view, t he fr eeze in t he '03
0 4 t ime fr ame o ver I P R and t his mo st r ecent fr eeze o ver beef has been a
failu r e, has been co u nt er pr o duct ive t o Amer ican int er est s.
Beef is a t iny co mpo nent o f U. S . co mmer cial r elat io ns wit h
T aiwan, and t he bu lk o f t ho se bu sinesses t hat wo uld benefit fr o m fur t her
liber alizat io n o f t he t r ade r elat io nship bet ween t he t wo ar e at t his t ime
co nt inu ing t o be shu t o u t as a fu nct io n o f t he T I FA fr eeze.
T hat said, t he manner in which T aiwan handled t he br eak ing o f t he
Oct o ber 20 09 P r o t o co l, which is, in fact , what t r anspir ed an agr eement
was r eached bet ween t he Obama administ r at io n and t he Ma
ad minist r at io n. T hat ag r eement was anno unced in Oct o ber '09, but t he
r o llo u t o f t he agr eement was bung led in T aiwan, and it t o o k a po lit ical
life o f it s o wn r esult ing in an ear ly Januar y 2010 decisio n o n t he par t o f
T aiwan's par liament t o make changes t o t he P r o t o co l.
T hat if and o f it self r aises legit imat e q uest io ns abo u t T aiwan's
r eliabilit y as a t r ad ing par t ner . I f we ar e t o do fu t u r e pr o t o co ls, will we
be co nfr o nt ed wit h similar challenges in dealing wit h a legislat ive
br anch t hat is no t in t une wit h t he execut ive br anch?
And also t he r egio nal imp licat io ns o f t his. I f we d o no t r eact in a
ser io u s manner t o T aiwan's changing o f ag r eed pr o t o co l, what message
d o es t hat send t o t he Ko r eans and t he Japanese, who ar e also lo o king
clo sely at mar ket access issues, so me o f which also ar e r elat ed t o beef?
S o t hat 's ver y mu ch o n t he minds o f US T R. T hat said, wit h t he
t iming o f E CFA and t he fact t hat Amer ica has equit ies in t he
r elat io nship wit h T aiwan, it is beho lden o n u s as a co u nt r y t o r espo nd.
I d o believe t hat t he Obama ad minist r at io n is lo o king fo r ways t o
ad dr ess t his issue wit h beef, while also at t empt ing t o schedule a T I FA
meet ing at so me po int lat er t his year , so t hat bo t h o pt ically, as well as
su bst ant ively, t her e is balance in T aiwan's ext er nal r elat io ns wit h it s t wo
p r incipal st r at eg ic int er lo cut o r s: t hat o f China o n o ne sid e wit h E CFA;
t hat o f t he Unit ed S t at es o n t he o t her sid e wit h T I FA.
One final t ho u g ht I wo uld like t o leave yo u wit h is what next ?
Once E CFA is d o ne, what challenges is t he U. S . g o ing t o face in r espect
t o su pp o r t ing t his nascent ear ly r appr o chement bet ween t he t wo sides?
Yes, we've made so me gains in r esp ect t o peace and secu r it y in t he
T aiwan S t r ait , but as t he Chinese demands o n T aiwan mo ve fr o m
eco no mic lo w hanging fr uit , t r ade no r malizat io n, and liber alizat io n,
what d emands will be p laced o n T aiwan in t he po lit ical and milit ar y
ar ena?
T her e is, t her e r emains anyway, a co nsensu s in T aiwan t hat
eco no mic no r malizat io n wit h China, as lo ng as it co mes hand in hand
wit h T aiwan's abilit y t o par t icipat e in bilat er al and mult ilat er al
71
init iat ives in t he r egio n, which at t his t ime China st ill o ppo ses, t hat
co nsensus fo r suppo r t o f E CFA r emains, but P r esident Ma has no such
co nsensus fo r suppo r t o n po lit ical and milit ar y mat t er s.
S o ho w do es t hat impact Ma's abilit y t o engage t he Chinese as we
mo ve t hr o ugh E CFA? And t hen what wo uld be an adequat e U. S .
r esp o nse t o suppo r t t he Ma administ r at io n as it deals wit h t ho r nier
issu es r elat ed t o so ver eignt y?
T hank yo u ver y much.
[ T he st at ement fo llo ws: ] 4
HE ARI NG CO CHAI R MULLOY: T hank yo u ver y much.
Dr . Kast ner .
S TATEM ENT O F DR. S CO TT L. K AS TNER
AS S O CIATE PRO FES S O R, DEPARTM ENT O F G O VERNM ENT
AND PO LITICS , UNIVERS ITY O F M ARYLAND, CO LLEG E PARK ,
M ARYLAND
DR. KAS T NE R: I 'd like t o t hank yo u ver y much fo r invit ing me
her e.
I want ed t o co mment br iefly o n so me o f t he po lit ical
co nsequences o f cr o ss S t r ait eco no mic int egr at io n. I n par t icular , my
co mment s will t o uch o n t wo issues:
Fir st , I co nsider if and ho w deepening eco no mic int egr at io n might
affect t he likeliho o d o f a fut ur e milit ar y co nfr o nt at io n in t he T aiwan
S t r ait ?
S eco nd, I ask whet her China T aiwan eco no mic int egr at io n makes
p o lit ical unificat io n bet ween China and T aiwan any mo r e likely?
E co no mic int egr at io n is widely believed t o have a st abilizing
imp act o n cr o ss S t r ait secur it y r elat io ns. And my r eading o f U. S . po licy
is t hat it has gener ally been suppo r t ive o f cr o ss S t r ait eco no mic
exchange fo r t his r easo n.
But t o be co nfident abo ut eco no mic int egr at io n’s st abilizing
effect s, I t hink it 's impo r t ant t o examine whet her t he specific pr o cesses
t hr o u g h which eco no mic t ies co uld affect co nflict ar e act ually playing
o u t in China T aiwan r elat io ns. Wit h t his in mind, I believe it 's po ssible
t o id ent ify at least t hr ee such pr o cesses t hr o ugh which China T aiwan
eco no mic int egr at io n co uld, indeed, po t ent ially lead t o a r educed danger
o f milit ar y co nflict in t he T aiwan S t r ait .
Fir st , and t his is t he mo st st r aight fo r war d, eco no mic int egr at io n
r aises t he co st o f milit ar y co nflict fo r bo t h sides. As t he co st s o f
milit ar y co nflict incr ease, it 's po ssible t hat leader s o n bo t h sides will be
mo r e caut io us abo ut using fo r ce o r ado pt ing po licies t hat co uld r isk
4
Click here to read the prep ared st at emen t of M r. Ru p ert
H a mmon d Ch amb ers
72
escalat io n.
S eco nd, eco no mic int egr at io n can po t ent ially fo st er a
t r ansfo r mat io n in t he p o licy pr efer ences o f t he t wo go ver nment s,
esp ecially in T aiwan, which is mo r e dep end ent o n t he bilat er al eco no mic
r elat io nship .
Fo r inst ance, a gr o wing per cent age o f T aiwanese likely r eco g nize
t hat T aiwan's gener al eco no mic fo r t u nes have beco me d eeply int er t wined
wit h t he P RC's.
I n t ur n, a g r o wing number o f T aiwan vo t er s may be less lik ely t o
su pp o r t cand idat es who will emp hasize so ver eignt y r elat ed issu es,
fear ing t hat such candidat es will pr o vo k e co nflict wit h Beijing.
As such, it may beco me mo r e difficult o ver t ime fo r leader s
co mmit t ed t o T aiwan independence t o be elect ed in T aiwan. E co no mic
int eg r at io n, in o t her wo r ds, may facilit at e so me co nver gence in t he
p r efer ences t hat go ver nment s in T aipei and Beijing have o ver
so ver eignt y r elat ed issues.
Co nflict , in t u r n, co uld beco me less likely as t he t wo sid es co me
t o have similar o r at least less d iver g ent u nder lying p r efer ences.
T hir d , cr o ss S t r ait eco no mic int egr at io n p o t ent ially mak es it
easier fo r Beijing t o co er ce T aiwan o r t o signal r eso lve cr edibly wit ho u t
r eso r t ing t o milit ar y measur es, since eco no mic int eg r at io n means t hat
Beijing can imp o se g r eat co st s o n T aiwan by enact ing eco no mic
sanct io ns.
I n essence, eco no mic int egr at io n may r educe t he likeliho o d o f war
in t he T aiwan S t r ait because it pr o vides Beijing wit h ways t o p unish
T aiwan wit ho ut needing t o r eso r t t o milit ar y vio lence.
As I no t e in my wr it t en t est imo ny, so me o f t hese p r o cesses may be
u nfo ld ing in t he T aiwan S t r ait . I n par t icular , I su spect t hat cr o ss S t r ait
eco no mic int egr at io n lik ely co nt r ibu t es t o a sense o f p r agmat ism amo ng
T aiwan vo t er s o n cr o ss S t r ait so ver eig nt y issues.
I n t ur n, t his pr ag mat ism pr o bably makes it har der fo r st r o ngly
p r o T aiwan independence candid at es t o be elect ed pr esident in T aiwan.
Yet , I also no t e t hat t her e is at least so me r easo n fo r sk ep t icism
co ncer ning ho w deep ly ent r enched o r r elevant t hese pr o cesses ar e in t he
T aiwan S t r ait , and I 'd be happ y t o exp and o n t hat a lit t le bit mo r e in t he
Q&A.
Fo r so me o f t he same r easo ns, I am so mewhat sk ep t ical t hat
cr o ss S t r ait eco no mic int egr at io n is having a majo r effect o n t he
p r o spect s fo r milit ar y co nflict in t he T aiwan S t r ait , I am also sk ept ical
t hat cr o ss S t r ait eco no mic int eg r at io n mak es p o lit ical unificat io n any
mo r e lik ely. Ag ain, I t hink t hat t her e ar e t wo plausible mechanisms
t hr o u gh which gr o wing cr o ss S t r ait eco no mic t ies co uld influence t he
lik eliho o d o f China T aiwan po lit ical u nificat io n.
Fir st , t o r et u r n t o an ear lier po int , eco no mic int eg r at io n might
enhance China's co er cive capacit y o ver T aiwan. T hat is, by o pening t he
p o ssibilit y o f t hr eat ening o r impo sing eco no mic sanct io ns, it may be
73
mo r e feasible fo r Beijing t o co er ce T aiwan int o a unificat io n bar gain.
S eco nd, eco no mic int egr at io n co uld lead t o changed pr efer ences
amo ng so ciet al act o r s in T aiwan so t hat t her e is mo r e demand fo r
u nificat io n.
Ho wever , again, my sense is t hat eco no mic int egr at io n is unlikely
t o lead t o unificat io n t hr o u gh eit her o f t hese pr o cesses, at least fo r t he
fo r eseeable fu t u r e.
Co nsider , fir st , t he po ssibilit y t hat t he P RC might use eco no mic
co er cio n as a means t o maneuver T aiwan int o so me so r t o f a unificat io n
d eal. As T aiwan's eco no my has beco me mo r e int egr at ed wit h t he P RC,
it is cer t ainly t he case t hat China co uld cause a g r eat deal o f pain in
T aiwan t hr o u gh t he use o f eco no mic sanct io ns.
Bu t it is impo r t ant t o r eco gnize t hat t he P RC wo uld also face
sig nificant co nst r aint s in any effo r t t o co mpel unificat io n t hr o ug h t he
u se o f eco no mic sanct io ns. Obvio usly, eco no mic sanct io ns wo uld also
be co st ly t o t he P RC, as well as T aiwan, bu t , p er haps mo r e impo r t ant ly,
it is by no means clear t hat T aiwan wo u ld r eact t o eco no mic co er cio n by
capit u lat ing t o P RC d emand s.
S anct io ns wo uld p o t ent ially alienat e t he ver y act o r s who m Beijing
wo u ld mo st need t o acquiesce t o P RC co nt r o l, t ho se who alr ead y have a
st r o ng st ake in a st able eco no mic r elat io nship. And sanct io ns wo uld
co nfir m t he wo r st fear s o f T aiwanese who suspect t hat China mig ht no t
have T aiwan's best int er est s at hear t .
A seco nd po ssibilit y is t hat gr o wing cr o ss S t r ait eco no mic t ies
will u lt imat ely lead t o incr eased demands in T aiwan fo r po lit ical
u nificat io n. Fo r inst ance, it is co nceivable t hat deep ening eco no mic t ies
and t he asso ciat ed gr o wt h in cr o ss S t r ait co nt act s and co mmunicat io ns
will lead a g r o wing nu mber o f T aiwanese t o ident ify mo r e wit h China
and t o see t hemselves incr easing ly as Chinese.
Alt er nat ively, T aiwan's vo t er s and businesses might st ar t t o mak e
a mo r e pr agmat ic calculat io n t hat T aiwan's eco no mic fut ur e is
fu ndament ally t ied t o China and unificat io n ult imat ely o ffer s t he best
way t o guar ant ee co nt inued st abilit y and pr o sper it y.
Yet , again, well kno wn t r ends in T aiwan pu blic o p inio n call int o
q u est io n whet her t hese so r t s o f pr o cesses ar e t aking ho ld o r ar e likely
t o t ak e ho ld in t he fut ur e. Fo r examp le, desp it e deepening eco no mic
t ies, t he p er cent ag e o f T aiwan cit izens who self ident ify as T aiwanese
r at her t han as Chinese o r bo t h Chinese and T aiwanese has co nt inued t o
g r o w.
I n so me r ecent su r veys, t ho se id ent ifying so lely as T aiwanese
o u t number t ho se placing t hemselves in t he o t her t wo cat eg o r ies
co mbined.
S imilar ly, var io us su r veys sugg est ext r emely limit ed suppo r t in
T aiwan fo r u nificat io n, ag ain, despit e bu r g eo ning eco no mic t ies.
Recent su r veys suggest t hat even when pr esent ed wit h a
hypo t het ical fut u r e scenar io wher e so cial, po lit ical and eco no mic
74
co nd it io ns o n mainland China and T aiwan ar e similar , mo st T aiwanese
vo t er s st ill o ppo se unificat io n.
S o , in sho r t , eco no mic int egr at io n do es no t ap pear t o be having a
t r ansfo r mat ive effect o n T aiwan p ublic o p inio n r elat ing t o T aiwan st at us
and id ent it y. P er haps sup po r t fo r u nificat io n wo uld be even lo wer if it
wer en't fo r deepening cr o ss S t r ait eco no mic t ies, but suppo r t r emains
q u it e limit ed as it is.
T hank yo u.
[ T he st at ement fo llo ws: ]
Prep a red S t at emen t of Dr. S cot t L. K ast n er
Associ a t e Pro fesso r, Dep art men t of G overn men t an d Poli t i cs,
Un i v ersi t y O f M ary la n d , Colleg e Pa rk, M ary lan d
Prior to the election of Ma Yingjeou as Taiwan’s president in 2008, the phrase “hot economics, cold
politics” succinctly summarized the nature of the ChinaTaiwan relationship. Despite hostile political
relations and occasional crises, economic ties grew rapidly beginning in the late 1980s; by the early 2000s
China had become Taiwan’s largest trading partner. Since Ma’s election, however, the political
relationship has improved dramatically. The two sides are engaged in regular dialogue, and have reached
numerous agreements on such issues as direct flights across the Taiwan Strait and allowing Chinese
tourists to visit Taiwan; both sides have even indicated some interest in trying to reach a peace accord.
Whether the détente in crossStrait relations is a permanent thaw, or merely a temporary warming,
remains unclear. The People’s Republic of China (PRC) continues to modernize its military capabilities,
and it has not reduced the large number of missiles deployed in range of Taiwan. Taiwan president Ma
Yingjeou’s approval ratings have been weak, meaning the island’s future political direction is uncertain.
Given this uncertainty, the impact of deepening crossStrait economic integration on crossStrait security
relations remains an important topic. My comments briefly address two issues. First, I consider whether
deepening economic integration helps to reduce the likelihood of a future military confrontation in the
Taiwan Strait. Second, I ask whether ChinaTaiwan economic integration makes it more likely that
Taiwan will eventually choose political unification with the PRC.
DOES CHINATAIWAN ECONOMIC INTEGRATION MAKE A CROSSSTRAIT MILITARY
CONFLICT LESS LIKELY?
Economic integration is widely believed to have a stabilizing impact on crossStrait security relations, and
my reading of US policy is that it has generally been supportive of crossStrait economic exchange for this
reason. This idea—that economic integration across the Taiwan Strait would help stabilize the
relationship—is grounded in a large body of literature that examines the relationship between
international trade and military conflict in a broadly international context. While this topic remains
controversial, it is my judgment that the preponderance of the evidence in this literature is on the side of
those who argue that trade does indeed tend, all else equal, to reduce conflict between countries.
Applying these findings to a specific case like ChinaTaiwan relations, however, is problematic. For
instance, it is possible that the Taiwan Strait is simply an exception to a broader pattern. There have
certainly been other cases where military conflict emerged despite considerable economic ties: the case of
World War I in Europe is an example in this regard. To assess whether economic integration affects the
likelihood of military conflict in a specific case like the Taiwan Strait, it is important to examine whether
the specific processes through which economic ties could affect conflict are actually playing out in that
75
case.
With this in mind, it is possible to identify at least three such processes through which ChinaTaiwan
economic integration could indeed lead to a reduced danger of military conflict in the Taiwan Strait.
First, economic integration raises the costs of military conflict for both sides; at a minimum, serious
military conflict would most likely lead to a prolonged interruption in crossStrait trade, and it is easy to
imagine more dire, and longterm, consequences. As the costs of military conflict increase, it is possible
that leaders on both sides will be more cautious about using force or adopting policies that could risk
escalation.
Second, economic integration can potentially foster a transformation in the policy preferences of the two
governments—especially in Taiwan, which is much more dependent on the relationship. In particular, a
growing number of Taiwanese have a clear economic stake in a stable crossStrait relationship. This
point does not apply only to those businesses with investments in China and their employees. Rather, a
growing percentage of Taiwanese likely recognize that Taiwan’s general economic fortunes have become
deeply intertwined with the PRC’s. In turn, actors in Taiwan who benefit from crossStrait economic
exchange may be less likely to support candidates who will emphasize sovereigntyrelated issues, fearing
that such candidates will provoke conflict with Beijing. Economic integration, in other words, may
facilitate some convergence in the preferences governments in Taipei and Beijing have over sovereignty
related issues; conflict, in turn, could become less likely as the two sides come to share similar—or at least
less divergent—underlying preferences.
Third, crossStrait economic integration makes it easier for Beijing to coerce Taiwan or to signal resolve
credibly without resorting to military measures. Leaders in Taiwan may have some uncertainty
concerning PRC resolve to use military force should Taiwan take concrete steps to formalize its sovereign
status; PRC threats in this regard are inherently suspect since talk is relatively cheap. War could result if
Taiwan concludes a truly resolved PRC is bluffing. But economic integration gives Beijing a way to
communicate its resolve more credibly if Taipei tests that resolve: in particular, China can impose
economic sanctions, which demonstrate a willingness to pay high costs to block Taiwan independence. In
essence, economic integration may reduce the likelihood of war because it provides Beijing with ways to
punish Taiwan without needing to resort to military violence.
Some of these processes may be unfolding in the Taiwan Strait. For instance, the average Taiwan voter is
quite pragmatic on sovereignty related issues. This pragmatism is revealed in surveys which show that a
substantial majority of Taiwan voters support maintaining the status quo in crossstrait relations.
Likewise, while a substantial majority of voters would support an independent Taiwan if peace with the
PRC could be maintained, an equally large majority would oppose independence if it were to provoke a
PRC attack. I suspect that this pragmatism in part arises because voters believe that war would be
incredibly costly for Taiwan, and I also suspect that deepening crossStrait economic ties help to reinforce
this belief. So, the perceived increasing costs of war may help to induce a cautious attitude at the level of
individual Taiwan voters, and this, in turn, probably makes it harder than it otherwise might be for
politicians strongly committed to independence to be elected to Taiwan’s presidency. In other words,
economic integration may reduce—at least marginally—the extent to which the PRC and Taiwan are
pursuing divergent foreign policy objectives.
Yet there is also reason to be at least somewhat skeptical about how deeply entrenched the causal
processes linking increased economic integration to a reduced likelihood of military conflict actually are
in the Taiwan Strait. For example, though economic ties may be contributing to a sense of pragmatism
among Taiwan’s voters, there is little evidence to suggest a deeper transformation in the fundamental
preferences held by most Taiwanese on crossStrait sovereignty issues. I will return to this point
momentarily when discussing whether crossStrait economic integration affects the prospects for political
integration.
76
Likewise, it is quite possible that economic integration can actually be destabilizing in certain contexts.
For instance, if economic integration does indeed raise the costs of war for Beijing, then a Taiwan
president may be tempted to “push the envelope” on sovereignty issues farther than he otherwise might.
At a minimum, economic integration may be less stabilizing when Taiwan is led by a president unhappy
with the status quo in crossStrait relations than is the case if Taiwan is led by a president generally
content with the status quo.
Finally, while the possibility of economic coercion does give Beijing a way to punish Taiwan without
firing a shot, economic sanctions could also backfire. For instance, economic sanctions would most
seriously hurt actors in Taiwan that already have a direct stake in the crossStrait relationship (such as
businesses with mainland investments) and as such tend to be more skeptical of Taiwan policies that could
be destabilizing. Punishing these sorts of actors could be especially damaging to Beijing’s longterm
goals in Taiwan, as it would in essence alienate a constituency that tends to support stable crossStrait
relations to begin with. If Beijing calculates that economic sanctions might backfire by further alienating
Taiwan’s population without leading to changed Taiwan behavior, then it is unlikely the PRC would
utilize economic sanctions as a way to signal resolve prior to initiating military conflict.
DOES ECONOMIC INTEGRATION MAKE POLITICAL UNIFICATION MORE LIKELY?
For some of the same reasons I am somewhat skeptical that crossStrait economic integration is having a
major effect on the prospects for military conflict in the Taiwan Strait, I am also skeptical that crossStrait
economic integration makes political unification any more likely.
I think there are two plausible mechanisms through which growing crossStrait economic ties could
influence the likelihood of ChinaTaiwan political unification. First, to return to an earlier point,
economic integration might enhance China’s coercive capacity over Taiwan. That is, by opening the
possibility of threatening or imposing economic sanctions, it may be more feasible for Beijing to coerce
Taiwan into a unification bargain. Second, economic integration could lead to changed preferences
among societal actors in Taiwan, so that there is more demand for unification. Economic integration, for
instance, could conceivably lead individuals in Taiwan to identify more with China. Or, alternatively,
individuals and businesses could come to view unification as essential to a stable crossStrait economic
relationship. However, my sense is that economic integration is unlikely to lead to unification through
either of these processes, at least in the foreseeable future.
Consider first the possibility that the PRC might use economic coercion as a means to maneuver Taiwan
into some sort of unification deal. As Taiwan’s economy has become more integrated with the PRC, it is
certainly the case that China could cause a great deal of pain in Taiwan through the use of economic
sanctions. Taiwan’s Mainland Affairs Council estimates, for instance, that trade with mainland China
accounts for over 22 percent of Taiwan’s total trade, and exports to China account for over 30 percent of
Taiwan’s total exports. Furthermore, roughly twothirds of Taiwan’s approved outward direct investment
flows to mainland China.
But it is important to recognize that the PRC would also face significant constraints in any effort to
compel unification through the use of economic sanctions. Obviously, extensive economic sanctions
would impose costs on the PRC as well as Taiwan. Some of these costs would be direct, such as lost trade
and investment linkages visàvis Taiwan. Others would be indirect, such as harm done to China’s other
bilateral relations. I doubt, for instance, that the US would simply stand by if Taiwan were subjected to
broadscale economic sanctions or an economic blockade. Perhaps more importantly, and as I noted
before, it is by no means clear that Taiwan would react to economic sanctions by capitulating to PRC
demands. Sanctions would potentially alienate the very actors whom Beijing would most need to
acquiesce to PRC control: those who already have a stake in stable crossStrait relations. And sanctions
would confirm the worst fears of Taiwanese who suspect that China does not have Taiwan’s best interests
77
at heart. Finally, while Beijing has shown some willingness to politicize crossStrait economic ties—such
as harassment of proDemocratic Progressive Party businesses in China after the 2000 and 2004 Taiwan
elections—these efforts seem to me to be quite limited and of questionable success. In sum, I don’t
believe deepening crossStrait economic ties make it much more likely that the PRC will be able to coerce
Taiwan into some sort of unification bargain.
A second possibility is that growing crossStrait economic ties will ultimately lead to increased demands
in Taiwan for political unification. For instance, it is conceivable that deepening economic ties—and the
ancillary growth in crossStrait contacts and communications—will lead a growing number of Taiwanese
to identify more with China and to see themselves increasingly as Chinese. Alternatively, Taiwan’s voters
and businesses might start to make a more pragmatic calculation that Taiwan’s economic future is
fundamentally tied to China, and unification ultimately offers the best way to guarantee continued stability
and prosperity. Yet wellknown trends in Taiwan public opinion again call into question whether these
sorts of processes are taking—or are likely in the future to take—hold.
For example, despite deepening economic ties, the percentage of Taiwanese citizens who selfidentify as
Taiwanese rather than as Chinese or both Chinese and Taiwanese has continued to grow; in recent
surveys, those identifying solely as Taiwanese outnumber those placing themselves in the other two
categories combined. Similarly, various surveys suggest extremely limited support in Taiwan for
unification, again despite burgeoning economic ties. Support for China’s proposed one country, two
systems framework has been consistently minimal. Recent surveys suggest that even when presented with
a hypothetical future scenario where social, political and economic conditions on the Mainland and in
Taiwan are similar, most Taiwanese voters still oppose unification. In short, economic integration does
not appear to be having a transformative effect on Taiwanese public opinion relating to Taiwan’s status
and identity. Perhaps support for unification would be even lower if it weren’t for deepening crossStrait
economic ties, but support is quite limited as it is.
CONCLUSION
In summary, the United States should not be too complacent about the implications of crossStrait
economic integration for the prospects for military conflict in the Taiwan Strait. While it is possible that
economic ties could reduce the danger of conflict—and there are several plausible ways this could
happen—there is at least some reason to be skeptical that the specific causal processes that could link
trade to a reduced danger of conflict are actually playing out in this case. With that said, I do not believe
that economic integration across the Taiwan Strait is on balance a bad thing (at least from the standpoint
of its securityrelated implications). I certainly don’t think it makes military conflict any more likely.
Moreover, I don’t believe that economic integration has clear implications for the likelihood of eventual
political unification between China and Taiwan. As such, I do not believe that ChinaTaiwan economic
integration is inconsistent with current US policy toward Taiwan.
PANEL IV: Di scu ssi on , Q u est i o n s an d An swers
HE ARI NG CO CHAI R MULLOY: T hank yo u , Dr . Kast ner .
We'r e g o ing t o have a five minut e q uest io n per io d fo r each
Co mmissio ner , and we'r e g o ing t o st ar t wit h Co mmissio ner Wo r t zel.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u, all, fo r yo u r
t est imo ny.
Mr . Hammo nd Chamber s, can yo u g ener ally char act er ize t he
ind ust r ial sect o r s fo r t he 2 , 244 p r o du ct cat eg o r ies t hat T aiwan r est r ict s
78
and t he r at io nale fo r t ho se r est r ict io ns? And t hen I 'll co me up wit h a
seco nd q u est io n, and t hen let yo u gu ys g o .
Fo r Dr . Kast ner , can yo u char act er ize t he po lit ical p o licy views o f
t he bu siness act o r s in T aiwan wit h mainland invest ment s? Ho w do t heir
p o lit ical views impact o n any do mest ic po lit ical act ivit ies t hey may have
in T aiwan and ho w do t hese business act o r s int er act wit h mainland
lead er s?
And Dr . Co o k e, if yo u have any views yo u want t o ad d o n eit her
o f t hese, please do .
MR. HAMMOND CHAMBE RS : T hank yo u, sir .
Abo ut 80 0 o f t hem ar e ag r icult u r al pr o duct s. P r esident Ma as a
cand id at e in t he r u n up t o t he Mar ch 20 08 pr esident ial elect io n
co nsist ent ly mad e t he po int t hat in any r app r o chement , eco no mic
r ap pr o chement , wit h t he Chinese, t ho se agr icult u r al pr o d uct s wo u ld no t
be p ar t o f any E CFA ag r eement .
I t is wo r t h no t ing t hat t he o ppo sit io n par t ies q uest io n t hat t he
far mer s' int er est s will, in fact , no t be jeo p ar dized. Ot her wise, yo u'r e
t alk ing abo u t an ar bit r ar y g r o up o f p r o du ct s t hat o st ensibly have
nat io nal t he T aiwanese do use t he t er m "nat io nal secu r it y" r elat ed
p r o d uct s, bu t t hey fall in ar eas such as fast ener s, indust r ial fast ener s, o r
heat p anels. I mean it r eally is an ar bit r ar y list o f pr o duct ar eas wher e
bar r ier s wer e put in place t o ensur e t hat T aiwan's nascent ind ust r ies in
t ho se ar eas wer e p r o t ect ed against Chinese impo r t s.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u.
Yes.
DR. KAS T NE R: I n r esp o nse t o yo u r qu est io n, I haven't do ne a
g r eat deal o f r esear ch o n t his specific issue, but my sense is t hat when it
co mes t o eco no mic mat t er s, t her e is cer t ainly a view t hat eco no mic
liber alizat io n is a go o d t hing . I t hink t hat t her e's a t endency t o t ake a
lo wer p r o file o n po lit ical issu es becau se it 's a lo se lo se sit uat io n t o be
t o o o ut sp o k en o n p o lit ical issues.
I 'm no t r eally sur e abo ut yo ur last po int , abo ut t he int er act io ns
wit h t he P RC go ver nment .
HE ARI NG CO CHAI R WORT ZE L: Ok ay. Dr . Co o k e, anyt hing
t o ad d?
DR. COOKE : I wo uld ju st mak e t hr ee simple po int s. Fir st o f all,
in t er ms o f t he int er act io n o f T aiwan CE Os wit h mainland co unt er par t s,
it dep ends r eally t he ind ust r y sect o r we'r e t alking abo ut . I n t he
info r mat io n t echno lo g y sect o r , t he fo und ing CE Os o f t he lar gest T aiwan
fir ms ar e viewed wit h co nsider able r esp ect as ment o r s fo r China’s
ind ust r y, but in mo r e fut ur e o r ient ed indust r ies lik e bio t echno lo gy o r
clean ener gy, t he Chinese business leader ship appear s t o feel t hat t hey
have a clear pat h t o t hat fu t u r e wit ho ut t he assist ance o f CE Os fr o m t he
T aiwan ar ea, and t he r elat io nship is st r uct ur ed acco r dingly.
Just an ad dit io nal co mment t hat t ies t o Co mmissio ner Wo r t zel's
q u est io n and t o Dr . Kast ner 's t est imo ny, in t er ms o f t he suscept ibilit y t o
79
co er cio n in t he mainland o n t he par t o f T aiwan businesses who ar e
act ive t her e, my o wn exper ience is t hat it is r elat ively less t han o ne
wo u ld expect .
I n t he year 2 000 , t her e wer e so me fair ly cr ude at t emp t s made in
t he mainland t o har ass T aiwan co mpanies t hr o ugh aggr essive aud it ing
and o t her disr upt ive p r act ices, and it was r eco gnized by t he T aiwan
business lead er ship as a co st o f do ing business t her e, but it did no t , it
d id no t seem t o t r anslat e in any way t hat was par t icular ly helpful t o t he
mainland o bject ives.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u.
HE ARI NG CO CHAI R MULLOY: T hank yo u ver y much.
Co mmissio ner Wessel.
COMMI S S I ONE R WE S S E L: T hank yo u, Mr . Chair man. T hank
yo u fo r yo ur r et ur n p r esence, and fo r o u r new wit ness. T er r y, I t hink
t hat yo u wer e a co nt r o l o fficer fo r o ne o f my CODE Ls pr o bably 20
year s ag o o r mo r e so . I t 's always g o o d t o see yo u. We've p r o bably
chang ed a bit in t he pr o cess.
I 'd like t o ask a slight ly differ ent ly fr amed quest io n because t her e
ar e a nu mber o f issues o n t he U. S . po licy agenda r ig ht no w, and I want
t o have so me u nder st anding fr o m t he panelist s abo u t ho w yo u view
t ho se as affect ing T aiwan's int er est s sp ecifically and also vis à vis China
and t he U. S .
T he t wo po licy ar eas ar e t he T r ans P acific P ar t ner ship, and t he
o t her is t he q u est io n o f China's cu r r ency manip ulat io n and t he up co ming
p o t ent ial fo r t he ad minist r at io n t o name China as a cur r ency
manip ulat o r .
Mr . Hammo nd Chamber s, if yo u co uld begin wit h t he qu est io n o n
t he T r ans P acific P ar t ner ship, which I assume yo u have fo llo wed a bit ,
which becau se o f so me per cept io ns t hat it is meant as an eco no mic
r espo nse t o China's gr o wing influ ence in t he r eg io n, so me view it as an
eco no mic co nt ainment po licy, ho w sho uld we be viewing it ?
Ho w vis à vis bo t h U. S . T aiwan r elat io ns and T aiwan's int er est s
it self in t he r egio n sho u ld it be viewed?
And , again, t hen, also o n t he cur r ency issue, wit h t he fair ly
massive invest ment s by T aiwan business int er est s in t he mainland , what
ar e t he implicat io ns o f China being named a cur r ency manipulat o r ,
ho pefu lly leading, o f co ur se, t o a mo r e mar k et based cur r ency, but sho r t
o f t hat , what d o yo u t hink happ ens in t he int er im?
T his is fo r t he o t her wit nesses as well.
MR. HAMMOND CHAMBE RS : T hank yo u fo r yo u r qu est io n, sir .
On t he T P P , in my view, sho uld t he U. S . cho o se t o lead o n t he
T P P , it wo u ld be bo t h impo r t ant fo r us as a co u nt r y, as well as fo r
T aiwan.
I 'll make a st at ement in my o wn view abo ut wher e we ar e r ight
no w. I n t he absence o f a t r ade liber alizat io n po licy her e in t he Unit ed
S t at es, we can't have a co mplet e Asia po licy. T he Chinese ar e dr iving
80
t hat p r o cess, and we have a self inflict ed, o r a cho ice, if yo u will, t o be
o n t he o u t side o f t hat pr o cess. I t 's d amaging o ur int er est s
eco no mically, and it 's damaging o ur int er est s st r at egically.
I f t he T P P r epr esent s an o ppo r t unit y fo r P r esident Obama t o lead
as P r esident o f o u r co unt r y t o lead in Asia o n t r ad e, t hat 's a win fo r
t he Unit ed S t at es, and far fr o m co nfr o nt ing China o r sur r o unding China,
it is simp ly t he Unit ed S t at es p ur suing it s o wn co mmer cial int er est s and
eq uit ies in t he r eg io n.
T aiwan wins because it is an o pp o r t unit y t o fo ld T aiwan int o a
p r o cess r ight no w t hat it is shut o ut o f. I t wo uld lo ve t o be par t o f t he
bilat er al and mult ilat er al ar r angement s being st r u ck in T aiwan, but as a
fu nct io n o f Chinese o pp o sit io n, it is shu t o ut .
COMMI S S I ONE R WE S S E L: Do yo u t hink t hat T aiwan co uld be a
p ar t icipant in T P P wit h China's acquiescence?
MR. HAMMOND CHAMBE RS : Acq uiescence. Ag ain, I t hink it 's
ver y imp o r t ant fo r t he Unit ed S t at es t o sho w lead er ship o n t hat . I f we
cho o se t o st ep fo r war d wit h t he T P P , t hat we cho o se t o includ e T aiwan
fr o m t he get go in t hat co nver sat io n, making it clear t o ever ybo d y t hat
g iven t hat T aiwan is par t o f t he ADB, t he WT O, t her e's abso lu t ely no
r easo n why it sho uld n't be par t o f t he T P P , as well, and AP E C.
S o t her e's ever y r easo n t o believe t hat if t he Obama ad minist r at io n
cho se t o t ake t his st ep and lead fo r cefu lly, t hat t hey co uld inclu de
T aiwan in t hat wit ho ut any co nfr o nt at io n o f o ur so ver eignt y po sit io n o n
T aiwan st at u s.
As fo r cur r ency manipu lat io n, T aiwan, t he int egr at ed r elat io nship
bet ween t he U. S . , T aiwan and China is such t hat T aiwan's bu sinesses in
t he mainland t hat pr o du ce p r o du ct s fo r u s wo uld be equ ally impact ed, as
wit h o u r o wn business invest ment s in t he mainland, as well as Chinese
co mp anies, bu t t hese businesses ar e all exceedingly co mpet it ive.
I believe t he issue wo uld be mo r e what so r t o f st abilit y o r
inst abilit y wo uld a r apid r evaluat io n in t he Yu an cr eat e in t he Chinese
eco no my, and as a co nseq uence, what wo uld t hat mean fo r businesses
t hat have sp ecific expo sur e t o expo r t s and a r apid appr eciat io n o r
p o ssibly d epr eciat io n, but hig hly u nlikely.
COMMI S S I ONE R WE S S E L: Under st and . Ot her wit nesses?
DR. COOKE : No , I t hink Ru per t has capt ur ed what I wo uld say
ver y well. No t hing par t icular t o add, t ho ugh I r emember fo ndly t he t ime
we had.
COMMI S S I ONE R WE S S E L: As do I . Dr . Kast ner .
DR. KAS T NE R: Yes. I do n't r eally have anyt hing t o add t o t hat .
COMMI S S I ONE R WE S S E L: Okay. T hank yo u.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
Co mmissio ner Fiedler .
COMMI S S I ONE R FI E DLE R: Dr . Kast ner , yo u wer e t alk ing
essent ially abo ut t he po lit ical and mo r e macr o level secur it y co ncer ns
abo u t eco no mic int egr at io n. I want t o g et do wn a lit t le far t her , and it 's
81
a t wo p ar t qu est io n. T he fir st par t is what do es t his eco no mic
int eg r at io n by exp o sing o u r t echno lo gy t hat is p r esent in T aiwan, what
ar e t he imp licat io ns fo r o u r o wn nat io nal secu r it y and t he t heft o f t hat ?
T his inclu d es defense info r mat io n. Given t he fact t hat t he
int eg r at io n po ses secu r it y, per so nal espio nage secu r it y p r o blems fo r t he
Unit ed S t at es. I ju st want t o kno w ho w d eep do yo u t hink t hat might
be, nu mber o ne?
Nu mber t wo , what is T aiwan's int er nal secur it y pr o blem po sed by
t his int eg r at io n? I n o t her wo r ds, can yo u t r ust even less t he allegiances
o f a T aiwan bu sinessman because t hey ar e mo r e o p en t o co er cive
o p p o r t unit ies fo r t he Chinese go ver nment ?
DR. KAS T NE R: I n r esp o nse t o t he fir st quest io n, I gu ess I do n't ,
I d o n't r eally have eno u gh exper t ise t o g ive yo u a go o d answer o n t hat
in t er ms o f t he ext ent t o which U. S . t echno lo gy o r U. S . secr et s might be
co mp r o mised .
I n r eg ar ds t o t he seco nd o ne, t her e ar e a number o f ways t hat
p eo p le in T aiwan t hink abo ut so me o f t he secur it y implicat io ns o f cr o ss
S t r ait exchange, and peo p le po int t o a number o f po t ent ial neg at ive
co nsequ ences fr o m a secur it y st andpo int .
S o met imes peo ple br ing u p t hings lik e t echno lo gy t r ansfer .
T her e's also co ncer n abo u t beco ming mo r e dep endent o n t he P RC, and
t her e is co ncer n abo u t t he implicat io ns o f having T aiwan businesses
int er act ing in t he P RC, and t hat t his might , as yo u put it , lead t o
chang ed po lit ical lo yalt ies.
I t hink t hat so me o f t hese co ncer ns ar e leg it imat e o nes. But t her e
ar e co u nt er ar g ument s as well. Fo r inst ance, t he lo ss in t er ms o f
eco no mic gr o wt h by no t int er act ing wo uld be mo r e co nsequ ent ial
COMMI S S I ONE R FI E DLE R: T hat 's just a gener al expo r t
DR. KAS T NE R: Yes.
COMMI S S I ONE R FI E DLE R: T hat 's what t ea wo uld make, yes.
DR. KAS T NE R: Bu t again, I 'm kind o f skept ical as t o kind o f
ho w much
COMMI S S I ONE R FI E DLE R: Okay. Let me ask t he o t her
wit nesses a quest io n. Let 's ju st t ak e semico nd uct o r s. T aiwan is a
wo r ld class semico nd uct o r pr o ducer . We have r est r ict io ns o n t he lat est
semico nd uct o r t echno lo gy being so ld t o China. S o what ? Do es it
mat t er t hat we have r est r ict io ns if it 's well expo sed t o t heft and
co o p er at ive ag r eement s t hat ar e co unt er t o o ur int er est s co ming fr o m
T aiwan?
MR. HAMMOND CHAMBE RS : T er r y is ver y, ver y go o d o n t his
st u ff, but I 'll just jump in befo r e he get s it all r ight . T he U. S .
g o ver nment allo wed I nt el t o invest in Dalian at 300 millimet er level. At
p r esent , T aiwan d o es no t allo w t hat level.
COMMI S S I ONE R FI E DLE R: E xcuse me?
MR. HAMMOND CHAMBE RS : At 30 0 millimet er , t he t echno lo g y
level fo r t he
82
COMMI S S I ONE R FI E DLE R: Yes, I kno w.
MR. HAMMOND CHAMBE RS : Yes, o k ay. S o we've alr eady
g o ne ahead and r eleased t hat t echno lo gy level fo r invest ment in China.
T aiwan has no t . T her e's an und er lying p r esump t io n her e abo ut t he
nat ur e o f T aiwan bu sinesses t hat I 'd like t o per haps addr ess.
Co mp anies like T aiwan S emico nduct o r ar e glo bal co mpanies wit h
I P t hat is as go o d , if no t bet t er , t han t heir glo bal co mp et it o r s. And t he
no t io n t hat t hey d o n't nu r t ur e t hat I P and pr o t ect it as vo r acio usly as
any U. S . co mp any is no t co r r ect . I n fact , wit h T S MC, t her e's just been
a r ecent case wit h a Chinese co mpany called S MI C in which T S MC wo n
a case in a Califo r nia co u r t o ver I P vio lat io ns. T hey wo n o ver a billio n
d o llar s in co mpensat io n, which includ ed t en p er cent o f S MI C.
T hese ar e so p hist icat ed co mpanies wit h an acut e sense t hat t heir
fu t u r e is inexo r ably int er t wined wit h t heir abilit y t o p r o t ect t heir
int ellect ual p r o p er t y as well as r esear ch and d evelo p new int ellect u al
p r o p er t y.
I 'll pass it o ver .
COMMI S S I ONE R FI E DLE R: Can I just r esp o nd t o so met hing? I
d o n't want t he p r esump t io n being her e t hat because t hey'r e so meho w
Chinese, t hat t her e's a g r eat er r isk . I t 's t he int eg r at io n quest io n t hat 's
t he r isk . We have plent y o f pr o blems pr o t ect ing o ur o wn st uff, and
we'r e pr et t y far away.
MR. HAMMOND CHAMBE RS : Yes.
COMMI S S I ONE R FI E DLE R: I 'm just get t ing t o a pr o ximit y
q u est io n and an int er co ur se q uest io n in t er ms o f r isk.
DR. COOKE : T hat 's a ver y useful clar ificat io n, Co mmissio ner
Fiedler , and I t hink when t he p o sit io n o f T aiwan co mpanies in a g lo bal
value chain is p r o p er ly under st o o d, t heir vit alit y depends p r ecisely o n
p r o t ect ing t he int ellect ual pr o per t y and br and eq uit ies o f t he br and
p ar t ner s at t he hig h end o f t he value chain.
S o it wo r k s in exact ly t he same way. E ven when o ne get s away
fr o m ext r emely sensit ive secur it y t echno lo gy, such as int eg r at ed chips,
and yo u lo o k at a mo r e co nsu mer based pr o duct like an iP ho ne, t he
eq uit y t her e has t o do mo r e wit h co nsumer dynamics r at her t han milit ar y
safet y, bu t t he co mpanies t hat ar e in t he midd le o f t hat value chain, su ch
as Ho n Hai Fo xco nn o r HT C, r ealize t hat t hey ar e ju st go r ing t heir o wn
o x if t hey allo w t he sensit ive p r o pr iet ar ial t echno lo gies t o bleed do wn
lo wer int o t he value chain o f co o per at ive r elat io nships.
T hing s do hap pen, but t he co mpanies have ver y imp r essive
syst ems in p lace pr ecisely t o pr event it fr o m happening becau se it 's in
t heir int er est s t o d o so .
COMMI S S I ONE R FI E DLE R: Okay. T hank yo u.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
Co mmissio ner Blument hal.
COMMI S S I ONE R BLUME NT HAL: Yes. T hank yo u all ver y
mu ch.
83
I have a qu est io n r elat ing t o U. S . po sit io ning vis à vis what seems
lik e t he inevit able p assag e o f t he E CFA, and what co uld t he Unit ed
S t at es do t o t ak e advant age and g r o w it s o wn eco no my, gr o w it s o wn
t r ad e and invest ment capabilit y, t ake advant ag e o f an o pening by T aiwan
t o China o r an o pening gener ally o f T aiwan sect o r s t o t he wo r ld
eco no my?
I t seems as if we'r e so r t o f enco ur aging t hem t o go ahead, but
we'r e no t t ak ing advant age. T hese ar e T aiwan co mpanies o r so me o t her
co mp anies t hat d o t he best in China by far . T hey kno w ho w t o d o
business t her e. Cer t ainly, it seems like t her e ar e o ppo r t unit ies fo r jo int
vent u r es, fo r all kinds o f t hings t hat wo u ld benefit o ur o wn co mpanies
and o ur o wn eco no my, and what kinds o f r eco mmendat io ns wo uld yo u
mak e su ch t hat we co uld bet t er p o sit io n o ur selves t o t ake advant age o f
t hat ?
DR. COOKE : My r eco mmendat io n is per haps less co ncr et e t han
yo u 'r e lo o king fo r , Co mmissio ner Blu ment hal, but I wo uld say t her e's a
wo nder ful o ppo r t u nit y fo r t he Unit ed S t at es t o seize a st o r y line her e,
which is simply t hat eco no mic liber alizat io n is a win win sit u at io n fo r
t he p ar t icipant s o f eco no mic liber alizat io n, and t hat t he T aiwan China
E CFA Ag r eement co u ld be held up in t and em wit h an aggr essive t r ad e
liber alizat io n po licy t hat we ar e o ur selves ar e br inging t o t he Asia
P acific r eg io n.
I t co u ld be held up as a po sit ive examp le o f eco no mic
liber alizat io n o ver co ming po lit ical r igidit ies t hat wer e deep ly built int o
a hist o r ical p ast but t hat ho ld benefit s fo r t he var io u s par t icipant s.
And , t hen, in su ppo r t o f t hat , we co u ld be engaging in o ur o wn r o bu st
eco no mic liber alizat io n wit h t he r egio n.
COMMI S S I ONE R BLUME NT HAL: I was lo o king fo r so met hing
mo r e co ncr et e.
DR. COOKE : I kno w.
COMMI S S I ONE R BLUME NT HAL: I t seems lik e we have a
p r efer ent ial po sit io n wit h T aiwan becau se o f o u r u niq ue r elat io nship .
T hey'r e abo ut t o go ahead and neg o t iat e a set o f t ar iff r ed uct io ns and
o t her t ypes o f r educt io ns, and we'r e o n t he o ut side lo o k ing in, wher e we
have I 'm no t an exper t o n t his bu t so me r eal co ncr et e po ssibilit ies t o
imp r o ve o u r o wn eco no mic st and ing .
DR. COOKE : Well, I will cede t o t he o t her t wo panelist s, but
ju st t o t r y t o r esp o nd a lit t le bit mo r e co ncr et ely. I did wr it e in 200 6
t hat I view a fr ee t r ad e agr eement bet ween t he U. S . and T aiwan as
d esider at u m, and I t hink t hat t he t iming o f, assuming t hat o ne is able t o
o ver co me T I FA d ifficult ies, t hat wo uld be a ver y st r o ng element t o
br ing t o bear , alo ng wit h a co nclusio n bet ween China and T aiwan o f an
E CFA in supp o r t o f T aiwan.
MR. HAMMOND CHAMBE RS : I wo uld st ar t wher e
Co mmissio ner Blu ment hal left o ff, t hat t he o pt imu m so lut io n is a U. S .
T aiwan Fr ee T r ad e Agr eement , all enco mpassing , pr o viding U. S . t r ade
84
neg o t iat o r s an o pp o r t unit y t o mat ch t he p r efer ent ial mar ket access and
even go beyo nd it in ar eas wher e we felt t hat we had a cr it ical
ad vant age.
I n r espect t o t he meant ime, I believe an ar ea wher e I wo uld ho p e
t hat t he Obama administ r at io n it 's cer t ainly been wr est ling wit h t his
issu e fo r so me t ime but t he no t io n o f a bilat er al invest ment agr eement .
We d o n't seem t o yet have t hat issue r eso lved wit hin t he ad minist r at io n
t o t he ext ent t hat o u r t r ad e nego t iat o r s can t hen t ak e it o ut int o t he
wo r ld .
Bu t t hat 's cer t ainly an ar ea wher e o ur Co u ncil member s ar e
lo o king t o g ain bet t er access and unifo r mit y and wo uld be an impo r t ant
win win fo r bo t h sides, t ax, as well.
COMMI S S I ONE R BLUME NT HAL: Am I o ut o f t ime?
HE ARI NG CO CHAI R MULLOY: No , yo u 've go t 30 seco nd s.
COMMI S S I ONE R BLUME NT HAL: Which, if yo u all t hink
cr eat ively, which sect o r s o f t he U. S . ind ust r y and eco no my co uld mo st
benefit fr o m T aiwan's liber alizat io n t o China and U. S . liber alizat io n vis
à vis T aiwan?
MR. HAMMOND CHAMBE RS : T en seco nds. Right no w we have
wo r ld class engineer ing businesses. T her e is a hug e r eq uir ement r ight
no w in T aiwan fo r infr ast r uct u r e imp r o vement . T her e is abso lu t ely no
r easo n t hat o ur businesses sho uldn't be all o ver t hat winning, I wo uld
say, all o f t he bu siness, but at least , at t he ver y least , co mp et ing wit h
T aiwan and Chinese businesses fo r infr ast r uct ur e and business.
S er vices co mpanies. I t hink ano t her , lo gist ics and t r anspo r t at io n,
I t hink, ar e o t her ar eas. Why is it t hat o nly T aiwan and China
co mp anies can ply t he T aiwan S t r ait ? S hip and air . We have
o u t st anding air lines. We have o ut st anding ship ping co mpanies. T hey
sho u ld be allo wed t o par t icipat e in t his o ppo r t unit y, t o o .
HE ARI NG CO CHAI R MULLOY: I sho uld t ell t he wit nesses, if
yo u g et int er r upt ed and yo u want t o submit so met hing t o sup plement
yo u r answer fo r t he r eco r d , we'r e hap py t o have t hat .
Co mmissio ner S hea.
COMMI S S I ONE R S HE A: I want t o t hank t he wit nesses fo r being
her e t o d ay. I 've enjo yed yo u r t est imo ny.
I 'd lik e yo u t o help me o ut her e. As I und er st and E CFA, t he
mo t ivat io ns o f t he Chinese and t he mo t ivat io ns o f t he T aiwanese and t he
end games fo r bo t h ar e co mplet ely differ ent . Fo r T aiwan, t he end game
is eco no mic. I t 's expanding t heir eco no my, using t he E CFA as a pr elu de
t o get o t her fr ee t r ad e, t o have gr eat er eco no mic int egr at io n int o Asia.
T hat 's ho w I und er st and it .
Fo r China, t he eco no mic benefit s o f E CFA ar e mu ch less
sig nificant , and t hey basically view E CFA as a st ep o n a po lit ical r o ad
t o u nificat io n.
I s t hat fair t o say, t hat t hey bo t h have d iffer ent mo t ivat io ns and
end games; is t hat co r r ect ? Do yo u ag r ee?
85
MR. HAMMOND CHAMBE RS : I abso lut ely do .
COMMI S S I ONE R S HE A: Ok ay.
DR. KAS T NE R: I wo uld agr ee as well.
COMMI S S I ONE R S HE A: S o t hese end games ar e ver y differ ent ;
r ig ht ? A st r o nger eco no my, o n t he o ne hand ; po lit ical u nificat io n o n t he
o t her .
I s t he end g ame, o ne po ssible end game, what so me have
su gg est ed , a Finlandizat io n o f T aiwan, wher e wit h gr eat er eco no mic
int eg r at io n, T aiwan essent ially accep t s t he r o le o f China in t he r egio n?
China g ives so me benefit s back t o T aiwan; T aiwan beco mes mo r e o f a
neu t r al po wer as o p po sed t o an info r mal st r at egic ally o f t he Unit ed
S t at es. Do yo u see t hat as a po ssible end game her e?
DR. COOKE : I wo u ld just make t hr ee co mment s. I t hink t hat is a
t heo r et ical o ut co me. I do n't t hink it 's by any means a fo r eo r dained
o u t co me, t he Finlandizat io n scenar io .
And I wo uld say t hat , alt ho ugh t he mainland's mo t ivat io ns ar e
o ver whelming ly po lit ical and T aiwan's mo t ivat io ns ar e o ver whelmingly
eco no mic, t her e is o ne small beachhead o f co mmo n gr o u nd , which has t o
d o wit h t he st at ed belief, exp licit ly ar t iculat ed by bo t h sides, and shar ed
by t he U. S . go ver nment , as well, t hat t o u r ism r elat io ns, t r ade r elat io ns,
and per so n t o per so n co nt act s have a beneficial effect .
COMMI S S I ONE R S HE A: Co mment ?
DR. KAS T NE R: I 'm also kind o f sk ep t ical o f t he Finlandizat io n
co ncep t as I do n't t hink t hat a neu t r al T aiwan is so met hing t hat China is
g o ing t o be willing t o accept as lo ng t er m o u t co me in t he T aiwan S t r ait .
S o I do n't t hink t hat Finland izat io n is a likely lo ng t er m o ut co me,
t ho u gh it might r ep r esent a po ssibilit y in t he sho r t t er m. I n t er ms o f
mo t ivat io ns, cer t ainly t her e ar e differ ent mo t ivat io ns, including po lit ical
mo t ivat io ns, fo r pu r suing an E CFA, and as T er r y po int ed o u t in his
t est imo ny, t her e is a lo t o f co nt r o ver sy in T aiwan abo u t t he po lit ical
imp licat io ns o f an E CFA.
Bu t I am sk ept ical o f t his id ea t hat E CFA is so met hing t hat
act u ally d o es signify a sig nificant st ep t o war d unificat io n.
COMMI S S I ONE R S HE A: Mr . Chamber s?
MR. HAMMOND CHAMBE RS : I wo uld just , just g o ing back t o
t he o p po r t unit y I had t o g ive so me r emar ks befo r e t he st ar t , fo r me, it
ap pear s t hat bo t h sides ar e vest ed in signing so me so r t o f ag r eement
t hat t hey'r e g o ing t o call E CFA in t he May June t ime fr ame, what ever
t hat might end u p being. P o lit ically, t hey've bo t h decid ed t hat t hat 's in
t he best int er est s o f t he d ir ect io n t his is go ing.
T he pr incipal challenge in my view is what next ? Becau se t hat 's
wher e t his who le t hing falls o ff a cliff.
COMMI S S I ONE R S HE A: E xact ly. I f yo ur lo ng t er m go al is
p o lit ical unificat io n, t hen yo u p ass t he E CFA, get t hat in place, yo u
mig ht beco me a lit t le bit impat ient ; what 's next ? Ho w do I achieve my
g o al?
86
Ok ay. T hank yo u.
HE ARI NG CO CHAI R MULLOY: Co mmissio ner Videnieks.
COMMI S S I ONE R VI DE NI E KS : Go o d aft er no o n, gent lemen.
We've been t alk ing a lo t abo u t eco no mic int egr at io n, cr o ss S t r ait
eco no mic int egr at io n. I n what fo r m will it t ak e place? Do t hey st ill
char g e cu st o ms d ut ies t o each o t her ? I 've no t been t her e so I 'm asking
t hese quest io ns, which may be o bvio us. Okay. Do t hey char ge d ut ies?
Will t hey eliminat e cu st o ms inco me fiscally? And ho pefu lly t hen
co r p o r at e inco me t axes will go u p. What will be t he net effect fiscally
o f cr o ss S t r ait eco no mic int egr at io n? Over what p er io d o f t ime will o ne
see any kind o f a r esult ? T hat 's t he q uest io n t o ever ybo dy.
DR. COOKE : I will lead o ff wit h per haps just a st at ement o f t he
o bvio u s, but t he t wo eco no mies ar e ext r emely co mplement ar y, and t he
p r imar y benefit o f an E CFA is t o r educe bar r ier s o f t ar iffs and
insp ect io n and t he lik e t hat cu r r ent ly imp ede t he fr ee mo vement o f t he
g o o d s and capit al t o sup po r t what is o t her wise a ver y co mplement ar y
ar r ang ement .
T he Chinese mainland has vast ad vant ages t hat T aiwan do es no t
enjo y in t er ms o f access t o labo r , lo w co st facilit ies, land availabilit y,
and a lar g e do mest ic co nsumer mar ket .
T aiwan has ver y advanced manu fact ur ing p r o cesses, pr o p r iet ar ial
k no w ho w and management exper t ise, and t he id ea is t o br ing t he t wo
t o g et her t o benefit bo t h wit h a minimu m number o f r igidit ies get t ing in
t he way.
COMMI S S I ONE R VI DE NI E KS : As in o ne co mpany? I n sever al
co mp anies? I nt egr at ed co mpanies? I n o t her wo r ds, a co r po r at io n
wo u ld be lo cat ed bo t h in T aiwan do ing high end st uff and maybe
manufact u r ing in China? T he same
DR. COOKE : T hat fr equent ly hap pens, yes.
MR. HAMMOND CHAMBE RS : T er r y has r eally co ver ed it , so I
wo u ld ju st no t e t hat T aiwanese t hink t ank s d o ing st ud ies o n E CFA, and
t her e's act ually a st u dy co ming o u t fr o m o ur o wn P et er so n I nst it ut e fo r
I nt er nat io nal E co no mics her e in D. C. , and acr o ss t he bo ar d , I 've yet t o
r ead a r epu t able st u dy d o ne t hat do esn't sho w significant year o n year
g r o wt h as a funct io n o f E CFA.
No t io nally, yo u'r e r ight , t hat any dut y and t ar iff r ed uct io n, sir ,
wo u ld co me wit h a mar g inal r educt io n in inco me fo r t he go ver nment .
T aiwan fo r t u nat ely t ak es a po licy o f having a lo w co r po r at e t ax r at e
which assist s it s co mp anies in t heir co mp et it iveness.
Bu t mo st ly t he imp act o f E CFA in mo r e gener al t er ms imp act s t he
r at io nalizat io n o f t he r elat io nship bet ween t he t wo t hat 's wher e we
alr ead y ar e t o day and imp r o ves invest ment flo ws. S o it dir ect s mo ney
mo r e t o war ds t he cr it ical ad vant ages t hat bo t h sides have.
COMMI S S I ONE R VI DE NI E KS : My quest io n basically is wo uld
t her e be a net gain o r lo ss immediat ely if t ar iff inco me wer e eliminat ed?
Ho w lo ng wo u ld it t ak e fo r addit io nal co r po r at e inco me t o mat er ialize
87
and wher e do t hey pay t heir t axes? Wher e t he headquar t er s ar e?
T aiwan, P RC? What pr o p o r t io n o f fiscal inco me o f each co unt r y, each
ent it y, is fr o m t r ade as o p po sed t o inco me t ax, budg et ar y inco me?
DR. KAS T NE R: I su spect it is a pr et t y t r ivial per cent ag e. I do n't
k no w t he exact p er cent ag e r at e. I t hink t hat cust o ms
COMMI S S I ONE R VI DE NI E KS : I s it sig nificant o r no t ?
DR. KAS T NE R: I t hink it wo u ld be p r et t y insignificant .
DR. COOKE : T he o nly t hing t hat I wo uld ad d is in so me o f t he
t r ad it io nal sect o r s o f T aiwan's eco no my, I t hink t he analysis is less in
t er ms o f p r o ject ed inco me. I 'm su r e t her e ar e acco u nt ant s at t he
co mp anies t hat ar e do ing t hat , but it r eally has t o do wit h t he viabilit ies
o f t he co mp anies t hemselves and t he ind ust r ial sect o r s o n a lo ng t er m
basis, if t hey ar e g et t ing eco no mically mar g inalized in t he Asia P acific
r eg io n. S o it has t o d o wit h t he o ver all vit alit y and lo ng t er m gr o wt h
p r o spect s. T hat 's t he analysis I 've seen mo r e t han specific inco me,
co r p o r at e ear ning s impact s.
COMMI S S I ONE R VI DE NI E KS : T hank yo u.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
Co mmissio ner Cleveland.
COMMI S S I ONE R CLE VE LAND: T hank yo u .
Mr . Hammo nd Chamber s, yo u said t hat in 200 9, t he br each in t he
p r o t o co l o ver beef cr eat ed q uest io ns abo ut T aiwan's r eliabilit y. I t hink
t hat was t he wo r d yo u used.
I 'm int er est ed in what yo u t hink co nt r ibut ed t o t hat br eakd o wn,
and what mig ht have been do ne t hat co u ld have p r event ed it ? And g o ing
fo r war d, ho w, ho w we pat ch u p t he differ ences?
MR. HAMMOND CHAMBE RS : T hank yo u, ma'am.
T his is a co mment ar y o n T aiwan do mest ic po lit ics. I t hink
init ially what we have seen as keen o bser ver s o f t he Ma administ r at io n
and T aiwan gener ally is t hat when P r esid ent Ma came in, he cent r alized
a g r eat deal o f go ver nment co nt r o l in his Nat io nal S ecur it y Co u ncil, and
t o lo o k at t his issue t hr o ug h t hat pr ism is inst r uct ive.
T he NS C was t he p r incipal o r ganizat io n addr essing t he P r o t o co l
and it s r o llo ut , and as a co nsequence t hey had a br eak do wn in
co mmunicat ing t he P r o t o co l t o t he Legislat ive Yuan and t o t he p eo p le
mo r e g ener ally.
Becau se T aiwan's p ar t isan at mo spher e is as act ive as o ur o wn, if
yo u 'll excuse t he t er m, all hell br o ke lo o se, and t he o ppo sit io n p ar t y saw
an o p po r t u nit y t o und er mine t he cr edibilit y o f t he pr esident and t o
q u est io n t he pr esid ent 's willing ness t o pu t at t he fo r efr o nt t he int er est s
o f t he T aiwan peo p le. T heir suggest io n was at t he expense o f put t ing
t he int er est s o f T aiwan's r elat io nship wit h t he Unit ed S t at es ahead o f
t he int er est s o f t he T aiwan peo ple.
And t he Ma ad minist r at io n lo st co nt r o l o f t he issu e, and it
r esult ed in t he Legislat ive Yuan's KMT Caucu s t he KMT , t he r u ling
p ar t y, do minat es t he p ar liament as well, but also as a r eflect io n o f ho w
88
lit t le co nt r o l t he p r esid ent has o ver his o wn par liament t hat might
r eso nat e t hat t hey went ahead and d id so met hing t hat t he pr esident
clear ly did no t want t hem t o do .
What do es it leave wit h u s?
COMMI S S I ONE R CLE VE LAND: Co uld I st o p yo u?
MR. HAMMOND CHAMBE RS : Yes, ma'am.
COMMI S S I ONE R CLE VE LAND: When yo u say t hat he lo st
co nt r o l and t hey went ahead and did so met hing, wit ho ut calculat ing t he
imp act o n t he r elat io nship wit h t he Unit ed S t at es? I mean I t hink we
wer e all so r t o f su r pr ised when we wer e t her e at t he vo cifer o us debat e
t hat was go ing o n, which did no t seem t o t ake int o co nsid er at io n t he
p o t ent ial damag e t o t he r elat io nship .
MR. HAMMOND CHAMBE RS : I t hink t hat 's fair . I mean I d o n't
t hink it 's unfair t o say wit hin T aiwan's legislat ur e, t her e ar e sever al ver y
r espo nsible g o o d par liament ar ians who u nder st and t he impo r t ance o f
p ar liament ar y r espo nsibilit y fo r t he co unt r y's ext er nal r elat io ns, bu t
t hey'r e a mino r it y. And all p o lit ics is lo cal, and t hat 's t r u e fo r ho w t his
sit u at io n played o u t .
Fo r o ur co unt r y mo ving fo r war d, as I ment io ned, we have a
challenge. We have a challenge in t hat t his has r egio nal implicat io ns.
We can't allo w T aiwan, fo r t his t o sit o ut t her e when we have significant
t r ad e eq uit ies and int er est s wit h o t her majo r t r ading par t ner s.
Ot her wise, it might o ffer a blu epr int fo r t hem t o change pr o t o co ls t hat
o u r nego t iat o r s sign.
Bu t t hat said, we have equit ies o n T aiwan t hat need t o be d ealt
wit h in t he face o f E CFA, and mo r e br o adly speak ing, because o ur t r ade
neg o t iat o r s ar e so limit ed in ho w t o r esp o nd t o China and Chinese
effo r t s t o dr ive t he pr o cess o f r egio nal liber alizat io n, we've go t t his
T I FA p r o cess, and it 's pr et t y much all we've go t r ight no w, and we need
t o g et it back up and r u nning .
S o pr o bably so me so r t o f penalizat io n o f T aiwan, what ever t hat
mig ht be, bu t also separ at ing beef o ut and r elaunching T I FA as so o n as
p o ssible.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
I have a qu est io n. I n t his E CFA, essent ially, t hat 's a fr ee t r ad e
ag r eement , and Ar t icle 24 o f t he WT O GAT T means it has t o co ver
su bst ant ially all t r ad e t o get t hat k ind o f except io n fr o m t he MFN
t r eat ment . Do yo u g uys expect t his E CFA t o co ver subst ant ially all
t r ad e bet ween China and T aiwan?
DR. COOKE : I t hink pr ecisely because it t akes place o ut sid e o f
WT O auspices, China and T aiwan ar e essent ially agr eeing t o handle it in
a so mewhat differ ent way. I n p r inciple, o ver t ime, t he idea is t hat it
wo u ld enco mpass all t r ade, bu t t o mak e it mo r e feasible t o co nclu de
q u ickly, t hey've r est r ict ed t he sco p e in t he init ial st ages q uit e clear ly.
HE ARI NG CO CHAI R MULLOY: Do yo u agr ee wit h t hat , Mr .
Chamber s?
89
MR. HAMMOND CHAMBE RS : I d o , Co mmissio ner Mullo y. I
hap p en t o believe in t he end, t his ag r eement will be a fr ee t r ade
ag r eement , as yo u've descr ibed, but t o T er r y's po int , I believe t hat
init ially t hey'r e wo r king o n a p o lit ical t ime t able, and t hey do n't want
issu es t hat may co me up in a no r mal t r ade nego t iat io n t o int er r up t t he
sig ning o f t his agr eement in t he sp r ing t ime, so so me o f t hat st uff may
p o ssibly fall o ff.
HE ARI NG CO CHAI R MULLOY: Okay. When we wer e in
T aiwan in December , senio r o fficials in T aiwan wer e saying t hat t hey
want ed t he E CFA becau se o f t he AS E AN China FT A, and t hey po sit ed
t hat if t hey wer e ever t o g et t he E CFA wit h China, t hat China might be
less r eluct ant t o see t hem do FT As wit h o t her , wit h t heir o t her t r ading
p ar t ner s.
Mr . Co o ke, yo u say o n page seven o f yo ur t est imo ny t hat may no t
be t he r ig ht assump t io n. Yo u'r e saying t hat t hese FT As ar en't what
China has in mind, mak ing t he po ssibilit y o f FT As wit h lar ger eco no mies
o u t sid e o f t he r egio n mo r e r emo t e. T hat China is no t g o ing t o be
p laying t hat g ame.
S o I ju st wo nder is so mebo dy o per at ing o n assumpt io ns t hat may
no t be r eal? I 'd be int er est ed in kno wing yo ur views.
DR. COOKE : One o f t he benefit s o f no lo ng er being a U. S .
g o ver nment o fficial is t hat I am able t o speak ver y fr eely. And it 's
no t hing bu t a per so nal int er pr et at io n, bu t my per so nal int er p r et at io n is
t hat China's t act ical p lan wit h an E CFA is t hat it can invo lve T aiwan t o
mu t u al eco no mic benefit in a r o bu st net wo r k o f r eg io nal t r ade
r elat io nship s wher e China has a ver y cent r al po sit io n, but in Beijing's
calculat io n, t hat may so meho w give Beijing a lit t le bit mo r e abilit y t o
int er fer e wit h a po ssible fr ee t r ade agr eement o ut side t he r egio n wit h
ver y lar g e par t ner s such as t he E U o r t he Unit ed S t at es.
Bu t I t hink it wo uld incumbent upo n t he E U and t he U. S . t o be
fo r cefu l in t heir glo bal co mmit ment t o eco no mic liber alizat io n
ever ywher e.
HE ARI NG CO CHAI R MULLOY: Mr . Co o ke. Mr . Chamber s,
have any view o n t hat ?
MR. HAMMOND CHAMBE RS : Co mmissio ner Mullo y, sir , I
hap p en t o t hink t hat in t he absence o f ano t her p lan t hat what P r esid ent
Ma is pr o p o sing makes sense, but wher e t he r ubber meet s t he r o ad is
Chinese willing ness t o change t heir p o sit io n o n o bject io ns t o T aiwan's
p ar t icipat ing in bilat er al and mu lt ilat er al ag r eement s.
T hat said , t her e is a st r o ng case t o be made. I f yo u lo o k at t he
chang e t hat China made in it s po sit io n o ver WHA o bser ver st at us last
year and t he no t io n t hat t he Chinese want ed t o demo nst r at e so me
mag nanimit y o n int er nat io nal space fo r T aiwan, it is po ssible, it is
co nceivable t hat t he Ma g o ver nment can quiet ly make t he case t o t he
Chinese t hat t his co uld fit in t he r ealm o f flexibilit y in t he no n
so ver eignt y r elat ed ar ea, t o affo r d T aiwan mo r e int er nat io nal sp ace
90
wher e it r aises t he eco no mic equ it ies o f t he T aiwan p eo p le, but do esn't
affr o nt China's int er pr et at io n o f T aiwan so ver eignt y.
And t hat wo uld be t o allo w T aiwan, under what ever t hey might
ag r ee t o call it , whet her it 's an E CFA fo r ever ybo dy else, as well, but t o
allo w T aiwan t o st ar t eng aging in r egio nal, bilat er al and mult ilat er al
init iat ives.
Bu t as it st and s r ight no w, t he Chinese ar e saying no .
HE ARI NG CO CHAI R MULLOY: Do yo u have anyt hing t o ad d?
DR. KAS T NE R: I wo u ld agr ee wit h t hat . I wo u ld t hink t hat
t her e wo uld be so me co mpr o mise aft er E CFA is r eached, especially wit h
t he Ma administ r at io n, t ho ug h I ’m no t sur e ho w br o ad su ch a
co mp r o mise wo u ld be o r whet her China wo uld dr o p o bject io ns t o
T aiwan nego t iat ing FT A’s wit h majo r eco no mies.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
Fello w Co mmissio ner s, t hr ee o f yo u have asked fo r an addit io nal
r o u nd . I f we co uld limit it t o t wo minu t es, we can do it . T
COMMI S S I ONE R FI E DLE R: I have just a fact ual quest io n.
HE ARI NG CO CHAI R MULLOY: Go ahead.
COMMI S S I ONE R FI E DLE R: Five seco nd s. Do es T aiwan have a
meaningful eq uivalent t o o u r Fo r eign Co r r up t P r act ices Act ?
DR. COOKE : No t t o a U. S . st andar d, no .
MR. HAMMOND CHAMBE RS : I agr ee wit h T er r y.
HE ARI NG CO CHAI R MULLOY: Co mmissio ner Wo r t zel.
HE ARI NG CO CHAI R WORT ZE L: Ano t her yes/ no . I f t he
Leg islat ive Yuan r ever sed so me o f Ma Ying jeo u's po sit io n o n t he U. S .
Beef Agr eement , co u ld t he LY do t he same kind o f t hing and d er ail an
E CFA aft er it is agr eed?
MR. HAMMOND CHAMBE RS : Co mmissio ner Wo r t zel, I 'll t ak e a
st ab.
S ir , co ncep t u ally, in my exper ience wit h t he LY, t hey can d o a lo t
o f t hings. But t hey, it 's int er est ing t he way it t r ack s wit h what we'r e
seeing g o ing o n r ight no w her e in t he Unit ed S t at es. T hey'r e lo o king at
a nu mber o f d iffer ent p r o cedur al met ho ds fo r hand ling E CFA t o
minimize t he po ssibilit y o f co llat er al damage and t he o pp o r t unit ies t hat
t ho se who o p p o se E CFA may feel t hey have in t r ying t o kill it .
Bu t , as yet , as I und er st and it , and please, please d isagr ee, t hey
haven't yet d ecided exact ly ho w E CFA will pass t hr o u gh t he Legislat ive
Yu an, bu t t he LY will g et so me o pp o r t u nit y t o r eview it , bu t ho w, t hat 's
st ill ap par ent ly t o be d et er mined .
HE ARI NG CO CHAI R MULLOY: I want t o t hank t his panel
ag ain fo r yo u r ver y helpful o r al t est imo ny. Yo ur wr it t en t est imo ny,
which was ver y t ho u ght fu l, will be in o ur r eco r d, and we can t hen use
t hat t o help wr it e o ur r ep o r t lat er . S o we t hank yo u ver y much, all
t hr ee o f yo u.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u.
HE ARI NG CO CHAI R MULLOY: T en minut es. We'll be back at
91
2 : 1 0. T hank yo u .
[ Wher eupo n, a sho r t r ecess was t ak en. ]
PANEL V: PO LITICAL AS PECTS
HE ARI NG CO CHAI R WORT ZE L: T he final p anel t o d ay will
exp lo r e t he po lit ical dynamics o f t he cr o ss S t r ait r elat io nship and it s
imp licat io ns fo r t he Unit ed S t at es. We have t hr ee ver y d ist ing uished
p anelist s.
T he fir st panelist is Rand all S chr iver , P r esident and CE O o f t he
P r o ject 2 049 I nst it u t e. He's also a fo unding par t ner o f Ar mit age
I nt er nat io nal LLC, and a S enio r Asso ciat e at t he Cent er fo r S t r at eg ic
and I nt er nat io nal S t u dies.
He ser ved as Depu t y Assist ant S ecr et ar y o f S t at e fo r E ast Asian
and P acific Affair s fr o m 20 03 t o 2 005 , and as Chief o f S t aff and S enio r
P o licy Ad viso r t o t hen Deput y S ecr et ar y o f S t at e Richar d Ar mit age fr o m
2 0 01 t o 20 0 3. He's also ser ved as an int elligence o fficer in t he U. S .
Navy.
Dr . S helley Rig ger is t he Br o wn P r o fesso r o f E ast Asian P o lit ics
at Davidso n Co llege in No r t h Car o lina. S he has a P h. D. in Go ver nment
fr o m Har var d Univer sit y and B. A. in P ublic and I nt er nat io nal Affair s
fr o m P r incet o n Univer sit y.
S he's been a Visit ing Resear cher at Nat io nal Chengchi Univer sit y
in T aiwan and a Visit ing P r o fesso r at Fud an Univer sit y in S hanghai.
S he's a p r o lific wr it er and has published t wo bo o ks and nu mer o us
ar t icles o n T aiwan's do mest ic po lit ics and cr o ss S t r ait r elat io ns.
T he final panelist is Dr . Richar d Bush, I I I , a S enio r Fello w at t he
Br o o k ings I nst it ut io n and Dir ect o r o f it s Cent er fo r No r t heast Asian
P o licy S t u d ies.
Dr . Bu sh has lo ng t ime exp er ience in dealing wit h China and
T aiwan beginning in 1 977 wit h t he China Co uncil o f T he Asia S o ciet y.
He has wo r ked in t he Ho use Fo r eig n Affair s Co mmit t ee S u bco mmit t ee
o n Asia P acific Affair s, t he Ho use Fo r eign Affair s Co mmit t ee, and t he
Nat io nal I nt ellig ence Co uncil as Nat io nal I nt elligence Officer fo r E ast
Asia.
His final p o sit io n pr io r t o Br o o kings was as Chair man and
Managing Dir ect o r o f t he Amer ican I nst it ut e in T aiwan. He's also t he
au t ho r o f nu mer o u s ar t icles and sever al bo o ks o n cr o ss S t r ait r elat io ns
and U. S . r elat io ns wit h China and T aiwan.
We lo o k fo r war d t o yo ur t est imo ny. I t will be seven minu t es
each. P lease, Rand y.
S TATEM ENT O F M R. RANDALL G . S CH RIVER
PRES IDENT AND CEO , PRO JECT 249 INS TITUTE
ARLING TO N, VIRG INIA
92
MR. S CHRI VE R: T hank yo u, Co mmissio ner Wo r t zel, and t hank
yo u t o all t he Co mmissio ner s. I app r eciat e t he o ppo r t unit y t o be her e,
and I p ar t icular ly appr eciat ed being seat ed wit h peo ple I r espect so
mu ch, Dr . Rig g er and Dr . Bush.
T his has been, I t hink, a lo ng day fo r t he Co mmissio ner s, and I
k no w mu ch g r o und has been co ver ed, but I do t hink t hat t he po lit ical
element s o f t his cr o ss S t r ait envir o nment ar e, in fact , t he mo st
imp o r t ant and t he co r e element s. At t he hear t o f it , t he disput e is a
p o lit ical dispu t e.
Bu t I will be ver y br ief and want t o fo cu s ver y int ensely o n what I
t hink ar e t he co r e challenges t o an end ur ing st abilit y and a st abilit y
which wo uld ensur e pr o sper it y and peace go ing fo r war d becau se I t hink
t her e is a nar r at ive o ut t her e t hat is beco ming clo se t o co nsensus and
co nvent io nal wisd o m, even, which I t hink may no t , in fact , be t he
co r r ect nar r at ive.
what I mean by t hat is I t hink mo st wo uld ag r ee, per hap s all
wo u ld ag r ee, t hat t her e is a gr eat d eal o f po sit ive mo ment um in t he
cr o ss S t r ait r elat io nship , and t hat t he envir o nment is mu ch impr o ved
o ver t he last co u p le o f year s, but I t hink when yo u pull t he t hr ead
fu r t her and give co nsid er at io n t o t he fut ur e t r aject o r y, I cer t ainly t hink
t hat t r aject o r y is far fr o m cer t ain, and when peo ple st ar t t o t alk abo ut
challenges and o bst acles, I t hink t hey'r e o ft en go ing t o t he wr o ng place
and lo o king at t he wr o ng issues.
I t hink o ne o f t he co mmo n nar r at ives is t hat t he p o t ent ial
challenge o r o bst acle fo r an endur ing peace and st abilit y is so r t o f t he
vo lat ilit y o f T aiwan's d emo cr acy and p er haps t he unpr edict abilit y o f an
act ivist Legislat ive Yuan o r pr esid ent o r fut ur e p r esident , bu t I d o n't
t hink t hat t he r o bust and ver y r epr esent at ive nat ur e o f T aiwan's
d emo cr acy is t he co r e p r o blem.
I t hink t he co r e p r o blem is Beijing's int r ansig ence, t heir st r at egy,
which is fund ament ally flawed in t hat it o ver ly r elies o n co er cio n as o ne
o f t he key element s and t heir neur algia r eally r elat ed t o t he demo cr acy
o n T aiwan.
S o let me be a lit t le bit mo r e specific abo ut t his. I do t hink
Beijing in a sense has so mewhat o f an u pper hand. T hey act ually have a
visio n, and t hey have a st r at egy t o get t her e. T heir visio n is quit e clear .
T hey want so me r eco nciliat io n, and what t hey wo u ld say r eunificat io n
what o t her s wo u ld say unificat io n ar o und t he co r e pr incip le o f "One
China. "
T heir st r at eg y, alt ho ug h it has many mo ving par t s t o it , is
essent ially a st r at egy o f car r o t s and st icks, and t hen a few year s ago it
was no t ed sweet er car r o t s and har der st icks. S weet er car r o t s being t he
eco no mic ind u cement s; t he har der st icks being t hings like t he Ant i
S ecessio n Law and t he milit ar y bu ild up o ppo sit e T aiwan.
T his is all under sco r ed by a ver y aggr essive per cept io ns
manag ement camp aig n which is desig ned t o d r ive a wedge bet ween
93
T aiwan and it s k ey sup po r t er s, mo st pr incipally t he Unit ed S t at es, but
also t o iso lat e T aiwan int er nat io nally and vilify t ho se t hat might seek a
d iffer ent fut ur e fo r T aiwan.
S o t his is t he fu ndament al st r at egy t hat has been in place fo r I
t hink so me p er io d o f t ime. E ven t ho u gh t he level o f so phist icat io n and
t he imp lement at io n o f t his st r at egy and so me o f t he element s o n t he
mar g ins changed, t his is essent ially it , a car r o t s and st ick st r at egy
su pp o r t ed by an agg r essive per cept io ns management campaig n.
T he p r o blem wit h t his is t hat t he sweet er car r o t s have been
p o wer ful eno ugh t o cr eat e t hese eco no mic linkages, have been po wer fu l
eno u g h t o chang e so me o pinio ns abo ut mainland China wit hin T aiwan,
but t he st icks p ar t , t he co er cive element s have had t he o ppo sit e effect in
t er ms o f eng ender ing po sit ive feeling s t o war d China in T aiwan.
S o t he o ut co me has been an int er est in gr eat er eco no mic t ies and
g r eat er int er act io n, but t he p o lit ical go al which Beijing ho ld s may
act u ally be g et t ing fur t her away o r mo r e difficult t o o bt ain d ue t o t his
co er cive element o f t heir po licy.
S o what do es t he net effect t hen beco me o ver t ime? Over t ime,
yo u have a sit uat io n wher e Beijing eit her changes a po lit ical o bject ive,
which I t hink is hig hly unlikely, o r yo u ask fo r unlimit ed pat ience, which
is I t hink is also p r et t y unlikely, o r t he co er cive t o o ls beco me mo r e
at t r act ive t o t hem, which I t hink is a caut io nar y no t e and so met hing t hat
we d o need t o be wat chfu l abo ut .
I t hink t he po lling in T aiwan, t ho ug h fickle and no t 100 per cent
r eliable, und er sco r es t his view. I f yo u ask peo ple t heir o pinio n abo ut
t he p o lit ical st at u s bet ween t he t wo sides, yes, o ver whelmingly, p eo p le
say st at us q u o , t he so called "st at u s qu o . " But if yo u ask fo llo w o n
q u est io ns su ch as st at us quo , t hen what , o r t he t heo r et ical, in t he
absence o f milit ar y t hr eat o pp o sit e T aiwan, what wo u ld yo ur o pinio n be,
in bo t h cases, t ho se su ppo r t ing ind ependence is act ually incr easing
acco r d ing t o t he Mainland Affair s Co uncil in t heir p o lling.
S o st at u s q uo no w, indep endence lat er is incr easing. What wo uld
yo u sup po r t in t he absence o f a milit ar y t hr eat ? I ndependence is
incr easing. And so , ag ain, I t hink t he dynamic t hat is unfo lding is a
sit u at io n which co uld be mo r e and mo r e difficult fo r Beijing t o t o ler at e.
Many have co mment ed o n t hese po lls and said, well, t he o ut co me
her e t hen sho uld act ually g ive u s so me r eassu r ance T aiwan is no t go ing
t o r u sh int o a deal t hat 's bad fo r t heir int er est s. T hey wo uld n't sacr ifice
t heir so ver eig nt y and t he har d fo ught fo r d emo cr acy t hat t hey have, but ,
in fact , no t as mu ch at t ent io n is being paid o n t he effect s t hat t his
d ynamic co uld have o n Beijing .
Again, do t hey have u nlimit ed p at ience? I hear d Co mmissio ner
S hea's q uest io n t o t he pr evio us panel. Do t hey have a fundament ally
d iffer ent p o lit ical go al? Do we exp ect t hem t o have unlimit ed pat ience
o r d o we t hink t he co er cio n t o o l co uld beco me mo r e at t r act ive t o t hem?
T o co nclu de, I do want t o t ake t he o p po r t unit y o f t his hear ing and
94
t his p anel t o mak e so me r eco mmendat io ns because, I t hink, ag ain, if
yo u r analysis is flawed and yo u'r e lo o king at t he wr o ng o bst acles and
challenges t o an endu r ing st abilit y, t hen yo ur p o licy r eco mmendat io ns
t hat fo llo w fr o m t he analysis co u ld also be flawed.
I t hink t her e ar e a number o f r eco mmendat io ns t hat have been p ut
fo r war d by scho lar s and academics and fo r mer o fficials t hat su ggest
so meho w t his sho uld be o n aut o p ilo t , ever yt hing is g o ing g r eat , and
t her efo r e we sho u ld no t met t le o r vio lat e t he Hippo cr at ic Oat h o f
invo lving o ur selves in act ually do ing har m, o r t hat t hese o ut co mes ju st
ar en't co nseq uent ial o r imp o r t ant eno u gh fo r t he Unit ed S t at es t o upset
t he t r end line.
I kno w my t ime is sho r t . Just ver y quickly, I do t hink t he Unit ed
S t at es sho u ld r eint r o du ce and st r o ng ly ur ge t he Chinese t o r eno unce t he
u se o f fo r ce. I t hink t hat 's fallen o ut o f o ur mant r a. And sho uld put a
g r eat deal mo r e pr essur e o n China t o r edu ce t he milit ar y aggr essive
p o st u r e o ppo sit e T aiwan.
Failing t hat , I t hink t he Unit ed S t at es sho u ld co nsider scaling
back so mewhat t he milit ar y t o milit ar y r elat io nship wit h China. I t hink
it is o f so mewhat qu est io nable valu e t o begin wit h, but as lo ng as t he
p o st u r e is as we kno w it t o be o pp o sit e T aiwan, I t hink having a mo r e
r o bust milit ar y int er change wit h China is no t well advised.
I t hink t he Unit ed S t at es sho uld do a ser ies o f t hings, ho p efully,
in 2 010 , t o enhance t he U. S . T aiwan r elat io nship, and I wo uld includ e
t hing s t hat have alr eady been put o n t he ag enda, like a visa waiver
p r o g r am, an ext r adit io n t r eat y. I wo uld also like t o see a Cabinet
S ecr et ar y visit T aiwan in 2 010 . Of co ur se, we kno w t he Clint o n
ad minist r at io n sent t hr ee. T he Bush administ r at io n in eight year s sent
zer o . S o it 's been o ver a decad e since a Cabinet S ecr et ar y has visit ed.
I do su pp o r t a Fr ee T r ade Agr eement bet ween t he Unit ed S t at es
and T aiwan. I t hink in t he cu r r ent envir o nment , par t icular ly o n o ur
sid e, t hat 's no t likely, bu t a mo r e r o bu st T I FA pr o cess, which wo uld, I
t hink , no t o nly sup p o r t o ur eco no mic int er est s, but I t hink wo uld give
T aiwan t he valu able hed ge ag ainst E CFA, against fu r t her iso lat io n.
I do su ppo r t mo r e enhanced secur it y assist ance t o T aiwan. I
k no w t he issue o f F 16 has been o n t he t able. I do su ppo r t t hat pr o g r am
ver y mu ch. I t hink it wo u ld be t he r ig ht message t o send t o China r ight
no w, and I do t hink t he Unit ed S t at es sho uld co nt inue effo r t s t o suppo r t
T aiwan's p ar t icip at io n in int er nat io nal o r ganizat io ns, and par t icu lar ly
mak e t his a mo r e pr o minent feat u r e in o ur discussio n wit h Asian allies
lik e Japan and Aust r alia.
T hank yo u.
[ T he st at ement fo llo ws: ]
Prep a red S t at emen t o f M r. Ra n d all G . S ch ri v er
Presi d en t an d CEO , Proj ect 249 In st i t u t e
Arli n gt on , Vi rgi n i a
95
Good afternoon Commissioners. Thank you for the opportunity to appear before you today to convey my
views on the current state of the crossStrait relationship and the direction of important trend lines. And
thank you as well for making me look good by association – I’m honored to sit on the same witness panel
with both Dr. Rigger and Dr. Bush.
As this is the last panel of the day, and many issues associated with the crossStrait economic and
security environment have already been ably addressed, I’d like to keep my statement very brief. In that
spirit, I’ll forgo extensive discussion of where I see things stand today, and instead focus more on what I
believe to be the major challenges to stability and progress in the Taiwan Strait going forward. I’d also
like to take this opportunity to address the interests of the United States that are at stake and some specific
policy recommendations.
Background:
Since the election and inauguration of Ma YingJeou as President of Taiwan in Spring 2008,
Asiawatchers have observed a remarkable rapprochement between the People’s Republic of China and
Taiwan. Significant progress has been made between the two sides in areas such as crossStrait
commercial air travel, tourism in both directions, an easing of investment restrictions, and even
international space for Taiwan. Arguably, crossStrait relations have never seen so much positive
momentum, over such a short period of time in the modern area.
The future trajectory of crossStrait relations, however, remains far from certain. A number of
essential questions about China and Taiwan’s collective future remain extremely difficult to answer.
There are a large number of variables, each complex and fluid, that factor into the equation that will
ultimately determine the health of ChinaTaiwan ties. While current trend lines remain mostly positive,
there are increasing signs that the direction of crossStrait relations could still change dramatically. The
environment remains fragile and vulnerable to disruption from a variety of sources. As a result, the
interests of the United States could be adversely impacted.
Potential Challenges:
There seems to be an emerging conventional wisdom that progress and/or minimal stability
hinges upon effective leadership and governance by the current Kuomintang (KMT) government in
Taiwan. This is largely informed by Chinese government officials and academics who vociferously warn
us of the dire consequences for crossStrait relations should the Democratic Progressive Party return to
power in Taipei. Yet the sources of potential challenge to stability in the Strait are far more complex, and
have much more to do with the continuing insecurities of the Chinese leadership, Beijing’s neuralgia
associated with democracy on Taiwan, and a strategy that is fundamentally flawed by an overreliance on
coercion. While it’s true there are two primary parties to the dispute and thus both sides contribute to the
political environment, the threats to peace and progress emanate most acutely from the PRC side.
Let me try to be more specific. I believe leaders in Beijing have a grand vision for Taiwan and a
strategy to get there. By some measure, this greatly advantages Beijing by virtue of the clarity of their
view and their ability to sustain a disciplined approach to Taiwan and the outside world. While China has
a strategy, Taiwan continues to lack consensus on even the most fundamental aspects related to the
desired end state of relations between the two sides of the Strait. Thus Taiwan, and to a large extent the
United States, are in a responsive posture, and are constrained to tactical maneuvering.
On the other hand, Beijing’s strategy – which appears effective in the short term – may very well
contain critical flaws that will ultimately inhibit China from achieving the political outcomes they desire.
The dynamic we are witnessing, therefore, may actually be deceiving. We see rapid progress at the
present, particularly in the economic sphere, but the political objectives could be subtly diverging. This,
96
in turn, may test Beijing’s patience, and may make coercive tools even more tempting to China’s insecure
leaders.
Beijing’s vision is quite clear – they seek unification (which they refer to as “reunification”) in
political form under the rubric of “One China.” Their strategy is also clear, though rarely explicitly
stated. Fundamentally, China adopts a version of the classic carrots and sticks approach to Taiwan. This
was enhanced after President Hu Jintao came to power and was described by analysts as sweeter carrots
(more economic inducements) and harder sticks (the Antisecession Law and the military buildup). And
despite their rhetoric, Chinese leaders also recognize the Taiwan issue has been “internationalized.”
Therefore, they incorporate an international carrots and sticks approach to major outside players, as well
as an aggressive perception management campaign designed for the consumption of the international
community.
Beijing’s strategy can thus be said to have seven core elements: (1) complete intransigence on the
issue of “One China;” (2) economic and other inducements to attract the government and people of
Taiwan; (3) military buildup as a tool of intimidation and coercion; (4) pursue overwhelming military
advantage to make a variety of contingent scenarios credible; (5) isolate Taiwan from the international
community; (6) a steady stream of positive and negative inducements for the United States in an effort to
weaken U.S. resolve to support Taiwan; and (7) an aggressive perception management campaign that
supports all of the aforementioned elements of their strategy.
The PRC’s efforts in the area of perception management have grown increasingly sophisticated,
but the core objectives have been remarkably consistent over time. PRC leaders seek to paint China as the
responsible party, offering a reasonable political solution (Beijing assures that Taiwan need only to agree
to “OneChina” for all other things to be possible), seek to delegitimize and vilify Taiwan independence
seekers (Chen Shuibian was always described by the Chinese as a “troublemaker” who could bring about
war), seek to place blame on outside parties who show any level of support for Taiwan (China describes
U.S. arms sales to Taiwan as an obstacle to crossStrait relations, while never making mention of their
own aggressive buildup), seek to dangle the promise of better cooperation with other parties if core
interests are respected (e.g. North Korea and Iran cooperation), and seek to ensure China’s threat of war is
credible (China refuses to renounce the use of force against Taiwan and has repeated the mantra “Taiwan
Independence means war” so many times, that even former Deputy Secretary of State Zoellick urged
members of Congress to understand during a hearing that “Taiwan Independence means war”).
This overall approach from Beijing’s perspective enables an ability to sustain a clear and
consistent pursuit of their vision. Within their strategy, Chinese leaders have the latitude to make
pragmatic decisions on economic and other types of activities with Taiwan, and can realize incremental
progress in the overall relationship with Taipei. However, since the democratization of Taiwan, China’s
political goals may actually be more difficult to realize in the absence of outright coercion. Sweeter
carrots and harder sticks may very well bring closer economic ties and greater peopletopeople
interaction, but support inside Taiwan for eventual unification continues to drop. This phenomena is not
simply a result of generational change on Taiwan, it is a direct outcome of China’s policy choices. But
rather than recast her policy, at every juncture China seems to drive deeper into the culdesac.
This is Beijing’s conundrum. With Taiwan’s robust democracy, the possibility of Taiwanese
independence must be taken seriously. However, that which is necessary on China’s part to prevent
Taiwanese independence in actuality makes political reconciliation and unification much more difficult.
Unless China is willing to change its political objective (highly doubtful), Beijing’s options dwindle to a
choice between having unlimited patience, or more aggressive isolation and coercion of Taiwan. Since
unlimited patience carries some risk (Taiwan could slide further away and abandon the socalled status
quo), the isolation and coercion tools become more understandable. This starts to explain why Beijing
reacted so negatively to new U.S. arms sales to Taiwan even at a juncture when the crossStrait
relationship is so positive – they understand their ultimate political objective may remain out of reach
97
unless they can effectively coerce Taiwan.
Current polling in Taiwan underscores China’s dilemma. While it is true that a vast majority of
people in Taiwan support the socalled status quo, this statistic belies other important trends. When asked
what arrangement people would support for Taiwan in the absence of a military threat from China, the
numbers supporting independence have been steadily growing, and those supporting eventual unification
have been dropping. When people are allowed to answer “status quo now” but something else later,
according to the Mainland Affairs Council in Taiwan, those believing that independence should come
after the status quo in Taiwan is on the rise while those supporting unification after the status quo is on
the decline. This particular trend has developed even during the Ma Administration, and even after the
economic outreach from Beijing.
Some may take away a degree of confidence that these trends prove Taiwan will not rush into an
illadvised political reconciliation with China. In my view, however, not enough analysts are paying
attention to how these same trends may impact Beijing. It is truly a dangerous mix when Beijing refuses
to renounce the use of force, continues to gain military advantage in the Strait, and over time sees the true
fiction of the highly questionable narrative they had once embraced – that supporters of Taiwanese
independence were the simple byproduct a few troublemakers in Taiwan – it may see no alternative but to
seek a coerced outcome.
I do not mean this to sound alarmist or to suggest that conflict in the Taiwan Strait is inevitable.
We have policy choices going forward that can promote a more durable environment of peace, stability,
security and prosperity. And while I recognize that mine may be a bit of a contrarian view, I do worry
that acceptance of faulty analysis regarding the real challenges in the crossStrait political relationship
going forward will lead the Administration to poor policy decisions. Increasingly, respected people with
significant professional stature suggest in public forums that our approach to the Strait should be either
laissezfaire given how well the two sides are progressing, or that we should actually pull back our level of
support for Taiwan. Many advocates of the latter approach hope to either gain Beijing’s cooperation in
other areas, or speed along the inevitable political unification process. I strongly believe that a general
trend of weakening U.S. support for Taiwan will make a coerced outcome – to possibly include the use of
violent force – more likely, not less likely.
What is at Stake for the United States?
There are some who may disagree with my analysis above, and I welcome debate with anyone
who can disagree without being disagreeable. But what I find quite troubling is that some U.S. Asianists
may actually agree with my analysis, but might also be quite comfortable with the trajectory I’ve described
above. There are those who are willing to see Taiwan sacrificed in the hopes that greater strategic
cooperation can be forged with China. I believe this latter camp undervalues Taiwan and the U.S.Taiwan
relationship. I also believe they risk endorsing a false tradeoff, and the promise of Chinese reciprocation
for the U.S. abandonment of Taiwan would never materialize. Ironically, such a course would equate to
both bad Taiwan policy and bad China policy.
As Commissioner Blumenthal and I wrote in our coauthored report “Strengthening Freedom in
Asia” in 2008, “the United States has an interest in a free, democratic, prosperous, and strong Taiwan.” It
is a large trading partner of the United States, and has proven to be a responsible stakeholder on global
issues of concern such as climate change, counterproliferation, humanitarian relief, and the promotion of
democracy and human rights. Again to cite our 2008 report, “if Taiwan is successfully coerced by the
PRC into a settlement against the wishes of the 23 million people of Taiwan, Washington would not only
lose a valuable international partner, but its interests and regional position would also suffer a severe
blow… A coerced settlement against the wishes of the Taiwanese may carry even greater strategic
significance over the long term. Chinese control of Taiwan (and presumably, the Taiwan Strait) could
effectively deny the United States and its allies access to critical sea lanes during conflict. Mainland
98
control of Taiwan would also significantly extend the reach of the People’s Liberation Army in the Asia
Pacific region.”
Naturally, the United States also has a strong interest in a constructive relationship with China.
Instability in the Taiwan Strait, and the resulting tension with China could adversely impact our interests.
But too often in the past when trouble arose, the United States chose to treat the symptom rather than the
disease. Perhaps there is a practical logic at play. When facing tension in the Taiwan Strait, U.S. policy
makers often chose to impress upon the party where presumably we had the most influence – in other
words, we pressured Taiwan to change their behavior or actions because we had greater chance of success
than had we tried to alter China’s behavior. But this type of actionreaction cycle only serves to obscure
the real challenges to enduring peace, namely China’s profound discomfort with democracy in Taiwan,
and her unwillingness to abandon a policy rooted in military coercion. And laterally speaking, analysts
would be hard pressed to demonstrate where our pressure on Taiwan ever resulted in enhanced Chinese
cooperation in other areas (quite to the contrary – historically speaking, there is absolutely no correlation
between U.S. policy toward Taiwan and Chinese decision making on Iran, North Korea, etc.)
Policy Recommendations:
U.S. interests at first blush may appear complex due to the perception that we are faced with
competing interests and policy tradeoffs. I would submit, however, those are perceptions largely
manufactured by Beijing who want us to believe such tradeoffs are real. The reality may actually be the
counterintuitive. Given the fundamental flaws in China’s strategy toward Taiwan, and given our
interests in both avoiding conflict in the Strait, as well avoiding a potential coerced settlement, we are not
on the optimal trajectory as popular opinion might have us believe. I would advocate that we reorient our
own policy objectives to more accurately address the long term challenges to peace, stability, security and
prosperity in the Taiwan Strait.
As an overarching goal, the United States should be seeking to mitigate and/or remove the true
obstacles to an enduring peace in the Taiwan Strait. And the true obstacle to peace is not a vibrant,
flourishing democracy in Taiwan – it is the Chinese refusal to renounce the use of force, and an overall
Chinese approach that is leading all parties in the direction of a coerced settlement. Specifically, I have
six policy recommendations for the Obama Administration and the Congress:
The United States should resume strong calls for China to renounce the use of force against Taiwan,
and should resume strong calls for China to pull back from its threatening posture opposite Taiwan in
consequential ways. Doing so would be an appropriate counter to growing Chinese assertiveness.
The United States’ militarytomilitary relationship with China should be scaled back until China is
more responsive to our calls for constructive steps related to the security environment in the Taiwan
Strait. After nearly 30 years of interaction, the U.S.China militarytomilitary relationship has proven to
be of very limited value to the United States. Ironically, when Beijing’s leaders want to demonstrate pique
over U.S. support for Taiwan, China pulls back from military to military exchanges. In such cases in the
future, the United States should welcome China’s decision. As China aggressively pursues military
modernization and seeks a more professional force, choosing to limit interaction with the world’s greatest
military will actually hurt China more than the United States.
The United States should take a series of steps to enhance the U.S.Taiwan relationship. Before the end
of 2010, the United States should send a U.S. cabinet secretary to Taiwan, should reach agreement on
extending Visa Waiver to Taiwan, and should conclude an extradition agreement. These steps would
demonstrate that we see merit in a U.S.Taiwan relationship in its own right, breaking free from the
mindset that Taiwan is only important as a subset to broader U.S.China relations.
The United States should pursue a Free Trade Agreement (FTA) with Taiwan. As the current political
99
environment in Washington may not be favorable to any new FTA efforts, we should at a minimum re
start a robust TIFA process to promote bilateral trade. Such a step would not only support U.S. economic
interests and strengthen U.S.Taiwan ties, it would also help Taiwan to have a valuable hedge against
PRC economic influence in Taiwan.
The United States should support a robust security assistance program for Taiwan. As a first step, the
United States should accept a “Letter of Request” from Taiwan related to the followon F16 purchase,
and should ultimately approve the request for additional F16s. If Taiwan has greater defense capabilities,
it will have greater confidence to proceed with constructive dialogue with Beijing.
The United States should promote Taiwan in international organizations and should to promote Taiwan
as an important issue with our key Asian allies such as Japan and Australia. Taking such measures may
help counter China’s attempts to isolate Taiwan.
S TATEM ENT O F DR. S H ELLEY RIG G ER
B RO WN PRO FES S O R O F PO LITICAL S CIENCES , DAVIDS O N
CO LLEG E, DAVIDS O N, NO RTH CARO LINA
DR. RI GGE R: I 'd like t o echo Mr . S chr iver 's t hanks t o t he p anel
fo r including us and fo r co nvening t his meet ing and , in par t icu lar , fo r
inclu d ing me o n yo u r d o ck et . I 'm ver y happ y t o be her e.
I t hink t hat it 's a pr et t y well est ablished o bser vat io n t hat d o esn't
r eally bear r epeat ing, but I 'll r epeat it anyway, t hat t he r elat io ns
bet ween T aiwan and mainland China ar e mu ch bet t er t o d ay t han t hey
have been o ver t he past decad e o r so , and in so me ways o ne might
ar g ue, ar e bet t er t han t hey have ever been because even in t he er a when
u nificat io n, speak ing o f mant r as, was t he mant r a o f bo t h sid es, act ual
act io n t o war d unificat io n, act ually co mmu nicat io n bet ween t he t wo sides
and r eal meaning ful co nt act s wer e co mplet ely absent .
T o d ay r eally is t he fir st t ime t hat we have seen d eep pr o g r ess and
o p p o r t unit ies fo r co llabo r at io n and co o per at io n bet ween t he t wo sides
o n bo t h t he eco no mic fr o nt and t he po lit ical fr o nt . T his is r eally an
u np r ecedent ed mo ment , and I t hink becau se it is an unpr ecedent ed
mo ment , it has pr o vo k ed a lo t o f debat e and a fair amo unt o f r esist ance
amo ng t he T aiwanese p ublic.
Fo r eight year s, du r ing t he Chen S hui bian ad minist r at io n, t he
p r imar y dr iver o f T aiwanese po lit ical debat e was a co nver sat io n abo ut
ho w wise o r unwise P r esident Chen's cr o ss S t r ait po licies wer e, and was
he t o o pr o vo cat ive? Was he t aking T aiwan in a r isk y dir ect io n? And
t hat debat e r eally escalat ed in P r esid ent Chen's seco nd t er m bet ween
2 0 04 and 20 08.
Given t he amo unt o f at t ent io n and scr ut iny t hat T aiwanese vo t er s
and T aiwanese p ublics had g iven t o P r esident Chen's po licy, t her e was
an expect at io n, and no t su r pr isingly so , t hat when a new pr esid ent came
in wit h a ver y d iffer ent ap pr o ach t o cr o ss S t r ait r elat io ns, t he p ublic
wo u ld embr ace t hat new appr o ach, having been cr it ical o f t he pr evio us
o ne.
Bu t what we fo und is t hat t he T aiwanese pu blic is no t par t icular ly
100
ent hu siast ic o r cer t ainly no t sanguine abo ut t he po ssibilit ies fo r
mischief o r t r o u ble asso ciat ed wit h t he Ma Ying jeo u administ r at io n's
ap pr o ach. T his is no t t o say t hat anybo dy wo u ld be eag er t o go back t o
t he Chen ad minist r at io n, but simply t o say t hat t her e is a g r eat d eal o f
anxiet y amo ng T aiwanese abo u t t he fut ur e dir ect io n o f t heir r elat io nship
wit h mainland China, and t her e is a ver y widespr ead sense t hat t he r ange
o f o p t io ns fo r T aiwan ar e ver y nar r o w so t he mo st impo r t ant
char act er ist ic t hat nat io nal lead er ship can br ing t o T aiwan is t he abilit y
t o navig at e t hr o ug h t his ver y nar r o w channel wit ho ut d r ift ing t o o far in
eit her dir ect io n because, at bo t h sid es, t her e ar e ser io u s p er ils and
d ang er s.
Dur ing t he Chen administ r at io n, we saw a lo t o f public o pinio n
p o lling , k ind o f nu d ging t he p r esident back t o war d t he cent er o f t he
channel, and no w we see public o p inio n po lling lo o king ver y d iffer ent ,
which I t hink is r eally t he T aiwanese po pulace nudging P r esident Ma
back t o war d t he cent er o f t he channel.
S o I t hink t he mo st impo r t ant message we can d er ive fr o m t he
p o lit ical fer ment wit hin T aiwan is t hat t her e is no mandat e fo r r apid o r
r ad ical act io n fo r T aiwan's leader ship in t he T aiwanese public o r in t he
T aiwanese elect o r at e.
Bu t t her e also was no mand at e fo r r ad ical o r ext r eme act io n fo r
t he p r evio us administ r at io n, eit her . S o it seems t o me t hat t he effect o f
p u blic o p inio n in d o mest ic po lit ics, t he p r imar y effect o f d o mest ic
p o lit ics o n cr o ss S t r ait r elat io ns, is r eally t o r est r ain all T aiwan
g o ver nment s and t o slo w t he p ace o f cr o ss S t r ait develo pment s so t hat
t o d ay we find , even o n t he eco no mic fr o nt wher e, dur ing t he Chen
ad minist r at io n, t her e was t he g r eat est ent husiasm fo r r amping u p cr o ss
S t r ait co o per at io n and int egr at io n, even o n t he eco no mic fr o nt , t her e's
r ising skep t icism abo u t whet her o r no t T aiwan sho uld co nt inue t he
cu r r ent t r aject o r y o f eco no mic int egr at io n.
I t hink u lt imat ely, t his is act ually ver y beneficial t o T aiwan. I t
ser ves T aiwan's int er est s well t o have t his level o f skep t icism and
p o p u lar r eluct ance t o embr ace t he p r esident 's appr o ach becau se it gives
P r esident Ma a ver y cr edible fo und at io n o n which t o ar gue t o his
Chinese co unt er p ar t s t he limit at io ns o f what he can deliver and what he
can yield .
T o t he ext ent t o which p eo p le in mainland China may have go ne
int o t he Ma ad minist r at io n wit h t he expect at io n t hat t hey wo uld ver y
q u ickly gain t heir hear t 's d esir e, t hat expect at io n has been subst ant ially
r evised wit h so me d isapp o int ment but also a co nsider able amo unt o f
r ealism o n t he p ar t o f P RC lead er s and peo ple in China who ar e
k no wledg eable abo ut t he T aiwan issue, many o f who m knew t his wo uld
hap p en befo r e Ma Ying jeo u was ever elect ed.
Bu t t he co nsequence is t hat Ma has a ver y cr ed ible case t o mak e
in d ealing wit h t he mainland, t hat he has t o t ake it slo w, t hat he canno t
d eliver ver y qu ickly, especially o n t he mo st co nt r o ver sial it em, which is
101
t o say t he po lit ical element s o f what Beijing mig ht ho p e o r expect t he
t wo sides co uld engag e o n.
Wit h t hat , I 'll yield t he r est o f my t ime t o Dr . Bush.
[ T he st at ement fo llo ws: ]
Prep a red S t at emen t of Dr. S h elley Ri gger
B rown Pro fesso r of Poli t i cal S ci en ces, Davi d son College, Da vi d son ,
No rt h Ca roli n a
Describe the current status of, and recent trends in, the CrossStrait Relationship
Relations between Taiwan and mainland China have warmed substantially since President Ma Yingjeou
assumed office in May 2008. The tension that gripped Taiwan and China during the Chen Shuibian
presidency (20002008) has abated. Highlevel visits have become routine, with the heads of the two
sides’ quasiofficial negotiating bodies, (Chiang Pinkung of Taiwan’s Straits Exchange Foundation and
Chen Yunlin of China’s Association for Relations Across the Taiwan Straits) exchanging regular visits
and engaging in substantive negotiations during those visits. The agreements already negotiated and
currently under negotiation focus on economic issues, but they also include technical matters related to
crossStrait travel, trade and investment. A comprehensive trade agreement, which Taipei is calling an
Economic Cooperation Framework Agreement (ECFA) is under negotiation. Officials in Taipei say they
expect it to be finalized this spring.
What is your assessment of China’s recent diplomatic and economic initiatives toward Taiwan? Why has
there been no parallel movement on the military front by Beijing?
It appears the PRC government has determined President Ma is the most favorable interlocutor they can
realistically expect to find in Taiwan. Although resistance within Taiwan has made for a slowerpaced
crossStrait rapprochement than many observers expected, Chinese leaders have tolerated the slow pace.
For example, they fulminated against the U.S. for selling arms to Taiwan, but spared Taipei from direct
criticism. Beijing has not allowed setbacks in the relationship, such as protests and failed agreements, to
scuttle the talks. The PRC even has made limited concessions on Taiwan’s demand for international
space. It has joined Taipei in the tacit “diplomatic truce” Ma proposed after his inauguration (neither
sides has established diplomatic ties with the other’s existing diplomatic partners) and in 2009, Beijing
withdrew its opposition to Taiwan’s efforts to secure observer status at the UN World Health Assembly.
The most persuasive interpretation of Beijing’s actions, in my view, is that they reflect a “hope for the
best, prepare for the worst” strategy. That is, China is pursuing better relations with Taipei on the
economic and diplomatic front, but it will not relax its military posture. Chinese leaders believe longterm
trends are in their favor. They expect that increased economic integration and peopletopeople contacts –
when combined with the steady increase in mainland China’s global weight – will pull Taiwan toward the
mainland. However, they also believe there is a small, but real, chance Taiwan might make a sharp
gesture toward formal independence. China’s military posture is designed to deter that gesture. If
deterrence fails, it is designed to respond forcefully to Taiwan’s move.
Other interpretations for the gap between China’s economic/diplomatic conduct and its military posture
are less persuasive. The idea that the military posture is dictated by the People’s Liberation Army, and is
in tension with the civilian leadership’s preference for carrots as opposed to sticks, overstates the degree
of autonomy the PLA enjoys. Taiwan policy is one of the PRC’s very highest priorities; it is unlikely top
leaders would permit the PLA to deviate from their preferred line. For that reason it is more likely that
China’s threatening military posture is intended and approved at the very top. The argument that Beijing
is using carrots to stall for time while it prepares for military action also is unpersuasive, because enticing
Taiwan to move closer to the mainland is far less costly than unleashing military force. The military
option is real, but it remains a last resort.
102
What is your assessment of future trends in the crossStrait relationship? Will it continue to improve, or
has it reached a plateau? What unforeseen events could provide a setback to crossStrait relations?
At present there is very little overlap in the two sides’ longterm visions. Beijing is committed to a form of
unification in which Taiwan is absorbed into the People’s Republic of China – albeit with a very high
degree of local autonomy. The democraticallyelected government in Taipei is accountable to a public that
is united in its determination to remain politically independent of the PRC. Taiwan’s public is willing to
accept compromises on symbolic issues, such as the island’s nomenclature, but there is no support for
folding Taiwan (or the Republic of China) into the PRC.
Given these visions’ irreconcilability, the key to successfully managing crossStrait relations is to draw out
the process long enough that those visions can be reconciled. Prolonging the process will require the two
sides to find issues that can be negotiated; some observers have begun to wonder whether the supply of
such issues might be dwindling. I would argue that it is not. Even after all the outstanding economic and
technical issues are resolved (and there are many), there will be opportunities to negotiate and implement
military confidence building mechanisms. Beyond confidence building lies a peace accord (something
both sides agreed was desirable back in 2005). Each of these steps can take a very long time. So long as
both sides are content to let the process take its course, they will provide ample fodder for protracted
negotiations.
The quality of relations may be at something of a plateau, but I would argue that reflects more the big
improvement over the Chen era than a slowing of the warming trend under President Ma. Moreover,
Taiwan leaders’ confidence that they will sign an ECFA in the next few months suggests that on
substantive issues, if not in the atmospherics, progress continues.
Unforeseen events that could provide a setback would include a military or serious civilian accident
involving actors from the two sides. A sudden increase in the hostility directed at Taiwan from Beijing
would provoke a retrenchment in Taiwan’s position. (It also would hurt President Ma and his party
politically, raising the likelihood that the DPP would win the 2012 presidential election. That would put
the Sinoskeptical DPP back in charge of mainland policy – something Beijing would prefer to avoid.)
Such an event could be caused by a surge in nationalist activism in the mainland, either domestically
generated or in response to actions in Taiwan or the U.S. Because it prefers to avoid this outcome, the
PRC government has been at pains to “accentuate the positive” in interpreting crossStrait developments
for its citizens.
Do you feel that greater crossStrait economic integration will led to increased political integration?
There is no necessary relationship between economic and political integration; if there were, Ottawa and
Washington would have set aside their differences and reunified British North America long ago. Of
course, Taiwan and mainland China shared a vision of unification more recently, so the analogy may be
faulty, but Taiwanese support for unification is negligible today. Economic interactions have reduced the
level of tension, in part by creating large constituencies on both sides that derive direct benefits from good
relations. That is especially important in Taiwan, which at one time looked like it might be an obstacle to
peaceful relations. However, reducing tension is not the same thing as increasing political integration. A
shift toward political integration is not inconceivable in the long run, but it is hard to map a route to
political integration that reaches that destination in the next decade.
Can the Chinese Communist Party continue to live with de facto independence for Taiwan as long as
economic integration progresses?
On the Taiwanese side, if Taipei were to make a strong gesture toward de jure independence, its de facto
independence might become intolerable to Beijing. On the PRC side, domestic politics in the mainland
103
could develop in such a way that the CCP would be forced to sacrifice Taiwan to preserve its own power.
The most likely scenario of that kind would be a strong surge in nationalistic sentiment sparked by
setbacks in other areas, such as a loss of international prestige or a major economic failure. Neither of
these are necessary developments, which suggests the CCP can continue to live with Taiwan’s de facto
independence.
Another relevant factor here is China’s increasing comprehensive national power. The PRC’s economic,
political and military power is growing rapidly, and other nations are recognizing its rise. The sense that
China has “come into its own” could prompt a debate in the PRC over whether it is necessary to continue
tolerating Taiwan’s de facto independence. The outcome of such a debate is hard to predict, as there are
strong voices that would argue precipitous action would be unnecessary and costly – and might even set
back China’s rise. Chinese leaders’ statements to this week’s National People’s Congress meetings
stressed China’s domestic challenges – including corruption, inequality and economic instability. I see
little evidence that the Chinese leadership is prepared today to risk its domestic stability and international
stature in order to force a change in the Taiwan Strait status quo.
In your opinion, how willing is Taiwan’s domestic audience to accept greater political and economic
integration with China?
Taiwanese are eager to reap the benefits of economic integration, but they are deeply skeptical of political
integration. Even the level of political rapprochement already achieved makes many Taiwanese
uncomfortable. Their anxiety is evident in their receptivity to criticism of President Ma and his cross
Strait policy. It is easy for Ma’s political opponents to activate citizens’ distrust of Ma and his party by
claiming they are insufficiently alert against PRC threats.
Most importantly, Taiwanese do not currently perceive a need to sacrifice their preference for political
separation to achieve economic benefits. Since 1987, Taiwanese have enjoyed evergrowing economic
cooperation and engagement with the mainland, while surrendering little of their political autonomy.
They have made sacrifices, to be sure. In the early 1990s, there was serious talk about how Taiwan might
win formal independence. Today, Taiwanese rarely talk of de jure independence; when they do, the
possibility is often set in the context of a hypothetical statement like, “if the CCP loses power” or “were
China to implode...” But changing the name of the country (one of the few events Taiwanese would
recognize as “changing the status quo”) has never been a high priority for a majority of Taiwanese.
Preserving Taiwan’s de facto political independence is the most important goal, and I do not perceive
much change on that dimension.
Many Taiwanese found President Chen Shuibian’s policies unnecessarily provocative, but they have not
thrown their unconditional support to President Ma. Over the course of his two years in office, citizen
confidence, as measured in polls, has been consistently low for a number of reasons. The lack of
transparency in decisionmaking has been a particular concern. Politicians in the main opposition party,
the Democratic Progressive Party (DPP) argue that the government’s crossStrait decisionmaking –
including on the proposed Economic Cooperation Framework Agreement (ECFA) – is dangerously
opaque. They charge that the negotiators may fail to secure Taiwan’s interests. To protect Taiwan, Ma’s
critics are demanding ECFA be subjected to formal ratification, either by popular referendum or in the
legislature. Legislative speaker Wang Jinpyng, a KMT member, has said the legislature might overrule
the ECFA deal if it does not meet lawmakers’ standards. As President Ma chairs the KMT, the weak
support for his policies in the KMT reinforces the sense that he lacks a firm hand – exactly what he needs
to deal effectively with the evertough negotiators from Beijing. Declining confidence in the Ma
government also reflects the public’s sense that his administration has not responded well to domestic
concerns, including typhoon Morakot, H1N1 vaccine and U.S. beef imports.
In short, Taiwan’s domestic political environment would not welcome a shift toward “political
integration.”
104
How do recent crossStrait political developments impact U.S.Taiwan relations?
The warming trend in crossStrait relations reduces the threat of a sudden, violent rupture that would
require U.S. action. This is a highly positive development for the U.S.
How might greater crossStrait political and economic integration affect U.S. national interests in the
region?
Improving relations between Taiwan and the mainland benefit both economies. To the extent that stable
economic growth serves U.S. interests, crossStrait economic ties serve U.S. interests. Because economic
integration is not likely to produce political integration – much less unification – in the near future, the
U.S. is unlikely to find itself facing a radical shift in its relationships in the region. In other words, U.S.
interests still are threatened far more by the absence of good crossStrait economic and political ties than
by their presence.
What role should the United States play in the U.S.TaiwanChina triangular relationship in light of
recent developments between Taiwan and the Mainland?
The U.S. should continue to reassure Taiwan that it will help Taipei resist Beijing’s pressure to accept a
political deal with that would erase Taiwan’s democracy. Pressing for a particular outcome is likely to
backfire, not only in the mainland, but on Taiwan as well. It is not the U.S.’s job to push the two sides
together or to drive a wedge between them. The most useful course of action for the U.S. is to help Taiwan
remain strong and confident to resist Beijing’s pressure without appearing to be pulling Taiwan away
from the mainland. That is a tricky balance, but acting consistently, in line with decadesold practices,
minimizes the room for misunderstanding in Beijing and Taipei.
Altering U.S. policy would be risky. In Beijing, some policy changes could be viewed as an opportunity to
exploit U.S. weakness or lack of resolve, while others could be seen as attacks on China’s core national
interests. In Taipei, even small adjustments in how U.S. policy is communicated provoke storms of debate;
an actual policy shift would be profoundly destabilizing and confusing; a retreat from the traditional levels
and types of support the U.S. has provided would be dangerously demoralizing.
Is there a logical disconnect between Taipei moving to improve economic and political relations with
Beijing while continuing to press for arms purchases from the United States?
The United States and Taiwan have long shared the position that without robust military defenses, Taipei
will lack the confidence to negotiate with Beijing. For that reason, improving economic and political
relations across the Strait not only is consistent with continued arms sales, but depends on continued arms
sales. In addition, a sharp change in the military balance in the Strait would destabilize the region.
Instability is not conducive to better relations; on the contrary, it is likely to prompt Taiwan to recoil from
interactions with the mainland.
All sides need to bear in mind the dangers posed by a sudden deterioration in Taiwan’s political position.
There is a broad consensus among Taiwanese that the status quo is acceptable, but there is no consensus
about what else would be acceptable. If the PRC (or the U.S.) were to demand or impose a change in the
status quo, Taiwan’s domestic situation would become chaotic, with heavy economic losses. The economic
troubles would spill over into the PRC, especially its high tech sector. Taiwanese are not only the main
foreign investors in that sector; they also divide their production between the PRC and Taiwan. A
disruption in the Taiwanese supply of high tech components to assembly plants in the mainland would
have a large impact on PRC exports – and on the global supply and price of high tech goods. This is a
concrete example of how excessive pressure from Beijing – even short of military force – could backfire,
with global consequences.
105
Concluding Thoughts
When President Ma Yingjeou took office, a grand experiment began. His crossStrait policy differs from
any previous policy – it is not Chen Shuibian’s policy of minimizing compromise while fortifying
Taiwanese for resistance, nor is it the policy followed by Chen’s predecessor, President Lee Tenghui.
The stakes for this experiment are high. President Chen’s policy did not strike a sustainable balance
between enhancing economic interactions and avoiding political interactions. Instead, economic ties raced
ahead of technical agreements, leaving Taiwanese overexposed in the mainland and exacerbating the
asymmetry between the two sides. Overall, Taiwan’s options were narrower at the end of the Chen
administration than at the beginning. Chen’s approach also undermined Taiwan’s relations with the
United States. The lesson of the Chen years was that Taiwan needed a different policy direction. Ma’s
approach represents that new direction. The risk is that if Ma’s approach does not succeed, it is unclear
what new policy Taiwan might adopt. Although the DPP opposes Ma’s policy, it has not articulated a
concrete alternative for the future.
The popular reaction to the “grand experiment” has been skeptical, which has slowed the pace of
implementation. Overall, the experiment seems to be having modest success. Economic ties are bearing
fruit (Taiwan’s economy is recovering relatively quickly from the global recession), and China is not
pressing Taiwan very hard politically. Still, Beijing shows no sign of giving in on its core demands, it has
not reduced its military threat, and it has made aspects of the Taiwan issue (especially arms sales) a focus
of nationalist discourse aimed at domestic audiences. In sum, the atmosphere in the Strait is far better
than it was three years ago, but the fundamental source of conflict – the two sides’ contradictory goals –
remains unresolved.
S TATEM ENT O F DR. RICH ARD C. B US H , III
DIRECTO R, CENTER FO R NO RTH EAS T AS IAN PO LICY
S TUDIES , TH E B RO O K ING S INS TITUTIO N, WAS H ING TO N, DC
DR. BUS H: Chair man Mullo y, Co mmissio ner s, t hank yo u ver y
mu ch fo r having me t o d ay. T hank yo u fo r d o ing t his hear ing .
Clar ifying t he t r aject o r y o f China T aiwan r elat io ns is o ne o f t he mo st
p r essing analyt ical challenges facing t he t wo co unt r ies co ncer ned and
t he Unit ed S t at es.
Let me sp eak t o t he t o pics t hat t he st aff p r o po sed. Fir st o f all, o n
t he back gr o und o f r ecent event s, fr o m t he ear ly 199 0s t ill 20 08, a
co r r o sive po lit ical dynamic came t o do minat e po lit ical r elat io ns bet ween
T aiwan and China in sp it e o f co mplement ar y eco no mic r elat io ns. E ach
sid e fear ed t hat t he o t her was pr epar ing t o challenge it s fundament al
int er est s. E ach side t o o k st ep s, milit ar y o r p o lit ical, t o defend t ho se
int er est s which o nly int ensified t he spir al o f mut ual fear .
T he cr o ss S t r ait sit uat io n impr o ved mar k edly aft er t he elect io n o f
P r esident Ma Ying jeo u. Ma's belief t hat T aiwan co uld bet t er assur e it s
p r o sper it y, dig nit y and secur it y by engaging and r eassur ing China r at her
t han pr o vo k ing it beg an t he pr o cess o f r ever sing t he pr evio us negat ive
sp ir al.
No w o n t he nat ur e o f t he cur r ent p r o cess, analyt ically, I t hink
what we'r e seeing can yield t wo pr incipal o ut co mes. One is t he
st abilizat io n o f cr o ss S t r ait r elat io ns, mo ving fr o m t he co nflict ed
co exist ence t hat we saw pr io r t o 20 08 t o a mo r e r elaxed co exist ence.
106
T he o t her is r eso lut io n o f t he fundament al d isput e bet ween t he t wo
sid es, what we call u nificat io n.
I n and o f it self, st abilizat io n d o es no t lead t o r eso lu t io n. P o lit ical
int eg r at io n is no t t he inevit able r esult o f eco no mic int egr at io n.
P r esident Ma has been explicit t hat unificat io n will no t be discu ssed
d u r ing his t er m o f o ffice. T he Chinese lead er ship act ually ap pear s t o
u nd er st and, co r r ect ly, t hat r eso lut io n is a lo ng t er m p r o po sit io n.
Cer t ainly st abilizat io n can cr eat e a bet t er climat e fo r r eso lut io n.
I t can also evo lve incr ement ally in t hat dir ect io n, eit her t hr o u gh bet t er
mu t u al u nder st and ing o r because o ne sid e kno wingly o r unkno wingly
mak es co ncessio ns t o t he o t her .
No w, o n China's init iat ives. S ince 2005 and in co nt r ast t o past
p er io d s, China's ap pr o ach t o T aiwan has been so mewhat mo r e sk illful.
P r esident Hu Jint ao shift ed t he near t er m pr io r it y fr o m achieving
u nificat io n t o o pp o sing T aiwan indep end ence.
T he Beijing leader ship r eco gnizes t he impo r t ance o f build ing
mu t u al t r u st t hr o ug h d ialo gue and exchanges. I t is emphasizing what
t he t wo sides have in co mmo n r at her t han what d ivides t hem.
I t is t r ying t o bu ild up supp o r t fo r a P RC fr iendly p ublic o n
T aiwan. I t sees t he value o f inst it ut io nalizing a mo r e st able cr o ss S t r ait
r elat io nship .
T he main and wo r r iso me except io n t o t his t r end is t he P eo ple's
Liber at io n Ar my's co nt inuing acq uisit io n o f capabilit ies t hat d eg r ade
T aiwan's secu r it y. Why t his bu ild up co nt inues in spit e o f t he d ecline in
t ensio ns is pu zzling. I 'm inclined t o believe t hat it r eflect s bo t h issues
in civil milit ar y r elat io ns and t he P RC's d esir e fo r a su fficient co er cive
capabilit y t o bo t h det er T aiwan ind ependence and per haps t o co mp el
T aiwan t o nego t iat e o n it s t er ms, and we sho uld r ecall Beijing has
miscalculat ed befo r e. I t can miscalculat e again.
Wher e d o cur r ent t r ends lead? I can't r ule o ut t he p o ssibilit y t hat
g r adu ally and o ver t ime t he T aiwan p ublic and lead er s will decide t hat
T aiwan sho uld beco me a S pecial Administ r at ive Regio n o f t he P RC, but
I d o u bt it . T her e is st ill a br o ad co nsensus t hat t he Rep ublic o f China
o n T aiwan is a so ver eign st at e, a p o sit io n t hat is inco nsist ent wit h
China's unificat io n fo r mula.
T he mo r e likely fut ur e, I t hink, is a cr eat io n and co nso lidat io n o f
a st abilized o r der , o ne in which eco no mic int er dep end ence deepens,
so cial and cu lt u r al int er act io n g r o ws, co mpet it io n in t he int er nat io nal
co mmunit y is mut ed , and all t hese ar r angement s will be
inst it u t io nalized, but no ne o f t his is aut o mat ic.
T he so ver eignt y issu e and China's gr o wing milit ar y p o wer co uld
co mp licat e st abilizat io n. Dr . Rig ger has emp hasized t he anxiet ies o f t he
T aiwan public, and if t he DP P wer e t o co me back t o po wer , China might
misr ead it s int ent io ns and abo r t st abilizat io n. Ho w will t he T aiwan
p u blic r esp o nd t o all o f t his?
S o far po lls sug gest t hat t he T aiwan public su ppo r t s co nt inu ed
107
eco no mic int eg r at io n but no t po lit ical int egr at io n. A subst ant ial
majo r it y favo r s keeping t he st at u s qu o fo r t he fo r eseeable fu t u r e. I f
Beijing wer e t o p u sh p o lit ical t alk s befo r e t he public was r ead y, t her e
wo u ld likely be a backlash.
No w, I believe t hat T aiwan will be mo r e likely t o suppo r t
eco no mic int egr at io n and per haps mo dest p o lit ical int egr at io n if it has a
sense o f self co nfid ence. Cr eat ing t hat self co nfidence will r equir e self
st r eng t hening in t he eco no mic, milit ar y and po lit ical ar eas. Do ing so
will also det er P RC mischief.
Can Beijing live wit h t he st at us quo ? I n Chinese pr ess
co mment ar y, we so met imes see o pinio ns t hat eco no mic int egr at io n will
lead t o a fair ly quick p o lit ical r eco nciliat io n and o n Beijing's t er ms.
China's leader s, I t hink, ar e mo r e r ealist ic and mo r e pat ient . Alt ho ugh
u nificat io n do es r emain t heir g o al, t hey k no w t his will o ccur aft er a
p r o t r act ed and co mp lex pr o cess. What is impo r t ant fo r Beijing in t he
sho r t and mediu m t er m is t hat no t hing happ ens t o put t heir go al o u t o f
r each.
What abo u t t he U. S . view? Befo r e 2008, t he Unit ed S t at es
wo r r ied t hat t he t wo sides might inadver t ent ly slip int o a co nflict
t hr o u gh accident o r miscalcu lat io n, and so enco ur ag ed bo t h sid es t o
sho w r est r aint . S ince Ma's elect io n, Washingt o n has welco med his
ap pr o ach t o cr o ss S t r ait r elat io ns.
Clear ly, if t her e wer e a mo vement fr o m eco no mic int egr at io n t o
p o lit ical int egr at io n, t her e wo uld be implicat io ns fo r t he Unit ed S t at es.
One co ncer ns t he U. S . geo po lit ical p o sit io n in E ast Asia. T hat , o f
co u r se, d epend s o n t he t er ms o f u nificat io n and, sp ecifically, whet her
t he P LA Navy and Air Fo r ce co uld o per at e fr o m T aiwan.
Bu t I believe t hat po lit ical int egr at io n wit h all it s at t endant issues
is no t even o n t he ho r izo n. U. S . int er est s might also be affect ed by t he
p r o cess o f st abilizat io n. T her e's been init ial t alk abo u t t he t wo sides
co nclud ing a peace acco r d. I f t hey t r y, I exp ect Beijing is likely t o place
U. S . ar ms sales o n t he ag enda. Bu t I d o n't believe t hat a peace acco r d
is lik ely in t he near t er m.
Right no w t he main secur it y issue is t he P LA's co nt inu ed build u p
o f cap abilit ies r elevant t o T aiwan and t he pr o per U. S . r espo nse is
co nt inu ed ar m sales.
Ano t her ar ea in which t he Unit ed S t at es can co mplement what
T aiwan is do ing vis à vis t he P RC is in t he ar ea o f eco no mics and t r ad e,
and I agr ee wit h Randy S chr iver 's r eco mmendat io ns her e.
I n co nclusio n, T aiwan's impr o ving r elat io ns wit h China sho uld no t
be r egar d ed as an inexo r able and ir r ever sible mo vement t hr o u g h
eco no mic int egr at io n, po lit ical r eco nciliat io n and u nificat io n. Neit her
Beijing no r T aipei sees it t hat way, and t her e ar e r eal br akes o n t he
p r o cess t he inher ent d ifficu lt y o f so me o f t he issu es at play, t he
caut io n o f T aiwan's leader s, and T aiwan's demo cr at ic syst em.
T hank yo u ver y much.
108
[ T he st at ement fo llo ws: ]
Prep a red S t a t emen t o f Dr. Ri ch ard C. B u sh , III
Di rect or, Cen t er fo r Nort h east Asi an Poli cy S t u d i es, Th e B rooki n gs
In st i t u t i on , Wa sh i n g t o n , DC
Clarifying the trajectory of ChinaTaiwan relations is one of the more pressing analytical
challenges facing the two parties concerned and the United States. The hope is that the
outcome can be beneficial for all parties concerned, and certainly for the people of
Taiwan. The worry is that trends will work against one or more of the parties and create a
suboptimal situation.
The Recent Past
To clarify the present and the future, it is important to understand the trajectory of cross
Strait relations in the recent past. From the early 1990s until 2008, a corrosive political
dynamic came to dominate political relations between Taiwan and China, dashing the faint
hopes in the early 1990s of a political reconciliation after decades of hostility. All this
happened in spite of their complementary economic relations.
This process was complex, but the result was obvious: deepening mutual suspicion
between Taiwan and China. Each feared that the other was preparing to challenge its
fundamental interests. China, whose goal is to convince Taiwan to unify on the same terms
as Hong Kong, feared that Taiwan’s leaders were going to take some action that would
have the effect of frustrating that goal and permanently separate Taiwan from China – the
functional equivalent of a declaration of independence. Beijing increased its military power
to deter such an eventuality. Taiwan feared that China wished to use its military power
and other means to intimidate it into submission to the point that it would give up what it
claims as its sovereign character. Taiwan’s deepening fears led it to strengthen and assert
its sense of sovereignty.
Certainly, there was misunderstanding at work here. I have long believed, for example,
that Beijing incorrectly read former Taiwan President Lee Tenghui’s opposition to its
onecounty, twosystems formula as a rejection of unification all together. Certainly,
domestic politics was at play, particularly in Taiwan’s lively democratic system. The 2008
Taiwan election was a case in point. But politics is a force in China as well.
Misperceptions and politics thus aggravated the vicious circle of mutual fear and mutual
defense mechanisms – military on the Chinese side and political on the Taiwan side.
The United States came to play a special role in this deteriorating situation. It did not take
sides, as each side preferred. Rather, Washington’s main goal has always been the
preservation of peace and security in the Taiwan Strait. First the Clinton Administration
and then the George W. Bush Administration worried that the two sides might
inadvertently slip into a conflict through accident or miscalculation (in which case,
Washington would, unhappily, have to choose sides). So each administration employed the
approach of “dual deterrence.” Each warned Beijing not to use force against Taiwan, even
109
as it offered reassurance that it did not support Taiwan independence. Each warned Taipei
not to take political actions that might provoke China to use force, even as it conveyed
reassurance that they would not sell out Taiwan’s interests for the sake of the China
relationship. In this way, Washington sought to lower the probability of any conflict.
The 2008 Transition
The situation improved markedly after the election of Ma Yingjeou, the leader of the more conservative
Nationalist party, or Kuomintang (KMT). This created the possibility of reversing the previous negative
spiral. Ma campaigned on the idea that Taiwan could better assure its prosperity, dignity, and security by
engaging and reassuring China rather than provoking it. Since Ma took office in May 2008, the two sides
have undertaken a systematic effort to stabilize their relations and reduce the level of mutual fear. They
have made significant progress on the economic side, removing obstacles and facilitating broader
cooperation. There has been less progress on the political and security side, but this is partly by design.
Beijing and Taipei understand that the necessary mutual trust and consensus on key conceptual issues is
lacking, so the two sides have chosen to work from easy issues to hard ones and defer discussion of
sensitive issues.
The Nature of the Current Process
What is the trajectory of the current process? Conceptually, there are at least two possibilities. On the one
hand, and more consequential, what we are watching might reflect movement toward the resolution of the
fundamental dispute between the two sides. One type of resolution would be unification according to the
PRC’s onecounty, twosystems formula, but there are others. On the other hand, what we are seeing could
be the stabilization of crossStrait relations. That term implies several things: increasing twoway contact,
reducing mutual fear, increasing mutual trust and predictability, expanding areas of cooperation,
institutionalizing interaction, and so on. It constitutes a shift from the conflicted coexistence of the 1995
2008 period to a more relaxed coexistence. Examples of this process at work are the array of economic
agreements that the two sides have concluded, removing obstacles to closer interchange; China’s approval
for Taiwan to attend the 2009 meeting of the World Health Assembly; and the two sides’ tacit agreement
that neither will steal the other’s diplomatic partners.
In and of itself, stabilization does not lead ineluctably to a resolution of the ChinaTaiwan dispute—
however much Beijing prefers inevitability and however much some in Taiwan fear it. President Ma has
been quite explicit that unification will not be discussed during his term of office, whether that is four or
eight years. The Chinese leadership at least realizes that the current situation is better than the previous
one and understands that resolution will be a longterm process.
Certainly, however, stabilization can create a better climate for resolution. It’s easier to address the tough
conceptual issues that are at the heart of this dispute in an environment of greater mutual trust. But I don’t
see that happening anytime soon. Stabilization can also evolve very incrementally toward resolution,
either through better mutual understanding or because one side, knowingly or unknowingly, makes
concessions to the other. How stabilization might migrate to resolution brings me to the Commission’s
questions.
China’s Initiatives
Since 2005, and in contrast to past periods, China’s approach to Taiwan has been rather skillful. President
Hu Jintao shifted the priority from achieving unification in the near or medium term to opposing Taiwan
independence (unification remains the longterm goal). Although he speaks about the need for the two
sides to “scrupulously abide by the oneChina principle,” he has been prepared, for the sake of achieving
substantive progress, to tolerate so far the Ma administration’s quite ambiguous approach to that issue.
110
The Beijing leadership recognizes the importance of building mutual trust through dialogue and
exchanges after a decadeplus of mutual fear. It is emphasizing what the two sides have in common—
economic cooperation and Chinese culture—and agreed to reduce somewhat the zerosum competition in
the international arena. Through its policies and interactions, it is trying to build up support for a PRC
friendly public on Taiwan. It sees the value of institutionalizing a more stable crossStrait relationship.
The exception to this trend is the continuation of the People’s Liberation Army’s acquisition of
capabilities that are relevant to a Taiwan contingency. Why this buildup continues, in spite of the decline
in tensions since President Ma took office, is puzzling. After all, Ma’s policies reduce significantly what
Beijing regarded as a serious national security problem. China is more secure today than two years ago,
yet it continues to make Taiwan more vulnerable. Possible explanations are rigid procurement schedules;
the inability of civilian leaders to impose a change even when it makes policy sense; and a decision to fill
out its capacity to coerce and intimidate Taiwan, in case a future Taiwan government challenges China’s
fundamental interests. The answer is not clear. I am inclined to believe that it is a combination of the
second and third reasons.
What is clear is that this trend is in no one's interests – Taiwan's, China's or the United States'. Taiwan's
leaders are unlikely to negotiate seriously on the issues on Beijing's agenda under a darkening cloud of
possible coercion and intimidation. The Taiwanese people will not continue to support proengagement
leaders if they conclude that this policy has made Taiwan less secure. The U.S. will not benefit if mutual
fear again pervades the Taiwan Strait.
Where do Current Trends Lead?
To be honest, I do not know. I cannot rule out the possibility that gradually and over time the Taiwan
public and political leaders will abandon decades of opposition to onecountry, two systems and choose to
let Taiwan become a special administrative region of the PRC. But I doubt it. Despite the consciousness
on the island of China’s growing power and leverage, there is still a broad consensus that the Republic of
China (or Taiwan) is a sovereign state, a position that is inconsistent with China’s formula. Moreover,
because of the provisions of the ROC constitution, fundamental change of the sort that Beijing wants
would require constitutional amendments and therefore a broad and strong political consensus, which
does not exist at this time.
So if political integration is to occur in the next couple of decades, it will occur not because of the
cumulative impact of economic integration but because Beijing has decided to make Taiwan an offer that
is better than onecountry, two systems. So far, I see no sign it will do so.
The more likely future is the continued creation and consolidation of a stabilized order, one in which
economic interdependence deepens, social and cultural interaction grows, competition in the international
community is muted, and all these arrangements will be institutionalized to one degree or another. But
none of this will be automatic. Issues relevant to the resolution of the dispute (e.g. whether Taiwan is a
sovereign entity) may come up in the process of stabilization and dealt with in ways that do not hurt either
side’s interests And the issue of China’s growing military power—and what it reflects about PLA
intentions—remains.
How Will the Taiwan Public Respond?
Clearly, as long as the Taiwan government wishes to pursue something like the current policies, it will
have to maintain political support for its continuation in power. How the public views its crossStrait
policies are one key factor. So far, polls suggest that the public supports continued economic integration
but not political integration. A substantial majority favors keeping the status quo for the foreseeable
future. Because swing voters are a substantial block of public opinion, views of the government’s
performance can be fairly volatile.
111
If Beijing were to push for advances in political relations and the Taiwan government chose to go along
before the public was prepared, there would likely be a backlash. Beijing appears to understand that
(Taipei certainly does), and I hope that China will see the value of improving its image on Taiwan by
initiatives that increase Taiwan’s sense of security and its international dignity. These should not be
regarded as favors but as steps to maintain the current momentum, which is in Beijing’s interest. If China
is, for example, too grudging in the runup to the 2012 elections, there is the chance that Taiwan voters
will punish Ma and his party because their promise of benefits from engagement would not be realized.
The Taiwan public will be more likely to support economic, and possibly modest political integration, if it
has a sense of selfconfidence. Creating that will require selfstrengthening in a few key areas.
· It must continue to enhance its economic competitiveness. Interdependence with the Mainland is
one way. The Economic Cooperation Framework Agreement (ECFA) on which the two sides are
working is another way because it will enhance interdependence. But economic liberalization
with others is also necessary, including the United States. And Taiwan should undertake
domestic economic reforms to facilitate the transition to a knowledgebased and servicebased
economy.
· Taiwan also needs to strengthen itself militarily. If, as is possible, China intends to complete the
creation of a robust capability to coerce Taiwan, then the island’s armed forces need the ability to
raise the costs of coercion and so ensure some degree of deterrence. The United States certainly
has a role to play in improving Taiwan’s deterrent.
· Finally, Taiwan needs to strengthen its democratic system. Some key institutions, such as the
legislature and the mass media, could serve the public better. Unfortunately, they reinforce a
regrettable polarization that began ten years ago. A centrist foundation to politics, in which the
two major parties cooperate on pressing tasks, is what the Taiwan people deserve. The growing
pragmatism in public opinion, which Dr. Rigger has so ably documented, suggests that the public
would welcome more constructive politics.
Can Beijing Live with the StatusQuo?
There is no question that China has different expectations for crossStrait relations than does Taiwan. In
Chinese press commentary, writers regularly express the belief that economic integration will lead to a
fairly quick political reconciliation. Last summer, there was a very interesting poll in which people on
each side were asked what was likely to happen over the long term. Sixty percent of Taiwan respondents
believed that the status quo would persist. Sixtyfour percent of PRC respondents said that the two sides
would become one nation. So, Taiwan people prefer stabilization, while Mainland people expect to see
resolution on Beijing’s terms.
When it comes to the Chinese leadership, however, I detect a different calculus. They certainly seek
unification as the ultimate outcome, and they give no hint of any deviation from onecountry, twosystems.
On the other hand, there is an appreciation that this is a protracted and complex process. What is
important in the short and medium term is that nothing happens to negate the possibility that the PRC
goal will be achieved. As long as the door to unification remains open, patience is possible. It is when
Beijing sees that door closing that it becomes anxious and a bit reckless. Thus, the growing emphasis
before 2008 on preventing Taiwan independence. If the danger of Taiwan independence is low, the
leadership can wait for political integration.
What Is the United States View of Recent Developments?
First the Bush Administration and now the Obama Administration have welcomed the change that
President Ma’s approach has brought to crossStrait relations. Recall that in the late 1990s and early
2000s, Washington was worried that the situation of mutual fear might lead either or both sides to
112
miscalculate, leading to a conflict that would likely involve the United States. As the chances of such a
scenario decline and Beijing and Taipei take more responsibility for the peace and stability of their
neighborhood, the United States has one less problem to worry about. It does not need to engage in dual
deterrence. For similar reasons, the stabilization of crossStrait relations, if it occurs, would also benefit
the United States.
Clearly, if the situation evolved from stabilization to an attempt to resolve the fundamental TaiwanChina
dispute, and if there was movement from economic integration to political integration, there would be
implications for the United States.
Some of these potential consequences are strategic in nature. Would unification, on whatever terms,
undercut the U.S. geopolitical position in East Asia by facilitating PLA Navy operations in the Western
Pacific and limiting freedom of navigation for the U.S. and Japanese navies? It is impossible to tell,
because we cannot know what the terms of that unification might be. If the PLA were to have no presence
on Taiwan, as is sometimes suggested, the consequences for the United States might be limited. But I
believe that political integration, with all its attendant issues, is not even on the horizon. The two
governments are not yet ready, conceptually, to address the key issues (Taiwan’s sovereignty, for
example), and Taiwan’s public is not ready.
Even in the task of stabilizing the crossStrait order, U.S. interests might be affected. There has been
initial talk about the two sides’ concluding a peace accord. President Ma has long since signaled that such
an effort would have to be accompanied by changes in PLA capabilities and/or deployments, particularly
of ballistic missiles. If Beijing agreed, then it would likely try to place on the agenda the advanced systems
that the island acquires from the United States and the American security commitment.
Again, I don’t believe that negotiations on a peace accord are likely in the near term. The two sides will
have enough problems negotiating an economic accord, much less a peace accord. And right now, the
main security issue is the PLA’s continued buildup of capabilities relevant to Taiwan. The proper U.S.
response to China’s continued buildup is to increase Taiwan’s capabilities. We should, of course, be
guided by how the island's civilian and military leaders assess their security needs. But if China increases
the island's vulnerability even when President Ma’s policies have removed its need to do so, then the
United States, at the request of Taiwan, should seek to reduce the island's insecurity. It is China’s actions,
therefore, that create the disconnect between economic and security relations.
Another area in which the United States can complement what Taiwan is doing visàvis the PRC is in the
area of economics and trade. As Taiwan liberalizes its economic relations with China, it has an interest in
pursuing liberalization with other trading partners. Hopefully, the conclusion of ECFA will open the door
to liberalization with the countries of ASEAN. But the United States should be involved as well. The
Administration should resume our economic talks with Taiwan under the Trade and Investment
Framework Agreement. It should not hold those talks hostage to single issues like market access for small
amounts of American beef.
Taiwan’s improving relations with China should not be regarded as an inexorable and irreversible
movement through economic integration, political reconciliation, and unification. Neither Beijing nor
Taipei sees it that way. And there are real brakes on the process. One is the inherent difficulty of some of
the issues at play, particularly in the security area. Another is the caution of Taiwan’s leaders when it
comes to those sensitive issues. And finally, there is Taiwan’s democratic system, despite its problems.
Taiwan’s legislature will have some say on ECFA, and the island’s voters will have the opportunity to
judge the performance of President Ma and his party in municipal elections this December, and in the
legislative and presidential elections of early 2012. Any fundamental change in Taiwan’s relationship
with the PRC will require a broad political consensus.
113
PANEL V: Di scu ssi on , Q u est i o n s an d An swers
HE ARI NG CO CHAI R WORT ZE L: T hank yo u all fo r yo ur
t ho u ght fu l t est imo ny.
Co mmissio ner Blu ment hal will st ar t , and it 's go ing t o be five
minu t e r o unds o f qu est io ning by t he Co mmissio ner s.
COMMI S S I ONE R BLUME NT HAL: T hank yo u ver y much fo r
yo u r t est imo ny. I t was all ver y go o d and ver y insight ful.
I ask ed a q u est io n o f t he ad minist r at io n ear lier t o day, which I was
t r ying t o lo o k fo r t he r ight analo gy, and I asked my Cat ho lic fr iend her e
if t his is t he r ight analo g y. I t was like int r o du cing so met hing new int o
t he encyclical o r so met hing like t hat , but t he r eact io n cer t ainly felt like
I was int r o d ucing so me k ind o f majo r t heo lo gical change o r so met hing ,
but t he basic quest io n was t his:
T he t est imo ny was which is sensible and t her e's an always if t hat
was t he case is t hat o ur basic po licy is o ne o f peaceful r eso lut io n o f
t he co nflict bet ween T aiwan and China; we'r e agno st ic abo ut t he
o u t co me as lo ng as it 's peaceful. But t hen he added bu t we do n't
su pp o r t ind ep end ence, and I can und er st and why we wo uld say we do n't
su pp o r t independence, we d o n't want war and so fo r t h, and t hat 's
sensible.
Bu t ho w can yo u be bo t h agno st ic o n peaceful r eso lu t io n and have
a st at ed po licy o f no t supp o r t ing indep end ence? What if t he t wo sid es,
lik e so many o t her co u nt r ies have do ne in t he wo r ld , ar e a
co mmo nwealt h o f Anglo st at es and so fo r t h? What if t he t wo sides
neg o t iat ed a peaceful ind ep endence, wo uld we t hen no t supp o r t a
p eaceful ind ep endence? I mean d o esn't saying t hat befo r ehand pr eclu de
o p t io ns and give u s less d iplo mat ic flexibilit y in t he fut ur e?
I give t hat t o ever ybo dy.
DR. BUS H: I t hink t hat if t he t wo sides nego t iat ed an
ind ep endence deal fo r T aiwan, o f co ur se, we wo u ld accept it and
su pp o r t it . I t hink we ju st have a ver y r ealist ic assessment o f what t his
P RC g o ver nment is pr ep ar ed t o t o ler at e.
I t hink when we say we d o n't suppo r t indep endence, it 's a
p ar t icu lar k ind o f independence t hat we ar e no t sup po r t ing, but it 's
r eally a neut r al p o sit io n. I t hink t he mo r e pr ecise way o f saying it is
what Rand y S chr iver pr o bably sugg est ed P r esident Bush say, t hat we
o p p o se any u nilat er al change in t he st at us quo .
COMMI S S I ONE R BLUME NT HAL: Okay. T hey wer e q uit e
ad amant abo ut saying we do no t sup po r t ind ependence, and t his was
also it 's been puzzling me since I ser ved in go ver nment because we
u sed t o have peo ple who almo st say t hey o p po se ind ep endence, which
t hen we'r e in a p o sit io n o f, well, what if t hey bo t h agr ee t o it , ar e we
o p p o sed?
MR. S CHRI VE R: My po licy p r efer ence wo uld be t hat we suppo r t
p eaceful r eso lut io n, fu ll st o p . I f yo u t alk abo ut o pp o sing unilat er al
114
chang es t o t he st at u s qu o , t hen yo u co uldn't o ppo se a nego t iat ed
ind ep endence. I appr eciat e t he co mment t hat we'r e being r ealist ic abo ut
what Beijing can t o ler at e, but we'r e being assur ed t hat unificat io n isn't
o n t he t able eit her , yet , we'r e no t g o ing o u t o f o ur way t o say we do no t
su pp o r t u nificat io n.
S o I t hink if yo u'r e go ing t o have a po licy t hat is essent ially
ag no st ic o n t he o ut co me, and is mo st ly abo ut pr o cess, t hat it be
p eaceful, independence sho u ldn't necessar ily be t aken o ff t he t able
because alt ho u gh it may be in t he cat ego r y "ver y unlikely, " it 's no t
imp o ssible. As yo u say, t her e ar e hist o r ic examples o f sides nego t iat ing
ver y d ifficu lt t hing s.
S o I guess my o t her co ncer n, no t t o go o n t o o lo ng, but I t hink
t her e is a sense t hat Beijing t hr o ugh pr essu r e and t heir o wn r het o r ic has
t he abilit y t o maneu ver peo ple even fur t her alo ng t he line t hat t hey
p r efer .
I t hink in t he Bush administ r at io n, we saw a mo vement fr o m d o
no t su pp o r t t o o ppo se ind ep endence, and maybe t hat was t he po lit ical
co nd it io ns at t he t ime, but again I t hink st ick ing t o t he essent ial
p eaceful r eso lut io n, which in my mind d o es keep a fo r m o f independence
o n t he t able, wo uld be my p o licy p r efer ence.
COMMI S S I ONE R BLUME NT HAL: Anyt hing t o ad d t o t hat ?
DR. RI GGE R: No t t o add.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u.
Mr . S chr iver , in yo ur wr it t en submissio n, yo u r eco mmend t hat t he
Unit ed S t at es milit ar y t o milit ar y r elat io nship wit h China sho uld be
scaled back unt il China is mo r e r espo nsive t o o u r calls fo r co nst r uct ive
st ep s in t he secu r it y r elat io nship in t he T aiwan S t r ait s.
Given t he r est r ict io ns in milit ar y t o milit ar y co nt act s in t he 200 0
Defense Aut ho r izat io n Act , and fu r t her limit at io ns in t he 2 010 Defense
Au t ho r izat io n Act , what wo u ld yo u fu r t her scale back?
MR. S CHRI VE R: Well, I 'll answer t hat quest io n, but let me also
ad d co nt ext . I t hink t her e's a playbo o k t hat we'r e all familiar wit h,
when t he Chinese want t o sho w t heir piqu e o ver T aiwan ar ms sales, t hey
immed iat ely r each fo r t he mil t o mil and cur b t hat .
I t hink r at her t han wr ing o ur hand s and beco me t he ar dent suit o r ,
we sho uld say o kay, t her e's a lo t o f t hings t hat t he Unit ed S t at es d o esn't
d o well, we have o u r flaws, we have o ur deficiencies, but we st ill have
t he g r eat est milit ar y in t he wo r ld. I f yo u have asp ir at io ns t o be a
mo der n g r eat milit ar y, and yo u 'r e cho o sing no t t o int er act wit h us, t hat
is at yo ur p er il and is co unt er pr o duct ive t o yo ur u lt imat e go als.
Co mmissio ner Wo r t zel and I bo t h have had invo lvement wit h t he
mil t o mil r elat io nship . I t hink t her e ar e aspect s t hat ar e valuable. I
wo u ld p o int mo st ly t o senio r level d ialo gue because I t hink t her e is
wher e yo u get at p er cept io ns and wher e yo u get at int ent io ns.
I t hink t he int er act io ns bet ween milit ar y fo r ces ar e o ft en o ne
sid ed, and t hat can be chipped away at and wo r ked o ut o ver t ime, but
115
linking t hat back t o t he t o pic o f t o day, t he P RC po st u r e o pp o sit e
T aiwan, I t hink it 's so mewhat inap pr o pr iat e, given t his po lit ical
envir o nment bet ween t he t wo sides o f t he S t r ait , t hat t he buildup
co nt inu es, t he p o st ur e is as aggr essive as ever , and we've do ne no t hing
o u r selves t o sho w disp leasu r e o ver t hat .
DR. BUS H: I t hink t he o t her piece o f t his is t hat what t he
sit u at io n r eally r eq uir es is t he P RC sid e be willing o f eng age in ser io us
d ialo g ue abo ut t hese issu es wit h T aiwan and find ways t hr o ugh t hat
p r o cess t o mak e T aiwan feel mo r e secu r e.
HE ARI NG CO CHAI R WORT ZE L: Let me get r eally specific, if I
co u ld , because yo u've been invo lved in t hese t hings as I have.
Wo u ld yo u t ell t he P acific Co mmand and t he milit ar y ser vices t o
st o p engagement ? T hey d o , ever y year t hey sit do wn and figur e o ut
t heir engagement p lans and ho w many ser geant s t hey'r e go ing t o t r y t o
g et t o China, and ho w many majo r s. Wo u ld yo u cu t t hat back and ju st
st o p act ing as t ho ugh we t hr ive o n t hese co nt act s?
MR. S CHRI VE R: Yes. I t hink t hat wo uld be t he app r o pr iat e
t hing t o do . Again, my analyt ical fr amewo r k her e is what is t he
p r o blem, t he o bst acle, t he challenge, and I t hink it 's t he P RC r efusal t o
r eno u nce t he use o f fo r ce and t he aggr essive build up.
S o I t hink t her e's a var iet y o f ways we can addr ess t hat , and o ne
o f t hem sho uld be t hr o u g h t he mo dalit ies o f ho w we engage t heir
milit ar y.
HE ARI NG CO CHAI R WORT ZE L: T hank yo u ver y much.
Co mmissio ner Wessel.
COMMI S S I ONE R WE S S E L: T hank yo u, gent lemen, ma'am, and
Dr . Bu sh, go o d t o see yo u again. We had many int er act io ns, I guess is
p r o bably t he best way t o pu t it , o ver many year s o n issues r elat ed t o
Asia p o licy.
I ask ed a qu est io n o f t he p r evio us panel o n eco no mics r elat ing t o
so me p o licy challeng es t hat ar e go ing t o co me up, pr imar ily bet ween t he
U. S . and China, but fr o m a p o lit ical p er spect ive, I was ho ping t o get
so me gu idance and insight s.
We have a number o f eco no mic p o licies t hat ar e co ming t o a head
o r mo ving fo r war d. One is t he T r ans P acific P ar t ner ship, T P P . T he
o t her is t he upco ming po t ent ial fo r t he U. S . t o name China as a cur r ency
manip ulat o r .
Vis à vis T aiwan, and t he imp act o f t ho se po licies, can yo u give
me what yo u t hink t he p o lit ical impact wo u ld be? Fo r examp le, T P P ,
so me believe is an effo r t t o eco no mically iso lat e China o r t o enhance
U. S . p r esence in t he r egio n. Vis à vis T aiwan, ho w might t hat affect
t hem since t hey wo n't be in t he T P P at t he beginning?
And fr o m t he cu r r ency issue, if we have a blo wup o ver cur r ency,
ho w d o T aiwan's int er est s g et affect ed po sit ively o r negat ively? P lease,
all t he panelist s, and Dr . Bush fir st .
DR. BUS H: S ince yo u'r e lo o k ing at me, I 'll g ive it a sho t . I t hink
116
bo t h o f t hese issu es sho uld be lo o k ed at in t he co nt ext o f t he nat ur e o f
t he eco no mic act ivit y t hat g o es o n, and t hat is t hat T aiwan is in t he
mid d le. I t 's t he mid dle link in a glo bal su pply chain, and so anyt hing
t hat r at t les t hat chain may well have a p o lit ical o r eco no mic imp act o n
t hem. T hat , I t hink, wo uld be t he main co ncer n, t hat T P P might diver t
t r ad e away fr o m t hem, and t hat a big fight bet ween t he Unit ed S t at es
and China, if t hat is what wo uld happen fr o m o ur naming t hem, might
co mp licat e t heir eco no mic r elat io ns wit h bo t h o f u s. But t hat is pur e
sp ecu lat io n o n my par t .
COMMI S S I ONE R WE S S E L: As far as yo u o r any o f t he o t her
p anelist s kno w, in t he T P P , has T aiwan st at ed any int er est , po sit ive o r
neg at ive, so far ?
DR. BUS H: Gener ally t hey wo uld lik e t o do fr ee t r ade ar ea lik e
COMMI S S I ONE R WE S S E L: I und er st and, yes.
DR. BUS H: ar r angement s wit h u s. I t hink t hat t he g o ver nment
has made t he judg ment t hat do ing E CFA fir st may o pen t he do o r s t o
d o ing similar ar r angement s wit h S o ut heast Asia and o t her par t ner s. I
ho pe t hat wo r k s. I t r emains t o be seen.
COMMI S S I ONE R WE S S E L: Dr . Rigger .
DR. RI GGE R: I t 's a t r uism in T aiwan, and I t hink ver y widely
accep t ed, t hat when r elat io ns bet ween t he U. S . and China ar e bad ,
T aiwan suffer s, and I had a co nver sat io n last mo nt h act u ally wit h an
emp lo yee o f t he DP P Headqu ar t er s, and I r aised t hat issue. I asked, d o
yo u st ill feel t hat way? And she said o h, yes, definit ely. When t hings
heat u p in t he Beijing Washingt o n r elat io nship, t hings heat up fo r
T aiwan as well.
S o fr o m a po lit ical st andpo int , I t hink t hat when t he U. S . and
China ar e t o o clo se o r seem t o be appr o aching a mo ment wher e t hey
mig ht be t alking abo u t T aiwan in a pr ivat e co nver sat io n in which T aiwan
is no t a par t icip ant , t hat 's no t co mfo r t able eit her .
Bu t , China and t he U. S . ar guing in t he hallway d o esn't make t he
T aiwanese hu ddling in t heir bed r o o m feel any bet t er eit her . S o t hat 's
o ne p iece.
T he o t her p iece is t he eco no mic element , and her e I wo u ld ver y
mu ch ag r ee wit h Richar d , t hat T aiwan's eco no mic int er est s ar e so
ent wined at t his po int , no t o nly in China's eco no mic int er est s bu t also in
t he eco no mic r elat io nship bet ween China and it s p r imar y expo r t
mar k et s, t hat an int er r u pt io n in U. S . China eco no mic co o per at io n is also
d amaging t o T aiwan.
T her e ar e many ways in which T aiwan's eco no mic int er est s in
China ar e fung ible and flexible, and t he r elat io nship is cer t ainly no t a
o ne way r elat io nship in which China g ains all t he advant ag e o r all t he
lever age. I t hink it 's ver y much a t wo way r elat io nship o f gr eat value t o
t he P RC as well as t o T aiwan.
Bu t it 's no t easy fo r T aiwanese businesses t o pick up and mo ve o r
t o change t he mix in t heir o wn business p r o cess r ap idly. S o I t hink bo t h
117
as a p o lit ical mat t er and as an eco no mic mat t er , det er io r at ing r elat io ns
bet ween t he U. S . and China wo uld no t be welco me in T aiwan and
wo u ld n't ser ve T aiwan's int er est s.
COMMI S S I ONE R WE S S E L: Mr . S chr iver .
MR. S CHRI VE R: I 've always kind o f t ho ught t he Go ldilo cks
p r inciple app lies: t hey do n't want r elat io ns t o o bad o r r elat io ns t o o
g o o d bet ween t he Unit ed S t at es and China; t hey want it so r t o f ju st
r ig ht . And I t hink t hat , even wit h t he chang e o f go ver nment , I t hink
t hat 's st ill so r t o f a fu nd ament al po int o f view.
On T P P , just t o add t o what I t hink wer e ver y g o o d co mment s, I
t hink t her e's a br o ad er p o lit ical issue at st ake her e. T her e's a lo t o f t alk
abo u t t he Unit ed S t at es being back in Asia and being invo lved again,
and I t hink t his ad minist r at io n deser ves cr edit fo r sho wing u p t o
meet ings again and being a par t icip ant in a lo t o f t he r eg io nal affair s,
but I d o n't t hink yo u 'r e t r u ly back in Asia wit ho ut a t r ade po licy.
And t r ade p o licy/ co mmer ce, t hat 's t he life blo o d o f Asia so I t hink
t his is t he g ame in t o wn. T his is what t he ad minist r at io n finds
accep t able, I gu ess, given t he po lit ical envir o nment , as t hey r ead it her e
in Washingt o n, and so t his is what is d r awing us int o what is a ver y
d ynamic g ame in Asia.
We may no t be int er est ed in fr ee t r ad e, but ever ybo dy else in Asia
is, and we'r e no t in t he game wit ho ut t his, wit ho ut t his play. S o I t hink
fr o m T aiwan's p er spect ive, pu t t he eco no mic issues aside, t hey see
t ensio n in t he U. S . Japan alliance, t hey see a favo r able go ver nment in
S eo u l, bu t o ne t hat we'r e no t being as r esp o nsive t o as t hey wo uld lik e.
T his is po t ent ially o ne o f t he key p illar s t o br ing us back int o t he
r eg io n in a co nsequent ial way.
COMMI S S I ONE R WE S S E L: T hank yo u.
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner Fied ler .
COMMI S S I ONE R FI E DLE R: A co uple o f quest io ns. Chinese
lead er ship chang e is u pco ming. Any ant icipat ed effect o r ar e we g o ing
t o have a seamless t r ansit io n in T aiwan p o licy fr o m t he next cr o wd ?
DR. BUS H: I 've spent my who le car eer ho ping fo r a bet t er next
g ener at io n o f lead er s.
COMMI S S I ONE R FI E DLE R: Yes, and we'r e bo t h g et t ing a lit t le
g r ay.
DR. BUS H: And I t hink it 's impr o ving so mewhat . T her e is no
way t o k no w what t he next gr o u p will do wit h r esp ect t o T aiwan. My
bet wo uld be o n co nt inu it y as lo ng as t hey feel t hat t he do o r is no t
shu t t ing o n t heir go als and t hat t hey'r e making pr o gr ess.
One t hing t hat co ncer ns me is civil milit ar y r elat io ns because t his
next leader ship will be t he t hir d o ne t hat do esn't have milit ar y
exp er ience, and so I t hink t hat cr eat es gr eat er aut o no my fo r t he P LA t o
so r t o f shape t he co ur se o f nat io nal secur it y po licy, and t hat is
COMMI S S I ONE R FI E DLE R: Bo t her so me.
DR. BUS H: no t necessar ily go o d fo r T aiwan, no t go o d fo r u s.
118
COMMI S S I ONE R FI E DLE R: Anybo d y?
DR. RI GGE R: Just a small po int . One t hing t hat has cer t ainly
chang ed o ver t he last 15 year s o r so is t he q ualit y o f t he info r mat io n
abo u t T aiwan t hat 's available t o Chinese leader s. We used t o say t hat
t hey r eally d idn't under st and T aiwan, t hat so meo ne was giving t hem t he
p o lls fr o m t he GI O Web sit e, but ho w co uld t hey int er pr et t hem?
Bu t we k no w no w t hr o ugh co nver sat io ns wit h P RC scho lar s and at
P RC t hink t anks devo t ed t o und er st anding T aiwan t hat , in fact , t her e's
r eally g o o d info r mat io n available t o Chinese lead er s, ver y nuanced and
ho nest assessment s o f t he d o mest ic p o lit ical sit uat io n in T aiwan.
T hese do cu ment s and br iefings ar e available t o P RC leader s.
Unfo r t unat ely, I can't t ell yo u what t hey do wit h t hem, but t hat is a
su bst ant ial imp r o vement .
COMMI S S I ONE R FI E DLE R: Well, t hey go t a lo t o f info r mat io n
o n u s, t o o , and it seems t o be a mild disco nnect .
DR. RI GGE R: But I t hink in t er ms o f miscalcu lat io n, in t er ms o f
act u ally d o ing so met hing co unt er pr o du ct ive because t hey ho nest ly didn't
u nd er st and t he sit u at io n in T aiwan, t hat seems less likely.
COMMI S S I ONE R FI E DLE R: Ok ay. Yes, Randy.
MR. S CHRI VE R: I just want ed , I d efinit ely want ed t o u nder sco r e
t he p o int Richar d mad e abo ut civil milit ar y r elat io ns. T hat 's a co ncer n.
Bu t t o add t o t hat , ir r espect ive o f t heir view o nce t hey t ak e o ffice, I
wo u ld lik e t o po int o u t t hat I t hink t his per io d up u nt il t hat po int is a
t r ick y per io d because I 've yet t o meet t he po lit ical lead er in China o r
t he Minist r y o f Fo r eig n Affair s p er so n o r t he P LA o fficer who has fo und
it car eer enhancing t o be mo der at e o n T aiwan.
COMMI S S I ONE R FI E DLE R: Right .
MR. S CHRI VE R: And I t hink as t hey'r e maneu ver ing and
p o sit io ning and t r ying t o secur e t heir po sit io n, we co u ld act ually get a
bit o f a har d er line u p unt il t he po int o f t hat t r ansit io n, and r emember ,
o f co u r se, 20 1 2 is also an elect io n year in T aiwan. S o t hat 's a
d ang er o us
COMMI S S I ONE R FI E DLE R: T hat 's what I want ed t o co mbine
int o t he p ict ur e next , which is t he DP P co uld win. S o t he quest io n
beco mes has t he DP P leader ship, new lead er ship, mat ur ed at all in it s
willing ness o r u nwillingness t o play chicken? S o do es it u nder st and it
has a differ ent d ynamic at p lay? And we'r e co mbining t wo changes o f
lead er ship, t wo p o t ent ial changes o f leader ship , which seems t o me t o
be a vo lat ile sit uat io n.
DR. RI GGE R: I t hink fr o m t he st andpo int o f T aiwan's next
p r esid ent ial elect io n, t he po ssibilit y o f a r eplay o f 20 00 is r eal, t hat t he
P RC may no t have co me t o t er ms wit h t he necessit y o f t aking ser io u sly
and having a r elat io nship wit h a DP P pr esident .
S o if o ne wer e elect ed in 201 2, which is no t inco nceivable g iven
t he cu r r ent p o lit ical sit uat io n o n T aiwan, alt ho ug h I st ill t hink it 's kind
o f a lo ng sho t , but if t he DP P wer e t o win t hat elect io n, t he P RC
119
lead er ship might , if yo u d o n't mind me I 'm no t a diplo mat o r a per so n
COMMI S S I ONE R FI E DLE R: Ho pefully.
DR. RI GGE R: paid I 'm no t paid t o say t hing s car efu lly. I 'm
p aid t o k eep p eo ple awake
COMMI S S I ONE R FI E DLE R: Go o d. Go o d.
DR. RI GGE R: in classes.
I t hink t hey co u ld p anic and assume t hat o nce again, as t hey did
wit h Chen S hui bian, we d o n't kno w ho w t o deal wit h t his per so n. T his
is g o ing t o be so meo ne we can't wo r k wit h.
I t hink t he DP P leader ship is much mo r e r espo nsible, mu ch mo r e
car eful and ser io us t han t hey ar e po r t r ayed ver y o ft en in o ur med ia and
cer t ainly in t he P RC med ia. I t hink t hat was also t r ue, t ho u gh, in 200 0.
I do n't t hink Chen S hui bian when he t o o k o ffice was t he o gr e t hat t he
Chinese lead er ship decid ed he mu st be.
S o o ne p o ssibilit y is a r epeat o f 2000, but t hat 's cer t ainly no t t he
o nly o ne.
COMMI S S I ONE R FI E DLE R: Richar d.
DR. BUS H: I agr ee wit h t hat . T he DP P is o nly no w t r ying t o
fig u r e o u t what it s app r o ach t o China will be, and t her e ar e ideo lo g ical
and g ener at io nal disag r eement s o n t hat sco r e, and ho w t hey co me o ut o n
t hat I t hink will shap e what t he P RC wo uld d o .
I 'd o nly no t e t hat we'r e go ing t o have a t r ansit io n her e, t o o . T his
is t he fir st t ime t her e will be so r t o f po lit ical t ur no ver in all t hr ee
co u nt r ies in t he same year .
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner Mu llo y.
HE ARI NG CO CHAI R MULLOY: T hank yo u , Mr . Chair man. I
want t o t hank each o f yo u fo r being her e and yo u r ver y help fu l pr ep ar ed
t est imo ny.
Fir st , I 'll just make a co mment . Just fo r t he r eco r d , if yo u'r e
int er est ed in fr ee t r ad e wit h Asia, t hat may be o ne mat t er . I f yo u'r e
int er est ed in co nt inuing a t r ading r elat io nship like we've had wit h Asia,
t hat 's ano t her mat t er . S o I t hink t hat 's par t o f t he p r o blem.
Co ming t o t he E CFA, Dr . Bu sh, yo u said t hat it co u ld lead t o
FT As wit h maybe so me o f t he o t her Asian co unt r ies. I do n't kno w
whet her yo u wer e her e when Dr . Co o k e was her e befo r e; he t ho ug ht t hat
may be t r ue wit h so me o f t he o t her Asian co u nt r ies, but t hat it wo uld
no t lead t o FT As beyo nd t he r egio n.
S o he t ho ug ht China was r eally go ing t o t r y and enmesh T aiwan
int o a gr eat er Chinese co pr o sp er it y spher e o r so met hing like t hat . He
d id n't use t ho se exact wo r d s. T hat 's my capt ur ing o f it . Do yo u agr ee
wit h t hat ? I s t hat what yo u see g o ing o n?
DR. BUS H: I fr ank ly d o n't kno w what t heir st r at egy is her e. I
t hink what Dr . Co o ke sugg est ed is cer t ainly plau sible. I t hink t hat even
t he q uest io n o f T aiwan do ing FT A like ar r angement s wit h S o ut heast
Asian co unt r ies is no t a slam dunk eit her .
I t hink t hat , t ho u g h, t his is a place wher e at t he appr o pr iat e t ime
120
we co uld st ep up and say t hat we have ever y r ight t o do an FT A like
ar r ang ement wit h T aiwan and t hey have a r ig ht t o do it wit h u s, t hat we
sho u ld go fo r war d o n t hat basis.
HE ARI NG CO CHAI R MULLOY: Do any o f yo u have a co mment
o n t hat issue?
T he seco nd qu est io n, I r emember t alking wit h a senio r o fficial o f
T aiwan, and he said maybe t he best deal T aiwan co uld get wo uld be a
5 0 year st at u s qu o agr eement . No invasio n. No ind ependence. S t at us
q u o . Let 's see wher e we ar e aft er 5 0 year s. What do yo u t hink? I s t hat
a g o o d idea? I s t hat wher e we sho u ld be head ing ?
Dr . Rig ger , yo u mig ht co mment . I r emember , yo u wer e ver y
helpful in 2 004 when we wer e in T aiwan, and I went t o o ne o f yo ur
lect u r es, and I lear ned a lo t . S o I wo uld maybe ask yo u t o t ake t he lead
o n t hat o ne.
DR. RI GGE R: Well, t hank yo u.
I can't r emember wher e I was in 2 004 so I 'm g lad yo u can. I t hink
o ne, maybe t his is a slig ht ly mischievo us way t o lo o k at it , but it seems
t o me t hat if we dat e 1 98 7 as t he beginning o f cr o ss S t r ait s
r ap pr o chement , t hat 's when t he T aiwan side allo wed peo ple t o begin
t r aveling back and fo r t h, and t hings ver y qu ickly acceler at ed fr o m t her e,
bo t h o n t he bu siness sid e in a kind o f chao t ic and unmanag ed way, but
also o n t he po lit ical side in a ver y up and do wn kind o f way.
S o if 19 87 is t he beginning, t hen we'r e p ast 1 997 and we'r e past
2 0 07 , so we've po st p o ned t he beginning o f t hat 50 year per io d no w by
clo se t o half it s o wn lengt h.
S o what I t hink a lo t o f peo p le in T aiwan wo u ld like t o d o is t o
t alk abo u t a 50 year per io d fo r ano t her 50 year s and t hen imp lement
o ne. T he indefinit e p o st po nement o f a final r eso lu t io n is, I t hink ,
p er ceived as t he mo st d esir able o ut co me by a kind o f mainst r eam
co nsensu s o f T aiwanese cit izens.
HE ARI NG CO CHAI R MULLOY: P o st po ne t he ult imat e
o u t co me.
DR. RI GGE R: Ju st t o p o st po ne. S o t her e was a t ime ar o und
1 9 87 t o abo ut 1 9 95 when it was easy t o find p eo p le, ver y easy t o find
p eo p le in T aiwan who wo uld say t hings like I just need t o have t his
set t led; I can't st and t he uncer t aint y. I t hink p eo p le have go t t en ver y
g o o d at living wit h uncer t aint y and ver y g o o d at living wit h t his kind o f
liminal st at us t hat t hey have as neit her fish no r fo wl, but so met hing t hat
bo t h swims and flies pr et t y successfu lly.
S o t hat I t hink t he pr o po sal fo r a 50 year , it was a peace acco r d .
I t 's been phr ased in var io u s ways, bu t t he idea o f a 50 year fr eeze o n
chang e was a way o f put t ing int o a mo r e leg alist ic o r fo r mal fr amewo r k
what is r eally ju st a felt pr efer ence fo r let 's just keep t his go ing as lo ng
as we can. I ent ir ely ag r ee wit h Randy, t hat t he fact o r t hat allo ws o r
d isallo ws t hat o ut co me o r it 's r eally no t an o ut co me , t hat no n
o u t co me, is Beijing's d et er minat io n t o have it s way o r Beijing 's
121
d et er minat io n t hat having it s way is t o o co st ly, and t hat t her efo r e it will
allo w t his p r o cess t o u nwind fo r so me indefinit e per io d.
MR. S CHRI VE R: I 'll just quickly jump in o n t his o ne as well. I
t hink if t he t wo sides decided t hat it 's no t fo r an o ut side p ar t y t o say
t hat 's t he wr o ng decisio n, bu t I wo uld be p r et t y skep t ical t hat t hey
co u ld g et t her e, number o ne, but also t hat it wo uld ho ld .
Nu mber o ne, I 've never par t icular ly liked t he t er m "st at us quo . " I
fo u nd it r emar kable t hat my o wn administ r at io n, which I ser ved in, said
we d emand t hat t her e be no chang es t o t he st at us quo , as we d efine it ,
but we wo u ldn't d efine it .
I f t her e is a st at us quo , it 's har dly st at ic. S o t hen yo u get int o a
g ame o f what 's a vio lat io n o f t he st at us q uo ? I am pr et t y co nfident
China wo u ld feel fur t her U. S . ar ms sales t o T aiwan wo u ld be a vio lat io n
o f st at us qu o . I wo uld say t he milit ar y bu ild up is a change.
S o I 've never been a huge fan o f t hat because it 's har d t o d efine,
and it 's no t r eally st at ic. I mean a new g ener at io n o f new T aiwanese is
a change o f t he st at u s q uo in a way if t hey have a d iffer ent wo r ld view;
r ig ht ?
I also t hink t her e's a qualit at ive differ ence. Yo u g et int o so r t o f
d ang er o us p o sit io n o f eq uat ing a P RC milit ar y p o st ur e and t heir
ag gr essio n t o demo cr at ic decisio n making o n T aiwan, and I t hink t hat 's
q u alit at ively d iffer ent .
I f peo ple in T aiwan want t o have a say in t heir fut ur e, and we'r e
saying , no , yo u must ag r ee t o no t d o t hat , and in exchange Beijing wo n't
at t ack yo u , I t hink yo u'r e eq uat ing agg r essio n and milit ar y po st u r e wit h
what I t hink sho uld be t he p ur view o f t he peo ple o n T aiwan t o have a
g r eat say if no t ult imat e say in t heir fu t u r e.
HE ARI NG CO CHAI R MULLOY: T hank yo u .
DR. BUS H: I agr ee wit h all o f t hat . I wo uld o nly ad d t hat t her e
is a d anger o f t r ying t o neg o t iat e su ch an agr eement and failing , which
is no t o ut o f t he qu est io n, because each sid e wo uld figu r e o ut t hat t he
o t her side was no t as war m and fuzzy as t hey t ho ught .
HE ARI NG CO CHAI R MULLOY: T hank yo u all.
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner S hea.
COMMI S S I ONE R S HE A: T hank s fo r t he t est imo ny. I t 's been
ver y int er est ing.
Dr . Rig ger , I just want yo u t o kno w t hat I r ead a po r t io n o f yo ur
t est imo ny t o t he administ r at io n wit nesses t his mo r ning, and t hat was
yo u r st at ement t hat impr o ving eco no mic and po lit ical r elat io ns acr o ss
t he S t r ait no t o nly is co nsist ent wit h co nt inued ar ms sales, bu t depends
o n co nt inu ed ar ms sales, and t hey bo t h said t hey agr eed wit h yo ur
p o sit io n. S o I just want t o let yo u kno w t hat .
And , Mr . S chr iver , I appr eciat e t he po int s yo u pu t in yo ur
st at ement . I was ho pefu l t hat yo u co u ld flesh o ut t he last po int t hat yo u
mak e, t he last r eco mmendat io n, which is yo u say U. S . sho uld pr o mo t e
T aiwan as an imp o r t ant issue wit h o ur key Asian allies such as Jap an
122
and Aust r alia.
Co u ld yo u p u t mo r e det ail int o t hat , and co u ld yo u also info r m us
a lit t le bit , and maybe t he r est o f t he p anel as well, o n Japan T aiwan
r elat io ns and what 's g o ing o n t her e wit h t he new administ r at io n in
Jap an?
MR. S CHRI VE R: S ur e. T hank yo u. I was t r ying t o mak e
r eco mmend at io ns t hat wer e ap pr o pr iat e fo r what I descr ibed as t he P RC
st r at eg y, and I t hink o ne o f t he main p ar t s o f t heir st r at egy is t o iso lat e
T aiwan and d e legit imize a lo t o f T aiwan's asp ir at io ns, and I t hink t he
Unit ed S t at es is in a po sit io n, as g iven t he p o wer ar chy o f wher e we
st and in t he wo r ld, t o r esist a lo t o f t hat , and o t her co unt r ies ar e no t
q u it e as able t o , and so t hey r eally need a U. S . bilat er al effo r t t o
p r o vide t he kind o f su pp o r t I t hink t hey sho uld be p r o viding t o T aiwan
because d o ing so o n t heir o wn is o ft ent imes much mo r e d ifficult .
What I have in mind is t his is a po t ent ial flashpo int and p r o blem
ar ea fo r Asia. I t sho u ld ver y much be subject t o discussio n and a
milit ar y alliance and no t ju st t he milit ar y issues asso ciat ed wit h it , bu t
br o ad er .
S o I t hink no t o nly sho uld t he Unit ed S t at es be invo lved in T I FA
t alk s, bu t we sho uld be enco ur ag ing o t her s, Japan, Aust r alia. T her e's
alleg edly t his gr o u nd bar gain o n t he t able, T aiwan g et s E CFA, and t hen
t hey have t he abilit y t o g o t alk t o o t her s. We sho uld be enco u r aging
"t he o t her s" par t o f t hat equ at io n t o st ar t t hat dialo gu e so o ner r at her
t han lat er , r at her t han hanging back and wait ing t o see wher e E CFA
g o es.
Just ver y br iefly, my o wn sense o f Japan T aiwan r elat io ns is
t hey've so mewhat so u r ed . P ar t o f t hat is based o n per cept io ns t hat
mig ht be fair o r u nfair , but when Ma Ying jeo u t o o k o ffice, t her e wer e
co ncer ns in Japan abo ut his views t o war d Japan, and he said, well, I
t hink t hat 's becau se I wr o t e my disser t at io n o n disp ut ed t er r it o r ies, and
so he had an exp lanat io n fo r t hat .
Bu t t her e was a per cep t io n co ming in t hat he might no t lo o k at
favo r ably, bu t t hen yo u also had a t r ansit io n in T o k yo wher e I t hink t he
Hat o yama g o ver nment , amo ng o t her t hings, I t hink is ver y int er est ed
wit h r app r o chement wit h China.
And so I t hink t hing s have so ur ed a bit . T her e ar e a few
init iat ives. T aiwan just o p ened up a new r epr esent at ive o ffice in
S app o r o so t her e's t hing s go ing o n, bu t I t hink o ver all it 's a bit do wn
fr o m wher e it has been in t he r ecent past .
DR. BUS H: T o so me ext ent , Japan T aiwan r elat io ns ar e a
fu nct io n o f t he r elat io ns o f each wit h China. Japan T aiwan r elat io ns
wer e pr o bably best while Chen S hui bian was P r esident o f T aiwan and
Ko izu mi Junichir o was P r ime Minist er o f Jap an becau se bo t h o f t hem
saw China as a pr o blem o r act ed in ways t hat o ffended China.
T hen Japan st ar t ed mo der at ing it s po licy t o war ds China, and at
least so me p eo p le in T aiwan go t co ncer ned , and co nser vat ives in Jap an
123
g o t co ncer ned wit h Ma Ying jeo u's mo r e favo r able app r o ach t o China.
Wher e t he Hat o yama ad minist r at io n is go ing wit h it s China po licy
r emains t o be seen.
DR. RI GGE R: I f I can just t ake t his issue in a slight ly d iffer ent
d ir ect io n. I t hink so met hing ver y impo r t ant fo r peo ple in T aiwan and
also fo r peo ple who car e abo ut T aiwan in t he U. S . t o bear in mind is
t hat t he g ener at io nal change in T aiwan bu t also in neighbo r ing co unt r ies
has r equ ir ed a new g ener at io n o f cit izens and also po lit icians t o pr o duce
t heir o wn und er st anding o f why T aiwan is impo r t ant t o t hem o r t o t he
lar g er wo r ld o r t o t heir r eg io nal co mmunit y, what ever it may be.
I t hink develo p ing t hat under st anding is no t always easy fo r
cit izens who have been r aised wit h t he id ea o f China as a member o f t he
co mmunit y o f nat io ns, ( which is no t r eally what p eo p le o ver 50 in any o f
t hese co unt r ies wer e r aised t o und er st and China t o be, since China was
a p ar iah st at e unt il t he 1 98 0s, and t hen so r t o f became a par iah st at e
ag ain in t he ear ly 199 0 s. )
Bu t yo ung p eo p le do n't see it t hat way. And so t he quest io n o f
why sho uld we car e abo ut T aiwan I t hink is act ually ver y p r essing fo r
p eo p le in t he yo u nger gener at io ns o f cit izens and leader s in places like
Jap an, and I t hink it is impo r t ant t hat T aiwan make t he case fo r it self o n
t he g r o und s o f so met hing o t her t han, well, we ar e so meho w st anding
bet ween yo u and China because t hat p ut s T aiwan’s st at us in t he co nt ext
o f o t her nat io ns' r elat io ns wit h China, which is no t an ind ependent
p o sit io n t o st and o n.
S o I t hink it 's a change t hat we need t o pay at t ent io n t o , whet her
o r no t new lead er s have t he u nder st and ing o f t he r o le t hat T aiwan has
p layed hist o r ically and t he values t hat T aiwan br ings t o t he r egio n and
t o t he wo r ld . I t may no t be so o bvio us t o t hem.
COMMI S S I ONE R S HE A: T hank yo u.
HE ARI NG CO CHAI R WORT ZE L: Co mmissio ner Videniek s.
COMMI S S I ONE R VI DE NI E KS : Go o d aft er no o n, ever ybo d y.
T his is kind o f a br o ad quest io n fo r ever ybo dy and maybe it 's been
answer ed . I s t her e p r eced ent anywher e g lo bally fo r a bilat er al eco no mic
int eg r at io n wit ho ut so me po lit ical int egr at io n befo r ehand? I s o ne a
co nd it io n o f t he o t her ? Or sho uld t he o r d er be r ever sed?
T o me, t he last panel discussed t he eco no mic int egr at io n and t he
mo ves maybe fo r co mmo n fir ms t o o p er at e in bo t h sides o f t he S t r ait in
T aiwan and mainland. My quest io n is can it be do ne? Can eco no mic
int eg r at io n, what ever fo r m, eit her nat io nal o r by fir m o r by indust r y,
can it be d o ne wit ho ut pr io r p o lit ical int eg r at io n?
DR. BUS H: I t hink t he E ur o p ean Unio n is a case.
COMMI S S I ONE R VI DE NI E KS : T hat 's mult ilat er al t ho ugh, and
t her e is so me quest io n as t o t he degr ee. Besides t hat ? I n Lat in
Amer ica, Asia, Afr ica, wher ever ?
MR. S CHRI VE R: No t being an eco no mist , I 'll pr o bably say
so met hing ver y st u pid her e, but I t hink it dep ends o n what yo u mean by
124
eco no mic int egr at io n. I wo u ld p o int t o t he Unit ed S t at es and China as
being t wo eco no mies t hat ar e incr ed ibly int egr at ed.
COMMI S S I ONE R VI DE NI E KS : Go o d po int .
MR. S CHRI VE R: And, we'r e no t hing even clo se t o po lit ical
int eg r at io n. Bar r ing having a co mmo n cur r ency, majo r t r ading par t ner s,
majo r ho ld er o f o u r debt s, I t hink a lo t is po ssible in t er ms o f
COMMI S S I ONE R VI DE NI E KS : Having a t r ad e par t ner is
p o lit ical int egr at io n?
DR. RI GGE R: I wo uld ar gue t hat fo r T aiwan, t he bigg est mist ak e
was act u ally no t addr essing t he po lit ical side ear lier , no t in t he sense o f
p o lit ical int egr at io n but in t he sense o f r ealist ic management o f t he
eco no mic r elat io nship.
S o I t hink wher e T aiwan's vulner abilit y came fr o m was in a
sit u at io n, whet her it was so met hing t hat t he T aiwanese leader ship co u ld
have co nt r o lled o r no t , what hap pened was T aiwanese fir ms went t o
China whet her o r no t t hey had t he blessing o f t heir o wn go ver nment .
And t heir go ver nment t hen belat edly played cat ch up and is st ill playing
cat ch up wit h t hese T aiwanese fir ms.
Bu t t ho se fir ms incur r ed a lo t o f vulner abilit y as fir ms. T aiwanese
p eo p le incur r ed a lo t o f vulner abilit y as ind ividuals in mainland China
because t heir go ver nment had no t made ar r angement s fo r t he secu r it y o f
t heir invest ment s and t heir per so ns while t hey wer e do ing bu siness in
China.
S o I t hink t he p r o blem wit h t r ying t o decide which is t he car t and
which is t he ho r se is t hat unr est r ained eco no mic act ivit y pr o duces ju st
as many pr o blems as under t ak ing t he pr o cess o f po lit ical nego t iat io n,
ho wever awkwar d and difficult t hat might be, int r o duces.
COMMI S S I ONE R VI DE NI E KS : Any o t her co mment s? T hank
yo u .
HE ARI NG CO CHAI R WORT ZE L: No . Ok ay. Well, t hank yo u
ver y much fo r help ing us t hink o ur way t hr o ugh it and fo r so me ver y,
ver y t ho u ght fu l wr it t en su bmissio ns and g r eat o r al t est imo ny and
answer s t o qu est io ns. T hank s. We'll call it a day t hen.
DR. BUS H: T hank yo u.
MR. S CHRI VE R: P leasur e t o be her e.
[ Wher eupo n, at 3: 15 p. m. , T hu r sd ay, Mar ch 18, 201 0, t he hear ing
was ad jo u r ned . ]
125
ADDITIO NAL M ATERIAL S UPPLIED FO R TH E RECO RD
Statement of Phil Gingrey, a U.S. Congressman from the State of Georgia
Chairman Mulloy, Chairman Wortzel, Chairman Slane, Vice Chairman Bartholomew, and
Commissioners—I appreciate this opportunity to testify before you today and would like
to thank each of you for your important work on the U.S.China Economic and Security
Review Commission. Geopolitics is far from static, and we have an obligation to
thoroughly evaluate the changing state of international relations and the shifting balance of
international power and influence—particularly as we see the rapid economic and military
growth of the People’s Republic of China. The implications of this growth only help to
underscore the importance of preserving and strengthening our relationship with the
Republic of China on Taiwan.
Accordingly, I am pleased to be able to share my thoughts with you and to also express
the general sentiments of the House of Representatives Taiwan Caucus.
I am also pleased and honored to be able to join today with my friend, colleague, and
fellow CoChairman of the Taiwan Caucus—Lincoln DiazBalart. The House Taiwan
Caucus has four cochairs—2 Republicans and 2 Democrats—and maintains a strong, bi
partisan membership of almost 140 members. The strength of this Caucus demonstrates
this Congress’s continued commitment to support Taiwan in accordance with the Taiwan
Relations Act which requires Congress and the Administration to “preserve and promote
extensive, close, and friendly commercial, cultural, and other relations between the people
of the United States and the people on Taiwan.”
In fact just last year, Congress unanimously passed House Concurrent Resolution 55
th
recognizing the 30 Anniversary of the Taiwan Relations Act and reaffirmed the House’s
“unwavering commitment to the Taiwan Relations Act as the cornerstone of relations
between the United States and Taiwan.”
Peace is not only sustained through diplomacy, but also through the maintenance of
vigorous selfdefense. The preservation of peace in the Strait of Taiwan requires the
strengthening of Taiwan’s defenses to ensure that PRC military aggression against Taiwan
is never, never a viable option either from an international perspective or from a practical
standpoint.
Under the Taiwan Relations Act, our policy is that that “United States will make available
to Taiwan such defense articles and defense services in such quantity as may be necessary
126
to enable Taiwan to maintain a sufficient selfdefense capability.”
Further, after intense study and thorough examination, it has become abundantly clear that
the United States must move forward with pending announced arm sales as well as
agreeing to sell F16 Fighters to Taiwan.
These sales are critically important for several reasons. Outside of the F16, Taiwan’s
current fleet consists of F5s, Indigenous Defense Fighters, and Mirage 2000 Fighters.
The F5s are aging rapidly, while the Mirage 2000 fleet will have to be retired in 2010 due
to the lack of affordable spare parts. The Indigenous Defense Fighters are expected to
reach the end of their service life by 2020. Without new F16s, in the next 5 years the
Taiwanese fleet will be reduced by 120 aircraft. It is clear that new F16s would enable
Taiwan to maintain a sufficient selfdefense and ensure crossstrait stability through air
parity.
With respect to Taiwan’s participation in the global community, we must also recognize
that it is imperative that the United States encourage, and the international community
recognize, the practical contributions of the people of Taiwan. As clearly demonstrated by
its participation with the World Health Organization, Taiwan stands ready, willing, and
able to make meaningful contributions to the international community through
involvement in United Nations specialized agencies, programs, and conventions.
Accordingly, I think the U.S. should encourage the meaningful participation of Taiwan
International Civil Aviation Organization (ICAO).
We all recognize there remains to be unresolved questions for which there are currently no
definitive answers regarding Taiwan and China. However, as we continue to analyze and
deepen our comprehensive of the changing nature of the relationship between the United
States and the People’s Republic of China, U.S. policy must continue to reflect the
important role of Taiwan and preserve the special relationship between the people of the
U.S. and the people of Taiwan.
127
