Week of July 2, 1999

SUMMARY:

On 24 June the 24 members of the World Bank’s board approved a controversial $40 million loan to China that would relocate 58,000 poor Chinese farmers to Qinghai province on the Tibetan plateau. Pro-Tibet independence groups waged a campaign against the loan in the weeks leading up to the vote, stating that the project would further China’s goal of weakening Tibetan identity in the area. The United States signaled its opposition to the loan based on environmental concerns to which it charged the Bank did not give sufficient consideration in order to bring the project to a vote within the time limit that would provide China with the lowest interest rate. While the United States and Germany registered the only votes against the project, the Bank decided to withhold all funds until a more detailed independent review can be completed.

SUMMARY:

A story in the 25 June issue of the New York Times stipulates that two of the three people killed in the 7 May bombing of the Chinese embassy in Belgrade were intelligence officers and not journalists. The article states that the two were killed when 2,000 pound B-2 bombs fell on the compound’s intelligence gathering nerve center. American intelligence experts say that prior to the bombing they did not know the intelligence operation’s location. The Chinese government has refuted this allegation declaring that all three killed were journalists, and continues to call for a convincing explanation of the bombing from the United States.

SUMMARY:

Amid continuous pressure from Congress to resign, national security advisor Sandy Berger, in an unusual appearance before the Select Committee on Intelligence, continued to defend the Department of Energy’s handling of security breaches at the nation’s nuclear laboratories. Berger is accused of failing to warned President Clinton in a timely manner on alleged Chinese espionage as early as 1996. Berger claims not to have been fully briefed by subordinates on the issue until July 1997. Surprisingly, Clinton supporter senator Joseph Lieberman (D-Conn.), along with Senators Hatch (R-Utah) and McCain (R-AZ), both possible presidential candidates, appeared on "Fox News Sunday" and criticized DOE officials for their ignorance in handling issues of classified information leaks.

In June, former senator Warren B. Rudman (R-N.H.) released the Rudman report that explained the lapses in security and presented the recommendation to create a semi-autonomous agency to be responsible for nuclear laboratory security. This proposal is strongly opposed by Energy Secretary Bill Richardson, who favors creating a new undersecretary to run the security complex. Richardson insists that DOE has been thoroughly investigating the security breaches.

In a June 30 report, the DOE announced that the security problems at Livermore Lab in California lie in the lab’s computer system. It has been revealed that foreign nationals living abroad and doing non-weapons work for Livermore, in fact, had dial-up access to Livermore’s main, unclassified computer. This system was not monitored, and it was possible to also access sensitive information files of other employees. The report also concluded that Livermore is not sufficiently prepared for certain external security threats such as terrorists and computer hackers.

Many conservatives are not convinced that Richardson and the DOE can adequately solve the department’s counterintelligence and security problems on their own. Richardson is also accused of withholding information to protect his employees.

SUMMARY:

WTO negotiations, suspended since April, first due to Clinton’s refusal of the WTO package offered by Premier Zhu Rongji during his April visit, and second because of the May 7th accidental bombing of China’s embassy in Belgrade, are not likely to resume anytime soon. After providing numerous apologies and reparation for the bombing, U.S. officials are eager to get back down to business. But, Chinese officials stated that they do not accept the U.S. official explanation of the bombing that was presented to them by a delegation led by undersecretary Thomas Pickering two weeks ago. A top Chinese trade official, Long Yongtu, insists that China will not reenter WTO talks until it receives a satisfying explanation of the embassy bombing. Many fear that China will not reenter negotiations until later this summer, when it may be too late to finalize a deal with the U.S. in time for the November APEC meeting.

SUMMARY:

A decision reached by China’s National People’s Congress on 26 June overturned the ruling of Hong Kong’s Court of Final Appeal, leading observers in Hong Kong and the West to question China’s commitment to the "one country two systems" approach it adopted two years ago when the territory returned to Chinese sovereignty. Since the ruling on immigration rights, members of Hong Kong’s legal profession, government and pro-democracy activists have criticized both Chief Executive Tung Chee-hwa for inviting the Chinese government’s review and leaders in Beijing. These groups feel that allowing China to reinterpret Hong Kong’s legal rulings is tantamount to eradicating the rule of law, the foundation on which the area’s civil society, economy, and position as a center for international trade rest. The government, however, contends that this measure was an exception to the norm and does not constitute a weakening of the rule of law in Hong Kong. Some members of Congress, however, citing Beijing’s recent decisions to ban American military planes from landing in Hong Kong and to allow North Korea to establish a consulate there, question that position and have expressed their concern that Hong Kong’s status as an autonomous region is being eroded in favor of placating China.

The U.S. and China This Week