Week of November 17, 1999

SUMMARY:

On Thursday, Taiwan's most popular presidential candidate, James Soong Chu-yu, named Chang Chao-hsiung as his vice president for the election to be held in March. Dr. Chang is a heart surgeon with no actual political experience. The doctor does possess strong management experience, a keen understanding of technology, and is from the rural area near Kaohsiung; all of which were deemed important characteristics of a running mate by Mr. Soong. Being politically inexperienced, Dr. Chang may bring a certain freshness to the role of Vice President. On the other hand, he will be the second most important political figure in Taiwan and his political inexperience might make him a less viable vice president. It is yet unclear whether this vice presidential candidate's lack of political polish is truly an asset or a liability to Mr. Soong's campaign.

President Lee Teng-hui plans to retire, leaving the field open to several contenders. The frontrunners in this presidential election include several politically experienced candidates. The current Vice President Lien Chan belongs to the Kuomintang and is seeking the office of President. Another candidate from the Democratic Progressive Party (DPP), Mr. Chen Shui-bian, is a former Taipei mayor. While Mr. Soong is currently enjoying the most support in the opinion polls, the other two candidates appear to be in competition for second place.

SUMMARY:

On Wednesday, the U.S. Senate chose retired Admiral Joseph Prueher as the next U.S. Ambassador to Beijing. Admiral Prueher has garnered much experience dealing with China over the past years. In 1996, he was commander of the U.S. Pacific forces that sent warships into the Taiwan Strait. The U.S.'s presence was due to escalating tensions between the mainland and Taiwan regarding Taiwan's upcoming elections. With the dissipation of tensions in that area, Admiral Prueher remained in the Pacific until this year. During his time abroad, the Admiral is reputed to have made many high level contacts among the mainland's government officials. Beijing has approved of Admiral Prueher as the new Ambassador, which gives renewed hope that the two nations can forge a stronger relationship after the turmoil of the past year.

SUMMARY:

Beijing's negative response to the U.S. rejection of the Comprehensive Test Ban Treaty (CTBT) has been accompanied by the warning from Beijing's top arms-control official that this rejection could "destroy the strategic balance." Sha Zukang, the Foreign Ministry arms-control director, cautioned that the U.S.'s rejection of the CTBT may lead China and other countries to shy away from arms control agreements with the U.S. As such, the U.S.'s decision regarding the CTBT is causing ripples in its relations with China and possibly many other nations.

SUMMARY:

On Monday morning, the U.S. and China concluded six days of negotiations to reach agreement on China's ascension into the WTO. U.S. Trade Representative Charlene Barshefsky and Shi Guangsheng, Minister of Foreign Trade and Economic Cooperation (MOFTEC) conducted the negotiations. President Clinton's Chief Economic Advisor, Gene Sperling and MOFTEC's main trade negotiator, Long Yongtu were also present at the meeting.

The roller coaster negotiations rolled towards completion after a surprise visit by Prime Minister Zhu Rongi Monday morning . The agreement contains timelines and provisions for increased U.S. market access to China’s telecommunications and financial service sectors, as well as a lowering of tariffs on imports of agricultural and industrial goods. It also includes provisions for the elimination of US quotas on Chinese textile imports. China’s WTO ascension will also eliminate the U.S.’s ability to impose unilateral trade sanctions on China in exchange for formal WTO rulings.

Settling China's WTO entry had been fraught with difficulties. The U.S.'s expectation for talks to begin with the April package presented by Premier Zhu Rongji was a stumbling block in the negotiations. China held firm that there are mistakes in the U.S.'s published list of concessions from the April meeting of Premier Zhu and President Clinton. Zhu's package held many important offers of market access to previously untouchable sectors such as agriculture and telecommunications. President Clinton had rejected this offer and held out for more concessions in such areas as financial services and a promise to protect the U.S. from China's textile exports. During the six days of discussion in Beijing, U.S. negotiators had prepared to leave the table on several different occasions.

Some very basic hurdles still facing both countries overshadow the euphoria of the agreement’s conclusion. Although the Clinton administration hailed the agreement as a key to increasing the economic prosperity of both countries, trade unions in the US played up the negative impact on workers in the US and China through job displacement. Congress must also approve this agreement before it recesses in November. If this deadline is missed, China loses its ability to participate in key WTO talks, scheduled to begin November 30 in Seattle, Washington, regarding global trade liberalization. To achieve WTO entry, China must also forge market opening agreements with other members of the WTO, such as Canada and the European Union. Currently, China has not reached a resolution with either Canada or the EU on many important issues of WTO entry. As China implements the agreement, it will also face the need to implement far-sweeping changes in its legal system, accounting standards, and welfare systems.

Despite future obstacles, proponents of the treaty mark the occasion as a step toward closer U.S.-China diplomatic and trade relations, as well as one that brings China one step further into the circle of accords linking the international community.

The U.S. and China This Week