Week of June 9, 2000

SUMMARY:Key U.S. Senate leaders are still talking about the possibility of postponing the Senate vote on granting permanent normal trade relations (PNTR) to China. Senate passage of this trade legislation, which swiftly passed by the House of Representatives two weeks ago, is thought to be virtually assured. However, several Republican Senators claim the vote may be delayed so lawmakers can concentrate on more time-sensitive federal government spending bills. The Senate finance committee is scheduled to hold a meeting this week to "walk through" the China trade bill and discuss when the vote may take place. While Finance Committee Chairman William Roth (R-DE) is in favor of taking up the vote during the week of June 12-16, many including Appropriations Committee Chairman Senator Ted Stevens (R-AK) and Senator Mitch McConnell (R-KY) favor prioritizing spending bills. Senator Stevens told reporters that "PNTR can wait till September. It doesn’t make a damn bit of difference." Many Senate aides expect the vote will take place before the July 4 recess.

SUMMARY:On July 7 Taiwan defense officials confirmed that it had received permission from the United States to test the Patriot missiles on Taiwan. The missile test would be the first of the U.S.-built missile system outside of the United States. Patriot missiles are considered Taiwan’s most important defense against China’s nuclear capable Dongfeng-31 missile. Taiwan currently owns approximately 200 PAC-2 missiles, which are upgraded versions of Patriots used by the U.S. military during the 1991 Gulf War. Taiwan’s missile test report comes in conjunction with news reports in Chinese language newspapers that China will test its Dongfeng-31 in the near future.

SUMMARY:Taiwan’s economic ministry has worked out a draft amendment that would greatly reduce current legislative restrictions that limit Taiwan investments to mainland China. If approved by the ministry’s investment commission, the amendment would remove restrictions on certain types of investment to China, in areas including the high-tech and infrastructure sectors. Current restrictions, which ban investments in these sectors exceeding $50 million, were put in place by former Taiwan President Lee Teng-hui in 1996 in response to Beijing’s hostilities during Taiwan’s first democratic presidential elections. However, many Taiwan companies have invested heavily in the mainland despite restrictions, including a $6.4 billion semi-conductor joint venture in China formed by Taiwan businessman Y.C. Wang and Chinese President Jiang Zemin’s son.

SUMMARY:Taiwan officials have recently reported that they have caught 39,450 illegal immigrants from the mainland since the late 1980s, since a slight thaw in political relations between Taipei and Beijing led to a wave of migration across the Taiwan Straits. Officials claim the problem is getting worse because Chinese authorities are not cooperating in repatriating illegal mainlanders. Many underprivileged mainlanders take the risk of making an illegal and expensive journey across the straits, often chasing often elusive dreams of quickly becoming wealthy and returning to China. Despite the trend of increasing immigration, Taiwan officials claim China usually ignores an informal illegal immigration repatriation pact made in 1990. Taiwan’s Mainland Affairs Council says that this issue is a heavy administrative burden, but also is troublesome because of overcrowded detention centers. Political tension, which has increased between Beijing and Taipei since the March presidential elections, is considered to be a contributing factor to the mainland’s unresponsiveness to this issue.

SUMMARY:China’s Xinhua news agency recently reported estimates from the government-run China Internet Network Information Center that the number of Internet users in China has topped 10 million. The most rapid increase in Internet use since its introduction to China in 1994 was the quadrupling from 2 to 8.9 million users in 1999.

Ministry of Information Industry vice-minister Zhang Chungjiang has noted serious problems facing Internet development accompanying the rapidly spreading usage, such as high prices and unstable service. The Chinese government has become increasingly concerned that growth of the Internet industry could grow out of its control and become a source of societal instability. Consequently, it passed regulations in January which control Internet content, require registration of service providers, and consider illegal any content which compromises state security. However, the ability of the Chinese government to enforce these regulations and ability to control usage will be difficult.

SUMMARY:China has continued to respond negatively towards the United States attempts to develop an anti-missile system, which would be in violation of the Anti-Ballistic Missile (ABM) treaty signed in 1972. Zhang Qiyue, Chinese Foreign Ministry spokeswoman, said in a news conference, "This will not only affect the nuclear disarmament process, and shake the foundation stone of nuclear non-proliferation, but it will also directly trigger a new arms race, including an arms race in space."

Beijing also objected to Russian President Vladimir Putin’s proposition to join with Europe in developing an anti-missile system, similar to the one proposed by the U.S. In a press conference, Putin said, "This will avoid creating problems linked to an imbalance in the equilibrium of forces, and ensure 100 percent the security of all European countries, with obvious involvement of our American partners." However Zhang Qiyue, responding to the Russian news, stated, "We think such efforts would create an adverse impact on the global strategic balance and stability and would end up doing good to no country."

The U.S. claims development of a national missile defense system has been in response to potential long-range missile attacks by rogue states, like North Korea and Iran. However, despite differences between the US and China over the anti-missile system, both countries plan on holding talks on arms control and non-proliferation issues sometime in July.

---

Previous Summary || Next Summary

---

<

---

The U.S. and China This Week

uscpf@uscpf.org

Last updated: 9 June 2000