U.S. DEPARTMENT OF STATE DISPATCH
VOLUME 6, NUMBER 30, JULY 24, 1995
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS

ARTICLES IN THIS ISSUE:

1.  The International Conference on Bosnia: Now We Must Act -- Secretary 
Christopher  
2.  U.S. Condemns Tel Aviv Terrorist Bombing -- Secretary Christopher 
3.  U.S. Policy Toward Burma -- Winston Lord
4. Current State of U.S.-China Relations -- Kent Wiedemann



ARTICLE 1

The International Conference on Bosnia: Now We Must Act
Secretary Christopher Opening Remarks at a press briefing, Queen 
Elizabeth II Centre, London, U.K., July 21, 1995

Good evening. On behalf of the entire United States delegation, I want 
to thank Prime Minister Major for convening today's conference and 
Foreign Secretary Rifkind for his very skillful chairmanship. 

None of us is under any illusion about today's meeting. By now we are 
all too aware that no conference, including this one, can end the war 
and suffering in the former Yugoslavia. What a conference of this kind 
can do is focus our minds on how we can best contribute to alleviating 
suffering and achieving a negotiated settlement. This conference has 
served as a decision-forcing event. As I told my colleagues today, the 
entire world is watching us, waiting to see if the West will answer the 
Bosnian Serbs' outrageous aggression.

We face a very simple and stark choice: Either the international 
community rapidly takes firm steps to fulfill its mission in Bosnia, or 
its mission will collapse. Today, we have agreed on several actions, 
which, if vigorously implemented, offer a real opportunity to reassert 
the international community's role in Bosnia.

Let me stress the obvious: To have any chance of success, the decisions 
made today must be translated quickly into reality on the ground. 
President Clinton and the United States are determined to do so. The 
international community and the people of Bosnia simply cannot afford 
any more empty threats. Let me briefly review what the United States 
believes to be the central elements of today's agreement.

First is the unanimous reaffirmation that UNPROFOR will remain in 
Bosnia. In order to do so, its ability to fulfill its mandate will be 
strengthened. We are all painfully aware of UNPROFOR's shortcomings. 
Nevertheless, we agree that UNPROFOR's collapse in the face of Bosnian 
Serb aggression can only lead to far greater humanitarian tragedy and 
strategic danger in the Balkans.

Second, and of most immediate concern, Gorazde will be defended. Bosnian 
Serb leaders are now on notice that an attack against Gorazde will be 
met by substantial and decisive air power. Secretary Perry and General 
Shalikashvili can speak more fully on the military aspects of the plan, 
but let me make just a couple of points. Any air campaign in Gorazde 
will include significant attack on significant targets. There will be no 
more pin-prick strikes. Moreover, existing command-and-control 
arrangements for use of NATO air power will be significantly adjusted to 
ensure that responsiveness and unity--our purposes--are achieved. The 
new system is a much improved system.

Third, we will take steps to stabilize the situation in Sarajevo. Its 
people must be fed. French and British troops from the Rapid Reaction 
Force will take action to open and secure humanitarian access routes. At 
the same time, we agreed more broadly on the need   to fulfill the UN's 
other mandates, including in the other safe areas. In this regard, we 
are especially concerned about the escalating Bosnian Serb attacks in 
Bihac.

Fourth, we are agreed on the need to support on-going efforts to address 
Bosnia's deep humanitarian needs, which have certainly been exacerbated 
by the fighting in Srebrenica and Zepa. We intend to increase our 
contribution and we are urging others to do the same, especially in 
advance of the coming winter.

Fifth, we reaffirmed our belief that the conflict in Yugoslavia can be 
resolved only by a political settlement. Today, we received an update 
from the European Union's representative, Carl Bildt, and we underscored 
our support for his work. Tonight, the Contact Group ministers will be 
meeting with Mr. Bildt to review his political efforts. At the same 
time, during the conference I made clear our belief that so long as the 
Bosnian Serb aggression continues, any political process is doomed to 
failure. Our first step must be to take action that can return an 
element of stability on the ground. At that point, we agreed that a 
country-wide cease-fire should be declared which can be used as a basis 
for a resumption of the negotiations.

Finally, today's participants are fully aware of the risks that will 
accompany any effort to implement UNPROFOR's mission more vigorously. 
The Bosnian Serbs have taken hostages before, and they may do so again. 
As part of today's plan, we are urging the United Nations to take steps 
immediately to minimize the exposure of its personnel. At the same time, 
we are determined that the taking of hostages will no longer be allowed 
to prevent the implementation of our policies. We are also resolved to 
hold the Bosnian Serb leaders fully responsible for the safety of any UN 
personnel that they have detained.

Let me say again that President Clinton is committed to working with our 
partners, all of them--especially France and Britain--to see that the 
decisions we take today are translated into reality. We do not seek to 
make the international community a participant in the war in Bosnia, but 
we are determined to make another, perhaps final effort to fulfill the 
world's responsibilities in Bosnia. Today's meeting was a necessary 
first step toward that goal. Now we must act. Thank you.(###)




ARTICLE 2

U.S. Condemns Tel Aviv Terrorist Bombing
Secretary Christopher
Statement released by the Office of the Spokesman, Washington, DC, July 
24, 1995

I want to offer our deepest sympathies to families of those Israelis 
killed and injured in today's brutal terrorist attack in a suburb of Tel 
Aviv. This attack is a vicious effort to kill and injure Israelis and to 
strike at the heart of a historic process that offers Israelis and 
Palestinians the promise of a real peace. The extremists who carry out 
these acts seek to kill the prospects for peace. They cannot be 
permitted to succeed. Today, as in the past, we stand together with the 
people of Israel in moments of triumph and tragedy. We stand with them 
in the pursuit of genuine peace with security.

Over the past several years, Israelis and Arabs committed to peace have 
worked with extraordinary vision and determination to pursue this goal. 
And with each agreement reached, they have taken another step toward 
creating a new future and combating the forces of extremism and violence 
who want to keep this region mired in the conflicts of the past.

Much has been achieved already. But much more must yet be achieved. The 
people of Israel have demonstrated great courage throughout their 
history. They demonstrate it again today as    they pursue peace and 
refuse to give in to terrorists. For its part, the United States will 
continue to do everything it can to support those who stand on the front 
line of peace. And with the commitment and courage of the peace-makers, 
they will reach their goal of a lasting peace.(###)




ARTICLE 3

U.S. Policy Toward Burma
Winston Lord, Assistant Secretary for East Asian and Pacific Affairs
Statement before the Subcommittee on Foreign Operations of the Senate 
Appropriations Committee, Washington, DC, July 24, 1995

Mr. Chairman: Thank you for the invitation to speak before the Foreign 
Operations Subcommittee on behalf of the Department of State. I am 
pleased to discuss with you today our common concerns about the 
situation in Burma and to explore how we can best advance U.S. interests 
there in the areas of human rights, democracy, and counternarcotics.

Aung San Suu Kyi's Release

As you know, two weeks ago there was a dramatic development in Burma. 
After many years of determined effort by the United States and the 
international community, democracy leader and Nobel Peace Prize laureate 
Aung San Suu Kyi was released unconditionally after nearly six years of 
house arrest. As the courageous hero of the opposition forces in Burma, 
Aung San Suu Kyi has earned the support of her people and the respect 
and admiration of the world for her determination and steadfastness in 
holding to her principles throughout the long years of house arrest.

We warmly welcome Aung San Suu Kyi's unconditional release. She has been 
free to meet with her family, key supporters, the press, and other 
visitors. In her meetings and statements, Aung San Suu Kyi has been 
remarkably conciliatory and magnanimous. She says she personally bears 
the SLORC no ill will and emphasizes her commitment to engage in a 
dialogue with them to seek national reconciliation. She wants to hold 
the SLORC to its avowed aim of creating a multi-party democracy. She has 
emphasized that the divisions in Burma are not insurmountable and has 
called for all the citizens of Burma to work together for the good of 
the country.

After six years of house arrest, her spirit of conciliation is 
heartening. For the first time in a long time, there is some reason to 
hope that Burma will take the steps it must to emerge from a long period 
of isolation and repression.

Aung San Suu Kyi also has called upon the international community to 
remain steadfast in support of democratic change for Burma. As she 
herself has pointed out, her release is only the beginning of what 
promises to be a long, slow process. Our ultimate goal, one that we will 
continue to express clearly, remains the same--a stable democratic Burma 
that respects international norms. But we do not hold unrealistic 
expectations that the SLORC will transform itself overnight, nor do we 
underestimate its grip on power and its continuing ability to dictate 
the pace of change, nor does Aung San Suu Kyi's release diminish our 
serious concerns about human rights abuses in Burma or about the extent 
to which the drug trade remains ingrained in the political and economic 
life of the country. The Administration will continue to press the SLORC 
to make progress on these concerns.

In short, Mr. Chairman, we have no illusions about the SLORC. But we do 
want to emphasize that Aung San Suu Kyi's unconditional release is a 
very welcome step, one which we had urged the SLORC to take for a long 
time. It has brought us to a very delicate and critical moment. Its true 
significance will depend on whether it represents real movement toward 
national reconciliation and the restoration of democratic government.

U.S. Policy Toward Burma

To put her release and re-emergence on the political scene into context, 
I would like to briefly review recent U.S. policy toward Burma.

Last November, Deputy Assistant Secretary Tom Hubbard led the most 
senior U.S. delegation to visit Burma since 1988. The purpose of his 
mission, which was dispatched by the President, was to emphasize to the 
Burmese Government the strong U.S. interest in progress on human rights, 
democracy, and counternarcotics. He made clear to senior SLORC officials 
that the United States wants to have better relations with Burma, but he 
stressed that any improvement must be based on progress in these 
critical areas of concern. He told them that U.S. relations with Burma 
could improve if the SLORC made progress in each of these areas but 
would worsen if it did not. 

In the months following Mr. Hubbard's visit, the SLORC has had a mixed 
record in responding to the "two roads" he outlined for U.S.-Burma 
relations. Despite the release of Aung San Suu Kyi and some 130 others, 
the SLORC continues to hold hundreds of political prisoners. The SLORC 
has refused to negotiate seriously with the International Committee of 
the Red Cross to allow free access and unsupervised prison visits, and 
the organization now plans to leave Burma at the end of this month. 
Egregious human rights violations continue. Burmese citizens are 
routinely rounded up and forced to carry military equipment, weapons, 
and ammunition for the Burmese army. In addition to being denied 
adequate food and water, these porters are often forced to work, at 
great risk, in areas of armed conflict. The SLORC also compels its 
citizens to carry out forced labor on roads, railroads, and other 
infrastructure projects. The SLORC's renewed military offensives against 
the Karen and Karenni minorities have led to serious humanitarian 
concerns and have sent more than 10,000 refugees fleeing into Thailand. 
The refugees have put a substantial new burden on the Thai Government 
and the NGOs that are providing assistance to them. The Burmese army 
also has lent support to the Democratic Karen Buddhist Army, which 
launched attacks on Karen refugee camps inside Thailand.

On the narcotics front, we have seen some positive developments. The 
SLORC followed through in February on its promise to allow U.S. 
Government experts to conduct a joint opium-yield survey with the 
participation and assistance of the Burmese Government--an important 
step in the counternarcotics field. The Burmese army also has continued 
to attack the Shan United Army and taken significant casualties in an 
effort to regain control of the territory Khun Sa controls. Although 
this has resulted in some disruption of Khun Sa's ability to traffic in 
drugs, the SLORC must still take serious steps to deny legitimacy to 
other important narco-traffickers and to end corruption. Burma--
principally in its ethnic minority and insurgent-controlled areas--still 
produces about two-thirds of the heroin that reaches the streets of 
America.

In the past several years, the United States has steadily increased 
its pressure on the military regime in Rangoon. We suspended our own 
economic aid program and have urged other potential donors such as Japan 
to refrain from providing development assistance. We do not provide GSP 
trade preferences and have decertified Burma as a narcotics--cooperating 
country, which requires us, by law, to vote against assistance to Burma 
from international financial institutions. This and our influence with 
other countries have, in practice, prevented most assistance to Burma 
from the IMF, the World Bank, and the Asian Development Bank. Neither 
Eximbank nor OPIC provides loans or insurance for American companies 
selling to or investing in Burma. The United States has not had an 
ambassador in Burma since 1990.

Internationally, the Administration has strongly supported efforts in 
the United Nations General Assembly, the UN Human Rights Commission, and 
the International Labor Organization to condemn human and worker rights 
violations in Burma. We have urged the UN to play an active role in 
promoting democratic reform through a political dialogue with Aung San 
Suu Kyi. We refrain from selling arms to Burma and have an informal 
agreement with our G-7 friends and allies to do the same.

We believe these measures have had an impact on the SLORC. While the 
regime has sought, increasingly, to open the country to foreign 
investment and tourism, our actions and those of like-minded countries 
have made clear that Burma cannot fully rejoin the international 
community until fundamental changes are made.

U.S. Response to the Release Of Aung San Suu Kyi

When Aung San Suu Kyi was released July 10, the President welcomed the 
announcement. He also made clear, however, that this development would  
mark a major milestone toward restoring peace and stability in Burma 
only if it leads to a genuine process of political reconciliation and 
eventual installation of a democratically elected government. The 
President also emphasized the seriousness of the unresolved human rights 
problems in Burma and humanitarian concerns connected with ongoing 
military campaigns against ethnic insurgents. The question now facing 
the United States is how to respond to the unconditional release of Aung 
San Suu Kyi in a way to help the process of democratization and promote 
progress on other U.S. national interests.

In his meeting with SLORC officials last November, Deputy Assistant 
Secretary Hubbard said Aung San Suu Kyi's unconditional release was one 
of the key steps we wanted to see in Burma. While maintaining pressure 
on the SLORC, we should be prepared to give credit where credit is due 
when the regime takes positive steps, as it did in releasing her.

The Administration believes that her release is a necessary first step 
to warrant progress in relations with Burma. Aung San Suu Kyi has said, 
and we agree, that the key now is for the SLORC to begin a genuine 
dialogue on the future of the country with Aung San Suu Kyi and 
democratic elements. We want to support this process of dialogue and 
reconciliation.

We must let Aung San Suu Kyi and the democratic opposition take the 
lead in pursuing political reform and national reconciliation. We should 
offer steady and clear support, but, obviously, we cannot dictate the 
outcome or pace of the dialogue. Rather, we want to look for ways to 
promote the dialogue that Aung San Suu Kyi is seeking with the 
government as the next logical step in fostering national reconciliation 
and improving the political situation on which so much depends--the 
restoration of democratic, civilian government and an end to human 
rights abuses, narcotics trafficking, and attacks on ethnic groups.

To encourage a political dialogue to begin, the Administration will 
maintain the existing U.S. measures in place for Burma for the time 
being. In the absence of genuine political reforms in Burma, we do not 
believe it is appropriate to resume development assistance, restore GSP 
benefits, or resume Eximbank and OPIC programs. Of greatest impact, we 
also will continue to oppose lending from the international financial 
institutions and seek, with other friendly governments, to maintain our 
informal arms embargo.

The Administration will, however, take steps to underscore our support 
for Aung San Suu Kyi's call for a genuine dialogue toward national 
reconciliation. 

First, in light of the Nobel laureate's release, we believe it is 
important that the Administration continue its direct dialogue with the 
SLORC. We also will seek Aung San Suu Kyi's views directly on the 
situation in Burma and how the international community can assist her in 
moving the process in Burma forward.

Second, the Administration proposes to continue U.S. support and funding 
for UNDP and UNDCP activities in Burma. Aung San Suu Kyi has endorsed 
the development and counter-narcotics objectives of these organizations. 
In her first press conference, she said she strongly supports the UN 
being allowed to play an important role in all countries, including her 
own. We note that UNDP's programs have been thoroughly revamped and 
redirected toward meeting the urgent needs of the poorest Burmese. 
UNDCP, meanwhile, is working to address the scourge of the drug trade--
an affliction for Burmese citizens as well as American. We share Aung 
San Suu Kyi's view that these and all UN activities in Burma should 
contribute to promoting democracy in the country.

Finally, we will continue to discuss the situation in Burma with other 
interested countries. As an important first step, Secretary Christopher 
will review the situation in Burma with the members of ASEAN and other 
countries next week at the ASEAN Post- Ministerial Conference in Brunei. 
He will stress the points that Aung San Suu Kyi has made which we 
believe reflect wisdom--this is a time for patience and perseverance. We 
must welcome the release, but it is not yet time to relax our efforts to 
promote meaningful change.

Views on Pending Legislation

While we call for the SLORC to take more steps to achieve national 
reconciliation, we must still recognize that Aung San Suu Kyi's release 
is potentially a turning point for Burma. In the coming weeks and 
months, the United States and the international community will need to 
react thoughtfully and carefully as developments unfold. As it becomes 
clearer how the SLORC will respond to the olive branch offered by Aung 
San Suu Kyi, the Administration's reaction will be considered and 
appropriate. I already have indicated that the Administration will keep 
in place the existing measures with respect to Burma for the time being. 
The Administration, however, also needs the flexibility to respond to 
what is clearly a changing situation in Burma. While the legislation 
under consideration in Congress is a serious effort to address 
continuing violations of human rights in Burma, we believe it would be 
counterproductive in the wake of the Nobel laureate's release. While 
international pressure helped produce Aung San Suu Kyi's freedom, we 
must now allow time for a dialogue of national reconciliation to begin.

First, the Administration believes that this is not the right time to 
impose unilateral trade and investment sanctions on Burma. The evidence 
on the effectiveness of economic sanctions is clear: They are not 
effective without broad international support. We have discussed 
sanctions with interested countries, and there is no support for them 
against Burma, particularly in the wake of Aung San Suu Kyi's release. 
Furthermore, we are concerned that some sanctions provisions, which call 
for actions against third countries, might violate our obligations under 
the WTO. We would not want to be required to take punitive action 
against countries on whom we need to rely to make common cause in other 
ways on Burma.

Second, we believe Congress should support continued U.S. funding for 
UNDP and UNDCP programs in Burma. As I already have indicated, the 
Administration believes these programs help needy Burmese without 
strengthening the SLORC.

Finally, the Administration believes Congress should not limit U.S. 
counternarcotics programs with Burma. As Assistant Secretary Gelbard 
will make clear, these programs are already very limited--as is 
appropriate. We believe that the minimal efforts now underway will not 
undermine our human rights goals.

In the wake of Aung San Suu Kyi's release, we do not want to restrict 
our options. Sanctions should remain one of those options. But if we are 
to be successful in our efforts to encourage dialogue in Burma, we must 
do more than penalize the SLORC at every turn. We must also be prepared 
to recognize positive steps such as the release of Aung San Suu Kyi. 
What the Administration will do in the coming months in Burma depends on 
the SLORC. The Administration needs the flexibility to respond 
appropriately.

Conclusion

Mr. Chairman: Congress and the Administration share the same objectives 
in Burma. We want to see a dialogue of national reconciliation that will 
help lead to a new democratic future for Burma. We want an end to human 
rights abuses and the installation of a democratically elected 
government in Rangoon. We want an end to trafficking in heroin. Our hope 
is that we will look back on the release of Aung San Suu Kyi as a 
turning point in Burma's history. Thoughtful, reasoned measures by the 
U.S. Government can help make these hopes a reality.

I look forward to continuing to work with the committee and other 
Members of Congress on these and other issues.(###)




ARTICLE 4

Current State of U.S.-China Relations
Kent Wiedemann, Deputy Assistant Secretary for East Asian and Pacific 
Affairs Statement before the Subcommittee on East Asian and Pacific 
Affairs of the Senate Foreign Relations Committee, Washington, DC, July 
26, 1995

Mr. Chairman, I very much appreciate the opportunity to come before this 
committee to discuss with you the current state of U.S.-China relations.

U.S. National Interest

One of the world's great civilizations, China has only in recent years 
begun to play a role on the world stage commensurate with its historical 
achievements. The economic reforms that Deng Xiaoping introduced and his 
policy of opening up China to the outside world have led to enormous 
economic progress and increasing social liberalization. The world's most 
populous nation and third largest in land mass, China is now also 
emerging as a world power. As such, it has a major and growing impact on 
fundamental U.S. national interests. The challenge now and in the future 
is to manage relations with China to serve and protect the broad range 
of U.S. interests. The reasons for China's importance are clear:

--  China is one of the five declared nuclear weapons states and is a 
growing military power.
--  China's economy is expected to continue to grow at a rate of 8-10% 
per year through the year 2000.
--  China's role in global trade has mushroomed. China purchased about 
$9.3 billion in U.S. goods and services in 1994, and the China market 
will continue to be important for U.S. business and jobs.
--  China's status as one of the "Perm Five" members of the UN Security 
Council with veto power gives it influence in dealing with major global 
issues such as resolutions dealing with international weapons 
proliferation, peacekeeping, and sanctions against Iraq and Libya.
--  China plays a key role in regional security issues, such as the 
North Korean nuclear issue, Spratlys, and Cambodia.
--  Finally, China's cooperation is essential on a range of bilateral 
and global issues, including interdicting drug trafficking, repatriating 
illegal Chinese migrants from alien-smuggling ships, and protecting the 
environment.

This Administration believes that the U.S. national interest is best 
served by developing and maintaining constructive relations with a China 
which is strong, stable, open, and prosperous. We work to further 
integrate China into the international community so that China will 
increasingly see its interests served by adherence to international 
norms, whether the issue is human rights, non-proliferation, or trade.

Comprehensive Engagement

It is in this context that, in September 1993, the President approved a 
strategy of "comprehensive engagement" with China. The purpose of this 
strategy can be simply stated:

--  To pursue all of our interests at the levels and intensity required 
to achieve results;
--  To seek to build mutual confidence and agreement in areas where our 
interests converge; and
--  Through dialogue, to reduce the areas in which we have differences.

This strategy is consistent with the policies of the past five 
Administrations, all of which recognized that while there would 
necessarily be differences between two great countries with vastly 
different political and social systems, it is necessary to pursue 
constructive relations with China now and in the future.

While we continue to have differences over trade, human rights, and non-
proliferation, we believe our engagement strategy has succeeded not only 
in helping advance U.S. interests with China but also in encouraging 
China's continued integration into the international community. Let me 
remind you of a few achievements over the past year:

--  Following high-level consultations with the U.S. last October, China 
reaffirmed its commitment to the Missile Technology Control Regime--
MTCR. China agreed that it would not export ground-to-ground, MTCR-class 
missiles--a commitment that goes beyond the obligations of the MTCR.
--  China agreed to cooperate on establishing an international 
convention to end the production of fissile materials for nuclear 
weapons purposes.
--  China had agreed to hold further talks on non-proliferation issues--
missiles and the MTCR, nuclear cooperation, and export controls. 
However, these talks have been canceled--casualties of very recent 
frictions over Taiwan policy.
--  China participated in the consensus on unconditional extension of 
NPT and pledged to join a CTBT next year. It has, however, declared that 
it will complete a series of tests prior to then.
--  China has continued to be a quiet but cooperative partner in helping 
to resolve the North Korean nuclear issue and joining us in continuing 
efforts to support the transition to a democratically elected government 
in Cambodia.
--  In March, we reached an IPR agreement to protect billions of dollars 
in U.S. business, as well as another agreement that will create more 
opportunities for U.S. agricultural exports to China.
--  Deals worth billions of dollars in business were struck during the 
visits of Secretaries Brown and O'Leary.
--  We held the first-ever bilateral military transparency briefings.
--  We have had cooperation on alien smuggling-related ventures. Since 
1993, for example, we have returned more than 3,000 Chinese aliens from     
14 smuggling ships. Last week, however, the Chinese told us they would 
not accept the return of 160 Chinese migrants on an alien-smuggling ship 
in the Pacific unless the Chinese nationals were repatriated from U.S. 
territory.
--  Meanwhile, inside China, popular support for economic reform 
continues. There has been some progress toward legal reform and rule of 
law and evidence of elections at local levels in some regions of China.
--  Many of our initiatives with China have been stalled since the Lee 
Teng-hui visit, due to China's assertion that the visit violated the 
fundamental principles of the three joint U.S.-P.R.C. communiques. 
Engagement, however, is a strategy that works over the long term as well 
as the short term.

Human Rights

The United States continues to have very serious concerns about human 
rights abuses in China. We have not seen the kind of progress we would 
like on human rights in China over the past year. The recent rearrest of 
dissident Chen Ziming, who was released last year on medical parole, is 
just the latest example of Beijing's continued defiance of 
internationally recognized norms in this area. At the same time, 
however, we have made some progress on the four human rights-related 
initiatives announced by President Clinton in May 1994. We received the 
welcome news earlier this week that dissident Yang Zhou was released on 
medical parole.

We have pursued an active bilateral human rights dialogue with the 
Chinese. The seventh round took place in Beijing January 13-15, 1995. We 
again raised our core issues of concern--freedom of speech, association, 
and religion and the treatment of prisoners and persons detained by the 
government--in these dialogues but also sought to broaden and make more 
substantive our engagement with the Chinese on rule-of-law issues and 
legal exchanges. We also are increasing our support for American NGOs 
that are working to promote a stronger civil society in China.

We also have continued our efforts in multilateral fora to work for 
improvements in the human rights situation in China. We joined with the 
EU, Japan, and a number of other countries to introduce and pass a China 
resolution at the UNHRC in Geneva. In spite of intense Chinese lobbying, 
we and the co-sponsors were able to defeat China's procedural motion to 
block the resolution. For the first time in five years, the resolution 
came to the floor. Although it was defeated--by only a single vote--the 
resolution sent a strong signal that China's human rights practices are 
of global--not just bilateral--concern. Furthermore, the vote laid down 
a marker that no country can avoid scrutiny of its human rights 
practices by the international community.

Thanks to their already high standards for international business 
practices, American businesses have become the employer of choice in 
China. Through their everyday operations, they are quietly contributing 
to the transformation of Chinese society. We have been consulting with 
U.S. businesses, human rights NGOs, Congress, and labor organizations on 
the development of a set of voluntary business principles for use in 
China   and elsewhere in the world. These principles were informally 
released March 27 at the White House. Consultations continue to further 
develop the principles and the plan for their implementation.

Since the beginning of the reform period in 1979, the lives of China's 
1.2 billion people have steadily improved. Even though we have serious 
concerns about their human rights problems, the long-term trend--and let 
me emphasize long-term--is positive.

MFN and Economic Interests

We are pleased that the House voted to support the President's decision 
to extend most-favored-nation--MFN--status for China. Congressman 
Bereuter's initiative was key to the outcome of the vote and is very 
much appreciated, although the Administration neither supported nor 
opposed the China Policy Act bill.

MFN is essential to maintaining a constructive relationship with China 
now and in the future. In considering whether to renew China's MFN 
status last year, the primary question was how the United States could 
best advance human rights and other vital interests in China. The 
President decided that extending MFN would promote broad engagement 
between the U.S. and China, not only through economic relations but 
through cultural, educational, and other contacts. These contacts, 
combined with vigorous efforts to promote human rights, are more likely 
to encourage constructive change in China.

Trade is not just a means of producing wealth but is also a conduit 
through which U.S. concepts and ideals filter into the consciousness of 
all Chinese. In the long run, opening markets for America's idea 
industries--movies, CDs, software, television--and for products that 
make international communications easier--fax machines and computers 
that are linked to the Internet--may contribute as much to the 
improvement of human rights in China as all of our direct, government-
to-government efforts combined.

To date, Beijing appears to have sought to insulate business and 
commercial affairs from the recent downturn in the overall bilateral 
relationship. The loss of access to the U.S. market, however, would 
leave China with little incentive to cooperate with us in all aspects of 
our bilateral, regional, and global foreign policy agenda. This was also 
a key consideration in the President's decision to renew China's MFN 
status and preserve our increasingly important trade links with China.

China's economic progress has dazzled the world with its speed. Although 
growth is still uneven--and this could be the source of future problems 
for China--most scholars agree that the long-term economic outlook for 
China is positive. The World Bank has estimated China's GNP will grow at 
8-10% per year.

Following the introduction of market-oriented reforms, China has enjoyed 
one of the fastest economic growth rates in the world. The potential for 
expanded business and trade is vast. Major firms in many leading U.S. 
export sectors--including agriculture, aircraft assembly, and power 
generation equipment--believe that an expanded presence in China is key 
to their long-term, global marketing strategies. These companies face 
stiff competition from other international suppliers. Other governments 
routinely provide political and financial support for their own 
companies' activities in China. We must remain actively engaged in this 
critical market. There is no rational alternative. In the future, our 
trade with China will be a vital source of export revenues and jobs.

While great, much of China's market potential is at this time still 
unrealized. U.S. firms face myriad visible and invisible barriers to 
their efforts to do more business in China. In 1994, our bilateral trade 
deficit with China was nearly $30 billion--second only to our trade 
deficit with Japan. This is clearly unsustainable. A central tenet of 
this Administration's China policy is that China must remove import 
barriers in a way that will allow U.S. exporters to compete in the 
Chinese market on a fair and equitable basis. This effort, too, requires 
that we remain actively and constructively engaged with the Chinese 
Government.

Through hard work in bilateral trade talks, we have, in recent years, 
made considerable progress toward opening up China's market and ensuring 
that trade is equitable and based on the rule of law. We also have 
worked very hard with China and our other trading partners on China's 
efforts to join the World Trade Organization. A new round of bilateral 
and multilateral talks will begin this Friday in Geneva.

Incorporating all of the Uruguay Round agreements, the WTO covers a much 
broader spectrum of international trade than the original GATT. When 
completed, China's accession to the WTO will open up many more 
commercial opportunities for U.S. suppliers of both goods and services.

Non-proliferation

Since the 1970s, China's position on international efforts to stop the 
proliferation of weapons of mass destruction has shifted. China, which 
used to oppose automatically such efforts for ideological reasons, now 
supports many non-proliferation initiatives.

China is a significant producer of nuclear-, chemical-, and missile-
related equipment, materials, and technology. Since China is a major 
player in the international arms world, Chinese observance of the 
multilateral proliferation regimes is necessary to halt the spread of 
weapons of mass destruction and missiles. Proliferation is a high-level 
concern in our dealings with Beijing, and comprehensive engagement has 
helped us to move ahead on several fronts with the Chinese in this very 
important area of U.S. national interest.

We continue to work with the Chinese to bring their policies into line 
with prevailing world standards on the full range of nuclear and 
conventional weapons proliferation issues. As is the case in most issues 
with China, we are making varying degrees of progress in these 
endeavors.

China joined with the United States to support the indefinite extension 
of the NPT at the NPT review conference held earlier this year. We 
regret that China has continued its nuclear tests and have called on 
Beijing to stop its testing program immediately. We also have welcomed 
China's pledge to join the CTBT and cease nuclear testing in 1996.

With respect to recent press stories about missile technology transfers 
by China to Pakistan or Iran, we do not, as you know, publicly discuss 
the alleged content of intelligence reports or analyses. We take all 
reports of alleged proliferation activities seriously. We will continue 
to review information as it becomes available in order to apply the 
sanctions law. Our non-proliferation dialogue is on hold now. We hope, 
however, to continue talks in the future and to build on the gains we 
have made in the recent past.

Taiwan

In recent months, Taiwan has again emerged as a principal bilateral 
issue between the United States and China. Since 1979, we have 
consistently declined to play an active role in shaping the future 
between Beijing and Taipei. We insist only that any resolution to the 
situation be achieved through peaceful means. Our actions regarding 
Taiwan all have been designed to serve that end. The result has been a 
burgeoning of economic, cultural, and social ties between Taiwan and the 
mainland, with benefits accruing to both sides. In our view, this 
process is the best hope for a peaceful resolution of the differences 
between the two sides, and we must carefully avoid any action on our 
part that damages or disrupts it.

Taiwan is, of course, changing. The people on Taiwan, with the energy 
characteristic of the citizens of a new democracy, are seeking greater 
recognition and respect from the international community--and the 
government in Beijing--for their economic and political achievements, 
and they are increasingly unwilling to accept the status quo. This 
Administration believes that Taiwan's achievements should be 
acknowledged. That was one of the goals of our policy adjustments last 
September. We realize that many people both here and on Taiwan were 
dissatisfied with the results of that exercise, but our aim was to 
facilitate and to rationalize a number of the elements of our unofficial 
relationship with Taiwan while preserving the peace and stability which 
has proven so beneficial to all parties concerned.

It was not and is not, however, the objective of this Administration to 
preclude the eventual political reunification of Taiwan with the 
mainland-- we do not seek, in the words of the Chinese, to create "two 
Chinas" or "one China, one Taiwan."  We continue to adhere to the 
framework under which we normalized relations with the PRC: The United 
States of America recognizes the Government of the People's Republic of 
China as the sole legal government of China and acknowledges the Chinese 
position that there is but one China and Taiwan is part of China. 
Abandonment of this fundamental element of our policy would not only 
endanger our relationship with China but also threaten the security and 
stability of the whole East Asian region. The Administration's decision 
to admit Lee Teng-hui for an expressly private purpose does not change 
our basic policy.

Nonetheless, as a result of that decision, our relationship with China 
has entered a very difficult period. The Chinese have reacted strongly 
to the private visit of Lee Teng-hui, head of the governing authorities 
on Taiwan, to his alma mater, Cornell University, last month, calling it 
a grave violation of the three joint communiques and of our commitment 
since 1972 to a one-China policy. Chinese reaction has included the 
recall of their ambassador for an indefinite period of time, as well as 
the cancellation of all scheduled visits and talks touching on non-
proliferation and security matters.

We also note the postponement of cross-strait talks between China and 
Taiwan. We hope that the talks will be rescheduled soon as they are 
useful in furthering stability in the strait area.

The strong Chinese reaction to the Lee visit reflects in part the 
perception of many in China that the U.S.--and by this I mean both the 
Administration and the Congress--is trying to foster an independent 
Taiwan as part of an effort to "contain" China and prevent it from fully 
assuming a role as a great power. Nonetheless, as we have consistently 
stated, U.S. policy remains unchanged. We seek to engage China, not 
contain it, on a wide variety of issues of mutual concern, while at the 
same time we develop unofficial relations with the people of Taiwan.

The Arrest of Harry Wu

U.S.-China relations have been further complicated by the arrest of 
American citizen and human rights activist Harry Wu. We and other 
friendly nations strongly protested the Chinese Government's delay in 
permitting us access to Harry Wu--a violation of the U.S.-China 
bilateral consular agreement. We succeeded, however, in gaining consular 
access to him; the Consul General met with Wu on July 8 in Wuhan and 
ensured that he was well-treated. We are continuing our diplomatic 
efforts to seek Mr. Wu's immediate release.

Beijing Women's Conference

Another key, ongoing issue is the upcoming Fourth World Conference on 
Women. For this conference, some 45,000 people from around the world 
will gather in Beijing September 4-15. We have raised with the Chinese, 
in their role as the hosts, a number of issues which are key to making 
this international conference a success. U.S. participation in the 
Beijing Conference will ensure that American women and men will have a 
voice in an international forum on issues affecting the lives of women 
into the 21st century. The First Lady is the honorary chair of our 
delegation. No decision, however, has yet been made regarding her 
attendance at the conference.(###)

[END OF DISPATCH VOL. 6, NO. 30]

(###)

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