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China Trip Report
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Red China

Government Officials, Academics, Diplomats, Journalists, and Church Spokesmen

August 17-28, 2001

Prepared by Hon. Lawrence J. Straw, Jr., Esq.

Hong Kong: Dr. Doolittle’s "Pushmi-pullyu"

Just like Dr. Doolittle’s two-headed pet, the "Pushmi-pullyu," Hong Kong (HK) finds itself going in two directions at once.

It is a city of contradictions: glamourous neon-lit high-rises, but wizened Indians squatting in the alleys, eating curry; 150% luxury taxes, but a mere 15% maximum personal income tax; 2,000 People’s Liberation Army troops garrisoned in HK, but kept out of sight within their compound; Roman Catholic Masses packed with worshippers, but the Falun Gong labeled an "evil cult"; an almost-anything-goes economy, but political dissent and civil liberties efficiently and increasingly suppressed.

During the two days (August 19-20) spent in HK, the participants in the TCCF/USTA’s Far East Fact-Finding Tour heard from representatives of churches, universities, American law firms practicing in HK, U.S. and British government representatives, economists and from the chairman of the Democratic Party of Hong Kong. Each gave an evaluation of HK’s present and future from a different perspective.

Professor Li Shaomin of Hong Kong City University School of Business, with whom the TCC group dined, is a naturalized U.S. citizen. He was until recently lying in a prison in mainland China, having been charged with spying for the ROC (the Republic of China on Taiwan). (The basis of the charges against him was a public opinion survey he had conducted a number of years ago in Taiwan.) Professor Li indicated that HK business may deteriorate because of political uncertainty about its future and the relatively high cost of HK workers. In his opinion, "Mainland China is running on one leg." It has an almost free market – not very different from that of HK – but the political and legal systems are still mired in a "lawless" system that relies on personal contacts and bribery. Most wealthy people keep their money overseas. To develop its economy, China needs to protect private property rights and to dissolve its adherence to the "cardinal principles" of Marx & Mao, Communist Party Rule, and the "people’s" dictatorship.

Brian Hooper, a Harvard Law School student and intern with the Hong Kong office of the Richmond-based law firm Hunton & Williams, shared his insight into the legal and political situation in HK – as it is on paper and as it is in practice. Day-to-day life has changed little on the surface since the transfer of HK back to China. Fundamental rights – especially economic rights – are still honored. The United Kingdom-People’s Republic of China Joint Agreement (the "Basic Law"), guarantees freedom to HK (except in foreign affairs and national security). It also provides that socialist policies shall not be practiced in HK for 50 years. However, in areas where the PRC feels any sensitivity, there is a steady, incremental erosion of rights. This erosion is manifested in the "right to abode controversy," wherein the PRC intervened and overruled HK’s highest court; in the treatment of Falun Gong which is legal in HK, but is the target of vilification by HK’s quisling chief executive, Tung Chee-hwa, who has labeled it an "evil cult"; in the attacks on the "free" media that criticize the PRC in any way; and in the suppression of all protests by students.

Sir James Hodges, British consul general, was joined by consulate specialists Tim Summers (Cantonese political section) and Kurstie Payton (economic matters). Sir James is responsible for the largest consulate in the world and has the responsibility of monitoring the state of HK’s rights and the 3.5 million people in HK who hold British passports. After presenting a short history of British involvement in HK, from its 1841 acquisition in perpetuity of HK and Kowloon, through the 99-year lease of the New Territories in 1898, to the 1992 Joint Declaration, Sir James opined that the one-country, two-systems arrangement appeared to be working – in spite of certain legal controversies. He denied that there was any consistent erosion of basic rights, but acknowledged that there had been certain "incidents."

Hugo Restall, editor of the Asian Wall Street Journal and a Dartmouth graduate, reported that the changes since reversion have been gradual: values are slowly deteriorating; freedom of the press and independence of the courts are being questioned; PRC’s commitment to nonintervention in the economy is becoming anemic; civil liberties bills passed before reversion have been repealed; popular local politicians are not allowed to travel to the mainland; English language usage is on the wane. It was Mr. Restall’s opinion that the PRC is simply trying to emulate Singapore by developing a free economy but suppressing dissent. The PRC communists, in his opinion, are not ideological extremists but pragmatists who simply want to stay in power. In his mind, France is more socialist than China, and HK may be merely turning into a welfare state rather than a totalitarian communist regime.

Michael Klosson, U.S. consul general, and representatives of the economic section of the consulate explained the role of the U.S. consulate in HK. Like the British consulate, it reports directly to its home office and not to the embassy in Beijing. The role of the U.S. consulate is fourfold: to support the 50,000 U.S. citizens there; to support the rule of law and human rights; to support and coordinate U.S. trade with HK; and to enforce U.S. copyrights. The U.S. and the PRC comprise 50% of HK’s trade. Eight-five percent of HK’s business is now in services, the bulk of its production business has been exported to PRC during the last 20 years.

Martin C.M. Lee, member of the HK legislature and chairman of the HK Democratic Party, whose party won two-thirds of the vote at the last election but obtained only one-third of the seats. In his view, HK has changed tremendously since the reversion. During the British rule, HK was subject to the rule of law, but since reversion it is now subject to the "rule of man." The chief executive was selected in 1996 and is a puppet of the PRC. The present goal of the chief executive is to place all civil servants on three-year contracts so that he can then control the bureaucracy and guide it in the direction the PRC hierarchy chooses. He believes that, in the long run, China and HK must decide who is to emulate whom. There is no "blue-print" communism in China but the Communist Party is still in control. The 50-year ban on socialism was to permit China to catch up with HK, not for HK to slip back into the centralized, stultifying system of the mainland.

What is the bottom line? The United Kingdom-People’s Republic of China Joint Agreement concerning Hong Kong is being incrementally eroded, with limited concern on the part of the British and American governments. There is no doubt that the British legal system is in the process of being replaced by Communist Chinese "law," such as it is. If Beijing has its way, 50 years from now, at the end of the agreement, HK will have been fully integrated into the PRC. Economically, HK is steadily losing its appeal and is being supplanted by Shanghai as a magnet for investors and business activity.

Shanghai: Showcase or Window Dressing?

After Hong Kong, the TCCF/USTA group was on its way to Shanghai, a two-hour flight to the northeast, on the shores of the East China Sea. Shanghai’s pre-Communist architecture – like that of Hong Kong – is breathtaking! As the birthplace of the Chinese Communist Party and of the "Cultural Revolution" of the 1960s, the PRC is trying hard to make it a "showcase city."

Evidence of the energy, money, and vitality that are fueling Shanghai’s growth is everywhere. Thirteen million permanent residents and another three million transients crowd the streets and waterways. Traffic on the Huangpu River, which flows through the middle of the city, looks like a Los Angeles freeway – ships and barges literally bumper-to-bumper. It is said that 20 % of the world’s construction is taking place in Shanghai. Giant neon signs on top of skyscrapers, all in English, advertise companies familiar to every American: Epson, Panasonic, Pepsi, KFC, and Starbucks. Work goes on at all hours, even into the night.

Does this booming economy have a secure foundation? Or does it stand on the uneasy base of the Communist Party. A few glimpses behind the scenes give the impression that much of what is on display for the foreign investor may be only window dressing. One’s first impression is that there is a free-and-easy approach to law enforcement here – everyone ignores traffic signals and parking regulations. But a closer look reveals an iron-fisted authority forcing the removal of 50,000 helpless families from their homes in Shanghai as a way to relieve air pollution. People in the high-rise offices look affluent and fully westernized, but, just off the main streets, people are still eating in the streets. Many of the consumer products available in western cities are available here, but no one is allowed to own real property. One may buy only a 50-year lease. It is as if the Communist Party will allow the citizens to possess the flashy, transient emblems of free enterprise, but will deny them the right to that permanent badge of liberty: private property.

The Communist leaders with whom the TCCF/USTA delegation met only reinforced the impressions formed from the tour of the city. At the Shanghai Institute for International Studies (the "think tank" for the PRC Foreign Affairs Ministry), the chairman of the department of American studies, Pan Zhongqi, summarized the "reality" of China’s world view that would have done credit to the characters in Alice in Wonderland. "Without American interference, the Taiwan issue would have been resolved by now. The goal of the PRC is peaceful reunification but Taiwan does not want reunification." "The Dalai Lama must accept that Tibet is part of China." "Peace and stability is the first goal of Chinese foreign policy." And perhaps the most bizarre statement heard by the group: "China has no strategic interest in the Caribbean basin or Latin America. It is ignorant to think that the Chinese government is attempting to control the Panama Canal."

Dai Hui Xing, director of Pudong International Center, told the TCCF/USTA group that more than $50 billion had been invested in development of the center in the past ten years; $15 billion of this was foreign investment. Dai claimed that the occupancy rate of the Pudong are is 80 %; however, the lack of people and motor traffic on the streets, makes this claim more than a little suspect. The question arises, as it did in "old" Shanghai, Is this new construction little more than an expensive "Hollywood set"?

Perhaps the most visible U.S. investment in the "new" Shanghai is the General Motors Buick plant in Pudong, a 50-50 venture between GM and the city government. The $1.5 billion plant has the capacity to produce 100,000 cars per year and uses state-of-the-art technology. A GM job is considered a plum: there were 20,000 applications for the plant’s 1,000 jobs which pay an average of $500 per month. But, once again, the seeming injection of American-style economic freedom masks the reality of the Communist regime: the type of car built and the market for each model is regulated by the government. For instance, only top government bureaucrats and Party officials are entitled to have a New Century or other top-of-the-line model. And only the highest authorities are allowed to have vehicles with engines larger than three liters, so GM had to design entirely new engines with a maximum of 2.9 liters.

On the financial front, Richard McGregor, the Shanghai correspondent for the Financial Times, believes that Shanghai is the prime example of how the Party wants all of China to be: prosperous but centrally controlled. McGregor shared his thoughts on many aspects of the city’s economy. The private sector is underdeveloped, accounting for only 25 % of the local economy in 1999. China is lawless, and administrative whim decides everything (a phenomenon noticed throughout China). There is no real legal system, and without one, Shanghai will never become the showcase the Party wants it to be. The companies on the Shanghai stock exchange are not of good quality, and their financial statements are completely unreliable.

Another journalist, William Kazer, bureau chief of the South China Morning Post, shared many of the opinions members of our group had formed. Shanghai is not as good as it looks, but it is better than the rest of China. In agreement with McGregor, Kazer states the courts are unreliable and unpredictable; it is impossible to obtain a judgment against a local political power – and even it one could, no one would enforce it. The economic gap between Hong Kong and Shanghai is narrowing. The relative number of western companies with Asian headquarters located in Shanghai is increasing. Hong Kong’s is not the only economy that is losing out to the PRC showcase city. Taiwan’s toy, shoe, and garment businesses have come here. Investment that formerly went to South East Asia and India is now coming to Shanghai. India’s substantial software business is relocating to Shanghai. Massive tax breaks are attracting many of the businesses, but so is Shanghai’s highly respected mayor, who joined the Party only in his 40s and then only to be allowed to campaign for the office. In short, the PRC is running huge deficits and attempting to spend its way out of deflation.

Beijing: The Reality behind the Show

Great Wall

Larry Straw at the Great Wall of China

After five days of being shown the face China turns to the West, it was in Beijing that the TCCF/USTA delegation came face-to-face with the political realities of today’s China. The smiling dragon continued to smile, but one began to see the teeth.

With a smiling face, the first PRC ambassador to the U.S., Chai Zemin, feted the TCC group at a luncheon banquet in the Great Hall of the People (China’s capitol building), the first private delegation to be so treated. He protested that the people of China want, like U.S. citizens, a peaceful life and are only prevented from enjoying it by politicians who "create" problems between the two peoples. (He seemed oblivious to the irony of speaking these words in the "Tibet Room," built to celebrate the 50th anniversary of the "liberation" of Tibetan people by the Chinese army.)

This theme was continued by Zeng Jianhui, chairman of the China-U.S. Inter-parliamentary Group, Chairman of the National Peoples’ Congress ("NPC") Foreign Affairs Committee, and member of the Peoples’ Congress Standing Committee (the de facto lawmaking body of the legislature). At his meeting with the TCCF/USTA group, Zeng downplayed the differences between the U.S. and Red China, emphasizing that Taiwan was the "only issue" between the two nations. He reiterated in soothing phrases that mainland China does not consider the use of military force to resolve the issue; that only if Taiwan declares independence will the PRC be forced to use its military – and such a development will be of Taiwan’s choosing. "One China" is equated with unchallenged control by the Communist Party of China.

2008 Olympic Games, and – very likely – the chances of political advancement in 2002 when a change in China’s top leadership is scheduled. The PLA is largely responsible for its own support and, therefore, is much involved in commercial activity. And if the military establishment is to continue to grow at its present rate (17 % last year), it must have its fingers in many commercial pies. But again, there is an irony in the situation: in spite of massive expenditures on "modernization," the PLA’s commercial interests and holdings, and its political maneuvering may actually weaken it as a military force. These nonmilitary activities are vital to its continued existence, but serve to distract and corrupt its leaders and undermine the professionalism of the institution.

All the Communist officials with whom the TCCF/USTA group met in Shanghai and in Beijing embraced the view that time is on their side, that the correlation of forces is shifting in their favor. Their commitment to the 2008 Olympics is all the more fervent since it will serve to legitimate and extend their regime. They will do anything – short of compromising their authority – to continue the flow of western dollars into the country to shore up the economy and consolidate fresh in their minds), that is just what it will do. But the fundamental political system remains unchanged: the PRC will still take brutal action against any individual it deems a threat.

Tiananmen Square

Larry Straw in Tiananmen Square

To prove this point, one need only visit Tiananmen Square, as the TCCF/USTA delegation did. It is like a scene from Ice Station Zebra. At first glance, it is simply a gathering place for the population, a place to fly kites, mingle, and chat. But on closer inspection, one notices the white vans strategically placed throughout the vast expanse of the square. These are vans equipped with continually running television cameras and antennas to beam pictures of people and their activities to some unknown location. PLA troops are stationed throughout the square, ever watchful. The government wants to keep tabs on who is in the square and what they are doing – suppression of the first signs of unrest is the first priority of the PRC leadership.

Singapore: Economic Boom, Political Bust

Singapore is one of the smallest independent states in the world. It is comprised of one island and more than 60 surrounding islets. The city-state itself is only 250 square miles and is very modern and clean. However, its compact size belies its economic growth. It is, like the other stops on the TCC itinerary, crowded with people, bustling with activity, and economically prosperous. There are four million people, about 75% of whom are Chinese, 14% Malay, and 5% Indian. There have been serious race riots in the past, and race issues are still very serious, but they are not openly discussed.

While the people do not enjoy the personal or political liberty to which the West is accustomed, there is considerable freedom by Asiatic standards and the government remains friendly with the U.S. In short, Singapore is similar to a large gated community where, if you are willing to surrender your political and personal liberties, you can live rather comfortably.

At first glance, the political system of Singapore is a representative one. The Singapore Parliament claims to be modeled after the Westminster system of parliamentary democracy where members of parliament are voted in at regular general elections. The reality is considerably different, as explained to the TCCF/USTA delegation by Dr. Tan Bin Seng, chairman of the National Workers’ Party, and Huang Seow Kang, its vice-chairman. It has but two members in a parliament of 83 members. The Peoples’ Action Party ("PAP") controls the rest of the seats and manipulates the electoral process. Although it takes a two-thirds vote to amend the Singaporean Constitution, this is easily – and frequently – done by the ruling PAP which controls 98% of the seats. So, as a practical matter, the Constitution is whatever the PAP says it is!

The electoral process is contorted to ensure that the PAP stays in power. The PAP-controlled parliament need give only seven-days notice of any election and then, once the seven days are up, the campaigns are limited to only nine days. Boundaries of the electoral districts may be changed just before the elections according to the popularity of the candidates in each. The PAP uses its money to "entice" the 60 % of the electorate who live in public housing: if they vote for the opposition, it's possible that their cluster of houses may not be maintained or upgraded by the government.

Later, the TCCF/USTA group met with Steve Chia, secretary general of the National Solidarity Party, another opposition party, which believes that power is too concentrated and a more limited government should be established in Singapore. Mr. Chia gave our group more illustrations of the way the PAP controls the electoral process. For instance, in legislative districts, a voter must vote for more than one candidate, which dilutes the opposition vote. PAP may institute lawsuits against opposition candidates who may find it necessary to the country to avoid financial ruin from legal bills. The PAP-controlled media seldom reports on opposition party or leaders – forcing the opposition parties to rely on the Internet to "get their message out." Mr. Chia reported that the opposition parties are now forming a Democratic Alliance in an attempt to make a strong force to combat the PAP.

The populace’s acquiescence in this situation appears to be based on two facts: (1) Singaporeans are afraid of the consequences – both economic and personal – of tinkering with the political process; and (2) 36 years ago, when Singapore gained independence, the PAP and the electoral struck an unspoken "deal" – if the people don’t worry about civil liberties, the government will provide them with economic success. Until recently, the PAP has been keeping its part of the bargain. Other Singaporean leaders and our own U.S. embassy staff, however, gave the TCCF/USTA group reason to believe that the PAP’s ability to maintain the bargain may be short-lived in light of the weakening economic situation. Since 1997, Singapore has had two elections and is now in its second recession. The PAP is apparently unable to deal with it. Elections have been postponed because of it, although they are required to hold elections within the next twelve months.

On our group’s first day in Singapore, we met with Nicholas de Boursac, president of the American Chamber of Commerce and Edward Gilbert, past president, who gave an informative "snapshot" of the current economic situation in the city-state. The cheap labor in Singapore is well trained and well disciplined. Not the least of Singapore's strong points is the protection given to intellectual property and the observance of rule of law. Singapore is the world’s third largest petroleum refining center and the second largest container terminal. More shipping goes through Singapore than through the Panama and Suez Canals combined. The corporate tax rate is 24% and the maximum personal income tax is 29%. Twenty percent of personal income is automatically deducted and placed in an old-age savings account, which is available to the government for investment.

When the TCCF/USTA delegation met the next day with U.S. embassy officials, they echoed what was said by the Chamber representatives. In addition, Jon Bensky, Commercial Affairs Officer, Pat Freeman, Political Affairs Officer, and Captain Carlton Soderholm, Military Liaison, put Singapore’s relation to the U.S. in perspective. Singapore comprises close to half of all U.S. investments in Southeast Asia and is the tenth largest U.S. trading partner worldwide. Singapore, in spite of its socialist leanings, remains the strongest ally of the U.S. in the region. Its naval base was voluntarily designed to support U.S. nuclear aircraft carriers pierside. It buys about $1 billion in military equipment from the U.S. each year. In general, the Singapore government sees its commitment to the U.S. as one way to provide stability in the region and encourage investment and it views the U.S. as the only effective counterbalance to mainland China.

But this commitment to the U.S. cannot be taken for granted: Singapore is in a very sensitive position today. The government feels vulnerable because the economy is dependent upon so many outside forces. Technology manufacturing is the largest sector of the economy in Singapore but is in a recession now because of the U.S. economic slowdown. Unemployment may reach a record high of 4% by the end of the year – and there are no welfare or unemployment benefits in Singapore. It relies on Malaysia for its water supply, and its substantial investments in mainland China are subject to the whim of the PRC's Communist hierarchy.

And apart from the uncertainty of its economic future vis-a-vis China, there is the continuing threat of unrest in the Communist behemoth. When economic growth in China ceases or declines – and there is every indication that this may happen in the near future – unrest will occur. There is no knowing how the Chinese leadership will handle that unrest; if it crushes it as it did in Tianamen Square, Singapore anticipates a huge influx of Chinese refugees that will dislocate its own economy and social structure.

The long and short of it is, Singapore, like every other nation in the region, is in bed with a 400-pound gorilla – mainland China. No one knows which way it is going to roll, but whichever way it goes, everyone will be affected, and some may be crushed.

Republic of China ("ROC"): Free but Troubled

The TCCF/USTA delegation’s final stop on its trip was the Republic of China on Taiwan, the "wunderkind" of Asia and the nation that shamed mainland China with its economic success. Until this year, Taiwan enjoyed record-breaking economic growth every year since Chiang Kai-shek’s forces landed in 1949. But an economic downturn, coupled with growing ideological disputes in the government appears to have curtailed those boom times for the time being.

The negative growth rate and 4 % unemployment are the result of Taiwan’s heavy dependency on trade with Japan and with the U.S. When the latter two economies began to slow down, Taiwan’s could only follow. Moreover, with the PRC’s permitting limited capitalism in Shanghai and in Hong Kong, there has been an exodus of Taiwan industry to the mainland, including white collar workers. The business community is split between those favoring investing in Taiwan first and those wanting to branch out into mainland China.

Moreover, Taiwan suffers from problems that are unheard of in the other nations visited – unheard of because they are found only in politically free nations. Taiwan politics is comprised of several parties. First is the Kuomintang ("KMT") Party, founded by Dr. Sun Yat Sen almost 100 years ago, and the ruling party from 1949 until the last election. The Democratic Progressive Party ("DPP") fielded the winning presidential candidate, Chen Shui-bian, in the last election. The People First Party ("PFP") received 36% of the vote in the last presidential election. Finally, there is a recently formed fourth party and the Taiwan Solidarity Union, a group now being formed that consists of KMT legislators favoring independence for Taiwan. These are real political parties in the Western sense of the word, with real differences in policy and personnel. The TCC delegation was able to talk freely with representatives of several of these political parties while in Taiwan.

Taipei Mayor Ying-jeou Ma, a 1981 graduate of the Harvard Law School and a member of KMT, defeated the then mayor, Chen Shui-bian, who was subsequently elected president. When the KMT held the presidency, Ma was in charge of the council that is responsible for negotiations with Communist China, and he has an intimate knowledge of the relationship between the PRC and ROC. Economically, both the ROC and the PRC are prosperous. Taiwan has $31 billion in trade and enjoys a $20 billion surplus with the PRC. Taiwan’s entire surplus is only $10 billion, so if trade with the PRC were interrupted, Taiwan would face a severe deficit. The PRC is adamant that the ROC accept the "One China" principle before any negotiations on their future relationship can resume.

In 1992, Taiwan and mainland China reached a fragile compromise dubbed the "1992 Consensus." Both sides accepted the One China principle but agreed to differ on its meaning. A subsequent conference in Singapore broadened the agreement. The new DPP government in Taiwan has repudiated the Consensus, and the PRC has cut off any more discussion until the government once more embraces the 1992 accord. The DPP government is equally adamant in opposition to the One China-Two Systems policy that is currently in force in Hong Kong.

The TCCF/USTA group later heard more about this fragile relationship from Dr. Su Chi of the National Security Division. He likened the ROC-PRC relationship to a pencil – sharp at one end (military) and soft at the other (cultural and economic). And, based on the "soft end" of the relationship, the ROC and PRC seem to be pulling closer together. Millions of visits between the two occur each year (although less than one-tenth of them are from the PRC to ROC). Taiwan and mainland are each other’s fourth largest trading partner, and Taiwan’s investment in the mainland is $20-30 billion, second only to the investment of Hong Kong.

But Dr. Chi is pessimistic about the future. The Taiwanese economy has never been so weak. Its domestic politics are becoming more unpredictable, and its political parties more volatile. The Chen Administration has changed ROC policies toward the PRC in three ways: no Chen administration official has declared himself to be Chinese, the Chen government refuses to discuss the One China issue, and it refuses to acknowledge the 1992 Consensus. Neither side will talk to the other, and Dr. Chi believes that this increases the chances for miscalculation and misunderstanding.

Su Tzen-ping, the chief spokesman for the Chen government, emphasized the importance of the last election. It was the first time in all of Chinese history that power was freely transferred from the party or person in power. This is something that the people of ROC cherish. He also spoke of the challenges that President Chen is now facing. Since this is the first time that the KMT has been out of power and the first time the DPP has held the presidency, both parties are unaccustomed to their new roles. The new leadership is still learning how to operate the machinery of government and trying to do it without a parliamentary majority. Su states that negotiations with the PRC cannot commence because of Beijing’s One China precondition; Taiwan must build up its military before it is in a strong negotiating position. Finally, Chen must guide Taiwan through the first economic downturn in the ROC history. Since it is an export-dependent country, Taiwan suffers when the world economy is unwell.

Lien Chan, KMT Party Chairman and former vice-president of ROC, met with all the group next and agreed with much of what we had learned from our previous conversations in Taipei. The democratization of Taiwan was so successful that the KMT was voted out of office, and the economic problems Taiwan is now facing are unprecedented. The KMT had established a policy of detente with the PRC, turning their confrontation from a military one to an economic and cultural one. He emphasized that the Chinese people were not foreordained to suffer totalitarian rule, even though they have done so for many hundreds of years. Democracy is equally compatible with the Chinese people; there is no Asian value that requires totalitarianism. He firmly believes that time is on the side of Taiwan; there is only One China, it has just not yet been unified. Lien further hopes that the DPP government will accept the 1992 Consensus and restart negotiations with the PRC.

At the Foreign Ministry reception later that day, our delegation met with Tzu-Dan Wu (Deputy Foreign Minister); Dr. Harry Tseng (Chief, First Section, Department of North American Affairs); Shih Yi-hun (Senior Specialist, Department of North American Affairs). Both Teng and Shih admitted to members of the TCCF/USTA group that, should the PRC seize Taiwan investments in the mainland, there would be little that the ROC could do about it.

Former ROC President Lee Teng-hui

Lawrence J. Straw, Esq. with former ROC President Lee Teng-hui

The new People First Party ("PFP") is an offshoot of the KMT party. Party founder, James Soong previously served as private secretary to President Chiang Ching-kuo, son of Chiang Kai-shek, and was largely responsible for Lee Teng-hui becoming president after Chiang’s death, saying that it had been Chiang’s last wish that Lee succeed him. He lost the presidential election to Chen, but received 36% of the vote. As Soong's runningmate, Dr. Chang Chao-hsiung, explained, the PFP, like the KMT, embraces the 1992 Consensus. It differs from the KMT in that it believes the elected president should speak for the ROC and the KMT wants party-to-party negotiations with the PRC. Soong believes that economic pressures will push the mainland leaders toward democracy, but the crying need there is judicial reform.

The final meeting of our group was with former ROC President Lee Teng-hui. Lee was president of the ROC for twelve years and was the first Chinese leader in history ever elected by popular vote. The Chinese people have been oppressed for recorded history, first by the emperors and then by the Communists. Lee believes that Taiwan should be the model for the PRC and that "One China" is a realistic goal, but one that should be realized under a free government and not under the Central Committee of the Communist Party of mainland China.

From August 17-28, 2001, 23 Americans traveled to Hong Kong, Shanghai, Beijing, Singapore, and Taipei in the context of a Far East Fact-Finding Tour, jointly sponsored by The Conservative Caucus Foundation and the U.S. Taxpayers Alliance.

One of those making the journey was Lawrence J. Straw, Jr., a Los Angeles attorney, who served as Associate Director for Policy Review at the U.S. Office of Economic Opportunity during the tenure of OEO Director Howard Phillips, and he was Treasurer of The Conservative Caucus.  This report was edited by Mrs. Molly McClellan.

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