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Mock National Security Council Meeting on the U.S.-China Summit

Introductory Speaker: Leslie H. Gelb, President, Council on Foreign relations
Panelists: The Honorable Winston Lord, Former assistant secretary of State for East Asia, John Deutch, former director, Central intelligence Agency, Thomas E. Donilon, former assistant secretary of State for public affairs at the State Department, Ellen L. Frost, former counselor at the U.S. Trade Representative's office, Jamie S. Gorelick, former the deputy attorney general; former general counsel in the Pentagon, and George Stephanopoulos, former a senior adviser to President Clinton
October 14, 1997
Council on Foreign Relations

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Dr. LESLIE H. GELB (President, Council on Foreign Relations): Good evening. Welcome, members of the Council on Foreign Relations. Welcome, members of the Council on Foreign Relations Corporate Program and special guests, and our C-SPAN audience. We’re here tonight to discuss and explore the substantive issues in the United States-Chinese relationship that will arise in the upcoming summit meeting between Chinese President Jiang Zemin and U.S. President Bill Clinton.

We’ve chosen an unusual way to try to get to the heart of the matter. This event tonight is a mock, or make-believe, NSC meeting, and we hope this will be a lively and realistic way of getting to the issues.

There are a few important differences between what you will see tonight and the real thing. We have six participants here tonight. At a typical NSC meeting you will have a dozen or more, including the president. The six participants tonight will be playing roles. They have their own views, but they’ll be playing roles. So what they say here won’t necessarily reflect their real views. And finally, the actual status of some of the issues that are being developed for the summit may be different from what you hear tonight. They’ll be already worked out, such as a joint communique. This will be done in kind of real time, whatever has been already agreed.

And now, a little “Twilight Zone” music, please, because while what you see is not the real thing, it’s about as close as you can come to the real thing, because we have selected for you six people who know what National Security Council meetings are all about, who have been to those meetings and been responsible for positions of various departments.

In the role of National Security adviser, we have Winston Lord, who used to be president of the Council on Foreign Relations and then went on, went astray to become assistant secretary of State for East Asia. He was also head of Policy Planning in the State Department, and also on the National Security Council staff under Henry Kissinger.

On my right, immediate right, is John Deutch, who will be playing the role of the director of Central Intelligence, a position he held in the administration. He was also, among many other things, deputy secretary of Defense.

In the role of secretary of State, over on Winston Lord’s right, we have Tom Donilon, who’s now a partner at O’Melveny & Myers, and was assistant secretary of State for public affairs at the State Department. And this idea for a mock NSC is his.

To John Deutch’s right is Ellen Frost, in the combined role of secretary of “Economics.” That means Commerce, Treasury, the office of the U.S. Trade Representative. Ellen Frost is now a senior fellow at the International Institute for Economics, and she is a former counselor at the U.S. Trade Representative’s office.

To Ellen’s immediate right is Jamie Gorelick, who will be playing both secretary of Defense and chairman of the Joint Chiefs—first time in history. The Chiefs welcome a female chair. Jamie is now vice chair of Fannie Mae, formerly the deputy attorney general and formerly general counsel in the Pentagon.

And all the way over at the other end, last and not least, is George Stephanopoulos; George is in the unfamiliar role tonight of White House political adviser. He is, in his spare time today, a visiting professor at Columbia University and formerly a senior adviser to President Clinton.

Winston, all yours.

Amb. WINSTON LORD (in the role of National Security adviser): John, I just talked to the president from Brazil, and, as you can imagine, George, he’s frustrated about the coverage back here of his trip, or lack of it. But he’s also very unhappy, John, about, once again, leaks from your department on China’s dealing with Pakistan and Iran on nuclear weapons, and he’s hopping up and down. I just thought I’d let you know that before we start.

Let me set the stage for this meeting. President Jiang Zemin arrives October 26th in Hawaii, as you know; goes on to Williamsburg, is here in Washington roughly October 28th to 30th—hope it’s not too roughly, actually—and then on to Philadelphia, Boston, and Los Angeles. Now we’ve been working since the announcement last November on a steady series of Cabinet meetings, sub-Cabinet meetings, exchanges with the Chinese, negotiations and so on, to craft the best results that we could and prepare our audiences for this summit. And as a result, I think the basic plans are in place. The general shape of the summit is clear, but some key issues remain. So on behalf of the president, I’ve asked this select group to get together today to review the status of the key issues, to debate the remaining issues, shape up a final game plan, both for our private preparations and for our public posture. And based on this meeting, I will send a memo to the president, who will probably be in Brazil or Argentina at that point, and we’ll have a broader meeting when he gets back. For several years now—let me set the strategic context-we have been practicing a policy of engagement. We’ve intensified it, of course, in recent months. The basic concept is that China’s going to be a major power in the next century, no matter what we do, so the question is: Is it going to be relatively benign or relatively aggressive? And our ties with China will be crucial in this regard, and they’re also crucial for our strategic interests. We vote our containment as being a self-fulfilling prophecy, as diverting our resources, as forfeiting cooperation with the Chinese on various issues, and we’d be all alone; there’d be no other countries with us in such a policy. But we’ve also tried to make clear that engagement does not mean rolling over for the Chinese. We’re hedging. We’re going to remain the number-one military power in the world, maintaining our force presence in Asia-Pacific; continue to sharpen our security ties with Japan and our other allies in the region; demonstrate will where necessary—for example, sending our carriers into the Taiwan Straits a couple years ago; invoking sanctions, whether it’s in trade or in nonproliferation, wherever necessary; pressing them hard on human rights; negotiating hard on the other key issues. But at the same time, we’re seeking cooperation or parallel actions with the Chinese wherever we can, on a whole range of global, regional, bilateral issues that don’t always get much attention.

So, in short, I think it’s fair to say—and we’ve been working on this now for a couple years—but I just wanted to set the context for this meeting that, over the long run, we’re seeking to work with others to integrate China into the international community so it can reap both its benefits but also undergo its disciplines and respect its norms, try to encourage responsible behavior by Beijing, giving it a stake in the international system and taming any adventurous impulses through interdependence.

And it seems to me, in this context, the Chinese goal for the summit, frankly—and some are disappointed, at least to me, it seems; I welcome your views, Tom, when you make your presentation—to be an end in itself, that just meeting with the president symbolizes equal partnership with the U.S., that we’ve put the Tiananmen Square massacre behind us. It gives a personal boost to Jiang Zemin after the Party Congress. And so he and they probably would be content with the twenty-one-gun salute, the state dinner, the cross-country tour.

There’s three types of summit: historic, procedural, and ceremonial/cosmetic. And the Chinese, I think, would be content with the ceremony. We are not, and we’ve made that clear in recent months.

We’re pushing for as much substance as possible. Our domestic audience-correctly, in my view—would not settle for strictly a ceremonial summit. The president once suggested many months ago this could be historic, but, frankly, the Chinese attitude and our domestic scene makes that impossible. So we’ve been emphasizing-and I think when we get to our game plan, George, we ought to talk about this-the fact that this is part of a process of engagement, an ongoing process, as we had till the 21st century.

So that’s the scene, at least as I see it. Now I would recommend we go as follows—you’ve got your agenda here—and we start out, as we typically do, with some scene-setting, first by the CIA on the Chinese scene, and then, George, you could give us your perspectives on the American scene. Then I’ll call on each of you to run over the status of the key issues and raise any major ones we ought to try to focus on, on the president’s behalf, and then we should end up focusing on our public and congressional and media game plan, how we want to shape expectations for this important meeting.

Any questions before we begin here?

Prof. JOHN DEUTCH (in the role of director of Central Intelligence): Win, I have a real problem. You know, I came here with the understanding this was going to be a principles-only meeting, and I want to tell you, I’m constrained in what I’m going to be able to say in this kind of a group. George and I are due at a coffee in the White House in 15 minutes.

Amb. LORD: John, as usual, you got that half right, because when you read the invitation to this meeting, it said principles, but you thought it said A-L-S; it said L-E-S, and therefore, you probably shouldn’t be here.

Look, we’ve got a lot of business to cover here. Let’s get on with it. What’s going on in China?

Prof. DEUTCH: I want to be very brief and set what we see as the situation with respect to the way the Chinese are approaching this summit. First of all, let me begin at the top and say the Chinese leadership, in our judgment, has made a self-conscious choice to follow a path of economic liberalization and experimentation while maintaining absolute political control in their country. They view this as something that they have to do in order to maintain growth in the progress which has happened in China. They don’t like the Russian model, which consisted of trying both economic and political liberalization at the same time, and they feel very strongly that they have made tremendous progress in the strategy of economic liberalization while maintaining political control. They do not believe that the United States appreciates the progress that they have made, and this is a view which is held not only by the older leadership, but by the newer technocratic leadership, which are even more impressed with the very significant progress that they have made.

So, indeed, they do not understand what the policy is of the United States, and they come at it with a notion that the policy relationship, the strategic relation that you call engagement, to them, doesn’t have any real force.

Their military status is very clear. They’re potentially a great military power. They have nuclear weapons, but their military force is not very modern. It has very little power projection capability, little capability for combined arms with land, air and naval units; essentially, no logistical support capability. So if there is any trouble with Taiwan or with the islands near Taiwan, they would, indeed, have a very tough time, even if the United States were not involved.

What about the issues? The issues you summarized and the same we hear the Chinese talking about: trade, human rights, Taiwan; they’re very concerned about the U.S.-Japan relationship, proliferation and environmental issues, especially energy. But when the Chinese go through this list of substantive issues, for them the policy whole is less than the sum of its parts. They really do not understand how to put these different things together. They will not be expecting much, as you have suggested, when we have the same appreciation from this visit. Jiang does not need this kind of support at home; it will help him on the world scene for people to remember that China is China and not India, but he does not expect much to be accomplished in this visit. Hopefully, he’ll get a little help on energy; hopefully, there’ll be a few other things, but generally speaking, he’s here for the event only. Indeed, it should remind us, and especially Tom, that not much is going to happen substantively in U.S.-China relations for the next decade or so.

Let me stop there, Win, and I’ll hold on.

Amb. LORD: Thank you, John. I’m going to get the American scene, and then we can throw it open for a few minutes of discussion. And, Tom, when we get to you, I’d welcome your views as to whether, now that Jiang has solidified his position at the Party Congress, there’s been any signs in negotiations you guys have been having—little more flexibility in some of their positions now he’s got the Party Congress and Hong Kong behind him.

But, George, what’s going on in this country?

Mr. GEORGE STEPHANOPOULOS (in the role of White House political adviser): Well, I was feeling a little better before John spoke. I mean, I thought we were going to get something out of this meeting. Winston keeps saying it’s going to be more than a ceremonial meeting, and you’re sitting here telling us that Jiang Zemin is going to come here with nothing. We’re already shaping up for a loser of a summit. I wish it weren’t happening. And we expect it to be more than ceremonial, but there’s no way it can be a political winner for the president. I understand that we have to build a long-term relationship, but to the extent that anyone knows about our China policy right now, they either disagree with it or don’t care. And we’re facing a constellation of, you know, just bad timing.

But we have, in Congress right now, as you know, the president’s facing opposition on both the left and the right. Dick Gephardt is leading the fight on trade in China; Gary Bauer and others are pushing on religious persecution and human rights. We’re probably going to have a vote, if we’re not lucky and we don’t work hard on the speaker, on the religious-persecution bill the week before Jiang gets here, and those who are not engaged on human rights are upset about the nuclear nonproliferation policy.

On top of that, the press just can’t wait for this. You know, they get a chance to put pictures of the president’s campaign statements on the air again, coupled with pictures of Tiananmen Square and Charlie Trie and Johnny Chung to boot, so the TV is going to be horrible. Abe Rosenthal and Tony Lewis...

Amb. LORD: Too bad the president isn’t listening.

Mr. STEPHANOPOULOS: Abe Rosenthal and Tony Lewis are leading the fight in the pundit brigade to convince everyone that the president’s policy is without principles or principals, and even Hollywood’s getting into the act. “Seven Days in Tibet” was number two this week; Brad Pitt’s going all across the country, along with Tibet demonstrators, and Richard Gere’s movie “Red Corner” will probably be coming out before the end of the month, and that will have an effect on the climate that Jiang Zemin enters.

On top of all that, the press also still is pretty focused on Vice President Gore’s trip from a few months ago, where it was not handled particularly well, and we have to make sure we avoid those mistakes.

That all said, the expectations are low for this trip, and we should keep them there, but there is going to be an awful lot of pressure to deliver something, because I see, in the absence of that, John, that this is going to be an absolute failure if we can’t get them to come around on something on human rights and nonproliferation. We do have to do our best to change the question. This can’t be about China’s character. It has to be about whether or not engaging China’s and America’s interests, and we have to make sure we don’t put the president in a position I fear we’re going to put him in. We have to be clear that, unlike Vice President Gore, we are unapologetic about our policy. He has to be strong. He has to be straightforward. At the same time, I hope we’re not going to become the apologists for Jiang Zemin on this trip, and I think that, while we can’t preach to him, we have to make sure that we don’t become his PR agent as he goes from city to city.

And with that, let me stop.

Amb. LORD: George, I appreciate your candor, as always, but, you know, we’ve got two weeks before the summit. Our job for the president is to make this as successful as possible, and again, we should not kid ourselves about our problems. I think at least my view is that we’ve got a little bit more substance than you suggest, and we may hear that as we hear from our various agencies. I think there are some things we can show are substantive, but above all, we’ve got to be more articulate in our public presentations, and we’ll get to that at the end of the meeting about how we shape this.

Mr. STEPHANOPOULOS: One point. I mean, I’m sure that the substance is good, and I’m not disputing that, but unless a major dissident is released or we have a major agreement on nonproliferation, there is not anything coming out of this summit.

Amb. LORD: Again, we’ve got to get this up to a different level of historic engagement and the interest of the U.S. in a hardheaded way, but we’ll get back to that. And I do want to throw this open for any quick comments, either on what John has said or what George has said, about the Chinese and domestic scenes. Anyone want to take issue or elaborate?

If not, let’s move on and start addressing some of the issues, and let us hope that we have more substance than you suggested, George. Tom.

Mr. THOMAS E. DONILON (in the role of secretary of State): Let me go through a few things. I thought Stephanopoulos oversaw the president’s schedule and rescheduled these things, you know, in the planning and the...

Amb. LORD: I don’t recall quite the vehement ...(unintelligible) opposed to the summit a few months ago, you know.

Mr. DONILON: I’ll have to check the record of that meeting.

Let me talk about three areas quickly, Winston, in the interest of time. First of all, I was very impressed that at a principals meeting here that the CIA Director did stay fairly close to intelligence. Seemed to veer away from policy. It was pretty impressive discipline—very unrealistic.

Amb. LORD: I don’t know what you mean by intelligence, but...

Mr. DONILON: Let me talk about three areas very quickly: statecraft, public presentation, and some of the substantive issues. First of all, statecraft. Winston, you asked if we had seen any increased flexibility in the Chinese negotiating style or substance as a result of Jiang Zemin’s consolidating his position in China. There hasn’t been much change in the style of the Chinese negotiations leading up to this summit, and I don’t expect there will be. We know from experience that this group of leaders in China engages in a very formal style of negotiation with the United States and, indeed, with the world. There is no telephone diplomacy. It is impossible, even in this day and age, to do anything on the telephone with the Chinese. In fact, they refuse to do diplomacy over the telephone. It all has to be done formally, either on paper or in face-to-face meetings.

So secondly, it is unrealistic—and I’ll get to a point about this meeting—to expect spontaneous decisions from the Chinese leadership, at least this Chinese leadership, at any summit. That, of course, is in sharp contrast to some of the other summits that we’ve planned, where we often rely on the president’s personal skill and persuasion to get an open issue done. That’s not going to happen at this summit. It doesn’t happen in negotiations with the Chinese, at least in our experience over the last five years. Winston, you’ve had a lot more experience, obviously. And I don’t expect it to happen here.

Anything that we expect to get done, we need to decide at this meeting and try to get it done with the Chinese, because there will be no last-minute surprises at a summit with the Chinese—again in sharp contrast, for example, to some of the things that we’ve seen happen with Boris Yeltsin and Bill Clinton, where, in fact, there were very big open issues, and the two leaders were able, in a personal way, to make the decisions and go out and make a surprise announcement.

I think that calls for, Winston, and I would recommend, one, really trying to drive home what we’re trying to get done now and pursuing; secondly, to set that forth in a private letter from Clinton to Jiang Zemin—what our expectations are of this summit, what we would regard as a success, and I think we need to take George’s points into account with respect to that, and lay those out clearly to them. Lots of times in our negotiations with the Chinese, we find that they and we have entirely different ideas of what’s a success, of where the bar is. You know, this is especially the case in areas like human rights and political issues, where their perception of what passes muster in the international community, and certainly what might pass muster in the United States’ domestic scene, is completely off base and uninformed and not at all even in the ballpark. So I would recommend a private...

Amb. LORD: But you don’t tell them we’ve had extensive correspondence between the two presidents, including on the summit. You think another one is still...

Mr. DONILON: Yeah. I would lay it out, saying, you know, “We’re two weeks out and this is what I expect us to get done.” It’s the only way, I think, to set expectations with them, and as we know from experience, unfortunately, it’s the only way to communicate with them at that level. That’s a statecraft point.

Second, public presentation. There is in the country today the most vigorous debate over our approach to China that there has been since the opening of China in the 1970s, and we have to manage our way through that. As George said, attacks on our policy come from both the left and the right, and they come pretty consistently.

I think, and I would recommend, that the president give a major speech in advance of the summit, laying out our approach. We are, in fact, safer and more prosperous as a result of the policy of engagement with the Chinese. It is not just, as some have said, an attitude or a slogan; it informs a whole set of policy decisions and tactics that we undertake that serve our interests in the region. It’s intended to keep the peace in the region; it’s intended to press China to open up and to be a stable and open and non-aggressive country, and it serves the interest of China, it serves the interest of the region, it serves our interest, most of all.

And I think that case has to be made and made by the president. As we’ve discussed, Winston, the president to date, I don’t think, has given a complete, soup-to-nuts presentation on China.

Amb. LORD: I agree with that, but I don’t want to spend too much time now on the packaging. I want to get to the issues.

Mr. DONILON: OK. Third, the issues, right? I think, and this may be controversial here, I think we should—you’ve asked me my recommendation on this—announce here a specific date for Clinton to go to China, as a way to keep focus and momentum in this relationship. President Clinton has an enormously busy travel schedule abroad in 1998—several trips to Europe, Africa, Pakistan, India, Asia—and I think we need to put this on the agenda and to stay on this. This may be the most important relationship we’re trying to manage in the world, and I think nothing focuses—obviously, the government—nothing will allow us to continue to put step-by-step pressure on them and keep things moving as a presidential visit.

Fourth, nonproliferation; I know that Jamie’s going to address this in some detail in her presentation, and I’ll be interested in hearing what the facts are. As a policy matter, though, I think that it’s very important that we look at the facts as to whether the Chinese have met the requirements set forth in the congressional conditions to the U.S.-China nuclear agreement, the nuclear cooperation agreement, in 1985, and if they have, that we not move the goalpost, as some have recommended. If they haven’t, we call that what it is and we say that more progress has to be made.

Obviously, you know that under that agreement, the Congress’ condition that the Chinese can in no way be helping nonnuclear states become nuclear states—we’ve worked very hard on this...

Prof. DEUTCH: Tom, I hate to break in. I mean, I happen to like the policy place you want to go to, but making that argument is going to be very hard, indeed.

Amb. LORD: I want to reserve this issue for the secretary’s—Jamie’s presentation later. It’s important and I’m glad you put it on the table.

Mr. DONILON: Yeah. My general point is that, obviously, the facts will have to be decided, and John and Jamie will give us the facts on this. But it also needs to be put in context. Moving the goalpost here is a very bad idea. The Chinese are not where we would like to see them, obviously, on issues of proliferation across the board, but there has been steady progress over the last six or eight years with respect to the Chinese, and it’s because we engage them, bring them into regimes, set standards, and then call them on it, right? And right now, with respect to a lot of issues, we are in the implementation phase and calling them on it, and that is a very useful tool for us on an important thing.

In 1992—this is the country who said that the prohibition on, you know—15 years ago, 20 years ago—said prohibitions on the export of nuclear weapons is none of our business. 1992 they come on to the NPT; in 1993 the Chemical Weapons Convention; in 1994 in October Secretary Christopher signed an agreement with the Chinese where they agreed to abide by the MTC, our missile controls; in 19...

Amb. LORD: Again, I do want to reserve this for later.

Mr. DONILON: OK. Well, but there’s a whole range here of issues—broader point here—which is we have to make...

Amb. LORD: You’re making a broader point across the board here. Yeah.

Mr. DONILON: Last issue I’ll discuss before we move on to the next person at the meeting is human rights. It is the issue we have had the most difficulty making progress with the Chinese on during the course of our tenure in office. It is very important that this be a core point for President Clinton at the meeting. Jiang Zemin will be making, obviously, the first visit of a Chinese leader to the United States in a long time, and it’s important that it be raised and raised forcefully so that the Chinese understand how important it is here.

Second, we are pressing George for concrete deliverables with respect to human rights, as we have to use all our meetings to do, and I hope that they have the good sense to make visible progress on human rights, including, perhaps, the release of people, dissidents, between now and this summer.

Mr. STEPHANOPOULOS: Can I have one point there? Are we prepared to recommend, if they don’t, that the president not only say something privately but say something publicly in the press conference immediately following?

Mr. DONILON: I think that the president, if we get resold a lot of the same things that the Chinese have been selling us for a long time, I think the president has to say, “We have more in common strategically with the Chinese than we have in conflict.” That’s true. We have an interest in seeing an engaged policy in a China that is stable and prosperous. Amb. LORD: But he’s making the point there should—right.

Mr. DONILON: Well, but I’m saying what the president should say. But we also have disagreements, and I am—you know, I think that we’ve laid a good basis here for moving forward. I’m announcing that I’m going to China on X date, 1998, but we have not made enough progress on human rights.

Amb. LORD: Let me pick up two issues here that you raised. One, on human rights: As you know, we have been pressing hard. We’re going to get some progress, but it’s not what we would like, and it’s certainly not what people like Rosenthal or Bernstein or Bette Bao Lord or some of those people are going to be satisfied with. We still have in play the possible release of dissidents. This is a rather cynical game; they release one or two and then put them back in jail for the next summit. But hopefully, we can get some people released, and when we inquire about them it does help their conditions somewhat. Accounting for prisoners is not going too far. They are talking more to the Red Cross on prison visits. They’re going to probably sign one of the U.N. covenants, and they’re engaging in legal reform and legal exchange which, over the long run, I think, can help on the human rights front.

Tibet is a major issue, as you pointed out, George, and they still dug in very stubbornly on that. So there’s no question the president’s going to have to raise this, raise it forcefully and make clear at his press conference that he’s raised it. The only issue I would suggest is maybe this would be one we could highlight if we do send another letter to Jiang Zemin. I would assume that would be one element we’d highlight. Our basic position has been that this is not the only issue in our relationship, but the full potential of U.S.-Chinese relations cannot be realized unless there is progress on this issue.

Prof. DEUTCH: Win, let me just add one caution here. I think that the Chinese do not understand our position on human rights. I mean, the diplomats that you speak to may, and that Tom speaks to, but if you’re talking about the PLA, the understanding among the political leadership of China is not there, and I think you also ought to be careful not to set expectations of progress too high. You may be terribly embarrassed about an awkwardness in Hong Kong over the next year or two, so you have to be very careful on this human rights issue, keep pressing for progress, but don’t let your enthusiasm for this subject lead to an assumption that the Chinese have accepted it, understood it, or are acting on it. They may make symbolic gestures from time to time, but it’s a case that has not been sold in China yet.

Dr. ELLEN FROST (in the role of secretary of “Economics”): A lot depends on how you put it. If you just make it a U.S.-Chinese issue, that’s what gets their backs up. If you start with the assumption that we’re bringing China into the world of democratic, market-oriented institutions over time, we can work on this problem together. It’s a little less confrontational.

Amb. LORD: Well, it would be useful if their allies would help us out, but as you know, they go after the contracts and not human rights.

Dr. FROST: Right.

Amb. LORD: Let me take up another issue—yeah, sure.

Mr. DONILON: Can I just say, on John’s point there—John, I think that they understand our point; they just don’t accept it at this point, and I think that over—this is—and it’s a very important admonition for the summit that the progress on human rights and my old boss, Warren Christopher, who, obviously, had a lot to do with this coming to the core of American foreign policy in the Carter administration, had always pressed the point that this is a long-term effort, that it will result from constant engagement, it will result from things that you do that you might not know are going to have an effect on it years down the line. And I have confidence, because I have confidence in our system, that over time, as societies open up, that progress can be made on these issues. But John’s admonition is exactly right.

Mr. STEPHANOPOULOS: Tom, that’s an expression of faith that is just not being borne out by events. I mean, read your own report and everybody else’s.

Mr. DONILON: Yeah. That’s not true, over time. China’s a very different place today than it was 20 years ago, and my confidence is born of a belief that, 20 years from now, it’ll be an even much more—it’ll be a very different place. But that’s a...

Amb. LORD: In any event, this is an important issue, but I tell you, I think there is general consensus that we don’t hold the entire relationship hostage to human rights.

Mr. DONILON: Right.

Amb. LORD: On the other hand, it’s a core issue for us that the president should continue to press, including at this summit, and we should continue to make clear to the Chinese that it’s in their own self-interest to open up their society to develop economically, and that the full relationship with the U.S. cannot flower without some better improvement. We’ve got a tremendous domestic problem, but...

Mr. STEPHANOPOULOS: Again, I want to add one small amendment to what Tom said. If they do not deliver something on human rights, I think we have to go one word beyond “disagreement.” I think it has to be “disappointment” in the press conference, and I think we have to work on the talking points, but I think he will have to say that he’s disappointed.

Amb. LORD: Well, I think we’ll find that there’s something to be said for that. Let me pick up another issue you raised before we go over to the economic issues. You suggested that we set a date for the president’s return visit. Now as I understand some of the key factors here—of course, the president’s calendar. When is he due, George, do you know, to go to India and Paki...

Mr. STEPHANOPOULOS: It’s in January, I think, and in the early spring.

Amb. LORD: Yeah, I think it’s a little bit later than that, but we have that; there’s the fact that there’ll be a new premier and perhaps some greater flexibility as of March in China. And, of course, although Jiang is his host, so will the prime minister be his host as well, and it looks like Zhu Rong Ji will take Li Peng’s place. Is that your assessment? Prof. DEUTCH: Yes.

Amb. LORD: Is that the agency’s view on that?

Prof. DEUTCH: Yes. Yes. And your view, too.

Amb. LORD: Yeah. Well, I’m just trying to be an honest broker here.

Prof. DEUTCH: That’s unusual.

Mr. DONILON: New style of security adviser.

Amb. LORD: We also need a few months to try to make further substantive progress, because when the president goes to the Bengal kingdom he’s got to have results.

Prof. DEUTCH: I’m going there in July. I don’t want him to screw it up when I’m there in July. I’m going to go there in July.

Mr. STEPHANOPOULOS: Well, on top of that, he can’t—I think a window is somewhere between March and April and August. He shouldn’t go after August with the congressional elections and everything.

Amb. LORD: Congressional—yeah. Jamie.

Ms. JAMIE GORELICK (in the role of secretary of Defense): I just have a—we can get to this when we get to the certification issue, but I have enough reservations about whether we can certify that they’re not a proliferator that I would, at the very least, hold out a commitment on a summit until we see greater progress. I mean, I think we need to use that as...

Amb. LORD: Well, we’re committed to a summit; I mean, the issue is the date.

Ms. GORELICK: I know. Hold out the timing, because I think that you have to leave a period of time to see whether they will actually come across on some of the commitments that they’ve only just recently made, and some of them we need to get them to make before this summit, before this meeting.

Amb. LORD: Anyone have a counterview on that?

Mr. STEPHANOPOULOS: Well, I’m very torn, because, obviously, as you all know, the president really wants to go to China, and he’s going, but—and he said he’s going. But I’m afraid that if we announce the dates that we’re giving away the game and we’re going to have to cancel if something happens.

Ms. GORELICK: That’s right. I think it gives away our leverage.

Amb. LORD: Well, I mean, let me make the counterarguments. The president’s going to India, Pakistan, in any event, in March. You’ve got congressional elections the second half of the year; I don’t think it’s a great time for him to be traveling to China. So realistically, it looks like the first half of the year.

Prof. DEUTCH: Right.

Amb. LORD: Now we have several options. We don’t have to be all that precise. We can say “early next year” or “next spring.” We don’t have to fix specific dates. But do you still feel that gives...

Mr. STEPHANOPOULOS: But if we say he’s going to go, why does it matter what date when we—when, now?

Ms. GORELICK: It depends on—it seems to me one of the things that you could get out of it is a greater period of time in which to make an assessment about whether they are doing what they said they were going to do. For example—and again, we’re jumping ahead, but just for example, they have only just issued regulations on the control of nuclear exports. It’s only a month ago. We have no idea if this regime is anything more than a piece of paper.

Amb. LORD: Well...

Ms. GORELICK: And I don’t think that, you know, I don’t think that a couple of months will tell, frankly.

Amb. LORD: OK. Well, I...

Prof. DEUTCH: Excuse me. Can I ask a question?

Amb. LORD: Yes.

Prof. DEUTCH: Why is—the certification issue is a secretary of State issue, isn’t it? It’s not a secretary of Defense issue.

Ms. GORELICK: Well, hey.

Prof. DEUTCH: And, look, I’d like to...

Mr. DONILON: It migrated to the combination of secretary of Defense/Joint Chiefs Chair.

Prof. DEUTCH: You’re losing again, Tom.

Amb. LORD: Look, we’ve got a big agenda here. Let’s try to move ahead. I think clearly there’s no consensus at this point about whether we announce the president’s return, so in a memo to the president, we’ll set out the arguments both for and against, and we’ll have to take that up in the NSC meeting next week.

Mr. DONILON: Can I make one point on that?

Amb. LORD: Yeah.

Mr. DONILON: We don’t—one, the president is committed to go to China in 1998. He’s said so repeatedly. So he is going. Secondly, we make progress on these hard issues when we have action-forcing mechanisms, when things have to get done by certain times. And if he’s going, and if that’s the case that these are action-forcing mechanisms, I think the more specific the better, and I think we will—it also, I think, gives the summit a little lift.

Amb. LORD: Also, it underlines the fact that this is a process that’s ongoing.

Mr. DONILON: Right.

Amb. LORD: We want to make these summits routine, not spectacular so we need breakthroughs every time.

Mr. STEPHANOPOULOS: Regular ones.

Amb. LORD: We had summits with the Russians throughout the Cold War, when we had worse relations than we have with the Chinese now. So if you want to make this clear to the public, it seems to me there’s an argument to be made for committing yourself. Plus, we’ve found with the Chinese that holding the so-called carrot of a summit as if it’s only in their interest and not in ours doesn’t produce a hell of a lot of concessions; whereas, if you set an actual meeting and work hard toward it, you do make some progress.

But I recognize your points. The president will hear them, of course, and we’ll have to debate that again next week. One issue I’d like any of you to pick up as you go along—probably not in the economic area, but certain other areas—is the Taiwan issue, which you didn’t cover, Tom.

Ms. GORELICK: I’m going to talk about that.

Amb. LORD: But I think we ought to move to the economic area now and, Ellen, if you would address that.

Dr. FROST: Well, as far as the press and Congress is concerned, there are two issues on the table. One is the Chinese trade surplus with us, and the other is China’s entry into the WTO. And as I’m going to explain, one of them is a phony issue; that is, China’s trade deficit is a phony issue, and the other one, WTO entry, is real, but it’s been taken out of context.

Unfortunately, opponents of the president have made a negative linkage between these two, to the point where they’re citing the deficit with China as an argument against fast track, and they want to vote on China’s WTO entry and all of this. What I think our strategy for the summit ought to be is to try to turn that linkage around and into a positive linkage, and I think the only way we can do that is to think of the summit as phase one and ‘98 as phase two, downplaying some of the more contentious issues but dropping hints of a more ambitious package that I’ll outline in a minute, because I think the overarching goal here is the integration of China into the economic system, and this isn’t an issue for specialists. This is an issue that involves the rule of law; it involves openness, transparency; it’s very consistent with what we’re trying to do with China across the board, and that’s where I’m going to be headed.

But first, let me explain to you why I think the first issue is a phony issue, and I really hope you all explain this to audiences as you go around the country.

Mr. DONILON: You’ve got to explain to the president first.

Dr. FROST: Well, that’s what we’re going to do.

Amb. LORD: And the U.S. Congress and most of our pundits.

Dr. FROST: Well, you know, whenever I hear people say, “Oh, Congress will never buy it,” I ask, “Well, have you tried to explain it?” I think you can get some simple facts through here. First of all, when you drop out Hong Kong and Taiwan, the size of the deficit drops by at least a third. All right, still a big deficit, but secondly, we have looked in detail—my guys at the Treasury Department...

Amb. LORD: You mean the goods going through Hong Kong and Taiwan, counted against China.

Dr. FROST: Yeah. There is a Chinese economic zone out there, with a lot of capital washing around, you know? And they go where the opportunities are, basically. But more specifically, when we looked at the Treasury Department and USTR and Commerce, at what this surge of imports from China in the ‘90s was, we learned some interesting things. We learned, first of all, that there has, of course, been a big surge above and beyond what you’d expect for a market share, but 90 percent of the surge comes from other Asian countries. It’s not causing job displacement in this country; it’s causing job displacement, arguably, in other parts of Asia.

Moreover, when you look at what this stuff is—OK, are you ready for this?—Dolls, wigs, umbrellas, plastic footwear.

Prof. DEUTCH: Rifles.

Dr. FROST: I mean, is this the kind of, you know, United States that the president was talking about when he talked about high-wage jobs? This is not the area where we want to get worked up about, because this is part of a natural...

Mr. STEPHANOPOULOS: North Carolina, South Carolina...

Dr. FROST: Now hang on. Hang on. I’ll get to that. I’ll get to that. I knew George would come in and get me. I’ll give you some deliverables. You know, we got to have deliverables. But the third reason why this is a phony issue is China is not a chronic surplus country. Japan is a chronic surplus country. Japan has run up surpluses consistently, global surpluses, that you can argue really do distort the trade system. China does not—China has more or less equal reserves and debt, and has run deficits in some years, surpluses in others. This is a very different animal, and the worst thing we could do would be to fall into the trap that this is sort of another Japan issue, and they’re all alike. I mean, it really is important to understand that.

OK. So, having said that, obviously there are lots and lots of barriers in the Chinese market, OK? So since the leadership is committed to marketization, as they call it, what’s the problem here? Why don’t they act more rapidly? Well, that leads to the WTO issue, which I said is taken out of context. What’s the context? Massive, massive unemployment looming in China.

Let me give you just a rough number here. We’re talking already, probably, 60 million, 70 million people walking around the countryside, looking for work, moving, trying to take advantage of these changes, but unemployed, essentially. And if you take, on top of that number, the state-owned enterprises and you privatize them—which everybody knows has to be done; Jiang Zemin himself says it—then you might be adding another, say, 30 million to 60 million more. And you’re talking about numbers of unemployed people in China equal to the entire labor force of the United States. I mean, this is a big problem. This is what’s driving them in their foot-dragging.

So what we really want to do, whatever it is, is try to design our initiatives such that they help the local leaders. There’s a lot of decentralization of power these days. We want to help the local leaders most committed to reform. We want to make sure that what we do doesn’t arouse such a backlash that people opposed to the entire process can cite, you know, the U.S. bully to oppose it. We really have to play this thing right, because it potentially is a win-win situation; no pun intended, Winston. It’s a Lord-Lord situation here.

All right. So, having said that now, I know George is about to get me on this.

Amb. LORD: You’ve only got a couple more minutes, too. We’ve got to move on.

Dr. FROST: Well, OK. So we downplay for the summit, we downplay the deficit, and we downplay the WTO, I mean, for the reasons I cited. But I’d like to at least put in a hint of what I call phase two. There’s got to be, in this coming summit, some deliverables. What is it? Agriculture and textiles. Those are always the big ones. Happily, the pork lobby wants to increase pork exports to China. That’s a terrific idea. We’re all for that, right? And the Textile Manufacturers Institute also wants to increase exports to China and get them to lower their barriers on textile. Terrific idea. We’re all for it.

Amb. LORD: What should our position be, though, on the—we have a specific problem for the president of what we say about—anything about the WTO. They clearly haven’t made enough progress in their position, as you suggested.

Dr. FROST: Talks are continuing.

Amb. LORD: Do we have a down-payment type statement or an interim announcement? I mean, how do we handle this interview?

Dr. FROST: Well, my phase two for ‘98 is going to be: Let China be treated as a developing country, accept them in principle into the WTO with maximum phase-ins, and that’s a concession from where we are now. I wouldn’t hint at that now. I would try to keep the U.S. role in this WTO negotiation somewhat downplayed, because it stirs up a backlash among the Chinese leadership. Be businesslike about it. We all know...

Amb. LORD: Isn’t this our last major leverage to open up that market? And there are some unfair practices.

Dr. FROST: No.

Amb. LORD: And we’ve gotten over this ideological debate of developing versus developed.

Dr. FROST: The market is opening up piecemeal anyway. As fast as they can do it and learn about it, they’re moving, OK? It’s not up to us to tell them exactly what to do. Jiang Zemin has told them what to do, but he hasn’t told them how to do it. Why? Because they don’t have any idea.

Amb. LORD: So at the summit you would suggest saying we still favor their entry.

Dr. FROST: Of course.

Amb. LORD: Negotiations are proceeding, but there’s a good way to go yet—I mean, that kind of approach, generally?

Dr. FROST: Yeah. Yeah. Yeah, downplay it. But what I’m leading up to, though, is to try to turn this into a positive for ‘98, because I kind of agree with George about the near term.

Mr. STEPHANOPOULOS: Do you have anything to announce on pork?

Dr. FROST: We will.

Amb. LORD: Let’s keep on the big issues here. Keep going.

Dr. FROST: I mean, we’ll—this is a...

Mr. STEPHANOPOULOS: I think the vice president in Iowa thinks that pork’s a big issue. He’ll probably want to do some things.

Dr. FROST: Oh, listen, we all—I mean, it’s such wonderful, you know, symbolism, right? Pork to China, coals to Newcastle; I mean, isn’t this great? OK. No, I’d like to—what we really are aiming for, keep remembering, is engagement and integration of China into the economic system. So what I propose we hold out to them on our side are concessions: dropping as many as possible of the Tiananmen sanctions, and this ought to be accompanied by a big presidential effort, which has nothing to do with China, on sanctions generally. We can talk about that. But they’ve been proliferating like mad.

Amb. LORD: Even if they’re not making progress on human rights?

Dr. FROST: Whatever the law permits us; we ought to go as far as we can on that.

Prof. DEUTCH: Will that be popular with Congress, George?

Dr. FROST: Now wait a minute. See, you’re always shooting down without even trying, see?

Amb. LORD: We’ve got to draw this to a conclusion. Now keep...

Dr. FROST: We’ve got to get China into the WTO. I would like to think about something else which hasn’t been mentioned yet in the press as part of the ‘98 package, and that is a kind of association of China with the G-7 finance group. In the early stages, it would just be listen and learn, but it’s another forum in which we say, you know, “Come on in. We’d like you to take part in the governance of the world economic system.”

They’ve already played a fairly constructive role in APEC, a fairly constructive role, and that’s what this kind of symbolism, you know, would be all about. At home, we have to keep pushing the theme that engagement is good for us. I’d like to have, you know, the president meet publicly with some of the small companies around the U.S. that have benefited from trade, because not only have imports expanded disproportionately, but exports have expanded disproportionately also. So there are a lot of good-news stories out there that I think would take care of that.

Amb. LORD: What are the prospects, speaking of good news, of some major purchases of Boeing and so on around the time of the summit? And, George, is it better to keep that away from the summit and looking like it’s too commercial, or should we have it take place about the same time? Because some of those contracts, I think, are about ready to be signed.

Dr. FROST: Oh, I think they’re all ready. I’d like to see a Westinghouse contract, but that’s Jamie’s turf. But I think there has to be something big and visible.

Mr. STEPHANOPOULOS: Yeah. As much as I want deliverables, unless you want a story about how much Westinghouse has contributed to everybody for the last six months, I would not put it with the summit.

Prof. DEUTCH: Not much, is my guess.

Amb. LORD: No, no, but seriously, why should we be apologetic about helping American jobs and exports?

Dr. FROST: Well, we shouldn’t be apologetic in areas where the U.S. is extremely competitive, and that’s one. I think all I’m saying is we have to have the deliverables. The piglets at the trough have to be fed, right? But as a great power, we can’t limit ourselves to that, and I’m just proposing a framework to push for some of these changes that is not simply crass export.

Amb. LORD: Sorry, George; we’ve got to move on.

Mr. STEPHANOPOULOS: If we have some progress in human rights, maybe, but if it looks like, instead, that we’re taking jobs and economics over our concerns about human rights, I think that would be a mistake.

Dr. FROST: George, let me ask you about public opinion, though. I mean, what is on the mind of the public? Isn’t it jobs and sort of economic insecurity? They’re scared of competition in China, right?

Mr. STEPHANOPOULOS: Well, and to the extent that we’re talking about trade with China, they get more scared.

Dr. FROST: They get more scared. Right. But that’s why you’ve got to explain what I just told you.

Amb. LORD: Would anyone like to comment on what has been raised by Ellen, either sort of the 1998 broader package or—and so on?

Mr. STEPHANOPOULOS: Well, I’d like a clarification. When you say drop the Tiananmen sanctions, do you actually mean by administrative action undoing the sanctions, even though the targets haven’t been met in law?

Dr. FROST: Yeah.

Mr. STEPHANOPOULOS: Well, I mean, the majority we had on MFN will be gone. This will be the one issue that will unite Newt Gingrich and Dick Gephardt in the Congress. They will overturn us.

Dr. FROST: Well, it’s how you—look...

Amb. LORD: Some of these are shooting ourselves in the foot, of course.

Dr. FROST: No, no, no. Look, it’s how you do it, right? I’m not saying he drops this bomb on them unprepared; you start working toward a process in which sanctions are—sanctions are part of the use of economic leverage, right? I’m talking about shifting the economic leverage from the negative, where it doesn’t work, to the positive, where it does. From an incoherent approach, or grapeshot approach, to something that’s more than the sum of its parts—that’s the transformation. And Newt Gingrich, of all people, who’s a historian, understands that kind of thing.

Mr. STEPHANOPOULOS: I’m not quarreling with your conception of the issue; I’m just saying that they will then put together a package to reimpose the sanctions, and they will win, and we will face with a veto, and you’ll have to face in China whether that’s worse to have an expression...

Dr. FROST: That’s why I said it has to be part of a bigger set of concessions.

Amb. LORD: This is an important discussion, but we’re going to have to move on. What I suggest—there’s, obviously, not a consensus here. I take it you agree we can’t...

Dr. FROST: Except on pork and textiles.

Amb. LORD: ...we can’t come up with a major package between now and the summit, but what we can do is try to use the ongoing process, including the visit next year, with a more ambitious approach.

Dr. FROST: Right.

Amb. LORD: I’m not sure there’s going to be consensus behind an approach, but I suggest you develop a memo to the president we could all look at with your views on how we would proceed on that.

Dr. FROST: See, the t...

Amb. LORD: I personally am not convinced that the sophisticated and, I think, justifiable, in some respects, arguments on our trade deficit are going to get through to the average American or the average Congressperson. But that doesn’t mean we shouldn’t try to put it in perspective.

Dr. FROST: Some of this has implications for the timing of a presidential visit, because if you’re going to pick up my idea on the G-7—that’s usually in June—you know, Zhu Rong Ji, who is a very sophisticated reformer, translator of John Steinbeck, for God’s sake—he becomes prime minister in March. You know, somewhere in there, there may be some good times for him to visit that are linked with the economic issues—the GATT 50th anniversary, for example. These are all opportunities for him to play a bigger role.

Amb. LORD: It does raise a point that Tom was mentioning earlier and I think we all ought to keep in mind: the debate in this country seems to have been sort of simplified, that it’s trade policy versus human rights policy, as if we forget human rights only because of trade.

Dr. FROST: Right. Right. Negative link to that, yeah.

Amb. LORD: First of all, in my view, we shouldn’t be apologetic about getting Americans jobs. On the other hand, we should also be stressing there’s a lot more interest here that we have with China than trade.

Dr. FROST: Right.

Amb. LORD: We may be aware of it, but I don’t think the American public—I don’t think we’ve done a very good job. We’ll get back to that.

Ms. GORELICK: We have major security interests that people need to understand.

Amb. LORD: Yeah, well, that’s a segue into the security dimension.

Ms. GORELICK: Let me try to give a...

Prof. DEUTCH: Excuse me. I’m sorry. I’m sorry. I’ve just had this note brought in from the situation room, and I understand that there’s...

Amb. LORD: That’s one of the new junior interns.

Dr. FROST: I thought it was principals only.

Prof. DEUTCH: I understand that there’s a French convoy that is in trouble outside of Pale, and that the French Foreign Minister is trying to get a hold of Tom to indicate that he doesn’t want any United States involvement, and that the French Defense Minister is trying to get a hold of you, Jamie, to say that he wants all the military assistance we can provide. I suggest that maybe, Win, you want to stop this conversation now and go and talk about Bosnia. And Oprah is outside on the phone.

Amb. LORD: I don’t think we have the urging to trot out the important—no, it is important. I think we’re going to wrap this up in another half-hour.

Prof. DEUTCH: Then we’ll get together and talk about it?

Amb. LORD: Yeah. Then why don’t we—because you’ve got an appointment, I know, with the Hill, but any of you who can stay after this...

Prof. DEUTCH: Madam Chairman, you’d better get somebody over to the J-3 and tell them about this, because...

Amb. LORD: You want to tell the—yeah.

Ms. GORELICK: They’re out of here. They’re gone.

Amb. LORD: OK. You want to tell the minister—tell your guy to take care of that. OK. Let’s move on to security issues. Jamie.

Ms. GORELICK: Let me try to set the scene, because I think, following on our earlier conversation, we have major security interests in this region that are just not part of the public debate, and they need to be. And, you know, that’s obviously not my bailiwick, George; it’s yours, but we need to figure out how to do that.

While it is true, as the director says, that the People’s Liberation Army is not a potent force, it is restructuring. It wants to turn itself into a modern fighting force. The estimates on their spending on military procurement widely vary, but I would say they’re about 2 percent and maybe they would like it to grow to about 6 percent.

The big problem is that the Southeast Asian market is the driver in military sales right now. Military spending in Southeast Asia is up 33 percent. That’s compared to a decrease here in the United States of 38 percent, a decrease in Europe of 35 percent and a Middle Eastern market that is up 10 percent. So we have the potential for a destabilizing arms race in this region. We need to have a presence there, and we need stability.

Now what are the threats to our national security? What are the threats to stability? The first threat to peace is North Korea. This is an unpredictable regime. The problems there are magnified by their economic problems, their inability to feed their population. And our goal has to be to keep nuclear weapons out of the region and to strive for stability, and China has helped there. It is part of that conversation. It is very much interested in keeping nuclear weapons off the Korean peninsula. They were instrumental in helping us reach the 1994 agreed framework. And so the partnership with China and our strategic investment in China in that respect is very important.

The second threat, and we’ve talked about it and we will get to the decision at hand, is the proliferation of weapons of mass destruction in and from the region. Now the specific concerns have to focus on the flow from China to places like Pakistan and Iran. And I’m not just talking about nuclear weapons, but chemical and biological weapons as well. Now the certification that we have to deal with has specifically to deal with the proliferation of nuclear weapons, but nevertheless, in the back of our heads has to be: What is China doing to destabilize the balance of power in terms of weapons of mass destruction around the world, and particularly in places that we care about?

The third threat is the type of territorial disputes that we’ve seen concerning Japan’s northern territories, the islands and South China, and the fourth is Taiwan. Now we, obviously, have a one-China policy. We’re committed to opposing the use of force to take Taiwan, but I think the premise of our thinking for a long time was that Taiwan would sort of migrate to China, and I think that thinking is just wrong. I think the Taiwanese don’t want that, and I think right now we’re in a position where the Taiwanese could do something provocative and draw us in, in a way that we have no control over. So I think we need to signal to Taiwan not to force the issue, and communicate a consistent message on one China to China. Now let’s talk about...

Amb. LORD: Shouldn’t we also signal, as we did in the Straits crisis a year and a half ago to Beijing, they shouldn’t resort to the use of force?

Ms. GORELICK: Yes. Well, I want to talk about that. I think that we need to do everything we can to avoid inadvertent conflict, and I think that the Chinese conduct in its missile exercises in the Straits of Taiwan showed that they did not know how we would react. I think they hugely miscalculated where we would be. And how could that happen? And I want to talk about what I think we need to do.

First of all, our secretary of State has said that we need to have a China that is neither threatening nor threatened. And our policy is to maintain 100,000 troops in that region. We need to maintain that, because without that commitment, we will destabilize the region. Now in the long run, if you have peace or some sort of rapprochement on the Korean peninsula, what are you going to do with those 45,000 troops? Where are they going to go? How are you going to maintain 100,000 troops in that area? We have to have a more balanced approach to security in the region, and I think this needs to be a thrust of our internal political debate, although it’s a hard set of concepts to get our arms around, and it needs to be part of our dialogue with China right now. We need to deal with—we need to have a greater regional structure to deal with these regional conflicts, like the dispute over the Spratlys. We need to keep—the main goal has to be to keep China to a coastal defense rather than a blue ocean extension of their power.

And on the point of inadvertent conflict, I think that better military-to-military contacts would have improved that situation enormously. Now I know my colleagues in the State Department would much prefer to have communications at a civilian level. I happen to believe that the military-to-military communication is the most effective. It works. People know how to pick up the phone and call each other and find out what is happening. And I think we need to break through that barrier and have a greater sense of engagement.

Now in terms of how we engage, I think we—we’ve had, you know, two Chinese destroyers and an oiler come to Pearl Harbor and to San Diego. In May Shally went and gave the Chinese all of our troop locations. I mean, that is an effort to say, “We will tell you what we’re doing. We need to hear back from you.” And we just haven’t had the reciprocity, and I think that has to be a major thrust for us. They need... Amb. LORD: That’s a problem, John, we’ve found in the intelligence area, too, wouldn’t you say? We try to work with them on some of these matters, and we don’t necessarily have to get as much from them as they get from us, but it would be useful to get a little bit more of their perspective. Go ahead.

Ms. GORELICK: I think we need an open dialogue. I think that we need to have information on their weapons purchases, on their troop locations. We need an exchange of military personnel. We need to work out and make sure we have a good system for U.S. Navy port calls on Hong Kong. We need rules of the road when our ships are in the same seas.

Amb. LORD: What is the status? I understand that we’ve pretty well reached a conclusion and we can announce at the summit...

Ms. GORELICK: On the maritime agreement.

Amb. LORD: Maritime agreement.

Ms. GORELICK: The maritime agreement, I think we have, but I think in terms of—our communications as we inhabit the same territory is just absolutely critical. And also I would say, too, that the military-to-military contact has the ancillary benefit of developing a sense of the rule of law, of the relationship between the military and civilian authority in this country, and how one has a system of laws.

I would also tell them that we intend to engage with the ASEAN regional forum. I think we need to get others in the region engaged, and I think we need to use this summit to begin a dialogue on the actual reduction of tactical nuclear weapons in that area, and I think we need to work toward a mutual commitm

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