U.S. Policy on China and North Korea
James A. Kelly, Assistant Secretary of State for East Asian and Pacific Affairs Remarks at the World Affairs Council
Washington, DC January 30, 2003
Good Morning. Thank you, Mr. Marino and Jerry Leach, for your kind introduction. I am delighted to have an opportunity
to speak to the national conference of the World Affairs Councils of America. As a long-time board member and officer of
one of your strong Councils, I know that this organization performs a magnificent public service in informing Americans
where they live and at this meeting, which brings together so many talented and thoughtful people from all over the
country to share perspectives on foreign policy issues. We owe you our special gratitude.
Before I speak about China, a subject so dynamic and important that it is never far from the minds of Asian
specialists, I would like to make a few remarks on North Korean issues, which in recent weeks have dominated the news
from East Asia. Rather than attempting a comprehensive overview of our East Asian relations in the short time allotted
to me, I would like to convey a snapshot of where we are in our relations with North Korea and China.
North Korea
North Korea's pursuit of a nuclear weapons program, in clear violation of its international obligations, presents both
a challenge and an opportunity to the international community. The challenge the North poses is self-evident: its
pursuit of nuclear weapons -- which we know has gone on for many years -- flouts the global nuclear non-proliferation
regime established by the Nuclear Nonproliferation Treaty (NPT). With 190 signatories, no country has ever resigned from
the NPT. The North's program also threatens the incipient reconciliation between North and South and the security of the
entire Asia-Pacific region.
Despite the attempt to put the nuclear issue in a U.S.-D.P.R.K. focus, the issue is inherently multinational. And, the
international community has made clear that North Korea must reverse its course or risk further isolation and
condemnation. The United States will not be pressured or blackmailed into providing the North with quid pro quos to meet
its existing obligations. But, if the North is willing to return to its obligations, we will talk with them about how to
do so. And, if the North abides by its obligations, we are prepared to work with it for a different and better future
for its people. Therein lies the opportunity -- for a revitalized process of reconciliation between North and South, a
new relationship between the U.S. and North Korea, and a new and more solidly founded era of peace, stability, and
prosperity in Northeast Asia.
Certainly, the most serious challenge from North Korea is its nuclear program, but this is not the only problem the
North poses. Production and export of ballistic missiles, broad disregard of human rights, and a tolerance for
starvation and death from disease are other serious challenges.
One such is the failure of North Korea to reform its economy. This is both a threat and a challenge to North Korea's
own future, to neighbors who fear the consequences of a collapsing state, and to the world community that is already
bearing much of the burden of the North's economic policies. First of all, resources are misallocated in an "army first"
official policy. The small and insufficient, but nevertheless significant steps, which the North undertook last summer
to reform its collapsed economy, seem to be doing very poorly, with inflation and worthless currency playing a role.
North Korea remains a threat and a problem. As the President said, we need to work with others -- South Korea, Japan,
China, Russia, and the EU -- to begin slow change. But, stepping back from nuclear weapons is essential.
I don't want to leave the impression that the U.S. is fixated on North Korea, so let me also take a moment to review
our relationship with the vibrant democracy and growing economic partner just to its south. The Republic of Korea is one
of our leading partners in Asia, not simply or even primarily because of our alliance and security relationship. The
South is a growing diplomatic and military partner that is making an impact around the world, as witnessed by its
support of Operation Enduring Freedom. South Korea is an engine of growth in East Asia and one of the top ten U.S.
economic partners.
The election of Mr. Roh Moo-hyun in December confirms South Korea as a shining example of liberal democracy in Asia and
represents a generational change that creates opportunities to reinforce this alliance for many decades to come. The
exemplary partnership between the Republic of Korea and the United States, countries both built upon open societies of
free and empowered citizens, will be deep and lasting. President Bush has invited President-elect Roh to come to
Washington as early as he can comfortably do so in his presidency. We look forward to working closely with South Korea
and the Roh Administration in the years ahead. We face together the immediate challenge of North Korea's nuclear weapons
program, the larger challenges posed by North Korea, and many other complex questions confronting democracies. Our
relationship will be based on mutual respect and a profound understanding of our inter-dependence. This relationship
will continue to strengthen and to deepen. Together, I am confident that we will meet the challenges ahead of us.
China
Let me now leave the Korean Peninsula and turn to China. Many have tried to sum up the United States' relationship with
China in a catch phrase. I don't believe such characterizations are useful or accurate. Our relationship with the P.R.C.
and its 1.3 billion citizens is too complex, varied, and fast changing to be reduced to soundbites.
President Bush, Secretary Powell, and all of us in the administration have worked over the last two years to forge a
candid, constructive and cooperative relationship with China. In the spirit of dealing straightforwardly with our
differences and building on common interests the President paid an unprecedented two visits to China in his first 13
months in office, and hosted President Jiang Zemin in Crawford last October.
While not minimizing the differences that remain over human rights, nonproliferation, and Taiwan, I can report to you
that the administration's approach to China has resulted in a U.S.-China relationship marked by close cooperation on a
broad range of issues: the war on terrorism, our economic and trade agenda, and critical regional security issues are
just three examples.
Both China and America understand that what we need -- what is in both of our interests -- is a relationship that is
pragmatic, based on mutual respect, and focused on furthering peace and stability in the world.
By pragmatic, I do not mean that we sacrifice our core interests or values. We have real and important differences with
China regarding its human rights record, proliferation activities, and the nature of its political system. We must
continue to encourage China's evolution as a responsible global power that respects the rights of all its citizens. But
it is possible to have a relationship with the P.R.C. that furthers cooperation on critical issues that affect us both
and that also stays true to US ideals and principles.
When I was recently in Beijing, I had the chance to speak with a number of P.R.C. officials. On the most pressing issue
in the East Asia region -- the situation in North Korea -- I held lengthy and productive discussions with my Chinese
counterparts. All of them stressed their disapproval of the D.P.R.K.'s announcement of its intention to withdraw from
the Nuclear Non-Proliferation Treaty, their concerns over North Korea's nuclear activities, and China's desire to see a
non-nuclear environment maintained on the Korean peninsula.
Some have said China is not doing enough in this regard. Certainly, we need to keep urging China to use its
relationship and leverage with the North Koreans to impress upon them just how worrisome and potentially destabilizing
their nuclear activities are. But it bears remembering that 50 years ago the U.S. and the P.R.C. were fighting on
opposite sides of a conflict on the Korean peninsula. Today, by contrast, we share a common goal in preventing North
Korea's development of weapons of mass destruction. China's appreciation of the need to bring North Korea back into
compliance with its international commitments is significant indeed.
China's diplomatic support in the war on terrorism and in ensuring Iraqi disarmament has been of great value. The
P.R.C. voted in support of both UN Security Council resolutions after the September 11th attacks. Within two weeks of
9-11, we initiated a U.S.-China counterterrorism dialogue to improve practical cooperation. China also publicly
supported the coalition campaign in Afghanistan and contributed to Afghan reconstruction following the defeat of the
Taliban and our successes in disrupting and setting back al Qaeda. Beijing lent its good offices to counsel restraint on
the part of Pakistan and India over Kashmir over the past thirteen months.
In addition, China voted for UN Resolution 1441 authorizing renewed weapons inspections in Iraq, and has publicly
decried Baghdad's attempts to play games with the UN Security Council.
Clearly, China and the U.S. do not have identical perspectives on world affairs. Our differences on Taiwan are an
example of this. However, we can say that on some of the most important international issues of the day, China and the
United States have overlapping, if not identical, interests, and that the areas of shared interest and cooperation are
growing in both scope and intensity.
I want to highlight today the profound importance of China's extraordinary, on-going economic transformation.
Discarding a bankrupt communist economic system, China implemented market-oriented reforms over the past two decades and
unleashed individual initiative and entrepreneurship. The result? The largest reduction of poverty and one of the
fastest increases in income levels ever seen.
China's economic relations with the United States and the world have also been transformed. Largely closed to foreign
firms until 1980, China is now the world's fourth-largest trading nation with total trade near $300 billion. Trade
between the U.S. and China has led the way, reaching more than $130 billion through November of last year. China is now
America s fourth-largest trading partner, seventh-largest export market and fourth-largest source of imports. I should
note that China is also the largest contributor to the U.S. trade deficit, an aspect of our trade relationship that we
will insist become more balanced as China implements its WTO market opening commitments. Our deficit with China is now
approaching $100 billion annually.
Foreign investment in China has soared in recent years. When the final statistics are calculated for 2002, China is
slated to emerge as the world's largest recipient of foreign direct investment (FDI). China received over $50 billion
from foreign investors in 2002, including more than $5 billion from U.S. firms. As recently as 1990, China barely
received $3 billion of FDI from all investors.
China's WTO membership, following more than 15 years of negotiations, marked both the final step in normalizing
U.S.-China trade relations and the first step in working constructively with China to help it implement fully its WTO
commitments on trade liberalization. We support China's WTO implementation not only because it will accelerate China's
economic reform through the creation of a more institution-based and market-driven economy. Just as significantly, it
means more export and investment opportunities for U.S. companies and ultimately more jobs for American farmers and
workers.
Since joining the WTO in December 2001, China has taken important steps to improve market access, including lowering
tariffs on a range of products important to U.S. exporters. For example, the information technology industry reports
that lower tariffs have already resulted in $500 million in savings. In addition to increasing market access, China has
agreed to undertake broad reforms that will foster greater transparency, providing for notice and comment on
regulations, permitting judicial review, and applying laws uniformly. All of these steps make it easier for U.S.
companies to do business in China, as well as provide a "rule of law" model for other areas in China.
I want to emphasize that monitoring and enforcing China's implementation of its WTO commitments are top priorities for
the U.S. government. We still have some serious concerns with China's WTO compliance in certain areas and are working
closely with the Chinese to address these concerns.
Some of our most serious disputes with China today relate to the nature of China's political system and its internal
policies. Growing access to information from outside China, and the imperatives of economic reform have made it
impossible for the Communist Party to completely control social and political thought or activities, and Chinese
citizens today have greater personal freedom than at any time since 1949. Over the past year, China has taken some
limited, but still unprecedented, steps that demonstrate that the P.R.C. knows that its human rights record is a
stumbling block to a better relationship with the U.S. and the international community and that it wants to take steps
to address those concerns.
Yet China remains a one-party system where the people who rule and who make the rules are by and large not accountable
to the general population. The abuses that such a system invites are manifest in China's lack of respect for the rights
of its citizens. Any individual or group the regime sees as threatening -- whether they be democracy activists, Falun
Gong practitioners, Christians, Tibetans, Muslim Uighurs, journalists investigating corruption, laid-off workers
protesting, or even university students venting on the internet -- any of these people run the risk of detention or
worse if they cross an ill-defined line, with few of the protections of due process or a fair and transparent legal
system. There is simply no other way to put it -- ongoing gross violations of human rights are a serious impediment to
better relations and undermine the goodwill generated by individual releases or other steps. An example of
non-transparency was the execution this week of a Tibetan. The act was sudden and sooner than we had been led to
believe, and it followed a secret trial that cannot be assessed for fairness or concern for the protection of his
rights.
There are also steps that need to be taken with regard to nonproliferation. The Chinese have expressed their desire to
stem the proliferation of missiles and WMD, and we are heartened by recent steps taken in the right direction. Under
Secretary for Arms Control and International Security, John Bolton, was just in Beijing for the inaugural round of a
semi-annual security dialogue aimed at moving forward on -- among other key issues -- halting the spread of these deadly
weapons and technologies. China recently issued updated regulations on the export of chemical and biological agents --
in addition to missile-related export controls. Getting these commitments on paper is important, but full implementation
and effective enforcement are even more critical. We still see disturbing trends in the proliferation activities of
certain Chinese firms, and China must realize that this kind of proliferation not only damages its relationship with the
U.S., but also ultimately hurts its own interests and security.
The U.S.-China relationship is a work in progress; but we have withstood some rocky moments-- notably the accidental
bombing of China's embassy in Belgrade, and the EP-3 crisis-- and recovered quickly to resume building constructive
relations.
Contrast those difficult moments with where we are today -- three presidential meetings in a little over a year, a
common stand on some of the most pressing matters of the day, and a relationship that across a number of different
dimensions is enormously robust. I do not underestimate the complexities and challenges of our relations with China, and
we must continue to speak frankly and forcefully on issues that concern us. A U.S.-China relationship that is candid,
cooperative, and constructive, is both necessary and possible today. Thank you. [End]
Released on February 3, 2003