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Recent Developments in China's Relations with Taiwan and North Korea RECENT DEVELOPMENTS IN CHINA’S RELATIONS WITH TAIWAN AND NORTH KOREA HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ONE HUNDRED THIRTEENTH CONGRESS SECOND SESSION THURSDAY, JUNE 05, 2014 Printed for use of the United States-China Economic and Security Review Commission Available via the World Wide Web: www.uscc.gov UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION WASHINGTON: 2014 ii U.S.-CHINA ECONOM IC AND SECURITY REVIEW COMMISSION Hon. DENNIS C. SHEA, Chairman Hon. WILLIAM A. REINSCH, Vice Chairman Commissioners: CAROLYN BARTHOLOMEW DANIEL M. SLANE PETER BROOKES SEN. JAMES TALENT ROBIN CLEVELAND DR. KATHERINE C. TOBIN JEFFREY L. FIEDLER MICHAEL R. WESSEL SEN. CARTE P. GOODWIN DR. LARRY M. WORTZEL MICHAEL R. DANIS, Executive Director The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Public Law No. 106-398, 114 STAT. 1654A-334 (2000) (codified at 22 U.S.C. § 7002 (2001), as amended by the Treasury and General Government Appropriations Act for 2002 § 645 (regarding employment status of staff) & § 648 (regarding changing annual report due date from March to June), Public Law No. 107-67, 115 STAT. 514 (Nov. 12, 2001); as amended by Division P of the “Consolidated Appropriations Resolution, 2003,” Pub L. No. 108-7 (Feb. 20, 2003) (regarding Commission name change, terms of Commissioners, and responsibilities of the Commission); as amended by Public Law No. 109- 108 (H.R. 2862) (Nov. 22, 2005) (regarding responsibilities of Commission and applicability of FACA); as amended by Division J of the “Consolidated Appropriations Act, 2008,” Public Law Nol. 110-161 (December 26, 2007) (regarding responsibilities of the Commission, and changing the Annual Report due date from June to December). The Commission’s full charter is available at www.uscc.gov. iii October 21, 2014 The Honorable Patrick J. Leahy President Pro Tempore of the Senate, Washington, D.C. 20510 The Honorable John A. Boehner Speaker of the House of Representatives, Washington, D.C. 20515 DEAR SENATOR LEAHY AND SPEAKER BOEHNER: We are pleased to notify you of the Commission’s June 05, 2014 public hearing on “Recent Developments in China’s Relations with Taiwan and North Korea.” The Floyd D. Spence National Defense Authorization Act (amended by Pub. L. No. 109-108, section 635(a)) provides the basis for this hearing. At the hearing, the Commissioners received testimony from the following witnesses: Ms. JoAnn Fan, Visiting Fellow, Center for East Asia Policy Studies, Brookings Institution; Mr. Rupert Hammond- Chambers, President, U.S.-Taiwan Business Council; Dr. Vincent Wei-cheng Wang, Professor of Political Science and Associate Dean, School of Arts and Sciences; Mr. William Murray, Associate Research Professor, U.S. Naval War College; Mr. Ian Easton, Research Fellow, The Project 2049 Institute; Mr. David Firestein, Perot Fellow and Vice President for the Strategic Trust-Building Initiative and Track 2 Diplomacy, EastWest Institute; Ms. Stephanie Kleine-Ahlbrandt, Director of Asia-Pacific Programs, U.S. Institute of Peace; Dr. Sue Mi Terry, Senior Research Scholar, Weatherhead East Asian Institute, Columbia University; and Ambassador Joseph DeTrani, President, Intelligence and National Security Alliance. The hearing examined economic, political, and security developments in cross-Strait and China-North Korea relations. It also assessed the opportunities and risks arising from closer cross-Strait economic integration for Taiwan and the United States, and examined Taiwan’s ability to defend against military coercion by China. The hearing also addressed whether China’s views and policies toward North Korea have changed in recent years and the implications for U.S. security interests. We note that prepared statements for the hearing, the hearing transcript, and supporting documents submitted by the witnesses are available on the Commission’s website at www.USCC.gov. Members and the staff of the Commission are available to provide more detailed briefings. We hope these materials will be helpful to the Congress as it continues its assessment of U.S.-China relations and their impact on U.S. security. The Commission will examine in greater depth these issues, and the other issues enumerated in its statutory mandate, in its 2014 Annual Report that will be submitted to Congress in November 2014. Should you have any questions regarding this hearing or any other issue related to China, please do not hesitate to have your staff contact our Congressional Liaison, Reed Eckhold, at (202) 624-1496 or via email at [email protected]. Sincerely yours, Hon. Dennis C. Shea Hon. William A. Reinsch Chairman Vice Chairman iv CONTENTS THURSDAY, JUNE 05, 2014 RECENT DEVELOPMENTS IN CHINA'S RELATIONS WITH TAIWAN AND NORTH KOREA Opening Statement of Commissioner Katherine C. Tobin, Ph.D. (Hearing Co-Chair) .......................................................................................................01 Prepared Statement .........................................................................................................02 Panel I: Cross-Strait Economic and Political Issues Panel I Introduction by Commissioner Daniel M. Slane (Hearing Co-Chair) .......................................................................................................03 Statement of Mr. Rupert Hammond-Chambers President, U.S.-Taiwan Business Council .....................................................................04 Prepared Statement .........................................................................................................06 Statement of Dr. Vincent Wei-cheng Wang Professor of Political Science and Associate Dean, School of Arts and Sciences, University of Richmond ................................................................................................15 Prepared Statement .........................................................................................................17 Statement of Ms. JoAnn Fan Visiting Fellow, Center for East Asia Policy Studies, Brookings Institution ...............24 Prepared Statement .........................................................................................................27 Panel I: Question and Answer............................................................................................34 Panel II: Cross-Strait Military and Security Issues Panel II Introduction by Commissioner Daniel M. Slane (Hearing Co-Chair) .......................................................................................................48 Statement of Mr. William Murray Associate Research Professor, U.S. Naval War College ...............................................49 Prepared Statement .........................................................................................................51 Statement of Mr. Ian Easton Research Fellow, The Project 2049 Institute ................................................................66 Prepared Statement .........................................................................................................68 Statement of Mr. David Firestein Perot Fellow and Vice President for the Strategic Trust-Building Initiative and Track 2 Diplomacy, EastWest Institute .......................................................................................75 Prepared Statement .........................................................................................................78 Panel II: Question and Answer ..........................................................................................96 v Panel III: China and North Korea Panel III Introduction by Commissioner Katherine C. Tobin (Hearing Co-Chair) .....................................................................................................111 Statement of Ms. Stephanie Kleine-Ahlbrandt Director of Asia-Pacific Programs, U.S. Institute of Peace .........................................112 Prepared Statement .......................................................................................................115 Statement of Dr. Sue Mi Terry Senior Research Scholar, Weatherhead East Asian Institute, Columbia University....128 Prepared Statement .......................................................................................................130 Statement of Ambassador Joseph DeTrani President, Intelligence and National Security Alliance ................................................134 Prepared Statement .......................................................................................................137 Panel III: Question and Answer ......................................................................................140 1 RECENT DEVELOPMENTS IN CHINA’S RELATIONS WITH TAIWAN AND NORTH KOREA THURSDAY, JUNE 05, 2014 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION Washington, D.C. The Commission met in Room 608 of Dirksen Senate Office Building, Washington, DC at 8:45a.m., Commissioners Katherine C. Tobin, Ph.D. and Daniel M. Slane (Hearing Co- Chairs), presiding. OPENING STATEMENT OF COMMISSIONER KATHERINE C. TOBIN, PH.D. HEARING CO-CHAIR HE ARIN G CO -CHAIR TOBIN: Good morning, everyone, and good morning to those online, as well. On behalf of my fellow Commissioners, I'd like to welcome you to the final hearing of the U.S. -China Economic and Security Review Commi ssion's 2014 report cycle. Today's hearing will examine recent economic, political and security developments in cross - Strait and China -North Korea relations.
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