China Brief, Volume 1

VOLUME 1 • ISSUES 1–12 • JULY 12–DECEMBER 20, 2001 their sub designs to the United States for later sale to Issue 1, July 12 Taiwan. Britain and Italy have conventional submarine designs they possibly could sell. Neither, how- Europe ’s Taiwan Submarine ever, is likely to do so. Dilemma Complicating the U.S. and Taiwan quest for a new By Richard D. Fisher, Jr. conventional sub design has been many years of pa- tient campaigning by Beijing to block European arms President George W. Bush’s decision to seek a Euro- sales to Taiwan. Beijing has dealt harshly with those pean conventional submarine design to sell to Tai- who have sold arms to Taiwan, such as locking the wan, and the brusque refusal of two European coun- Netherlands out of mainland markets for several tries to do so, highlights Europe’s increasing con- years after it sold Taipei two submarines. A desire to flicts about arms sales to China and Taiwan. As a re- sustain their sizable export to China is likely the main sult, it is time for Washington to insist that its Euro- motivator for the almost immediate German and pean allies exhibit the same moral clarity toward war Dutch refusal to offer to sell their very good conven- on the Taiwan Strait as the Unites States has done for tional submarine designs. decades. However, Europe is increasingly willing to sell mili- Bush’s decision to sell Taiwan eight to ten conven- tary technology to China despite a 1989 decision by tional submarines was a victory for both Taiwan and the European Union that forbade weapon sales to the small group of Pentagon officials who had pushed China following the Tiananmen Massacre. Britain, for the sale. It is also is a victory for the traditional Germany and Italy have sold China satellite technol- U.S. policy goal of deterring a Communist Chinese ogies that are informing Chinese military satellite attack on democratic Taiwan. For twenty years the programs. Britain’s Racal Corporation has sold air- State Department had blocked such a sale because it borne early warning (AEW) radar to the PLAN and defined submarines as “offensive” weapons that Britain’s Rolls Royce is trying to sell gas turbine en- could be used to attack the mainland. But at the same gines for PLAN warships. The latest version of the time, the People’s Liberation Army Navy (PLAN) PLAN’s new Type 039 Song-class conventional sub- has purchased new Russian Kilo submarines and marine bears an uncanny resemblance to the French Russian Sovremenny destroyers with their super- Agosta-class conventional submarine. And the Song sonic Sunburn missiles to enhance its ability to im- reportedly is powered by German MTU diesel en- pose a blockade on Taiwan. Selling Taiwan new sub- gines. marines will help defend against these new sub-surface and surface warfare threats. Should the Bush administration continue to focus on Europe as the source for Taiwan’s new submarine de- But this policy victory has led to a new battle to se- sign, it will have to start insisting on strategic and cure a foreign submarine design that a U.S. shipyard moral clarity from our allies. First, it must clearly tell can then build to meet Taiwan’s requirements. In Eu- Europeans that it is China who is, today and in the rope today, possible submarine designs are available future, the aggressor on the Taiwan Strait. If Taiwan from the Netherlands, Germany, Italy or Britain. Al- were to fall to Chinese military pressure, Asia’s stra- most immediately following Bush’s announcement, tegic equilibrium would be threatened. It would be the Netherlands and Germany forbade the sale of Communist China who would then control the sea ChinaBrief Volume I • Issues 1–12 • July 12–December 20, 2001 lanes vital to Japan. Absent a strong U.S. response, a Richard D. Fisher, Jr. is the managing editor of regional arms race would likely ensue, only adding China Brief and a senior fellow with the Jamestown to the potential for further more disastrous conflicts Foundation. in the future. None of this would be in Europe’s economic or political interest. Issue 2, July 24, 2001 Additionally, Europe should be alarmed by the prospect of Chinese aggression against Taiwan because of the likelihood that would quickly lead to a U.S.- China’s Accession To The WTO: China war. As Americans invested heavily in the pre- vention of a Soviet attack on Europe, and continues A Winning Outcome For Both to provide significant forces and leadership in pre- China And The United States venting greater war in the Balkans, it should be reasonable for Americans to expect European consider- After close to fifteen years of on-again, off-again, ar- ation regarding U.S. security interests in Asia. More duous negotiations, the People’s Republic of China to the point, given the enormous sacrifices Ameri- (PRC) is finally poised to enter the World Trade Or- cans have made for European security in the last cen- ganization, the institution governing the international tury, it is reasonable for Washington to expect Euro- trading system. Premised on the principles of free peans to acknowledge and condemn communist Chi- trade, the WTO requires new member nations to nese aggression against democratic Taiwan. abide by rules and norms that promote the free flow of goods and services across borders. Often times, It is also reasonable for America to demand similar countries will have to undertake sweeping economic moral clarity concerning arms sales. Washington reforms to move the country in a more market-ori- should be telling its European partners that selling ented direction. China is no exception. weapons that defend Taiwan is correct, while selling Despite legitimate concerns about China’s ability to military technologies to China is wrong. Preventing live up to all the obligations to which it has commit- as war on the Taiwan Strait by ensuring that Taiwan ted, it is in the interest of both the world trading com- remains strong deters a war that would threaten the munity and the United States to see China enter the safety of Americans, as well as threaten the Asian WTO. It serves the economic interest of all save stability that is in Europe’s direct economic interest. those industries already failing in the United States and the heads of state-owned monopolies in China. However, if Europe is not capable of moral clarity on More broadly, it is in U.S. security interests to help the Taiwan Strait, America has an alternative. The integrate China peacefully into the international last U.S. conventional submarine, built in the late community. Doing so will strengthen the hand of 1950s, called the Barbel-class, was in its time an ad- pro-reform elements in the Chinese leadership. vanced design that was used by some European countries to modernize their submarine production capa- Benefits to the United States bilities. While it waits for the Europeans to make up their minds, Washington should now examine the Economically, the United States stands to gain a possibility of updating the Barbel design, with U.S. great deal from China’s accession to the WTO. China or European technology. Foreign and U.S. orders is the United States’ thirteenth-largest market abroad could account for up to fourteen submarines, enough for U.S. goods. These exports support high-quality for U.S. shipyards to enter this market and compete jobs in sectors of the American economy that are key with Europe and Russia for the first time in forty parts of the engine driving the growth the United years. If anything, this prospect should help some Eu- States has experienced in recent years. Notable ropeans to clarify their policy on selling their subma- among these sectors are aircraft, power-generating rine designs for Taiwan. equipment, telecommunications equipment, comput- ers, fertilizers, medical equipment and organic chem- icals. 2 ChinaBrief Volume I • Issues 1–12 • July 12–December 20, 2001 Both U.S. consumers and the U.S. economy have status as a developing country, which will allow Bei- benefited from the expanding trade relationship with jing much more latitude within the WTO to control China over the past twenty years. In 1978, when the how it will interface with the world economy. PRC launched its ‘Open Door’ policy and abandoned The People’s Republic of China (PRC)—the eco- its largely autarchic past, trade between the United nomic growth of which is generating considerable States and China stood at an inconsequential US$2 fear among rival Asian states, and which has been billion. Today, China is the United States’ fourth- conducting massive military exercises—hardly largest trading partner, trading goods worth some seemed a worthy candidate for such special treat- US$100 billion. ment. The Clinton administration had glanced over the problem of China’s economic status when com- There is strong reason to believe that this beneficial pleting its 1999 bilateral accession agreement with trading relationship would expand were China a Beijing, but had held firm in Geneva that China WTO member. It is true that the United States would should be treated as a developed country subject to incur short-term losses in some sectors such as foot- reciprocal trade obligations. wear and textiles, but we should weigh these short- Chinese officials had repeatedly claimed that the term dislocation costs against the long-term benefits talks were stalled because America was demanding as we rationalize our economy to more accurately re- “excessive” market-opening measures from China. flect our strengths.

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