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-NOVEMBER, 1995-
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11/30/1995 LAMA OR PRETENDER?
11/17/1995 CHIPPING AWAY AT TRADE BARRIERS
11/06/1995 RISKY CHANGE IN A DYNASTY
AMID PROFOUND ECONOMIC DISLOCATION, DENG FADES AWAY, AND HIS HEIR APPARENT FACES A POWER STRUGGLE
11/03/1995 BACK ON EVEN KEEL
Jiang and Clinton Start Repairing a Battered Relationship
11/01/1995 STRANGE BEDFELLOWS
Managing the World's Most Important Relationship

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LAMA OR PRETENDER?

Posted Thursday, Nov. 30, 1995

Chinese officials are denying reports that they have imprisoned Gedhun Choekyi Nyima, the 6-year-old boy selected by the Dalai Lama as the new Panchen Lama, the second-highest religious leader in Tibet. In an effort to lend legitimacy to its 45-year rule of Tibet, China has unearthed an obscure 1792 agreement they say gives the government, rather than the Dalai Lama, the right to choose the Panchen Lama. Wednesday, the government chose Gynincain Norbu, born six years ago when the 10th Panchen Lama died, as the "legitimate" 11th incarnation of the Panchen Lama. With the Dalai Lama in exile, the Panchen Lama is the chief religious leader in the country, and TIME's Meenakshi Ganguly reports that the battle for his position is one of enormous political significance: "In the absence of a Dalai Lama, the Panchen Lama becomes the spiritual head of the Tibetan community, although he has no political power. What interests China is his religious right to locate the reincarnation of the Dalai Lama. The present incarnate is now 60, and they hope that by the time a new search has to begin, Gynincain Norbu would have completed his political education with his Chinese masters. Tibetans worship the Dalai Lama, and one controlled by China would mean an end of the Tibetan struggle for freedom."

From Time Magazine

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CHIPPING AWAY AT TRADE BARRIERS

Posted Friday, Nov. 17, 1995

Pacific Rim ministers approved a plan today to create the world's largest free-trade zone within 25 years, but they acknowledged the blueprint was vague and did not address some touchy areas. "It will be a slow process since they still have many details to work out and Japan remains opposed to dropping trade barriers," says TIME's Oscar Chiang. "But it was a significant step forward." The summit, which President Clinton had to skip because of his budget battles with Congress, now turns to some thorny political problems. "The next big issue is China and Taiwan," says Chiang. "Chinese Foreign Minister Qian Qichen warned today that they would use force if necessary to unify China. The Chinese will meet with vice-president Gore, who went to Japan in Clinton's place. But the Taiwan question remains the big roadblock to improving U.S.-China relations."

From Time Magazine

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RISKY CHANGE IN A DYNASTY
AMID PROFOUND ECONOMIC DISLOCATION, DENG FADES AWAY, AND HIS HEIR APPARENT FACES A POWER STRUGGLE

By BRUCE W. NELAN

Nov. 6, 1995

AT HIS VILLA IN BEIJING, DENG Xiaoping, 91, sits in a wheelchair unable to speak. Sometimes he is shown a document, specially printed in oversized characters. He nods, shakes his head or simply stares. One of his daughters then attempts to decipher his meaning. Years ago, Deng resigned from his official positions and tried to retire, but Chinese tradition and the ethos of the Communist Party conspire to force him to rule, or pretend to rule, until the moment he is pronounced dead. While he lingers, dozens of party elders, senior military leaders, provincial kingpins and Politburo members are maneuvering for influence, and the country and the world watch to see who will lead China's 1.2 billion people.

At the moment, the man who has the inside track is President Jiang Zemin, who last week held a sort of mini-summit with President Bill Clinton in New York City. Clinton and Jiang talked for two hours at Lincoln Center without reaching any new agreements. But they were determined to demonstrate publicly that Sino-American relations, which have been strained and verging on bad, are starting to improve. White House spokesman Michael McCurry offered a painstaking formulation: Clinton was "confident that we have begun a process that will lead to a series of dialogues that will help improve the opportunity" for better relations.

For Jiang, the most important audience was back in Beijing. He is in day-to-day control of the government, he has accumulated all sorts of impressive titles, but many Chinese and China watchers consider him weak, and he is still looking for ways to present himself as a dominating figure. During the planning for his trip to the U.S. for last week's 50th anniversary of the U.N., he tried to wangle an invitation for a full-scale state visit to Washington. But the Clinton Administration, mindful of how sour Congress's attitude toward China had become, invited him to Washington only at the less imperial level of a "working visit." Jiang balked and ended up settling for the rendezvous with Clinton in New York. Even then there was a last-minute hitch. The day before the meeting, China insisted that it be moved out of the New York Public Library because the building housed an exhibit that included material on the protests in Tiananmen Square in 1989.

State visit or not, Jiang seemed determined to wring all the advantage he could out of the occasion. He tried to put Clinton on the defensive, insisting he was still outraged that the U.S. had granted Taiwan's President Lee Teng-hui a visa to travel to his alma mater, Cornell University, last June. A Chinese official claimed later that the U.S. "has made it clear to the Chinese side that it has drawn a lot of lessons from the damage it has wrought upon Sino-U.S. relations."

In part, Jiang's message was what it seemed: a demand that the U.S. stick to its official "one-China" policy and avoid giving any encouragement to Taiwanese independence. At the same time, Jiang's denunciations served other purposes. He gained credit with hard-liners in Beijing, especially the military, for stoutly supporting China's national interests and standing up to the U.S. superpower. More and more, the regime has exploited nationalism to shore up its legitimacy, and this emergence on the New York stage provided Jiang with a fine opportunity to appear as China's advocate.

Still, it is not at all obvious that Jiang will ever demonstrate that he has the wisdom and strength to govern China under current conditions. The Communist Party has lost much of its authority among the people, who are convinced, as Deng told them, that "to get rich is glorious." Yet the economy is uneven. It registered 11.8% real growth last year, but the inflation rate peaked above 25%, and more than 40 million people are unemployed, while 100 million others are underemployed. The Chinese feel alienated from the government because of pervasive official corruption and memories of the 1989 suppression of the pro-democracy movement. If the communists are to maintain stability after Deng dies--if they are to ride the tiger, as they put it--then the leadership must find a new way to inspire loyalty and cooperation from the mass of ordinary Chinese citizens.

To meet that challenge, a collective leadership has been formed, with Jiang as "the core," as Deng himself put it. But once Deng is gone, rivals within the group can be expected to go gunning for Jiang, and he will have to fight to stay on top. Many China experts predict that Jiang will not prevail in an all-out test of strength. The affable apparatchik has been nicknamed Weather Vane because he tends to swing with the prevailing political wind.

Jiang joined the Communist Party in his teens. An electrical engineer, he worked as a factory administrator for 25 years. In the early 1970s he rose through the ranks in several economic agencies and headed the Ministry of the Electronics Industry before becoming mayor of Shanghai in 1985 and party chief in 1989. Last May he attended V-E day ceremonies with 50 other world leaders in Moscow and in July enjoyed a state visit to Germany. On such occasions he is an enthusiastic guest, smiling, shaking hands, chatting in one of his three foreign languages (Russian, Romanian and English), reciting T'ang-dynasty poetry and even quoting lines from the U.S. Declaration of Independence.

JIANG WATCHERS IN BEIJING GIVE him more credit for resourcefulness than many foreigners do. "He has had more than five years to build a power base and has done that methodically," says a Chinese official. Jiang has advanced his supporters from Shanghai inside the central and regional leaderships and has reshuffled the hierarchies of several provinces to replace old-timers with his own people. He has put close military and police associates into key positions, visited army bases around the country and promoted 19 new generals. He makes so many public appearances that he seems to be campaigning for the jobs he already holds.

If there is one likely future challenger to Jiang it is Qiao Shi, 71, chairman of the National People's Congress and a member of the Politburo's inner standing committee. Though the Congress has always been a rubber stamp for the party, Qiao is making a serious effort to turn it into a functioning legislature--and in the process use it as a power base. Some experts believe Qiao has liberalizing tendencies.

Another potential leader is Deputy Premier Zhu Rongji, 67, the country's top economic official. Tough and able, Zhu is, like Jiang, a former mayor of Shanghai. He is generally popular with the rising class of entrepreneurs, but rampant inflation and the credit-squeezing policies he has used to tame it have created resentment across the country. Premier Li Peng, though he is still a major figure, is a widely disliked hard-liner and one considered unlikely to succeed. But there are other senior officials who might challenge Jiang, and secrecy in Beijing is so thick that some unheralded candidate could easily emerge.

To the outside world, which can do little but observe and speculate, the most important question is not who comes out on top in Beijing but what the winner stands for. All the potential leaders speak up for the continuation of Deng's reforms and the creation of a "socialist market economy." But there are differences among them--so far only hinted at--on how fast the country can be freed from the bonds of central planning, how much authority should be devolved to the regions, and how much pain and dislocation the society can take in the process.

All the rivals are preoccupied with the economy. They know their political future depends on sustaining growth and delivering prosperity, but they do not know how to achieve that without overheating the system and shaking up the society. At a party plenum that approved a new five-year economic plan in late September, Jiang seemed to be placing stability ahead of growth, saying, "Without a stable political and social environment, nothing can be done." He clings to price controls, and he allows banks to discriminate against private enterprises to favor state firms when providing credit.

He has also backed away from his announced intention to close or sell off China's 100,000 mammoth state-owned enterprises. Half are losing money, and many are unable to pay their workers, who have staged violent as well as peaceful protests in major industrial centers. The problem, a familiar socialist hangover, is that these factories employ about 109 million people and sustain what are essentially company towns, providing housing, education and medical care to their workers.

Instability on the largest scale could arise in the countryside, away from the booming cities and coastal provinces. The 800 million peasants who live in the hinterland enjoy ample food and decent housing but have little cash in a society that is increasingly based on money and consumption. Li Zenghua, an orange farmer in central Hunan province, scrapes by on $20 a month. Rich entrepreneurs, he complains, "spend the equivalent of my annual income in one night at the karaoke bar."

Frustrated on the land, peasants are doing what they have always done in industrializing countries--moving to the cities. So far, 100 million people have pushed into the coastal cities from the interior to chase the style of living they see on television. Beijing alone shelters more than 3 million people who drift from job to job and feed on their discontent. The national total for this "floating population" is expected to rise to 200 million over the next five years. Add millions of newly unemployed state-enterprise workers to the mix, and the results could be disastrous.

Like Deng, who was hounded into exile by rampaging Red Guard demonstrators at the start of the Cultural Revolution in 1966, Jiang believes only a strong hand can stave off chaos in China. Yet time may be running out on that formula. Even now, says Mineo Nakajima, a Sinologist at the Tokyo University of Foreign Studies, "Jiang is using the police and security forces to control social unrest, but he will have difficulty if it continues to escalate." The country's volatile economic situation and its corruption accentuate the widespread sense of unfairness, feeding the "red-eye disease"--envy of those who are getting more, faster. And while China's masses are more interested in a higher standard of living than in profound political reform, Tiananmen and the forces that produced it still have a hold on the public's imagination.

The luster of the revolution and of the fighters who won it nearly a half-century ago is fading away, so the claimants to power in China need a new source of legitimacy. That makes a strong economy absolutely essential. But how can the market freedoms that are the basis for prosperity be reconciled with central political control? A search is beginning for a process in which China's people can have some say in public affairs and see some evidence that their leaders respect them. It is a commonplace that all-powerful, charismatic Mao and Deng were in the tradition of China's Emperors. Jiang Zemin and his rivals are mere politicians. They must be responsive ones, or the tiger will toss them off its back.

--Reported by Sandra Burton/Washington and Jaime A. FlorCruz and Mia Turner/Beijing

From Time Magazine

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BACK ON EVEN KEEL
Jiang and Clinton Start Repairing a Battered Relationship

By Todd Crowell

AS INTERNATIONAL SUMMITS GO, it was a fairly modest affair. There were no trumpets and no red carpets - only two hours of frank talk in a nondescript office at New York's Lincoln Center. On a "warmth scale," the Oct. 24 meeting U.S. President Bill Clinton had with his Chinese counterpart Jiang Zemin probably ranked midway between the cold shoulder he gave Cuban President Fidel Castro and the bear hug in which he enveloped Russian President Boris Yeltsin. For both sides, though, that was probably the right temperature. Yet, for all their differences, there were signs that the Chinese and the Americans were making progress on improving their troubled relationship.

The June visit of Taiwan President Lee Teng-hui to America had sparked such a crisis in Sino-U.S. ties that few observers were optimistic about last week's summit. And the coolness of the two previous Jiang-Clinton encounters may have led both men to rein in their own expectations for this one. In fact, both appeared visibly surprised that things went as well as they did. The Chinese found the talks "candid, friendly, positive and useful." The Americans were even more enthusiastic. "The two [leaders] had their best meeting yet," declared Winston Lord, assistant secretary of state for East Asian affairs. He said the personal chemistry was better. A Chinese official added that the presidents even laughed together a couple of times.

For China, whether Jiang would get some satisfaction from Clinton was always the key to the summit. Many Chinese leaders had opposed the meeting, which Washington insisted could not be an official state visit. They have a low regard for the American president and did not expect concrete results, especially as the U.S. is heading into an election year. And a summit without specific accomplishments might put Beijing on the defensive and make it look like a supplicant.

In the event, Jiang received no explicit assurances that another U.S. trip by a Taiwan leader was out of the question. The Americans repeated their public position that any such visits would be "rare, private, personal and unofficial." Yet there seemed to be subtler undercurrents. Jiang made it clear to Clinton that any more trips by Taiwan leaders would be very unwelcome. Significantly, the U.S. president said he "respected" China's view on the issue. He then reaffirmed "in general terms" his administration's adherence to America's standing "one-China" policy. That meant the U.S. would continue to maintain official ties with Beijing and unofficial links with Taipei.

The Chinese said there was "some improvement" in the U.S. position regarding Taiwan. It was left to China's official Central Television to fill in details. In its report on the summit, the state-run station said the U.S. "reaffirmed its recognition" that "Taiwan is a part of China." Washington, the account continued, "stressed that it is opposed to 'one China, one Taiwan,' Taiwan independence and any advocacy of Taiwan joining the United Nations."

For the Americans, the New York summit vindicates their strategy of ongoing dialogue as a way to resuscitate relations with China. This has been evident since an August meeting in Brunei between Secretary of State Warren Christopher and his Chinese counterpart Qian Qichen. It led to further top-level talks, which culminated in the Clinton-Jiang parley. Last week, both presidents agreed to continue their dialogue at the Asia Pacific Economic Cooperation summit in Osaka in mid-November.

During their two-hour discussion in New York, Jiang and Clinton covered many issues besides Taiwan. They included nuclear testing and non-proliferation as well as human rights - special concerns to the Americans. Clinton inquired specifically about Chen Ziming and Wei Jingsheng, two dissidents jailed by Beijing. The presidents agreed to expand the scope of dialogue at their next encounter to such topics as curbing drug cartels, protecting international property rights and safeguarding the environment. "That Jiang was willing to put on the agenda all these other American concerns suggests that he felt reassured by Clinton on the Taiwan question," says a Hong Kong sinologist. Clinton also stressed that America was not trying to "contain" China.

Washington apparently accepts that Jiang is the successor to Chinese patriarch Deng Xiaoping and believes he will hold power for quite some time. But the relationship still lacks real warmth. Last week, a senior U.S. official explained the Clinton administration's refusal to make the New York meeting a state visit by saying that such occasions were reserved for "our closest friends and allies."

With presidential politics heating up in the U.S., Clinton probably wants to keep some distance from Jiang to avoid being labeled "soft" on China by his challengers and critics. Prevailing anti-Beijing sentiment came to the fore recently during hearings by Senate Foreign Relations Committee Chairman Jesse Helms on the nomination of former senator James Sasser as ambassador to China. The nominee was challenged to explain why he had reversed his position on linking "most-favored-nation" trading status for China with progress on human rights there, as well as his remark that Beijing has the legal right to dissolve Hong Kong's recently elected legislature after 1997. The committee withheld its expected approval and Sasser was unable to attend the summit as America's new envoy.

Sino-U.S. relations are still colored by the Tiananmen crackdown of 1989, which in a curious way impinged on the parley. The presidents were scheduled to meet in a room at the stately New York Public Library, which was holding an exhibition titled "What Price Freedom?" Among the displays were videos, photos and artifacts of the Chinese army's suppression of demonstrators in Beijing. When the Chinese found out, they asked that the venue be changed to a "more neutral" location.

China had hoped that the summit might soften the American position on its accession to the World Trade Organization. But Jiang was apparently able to obtain little on that score. The Americans oppose Beijing's entry under the relatively liberal rules for developing nations on the grounds that it is already an export powerhouse. But insiders believe that Washington will likely refrain, at least for the moment, from fresh initiatives to open China's markets. It does not want to further strain the relationship with another bruising trade action along the lines of the row over copyrights early this year.

Despite China's $38-billion surplus, trade is currently the least contentious issue facing the two countries. Chinese leaders gave U.S. Commerce Secretary Ron Brown a warm welcome during his recent visit to China and Hong Kong. Jiang received him personally, and later Foreign Ministry spokesman Chen Jian said that the trip had been "positive and helpful in gradually improving and developing Sino-U.S. ties." For his part, Brown characterized America's relationship with China as its "most important." Clearly, the Chinese and the Americans get along best when they are talking business.

Reported by David Hsieh/Beijing and Sam Gilston/Washington

From Asiaweek

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STRANGE BEDFELLOWS
Managing the World's Most Important Relationship

DURING HIS RECENT VISIT to China, U.S. Commerce Secretary Ron Brown characterized his country's ties with Beijing as the most important bilateral relationship in the world. He is right, for with the dawning of the "Pacific Century," the interaction between the giants on both sides of that ocean will have a growing impact on the rest of the world. How to manage the often-contentious relationship will become an ever weightier theme in international affairs. And unless China and America find a way to do so peaceably and effectively, the nations of Asia, in particular, will not be able to sleep easy.

The challenges are manifold. When they met in New York two weeks ago, Chinese President Jiang Zemin and his U.S. counterpart Bill Clinton talked about establishing a "hotline" to facilitate communication. Such a move would make Zhongnanhai as accessible to the White House as the Kremlin. But it would also symbolize, perhaps unintentionally, the fragile and cagey relationship between the two powers. Their frequent spats - whether over trade, human rights or Taiwan - have eroded trust to the extent that the recent summit can only be a first step on a hard road to reconciliation.

Indeed, the basic differences between China and America are such that clashes seem preordained. One is the world's oldest continuous civilization, with a family-oriented culture that is almost reflexively conservative and respectful of authority. The other is the globe's youngest major civilization, which celebrates the individual and cherishes idealism, innovation and iconoclasm. Yet it is the older nation that is experiencing a resurgence, while the younger one is settling a bit uncomfortably into a less vigorous maturity. The bitter confrontations of the Cold War, though now over, have also left a legacy of mistrust between the leader of the capitalist world and the largest country that remains nominally communist.

Despite the resulting frustrations, both nations have a large and rapidly expanding stake in harmonious ties. The Chinese recognize America as the premier source of the technology and investment they need to modernize and strengthen their country. And for the U.S., China is potentially the biggest market of the next century as well as a pivotal collaborator on key international issues. Both know that peace serves not only their interests but also that of the entire Pacific region.

How can China and the U.S. manage their relationship better? Above all, each side must seek a greater understanding of the other's special characteristics and learn to treat them more sensitively. American politicians need to realize that few things are as important to China as its sovereignty and territorial integrity. The country only recently suffered a period of great internal division, arguably fanned by foreign intervention and domination. Taiwan is both a result and a reminder of that time. Until Beijing and Taipei themselves decide on a path to reconciliation, the island's fate will remain a uniquely delicate issue in which outsiders involve themselves at great peril. America's younger politicians need to be reminded that the communiqués on which U.S.-Chinese ties are founded acknowledge unequivocally that there is but one China and that Taiwan is a part of it. If the Americans continue to sell Taipei weapons or permit visits by its leaders, they will never have a smooth relationship with Beijing.

Human rights is another minefield. The situation in China is undoubtedly cause for concern - and to speak out against abuses of civil liberties is an essential element of the American character. Yet a nation as proud as China, which is now emerging from a long period of humiliation by foreign powers to reclaim a leading role on the world stage, simply will not heed anything that smacks of lecturing. Sometimes, Beijing will even act against its own interests simply to spite the lecturers.

Americans need to realize that China today is much freer and less repressive than it was just 20 years ago, primarily because of its rapid economic development. Rather than loudly confronting Beijing at every turn - and risking a backlash against their cause - Americans who want to boost human rights in China should work to expand commercial and cultural contacts. In time, these will help catalyze the desired changes. For their part, China's leaders should ease frictions with the U.S. on this score by being more accommodating of their own people's growing desire for a more relaxed society.

Beijing needs to learn more about America in other respects. It should understand that the U.S., as a democracy, speaks with a multitude of voices. Many parties mold the country's positions and policies, often after much debate and compromise. And because political careers depend to a large extent on public perceptions, populism is a persistent temptation. So China should not react oversensitively to the inflammatory rhetoric of some U.S. senators and congressmen. Beijing also needs to realize that if an American president sometimes seems weak or indecisive, it is partly because he has to share power with other elected representatives of the people - a concept still alien to China's own leaders.

In both countries, political realities pose additional obstacles to entente. China is still settling a leadership succession, while the U.S. is gearing up for its own - next year's presidential election. In each capital, a muscular posture toward the other side is widely, though mistakenly, viewed as strong statesmanship. Another potential flashpoint is China's expanding trade surplus with the U.S. Expected to exceed $38 billion this year, it is second only to Japan's. Since reducing large trade deficits has been a priority with the Clinton administration, more fireworks may lie ahead.

For all the difficulties, recent developments have been encouraging. Mr. Jiang and Mr. Clinton, who succeeded in breaking the ice in New York, will continue their efforts to boost the relationship this month at the Asia Pacific Economic Cooperation summit in Osaka. Movement in another sensitive area suggests that the favorable momentum is building. Last week, U.S. Defense Secretary William Perry announced that a senior American delegation of military experts will visit China to resume the nations' suspended dialogue on security matters.

Another positive sign may be Mr. Clinton's nomination of Mr. James Sasser, a confidant and former senator, as his next ambassador to China. Though he is no sinologist, the nominee will have the president's ear - a quality the Chinese appreciate. They were dismayed that America's last envoy, China specialist Stapleton Roy, was unable to exert much influence on the White House.

Though most Asian countries will be happy to see better Sino-American ties, one that may worry is Japan. Long an ally of the U.S. and a rival of China, it will need reassurances from both Washington and Beijing that its interests would not be jeopardized. Otherwise, Tokyo may rearm - rapidly and formidably. Good working relations among the three great powers of the Pacific are indispensable to lasting peace and stability in the region.

From Asiaweek

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