06 November 1997
TEXT: DAS KURT CAMPBELL 11/6 STATEMENT ON PLA COMMERCIAL ACTIVITY
(Engagement with China's military helps build trust) (1800) Washington -- Engagement with the People's Liberation Army (PLA) helps foster "the mature, trusting military-to-military relationship indicative of great powers -- one based on transparency and reciprocity," according to Deputy Assistant Secretary of Defense Kurt Campbell. "Engaging China is an important component of our East Asia security strategy," Campbell said in November 6 remarks before the Senate Foreign Relations Committee. "Following the successful (Clinton-Jiang) Summit, we must continue efforts to build a relationship for the 21st Century and beyond, including the pursuit of military exchanges on a fair and equitable basis. If we lack openness, transparency or reciprocity, or if we hold back even routine information on our military forces, then we will fail. We must remain engaged with China in order to foster regional peace and stability." According to Campbell, the PLA's business activity has been expanding rapidly since the mid-1980s but the scope of PLA business activity in the United States remains unclear. He noted that only two PLA firms have been identified as conducting business in the United States. However, Campbell stressed, "while we lack comprehensive information on the full scope of PLA-operated firms in the United States, we make every effort to address these concerns when engaging China's military in an effort to make their role more transparent." Following is the text of Campbell's remarks, as prepared for delivery: (begin text) STATEMENT OF DR. KURT CAMPBELL DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR ASIAN AND PACIFIC AFFAIRS BEFORE THE SENATE FOREIGN RELATIONS COMMITTEE NOVEMBER 6, 1997 Washington -- Good morning Mr. Chairman and Members of the Committee. Thank you for this opportunity to speak to you about China. In the interest of reserving time to answer any questions you may have, I respectfully request that the following statement be entered into record. I have prepared a brief statement that specifically addresses your interest in PLA commercial activities. I would like first to briefly outline our strategy in the Asia Pacific region, how we view our relationship with China within that framework, update you on developments in the military relationship post-summit, and discuss PLA commercial activities in the United States. As you know, Asia is changing at a dramatic pace and China is at the forefront of this change. Our strategy is to help shape the direction of China's evolution not only as a great economic actor but also as a key contributor to regional and world stability. A future where China has preserved its unique cultural heritage but is more open concerning security matters, more open about its markets, and more respectful of the rule of law, and human rights. The one essential element in achieving the future we seek is the expanded engagement of the United States throughout the region, such as with the recently revised U.S.-Japan Security Guidelines. China too is a beneficiary of the stable environment fostered by these arrangements. As you know, many of the economies of the region, China included, have experienced robust growth over the last several years. One effect of this growth has been a steady increase in defense budgets and force modernization in the region. Many countries are acquiring new capabilities. We believe that U.S. engagement in the region helps to mitigate any fears which could arise because individual countries are improving their military capabilities. Strengthening the military-to-military dialogue with China is an important part of the Administration's engagement policy. Over the past year, substantial progress has been made toward regularizing military dialogue. Since the visit of Minister of Defense Chi Haotian in December 1996, a succession of visits, including the May 1997 Chairman of the joint Chiefs of Staff trip to Beijing and the August 1997 People's Liberation Army Chief of the General Staff visit to the United States, has expanded and propelled our military ties to a new level. At the same time, a number of issues could impede further progress in military-to-military relations. Of primary concern are China's proliferation policies and practices. We have made significant progress with China, especially in the nuclear non-proliferation area but less on missiles and chemical weapons. We will continue our efforts to bring China's practices in line with international norms." We look for China to resolve disputes peacefully in accordance with international norms; to be more transparent and open about military affairs; and to stop the transfer of dangerous technologies to unfriendly nations. China has gone from being a net oil exporter in 1994 to a net importer today. China's reliance on oil imports, especially from the Persian Gulf, is projected to rise rapidly. This growing demand should give China a strong economic interest in stability in the Persian Gulf region. The United States understands that these goals are best achieved through constructive relations with China. That is why today the United States is pursuing a strategy of engagement with China. Our engagement strategy is this: "We will work with China where we can -- such as on the Korean Peninsula; and we will disagree where we must -- as we do with some of China's proliferation activities. I believe his engagement strategy recognizes China for what it is -- an emerging power, poised to either contribute to, or detract from, the tides of economic dynamism, cooperation, and trust that are filling the Pacific Basin. No nation has benefited more from the regional stability provided by America's engagement in the Asia Pacific than has China. Thus, none should have a greater interest in our sustaining and revitalizing those security structures that are the basis for the stability that underlies the region's economic dynamism. One purpose of Defense Secretary's visit to China this month is to ensure that the progress made between Presidents Clinton and Jiang is continued and, in that context, to build a foundation for preserving security in the region well into the next century. At this time, our two great nations are developing a better understanding based on mutual respect. We must take advantage of our warming relationship to strive for the next level. However, like all worthy and worthwhile endeavors, there is much work to be done to reach the next level in our relationship. As part of our overall engagement strategy, we are building a relationship with China's military. The PLA is a key player on the core issues that concern us. These core issues form the three pillars upon which U.S. regional security strategy is based: (1) engagement of the PRC; (2) strong bilateral security arrangements with a U.S. forward presence; and (3) prevention of the proliferation of nuclear, biological, and chemical weapons (NBC) and their delivery systems. Through our engagement of the PLA, we wish to develop the mature, trusting military-to-military relationship indicative of great powers -- one based on transparency and reciprocity. Our experience with China in this area has been mixed and we continue to strive toward a bilateral understanding on reciprocity and transparency that make our military exchanges satisfying and meaningful for both sides. We seek to understand, influence, and learn from the PLA. We seek to increase mutual confidence and decrease miscalculation. That is why we continually are engaging military personnel, have developed procedures for U.S. Navy ship port calls to Hong Kong, and are pursuing common understanding of "rules of the road" for our ships as they operate in the same seas. That is also why we are engaging in high-level strategic discussions. At this point I want to address your concerns about PLA commercial activities in the United States. As you are aware, the PLA's business activity has been expanding rapidly since the mid-1980s; however, the scope of PLA business activity in the United States is unclear. In fact, we have identified only two firms which conduct business in the U.S.. I think it is appropriate here to discuss the distinction between enterprises operated by the PLA and those operated by the defense industrial sector because the two are often confused. China's defense industries are not subordinate to the PLA and no trading companies run by the defense industries are owned, controlled, or subsidized by the PLA. Moreover, defense industry revenues not retained are remitted to other government organizations but not the PLA. Nonetheless, the PLA and defense industries are affiliated in the sense that the PLA is the primary customer for the defense industries output of military hardware. Let me be clear here. While we lack comprehensive information on the full scope of PLA-operated firms in the United States, we make every effort to address these concerns when engaging China's military in an effort to make their role more transparent. In this regard, the Summit produced several important Confidence Building Measures, including the Military Maritime Safety Agreement and our agreement for information sharing on disaster relief. While these CBMs are good first steps, we need more substantive programs to cement our relationship. For example, an agreement to conduct joint humanitarian exercises in anticipation of cooperation in the event of a natural disaster would be beneficial to our militaries and those served in time of need. We also need to develop a common vision for the Pacific Basin in the 21st Century. This common vision must advance a framework for regional security strategy in which we both can participate and benefit from. U.S. aims and objectives of our bilateral security arrangements are not to stifle, or to limit, or to contain China. Rather these arrangements are designed to provide a framework for peace and stability which benefits all countries in the region, including China and the United States. Finally, we view China's participation in the development of this framework for peace as vital. This is particularly true where we have mutual interests, such as in Persian Gulf stability. We seek China's cooperation to guarantee commercial access to the Persian Gulf for all interested parties. We view China's restraint on NBC technology transfer and other weapons proliferation as essential to the maintenance of stability in the entire region. In conclusion, engaging China is an important component of our East Asia security strategy. Following the successful Summit, we must continue efforts to build a relationship for the 21st Century and beyond, including the pursuit of military exchanges on a fair and equitable basis. If we lack openness, transparency or reciprocity, or if we hold back even routine information on our military forces, then we will fail. We must remain engaged with China in order to foster regional peace and stability. Thank you once again for the opportunity to address this topic today. I'd be happy to answer any questions you have. (end text)
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