Terabyte Leaks and Political Legitimacy in the U.S. and China

What the brave new world of global information warfare means for political and business elites everywhere.

The “leaking” of information is a time-honored tactic to undermine the legitimacy of a political opponent or a policy. Sir Winston Churchill relied on it during the run-up to World War II to attack what he saw as weak British responses to German rearmament.

Ever the master of using information and disinformation, he would use question time in the parliament to reveal morsels of secret information. As part of an embarrassment strategy, these were drawn from UK intelligence assessments of Germany’s military build-up and from UK policy planning documents.

At another level, the sustained control of information has always been viewed as central to political power. The totalitarian governments of the 20th century were among the best practitioners. The term propaganda came to symbolize this technique of political control of information.

Leaks and global governance

In such a governance frame, the idea of a strategic leak has always been one of a slow trickle of pieces of information. Meanwhile, the event itself or the process in question was unlikely to undermine the power of a determined state propaganda machine.

But now the old style of a steady flow of bit-by-bit “leaks” may be passing into history. Welcome to the brave new world of avalanche-like leaks, where the unauthorized release of secrets has moved from a trickle to a virtual flood.

And now, that flood has even biblical proportions. Wikileaks has been a manifestation of the changing times. All that is required is having a suitable platform to release those occasional floods of secret information.

In publishing 251,287 diplomatic cables from the U.S. government, the Wikileaks website provided a sustained embarrassment to the United States.

Wikileaks is passing into history

While there were temporary setbacks, the leaks did not shake the government to its core—or bring about the end of any political career. The total file size of the entire package of leaked cables was less than two gigabytes (2 billion bytes).

But Wikileaks is passing into history. By comparison, on some estimates, Edward Snowden took from the NSA 2,000 times as much information (4 terabytes, or 8 trillion bytes).

This did shake the United States government to the core. It did so not because Snowden revealed unusual activities that were not previously contemplated. The surprise lay in the scale of activity for which the U.S. government was fingered. That stunned people around the globe, foreigners first and, remarkably, American citizens later.

Leaks and legitimacy

The terabyte leaks of Snowden raised serious questions about the capacity of the United States government at a high political level: Can it contain the enormous technological potential of its own machines as well as the officials and managers who operate them?

The issue is not just one of basic constitutional rights. It also immediately raises questions of the moral legitimacy of government. The contest over whether Snowden’s acts were heroic or traitorous speaks to the depth of his impact on the legitimacy of the Obama administration.

That was June 2013. Within just seven short months, the wheel has turned again. The numbers have become even more staggering and the political environment around information security has become more chaotic as a result.

As the absolute size of the “leaks” is growing, it seems there will be growing threats to political legitimacy not really imaginable in earlier days.

China’s Snowden moment

Just as Wikileaks shook the US government to its core, China is now facing a similar seismic event.

This has been particularly visible in reports this week analyzing 2.5 million leaked files from offshore tax havens in the British Virgin Islands and the Cook Islands.

The leaks in question occurred more than a year ago and led to rapid adjustments in many tax jurisdictions to close loopholes highlighted by particular cases in the leaked documents.

But the sheer volume of the material meant that it has taken a team of more than 50 journalists worldwide over a year to start to see the totality of the files in a way that speaks very directly to bigger issues of political legitimacy.

As one might expect of journalists, to address the way these leaks threaten political legitimacy, they chose a prime news target: China’s ruling Communist Party and its wealthiest entrepreneurs.

In these tax havens, the International Consortium of Investigative Journalists (ICIJ) has identified 22,000 separate clients residing in China (including Hong Kong) who held offshore accounts. These are included in a database accessible through the ICIJ website.

The “red nobility” goes fishing

Their reports on China this week highlight the wealth and offshore trading of China’s “red nobility”, descendants or relatives of former or current Chinese leaders. There are no smoking guns revealed in the ICIJ reports on China so far, but there is no doubting the political sensitivity of the leaks.

To be sure, China’s internet censors have blocked all access in China to the database webpage and almost all access to the reports.

International media have correctly pointed out the link between this sort of information leak and the cases in 2012 of reports on the personal wealth of the extended family members of Wen Jiabao (then the Prime Minister) and Xi Jinping (then the named successor as Communist Party Secretary General).

Yet, the bigger story is not in the specifics of even these two notable families, but rather in the new phenomenon that the ICIJ database and its information sources represent.

Credibility at stake

Even if the Chinese offshore accounts are not illegal, many will be in some way connected with corrupt activity. Either way, the available data is so extensive and so unfamiliar to most Chinese citizens that it puts the credibility of the entire Chinese ruling elite in play. It does not matter whether this is elaborated in broad daylight or not.

Behind the scenes in China, the leaders have moved aggressively to shore up cyber security arrangements affecting their personal lives. But all indications are that this is an exercise doomed to failure.

There is now no single issue more sensitive in China than internet reporting on the leaders. Nor is there a topic of more public interest which, depending on your viewpoint, may either be curious or predictable for a formerly very closed society.

To counteract that imminent threat, China’s leadership has tried the route of technical surveillance by any means and of anyone.

Internet terror, anyone?

The term “internet terror” is used in newspapers in China to describe the practice of using leaked information to affect political careers and personal lives. The leaders now know that it affects them, and their hold on power, as well.

They fear the near certainty that there is a Chinese Edward Snowden out there who will deliver an even greater information catastrophe to them.

They also fear that one day soon, the U.S. intelligence community, with its massive cyber surveillance capability, will link up with investigative journalists or other activists to publish sensitive information about the leaders on such a scale that the Community Party itself will be discredited almost overnight.

They have images from 1989 in their minds: the Tiananmen protests and the collapse of Communist Parties in Eastern Europe. Now they fear the next wave of resistance will occur online.

Indeed, the U.S. government in 2010 offered funding for Falun Gong internet activity against the Chinese government.

Welcome to the info wars

These considerations give rise to a possible process of action and reaction. This mix of insecurity and conjecture could possibly lead to an information war.

The Chinese Foreign Ministry has already called into question the motives of the ICIJ, meaning a presumption that they are trying to dismantle Party legitimacy in China. As the terabyte leaks affecting China’s political class accumulate, the leaders’ insecurity will also increase.

One thing is for sure: The international information wars are moving to new levels. Issues of ethics and legitimacy long considered settled are now at risk in novel ways either because of the very large scale of leaks themselves or the scale they can take on through new internet-based media.

In the end, we may hope that liberal democracy—as in rule by the people in an atmosphere of personal freedom—can be the ultimate victor. But those who study the new technologies and politics, including in China, do not see that as inevitable.

Photo Credit: JoshuaDavisPhotography

Wilson Center 
Wilson Center (YouTube)

Brookings

Taipei Times

U.S.-China Economic Security Review Commission

Radio France International

Want China Times

International Relations and Security Network (ISN)/ETH Zurich

China-U.S. Focus

CD News (Taiwan)

VOA (Chinese) 
VOA (Cantonese) 
VOA (Fanti)

World Journal

Sina (Taiwan)

US China Press

Sing Tao Daily 

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Read the original article in New Europe, or see below. 

Much of 20th Century history unfolded in the shadow of events in Europe in August 1914, when major powers in Europe launched one of the most savage wars the world had seen. August 2014 is looking very different. The most powerful countries are as intent on avoiding war today as their European forebears were intent on making it 100 years ago. Yet the consequences of confrontations and alliances in this coming year may well determine much of what follows for decades to come. 

The wild card for 2014 in global alliance architecture is the geography between China and Japan. It includes the Korean Peninsula, the East China Sea and Taiwan. All three have changed their geopolitical character in significant and destabilizing ways in the past decade. Yet unlike 1914, geopolitics today is seated in an interlocking web of globalized investment, trade and networked communications. This globalization of interest seems to offer a massive counterweight to any shocks that geopolitical confrontation might deliver.

The major potential catalyst for a shock that I see concerns Taiwan. While we have seen a strong positive trend in the relationship between it and China, it is this new closeness that is itself creating the danger. 

The United States has undertaken a strategic rebalancing to Asia to hedge against military destabilization there. That move, understandable in its own limited terms, has taken on more negative overtones for China as a result of the subsequent return to power in Japan of Shinzo Abe. He leads an unapologetically robust Japanese government, which is intent on normalizing its international security status, recalibrating its armed forces against China’s military modernization, and consigning apology diplomacy to the dustbin of history. There is now a naval arms race in East Asia.

Taiwan has done nothing to inflame the situation and has been promoting cooperative diplomacy between Japan and China. The conduct of Taiwan/China relations by both sides has been a model of cooperation. What is the crisis potential around Taiwan?

For decades, China has threatened the use of military force against Taiwan and any intervening U.S. forces to prevent the permanent separation of the island from its mother state. What we now see emerging is the opportunity for China to promote the permanent separation of Taiwan from military alliance with the United States. 

China and Taiwan now have common cause against Japan’s uncompromising stand on territorial sovereignty over the disputed islands. Both claim the islands based on their common history as part of a unified China. The issue has become more emotional than ever. The United States position on the dispute has inflamed sentiment in China regardless of the logic of it.

A century ago, the change in allegiance of a strategically placed “client state” at a time of anxiety about changing balance of power was a classic recipe for military crisis. Luckily, the world has changed, Taiwan is not a client state of the United States, and aggressive war of the sort that such changes of allegiance once provoked has been outlawed for at least seventy years, since the signing of the United Nations Charter. 

But there should be no mistaking the strategic trends. Taiwan’s geopolitical position is changing fundamentally and events in the past year and in prospect for 2014 suggest a quickening of the pace. The only question we have to answer is what form will any shift in alliances take, and what sort of crisis might it provoke? 

Perhaps we can take a hint from the early days of the George W. Bush Administration when anti-China neo-conservatives tried to force more arms purchases on Taiwan that its parliament and government wanted. Those days are long gone, but they revealed the American geopolitical mentality at its worst and the Taiwan geo-economic mentality at its best. This is not as inevitable a partnership as many in Washington believe. 

What is Taiwan’s situation? A 2013 paper from Brookings by Joshua Melzer shows China (including Hong Kong) now taking 40 per cent of Taiwan’s trade, with the United States dropping to a 10 per cent share. The reversal over two decades of the relative positions of China and the United States in Taiwan’s trade pattern is historic, even if as Melzer points out, the United States is a primary destination of production from Taiwan-invested factories in China.  

Deeper analysis is needed. What is the significance of the statement on 10 October 2013 by President Ma Ying-jeou that the people of Taiwan are part of the Chinese nationality and that cross-strait relations are not “international” relations? What is the significance of the 30-year low in arms purchases from the United States by Taiwan?  

What are the trends in people to people contacts? Is China’s policy of binding Taiwan to it with economic ropes (in place for twenty years) finally working? Does 17 years of the “one country two systems” model in place in Hong Kong have any impact in Taiwan?

Above all, what would the impact be of a scene in 2014 of Chinese PLA navy vessels defending Taiwanese national dignity and possibly its citizens against Japanese actions in the Senkaku/Diaoyu Islands–when the United States has been so visibly backing Japan, with the former having invoked the 1951 Mutual Defense Treaty? 

I will not predict an outcome for East Asian alliances in 2014, but are we approaching an historic tipping point equivalent in geopolitical significance to the events of August 1914? I believe we probably are. Much more skilful and creative diplomacy may be needed in East Asia than we have seen so far.

Read the article in China US Focus. 

TAIWAN RELATIONS ACT PUBLIC LAW 96-8 96TH CONGRESS

January 1, 1979

An Act

To help maintain peace, security, and stability in the Western Pacific and to promote the foreign policy of the United States by authorizing the continuation of commercial, cultural, and other relations between the people of the United States and the people on Taiwan, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

Short Title

SECTION 1. This Act may be cited as the "Taiwan Relations Act".

Findings and Declaration of Policy

Section. 2.

1. The President- having terminated governmental relations between the United States and the governing authorities on Taiwan recognized by the United States as the Republic of China prior to January 1, 1979, the Congress finds that the enactment of this Act is necessary--
   1. to help maintain peace, security, and stability in the Western Pacific; and
   2. to promote the foreign policy of the United States by authorizing the continuation of commercial, cultural, and other relations between the people of the United States and the people on Taiwan.
2. It is the policy of the United States--
   1. to preserve and promote extensive, close, and friendly commercial, cultural, and other relations between the people of the United States and the people on Taiwan, as well as the people on the China mainland and all other peoples of the Western Pacific area;
   2. to declare that peace and stability in the area are in the political, security, and economic interests of the United States, and are matters of international concern;
   3. to make clear that the United States decision to establish diplomatic relations with the People's Republic of China rests upon the expectation that the future of Taiwan will be determined by peaceful means;
   4. to consider any effort to determine the future of Taiwan by other than peaceful means, including by boycotts or embargoes, a threat to the peace and security of the Western Pacific area and of grave concern to the United States;
   5. to provide Taiwan with arms of a defensive character; and
   6. to maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.
3. Nothing contained in this Act shall contravene the interest of the United States in human rights, especially with respect to the human rights of all the approximately eighteen million inhabitants of Taiwan. The preservation and enhancement of the human rights of all the people on Taiwan are hereby reaffirmed as objectives of the United States.

Implementation of United States Policy with Regard to Taiwan

Section. 3.

1. In furtherance of the policy set forth in section 2 of this Act, the United States will make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability.
2. The President and the Congress shall determine the nature and quantity of such defense articles and services based solely upon their judgment of the needs of Taiwan, in accordance with procedures established by law. Such determination of Taiwan's defense needs shall include review by United States military authorities in connection with recommendations to the President and the Congress.
3. The President is directed to inform the Congress promptly of any threat to the security or the social or economic system of the people on Taiwan and any danger to the interests of the United States arising therefrom. The President and the Congress shall determine, in accordance with constitutional processes, appropriate action by the United States in response to any such danger.

Application of Laws; International Agreements

Section. 4.

1. The absence of diplomatic relations or recognition shall not affect the application of the laws of the United States with respect to Taiwan, and the laws of the United States shall apply with respect to Taiwan in the manner that the laws of the United States applied with respect to Taiwan prior to January 1, 1979.
2. The application of subsection (a) of this section shall include, but shall not be limited to, the following:
   1. Whenever the laws of the United States refer or relate to foreign countries, nations, states, governments, or similar entities, such terms shall include and such laws shall apply with such respect to Taiwan.
   2. Whenever authorized by or pursuant to the laws of the United States to conduct or carry out programs, transactions, or other relations with respect to foreign countries, nations, states, governments, or similar entities, the President or any agency of the United States Government is authorized to conduct and carry out, in accordance with section 6 of this Act, such programs, transactions, and other relations with respect to Taiwan (including, but not limited to, the performance of services for the United States through contracts with commercial entities on Taiwan), in accordance with the applicable laws of the United States.
   3. 1. The absence of diplomatic relations and recognition with respect to Taiwan shall not abrogate, infringe, modify, deny, or otherwise affect in any way any rights or obligations (including but not limited to those involving contracts, debts, or property interests of any kind) under the laws of the United States heretofore or hereafter acquired by or with respect to Taiwan.
      2. For all purposes under the laws of the United States, including actions in any court in the United States, recognition of the People's Republic of China shall not affect in any way the ownership of or other rights or interests in properties, tangible and intangible, and other things of value, owned or held on or prior to December 31, 1978, or thereafter acquired or earned by the governing authorities on Taiwan.
   4. Whenever the application of the laws of the United States depends upon the law that is or was applicable on Taiwan or compliance therewith, the law applied by the people on Taiwan shall be considered the applicable law for that purpose.
   5. Nothing in this Act, nor the facts of the President's action in extending diplomatic recognition to the People's Republic of China, the absence of diplomatic relations between the people on Taiwan and the United States, or the lack of recognition by the United States, and attendant circumstances thereto, shall be construed in any administrative or judicial proceeding as a basis for any United States Government agency, commission, or department to make a finding of fact or determination of law, under the Atomic Energy Act of 1954 and the Nuclear Non-Proliferation Act of 1978, to deny an export license application or to revoke an existing export license for nuclear exports to Taiwan.
   6. For purposes of the Immigration and Nationality Act, Taiwan may be treated in the manner specified in the first sentence of section 202(b) of that Act.
   7. The capacity of Taiwan to sue and be sued in courts in the United States, in accordance with the laws of the United States, shall not be abrogated, infringed, modified, denied, or otherwise affected in any way by the absence of diplomatic relations or recognition.
   8. No requirement, whether expressed or implied, under the laws of the United States with respect to maintenance of diplomatic relations or recognition shall be applicable with respect to Taiwan.
3. For all purposes, including actions in any court in the United States, the Congress approves the continuation in force of all treaties and other international agreements, including multilateral conventions, entered into by the United States and the governing authorities on Taiwan recognized by the United States as the Republic of China prior to January 1, 1979, and in force between them on December 31, 1978, unless and until terminated in accordance with law.
4. Nothing in this Act may be construed as a basis for supporting the exclusion or expulsion of Taiwan from continued membership in any international financial institution or any other international organization.

Overseas Private Investment Corporation

Section. 5.

1. During the three-year period beginning on the date of enactment of this Act, the $1,000 per capita income restriction in insurance, clause (2) of the second undesignated paragraph of section 231 of the reinsurance, Foreign Assistance Act of 1961 shall not restrict the activities of the Overseas Private Investment Corporation in determining whether to provide any insurance, reinsurance, loans, or guaranties with respect to investment projects on Taiwan.
2. Except as provided in subsection (a) of this section, in issuing insurance, reinsurance, loans, or guaranties with respect to investment projects on Taiwan, the Overseas Private Insurance Corporation shall apply the same criteria as those applicable in other parts of the world.

The American Institute of Taiwan

Section. 6.

1. Programs, transactions, and other relations conducted or carried out by the President or any agency of the United States Government with respect to Taiwan shall, in the manner and to the extent directed by the President, be conducted and carried out by or through--
   1. The American Institute in Taiwan, a nonprofit corporation incorporated under the laws of the District of Columbia, or
   2. such comparable successor nongovermental entity as the President may designate, (hereafter in this Act referred to as the "Institute").
2. Whenever the President or any agency of the United States Government is authorized or required by or pursuant to the laws of the United States to enter into, perform, enforce, or have in force an agreement or transaction relative to Taiwan, such agreement or transaction shall be entered into, performed, and enforced, in the manner and to the extent directed by the President, by or through the Institute.
3. To the extent that any law, rule, regulation, or ordinance of the District of Columbia, or of any State or political subdivision thereof in which the Institute is incorporated or doing business, impedes or otherwise interferes with the performance of the functions of the Institute pursuant to this Act; such law, rule, regulation, or ordinance shall be deemed to be preempted by this Act.

Services by the Institute to United States Citizens on Taiwan

Section. 7.

1. The Institute may authorize any of its employees on Taiwan--
   1. to administer to or take from any person an oath, affirmation, affidavit, or deposition, and to perform any notarial act which any notary public is required or authorized by law to perform within the United States;
   2. To act as provisional conservator of the personal estates of deceased United States citizens; and
   3. to assist and protect the interests of United States persons by performing other acts such as are authorized to be performed outside the United States for consular purposes by such laws of the United States as the President may specify.
2. Acts performed by authorized employees of the Institute under this section shall be valid, and of like force and effect within the United States, as if performed by any other person authorized under the laws of the United States to perform such acts. 

Tax Exempt Status of the Institute

SECTION. 8.

1. The Institute, its property, and its income are exempt from all taxation now or hereafter imposed by the United States (except to the extent that section 11(a)(3) of this Act requires the imposition of taxes imposed under chapter 21 of the Internal Revenue Code of 1954, relating to the Federal Insurance Contributions Act) or by State or local taxing authority of the United States.
2. For purposes of the Internal Revenue Code of 1954, the Institute shall be treated as an organization described in sections 170(b)(1)(A), 170(c), 2055(a), 2106(a)(2)(A),, 2522(a), and 2522(b). 

FURNISHING PROPERTY AND SERVICES TO AND OBTAINING SERVICES FROM THE INSTITUTE

Section. 9.

1. Any agency of the United States Government is authorized to sell, loan, or lease property (including interests therein) to, and to perform administrative and technical support functions and services for the operations of, the Institute upon such terms and conditions as the President may direct. Reimbursements to agencies under this subsection shall be credited to the current applicable appropriation of the agency concerned.
2. Any agency of the United States Government is authorized to acquire and accept services from the Institute upon such terms and conditions as the President may direct. Whenever the President determines it to be in furtherance of the purposes of this Act, the procurement of services by such agencies from the Institute may be effected without regard to such laws of the United States normally applicable to the acquisition of services by such agencies as the President may specify by Executive order.
3. Any agency of the United States Government making funds available to the Institute in accordance with this Act shall make arrangements with the Institute for the Comptroller General of the United States to have access to the; books and records of the Institute and the opportunity to audit the operations of the Institute.

Taiwan Instrumentality

Section. 10.

1. Whenever the President or any agency of the United States Government is authorized or required by or pursuant to the laws of the United States to render or provide to or to receive or accept from Taiwan, any performance, communication, assurance, undertaking, or other action, such action shall, in the manner and to the. extent directed by the President, be rendered or Provided to, or received or accepted from, an instrumentality established by Taiwan which the President determines has the necessary authority under the laws applied by the people on Taiwan to provide assurances and take other actions on behalf of Taiwan in accordance with this Act. 
2. The President is requested to extend to the instrumentality established by Taiwan the same number of offices and complement of personnel as were previously operated in the United States by the governing authorities on Taiwan recognized as the Republic of China prior to January 1, 1979.
3. Upon the granting by Taiwan of comparable privileges and immunities with respect to the Institute and its appropriate personnel, the President is authorized to extend with respect to the Taiwan instrumentality and its appropriate; personnel, such privileges and immunities (subject to appropriate conditions and obligations) as may be necessary for the effective performance of their functions.

Separation of Government Personnel for Employment with the Institute

Section. 11.

1. 1. Under such terms and conditions as the President may direct, any agency of the United States Government may separate from Government service for a specified period any officer or employee of that agency who accepts employment with the Institute.
   2. An officer or employee separated by an agency under paragraph (1) of this subsection for employment with the Institute shall be entitled upon termination of such employment to reemployment or reinstatement with such agency (or a successor agency) in an appropriate position with the attendant rights, privileges, and benefits with the officer or employee would have had or acquired had he or she not been so separated, subject to such time period and other conditions as the President may prescribe.
   3. An officer or employee entitled to reemployment or reinstatement rights under paragraph (2) of this subsection shall, while continuously employed by the Institute with no break in continuity of service, continue to participate in any benefit program in which such officer or employee was participating prior to employment by the Institute, including programs for compensation for job-related death, injury, or illness; programs for health and life insurance; programs for annual, sick, and other statutory leave; and programs for retirement under any system established by the laws of the United States; except that employment with the Institute shall be the basis for participation in such programs only to the extent that employee deductions and employer contributions, as required, in payment for such participation for the period of employment with the Institute, are currently deposited in the program's or system's fund or depository. Death or retirement of any such officer or employee during approved service with the Institute and prior to reemployment or reinstatement shall be considered a death in or retirement from Government service for purposes of any employee or survivor benefits acquired by reason of service with an agency of the United States Government.
   4. Any officer or employee of an agency of the United States Government who entered into service with the Institute on approved leave of absence without pay prior to the enactment of this Act shall receive the benefits of this section for the period of such service.
2. Any agency of the United States Government employing alien personnel on Taiwan may transfer such personnel, with accrued allowances, benefits, and rights, to the Institute without a break in service for purposes of retirement and other benefits, including continued participation in any system established by the laws of the United States for the retirement of employees in which the alien was participating prior to the transfer to the Institute, except that employment with the Institute shall be creditable for retirement purposes only to the extent that employee deductions and employer contributions.. as required, in payment for such participation for the period of employment with the Institute, are currently deposited in the system' s fund or depository.
3. Employees of the Institute shall not be employees of the United States and, in representing the Institute, shall be exempt from section 207 of title 18, United States Code.
4. 1. For purposes of sections 911 and 913 of the Internal Revenue Code of 1954, amounts paid by the Institute to its employees shall not be treated as earned income. Amounts received by employees of the Institute shall not be included in gross income, and shall be exempt from taxation, to the extent that they are equivalent to amounts received by civilian officers and employees of the Government of the United States as allowances and benefits which are exempt from taxation under section 912 of such Code.
   2. Except to the extent required by subsection (a)(3) of this section, service performed in the employ of the Institute shall not constitute employment for purposes of chapter 21 of such Code and title II of the Social Security Act.

Reporting Requirement

Section. 12.

1. The Secretary of State shall transmit to the Congress the text of any agreement to which the Institute is a party. However, any such agreement the immediate public disclosure of which would, in the opinion of the President, be prejudicial to the national security of the United States shall not be so transmitted to the Congress but shall be transmitted to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives under an appropriate injunction of secrecy to be removed only upon due notice from the President. 
2. For purposes of subsection (a), the term "agreement" includes-
   1. any agreement entered into between the Institute and the governing authorities on Taiwan or the instrumentality established by Taiwan; and 
   2. any agreement entered into between the Institute and an agency of the United States Government. 
3. Agreements and transactions made or to be made by or through the Institute shall be subject to the same congressional notification, review, and approval requirements and procedures as if such agreements and transactions were made by or through the agency of the United States Government on behalf of which the Institute is acting. 
4. During the two-year period beginning on the effective date of this Act, the Secretary of State shall transmit to the Speaker of the House and Senate House of Representatives and the Committee on Foreign Relations of Foreign Relations the Senate, every six months, a report describing and reviewing economic relations between the United States and Taiwan, noting any interference with normal commercial relations. 

RULES AND REGULATIONS

SECTION. 13.

The President is authorized to prescribe such rules and regulations as he may deem appropriate to carry out the purposes of this Act. During the three-year period beginning on the effective date speaker of this Act, such rules and regulations shall be transmitted promptly to the Speaker of the House of Representatives and to the Committee on Foreign Relations of the Senate. Such action shall.not, however, relieve the Institute of the responsibilities placed upon it by this Act.'

Congressional Oversight

Section. 14.

1. The Committee on Foreign Affairs of the House of Representatives, the Committee on Foreign Relations of the Senate, and other appropriate committees of the Congress shall monitor-
   1. the implementation of the provisions of this Act;
   2. the operation and procedures of the Institute;
   3. the legal and technical aspects of the continuing relationship between the United States and Taiwan; and
   4. the implementation of the policies of the United States concerning security and cooperation in East Asia.
2. Such committees shall report, as appropriate, to their respective Houses on the results of their monitoring.

Definitions

Section. 15. For purposes of this Act-

1. the term "laws of the United States" includes any statute, rule, regulation, ordinance, order, or judicial rule of decision of the United States or any political subdivision thereof; and
2. the term "Taiwan" includes, as the context may require, the islands of Taiwan and the Pescadores, the people on those islands, corporations and other entities and associations created or organized under the laws applied on those islands, and the governing authorities on Taiwan recognized by the United States as the Republic of China prior to January 1, 1979, and any successor governing authorities (including political subdivisions, agencies, and instrumentalities thereof).

Authorization of Appriations

Section. 16.

In addition to funds otherwise available to carry out the provisions of this Act, there are authorized to be appropriated to the Secretary of State for the fiscal year 1980 such funds as may be necessary to carry out such provisions. Such funds are authorized to remain available until expended.

Severability of Provisions

Section. 17.

If any provision of this Act or the application thereof to any person or circumstance is held invalid, the remainder of the Act and the application of such provision to any other person or circumstance shall not be affected thereby.

Effective Date

Section. 18.

This Act shall be effective as of January 1, 1979. Approved April 10, 1979.

_

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Joint Communiqué of the People's Republic of China and the United States of America

August 17, 1982

(1) In the Joint Communique on the Establishment of Diplomatic Relations on January 1, 1979, issued by the Government of the United States of America and the Government of the People's Republic of China, the United States of America recognized the Government of the People's Republic of China as the sole legal Government of China, and it acknowledged the Chinese position that there is but one China and Taiwan is part of China. Within that context, the two sides agreed that the people of the United States would continue to maintain cultural, commercial, and other unofficial relations with the people of Taiwan. On this basis, relations between the United States and China were normalized.

(2) The question of United States arms sales to Taiwan was not settled in the course of negotiations between the two countries on establishing diplomatic relations. The two sides held differing positions, and the Chinese side stated that it would raise the issue again following normalization. Recognizing that this issue would seriously hamper the development of United States-China relations, they have held further discussions on it, during and since the meetings between President Ronald Reagan and Premier Zhao Ziyang and between Secretary of State Alexander M. Haig, Jr. and Vice Premier and Foreign Minister Huang Hua in October 1981.

(3) Respect for each other's sovereignty and territorial integrity and non-interference in each other's internal affairs constitute the fundamental principles guiding United States-China relations.  These principles were confirmed in the Shanghai Communique of February 28, 1972 and reaffirmed in the Joint Communique on the Establishment of Diplomatic Relations which came into effect on January 1, 1979. Both sides emphatically state that these principles continue to govern all aspects of their relations.

(4) The Chinese Government reiterates that the question of Taiwan is China's internal affair. The
message to Compatriots in Taiwan issued by China on January 1, 1979 promulgated a fundamental policy of striving for peaceful reunification of the motherland. The Nine-Point Proposal put forward by China on September 30, 1981 represented a further major effort under this fundamental policy to strive for a peaceful solution to the Taiwan question.

(5) The United States Government attaches great importance to its relations with China, and reiterates that it has no intention of infringing on Chinese sovereignty and territorial integrity, or interfering in China's internal affairs, or pursuing a policy of "two Chinas" or "one China, one Taiwan." The United States Government understands and appreciates the Chinese policy of striving for a peaceful resolution of the Taiwan question as indicated in China's Message to Compatriots in Taiwan issued on January 1, 1979 and the Nine-Point Proposal put forward by China on September 30, 1981. The new situation which has emerged with regard to the Taiwan question also provides favorable conditions for the settlement of United States-China differences over United States arms sales to Taiwan.

(6) Having in mind the foregoing statements of both sides, the United States Government states that it does not seek to carry out a long-term policy of arms sales to Taiwan, that its arms sales to Taiwan will not exceed, either in qualitative or in quantitative terms, the level of those supplied in recent years since the establishment of diplomatic relations between the United States and China, and that it intends gradually to reduce its sale of arms to Taiwan, leading, over a period of time, to a final resolution.  In so stating, the United States acknowledges China's consistent position regarding the thorough settlement of this issue.

(7) In order to bring about, over a period of time, a final settlement of the question of United States arms sales to Taiwan, which is an issue rooted in history, the two Governments will make every effort to adopt measures and create conditions conducive to the thorough settlement of this issue.

(8) The development of United states-China relations is not only in the interests of the two peoples but also conducive to peace and stability in the world.  The two sides are determined, on the principle of equality and mutual benefit, to strengthen their ties in the economic, cultural, educational, scientific, technological and other fields and make strong, joint efforts for the continued development of relations between the Governments and peoples of the United States and China.

(9)  In order to bring about the healthy development of United States-China relations, maintain world peace and oppose aggression and expansion, the two Governments reaffirm the principles agreed on by the two sides in the Shanghai Communique and the Joint Communique on the Establishment of Diplomatic Relations. The two sides will maintain contact and hold appropriate consultations on bilateral and international issues of common interest.

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Moderated by Robert M. Hathaway, director of the Wilson Center’s Asia Program, the panel discussion was co-sponsored by the Kissinger Institute on China and the United States.  Joining the authors of the report on the panel were Richard C. Bush, director of Brookings’ Center for East Asian Policy Studies, and Zhou Qi, senior fellow and director of American Politics at the Chinese Institute of American Studies (CASS). 

The panel focused on ways to reduce the mistrust that the issue of U.S. arms sales to Taiwan has historically generated in the U.S.-China relationship. “The current policies are failing from the standpoint of all three of the stakeholders,” David Firestein said. 

Think tank experts, journalists from mainland China, Taiwan and the United States, government officials and representatives of the diplomatic community participated in the subsequent lively discussion. Questions touched on a range of topics, from the reception the report received in Washington, Beijing and Taipei to the annual cap on arms sales proposed in the report. 

Bush and Hathaway hailed the report in their remarks. “This report is a very valuable resource… [it] will be one of those things I put on the shelf of books and reports that I need to get to at a minute’s notice,” Bush said. Hathaway added that this report on a difficult, highly sensitive issue was “unusually balanced, realistic and constructive.” 

Watch the webcast of the event:

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Read the about the Threading the Needle launch event in Washington D.C.