quires that something be taken from the rich landlord and given to the poor tenant. A decent health system in a poor country requires changes in doctors' professional attitudes and standards (which have been set by the developed countries) to allow the use of less costly paramedics. Salary increases of factory workers may have to be slowed, both so that some of the economic benefits of increased productivity can go to the families of nonfactory labor, who constitute the majority of society, and to reduce the incentive to use costly labor-saving machinery at a time when much surplus labor is available. The prices farmers get for their products must be improved, despite protests from the city dwellers. We all know how difficult these matters are to handle in a wealthy, modern society like the United States, where Americans are still debating full employment and full health care. This debate is even more intense, and the solutions even more difficult to achieve in economically poor societies. The lessons from Taiwan for the developed countries also are many. The high growth rates in Taiwan have made it far easier to achieve major reforms without major violence or extreme authoritarianism. And higher growth rates require more foreign exchange for machinery and for raw materials. It is no accident that every success story in the developing world in the 1960's which managed to combine major economic and social improvements for the whole population with high economic growth rates-for example, Israel, South Korea, Taiwan, Yugoslavia-is a society that has had broad access to aid, investment, and trade. Restructuring a society within growth is clearly much easier than restructuring a society within stagnation. Americans see in their own society how much more difficult it is to move people out of depressed industries during a period of recession than it is in a period of growth when alternative employment is open. This is certainly true for developing countries. But there is a real dilemma in finding additional sources of foreign exchange. In the final analysis it must come from aid, trade, and investment. There is no need to remind the Members of Congress, particularly those on this committee, of this dilemma. Not only are our aid expenditures falling, but protectionist winds are blowing strongly, as illustrated by the Burke-Hartke proposal. TAIWAN AND THE U.S. ECONOMY Taiwan has become an increasingly important trading partner for the United States in recent years. Despite the end of the AID program in 1965, U.S. exports have increased from $100 million in 1960, largely financed by the U.S. Government. to nearly $600 million in 1971. U.S. imports from Taiwan, in the same period, have increased even faster, from less than $30 million to more than $800 million in 1971. American investment in Taiwan graphically illustrates the new pattern of U.S. overseas investment to take advantage of low labor costs overseas to help meet foreign competition. A considerable portion of U.S. imports from Taiwan are for incorporation in U.S. brand names products partially manufactured or assembled in the United States, enabling these items to remain competitive in the United States and overseas with products from Japan and Europe. The employment benefits to Taiwan are substantial. A U.S. firm, General Electronics, is now the single largest private industrial employer on Taiwan. Taiwan's trade has continued to increase in 1972. However, the unseating of Taipei from the United Nations and President Nixon's trip to Peking, with its communique, have created uncertainties that can be expected to slow new foreign investment in Taiwan. The Japanese Government has suspended the granting of new credits to Taiwan since the U.N. vote in the fall, and Japanese business investments have slowed greatly. I would single out as the perfect example of ill-timed action, of the mystery of short term politics over longer term U.S. national and global interest, Ambassador David Kennedy's ironfisted mission to East Asia of November 1971, when he imposed "voluntary" restraints on exports to the United States from Taiwan, South Korea, and Hong Kong, which will impair their exports by hundreds of millions of dollars annually. The dynamics of Taiwan's economy today are such, however, that it should continue to grow rapidly in 1972 and 1973, if it does not suffer major new shocks such as the devastating effect on its exports if the Burke-Hartke bill were enacted in its present form. CONCLUSION The problems facing the developing countries in the years ahead are so great, as they seek to maintain and increase growth rates, improve markedly the liv ing standards of their poorer masses, slow population growth and anticipate the growing problems of the environment, that they need the benefit of every major successful experiment regardless of its ideological origin. Taiwan's experience, which was a major resource drawn on in the early 1960's by the world's agricultural researchers seeking to solve the emerging food crisis, and by the economists of the mid-1960's seeking successful growth and export models, has possibly an even larger contribution to offer other countries trying to solve their still uncontrolled unemployment, poverty, and population problems. Ultimately, there will need to be a resolution of the issues between the Chinese on the mainland and those on Taiwan. Hopefully, there is sufficient genius in the Chinese specifically and in the world community generally that armed conflict and the use of force can be avoided. Meanwhile, the developing countries of the world urgently need to know more about the strengths and limitations and transferability of the mostly different, but in some ways similar, development experiences of both mainland China and Taiwan. The United States can also learn much from its past foreign aid and current trade and investment involvement with Taiwan to guide its polices elsewhere in the world. ATTACHMENT 1.-COMPARISON OF THE ECONOMIES OF THE PHILIPPINES, TAIWAN, AND MEXICO 1 1 The 3 countries have many differences in their backgrounds, but each has fashioned its own variant of a vigorous free enterprise system and has had its own special form of access to American resources and technology: Mexico via proximity, tourist earnings and access to Wall Street finance; the Philippines by special treaty and tariff relationships, large sums from the United States via sugar quotas, veteran payments, etc., and moderate foreign aid; and Taiwan through large amounts of U.S. military aid and supporting economic assistance until the mid-1960's. Taiwan did not begin to perform spectacularly until it made a series of major policy changes, for the rural areas in the early 1950's, and for the industrial export sector in about 1960. The same is true for Korea, whose performance bears many similarities to Taiwan. 2 Approximate figures. 3 Intensive family planning program started. Mr. GALLAGHER. Dr. Reisman. STATEMENT OF MICHAEL REISMAN, ASSOCIATE PROFESSOR, YALE LAW SCHOOL BIOGRAPHY Mr. Reisman is an international law specialist. An associate professor at Yale Law School he also serves as an editor of the American Journal of Comparative Law and a member of the executive council of the American Society of International Law. His books include "Nullity and Revision: The Review and Enforce ment of International Judgments and Awards" and "The Art of the Possible: Diplomatic Alternatives in the Middle East," as well as a two volume introduetion to international law now in progress with two coauthors. His testimony before the subcommittee is based on a detailed study-"Who Owns Taiwan: A Search for International Title”—which was published in the March 1972 issue of the Yale Law Journal.1 Mr. REISMAN. Thank you. Congressmen, ladies and gentlemen, I had intended to read the remarks that I labored to prepare but I find that comments already made here so provocative that I would like to depart somewhat from my prepared remarks and comment on the international and legal status of Taiwan and what I believe to be the legal dimension of this part of the Shanghai communique. I should preface my remarks by saying that I am not a China specialist. I am an international lawyer, and my interest in Taiwan as a problem is a little more than a year old. I have been engaged in some intensive research with my colleague, Dr. Lung-chu Chen, at the Yale Law School, and together we have written a rather lengthy monograph on "Who Owns Taiwan: A Search for International Title," about who has a claim to this very important island. TAIWAN A RICH PRIZE My prepared remarks, which I would like introduced into the record also emphasize the point that Mr. Grant has made so eloquently: Taiwant is not a little island. It is larger than more than two-thirds of the member-states of the United Nations. Its annual per capita income is $300, as opposed to $90 in China, and though it is less than one-fiftieth the size of China, both Taiwan and China have an annual external trade of about $4 billion. In short, Taiwan is a large state, comparatively speaking, and it is a rich state. It is a prize. (The prepared statement of Mr. Reisman appears on p. 77.) DIFFERENT READING OF MRS. YEN'S STUDY I have a different reading of the history of Taiwan, and particularly the international law that applied to different stages in Taiwan than that developed today by Professor Rowe. What is particularly baffling is that I also rely very heavily on the excellent study by Mrs. Sophie Yen Sharf prepared as a dissertation under Professor Rowe at Yale University. It is certainly true that the original inhabitants of Taiwan were aborigines and that Chinese, for the most part from southern China, began to migrate in increasingly large numbers from the mailand to Taiwan in the late 15th and early 16th centuries. But let us not assume for a moment that this was migration in the conventional sense of the word, or a type of "colonization." What we were encountering here, for the most part, were Chinese who were fleeing from the government on the mainland such as many of the people who settled this country fled from conditions that they found less than desirable in their own home countries. In fact, a number of studies of Chinese immigration policy through the 18th century and into the middle of the 19th century indicated it was a serious crime to leave China, and that those who did leave the Chinese mainland would be given no diplomatic protection whatsoever. 1 See appendix, p. 256. Mrs. Yen's book, as I read it, also indicates that there was no move on the part of the Ch'ing dynasty, the Manchu Empire, to annex Taiwan until the 1880's. It is certainly true that before then the Manchu government did from time to time say that it owned Taiwan. It didn't have control over it; indeed, the Manchus relinquished control to the aborigines, in large sectors, who had their own hardy benign practices, such as beheading seamen. It was, of course, very common for states which had claims to territory to try to prescribe very special international rules on their own behalf Mr. GALLAGHER. Professor, may we interrupt at this moment? Please take a 5-minute break while we respond to the call of the bell. Mr. REISMAN. Surely. (Whereupon, a short recess was taken.) Mr. GALLAGHER. The subcommittee will come to order. TAIWAN NEVER COLONIALIZED BY CHINESE Mr REISMAN. I was suggesting that the migration of Chinese across the Taiwan Straits for the most part was not the usual type of colonial settlement, that the fact that these people were migrating was very often a capital crime, and that this situation continued in the middle of the 19th century. For this reason, international lawyers would be reluctant to say that Taiwan was colonized by the Chinese. One other point in this early history requires comment. The original inhabitants of Taiwan were aborigines of Malay stock. As of 1935, the number of these people was 4 percent of the population. This figure was put together by a party which was, I think, quite disinterested. It was a representative of the Republic of China who visited Taiwan, at that time a Japanese colony, and did a study to find out why Taiwan's economic development was so startlingly good as compared to that on the mainland. This particular 1935 report drew another distinction: It distinguished Taiwanese, who were at that time 90 percent of the population, and overseas Chinese, who were 2 percent. Even at that time, the Republic of China was making the distinction between Taiwanese, on the one hand, and Chinese on the other. JAPAN ACQUIRED TAIWAN IN 1895 Professor Rowe has mentioned the Treaty of Shimonoseki of 1895. This was the treaty that followed the Sino-Japanese war. China lost that war and they gave up all rights to Taiwan. At that time, 1895, the treaty constituted a complete alienation of Taiwan; there was no question in anyone's mind that Taiwan was transferred to Japan. From the period of 1895 on, virtually everything that I have read indicates that the Japanese set up a very effective administration on the island. The aboriginal Taiwanes in the center of the island did not constitute a great factor, since by 1935 they were no more than 4 to 5 percent of the population. At the beginning of the Second World War, the Republic of China, allied with the Western Alliance, denounced the Treaty of Shimonoseki and said that Taiwan had been stolen from it by the Japanese Empire. Such an act of unilateral denunciation is probably not legal under international law. But this particular act was given some credence in the Potsdam and Cairo Declarations. Yet these declarations made by the Allied Powers at high-level military meetings are not ordinarily accorded major international legal significance. Indeed, in 1951, the Japanese Peace Treaty said very clearly that Japan gave up all title to Taiwan, but it did not state to whom it had gone. POST WAR TITLE TO TAIWAN UNRESOLVED At the time of the peace treaty in 1951, a number of governments who attended the conference said very clearly that as far as they were concerned, the question of the disposition of Taiwan would be dealt with at some point in the future in conformity with the principles of the United Nations. I would like to clarify another matter that I think is extremely important. It is the question of Chiang Kai-shek's entry into Taiwan in 1945. Chiang did not in any sense enter as a conquering hero; he entered as the delegate of the Supreme Commander of the Far East. The order, which is a matter of public record, said quite clearly that Chiang Kai-shek and his forces were going in as the representatives or agents of the Allies, and the final disposition was to be made at some point in the future. There is no question that from 1947 or 1948 on until the present time, Chiang Kai-shek and his government in Taiwan have indeed maintained effective power. TAIWANESE SUPPORT OF CHIANG KAI-SHEK PROBLEMATICAL Does this in some sense indicate that the Taiwanese people are in support of Chiang Kai-shek? I find it very difficult to answer that question. I don't think any one in this room can answer it. Only the Taiwanese people can answer it. But the indications from Taiwan are not of a wild, spontaneous support for the Generalissimo by 87 percent of the Taiwanese population. The fact of the matter is that the Government of Taiwan is very repressive. I would refer members of the committee to a paper submitted by Congressman Fraser and published in the Congressional Record 2 years ago, entitled "Political Repression in Free China." It is a very detailed-and. I might add, blood-chilling-description of what is going on inside of the Republic of China. If a government, representing a small segment of the population, uses techniques of repression and terror against the majority, the population will often be quiet. This does not mean that the rest of the population supports that government; rather, that it has simply been stunned into silence. In fact, the continuation of this martial law, the continuation of a police state is, if anything, an indication of the continued doubts of the support of the population by the government. RACE NO BASIS FOR PEOPLE'S REPUBLIC OF CHINA TITLE I would say that the question of racial suzerainty, the question of whether or not China can claim control over the Taiwanese because * See appendix, p. 271. |