Presently the Republic of China benefits from most-favored-nation tariffs on exports to the United States and on GSP treatment on many goods. Under the Trade Act of 1974, MFN is unavailable to the PRC in the absence of a bilateral trade agreement. The "Jackson amendment" to the Trade Act denies certain trade benefits to countries interfering, inter alia, with the right of emigration. Former Secretary Kissinger once told the Senate Finance Committee that this law would "present massive difficulties" if it were to be applied to China. In the event of normalization, can trade concessions be continued to Taiwan and denied to the rest of China?

Earlier this week, according to the New York Times of Tuesday, September 20, 1977, an American citizen was stabbed on Chang An Chieh, Peking's main thoroughfare. This points up not only a need for accords providing consular protection within the People's Republic of China, but also the question of the means and extent of legal redress for injury to person or property available to a U.S. national in the People's Republic of China after normalization.

Mrs. MEYNER. Without objection, you may make subsequent submissions for the record in the context of your testimony today.

[The following was subsequently submitted by Mr. Theroux.]

INFORMATION CONCERNING SECURITY OF FOREIGN BUSINESSMEN AND OFFICIALS

IN THE PRC

The question of personal security of foreign businessmen and officials in the Chinese People's Republic is the subject of a most interesting chapter, by Professor Cohen, in the book "Law and Politics in China's Foreign Trade," published this year by the University of Washington Press. This volume, by the way, is edited by Professor Li.

Noting that "in view of China's political relations with the rest of the world, even so basic a problem as the personal security of trade personnel cannot be taken for granted, either in China or abroad," Professor Cohen provides the following review of difficulties encountered by foreigners in China:

Shortly before its demise the "Committee of One Million against the Admission of Red China to the UN" brought to the United States one George Watt, a British employee of the Vickers-Zimmer Company. Watt had been released in mid-1970 after serving a three-year sentence in a Chinese prison following an espionage conviction. Although the committee failed in its effort to have Watt appear before the Committee on Foreign Relations of the United States Senate, which was holding hearings on China policy, it did manage to publicize his views in the American press. Watt's message concerning Sino-American relations was a simple one: "If any American businessmen contemplate profits out of the approaching detente," he said. "I will give them a flat prediction: They will encounter disaster and will be lucky to escape without imprisonment of their representatives."

Watt's experience was not an isolated one during the Great Proletarian Cultural Revolution of 1966–69. For his participation in the same case another Vickers-Zimmer employee-a West German named Peter Deckart-was lucky enough to have been deported, rather than sentenced to prison. Other business representatives were reported to have been arrested; these included a Belgian banker and twelve Japanese trade representatives, as well as journalists and ship's officers from Great Britain and other countries.

In addition to those who were actually imprisoned, some personnel of foreign companies were subjected to other forms of harassment during the Cultural Revolution. For example, three British engineers, whose firm had sent them to Peking to supervise the installation of machinery, were kept under virtual house arrest for a number of weeks while the Chinese threatened to treat them as prisoners or hostage until a Chinese claim against their company was satisfactorily settled. Moreover, refusal to grant exit visas was commonplace. British banking personnel in Shanghai, for example, had by mid-1968 been waiting a year to leave China, even though their replacements had already arrived.

Infringement upon the personal security of foreign businessmen did not origiate with the Cultural Revolution, of course. During the early 1950's, while China

was participating in the Korean War and conducting a series of campaigns to eliminate counterrevolutionary activity at home, some businessmen were convicted of espionage. In July 1970 the People's Republic provided a tragic remainder of that era by announcing the suicide a few months earlier of Hugh Redmond, an American who had been a businessman in Shanghai until he began serving a life sentence following his conviction in 1951. Not only did the newly established Communist government imprison certain foreign businessmen during the early 1950s, but it also denied exit permits to a large number of employees of foreign firms, as part of what the United Kingdom charged was a "deliberate policy of the Chinese Government to render it impossible for most British and foreign firms to remain in China and to force them to surrender their assets." Harassment of foreign businessmen was muted from the mid-1950's until the Cultural Revolution, but still continued, and refusal to grant exit visas remained a principal sanction. An extreme case was that of a Belgian bank official in Shanghai, Frans Van Roosbroeck, whose bank had transferred $30 million to the United States on behalf of Chinese depositors as the Communists were taking over China in 1949; from 1952 until his arrest in 1968, Van Roosbroeck was refused permission to leave China. In interviews several other representatives of foreign firms have reported that in the early 1960s the Chinese government made it clear that their freedom to leave the country was contingent upon their company's satisfactory compliance with its obligations under Chinese law as expounded by the local authorities.

While Professor Cohen states that these are "unpleasant but undeniable facts," he rightly emphasizes that the risks of business travel to China are apparently not perceived severe enough to discourage the "tens of thousands" of foreign businessmen and company employees who have visited China since 1949. Over the last six years, hundreds of Americans have visited China, some for extended periods, without untoward incidents. Also, while there are presently no American businessmen held in China against their will, there remain many who are unsuccessfully pressing the Chinese to grant them an entry visa. Nevertheless, Professor Cohen's research on this subject amounts to a disquieting reminder that, in his words:

***** foreign traders ought to be warned: although the risk of detention by the police may be small if they visit China during periods of stability, if relations between their country and China are not hostile, and if they avoid intelligence work, the procedures employed in those cases in which businessmen are detained will be nearly as abhorrent to them as earlier Chinese procedures were to their predecessors.

"If experience is any guide, the detained person will be kept incommunicado for a period that may range from several weeks to several years. In this period the investigation proceeds, and the prisoner undergoes repeated interrogation, sometimes without adequate food and sleep and without even knowing the charges against him and the bases for them. During this time he will be unable to contact his family, friends, or government, nor will the authorities provide him with any independent source of assistance, such as the services of a local lawyer. Efforts of those on the outside to communicate with him will also be unsuccessful.

"Consular access appears rarely to have been granted for foreign missions at the investigation stage. Indeed, in diplomatic correspondence with India in 1963-64, China insisted that international law imposes no obligation to afford consular access to detained aliens who are suspected of crime until after they have been sentenced; and it refused to permit representatives of the Indian government to visit an Indian national held on a charge of rape until all proceedings in the case, including appeal, had been completed. The PRC did not appear to be embarrassed at all the fact that when India had detained Chinese nationals, the PRC had demanded consular access to them from the very beginning of their detention. This background must be taken into account when evaluating the significance of any agreement that the PRC may make with foreign governments to allow access to their detained nationals 'in accordance with domestic laws and regulations' or 'in accordance with international law.'" Mr. THEROUX. After derecognition, U.S. travelers will also require information about visas for travel to Taiwan.

Although the People's Republic of China maintains arbitration tribunals for the resolution of disputes in trade and maritime matters,

U.S. claimants have never succeeded in bringing about a formal arbitration of a dispute with a People's Republic of China trade organization. While agreeable by contract to third country situs for arbitration of commercial disputes, no People's Republic of China agency has yet allowed, to my knowledge, a foreign claimant to institute an arbitration abroad.

CHINESE COURTS

I know of no case, either, where a foreigner has been able to initiate a claim in a Chinese People's Court. Law courts and arbitration tribunals are both available and utilized in the Republic of China when commercial disputes arise with foreigners.

American lawyers and businessmen will want to know whether access to such tribunals on Taiwan will survive normalization, and to what extent the establishment of full United States-People's Republic of China relations might give them access to China's dispute settlement agencies.

The People's Republic of China provides for registration of foreign trademarks by applicants of countries with which it has a bilateral trademark agreement. Neither patent nor copyright protection exists in the People's Republic of China, and the People's Republic of China is not a member of either the Paris Convention for the Protection of Industrial Property or the Universal Copyright Convention. The Republic of China permits registration of patents and copyrights— but the status of such registration following normalization could become unclear.

Although the Republic of China, like the People's Republic of China, does not belong to any international copyright convention, domestic legislation there does permit application for copyright protection, and Republic of China law protects against the export of unauthorized reprints of copy-righted material.

U.S. businessmen will wish to be advised, in advance of normalization, about the legal status of agreements they have with private firms in the Republic of China. Questions concerning rights, remedies, currency, exchange rates, insurance terms, the likelihood of performance by the Republic of China party, the status of companies, partnerships, joint ventures or other business entities formed in the Republic of China, among other issues, could be substantially affected by normalization.

BUSINESS INTERESTS

Americans with property in the Republic of China, with investments in Republic of China institutions, or with deposits in Republic of China banks, or creditors of Republic of China entities, will wish early clarification by their government of the implications of normalization. U.S. natural or legal persons with interests in Republic of China property in the United States are also entitled to information about the implications of normalization for such interests.

Some U.S. firms seeking to continue business with Taiwan after United States-People's Republic of China normalization could discover that People's Republic of China pressure may be brought to seek to cause them to discontinue certain business with Taiwan. If so, would

U.S. boycott laws be available to help American firms resist such pressure, or would the U.S. Government regard this as an internal Chinese matter?

What changes, if any, in U.S. immigration laws should be made upon the cessation of recognition of the Republic of China by the United States? This question goes not only to necessary adjustments in the Immigration and Nationality Act, but also to preparation for possible political refugees from Taiwan.

Unrecognized governments and their nationals are, in certain circumstances, barred from bringing suit in U.S. courts. After United StatesPeople's Republic of China normalization, but during continued Republic of China administration of Taiwan, would plaintiffs from Taiwan be barred from U.S. courts?

U.S. exporters would need to know whether and to what extent normalization may result in changes in the status of Taiwan insofar as U.S. export control regulations are concerned.

There are many other issues which I am not going to treat here, but which I could submit, for the record. But in conclusion, I think the central fact of normalization is that the process requires drastic change in fundamental legal obligations the United States and the Republic of China presently have to each other. How these changes are made will not only affect the fate of Taiwan, but will reflect our own attitudes toward the place of law in our foreign relations.

Mrs. MEYNER. Thank you, Mr. Theroux, that was excellent testimony. Mr. Valeo, you are next.

STATEMENT OF HON. FRANCIS VALEO, FORMER SECRETARY OF THE SENATE

BIOGRAPHY

Consultant on governmental and Pacific affairs. Previously: Secretary of the U.S. Senate-11 years; Consultant to the Senate Foreign Relations Committee (specializing in Asian affairs)-6 years; Chief of the Division and Senior Specialist in Foreign Affairs, Congressional Research Service, Library of Congress-6 years; Principal staff adviser to Senate Majority Leader (Mike Mansfield)-15 years; Senior staff consultant on numerous Senate missions abroad, including missions to People's Republic of China (1976, 1974, 1972).

Mr. VALEO. Madam Chairman, I may skip a paragraph or two in the interest of brevity, but I would appreciate it if the entire statement would be printed in the record.

Mrs. MEYNER. All the statements will be printed in the record, as well as any additions. Please feel free to read as much of your statement as you care to.

Mr. VALEO. Madam Chairman, members of the subcommittee, and supporting staff. In these hearings on normalization, your subcommittee is performing an exceptional service. Not only are you opening up for legislative discussion an issue of foreign policy which may well be, in one form or another, before the 95th Congress, but you are also focusing public attention on a matter of great importance to the Nation.

I do not think that I use the word "vital" glibly in expressing the conviction that the prompt removal of the roadblock to the normal evolution of Sino-United States relations is in the vital interest of this Nation.

Because I see the China normalization issue in that fashion, I appreciate deeply your invitation to be a participant in these hearings. Any reticences which I may have had in accepting-I must apologize for them came solely from the limited time which was available for preparation. I have just returned from Asia.

Fortunately, much of the basic research in the legislative-legal problems of normalization has already been done by Dr. Victor H. Li, another participant on this panel, in a study for the Carnegie Endowment, entitled "De-recognizing Taiwan: The Legal Problems." It is an outstanding piece of work.

As Dr. Li makes very clear, the legal-regulatory structure which underlies our present relationship with China, including and largely because of Taiwan, is one of complexity as well as antiquity. To alter the relationship, to go from Taipei to Peking, so to speak, will compel a great deal of unraveling and reweaving of the present fabric. Therein lies a danger, in my judgment, to a rational and long overdue disposition of the question of full normalization. I think Mr. Theroux's statement underscores the point that I am trying to make there.

Complexity is an invitation to avoidance and evasion. It always seems easier to put off until tomorrow what is too nettlesome to deal with today.

It would be well to bear in mind, however, that the peculiarities of our internal legal structure are of no direct relevance to the issue of normalization as an international problem, nor, indeed, are those peculiarities relevant to the vital interests of the United States in the prompt resolution of the issue. The body of laws, regulations, treaties and agreements which involve China should not become the tail that wags the dog.

If foreign relations is not to be left to the generals, then China policy ought not to be left to the legal and other technicians of the executive and legislative branches, of which I was one for many years. The issue of full normalization belongs, as does any vital issue, firmly in the hands of the elected representatives of the people. It belongs in the hands of the President and the Congress.

Before it is a legal problem, normalization is a politicial problem. Its origins, a quarter of a century ago, were largely political. So, too, must an acceptable solution be found in politics. When that has been done, it would seem too that the legal and other adjustments, complex as they are, will fall into place.

The nature of the political role in resolving the problem can be delineated, I believe, by defining first what constitutes normalization. As a practical matter, most concepts of normalization involve, at least, the establishment of full diplomatic relations with the People's Republic of China; the formal designation of an Embassy in that nation and the establishment of a formal Embassy of the People's Republic in this nation.

THE JAPANESE FORMULA

Some opinion would have us delay indefinitely normalization in those terms. If we intend to continue to play the waiting game as, indeed, we have done for several years, then, what is being discussed here, today, stays largely academic.