came to power in violation of their own constitutions. Wilson's exception proved too rigid in practice and it rather quickly succumbed to the stress of reality. But Wilson's was not the last exception.

When the Chinese Communists established the People's Republic of China in 1949, we were again distracted from our earlier policy. During the Chinese civil war the United States had supported the Nationalist side. After the Communists took power, we were faced with the problem of recognizing rival claims. President Truman reacted in this way:

"We shall refuse to recognize any government imposed upon any nation by the force of any foreign power. In some cases it may be impossible to prevent forceful imposition of such a government. But the United States will not recognize any such government."

The weakness of Truman's exception is that, like Wilson's, it could prevent us from ever establishing relations with a government that we believe came to power wrongfully.

A few years later, when troops from the People's Republic of China entered the Korean war, Secretary of State Dulles stated his own limitation: "It has been the practice of the United States," he declared, "to recognize de facto governments when the latter are: (1) in control of the machinery of government; (2) are not confronted with active resistance in the country; and (3) are willing and able to live up to their international commitments." This formulation tends to ignore the reality that we, in our own national interest, may want diplomatic relations with governments precisely to urge them to live up to their international obligations.

Perhaps attractive on their face, these exceptions introduced in the 20th century have not always served the national interest. The premise of our present policy is that diplomatic relations do not constitute a seal of approval. Winston Churchill explained it best: "The reason for having diplomatic relations is not to confer a compliment, but to secure a convenience.”

REALITIES OF RECOGNITION

We maintain diplomatic relations with many governments of which we do not necessarily approve. The reality is that, in this day and age, coups and other unscheduled changes of government are not exceptional developments. Withholding diplomatic relations from these regimes, after they have obtained effective control, penalizes us. It means that we forsake much of the chance to influence the attitudes and conduct of a new regime. Without relations, we forfeit opportunities to transmit our values and communicate our policies. Isolation may well bring out the worst in the new government.

For the same reasons, we eschew withdrawal of diplomatic relations except in rare instances-for example, the outbreak of war or events which make it physically impossible to maintain a diplomatic presence in another capital.

If we continue to withhold diplomatic relations, this hesitancy invites confusion and can become the center of a touchy political issue. Eventual establishment of diplomatic relations then comes, wrongly, to be considered as a form of approval. In short, it means that someday, when we seek to normalize relations, we will be painting on a dirty canvas.

Indeed, efforts to restore relations once broken often encounter special difficulties. Inevitably, constituencies in both countries develop an emotional investment in the absence of relations. Financial claims and counterclaims pile up, and there is a backlog of issues which might have been resolved if normal relations had existed. Faced with this legacy of problems, the process of restoring relations must be approached with great care and deliberation.

Right now there are a score of countries with whom we do not have normal relations. Some, such as Iraq and Yemen, broke relations with the United States 10 years ago because of our support for Israel in the six-day war. With others, such as Cuba and Uganda, it was we who decided to withdraw our Ambassadors in sharp policy disputes.

Then there are governments with whom we never had normal diplomatic relations. Albania and present-day Cambodia have largely sealed themselves off from the outside world. Countries like the People's Republic of China, Mongolia, North Korea, and Vietnam are special cases.

STEPS TOWARD RECOGNITION

Fully aware of the difficulties involved, we are bent on shortening the list. Let me give a few examples of the kinds of steps being taken, under President Carter's leadership, to establish normal diplomatic relations with other countries.

Vietnam illustrates both the difficulties and the advantages of moving toward more open communications with others. The war is a fresh and painful memory. Early in his Administration, President Carter sent a distinguished commission, headed by Leonard Woodcock, to Hanoi to discuss the question of American servicemen missing in action (MIA's). We obtained information on our MIA's, and continue to do so.

Meanwhile, we told the Vietnamese that we will no longer oppose their membership in the United Nations, and I expect Vietnam to enter the United Nations early this fall. We lifted travel restrictions to Vietnam. We have offered to establish diplomatic relations immediately, and then to lift the trade embargo. The Vietnamese, for their part, still seek economic aid, something now forbidden under our law.

We have met with their representatives twice in Paris and will do so again. We have moved as rapidly as we could to put the tragedies of the past behind us. Vietnam, united, is a powerful nation of over 40 million people, which we trust will live peacefully with its neighbors in Southeast Asia. We want to have normal and mutually beneficial relations with that important nation.

The People's Republic of China, of course, presents a unique situation. For over two decades we stared across the Pacific at this giant with fear, hostility, and little communication.

Then, six years ago, began the dramatic process of establishing relations with the People's Republic of China. This process was complicated by the fact that we maintained relations with another government as the Government of China. In 1972, under the carefully crafted framework of the Shanghai Communique, we agreed to move forward toward normalization of relations. The Chinese stated in that communique that there was but one China, and we did not challenge that view. We have since exchanged liaison offices-not embassies-in Peking and Washington.

When Secretary Vance goes to Peking later this year, we hope to discuss with the leaders of the People's Republic of China ways to move forward in our relationship. The main obstacle to full normalization is the question of Taiwan, an issue of genuine concern to the American people. It is a question we believe should be settled peacefully-and by the Chinese themselves.

We hope also to reestablish normal relations with Cuba. We have already negotiated a new agreement on maritime boundaries and fisheries with Cuba, and we have agreed to accept each other's diplomats as members of a third country's embassy. These are significant way stations on the road to full relations. Other thorny issues-including the trade embargo and compensation for our nationalized property-remain to be resolved. But in a measured and reciprocal way we are moving toward normal relations. Disagreements over Africa may inhibit this process, but we believe that progress can be made.

There are several other countries with whom we would like to normalize our relations, among them Iraq and Mongolia. Since it's fresh on my mind, let me tell you what has just happened with the Congo Republic. Several years ago, we withdrew our Ambassador in Brazzaville, the Congo's capital, to protest the treatment given there to our diplomats. Since then the Federal Republic of Germany has taken care of American interests in Brazzaville. But just last week, meeting in Bonn, we and the Congo agreed to overcome some of our past differences and move toward normalization of relations.

As our actions indicate, the policy of the Carter Administration is to conduct our business with other members of the world community through normal and official diplomatic relations. The actual form of contact-up to and including the exchange of Ambassadors must be agreed to by both sides. In some cases it is the policy of other governments that precludes normal relations. But all governments should be aware of the message sent by President Carter to the Vietnamese that we want to put the bitterness of the past behind us and look to the future.

In sum, we believe normal diplomatic relations are an asset to promote other objectives, an asset we cannot deny ourselves, without incurring substantial cost. As Churchill put it: "When relations are most difficult, that is the time diplomacy is most needed."

There is no certainty that two nations will be able to resolve their disputes by talking about them. But without effective communications, without some form of dialogue, the odds are high that there will be no progress at all. This is true, as each of you knows, among individuals. So it is among nations, as well.

98-666 0-77- -27

APPENDIX 7

STATEMENT SUBMITTED BY THE AMERICAN CHAMBER OF COMMERCE IN HONG KONG

The American Chamber of Commerce in Hong Kong (AmCham-HK), on behalf of its 1,100 members representing 546 companies, appreciated receiving an invitation to send a witness to give testimony at hearings of the House International Relations Subcommittee on Asian and Pacific Affairs on the subject of "Normalization of Relations with the People's Republic of China: Full Implications".

Due to relatively short notice, AmCham-HK regrets it has no member available to provide testimony at the hearings.

Our Chamber's membership trades with, invests in, and manufactures in Taiwan as well as with the People's Republic of China. Thus, AmCham-HK is in a unique position to submit a balanced, in-depth statement on the subject of the hearings from the businessman's point of view. Under the circumstances, however, we must limit ourselves to the following statement for the record followed by some specific corollaries and comments:

AmCham-HK strongly supports free trade and political stability within the Asia-Pacific region. We believe in the peaceful resolution of intra-Asian disputes. We further are convinced that a strong, continuing, perceptive and imaginative U.S. commitment to the Asia-Pacific area is vital to the further development of regional stability and therefore fundamental to the economic interests of the U.S.A. We are categorically against any existing or proposed legislation, treaties or administrative orders which, without provocation, serve to isolate and/or discriminate against any Asian national economy. We believe the U.S. Government should continuously and actively assess the business, investment and trading enviroment in all Asian countries and initiate or support measures expected to further increase opportunities for mutually beneficial investment and trade. We are against host country expropriation of business property without reasonable notice, negotiation and compensation or unprovoked and discriminatory interference by host countries in the normal conduct of international investment and trade.

In line with our general position outlined above, AmCham-HK continues to recommend:

(1) The speedy resolution of the so-called "frozen assets" problem between our government and the government of the People's Republic of China to eliminate the more fundamental legal impediments to normal trade flow between our countries.

(2) We strongly advocate the extension of Most Favored Nation tariff treatment to the People's Republic of China, and believe that the Trade Act of 1974 should be amended to render it acceptable for accomplishing this end.

(3) So long as U.S. investment and trade in Taiwan can reasonably be maintained, the U.S. should press forward with normalization of diplomatic relations with the People's Republic of China.

We believe that international trade opportunities for U.S.-based business with the People's Republic of China will be greatly enhanced as a result of the above recommended actions, and that the potential volume of Sino-U.S. trade would be significant, especially in view of current domestic policies there.

(382)

APPENDIX 8

[From the Washington Post, Wednesday, Sept. 7, 1977]

TENG: VANCE TRIP WAS SETBACK IN U.S.-CHINA TIES 1

(By Louis D. Boccardi, Associated Press)

PEKING, September 6.-Chinese Vice Premier Teng Hsiao-ping said today that efforts to normalize diplomatic relations between the United States and China suffered a setback during the visit last month of Secretary of State Cyrus Vance. Teng said in an interview that the Vance discussions represented a retreat from proposals advanced by former President Gerald Ford and former Secretary of State Henry Kissinger.

Teng made these points in the interview, his first since returning to office in July:

Former President Ford promised in December 1975 that if re-elected he would break diplomatic relations with Taiwan, seat of the Chinese Nationalist government, and establish them with Peking.

Vance discussed setting up a U.S. liaison mission in Taiwan and a full diplomatic mission in Peking, but the Chinese rejected that.

Although the Chinese regard Taiwan as an internal problem that permits no foreign interference, they take into consideration the special conditions prevailing on Taiwan in trying to solve the problem with the United States. Reports of progress resulting from the Vance trip are wrong.

China does not believe U.S. claims of military superiority over the Soviet Union. Teng said China believes that the Soviets are greatly superior in conventional arms and that the United States seems bent on appeasing Moscow. He added that the Soviet economy is at its weak point and that the United States would only help the Soviets overcome their shortcoming by giving Soviet industry the technical help it needs.

The late Mao Tse-teng personally ordered that Teng be protected against harm after his purge from the Chinese leadership in April 1976 by the radicals under leadership of Mao's wife, Chiang Ching. Mao died in September 1976 and his wife and three other radical leaders were arrested a month later. Teng had continued to reside in his Peking home. The extent of Mao's involvement in Teng's purge has been unclear.

Teng made the comments in a 90-minute meeting with AP executives and newspaper publishers on the board of directors of the news agency who are on a 16day visit to China.

No direct quotations were permitted because, Chinese officials said, there was no official trauslation. Teng spoke through an interpreter.

Teng said Ford promised during his visit 2 months ago that if re-elected he would resolve the Taiwan problem the same way the Japanese had done it. Japan severed diplomatic relations with the Nationalists on Taiwan but has maintained nongovernment contacts, including substantial trade with the island. In December 1975, after Ford and Kissinger visited Peking, Kissinger told reporters he felt that Teng and the late Mao Tse-teng, then Chinese Communist Party chairman, had clearly signaled that they would accept an arrangement for diplomatic relations with the United States similar to the Japanese formula. Kissinger said there was no U.S. timetable for breaking diplomatic relations with the Taiwan government.

Just before Vance came to China, Teng said, Ford made a speech taking a different view of how to resolve the Taiwan issue, but Teng insisted that Ford had made the promise in 1975.

1 Copyrighted by the Washington Post and permission granted to reprint.

Teng said that the United States had promised to take the three actions China has demanded for normalizing relations: breaking diplomatic relations with Taiwan, abrogating the U.S.-Taiwan defense treaty and withdrawing the 1,200 American troops on the island.

[A State Department spokesman said that any comment on the position reportedly taken by former President Ford would have to come from an official of the Ford administration. Ford could not be reached for comment.

[The State Department spokesman stood by Vance's earlier refusal to discuss the details of the talks in Peking, noting only that the "Carter administration has made clear that normalization of relations is the goal of our China policy" and that both Peking and Washington have said that the Vance talks were "cordial and useful."]

Teng said Vance came to Peking with a proposal that was a step back from Ford's position as he described it.

He said Vance discussed establishing full diplomatic relations with China but at the same time establishing a diplomatic liaison office on Taiwan.

In effect, this would reverse the present situation. The United States has full relations with Taiwan and only a liaison mission in Peking.

Teng said the reverse liaison proposal is unacceptable because it would mean continued diplomatic links between the United States and Taiwan.

Teng said his discussions with Kissinger about Taiwan were based on the idea that eventually it would be the United States that would have to make the moves necessary to normalize relations.

However, he said, Vance came to Peking saying both sides would have to make efforts to normalize, and this, Teng said, is a step back from the position of Ford and Kissinger.

Teng stressed that the Vance meetings had been cordial and useful to exchange views but said reports of progress were wrong.

The vice premier, who is also vice chairman of the Chinese Communist Party under Chairman Hua Kuo-feng, reiterated the Chinese position that Taiwan is an internal problem.

He said the United States had been responsible for creating an impression after Vance's visit that the Chinese would be flexible about promising not to take Taiwan by force if the Americans withdraw.

He said there is no such flexibility on the part of the Chinese.

The Chinese people have patience, Teng said he told Vance, but the patience cannot last forever. He said there was no talk of a deadline.

Asked what would happen if the people of Taiwan resisted a takeover by the Chinese government, Teng said this would lead to a conflict.

He said that in finding a solution to the Taiwan problem the Chinese would take into consideration the special conditions on Taiwan. He said that if the United States did not interfere, the Chinese would not rule out the possibility of solving the Taiwan problem peacefully.

He did not elaborate on either of those points.

The question of continued American arms sales to Taiwan after some change in the diplomatic relationship did not come up when Vance was in Peking, Teng said. The AP officials participating in the meeting were president and general manager Keith Fuller; Jack Tarver, publisher of the Atlanta Constitution and Journal and chairman of the AP board of directors; David R. Bradley, publisher and president of the St. Joseph. Mo., News-Press and Gazette; Frank Batten, chairman of the board of Landmark Communications, Norfolk, Va.; Stanton R. Cook, chairman and publisher of The Chicago Tribune; Katharine Graham, chairman of the board of the Washington Post Co.; William H. Cowles 3rd, publisher and president of the Spokane, Wash., Spokesman-Review; Robert L. Taylor, chairman of the Philadelphia Bulletin; J. M. McClelland, Jr., president and publisher of the Longview Wash., Daily News; Daniel H. Ridder, editor and publisher of the Long Beach, Calif. Independent Press Telegram; Arthur Ochs Sulzberger, chairman, president and publisher of The New York Times; Robert M. White II, editor and publisher of the Mexico, Mo., Ledger; and Louis D. Boccardi, AP vice president and executive editor.