THE WHITE HOUSE
Office of the Press Secretary
(Shanghai, People's Republic of China)
For Immediate Release June 30, 1998 AND SPECIAL ASSISTANT TO THE PRESIDENT FOR INTERNATIONAL ECONOMIC POLICY LAEL BRAINARD
PRESS BRIEFING BY
PRESS SECRETARY MIKE MCCURRY,
SECRETARY OF COMMERCE WILLIAM DALEY,
Portman Ritz Carlton Shanghai, People's Republic of China
5:1 P.M. (L)
MR. MCCURRY: I really don't have a whole lot that I am doing here. I'm stalling until Secretary of Commerce Bill Daley, and Lael Brainard from the National Economic Council staff, come to tell you a little bit more about the context of the President's visit to Shanghai, what it says about some of our efforts to promote economic cooperation between the People's Republic and the United States, and the window that Shanghai is into the possible future for China as you see around you the enormous results of the economic change that is occurring here in South China.
So they'll be talking about that, talking a little bit about the importance of the President's visit tomorrow with young entrepreneurs and some of the other elements of the schedule. So, for the wires in the front, they will set up tomorrow for you pretty well. And I can just do clean-up on anything else that you need.
Q There are a lot of holes in tomorrow's schedule. The whole afternoon is open, the whole evening is open. Can you fill that in at all?
MR. MCCURRY: Not -- as I said, a lot of time tomorrow afternoon, and there are a couple of different possibilities of things he might do. Most of it will be consistent with some of the touring he's been doing, but we are looking at perhaps an opportunity to do some more outreach to the Chinese people. We'll alert you to that if we nail it down.
Q Tomorrow night?
MR. MCCURRY: Tomorrow night? I don't have any indication of a plan yet for tomorrow night.
Q Can you give us your own personal or the President's comparison of talk radio between the United States and what he did here?
MR. MCCURRY: I think he enjoyed it, and I think the questions -- they tended to be curious about Bill Clinton as a person, as you could tell from some of the people who dialed in. And that most likely is because there's not the same level of attention to the personal side of leadership here in China that there is in the United States. So obvious questions that an American audience would know the answer to might be of somewhat greater interest here. But you could see a range of questions from people who clearly enjoy the opportunity to question leaders about issues that are central in their own lives.
And with that respect, talk radio or emerging talk radio in China is very similar to talk radio in the United States -- that there's a high degree of interest in things that substantively impact the lives of average citizens. Now, that said, as all of you know, some venues of talk radio in the United States are much more prone to political discourse and political combat. I don't think that they've reached that point yet here in China and maybe that's to their benefit.
Q Mike, were there any agreements on screening the callers as to the nature of the questions that would be put through?
MR. MCCURRY: No, we asked only that they follow what their normal practice is and try to encourage as diverse a possible range of questions that would be appropriate for the President. But we didn't put any restrictures on the questioning. And I'm not -- as far as I know, the station and the program conducted their call-ins the way they normally do.
Q Mike, just to follow, do you know if the callers are required some way to identify themselves so they can be later identified?
MR. MCCURRY: You'd really have to pose that question to the station. I don't know the answer to that. They obviously were referring to people by name as they called in, so they had some idea of who they were.
Q Mike, what effect do you think this commitment statement of the three no's by the President will now have on the cross-straits dialogue? What do you hope that will achieve?
MR. MCCURRY: Well, I don't know that it has great significance because it's merely a reiteration of longstanding U.S. policy that had previously been reiterated by the Secretary of State and by the National Security Advisor. The President himself had indicated prior to coming here that he would reaffirm longstanding U.S. policy, and he did so. And I believe that during the course of this visit we've made it clear both publicly and privately that we hope the people of Taiwan and the people of the People's Republic find an amicable resolution to the question of Taiwan. And that obviously would be a useful outcome of a cross-strait dialogue.
Q Was there any particular reason why he stated the three no's here rather than in Beijing? He had a couple of opportunities when he was specifically asked about Taiwan back in Beijing and he didn't --
MR. MCCURRY: I think no particular reason. He knew he would have some opportunity to do it and the opportunity arose today.
Q Mike, is there any reason the President didn't challenge the comment of Mr. Wu: "I think the importance of such relations will overpass that of U.S.-Japan relations. I'm optimistic about that"? That was at the end of the question. The President then gave a Taiwan answer.
MR. MCCURRY: The President has in other settings addressed that question. This is not devil-take-the-hindmost in Asia-U.S. diplomacy; this is about building more constructive, useful relationships throughout this region. Our interests in this region, particularly with respect to security, are defined by our alliances with our five longtime and closest treaty partners in Asia, and that's the bedrock foundation of American presence and policy in Asia. That's the longstanding view of the United States.
Q Has the U.S. written -- given any written commitment to the three no's?
MR. MCCURRY: None that I'm aware of. There are, obviously, the three communiques and the Taiwan Relations Act and U.S. law.
Q Mike, Mr. Wu was not originally planned to attend this discussion meeting. Originally, it was that Mr. Chen, the expert on the Internet, who was invited to speak. But we learned from him that he was bumped this morning when he got to --
MR. MCCURRY: I don't know the answer to that. I'll have to look into that and see if I can get an answer.
Q -- said that he just took the opportunity of reiterating the three no's today. In fact, he had an opportunity at Beijing University, when somebody asked specifically about Taiwan --
MR. MCCURRY: You're correct. I should have pointed out that at Beijing University yesterday he obviously said the same thing and reaffirmed U.S. policy towards Taiwan -- you're correct.
Q -- no big deal, but you must know the Taiwanese are treating it like an enormous deal and some of them are very upset, right?
MR. MCCURRY: I don't know why they would be upset at a reiteration and restatement of longstanding United States policy that they're well familiar with.
Q Because a U.S. President has never said that before.
MR. MCCURRY: Well, administrations have said that. The Secretary of State has said that recently. The National Security Advisor has said it. I don't think it's a surprise the President would reiterate longstanding policy.
Q Mike, the point is that the President of the United States -- it's the first time that he has said it, not an official, not a lower ranking guy, right? And don't the Chinese place a lot of importance on that?
MR. MCCURRY: Whoever chooses to attach special significance to that will. We understand that.
Q What did he mean when he said "statehood" in that three no's clause -- and the U.S. is a state, Taiwan is kind of like a province, but now the Chinese use the word sovereign and --
MR. MCCURRY: I think he meant in the sense of sovereign nation. I think we're being a little exegetical here.
Q We're being what?
MR. MCCURRY: Exegetical. It's a tendency to look for illumination in text.
Q Was there any conscious decision for the President to make the statement here in Shanghai instead of Beijing, though?
MR. MCCURRY: I think there was some -- as I told many of you, some likelihood that he would find some opportunity during the course of the trip and it happened here in Shanghai.
Okay. I don't have anything to add on that subject. Anything else?
Q Has the President or administration officials raised this --
MR. MCCURRY: We, at a variety of levels, are working that issue. I'm not aware that the President himself has raised it yet. But we certainly are well aware of the issue and hope that the people of new York have an opportunity to benefit from the rich culture that China has to offer the world.
Q Why didn't the President have anything to say when the bishop stated his view about repression of religious Catholics here in the country? It seems that his view is more optimistic than the U.S. government's view.
MR. MCCURRY: Well, the President obviously has concerns and has spoken directly to them and is aware that there are others who don't share the Bishop's optimistic outlook. But the President also believes that having been incarcerated for 27 years, the bishop is entitled to state whatever view he has on the matter.
Q Does that include his wonderment, the bishop's wonderment -- "I don't quite understand why those people should do this kind of thing," talking about underground religious activities. The President understands why they do it, doesn't he?
MR. MCCURRY: Oh, I think the President has already addressed that when he's talked about the importance we attach to the ability to freely express one's religious faith without interference by government. And we're well aware of the concerns of those in China who believe that sometimes there are fetters placed on the practice of religion and the expression of religious faith. And we take those concerns seriously.
Q Mike, what's the status of the Guilin visit? There were heavy rains or something. Is it still on?
MR. MCCURRY: Our advance team reports that there have been very heavy rains and obviously a lot of flood damage, but that the community still is excited about the President coming and that the effects of the flooding from the last several days seem to be subsiding, and that should not at this point pose any interference. But they will keep an eye on it.
Q The boat ride is on as well?
MR. MCCURRY: I don't know what adjustments they're making given the flooding that's occurred there. But it's obviously extensive flooding; it's been some of the worst that they've had in 50 years. I think four people have lost their lives and a number of people are homeless.
Q Mike, in the hours and days since the two televised press conferences and the speech at the university, what kind of reaction or ramifications have you detected seeing as a result of those two telecasts?
MR. MCCURRY: I think we had some of our -- you mean here in China? Well, we spoke yesterday to that, or some of our top China folks tried to assess it. And I think it's a little bit early for us to make any preliminary conclusions on what the impact of those events are. I think they are extraordinary in that clearly that type of thing has not happened before. Anecdotally, we do believe that it has triggered some type of discussion within the body politic of China. But that is good in and of itself.
Where it leads or what it amounts to or what additional things might happen as a result of that type of opening is something that's not entirely clear to us. Maybe it's not even clear to the Chinese authorities themselves. But it was clearly a useful thing for the people of China to have exposure to the views of the President of the United States. It was welcomed by the President and by our delegation. And we hope it signals some reconsideration of the degree to which this has been a very closed political culture. We hope so. We have no way of knowing whether it will be. But having made a conscious decision to be that open, it sometimes becomes hard to reverse decisions like that. So, hopefully, that will be something that will continue.
Q In the pool report you were quoted as saying something to the effect -- I don't want to misquote you -- that as a result of this gesture by the Chinese, the U.S. has to be very careful or go out of its way to reward them, to pay them back --
MR. MCCURRY: No, no, no. That's not what I said and I want you to go back and look at that carefully. I said that there is some risk associated with the openness that President Jiang Zemin has allowed. And we recognize that and we obviously want to encourage openness and spirited public debate and find the right ways to do that and reward that type of openness. And there's a lot of different ways that that could happen.
Q What did you mean by, reward that kind of open
MR. MCCURRY: Well, to try to provide momentum for it, to try to encourage more discussion like it, to try to encourage progress on other fronts and to recognize that project as it achieves, clearly.
Q -- after that also about minimizing the opportunity for those who may not agree with his decision --
MR. MCCURRY: That's correct. We understand, too, that that's a very complicated political dynamic that exists in this country and that there are no doubt within the ruling elite people who question some of the decisions that have been made associated with the President's trip, and that, as in any political environment, people will look to try to calculate their own opportunities. And so we obviously want to try to help the good guys as much as we can.
Q -- is there some U.S. official going to Taiwan to brief going to Taiwan to brief --
MR. MCCURRY: Yes, he addressed yesterday that, consistent with our informal, unofficial relations, Mr. Bush, who is head of our coordination office, would provide a briefing at an appropriate point.
Q On another subject, do you think Ken Starr should have put off Linda Tripp's testimony to --
MR. MCCURRY: I don't know enough about his inquiry to know what decisions he's made with respect to timing and what factors went into it. So I don't have any comment.
Q How do you think that it would impact the investigation and this trip?
MR. MCCURRY: I have no way of speculating on that. It hasn't had any impact on our work here.
Q In his two private occasions, tonight and tomorrow, is the gentleman, Mr. Wang Dao Han being invited? The last time Tony Lake tried to meet with him, I guess due to the weather he was not able to fly from Beijing to Shanghai. So will this time Mr. President himself or the senior staff going to meet with him?
MR. MCCURRY: I don't know the answer to that. I am not aware of any plans for that. His work is, of course, widely known in our government. Both his radio program and his newsletter are considered good, authoritative sources of information on the condition of workers in South China. But I'm not aware at this point of any plans for anyone in our delegation to see him.
Q Mike, did that flag and the documents, the Declaration of Independence and the Constitution, get presented to the Chinese officials?
MR. MCCURRY: My understanding is that, as I indicated to you, that they were presented by our staff as they did the official exchange of gifts. I have to confess I never did track down what was exactly exchanged. I don't think we -- unless we put that out and I didn't know about it, I'd have to go find that out.
Q Could you take that question?
MR. MCCURRY: Yes.
Q And see if there was any response from the Chinese officials to that particular set of gifts.
MR. MCCURRY: I will.
Secretary of Commerce, William Daley, who we're delighted to have with us as part of this delegation, who has been busy promoting economic opportunity for the citizens of the United States of America, is here and present with us. And it's an honor, sir, to have you here. Thanks.
SECRETARY DALEY: Thanks, Mike.
Let me just for a few minutes make a couple of remarks and then obviously open it up.
This is a very multifaceted trip by the President, lots of issues that he has been dealing with. Obviously, the commercial relationship between the United States and China is important, it is important to our economy. We have seen tremendous opportunities come about for U.S. businesses in China The growth of investment in China is enormous. Shanghai, I think, as a city -- if you look you see the new China and a different China from the other visits to parts of the country that we've gone to.
We've had numerous successes in this trip. I think one of the most, for me, rewarding visits was to visit a brand new hospital that opened in Beijing. It was the first majority privately-owned hospital opened in China by women-owned business. The name of the company was Chindex, small company opened a 24-room hospital to bring American-type patient service to China. It's a small hospital, but I think it symbolizes a changing China and new opportunities for American businesses. We are all well aware of the large investments that have been made in China and we are also well aware of the market access issues that we've talked about repeatedly.
And I have, as I've been here meeting with U.S. business representatives, been made once again well aware of the lack of opportunities in many ways for American businesses. But at the same time, every one of the businesses I spoke to, business leaders have indicated strongly that they believe that there is a change that has occurred over the last two years and it is extremely positive. We see opportunities in the aviation sector, as the aviation infrastructure is improved in China there will be tremendous opportunities for U.S. businesses. In the housing arena also, as they begin to privatize.
Probably the most important sector, of course, is the infrastructure of China which needs to expand and grow -- whether it's bridges, power -- power development, bridges, roads, airports, a whole host of areas. I will be leading as the President announced in his list of items of this trip an infrastructure development mission early in 1999 of U.S. businesses and a number of federal agencies along with that trip, to look for opportunities for U.S. businesses to participate in this growing infrastructure of China.
So we feel very positive about the commercial developments in this trip, look forward to the visit tomorrow of the President to the exchange and his speech tomorrow before the Chamber here in Shanghai.
So I would open it up at this point to any questions which you may have.
Q What kinds of themes do you expect the President to touch on?
SECRETARY DALEY: I think Mike's going to brief on the speech tomorrow, to be honest with you. Or someone else is. I know he said I was, and I told him when he asked me if I was going to brief on it I said, if I do, it will be a very short one. (Laughter.)
Q As a result of this trip are the Chinese any closer to membership in the WTO?
SECRETARY DALEY: I would hope so. I think both Presidents statements on Saturday about their strong commitment to it -- but what has been said repeatedly by us, by Ambassador Barshefsky, by the President, is that it must be on commercially meaningful terms. It is not a political decision, it is a commercial decision.
Q -- progress made as a result of this trip?
SECRETARY DALEY: I think the progress was made right before the trip in the negotiations between the Ambassador Barshefsky and the MOFTEC people. There was progress made there and I think it was substantial.
Q Can you tell us what the obstacles are? Can you elaborate a little bit more on that, please?
SECRETARY DALEY: There's a whole host of them that I know the Ambassador has elaborated on. They relate to market access and the market must be open more. The offers that have been put forward just aren't sufficient at this point to allow us to move forward.
Q Mr. Secretary, that's not just a U.S. decision, is it? Are there other countries involved in seeking --
SECRETARY DALEY: Yes, and they have the same concerns -- the European Union has the same concerns about the openness of this market. So it's not a deal that's done with the United States alone -- obviously, we're an important player but it's not --
Q Would there still be a European --
SECRETARY DALEY: It could be. The odds are if the U.S. comes to terms then most of the world will be with us. But the bottom line is they also have to move.
Q Could you describe for us how the satellite controversy back in the states affected either the tone or the outcome of any of your talks?
SECRETARY DALEY: No one mentioned it to me in any of our discussions at all. I don't think it had much of an impact, to be frank with you, with the people that we've talked to you, whether the governmental or it's not been raised by any of the businesspeople, U.S. businesspeople that I've talked to.
Q You yourself and the President also mentioned that the skyrocketing U.S. trade deficit to China was unacceptable. Do you find anything that can make it acceptable now, or is there any concrete commitment made by the Chinese side that we would be able to see the shrinking of the deficit?
SECRETARY DALEY: I think there has been an acknowledgement that they understand that this has the potential to be a political issue, and that we do have a disagreement over the amount of the deficit. They believe it's much smaller than our figures. But the bottom line is, our exports have not grown anywhere near the degree that their exports to the United States have. But as far as concrete steps that have been taken in the last five days, no.
Q Mr. Secretary, do you think that you've seen any progress in terms of the President's engagement policy politically over the past few days, with the discussions on human rights, his live telecasts, and so forth, very friendly meeting on Saturday. Do you think that any of the warming of the political side of the relationship will have some fungibility when it comes to the commercial side and spark them to be more compromising on market access questions?
SECRETARY DALEY: I think it will, and I'll base that primarily on the comments of the U.S. businesspeople that we've met with. They feel that this trip and the tone that the President has set, and obviously the fact that he went through with the trip after some criticism at home, was an incredibly important thing for them and for the opportunities that they see in China.
We, in the commercial service operation department of Commerce, have a whole list of projects that we advocate on day in and day out in China. And most of the people who we advocate on behalf of that we've talked to feel that this trip will give them a substantial boost in their discussions as we go forward. So I think it does go a long way in helping with the commercial relationship and the opportunities for American businesses, absolutely.
Q Why didn't you bring any business leaders with you? Why no business delegation?
SECRETARY DALEY: Well, I think the only pure business delegation that was ever taken on a presidential trip was when President Bush went to Japan with three auto-making -- auto manufacturer CEOs. There's been some business people on other trips, but I think the decision was to keep this strictly governmental, understandably.
Q You took businessmen to Africa.
SECRETARY DALEY: A couple of businesspeople as part of a much larger delegation. Not just businesspeople, but a whole host of different -- people from different arenas, including Congress. But it was not -- there was never, in any of the discussions that I've had discussed as far as a business trip, many months ago, even when this trip was first talked about.
Q There was a lot of anticipation here that the President might visit an American plant or factory, such as the GM plant or Motorola, and there were a lot of talks about that. Has anything like that been scheduled, and if not, why not? It seems like a good way to show how Americans are engaging here.
SECRETARY DALEY: No, I think -- a lot of the companies talked about trying to get the President to do a whole host of things, visit their plants, visit schools that they support, and a whole host of them. But I never was involved in any discussions about him coming out, but a lot of businesses were trying to get him out to them.
I think that the message that the President has delivered, basically relating back to the question that was asked a few minutes ago, of greater cooperation is the most important thing that could happen in this and the symbolic visit to a U.S. business here would just, in my opinion, be nowhere near the impact -- positive impact for U.S. businesses that the overall message of engagement has been for them.
Q As a result of the end-use site visits, are there any licenses in the pipeline that would now be approved, any specifics you can tell us about?
SECRETARY DALEY: Well, I think that's a framework. A lot has to be developed, to be frank with you, exactly how we move forward as far as end-use visits are concerned. But it's the first time in 13 years that the Chinese government -- the U.S. government's been pushing to try to get a discussion about end-use. We finally got a framework to move forward, on a case-by-case basis, look at the opportunity to have visits. So I think it's important as a start, but there's a long way to go in trying to get that.
Q Do you anticipate that Commerce is going to have to hire more people to make these visits, or do you have --
SECRETARY DALEY: No, not at this point we don't. We have plenty of people.
MR. TOIV: Lael is going to get up now and give you a little idea of what we're doing tomorrow.
MS. BRAINARD: Hi. The President is going to spend a lot of tomorrow focusing on the economic reforms and economic dynamism in China and the related commercial opportunities and commercial ties that are growing between our two countries. This is something that Shanghai provides a fairly unique opportunity to do. I hope all of you have had a chance to wander around outside.
Shanghai has been at the forefront of China's economic reforms. It has frequently been the test city for a lot of reforms that have been introduced then on to the national scene in China. And so this is a sort of unique opportunity for him to talk about the economic reforms and how they're changing ordinary citizens' lives in China, how they're creating opportunities for American businesses, and also how they are creating challenges that all of us face in our own economies, but in China in particularly noticeable ways. It will also give him an opportunity to wander around and to see some of those reforms having an effect on people's lives.
In the morning he will give a set of remarks at the AM-CHAM. And there I think he'll want to focus a little bit more than he has in his previous remarks on the economic transformation that is really sweeping the landscape in China; talk about how American businesses have been part of that, the kinds of opportunities that are created for American business, but also very much the challenges that are faced by Chinese people who are changing their jobs, leaving state-owned enterprises, facing the private job market for the first time, trying to start their own businesses, owning their own companies, et cetera.
And he'll also want to talk a little bit about, I would imagine, the sort of financial -- the broader financial context that China is facing, which he has discussed with both President Jiang and Premier Zhu when he was in Beijing.
And then in terms of the day --
Q What is AM-CHAM?
MS. BRAINARD: The American Chamber of Commerce in Shanghai, sorry. He'll be giving his remarks at the American Chamber in Shanghai, which I believe is the fastest growing American Chamber in all of Asia, which tells you something about Shanghai's dynamism.
In terms of the other things that he will be doing over the course of the day, he'll probably stop by to see the Shanghai Stock Exchange for himself. As those of you who have seen it will know, it's really very modern. I believe it is the first of two stock exchanges in all of China, and obviously it's a real symbolism of the capitalist transformation of the economy.
He will also visit with a number of entrepreneurs who represent the different types of Chinese citizens who are starting to own and run their own businesses -- from people who have been laid off from state enterprises to members of the younger generation who have really aspired from day one to go into the private sector. So it will be an opportunity for him to ask how they view the economic environment and what kinds of impediments they face in starting businesses, et cetera.
He will also spend some time at a housing development, a fairly new housing development where he will meet with a Chinese family that is purchasing or has purchased its own home for the first time. The housing sector is undergoing really a fundamental transformation in China as well. This is one of the reforms that Premier Zhu has pointed to as something that he really wants to see undertaken starting this year. And I believe July 1 is an important date, that on that date work units, which are the traditional source of housing, subsidized rental housing, will phase out subsidized rental housing over time and mortgages will become more available to ordinary Chinese, so that, for the first time a lot of Chinese families will be able to choose where they want to live of right track first time and obviously that will free them up to look for the best economic opportunity, as well.
So that's quite a dramatic change, but obviously it's going to play out over a long time horizon. So I think those are all the pieces of his day tomorrow. If anybody has any questions on any of them I'd be happy to answer.
Q What about the speech, the themes of his speech?
MS. BRAINARD: The themes of his speech, I think he'll be talking about how China's economic reforms have changed the lives of ordinary citizens, expanding the kinds of personal freedoms that they have, the kinds of opportunities that has created for American businesses, the kind of challenges American businesses still face selling into the Chinese market -- which is something that he also raised in his government meetings in Beijing and which are an ongoing source of concern to our private sector -- and talking a little bit about the reform challenges ahead.
Q Can you give us some figures? Do you have any numbers on how much has been invested in the real estate here in Shanghai and how important it is for the general development of the economy in China and whether America can count on that so that the Chinese economy can start to develop and help out, basically.
MS. BRAINARD: I, unfortunately, don't have numbers on the housing market in Shanghai. We could perhaps try to get some for you. I have seen a variety of estimates of how much stimulus the housing reforms would provide to the Chinese economy. But we don't have any analyses of those ourselves. I think they're sort of the ones that you will have seen in articles that are readily accessible to you. I haven't seen any independent economic analyses of those.
Q You mentioned he'll say something about reform challenges ahead. What are some of those?
MS. BRAINARD: Well, I think China is in the midst of a quite fundamental transformation. Obviously the economy has changed massively in the last two decades. But they still have a long way to go in terms of reforming the state owned enterprises, restructuring the financial system -- the obvious kinds of things, creating a social safety net that is independent of the state owned enterprises.
Q The current Japanese recession-depression started with the real estate bubble. Shanghai is the epitome of a different kind but nonetheless a big real estate problem for China with all this over building, these huge vacancy rates here especially. In your discussions here do you guys have any sense of how big a problem this is -- have a better idea and is this likely to trip up China's growth?
MS. BRAINARD: I don't have any sort of independent sources on that issue. I think we obviously have had real estate and financial problems in the past. I think loads of economies have experienced them. And one of the things that we are doing with the Chinese that is significant is we are trying to engage them on a variety of different areas where we might provide technical assistance based on our past experiences and expertise, among which is included the banking system.
Q Thank you.