Select Committee on Foreign Affairs Seventh Report

3  CHINA'S RISE AND ITS IMPACT ON FOREIGN POLICY AND SECURITY

86. The FCO memorandum describes China's growing geopolitical power:

Sustained economic growth and development over the past 25 years have made China an established economic power with global reach. This in turn has increased the country's geopolitical influence, and the importance of ensuring that it contributes constructively to the collective goals of the international community.[101]

At present China pursues a policy of 'peaceful development', which Zheng Bijian, the Chair of the China Reform Forum, described in an article in Foreign Affairs in September 2005. In the article, Zheng wrote:

For the next few decades, the Chinese nation will be preoccupied with securing a more comfortable and decent life for its people […] The most significant strategic choice the Chinese have made was to embrace economic globalisation rather than detach themselves from it […] Beijing has stuck to the belief that there are more opportunities than challenges for China in today's international environment.[102]

The article continues by saying:

China will not follow the path of Germany leading up to World War I or those of Germany and Japan leading up to World War II, when these countries violently plundered resources and pursued hegemony. Neither will China pursue the path of the great powers vying for global domination during the Cold War. Instead, China will transcend ideological differences to strive for peace, development, and cooperation with all countries of the world.[103]

We asked Dr Hughes about China's 'peaceful development'. He said:

They talk about 'peaceful development' now, but originally the term was 'peaceful rise', which was about three years ago […] To talk about 'peaceful rise', how do you reconcile it with the arms build-up opposite Taiwan?[104]

87. Professor Wall also raised concerns about China's 'peaceful development'. He said:

They talk about the peaceful development and that they are no threat to other countries of the world but they have 20 neighbours […] and they have disputes with every single one of them. If you were one of the 14 fishermen who was killed by the Chinese Navy because you happened to slip over what the Chinese regard as their maritime border, you would not feel that the Chinese are that friendly across borders.[105]

88. Economic growth is central to China's rise. The FCO wrote that China's "overriding objective is economic growth, which it sees as central to restoring China's regional pre-eminence and global importance."[106]

89. Professor Rosemary Foot of St Antony's College, Oxford, agreed and wrote in her submission that China "is an authoritarian country and thus it derives its legitimacy, its authority to rule, not from being a representative state, but from being able to guarantee continued high levels of growth from which important sectors of society benefit."[107]

90. Steve Tsang also wrote:

The domestic imperative is rooted in the existence of a de facto 'social contract' between the Communist Party leadership and the people of China after the Tiananmen crackdown of 1989. This involves the Party delivering social stability and steadily improving living standards on the basis of rapid and sustained growth in return for the general public's acquiescence to continued Party rule […] For this condition to sustain China requires a benign international environment and continued inflow of foreign investments.[108]

91. China has a voracious appetite for raw materials from overseas, which are essential for its continued economic expansion. Rosemary Foot wrote that China "has become a resource-hungry country for oil, natural gas, water, inputs for processing, home construction and manufacturing […] These kind of resource needs drive a lot of its foreign policy."[109]

92. In 2005 China accounted for 31% of world oil demand.[110] Of that oil, roughly 60% is brought in by ship from the Middle East, a proportion which will rise to 70% by 2015.[111] This dependence on imports of raw materials and other commodities has contributed to some sense of insecurity in Beijing, and has led to diplomatic initiatives by China in areas traditionally associated with resource provision, such as Africa and Middle East.[112] However, Dr Philip Andrews-Speed of Dundee University described how Chinese oil and gas strategy could damage Western interests, because with "respect to oil and gas supply, China's 'strategic' approach threatens to undermine the nature of the existing market mechanisms preferred by the West." [113] He went on to say:

China's international oil and gas strategy poses potential threats to Western diplomatic and strategic interests in two ways. The first is through China's willingness to do business with 'states of concern' and other governments currently out of favour with the West. These include Iran, Sudan, Myanmar and Venezuela. China's actions directly and indirectly undermine Western policies towards these states. The second is through China's growing influence in regions of strategic interest to the West, for example the Middle East or Central Asia. Through its oil and gas diplomacy China's profile is rising across much of Africa and Latin America, as well as closer to home in Southeast Asia.[114]

93. Professor Wall also told us:

China does not have an equivalent of the American desire to spread democracy by force around the world. It has given up any hope of forcefully imposing communism. It also takes the line that what in the West we would sometimes think of as grounds for intervention are not grounds for intervention because they are very strong believers in the philosophy of non-intervention, even though the countries may be engaging in activities which are alien to the United Nations.[115]

94. We asked the Foreign Secretary about China's attitude to securing resources. She told us:

An extremely long-standing principle of the Chinese regime […] is a sort of non-intervention in other countries' affairs […] Obviously […] we do try to encourage […] the notion that it is not just a matter of signing a contract in the short term […] that we see it as very much in their long term interests to take account of some of these issues.[116]

95. We conclude that China's policy towards resources threatens the market-based mechanisms on which Western states rely for supply, and that Beijing's attitude to business with states which the international community has condemned for their behaviour damages efforts to uphold international standards in human rights and good governance. We recommend that the Government increase its efforts to persuade the Chinese authorities that they have a strong interest in the maintenance of international standards and that working with or supporting outcast regimes will damage China's reputation and could set Beijing on a course in opposition to other major members of the international community.

96. Africa presents a particular illustration of this problem. China's trade with Africa has grown very rapidly in the last decade, increasing by 58.6% in 2003 alone, reaching about $29 billion. Much of the trade is of African exports of commodities such as oil or mineral ores, in exchange for finished industrial goods; Africa supplied 28.7% of China's crude oil imports in 2004, and China is cultivating relationships with Algeria, Angola, Egypt, Gabon, Kenya, Zimbabwe and states in the Gulf of Guinea, such as Nigeria.[117]

97. Sudan, which has come under much criticism for its brutal policies in Darfur, is a major trading partner of China. Currently, China receives about 5% of its oil imports from Sudan, and has invested about $3 billion in the oil industry;[118] Beijing reportedly also has 4,000 non-uniformed forces protecting its interests there and rumours have emerged that Beijing might make use of prisoners to construct pipelines in Sudan.[119] Professor Foot wrote in her submission: "China is Sudan's leading trade partner and leading foreign investor in its oil industry. It has a 40% stake in Sudan's Greater Nile Petroleum Operating Company. China has also made efforts to develop close relations with other oil-producing countries on the African continent: Algeria, Angola, Nigeria as well as Sudan."[120] Professor Wall went further when he told us:

[The Chinese] have continued to block discussions of the problems in Sudan on the grounds that they have business interests in Sudan and will not have the [UN] Security Council interfering. The foreign minister said, 'Business is business' when he was asked why he would not allow Sudan to be protected by the Security Council.[121]

China is also a close ally of Zimbabwe, despite the terrible abuses committed by the government of Robert Mugabe.[122]

98. However, the Foreign Secretary was more positive about China's engagement in Africa. She told us:

over the years there has been a growing recognition by the international community that it is not in anybody's interests […] to see this appalling governance, because […] that in itself is not sustainable […] and it is to everybody's mutual disadvantage. China is much too wise not to see that that thinking.[123]

99. We conclude that Beijing's support for regimes in Africa which flout existing norms, such as Sudan and Zimbabwe, damages both the interests of Western states like the United Kingdom, and also China's own long term interests, since corrupt, brutal and incompetent regimes make unreliable partners. We recommend that the Government urge the Chinese to support the referral of the Darfur and Zimbabwe situations to the UN Security Council. We further recommend that the Government increase the resources of the Foreign and Commonwealth Office dedicated to monitoring Chinese activity in Africa.

100. It is not only in Africa that China's role is in question; the issue is global. Commenting on the question of growing Chinese investment in Latin America, Daniel Erikson, Director of Caribbean Programmes at the Inter-American Dialogue, wrote in his submission: "China has the potential to displace US trade and investment while offering an alternative model for development to Latin American countries that have lost faith in policies associated with the 'Washington Consensus' reforms of the 1990s."[124] For instance, Venezuela and Bolivia have seized on links with China as a means to increase leverage against the traditional dominance of the USA in South America.

101. Access to Middle Eastern oil supplies is also a paramount concern in Chinese foreign policy. This may also lead to collision with Western interests. China has put a lot of effort into its relations with major Middle Eastern players like Iran and Saudi Arabia. For instance, China played an active role in Iran's civil nuclear program between 1985 and 1997.[125] In 1997 China pledged to cease nuclear co-operation with Iran, but has had difficulties in stopping all support for weapons programmes; in 2002 the US imposed sanctions on eight Chinese companies for selling biological and chemical weapons technology to Iran.[126] Beijing also has major economic links with Tehran; Iran supplies about 13% of Chinese oil needs at present and China signed a deal with Iran in 2004, comprising investment of about $100 billion over twenty years in the Yadavaran oil and gas field.[127]

102. However, Dr Hughes told us that he did not see China preventing international action on Iran:

[The Chinese authorities] are not in a position to confront the United States on these issues—that is the bottom line. The most they will do is abstain on these issues. I do not think they will play a particularly positive diplomatic role either, which is maybe disappointing.[128]

We asked the Foreign Secretary about Iran and China. She said: "There is a very considerable amount of common ground, agreement, understanding and basic concern among the participants in that dialogue, the P5 and Germany."[129]

103. We recommend that the Government urge its counterparts in Beijing to use their influence in regions such as the Middle East and Latin America to work in concert with the international community to settle controversial issues in an equitable manner and to play a positive role in the resolution of the Iran crisis.

The United Nations

104. China is a longstanding supporter of multilateral fora in general and the United Nations in particular. The Republic of China (Taiwan) held China's seat at the UN until 1971, when the PRC took over. The Chinese Embassy in London wrote: "China attaches great importance to the role of international organisations such as the UN and has already acceded to 267 multilateral treaties and 130 inter-governmental organisations, and is playing an increasingly important role in upholding and promoting multilateralism."[130] Steve Tsang wrote in his memorandum: "China puts great importance on international organisations in general and on its United Nations Security Council seat in particular. They are useful in countering the preponderance of the US."[131]

105. Dr Swenson-Wright agreed and told us:

It is important to stress the extent to which China, since the mid 1990s, in a whole range of initiatives, has demonstrated that it is much more willing to identify with international norms, whether it is participation in multilateral organisations, signing on to regional agreements, giving very explicit support to the role of the United Nations, perhaps more so than the United States.[132]

The FCO also pointed out that China had supported counter-terrorism measures in the UN Security Council.[133]

106. However, only rarely has China driven events within the UN, and the PRC has been sparing in its use of the Security Council veto. Dr Hughes said:

I suppose until now Chinese behaviour in the Security Council has been seen as pursuing its own interests rather than taking the responsibility of a permanent member […] You may think that is good or bad, but for many people in China especially this has been a disappointment that it is not acting like a great power and is not really taking the responsibility that comes with its special status as a permanent member.[134]

107. On the question of UN reform, China has made clear that its priorities include expanding the roles of developing states, particularly African countries, but Beijing opposed Japan's membership of the UN Security Council. Professor Wall told us: "They blocked the reform of the Security Council by making clear that they would not approve of the inclusion of Japan, which meant the reform could not go ahead at all."[135]

108. We asked the Foreign Secretary about China's role in the United Nations. She told us:

I would say that China tends to be a quiet and sometimes a silent power house rather than a vocal one at present. I think China's economic importance is increasingly recognised, and of course China is a powerful player and fully understands and recognises that. I think, however […] that China is not yet using her economic power as fully as she could.[136]

109. We recommend that the Government maintain its support for China's growing prominence at the United Nations and encourage the Chinese authorities to view their permanent membership of the Security Council as a means to influence the international community, rather than simply as a useful tool with which to defend narrow national interests.

Security in East Asia

110. The current US-led order in East Asia revolves around a series of treaties, inherited from the Cold War era. Professor David Shambaugh, Director of the China Policy Program at the Elliot School of International Affairs, George Washington University, wrote in his submission:

The US-led security system remains the predominant regional security architecture across all of Asia […] This includes a number of elements: the five bilateral alliances in East Asia; non-allied security partnerships in Southeast Asia, South Asia and Oceania; the build-up of forces in the Southwest Pacific; the new US-India and US-Pakistan military relationships; and the US military presence and defence arrangements in Southwest and Central Asia. Taken together, these comprise the dominant security architecture across all of Asia. No country can match the United States in these regards.[137]

111. The FCO agreed and wrote:

The US is the largest Pacific power. It has an essential national interest in peace and stability in the western Pacific. It has kept the lid on a regional arms race by guaranteeing Japanese and South Korean security and their non-nuclear status. In the absence of any indigenous security structures, the US network of bilateral alliances is the chief guarantor of peace and stability. The US maintains a large number of troops and military assets in both Japan and ROK, and has a legal and political commitment to help Taiwan defend itself.[138]

112. China recognises the historic role the USA has played in the maintenance of stability in the region. Professor Foot wrote that China "accepts that the US provides a degree of regional order in China's neighbourhood."[139] Professor Shambaugh wrote: "The system […] has been central to the maintenance of strategic stability and economic development throughout the East Asian region. Even China has benefited from the regional security and stability engendered by the system, which has provided a conducive environment for China's recent explosive economic development."[140]

113. The USA will maintain its role, said Dr Swenson-Wright:

The United States remains committed. It sees itself as a Pacific power. It sees itself tied to the region, partly because of the obvious economic interest the country has in East Asia.[141]

114. However, China's economic growth is contributing to a slow change in the existing system thanks to increases in military spending by the PRC government. The FCO wrote: "China's rise could disturb the military balance in the region which the US has maintained for half a century."[142] The Pentagon's Quadrennial Defence Report pointed to the global implications of China's economic growth in February 2006: "As China's economy expands so will its interests and the perceived need to build an armed force capable of protecting them."[143] China has increased its defence spending by more than 10% every year since 1996, except 2003.[144] Indeed, US Secretary of Defence Donald Rumsfeld has made clear his concerns about China's growing military might.[145] He said: "I think it's interesting that other countries wonder why they China would be increasing their defence effort at the pace they are and yet not acknowledging it […] It is almost as interesting as the fact that it is increasing at the pace it is."[146]

115. The USA's main concern is the lack of transparency in Chinese defence spending. A prominent academic in Shanghai explained to us why defence spending in China was not transparent. He said that the definition of military spending does not include the two million People's Armed Police, who are effectively soldiers, and that subsidies from local government are not included in the military budget; that military research and development funding is dispersed by the central government through industrial ministries, and so does not count as part of the military budget; that many Russian arms purchases do not come from military funds but from the Prime Minister's budget; and that funds for housing the 2.5 million standing forces comes from the civilian budget, not from the military budget. The Pentagon estimates China's real military spending at between $70 and $105 billion, far above China's own figures of about $35 billion.[147]

116. Dr Hughes explained the purpose behind Chinese military spending:

The answer is very simple, it is Taiwan. The nature of the deployment, the redeployment from the north to the south-east, the nature of the armaments, all point to one thing which is a contingency over Taiwan. Given that there was a near conflict with the US in 1995-1996, it came very close to real naval conflict, that was really the wake-up call.[148]

Given the role of the USA as a guarantor of the status quo in the Taiwan Straits, some analysts have pointed out that the Chinese army is the only one in the world being developed to fight the USA.[149]

117. Partly in response to the changing security dynamic in East Asia, the USA is in the process of restructuring its military forces throughout East Asia. The USA has decided to move an additional aircraft carrier group to the Pacific.[150] Dr Swenson-Wright told us:

The American administration has drafted a new security doctrine, the Global Force Posture Review, and we see in that […] a commitment on the part of the United States to maintain a flexible presence within the region, albeit a reduced one; so one should not view the build-down of military forces, whether from the Korean peninsula or the reallocation of forces from Japan to Guam, as a sign of diminishing commitment. Far from it, I see it much more as a re-emphasis of America's commitment to stay within the region in a fashion that allows it to exert maximum flexibility; a strategy based on a hub and spokes approach involving the use of both bilateral and multilateral alliances, which […] gives the United States the opportunity to build coalitions that are willing with some of its key allies, most notably Japan.[151]

He added: "It is very clear that part of the Global Force Posture Review is an attempt to deal with contingencies that might involve Taiwan."[152]

118. Professor David Shambaugh wrote:

The US Global Force Posture Review […] envisions changes in deployments and command structures that increase joint military interoperability and further facilitate Japan's involvement in global peacekeeping operations […] The United States has also undertaken its own unilateral military build-up in the western Pacific. Guam in particular is being built up into a forward base of major significance. The forces deployed there are directly relevant to China, potential contingencies in the Taiwan Strait or Korean Peninsula, and can also be used for deployments into the Indian Ocean, Persian Gulf, and broader Middle East.[153]

119. Any instability in East Asia would have severe global repercussions including damage to British interests in the region. The FCO submission stated:

Economic interests which the EU—and with it the UK—have at stake in the region are large. China, Japan, ROK, Taiwan and member states of the Association of South East Asian Nations account for 26% of the EU's global trade; and this proportion is rising. The EU is now China largest trading partner, and China is the EU's second largest trading partner after the US. East Asian economies hold the greatest volume of the world's foreign currency resources and consequently have significant influence on global financial stability. The security and stability of the region has direct consequences for Europe; and for the region itself, it is a precondition for continued economic success.[154]

In this context, it could be in the United Kingdom's interests to make a contribution to East Asian security. Commenting on how the United Kingdom might assist in the maintenance of stability in the region, the Foreign Secretary said:

Is there anything we can do to assist? Yes, I think there is […] One of the things that we try to do is build good relationships, obviously, with all those with whom we interact but also encourage them to build relationships with each other. As you may have noticed, of recent years we, the UK (and we have encouraged this in the EU) have set up strategic dialogues with a number of emergent major players in the world scene in order precisely to encourage […] recognition of mutual concern, mutual dangers and difficulties.[155]

The United Kingdom's experience within multilateral frameworks such as the European Union, the Council of Europe and the Organisation for Security and Co-operation in Europe might be one area of expertise which would be of value in East Asia, given the region's lack of effective regional security mechanisms.

120. We conclude that the USA continues to play a huge role in the maintenance of stability in East Asia. We further conclude that the maintenance of peace and security in East Asia is profoundly in the United Kingdom's interests. We recommend that the Government draw on the UK's involvement with and knowledge of NATO and of regional organisations in Europe, such as the Council of Europe, the Organisation for Security and Co-operation in Europe and the European Union, to encourage debate about the institutionalisation of security issues in East Asia. These organisations provide useful models for any indigenous security structures which might broaden the security system from one based on alliances into one of mutual interdependence.

The European Union

121. Although the US plays the predominant role in security in East Asia, the EU also has a role. The FCO said: "The EU is a major economic player; but up to now has not played a significant political role."[156]

122. The first meeting between an EU troika and PRC officials took place in 1998, but the relationship has grown rapidly since so that now the EU and China are involved in more than 20 sectoral dialogues.[157] The last EU-China summit, in September 2005, concentrated on five main areas of co-operation, which were: a memorandum of understanding on labour, employment and social affairs; a joint statement on cooperation in space exploitation, science and technology development; a memorandum of understanding on China-EU dialogue on energy and transport strategies; a maritime protocol extending the existing maritime agreement to new member states; and two financing agreements for China-EU bio-diversity and river basin management.[158] A round of the EU-China strategic dialogue also took place in December 2005.[159]

123. The nature of relations with China varies across the European Union. The FCO wrote: "EU engagement [with China] has to date […] been largely defined through Member States' economic interests in the region, rather than the political or security concerns of regional partners."[160] We asked the FCO how the EU operates throughout the region. It wrote:

The EU is developing [a] wide-ranging strategy in China. Both sides are committed to strengthening and focusing their relationship through a new Partnership and Co-operation Agreement (PCA) […] The PCA will help to reinforce key strands of the EU-China bilateral relationship (e.g. encouraging regulatory and economic reform in China, promoting rule of law and governance) and support further collaboration on global issues (e.g. environment and climate change, sustainable development, energy security co-operation). The UK is encouraging the EU to take a long-term strategic approach to China.[161]

124. However, Dr Hughes was critical of the European Union's policy towards China. He said that the EU arms embargo issue "tells us, first of all, about the lack of capacity in the EU and the lack of awareness of the broader strategic issues in the region beyond economic issues, the political and military balance of power and so on, which of course the United States is at the centre of."[162]

125. We recommend that the Government continue to work with its EU partners to expand the resources dedicated to strategic issues in East Asia, so that policy makers take a range of other matters into account in addition to economic relations. We conclude that the new Partnership and Co-operation Agreement might be an effective venue for tackling strategic issues, as well as other important concerns such as human rights and the environment.

126. The United Kingdom has a particular role to play, in the context of the debate about the future of the EU's arms embargo on China. The EU introduced the embargo following the massacres in Tiananmen Square in 1989. However, in 2005 France and Germany launched a debate about lifting the embargo against China.[163] The USA and Japan both strongly opposed lifting the ban, and in response to their comments and the passing of the Anti-Secession law by China, the EU shelved discussions.

127. Feeling is still strong in the USA. Commenting on the EU arms embargo, the May 2006 Pentagon Report to Congress on Chinese Military Power stated:

China has maintained pressure on the European Union (EU) to lift its embargo on the sale of arms to China, which the EU established in response to the Tiananmen crackdown in 1989. An EU decision to lift the embargo would, in the US view, weaken the restraints on EU member states' transfers of arms and other technologies with military application to China. Chinese access to European military and dual-use technologies could result in new weapons systems entering into China's inventory and an increases in the quality of, and production capabilities for, current and future systems.[164]

Sales of European military goods might also provide an insight for Chinese military planners into the capabilities of the US military because of NATO interoperability, we heard from interlocutors in the USA.

128. The Foreign Affairs, Defence, Trade and Industry and International Development Committees, meeting as the Quadripartite Committee, which examines the Government's policy on strategic export controls, tackled the question of the China arms embargo in its Report last year. It concluded:

Although we believe that the embargo is an imperfect tool, there are risks associated with its removal. It is possible that there could be major EU-US trade repercussions from an EU arms 'export drive' to China, or that EU member states enhance China's military capability in a worrying way, or that the Chinese Government uses arms exported from the EU for internal repression.[165]

Commenting on the arms embargo in its memorandum to the Committee, the FCO wrote:

The embargo is politically, not legally, binding at the EU level and in practice member states interpret it as covering only lethal weaponry. The great majority of applications for the export of licensable defence or other sensitive equipment to China do not fall into this category: these are assessed instead against the criteria of the EU Code of Conduct. Under the criteria of the Code, the Government would not permit the export of goods if there was clear risk that the export would be used for internal repression or external aggression or would upset the regional military balance or cause instability. The embargo is therefore of largely symbolic significance.[166]

129. Yet Dr Fell of the Department of Politics and International Studies at the School of Oriental and African Studies, felt that its symbolism was a reason to maintain the embargo:

the lifting of the embargo would be highly symbolic, and I think perhaps that impact would be greater than the practical issue of increasing the PRC's arms capabilities. In the light of the failure to re-examine the Tiananmen student incident of 1989, which was the key factor in why the arms embargo was enforced in the first place, I cannot see that there is a clear case for lifting the arms embargo at this stage. Moving back to Taiwan, the issue of the 700-800 missiles that have been built up pointing at Taiwan, I think, should be a factor that is considered.[167]

130. Dr Hughes also felt that symbolism was important. He told us: "With the EU arms embargo issue we saw how even on these rather traditional security issues now European states, and the EU too, are not able to just stay out of these issues [...] In that sense it impacts, also, on the transatlantic relationship". [168]

131. Dr Cronin also emphasised the transatlantic element to the discussions on the arms embargo, and told us:

I […] would like to see [Trans-Atlantic] co-operation on dealing with the big issues of the twenty-first century, and integrating China is exactly one of those big issues […] It is in Britain's interest, it is in Europe's interest, as Asia rises—China, India even Japan globalising—to take a more active participatory role in shaping China's integration and shaping Asia.[169]

132. On the other hand, Dr Cronin accepted that a case might exist for lifting the embargo in exchange for certain concessions from China. He said:

Lifting the arms embargo, under some circumstances, could be the right move, but it has also been linked with the other issue of human rights and human rights abuses and there is a linkage issue. The Chinese say, 'We do not like that linkage.' That is fine, but you have to take what leverage you have. [170]

133. We asked the Foreign Secretary about the arms embargo and she told us the issue was not currently under discussion in the EU.[171] Nonetheless, the United Kingdom has a particular role to play in this debate given its close links with Washington, at a political level between governments and at a commercial level between defence manufacturers. In addition, the United Kingdom must ensure that other European states do not let it wither on the vine.

134. We recommend that the Government work within the EU to maintain the arms embargo on the People's Republic of China. We further recommend that the Government stay in close contact with its US counterparts on this issue and explain US sensitivities to its EU partners, as part of its broader efforts to strengthen transatlantic ties and to ensure the embargo stays effective.

Sino-US Relations

135. China's most important relationship, and the most important for all states with an interest in stability in East Asia, is that between Washington and Beijing. Robert Zoellick, when US Deputy Secretary of State, made a major statement of policy on Sino-American relations in September 2005; he said that the USA must urge China to become "a responsible stakeholder" in the international system.[172] The Foreign Secretary was supportive of this effort. She told us: "I thought his speech was an important signal, which was warm towards China and was in a sense encouraging China."[173]

136. The Pentagon's Quadrennial Defense Review Report reiterated this point in February 2006:

US policy remains focused on encouraging China to play a constructive, peaceful role in the Asia-Pacific region and to serve as a partner in addressing common security challenges […] The United States' goal is for China to continue as an economic partner and emerge as a responsible stakeholder and force for good in the world.[174]

137. China seems willing at present. The Chinese Embassy in London wrote:

At present, China-US relations enjoy a sound and stable development momentum in general. China and the US have maintained effective cooperation and coordination in various important fields including economy and trade, anti-terrorism, law enforcement, prevention and control of Avian Flu, nuclear issues in the Korean Peninsula and Iran, and UN reform.[175]

138. The relationship has strengthened of late. Since 2001, ties between Beijing and Washington have progressed towards what Professor Shambaugh described as "a real institutionalisation".[176] A Pentagon Report of July 2005 pointed to developments in the relationship since the 2001 EP3 spy plane incident, including: the establishment of the Six Party Talks on the Korean crisis, and co-operation on counter-terrorism, with China's membership of the Container Security Initiative; efforts to manage trade between the USA and China through the Joint Commission on Commerce and Trade and the Joint Economic Committee; a periodic dialogue on strategic issues; and expanded military to military exchanges, including high level visits and co-operation between military academies.[177]

139. However, views in the US Congress are more critical. A report by the US-China Economic and Security Review Commission of Congress in November 2005 pointed to a range of risks inherent in the US-China relationship and concluded by recommending the introduction of tariffs to reduce China's trade surplus with the USA.[178] Particular points of friction have been over: the value of China's currency, which many US legislators feel is undervalued,[179] abuses of intellectual property rights in China;[180] China's efforts to 'lock up' commodity supplies with a mercantilist approach to trade;[181] and Beijing's growing military spending.[182]

140. However, Dr Cronin told us that the outlook is quite positive. He said that "for all of the concerns that you have in Washington […] there is an understanding that the major powers have to get along and have to find a co-operative way of working."[183] He went on to say that the relationship:

is one of both competition […] and it is also one of growing co-operation and it is that complexity that makes it uncertain, increases concern around the world and raises questions about Europe's role in the future of Asia perhaps as well. Overall I am fairly optimistic about US-China relations. I think […] despite the hedging strategies that occur on both sides […] the reality is that there is still growing co-operation […] There are clearly some areas that are right for co-operation and some areas that are very vexing.[184]

141. Professor Shambaugh wrote in his submission that the US-China relationship is "characterised by substantial cooperation on bilateral, regional, and global issues—while, despite this tangible and positive cooperation, there remain evident suspicions and distrust of the other's motives and actions."[185]

142. Professor Foot broadly agreed:

Overall, Beijing's aim has been to accommodate where possible and to seek coincidences of interest with the US. Only over the Taiwan question and US criticism of its human rights record […] has Beijing consistently taken a firm stand […] However, China's strategy also contains an important 'hedging' element, through which China seeks to secure its future. If necessary, China can try to use its newly-formed bilateral and multilateral relationships to offset any serious deterioration in relations with America.[186]

143. The Foreign Secretary pointed in particular to the economic risks in a deterioration of Sino-American relations: "domestically in the United States […] is recognition that China's existing and potential economic power is leading to anxiety about competitiveness and there is a terrible danger […] of it helping to fuel the drive towards protectionism".[187]

144. We conclude that an effective and constructive Sino-American relationship is a fundamental condition for the maintenance of peace and security in East Asia. The growing strength of the relationship is therefore welcome. We recommend that the United Kingdom support both the USA and China in their efforts to entrench a process of 'managed interdependence' in Sino-US ties, perhaps by drawing on British expertise in working within frameworks such as the Organisation of Security and Co-operation in Europe (OSCE). We also recommend that the Government work to support the US vision of China as a global stakeholder and to assuage any misgivings in Beijing about US motives.

Taiwan

145. The issue with greatest prospect for leading to a crisis in East Asia is that of Taiwan. The FCO underlined the peculiarity of Taiwan's situation: "Taiwan holds a unique position in the world. It has an economy of global importance and its own democratic system. Yet the UK, like most other states, does not recognise Taiwan as a state and does not have diplomatic relations with Taiwan".[188]

146. The roots of the problem are deep. In 1949 the Kuomintang (KMT) retreated to Taiwan and established the Republic of China (ROC), while the Chinese Communist Party took control of the mainland and declared the People's Republic of China. The division of China became one of the Cold War pivots until 1971, when the PRC took over the ROC's seat in the United Nations, after which US President Nixon visited Beijing. The USA did not formally recognise Beijing until 1979, but the tilt towards Beijing proved controversial in the USA and Congress passed the Taiwan Relations Act, which established US links with Taiwan through the American Institute in Taiwan and enshrined in law the US undertaking to help Taiwan to defend itself in the event of a military attack. The FCO wrote: "The Taiwan Relations Act does not oblige the US to come to the defence of Taiwan in the event of an attack by China. It does, however, require the US to maintain a capacity to resist any resort to the use of force or other forms of coercion that would jeopardise Taiwan."[189]

CHINA AND TAIWAN

147. The People's Republic of China maintains that Taiwan is a province of China. The Chinese embassy wrote in its submission:

Settlement of the Taiwan issue and realisation of the complete reunification of China embody the fundamental interests of the Chinese nation. The Chinese government has worked persistently towards this goal over the past 50 years. The Chinese government adheres to the basic principle of 'peaceful reunification and one country, two systems' on handling the Taiwan issue. The purposes of our policies on Taiwan issue are opposing and checking Taiwan's secession from China by secessionists in the name of 'Taiwan independence', promoting the development of Cross-Straits relations, maintaining peace and stability in the Taiwan Straits, and endeavouring on achieving the peaceful reunification of China.[190]

148. China vehemently opposes the concept of Taiwan as an independent state and has taken steps, both domestically and internationally, to underline its claim that Taiwan is an indivisible and inalienable part of China. A white paper issued in 1993 by the People's Republic of China describes the question of Taiwan, outlining the international legal principles used to support its view, which are primarily the principles of territorial integrity of states and of non-interference by other states in a country's internal affairs espoused in the Charter of the United Nations.[191] China sees the question as an internal, domestic matter and does not accept other states' intervention in attempting to resolve the dispute. The paper discusses the historical relationship between China and Taiwan:

Taiwan has belonged to China since ancient times […] Many historical records and annals documented the development of Taiwan by the Chinese people in earlier periods. Reference to this effect were to be found, among others, in Seaboard Geographic Gazetteer compiled more than 1,700 years ago […] Since [the] early seventeenth century the Chinese people began to step up the development of Taiwan […] from the very beginning the Taiwan society derived from the source of the Chinese cultural tradition […] After the Chinese people's victory in the war against Japanese aggression in 1945, the Chinese government reinstated its administrative authority in Taiwan Province.[192]

149. China maintains that "Taiwan was returned to China de jure and de facto at the end of the Second World War. It became an issue only as an aftermath of the ensuing anti-popular civil war stated by Kuomintang, and more especially because of the intervention by foreign forces." [193] Its argument was further set out in a later white paper issued in 2000, and Beijing has consistently maintained its position.[194]

150. The PRC has made clear that any moves towards formal independence by Taipei would lead to a military reaction in response. Article 8 of the Anti-Secession Law which was adopted by the National People's Congress in May 2005 states:

In the event that the Taiwan independence secessionist forces should act under any name or by any means to cause the fact of Taiwan's secession from China, or that possibilities for a peaceful re-unification should be completely exhausted, the state shall employ non-peaceful means and other necessary measures to protect China's sovereignty and territorial integrity.[195]

151. The Taiwan question is closely linked to the Chinese Communist Party's claims to legitimacy. Dr Hughes told the Committee:

The Taiwan issue is so important as an issue of legitimacy that it has been established as one of the three pillars of legitimacy for the leadership along with opposing hegemony, and economic development. It is more than an exception, it really is at the core of Chinese politics and legitimacy.[196]

152. Steve Tsang described China's approach to Taiwan:

China […] wants to gain control of Taiwan. There is no question that China is ultimately prepared to use force against Taiwan if the latter should assert de jure independence […] However, this is a last option for China. In its long term strategic view, the best outcome is to weaken Taiwan's international […] capacity […] to resist so […] that Taiwan would […] negotiate for unification under overwhelming Chinese military pressure.[197]

TAIWAN'S PERSPECTIVE

153. Taiwan has a different perspective. Although in its official policy positions the government no longer officially claims to represent the whole of China, it argues that "the Republic of China (Taiwan) is an independent and sovereign country."[198] Taiwan bases its claim on the recognised international legal principles of state sovereignty, democratic legitimacy and adherence to the generally accepted criteria of statehood in the Convention on the Rights and Duties of States.[199] Taiwan also maintains that it has the right of self-determination and states that other attributes such as having a constitution, the capacity to regulate in various fields and the evidence of signing treaties, show evidence of sovereignty. It also holds that Taiwan has never been ruled by mainland China.[200]

154. Taiwan claims that although the Republic of China's seat in the UN Security Council passed to the PRC in 1971, the transfer did not settle the question of the international status of Taiwan. In this context, Professor James Crawford of the University of Cambridge has written that, although Taiwan appears to fulfil the criteria of statehood, it "is universally agreed not to be a separate State". He has emphasised, however, that "this does not mean that Taiwan has no status whatever in international law."[201] Don Starr told us that: "The UK recognizes one China, but there is a strong case for Britain supporting the status quo of de facto but not de jure independence for Taiwan" particularly because of its democratic status.[202]

155. Taiwan is a member of a number of international institutions, although none which are limited to states: "Of around 7,200 [Inter-Governmental Organisations] in the world, Taiwan only participates in 26, and has membership, observership or some other status in 17. Taiwan's participation in the international community is not at all proportional to its political and economic achievements."[203] Yet, given the emergence of global concerns such as the SARS and avian influenza epidemics Taiwan argues that it should have observer status in the World Health Organisation (WHO). In our China Report of 2000 we noted that China "does not take objection to the non-governmental, economic or cultural exchanges between Taiwan and foreign countries", but that the WHO is a UN body which only states can join.[204] Nonetheless, this has implications; as Dr Cronin told us, Taiwan's peculiar status "does affect Britain, Europe and the world on things like avian flu when Taiwan is not represented […] there are real implications."[205]

156. We conclude that Taiwan's exclusion from bodies addressing concerns in areas including health and environment is unsatisfactory, particularly with the spread of avian influenza. We recommend that the Government set out in its response to this Report what measures it is taking to ensure that Taiwan takes a fuller part in organisations tackling such matters, and its attitude towards full membership of the World Health Organisation (WHO) for Taiwan.

157. Taiwan is a young and vibrant democracy. Since the end of martial law in 1987 a four-party, or two-bloc, system has emerged, with the Pan-Greens (the pro-independence Democratic People's Party (DPP) and its partner the Taiwan Solidarity Union (TSU)), competing with the Pan-Blues (the KMT, and its ally the People First Party (PFP)). In its Report on China in 2000 the previous Foreign Affairs Committee recommended that: "the United Kingdom should take account of the remarkable development of Taiwanese democracy by incrementally strengthening relations. This should include enhancing the status of Taiwanese inward visits and the level of outgoing ministerial visits to Taiwan, but not recognition of Taiwan as a state."[206] We saw at first hand the freedom of discussion in Taiwan, where we met with legislators from the main four political parties represented in the Legislative Yuan and enjoyed seeing the vigorous debate between them.

158. Domestic political developments in Taiwan may be the key to maintaining peace, since any changes to Taiwan's de jure status would provoke an angry response from Beijing. Dr Cronin explained:

Before [2008] the most likely catalyst or trigger for conflict may be political manoeuvrings inside Taiwan by the DPP for adding amendments to the constitution, which are probably not real 'red meat' amendments of national identity but the Chinese are likely to be quite reactive to almost anything, frankly, because they do not trust [Taiwan's President] Chen Shui-bian.[207]

159. The question of relations with the PRC divides Taiwanese politics. The opposition Kuomintang and People First Party take a more conciliatory line towards mainland China than the government. In the summer of 2005 both James Soong, Chairman of the PFP and Lien Chan, then Chairman of the KMT, visited mainland China, marking the first visit by incumbent opposition leaders. The Embassy of China wrote:

In April and May [2005], Lien Chan, then Chairman of the Kuomintang (KMT) and James Soong, Chairman of the People's First Party (PFP) led delegations respectively to visit the Mainland at the invitations of the Secretary General of the Central Committee of the Communist Party of China (CPC), Chinese President Hu Jintao. President Hu Jintao held official meetings with both Lien Chan and James Soong.[208]

We met Lien Chan in Taipei.

160. The strength of economic links between Taiwan and mainland China influences the KMT and PFP positions. We heard from interlocutors that Taiwan's stake in the economic development of China is huge. We were told that Taiwan's investment represents about 10% of all foreign direct investment in mainland China and about 70% of Taiwan's outbound investment; around 500,000 Taiwanese live on the mainland; and about 70,000 Taiwanese companies are based in China. The FCO wrote in its submission: "China's apparent acceptance that time is working in its favour through the gradual increase of economic and social contact between Taiwan and the mainland has contributed to the easing of political tensions."[209] Air links for tourism also mark the growing closeness of ties. However, despite supporting closer economic links, the KMT does not support a 'one country, two systems' policy. Dr Fell told us:

They have been doing opinion polls on this 'one country, two systems' issue in Taiwan for well over ten years. Support has never been over 15% […] The KMT's position is still opposed to one country, two systems. However, the visits to China by the KMT last year do show that there is some potential for agreement.[210]

161. In contrast, the current government of Chen Shui-Bian and his Democratic People's Party (DPP) is part of the 'Pan-Green' camp which works to consolidate Taiwan's status as a state separate from the PRC. Chen narrowly won the presidential elections in 2000, espousing a policy of formal independence. In a speech shortly after his election he announced that he would not call a referendum on independence, instituting the policy of the Four Noes, One Not and One If.[211]

162. Since then Chen has taken some controversial actions. His latest widely debated comments, following a setback in local elections in December 2005, were in a speech in January 2006, outlining plans to abolish Taiwan's National Unification Council and the National Unification Guidelines, which he had previously agreed to retain. His comments elicited a strong response from China, which branded him a troublemaker.[212] However, Chen announced that that the Council would 'cease to function' and the Guidelines would 'cease to apply' in February 2006. We had the opportunity to meet President Chen during our visit to Taiwan. He assured us that politically sensitive issues such as any change of sovereignty were unlikely to be adopted due to the high threshold of consent required—approval by three-quarters of the Legislature, and then support of at least half of the eligible citizens in a national referendum. He added that Taiwan's Constitution was a contract between the government and the people, saying that no options should be excluded as long as they are by the consent of the people and not aimed at cross-strait unification as the ultimate goal.[213]

163. We asked Dr Fell about Chen's latest moves. He told us:

there is a limit to how reckless the Chen Shui-bian administration can be in its last two years […] It is a minority government […] To actually pass constitutional reform they need a two-thirds or three-quarters majority in the parliament and they do not even have 50%. There were some tensions created by scrapping the National Unification Guidelines and Council […] but again this was essentially a symbolic move. It was something that could be done without parliamentary agreement.[214]

164. Dr Cronin told us that this "is why you are more likely to see the mainland trying to isolate the DPP, posturing for 2008, and you are more likely to see Chen Shui-bian and the DPP trying to test the limits of what they can get away with, with their […] limited power."[215]

ROLE OF THE USA AND JAPAN

165. The USA has a particular role to play in Taiwan. China wants the USA to rein in the Taiwanese government, which, in the run-up to the 2008 elections, could prove problematic if the President takes a populist, pro-independence line. The Chinese Embassy in London wrote:

China demands the US to seriously abide by its commitment [to maintain the status quo in the Taiwan Straits], put an end to its sales of advanced weapons to Taiwan and its elevation of US-Taiwan relations, refrain from sending any misleading signals to 'Taiwan Independence' elements, and take concrete actions to maintain peace and stability across the Taiwan straits and safeguard general situation of China-US relations.[216]

166. The US has worked to restrain President Chen Shui-bian. For instance, Condoleezza Rice, the US Secretary of State, on 10 July 2005, made clear that the US wants to see no unilateral changes to the status quo, and more recently the USA did not permit Chen anything more than a refuelling stop in Alaska in May 2006, which was taken by observers as a sign of US displeasure with his controversial political programme and statements.[217]

167. US guarantees to Taiwan may also be less solid than they appear. The FCO wrote:

US policy has been deliberately ambiguous on the subject of defending Taiwan in the event of an attack from China. The Taiwan Relations Act does not oblige the US to come to the defence of Taiwan in the event of an attack by China. It does however require the US to maintain a capacity to resist any resort to the use of force or other forms of coercion that would jeopardise Taiwan. But the US is also clear that it does not support Taiwan independence, and that it opposes unilateral steps on either side of the Taiwan Strait to change the status quo.[218]

168. We asked our witnesses if the USA would support Taiwan against all eventualities. Dr Fell told us that it would depend on whether Taiwan crossed a "red line".[219] Dr Cronin agreed:

That is right, that is the point. If Taiwan is doing something that is so flagrant that they are clearly provoking Beijing […] then I think you have seen in recent years the United States saying, 'Wait a second, we want stability, we want peace. We have agreed to this principle so there is no unilateral change of the status quo.'[220]

169. In the interim, however, the military balance in the Taiwan Straits is shifting in favour of the PRC. The Pentagon's report of June 2006 on the PRC's military capabilities stated:

The cross-Strait military balance is shifting in the mainland's favour as a result of Beijing's sustained economic growth, increased diplomatic leverage, and improvements in military capabilities based within striking distance of Taiwan […] Taiwan's defense spending has steadily declined in real terms over the past decade, even as Chinese air, naval and missile force modernisation has increased the need for defensive measures that would enable Taiwan to maintain a credible self-defence.[221]

170. We heard in Taiwan a widespread concern expressed by many interlocutors about the increasing number of missiles aimed across the Straits by the PRC.

171. Japan also has a role to play in the situation. Japan made a joint statement with the USA on the Taiwan issue in February 2005.[222] Dr Swenson-Wright explained why the issue was important for Japan, saying that "Japan critically depends on access to those sea lanes of communication given its 80 per cent dependency on oil from the Middle East."[223] He went on:

The reinforcement of the co-operation between the United States and Japan takes Taiwan as one of its principal concerns. Japan maintains a one China policy […] from the point of view of the policy making community they want to avoid instability, they support the American position, they want to encourage a continuing co-operative relationship. Taiwan is important principally because of where it is and the risk of instability associated with Chinese direct action.[224]

172. Japan also has strong historic and current ties with Taiwan, where the population has a largely positive view of its role during the 1895-1945 colonial rule, which was a relatively benign civilian administration in contrast to the harsh military government in Korea or the ravages carried out in mainland China between 1931 and 1945. Dr Fell said:

Another factor here is the fact that Taiwan was a Japanese colony for 50 years. Again, there are very close links there and many see that Japanese colonialism during that period was relatively benevolent, and that is a factor in the slightly more pro-Japanese sentiment within Taiwan itself. [225]

Taiwanese lobbyists also have close links with Japanese legislators.[226]

173. We conclude that the Chinese military build-up across the Taiwan Straits threatens peace and stability in East Asia. We recommend that the Government support US efforts to preserve peace and stability in the Taiwan Straits. We further conclude that the growth and development of democracy in Taiwan is of the greatest importance, both for the island itself and for the population of greater China, since it demonstrates incontrovertibly that Chinese people can develop democratic institutions and thrive under them. We further recommend that the Government and its partners in the EU make clear to the Taiwanese government that it should not provoke a crisis by acting in an impetuous manner and continue to urge all parties in the Taiwan dispute to seek a peaceful resolution of the problem.

THE UNITED KINGDOM'S ROLE IN TAIWAN

174. The United Kingdom accepts the PRC's One China principle. The FCO told us:

Under the terms of a 1972 agreement with China, HMG acknowledged the position of the government of the PRC that Taiwan was a province of China and recognised the PRC Government as the sole legal government of China [… This] remains the basis of our relations with Taiwan. We do not deal with the Taiwan authorities on a government to government basis, and we avoid any act which could be taken to imply recognition.[227]

175. The FCO went on to describe the nature of relations:

HMG's principal objectives in relation to Taiwan are economic. We seek to develop UK trade and commercial involvement with Taiwan, including inward investment. We also seek to develop a wide range of unofficial links, particularly in the educational and cultural fields. We support the further economic development of Taiwan. We also welcome Taiwan's political development and the democratic elections that have taken place there. In developing our relations with Taiwan we act within the restraints imposed by our formal position on the status of Taiwan and bear in mind China's sensitivities in order to ensure that unnecessary damage to that relationship is avoided. We also make clear that we consider the Taiwan issue is one to be settled by the people on both sides of the Taiwan Strait. We are strongly opposed to any use of force and urge both sides to engage in constructive dialogue.[228]

176. The size of Taiwan's economy, which is the seventeenth largest in the world and as big as many western European states such as Belgium or Denmark, means that economic links between the United Kingdom and Taiwan are of particular importance. We heard from British business representatives in Taiwan that Taiwanese companies and investors play a very important role in China's economic growth and that the economy had become closely linked to the mainland. They told us that Taiwan provides an ideal base for companies doing business in mainland China. However, they also raised concerns about the limited number of British ministerial visits to Taiwan in relation to Taiwan's economic weight.

177. We asked our witnesses how the United Kingdom's policy towards Taiwan could be improved. Dr Fell said:

Personally I would suggest that on the Taiwan issue that perhaps we should learn a little bit from our US cousins and take a slightly more pro-Taiwan position. If we are going to have an ethical foreign policy, we need to consider the fact that Taiwan is a liberal democracy, perhaps one of the few functioning liberal democracies in Asia.[229]

Dr Cronin agreed that support for Taiwan's democracy was important. He told us:

Maybe there is a special role for parliaments and legislative branches to especially uphold the support of liberal democracies, the support of the rule the law […] Being democratically elected does not guarantee good policy […] but nonetheless it is a liberal democracy and it is one that makes the world a better place overall.[230]

178. In Beijing, we were told on repeated occasions not to visit Taiwan. During our discussions with representatives of the National People's Congress and Chinese government representatives we were told that if we went ahead with our visit to Taiwan there would be "serious consequences" for bilateral UK-China relations and one meeting in Beijing was cancelled. We made clear to our hosts that:

The Foreign Affairs Committee of the House of Commons is a Committee of the British Parliament, made up of 14 Members of Parliament from the Labour, Conservative and Liberal Democrat Parties. The Committee's role is to scrutinise the British Foreign and Commonwealth Office and to hold the Government to account. The Committee conducts inquiries into areas of Government policy, by taking evidence in public from expert witnesses and travelling to visit the relevant regions. The Committee usually publishes Reports of its inquiries, making recommendations to the Government. In November 2005 the Foreign Affairs Committee announced the launch of an inquiry entitled 'East Asia' […] Successive British Governments of all parties have maintained the position set out in the 1972 Communiqué signed with the People's Republic of China in which the United Kingdom recognised the Government of the People's Republic of China as the sole legal Government of China. The United Kingdom does not recognise Taiwan as a state and does not have diplomatic relations with Taiwan. The United Kingdom considers that the Taiwan issue should be settled peacefully by the people on both sides of the Taiwan Straits. The United Kingdom urges both sides to take confidence building measures and engage in constructive dialogue.[231]

As a Committee of the House of Commons, we reserve the right to travel to destinations in order to enhance our understanding of key foreign policy questions and, as a Committee of parliamentarians, we will continue to express our support for democracy and parliamentary government throughout the world, including in Taiwan.

179. We recommend that the Government should increase contacts with Taiwan at a political level, especially between elected representatives of Taiwan's vibrant, young democracy and of elected members of the United Kingdom's democratic system. It should be made clear, however, that such contacts do not constitute recognition of Taiwan as a state and that the policy of the Government is not to recognise Taiwan as a state. We further recommend that the Government increase the number of informal ministerial visits to Taiwan so as to strengthen economic links between Taiwan and the United Kingdom in a manner commensurate with the size of its economy.

The Korean Peninsula

180. Since the end of the Korean War in 1953, a peace treaty has never been signed between North and South Korea, or between North Korea and the USA. Although the past few decades have seen rapprochement, the North remains a pariah state which poses a range of threats to the stability of the region and beyond. The FCO described North Korea (the Democratic People's Republic of Korea, or DPRK) to us as "a potentially destabilising factor, posing a [Weapons of Mass Destruction] and proliferation threat, risk of economic collapse and an appalling human rights record".[232] South Korea, (Republic of Korea, or ROK) on the other hand, is a major free-market democracy, with the eleventh largest economy in the world, a high trade and investment relationship with the UK, which "largely shares our political outlook and is developing a greater international commitment".[233]

181. Dr Cronin told us that "managing the changing relationship between the peoples of the Korean peninsula remains one of the salient challenges of our time",[234] and Professor Shambaugh described the nuclear crisis in North Korea as one of the world's most dangerous military flashpoints.[235] During our inquiry, we considered the foreign policy challenges posed by the Korean Peninsula in its own right, and also explored China's role in Korean security.

NORTH KOREA

182. The most worrying of all the security threats posed by North Korea is its nuclear programme, although it is also suspected of having a chemical and biological weapons programme, and of proliferating conventional weapons, including long-range missiles, to unsavoury regimes.

183. North Korea's nuclear programme dates back to 1958, when the Soviet Union agreed to assist its research, following the deployment of nuclear weapons on the Korean Peninsula by the United States.[236] In the 1980s, work began on several industrial scale plutonium reactors (5MW(e), 50 MW(e) and 200MW(e)), facilities for mining and processing uranium ore, and for reprocessing and storing spent fuel.[237] In 2002, US intelligence assessed that North Korea had a secret programme to enrich uranium using gas centrifuge technology obtained from Pakistan.[238]

184. Over the past few decades, diplomatic efforts to bring North Korea's nuclear activity within international safeguards have progressed intermittently. In 1985 North Korea acceded to the Non-Proliferation Treaty (NPT), and it accepted inspections by the International Atomic Energy Agency in 1992. However, the refusal of DPRK to accept verification of plutonium produced before 1992 led to collapse of the inspections and threats from North Korea to withdraw from the Treaty in 1993. An agreement between North and South Korea to denuclearisation made in 1992 was never implemented.

185. Renewed diplomacy led to conclusion of the Agreed Framework between the US and North Korea in 1994. This called for the freeze and dismantling of plutonium production facilities in exchange for oil supplies and assistance in developing a Light Water Reactor for production of civil nuclear power. In 2002, however, the US revealed its suspicions of the uranium programme and the Agreed Framework collapsed. In December 2002 DPRK revived its plutonium facilities and in January 2003 withdrew from the Non-Proliferation Treaty. Since then, Six Party Talks between the US, ROK, DPRK, China, Japan and Russia, have been in stalemate. In February 2005, the DPRK government claimed publicly to possess a nuclear weapon.[239]

186. There have been various points at which North Korea could have produced weapons-grade plutonium. Before 1992, the US assessed that North Korea could have produced 8-12 kg of separated plutonium, or "enough plutonium for one or possibly two nuclear weapons".[240] In 1994, North Korea unloaded and stored 8,000 spent fuel rods from its 5MW(e) reactor, and may have reprocessed "enough to produce one or two nuclear weapons".[241] In 2003 North Korea is believed to have restarted the 5MW(e) reactor, which is capable of producing up to 7.5kg of plutonium a year, "perhaps enough for one nuclear weapon".[242] North Korea announced it had reprocessed the spent fuel from this reactor in 2005, perhaps producing enough plutonium for another one or two weapons.[243] The 50MW(e) and 200 MW(e) reactors have apparently never been completed, but if completed, could produce "about 55kg of plutonium per annum, enough for about five to ten nuclear weapons" and "hundreds of kilograms of plutonium annually, enough for tens of nuclear weapons", respectively.[244] Whereas the 50MW(e) reactor "would […] likely take a few years to complete", the 200MW(e) reactor is at a much earlier stage of development and "some experts believe that it may be a complete write-off".[245]

187. North Korea has never carried out a full nuclear weapons test. However, the International Institute for Strategic Studies stated in its Net Assessment of 2003 that "in theory, [… high-explosive tests for nuclear weapons development] can be used to develop an effective nuclear weapon design without the need for a full nuclear test".[246] North Korea has apparently conducted such tests since the 1980s, leading to the conclusion that it is now capable of building a simple nuclear weapon.[247] US intelligence believes that Pakistan may have provided North Korea with weapons-design information in the 1990s.[248]

188. North Korea possesses a range of missiles, some of which could, in theory, be used to deliver nuclear weapons. The FCO stated in evidence that:

[DPRK] possesses and has tested missiles which we believe are capable of delivering payloads, possibly including nuclear, to the ROK, Japan and beyond. It has also demonstrated expertise in technologies that could enable development of missiles with ranges of over 10,000 km, allowing it to target the UK.[249]

189. In March 2006, North Korea claimed that it had the ability to launch a pre-emptive attack on the United States.[250] The Center for Nonproliferation Studies at Monterey Institute of International Studies published the following assessment of DPRK's missile capabilities in March 2006:

190. On 4 July, North Korea tested a Taepodong-2 missile for the first time, which, theoretically, has a range which could reach parts of the United States.[251] This was the first ballistic missile test since 1998, after North Korea signed up to a moratorium on testing in 1999.[252] The missile crashed within a minute of launch, suggesting that DPRK's missile programme is not as successful as some had feared. Preparations for the launch had been observed by intelligence agencies several weeks beforehand, and it was reported in June that the US had activated its missile defence shield in response.[253] Analysts suggested that the missile launch was intended to shore up domestic support for Kim Jong-il's regime, and to express dissatisfaction at the lack of progress in the Six Party Talks.[254]

191. The reactions were immediate. The Foreign Secretary stated that: "These tests are provocative, and only serve to raise tensions in the region", and urged the DPRK to adhere to its moratorium and return to the Six Party Talks.[255] The United States stated that it "strongly condemns these missile launches" and said that: "we will continue to take all necessary measures to protect ourselves and our allies".[256] South Korea also issued a condemnation of the launch, and Japan imposed sanctions on DPRK.[257] Before the launch took place, Russia and China had both expressed strong concern,[258] but following the launch, the two countries opposed the imposition of UN sanctions.[259] The DPRK responded to criticism by stating that the launches were "part of the routine military exercises staged by the KPA [Korean People's Army] to increase the nation's military capacity for self-defence", which did not transgress any international agreement, and that the DPRK "will have no option but to take stronger physical actions of other forms, should any other country dare take issue with the exercises and put pressure upon it". However, the statement claimed that the DPRK "remains unchanged in its will to denuclearize the Korean Peninsula in a negotiated peaceful manner".[260]

192. The UN Security Council adopted a Resolution on 15 July which condemned the missile launches, demanded the suspension of the missile programme, required other states to prevent the transfer of materials related to missile construction or WMD to the DPRK, and called for the resumption of the Six Party Talks.[261] An earlier draft drawn up by Japan under Chapter 7 of the UN Charter, which provides for the use of military force, was abandoned in response to objections by China and Russia.[262] North Korea immediately denounced the Resolution and Japan announced it would impose further bilateral sanctions on the DPRK.[263]

193. We conclude that the launch by North Korea of a series of missiles on 4 July 2006 was calculatedly provocative and unacceptable. We recommend that the Government and the UN continue to urge North Korea to return to the Six Party Talks forthwith, and to call on the DPRK to adhere to its commitment to a moratorium on missile testing.

194. Some of the evidence we took was sceptical that an effective weapons programme could be sustained and developed in a country in which the economy is debilitated. Dr Jim Hoare, former British chargé d'affaires in Pyongyang, told us that:

having travelled on North Korean roads and on North Korean railways, having seen the nature of the military vehicles that the army—the most favoured group in society—drive around in, I do find it very hard to reconcile that with, somewhere, a white-hot modern technology, producing sophisticated weapons.[264]

195. Professor Hazel Smith of Warwick University stated that: "Given the parlous state of the economy and the lack of resource base in the civilian and the military sectors, it is unlikely that the DPRK has a stockpile of usable short-range, medium or long range missiles".[265] More pressing than the nuclear weapons programme, according to Professor Smith, is the possibility of a nuclear accident:

The DPRK has no systematic technical arrangements for what is known in engineering parlance as 'quality assurance' in any of its industrial or energy sectors [… which] means that a nuclear accident is more likely than not given the recent resuscitation of the DPRK's nuclear reactors […] A nuclear accident is a much more likely cause of a regional nuclear crisis than the launch of a nuclear weapon.[266]

196. We conclude that, lack of verification notwithstanding, it would be irresponsible for the Government to assume that North Korea had not developed a nuclear weapon or weapons. We further conclude that the risk of a nuclear accident occurring in North Korea is significant, and recommend that the Government set out, in its response to this Report, its assessment of the likelihood of this scenario, possible effects, and the UK's strategic planning to react to such an event.

197. Our witnesses also queried the likelihood of DPRK actually using a nuclear weapon in war, given the rapprochement which has taken place between North and South Korea, and the annihilation which would occur if it attacked the US or Japan. Dr Hoare told us:

If you sent a nuclear warhead against Japan, that would be suicide. If you tried to launch something against the United States or, nearer to home, the United States Forces in Japan or South Korea, that would be suicide. Of all the traits of the North Korean regime, suicide does not actually seem to me to be a very strong one. They are desperate to survive, not to go out in a blaze of glory.[267]

198. Professor Smith told us that any weapon would therefore be "intended to be negotiated away in return for economic assistance", and is being sought to counterbalance DPRK's weakness in conventional military terms.[268] However, Aidan Foster-Carter, Honorary Senior Research Fellow in Sociology and Modern Korea, Leeds University, has said that it is "frankly unlikely that North Korea will soon 'do a Libya', and surrender the nuclear deterrent which it claims and is believed to possess. It has no other card to play".[269]

Other threats

199. The DPRK is also suspected of possessing a chemical and biological weapons programme. The FCO stated in evidence that:

the DPRK is also believed to have chemical weapons capabilities and the infrastructure to support a biological weapons programme. It is not a party to the Chemical Weapons Convention (CWC), but has ratified the Biological & Toxin Weapons Convention (BTWC).[270]

200. Aidan Foster-Carter told us that "North Korea's suspected chemical and biological warfare (CBW) stocks have never been formally addressed" and said that "chemical and biological weapons are neither technically difficult nor expensive—it would surprise me very much if [North Korea] did not [have CBW capability]".[271] However, Professor Smith told us that: "If the DPRK ever had a capacity to produce huge stockpiles of chemical and biological weapons we now know that it does not have this capacity today".[272] Fertiliser plants which could have been used to produce chemicals for warfare have now been dismantled: "much of the heavy industrial plant of the DPRK has been dismantled for scrap due to lack of energy supplies and other basic inputs; and […] fertiliser and agricultural chemicals are hardly produced any more".[273]

201. DPRK has demonstrated in the past a willingness to proliferate its weapons to other regimes. The FCO made clear the added dimension this poses in respect of the nuclear programme, stating that "an unchecked DPRK nuclear programme would undermine global non-proliferation norms weakening our ability to counter proliferation elsewhere".[274] Mark Fitzpatrick, Senior Fellow for Non-Proliferation at the International Institute for Strategic Studies, told us that the Proliferation Security Initiative (PSI) "was…designed largely to contain North Korea".[275] Although the PSI has not yet interdicted "a WMD-laden North Korean ship", Mr Fitzpatrick concluded that "undoubtedly there has been a deterrent effect". [276] North Korea has shown itself willing to sell missiles to unsavoury regimes in the past. Dr Tat Yan Kong, Senior Lecturer in Politics at the School for Oriental and African Studies, University of London, stated in evidence that "the export of missiles (mainly ageing Scuds) to the Middle East earns around $500 million per annum".[277] Iran remains a customer.[278] Aidan Foster-Carter reminded us that North Korea is not signed up to the Missile Technology Control Regime.[279]

202. We conclude that, although it is not possible to verify North Korea's possible stocks of biological and chemical weapons, the risk of an ongoing programme remains real. We therefore conclude that the Government is right to regard North Korea as a potential proliferation risk, and to act accordingly. We further conclude that North Korea's exports of missile technology pose a threat to peace and security. We recommend that the Government sets out in its response to this Report, what measures it believes can be taken to restrain or stop these sales.

DPRK as a Failing State

203. Over the last few decades, DPRK has become increasingly impoverished and unstable, and poses risks to the region as a failing state. The DPRK underwent economic meltdown during the 1990s as a result of losing support from Russia, Eastern Europe and China at the end of the Cold War. Severe floods in 1994 and 1995 damaged infrastructure and harvests and, in the famine that followed, one million people died. Since then, there have been some economic reforms, but criminality has flourished. In evidence, Professor Smith described "various kinds of cross-border illegality: economic migration to China, trafficking in women, armed robbery and night-time theft, and smuggling".[280]

204. The regime maintains its control of the country through the support of the military, its ideology of self-sufficiency (juche) and tight control of information. Indoctrination begins at an early age and North Koreans are sealed off from contact with the outside world.[281] Human rights are routinely abused. The FCO Human Rights Annual Report 2005 gave the following assessment:

There are allegations of abductions and disappearances; arbitrary detention and imprisonment for up to three generations of the same family; regular use of the death penalty, including political and extra-judicial executions; routine use of torture and inhumane treatment; forced abortions and infanticide; political prison camps and camps for rehabilitation through labour; extreme religious persecution; chemical experimentation; and sanatoria for non-conformists […] There is no freedom of expression, assembly, association, movement or information. The state tightly controls all media […] there is no genuine religious freedom […] There are no workers' rights: the government allows unions but uses them as instruments of social control […] North Koreans are subject to arrest and detention without trial […] The government has fitted all apartments in Pyongyang and other cities with radios tuned to a specific station to cascade propaganda: people can turn the radios down, but not off. The judiciary has no independence and the legal system has no transparency.[282]

205. Despite these abuses, our witnesses assessed that the regime is not in immediate danger of collapse. Aidan Foster-Carter judged that "Kim Jong-il's regime arguably has a more stable outlook, at least in the short and medium term, than the usual talk of a 'crisis' (albeit technically correct) would suggest".[283] The collapse of Kim Jong-il's regime would have a serious impact on the surrounding region, and neighbouring countries will seek to avoid that scenario. Dr Hoare told us that "anything that would lead to the implosion of North Korea and the expulsion of numbers of people would worry both China and South Korea. It also worries Japan. I think they have a common objective in trying to keep North Korea stable".[284]

206. Moreover, Aidan Foster-Carter has said that: "the alternative [to Kim Jong-il] may well be worse": "Imagine warlords; imagine the degree of lawlessness that we have, dare I say, in present-day Iraq, if there were loose nukes around. Kim Jong-il is not the worst possible thing that one can have".[285]

Managing the North Korean Threat

207. The regional and international communities are hobbled in their attempts to deal with North Korea by a divergence of views on the best long-term strategy. The Bush Administration has followed a hawkish line, with President Bush's designation of North Korea as part of the "axis of evil" in 2002, and Condoleezza Rice's description in January 2005 of DPRK as an "outpost of tyranny".[286] The US does not have diplomatic relations with DPRK, and the Swedish Embassy represents US interests in Pyongyang.[287] Some witnesses have described a tussle between conflicting camps within the Administration to determine policy on North Korea: Mark Fitzpatrick said in his evidence that the Administration "was following bifurcated policy tracks"[288] and Aidan Foster-Carter told us: "[the Americans] have not got a policy. They have not made up their minds. There are some of them who would engage […] Were I Kim Jong-il I would not know what the American Government wants of me".[289]

208. Dr Hoare suggested that the US had the capacity to resolve the nuclear issue whenever it wished to do so, by buying out Kim Jong-il's regime, stating "the United States could solve the North Korean nuclear issue if it wanted to very quickly. The North Koreans are willing to be bought out on this issue […] Unfortunately the other partner will not come to the bargaining table".[290]

209. Japan has followed the hard line towards North Korea, although perhaps with less vacillation. Dr Swenson-Wright told us that: "The emphasis on enhanced missile co-operation between Japan and the United States is in part prompted by the fear and the risk of the threat from North Korea".[291] Aidan Foster-Carter described Japan's priority towards DPRK as the resolution of the kidnapping over 20 years ago of at least 13 of its citizens. Bilateral trade is down to its to its lowest point since 1977 (US$194m in 2005) and Chongryun, the General Association of Korean Residents in Japan, is under scrutiny by the government.[292] A Bill in the Japanese Parliament introduced in 2006 threatens to impose sanctions on North Korea for failure to improve human rights.[293]

210. Other regional powers, notably China and South Korea, have attempted to deal with North Korea through rapprochement and engagement, for a variety of reasons. The "sunshine policy" begun by Kim Dae-jung (President of the Republic of Korea from 1998-2003) and the "peace and prosperity" policy of his successor Roh Moo-hyun, led to the first and only inter-Korean summit in 2000, contacts through regular ministerial meetings, mass tourism to the North's Mount Kumgang resort, family reunions, and the construction of two new cross-border rail and road corridors.[294] Trade between North and South Koreas exceeded $1 billion in 2005, up from $700 million in 2004, spurred by a joint North-South Korean industrial park in Kaesong just north of the border. [295] The South also provides food aid.

211. This policy is in part driven by fellow feeling: Mark Fitzpatrick told us that South Koreans view the North as "a pitiable renegade brother, estranged by an accident of history in which America was culpable".[296] However, the South Koreans also see engagement as a way to bring North Korea into line with international norms. For example, Dr Key Young-Son, lecturer in Korean studies at the University of Sheffield, told us that: "At present, the South Korean government is making all-out efforts to convince the United States that the industrial park project is an important step in offering a capitalist training to North Koreans and enabling North Korea to find an alternative source of income instead of resorting to the exports of weapons, counterfeiting, drug trafficking and other forms of internationally banned activities".[297]

212. Assessments of the impact of ROK's engagement policy vary. Professor Smith stated that the ROK "currently is taking much of the initiative and bearing much of the burden of keeping diplomacy alive in the interrelated nuclear, security and humanitarian crisis which persists in respect of DPRK relations with the rest of North-East Asia".[298] Aidan Foster-Carter was more negative, describing the ROK approach as "quasi-unconditional generosity, which gives North Korea no incentive to behave better", and downplays human rights.[299]

213. China has also followed a policy of engagement with DPRK, although its motives are slightly different. China signed the Treaty of Friendship, Cooperation and Assistance with North Korea in 1961, which is still in effect today.[300] China has historical links and a long border with DPRK, with ethnic Koreans who are Chinese citizens living on the Chinese side.[301] Chinese annual investment and trade with North Korea rose to $2 billion in 2005, accounting for 40% of North Korea's foreign trade. Dr Key Young-Son described China as a "life line for North Korea as the main supplier of food and energy", supplying 80% of consumer goods and 70% of oil used in North Korea and "cancelling out" US sanctions.[302] Kim Jong-il visited Beijing in January, his fourth visit in six years, and was welcomed by Hu "with no sign of any reprimand or pressure".[303]

214. China appears to offer to North Korea a model of economic development which does not threaten the authoritarian regime. Dr Swenson-Wright told us that "China acts as a powerful model of a potential way out of the current predicament in the long term through economic development".[304] Our witnesses also told us that China's engagement is partly motivated by competition with South Korea for economic and strategic influence: "the race to control the Korean peninsula".[305] China's interests are in preserving an anti-Western country on its perimeter—"a useful buffer state against the United States"[306]—and, as Aidan Foster-Carter told us: "North Korea's economy is in a terrible state but it does have a lot of minerals. You know what is happening to mineral prices currently. China is on the doorstep, South Korea is on the doorstep. There is quite direct competition now".[307]

215. This engagement does not mean that China is unconcerned by the regime's policies. In particular, China does not want to see nuclear weapons on the Korean Peninsula trigger Japan's development of a nuclear capability.[308] However, although China "would have preferred North Korea not to have developed nuclear weapons or to have brought about the current tension", [309] neither is she willing to exert maximum pressure, for fear of bringing down the regime. Implosion of Kim Jong-il's regime would "upset the stability, order and basis for rapid economic growth in Northeast Asia and, as such, harm Chinese interests". [310]

216. Other relationships complicate the picture. The US relationship with South Korea, which has been essential to South Korean security since the 1953 Mutual Defense Treaty, is now under strain. Recent changes to US forces have caused tensions, as the United States has sought to restructure its military bases and convert stationary forces into units which could be deployed elsewhere.[311] Professor Shambaugh described in evidence "rising anti-Americanism in South Korea as well as divisions between Seoul and Washington over handling of the North Korean nuclear crisis"[312] and Mark Fitzpatrick described the ROK and the US having "an increasingly divergent set of threat perceptions and security priorities", in particular, how to deal with North Korea.[313] However, a ministerial conference between the US and ROK in January 2006 sought to improve cooperation between the powers, on the Peninsula, Iraq, Afghanistan, counter-terrorism, proliferation, and other measures.[314] In February 2006 ROK and the US agreed to open talks on a Free Trade Agreement, the first round of which was completed in June.[315]

217. South Korea's relationship with Japan is complicated by a dispute over a small group of islands, known as the Dokdo or Takeshima Islands, to which both countries assert rival claims. The islands lie in valuable fishing grounds and the area may have extensive gas deposits. South Korea recently launched a survey of the islands as part of a five-year development plan; Japan has called for the survey to be stopped, warning that Japan would "respond appropriately" should South Korea go ahead.[316]

218. China's relationship with South Korea is also evolving. According to an article submitted to us by the Embassy of ROK:

Human and economic exchanges between ROK and China have rapidly increased since establishment of diplomatic ties in 1992, and China has become the number one trading partner of Korea in terms of quantity. Politically, also, the relationship between the two countries has been enhanced to an all-round cooperative partnership in 2003.[317]

219. Nonetheless, mutual suspicions remain. Dr Key Young-Son told us:

In particular, the South Korean government worries [about] the possibility that the North Korean military, which has close ties with its Chinese counterpart, might launch a pro-Beijing military coup in the event of an internal power struggle in the future. Given the presence of an estimated three million ethnic Koreans in the north-eastern provinces of China, the Beijing government also holds a suspicion that a reunited Korea might try to 'recover its fatherland' as part of a 'greater Korea'.[318]

220. Dr Key Young-Son also told us that China could have something to offer both Koreas, at the expense of US influence:

For North Korea, which has been increasingly bullied by the powerful capitalist states around it after the collapse of the Soviet bloc, China's rise has served as a long-awaited buttress for its survival as an independent state. For South Korea, China is offering an opportunity to end its decades-long reliance on the United States in terms of security and economic affairs and reshape its identity as an independent regional power interacting dynamically with the United States, the world's sole superpower, and China, a potential challenger of US hegemony.[319]

Ways forward: Six Party Talks

221. Since 2003, the Six Party Talks between the US, China, DPRK, ROK, Russia and Japan have replaced previous diplomatic efforts on the nuclear issue. The Talks have gone through several rounds and appear to have reached a stalemate. At the fourth round in September 2005, it seemed that progress had been made, with the announcement of a Joint Statement.[320] In the Statement, the DPRK committed to abandoning all nuclear weapons and existing nuclear programs, while the other parties agreed to discuss "at an appropriate time", the provision of a Light Water Reactor to the DPRK, for the production of civil nuclear power. The parties agreed that the 1992 Joint Declaration on the Denuclearization of the Korean Peninsula should be observed and implemented, and the US stated that "it has no nuclear weapons on the Korean Peninsula and has no intention to attack or invade the DPRK with nuclear or conventional weapons". The parties signed up to implementation of the agreement "in a phased manner in line with the principle of 'commitment for commitment, action for action'". However, the ambiguity of the statement on the implementation process immediately undermined the agreement. The US issued a statement saying that the Light Water Reactor would be discussed when DPRK complied with the NPT and "has demonstrated a sustained commitment to cooperation and transparency"; North Korea announced the next day that the agreement would only be implemented when the Light Water Reactor had been provided. [321] A fifth round of talks in November 2005 failed to make progress, as did an attempt in April 2006 to meet in the margins of a conference in Tokyo.[322]

222. US accusations of money-laundering and counterfeiting US currency in North Korea, as well as the sanctioning of eight North Korean companies as having been involved in the proliferation of weapons of mass destruction and their delivery vehicles, have provided DPRK with a reason to refuse to reconvene the talks.[323] Mark Fitzpatrick told us in evidence that:

[the Bush administration] believes North Korea will not give up its nuclear weapons for any inducement, unless the survival of the regime is at stake. Hence, pressure through financial measures is deemed useful not only for containing North Korea but as part of a longer-term strategy of putting pressure on the regime.[324]

223. Our evidence suggested that, while the Talks may reconvene, they are unlikely to be successful. Mark Fitzpatrick stated that:

the two protagonists have no willingness to offer fundamental compromises. North Korea will not give up its nuclear deterrent without a tangible, irreversible assurance of 'no hostile intent', and the only tangible assurance it seems willing to settle for is a light water reactor. The Bush Administration will not be party to providing a nuclear reactor.[325]

224. Dr Hoare stated that: "Until you get direct talks [between North Korea and] the United States, I do not think that you will make a great deal of progress. The United States does not want to talk to the North Koreans".[326] The fundamental problem, according to Dr Tat Yan Kong, is "whether North Korea trusts the US to allow its regime to survive after denuclearization, and whether the US administration is prepared to recognize (thereby guarantee the survival of) a regime that it genuinely considers 'evil' (and by extension, dangerous)".[327] Daniel A. Pinkston, Director, East Asia Non-proliferation Program, Center for Non-proliferation Studies at the Monterey Institute of International Studies, judged in an article of April 2006 that: "Since many North Korean officials probably believe the Bush administration is determined to topple Kim Jong-Il and the Korean Workers Party, the commitment problem might be insurmountable until Washington undergoes regime change in January 2009".[328]

ROLE OF THE UK

225. The UK is not a party to the Six Party Talks and is not a major player in the region. The FCO told us that the UK signed a joint declaration in 1953 "pledging to resist if armed attack in Korea were renewed", but without "an automatic commitment to get involved". The UK however "continues to play a role in upholding the Armistice; the British Defence Attaché in Seoul is the one-star Commonwealth Member of the United Nations Command".[329] Professor Smith told us that: "Politically and strategically the Korean nuclear crisis is understood, given the extensive US military and political interests in the region, as best left to United States leadership".[330] However, the UK does have diplomatic relations with DPRK, unlike the US, and sponsored various forms of engagement, until 2003. The FCO told us:

HMG does not consider the DPRK to have met the withdrawal provisions of the NPT when announcing its departure from the NPT in 2003 […] Following that announcement, we halted bilateral activity which might be held directly to support the DPRK regime e.g. economic/technical assistance and trade promotion. We have made clear to the DPRK that relaxation of these restrictions will not be considered without progress on the nuclear issue and also on human rights concerns. Other EU Member States adjusted their approach to the DPRK on similar lines.[331]

226. According to a Written Answer in May 2006, the Department for International Development contributed more than £1.2 million in humanitarian assistance to the DPRK in 2005, for water, sanitation and health care (through UNICEF) and disaster risk deduction (through the International Federation of the Red Cross). However, following DPRK's announcement in late 2005 that it would no longer accept international humanitarian assistance, "DFID can no longer feel confident that programmes of assistance are appropriate and are reaching those who most need it most".[332]

227. The UK's relationship with ROK is strong, particularly in the economic sphere. UKTI told us that: "Trade and Investment links with the Republic of Korea (ROK) have a long and robust history" and that total UK-Korea bilateral trade in goods in 2004 amounted to £4578.6 million. The UK is also South Korea's preferred destination for foreign direct investment in Europe.[333]

228. We conclude that it is not clear how the Six Party Talks will be carried forward, and that the US policy of increasing pressure on the North Korean regime may be entrenching the divisions between the parties. We recommend that the Government use its relationship with the US to suggest a more flexible and pragmatic approach, in the interests of reconvening the Six Party Talks as soon as possible. We further recommend that the UK maintain its strong relationship with the Republic of Korea.

Sino-Japanese Relations

229. Links between Tokyo and Beijing have fallen to a low of late. Professor Shambaugh said that the Sino-Japanese relationship:

is on the verge of being dysfunctional, despite the robust economic relationship between the two nations. Some describe it as 'hot economics, cold politics' but in fact the relationship is more complex than that. Suspicions, nationalism, and hostility run deep in each society. Mutual perceptions are increasingly negative. The 'history issue' hangs as a dark cloud over the entire relationship, and repeated visits to the Yasukuni Shrine by Japanese Prime Minister Koizumi are an unnecessary irritant. To make matters worse, the potential for military engagements over disputed maritime claims in the East China Sea/Sea of Japan and around the Diaoyu/Senkaku Islands is growing.[334]

230. The rise of China in the 1990s has led to a shift in the strategic balance in the region. Dr Swenson-Wright told us:

From Japan's perspective, the challenge of China is the challenge of an emerging power in the region that threatens its dominance. The Japanese worry about the economic competitiveness of China. Like the Americans, they worry about the military modernisation and the lack of transparency. They worry about China as a political rival regionally and globally.[335]

He added that a particular concern was the lack of any serious dialogue between high level representatives from each state, although recent positive signals about dialogue are most welcome.[336]

231. Dr Cronin also told us: "From the Japanese policy perspective, China is the number one issue and country of concern for the twenty-first century. They have no framework for a relationship with China, and they are very worried about this and they openly acknowledge this."[337]

232. The transformation of Japan's political landscape over the 1990s has added to the tensions across the East China Sea. The pacifist constituency in Japan has declined markedly since 1991, while Prime Minister Koizumi's role in national security measures has increased with administrative reforms introduced in 2001. The perception by the public of the threat to Japan posed by North Korea's nuclear capabilities has contributed to the trend.[338]

233. Dr Cronin said:

They also have in Japan, as a result of this concern in China's accelerative rise and the perception of it, growing nationalism. Nationalism is throughout East Asia. We have a decoupling of both Koreas from the major powers. That is an uncertainty. China's nationalism is growing, reflected in popular concerns about Japan, and the politics in Japan are moving to the right, so that poor [Foreign] Minister Aso will tell you, 'I used to be a conservative, but now I am in the middle, I am a centrist'.[339]

234. In China, part of the rise of nationalism may be the consequence of the patriotic education campaign, focussing on the war against Japan in the 1930s and 1940s, which the CCP launched after the Tiananmen Square massacres as a means to restore its legitimacy. In its submission the FCO wrote: "Many Japanese […] see the Chinese government's 'patriotic education', with its emphasis on Japanese war crimes, as a ploy to shore up legitimacy by stoking nationalist, anti-Japanese feeling among young Chinese."[340] The strength of popular nationalism in China was most visible in a spate of anti-Japanese riots in April 2005. Dr Fell told us: "It would seem that these recent anti-Japanese demonstrations have not been completely government controlled […] I think also the CPC [Communist Party of China] itself is concerned about these demonstrations getting out of hand."[341] Questions from history loom large. The legacy of World War II is still visible in some parts of Northern China, in the form of Japanese chemical and biological weapons, and the collective memory of atrocities such as the 1937 'Rape of Nanjing' raises passions in China.

235. Japan has expressed regret for its wartime record, first in 1971 and on subsequent occasions. For instance, in 2005, Prime Minister Koizumi said:

In the past, Japan, through its colonial rule and aggression, caused tremendous damage and suffering to the people of many countries, particularly to those of Asian nations. Sincerely facing these facts of history, I once again express my feelings of deep remorse and heartfelt apology, and also express the feelings of mourning for all victims, both at home and abroad, in the war. I am determined not to allow the lessons of that horrible war to erode, and to contribute to the peace and prosperity of the world without ever again waging a war.[342]

236. However, the Chinese do not feel these expressions of remorse are adequate and the visits of Prime Minister Koizumi to the Yasukuni shrine have seriously damaged the relationship.[343] The Chinese Embassy wrote in its submission:

At present, China-Japan relations are in difficulties and the root cause lies with the repeated visits by Japanese leaders to the Yasukuni Shrine where WWII Class A war criminals are worshipped. Such wrong doings of Japanese leaders have deeply hurt the feelings of people in victimized Asian countries including China, undermined the political foundation of China-Japan relations, and put the relations between Japan and its East Asian neighbours into a state of disharmony.[344]

237. Commenting on the shrine issue, Dr Swenson-Wright told us: "Much of the dispute surrounding the shrine has to be attributed to the personality of the Prime Minister."[345] Yet he also pointed to opinion in Japan which favoured a less aggressive attitude on the Shrine:

It also has to be said that, yes, there are emerging nationalist tendencies in Japan, there has been a swing to the right, but there are also moderate voices. One hundred and twenty members cross-party have put forward a proposal to establish a new alternative shrine. That would be a very constructive and immediate way of demonstrating a willingness to address this issue.[346]

238. Relations between Tokyo and Beijing are also subject to outside influences; Washington's attitude towards both plays into the strategic calculus. At present Japan is taking a more assertive security role than in the last fifty years, by providing UN peacekeepers and sending elements of its Self-Defence Forces (SDF) to Iraq, although the Prime Minister announced their withdrawal in June 2006.[347] The FCO outlined the changes which have occurred under the current Prime Minister:

Under Koizumi Japan has aligned itself closely with US policy in the war on terrorism and Iraq, and reinforced the security alliance, including through joint development of Ballistic Missile Defence […] The Security Consultative Committee Document agreed by US and Japanese Foreign and Defence Ministers in October 2002 represents a further significant step in the evolution of the security alliance. Although this included a provisional agreement on the reduction of the US Marine presence in Okinawa, it also committed Japan and the US to work more closely on international as well as regional security issues. Koizumi has said that he regards a strong relationship with the US as a 'necessary foundation' for Japan's relations within the region.[348]

239. Professor Shambaugh described what the redefinition of the US-Japan military alliance meant, saying it:

has involved collaboration on theatre missile defence (TMD), a resolution of the nettlesome Okinawa base issue (with redeployment of the Third Marine expeditionary Force), and the issuance of a Joint 2+2 Statement on mutual security interests (which outlined twelve common strategic objectives, including a controversial clause identifying Taiwan as a matter of 'mutual security concern').[349]

Japan has also recently expressed a desire to enter into closer partnership with the North Atlantic Treaty Organisation (NATO) and the United Kingdom favours such efforts. The Foreign Secretary told us: "We are supportive of Japan's wish to have a better relationship with NATO […] We believe there is a useful role that they can play and would not be hostile to seeing them play it."[350]

240. However, Japan's role as a frontline command post for US military power projection is a cause of concern for Beijing. China fears that Japan will lend support to the USA in the event of a Taiwan crisis.[351] Indeed, Dr Fell told us: "The Taiwan perspective on Japan's military normalisation tends to be fairly positive. I think the idea is that there is an extra counterweight against the PRC."[352] The question of Japan becoming a nuclear weapon state—particularly in the face of the threat from North Korea—also raises serious concerns in China as we heard from interlocutors in Beijing and Shanghai, and could precipitate a cascade of states moving to adopt nuclear weapons in East Asia.[353]

241. Dr Cronin said:

All of this […] is of some consternation to China, which does not look at Japan as a small island country with self-defence forces. It looks at Japan as the high technology country [...] The outside powers, not just the United States, have an important role to play in making sure that two major East Asian powers, China and Japan, for the first time in modern history, can co-operate and get along.[354]

242. One potential source of military exchanges is over eight small islets in the East China Sea, which the Chinese call the Diaoyu Islands and the Japanese call the Senkaku Islands. The islands may mark significant oil and gas deposits, making them of potential economic importance.

243. Japan argues that the islands were unclaimed until 1885, when Okinawa Prefecture, and by extension the Japanese government, surveyed them. In January 1895 Japan formally incorporated the islands, although Tokyo contends that the islands were not part of the land ceded by China under the 1895 Treaty of Shimnoseki, as was Taiwan. China's claims date to the seventeenth century, when the Ming dynasty charted the islands. Japan and China also dispute their sea border and the incursion of Chinese submarines into Japanese waters in November 2004 has added to tensions.[355] Dr Swenson-Wright told us:

The territorial issues, I think, are much more fundamental, particularly […] because they deal with the immediate national interests of Japan and access to oil and gas reserves, and the position adopted by the two governments […] underlining their claim over the territory in very different terms does not leave much room for compromise. There does not appear to be a very effective legal mechanism which can provide a route out of that particular disagreement.[356]

244. Dr Cronin agreed on the potential for conflict over the disputed islands. He said:

China and Japan are going to increasingly bump into each other, and more than metaphorically. That does not mean they will come to blows, but we have seen Japan very anxious over Chinese incursions into territorial waters. We have seen a very assertive China when it comes to oil, gas and mineral rights. China has got an economic strategy right now. It is a quiet strategy, but on resources it is very aggressive and they will push it to the limit, and Japan is being pressed to the limit in the East China Sea.[357]

245. The United Kingdom can play only a small role, given its limited presence in East Asia, but a constructive one. The Foreign Secretary told us: "We have a very good relationship […] with China. We also have with Japan and we are doing everything we can to encourage two countries [...] to maintain more positive relationships with each other."[358] We agree that the United Kingdom should do all it can to help Japan and China improve relations.

246. We conclude that productive links between China and Japan are essential for peace and stability in East Asia, and we regret the deterioration of those ties to the 'verge of dysfunctional'. We also conclude that the dispute over the Senkaku/Diaoyu Islands in the East China Sea is most worrying. We recommend that the Government set out in its response to this Report what it is doing to improve dialogue between Beijing and Tokyo.

Other Aspects of Chinese Foreign Policy

Regional Integration

247. China's relations with the ten members of the Association of South East Asian Nations (ASEAN)[359] are prominent in Beijing's foreign policy. Commenting on the emergence of regional institutions in East Asia, Professor Shambaugh wrote in his evidence to the Committee: "The Chinese government's general embrace of regional multilateralism is very significant, as no regional institution can be considered effective unless China is not only a member, but an active one."[360]

248. Dr Hughes explained China's attitude to the regional fora. He said:

China does not want its action in South East Asia to be seen as hegemonic, so therefore it has encouraged ASEAN Plus Three [...] It wants to keep South East Asia as a region of good neighbourliness, as they describe it, with very little friction […] The big question is whether ASEAN Plus Three can become a sort of regional architecture, in some form, bridging North East and South East Asia […but] at the moment it is very much ASEAN Plus One.[361]

249. Professor Wall also told us:

[The Chinese] are looking for an institutional form for the links with the South East Asian countries, and ASEAN Plus One provides that. They do not particularly want the ASEAN Plus Three to develop into a regional entity in its own right and they are blocking that, and they have kicked it into the long grass, if you want.[362]

250. Moves towards an East Asian Community also experienced a fillip in 2005, with the East Asian Summit (EAS). Commenting on the EAS, the 48 Group wrote in its submission to the Committee:

The recent […] Kuala Lumpa summit ended with an ASEAN+3+3 meeting […] This reflects several different national agendas, the possible rise of a new third and most dynamic free trade area, and the failure of the west to contemplate, and be alert to, the emergence of the unexpected. China will be the economic dynamo at the centre of the new emerging area."[363]

251. However, Dr Hughes told us the EAS was unlikely to present a trade bloc which might exclude EU products. He said:

I do not think so because it would include Japan and the Republic of Korea, and their interests in maintaining solid relations with the EU are very high. Even China, I think […] wants to have good relations with the EU. Given the nature of the exporting economies of the region, the EU is still the main market, along with the US.[364]

252. We welcome the development of institutions in East Asia which strengthen links between the regional states. However, we recommend that the Government monitor developments closely to ensure that a group does not develop which might discriminate against EU trade.

CHINA AND THE RUSSIAN FEDERATION

253. In contrast to the strained relations between the Soviet Union and China between the late 1950s and 1989, ties between Moscow and Beijing are now strong, based on a Treaty of Good-Neighbourliness, Friendship and Co-operation, signed in 2001.[365] Dr Marcel de Haas from the Netherlands Institute of International Relations wrote that:

The long-standing border disputes between both states were settled in agreements in 2005. Furthermore, Russia, in addition to its arms exports, will supply China with oil and gas. But even more important, both countries have found each other in a strategic partnership aimed at countering the (Western/US) 'monopoly in world affairs', as was made clear in a joint statement by the Chinese and Russian Presidents in July 2005.[366]

254. However, China's growing strength raises difficulties for Russia. One concern is that Russia needs to establish a new policy of development for Asiatic Russia.[367] Professor Wall told us:

The Russians are moving out of that area and the Chinese are moving in at a rate which alarms people in Moscow. They are trying to strengthen their hold over that part of Russia [...] There is much discussion on how many Chinese are there; the scaremongers in Moscow talk about two million already. If you take the whole area around the Chinese border, seven million Russians, declining rapidly; on the Chinese side there are 120 million, officially 100 but probably 120. The Chinese with resident rights in the area of Vladivostok are about 200,000, maybe 500,000 will be there on a daily basis and the numbers are growing. In some towns the Chinese inhabitants almost outnumber the Russian inhabitants.[368]

Dr de Haas also pointed to Chinese immigration into Eastern Russia. He wrote:

Although continuously denied there seems to take place a constant large Chinese immigration into Russia's thinly populated Far East. It is not inconceivable that this flood is more than a coincidence, it might well be a planned policy directed from Beijing. Possibly, China is carrying out a policy of 'Finlandisation', in order to gradually increase its influence over this Russian region. The reasons for such a policy might be to create an overflow area for Chinese citizens […] but also to gain a political and/or economic foothold in this area, which is rich in energy sources.[369]

255. Professor Wall went on to discuss Russia's reactions to the influx of Chinese. He said:

At the operational level, Moscow is doing everything it can to stop it, to slow it down. They raised tariffs last year on Chinese imports […] into that part of Russia by 300 per cent […] The links are there and growing strong, they are known to be a threat, Moscow sees it as a threat.[370]

Dr de Haas echoed his views, when he wrote: "This close relationship with China could very well turn out to be for the short term […] Russia is well aware that China's growing economic and military importance could develop into a threat."[371]

The Shanghai Co-operation Organisation

256. China's north-west also plays a big role in Sino-Russian ties. Since 1991 China has taken a political lead in Central Asia, and in the longer term, some Chinese thinkers see Central Asia as a crucial transport corridor to the oil reserves of the Middle East, presenting a more secure alternative to the risky sea route through the Malacca Straits.[372] China also has major economic interests in Central Asia. Professor Wall told us: "For the first time in recent history one of the pipelines in Central Asia is now going east not west. It is in the process of being filled with Russian oil that is coming out of the Chinese financed Kazakhstan oil fields".[373]

257. China operates in part in Central Asia through the Shanghai Co-operation Organisation (SCO), membership of which includes China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. India, Iran, Mongolia and Pakistan have observer status. Professor Foot wrote in her submission:

The Shanghai Cooperation Organisation involving China, Russia and five central Asian countries has also witnessed China taking a more active role in its deliberations. It is important to China because of geographical location (it borders China's restive province of Xinjiang), energy needs, and because Central Asia has seen a larger US presence since 11 September 2001.[374]

258. Dr Hughes told us:

One of the achievements [the Chinese] are most proud of is the Shanghai Co-operation Organisation which brings Russia and China together with the central Asian states essentially to […] control secessionist movements.[375]

The SCO has changed focus recently. Dr de Haas said:

At its […] Summit of July 2005, in Astana, Kazakhstan, the SCO proclaimed a radical change of course. The last few years the governments of the Central Asian member states—faced with the Western backed regime changes in Ukraine and Georgia, as well as with Western criticism of the Uzbek government's beating down of the unrest in Andijan—increasingly saw their existence threatened, which forced them to choose for an alliance with Russia and China and diminishing the (economically favourable) relationship with the West. At the Summit this led to a final statement of the SCO members, in which (US) unipolar and dominating policies as well as foreign military deployment in Central Asia were condemned and the withdrawal of the (Western) military troops was encouraged.[376]

259. However, Dr de Haas also told us that the SCO was based on a negative strategic objective:

To a large extent common, positive targets are absent. For example, China is seeking markets and energy sources, Russia is eager to regain its leadership status within the CIS [Commonwealth of Independent States] as well as that of a superpower in the international arena, and the Central Asia regimes consider the SCO as their guarantee of survival.[377]

260. He went on to say that a split in the organisation was not inconceivable in this context. Dr Caroline Hoy, of the University of Glasgow, pointed to unease about China's activities in Central Asia even amongst its treaty partners: "There are wider concerns in Central Asia, which extend to Russia, about the extent to which China is seeking access to energy resources and the consequent impacts on geo-political relationships."[378] The presence of President Ahmadinejad of Iran and President Musharraf of Pakistan at the most recent summit in June 2006 demonstrated the growing importance of the SCO. We asked the Foreign Secretary about the SCO, but she said that it was too early to comment on its development.[379]

261. We conclude that the growing links between Russia and China present a particular concern for the United Kingdom and other advocates of human rights as well as democratic and pluralistic values, since their new ties may signal the emergence of an authoritarian bloc opposed to democracy and Western values in Eurasia. We further conclude that the Shanghai Co-operation Organisation has the potential to evolve into an alliance of authoritarian powers opposed to the West, and may aid China's efforts to establish control over Central Asian energy reserves. We recommend that the Government set out in its response to this Report how it is expanding its presence in Central Asia, and how it is monitoring Chinese activity in the region, so as to nurture democracy and Western values in Central Asia.

INDIA

262. India's relations with China have improved since the April 2005 launch of a "strategic partnership for peace and prosperity", aimed at improving economic links and ending the Aksai-China border dispute.[380] India has also signed a Memorandum of Understanding on defence with China in May 2006, and opened the Nathu La border crossing to trade between Sikkim and Tibet in July 2006, which may lead toward better ties.[381] Dr Hughes commented on relations between India and China: "The border issues are still there and there was an incursion late last year from the Chinese side but it did not get blown up into anything bigger."[382] Professor Wall told us that the border issue would remain problematic. He said: "People forget there is a third bit of Kashmir which the Chinese have occupied for sometime. They have now integrated into their defence mechanism by building roads […] I do not see any solution coming out of that committee which has been meeting".[383] We will consider China's relations with India in greater detail during our forthcoming inquiry into South Asia.

THE SOUTH CHINA SEA

263. China also disputes territory in the South China Sea with its neighbours.[384] China's claims over the two island archipelagos within the Sea are based on their discovery by explorers and traders in 2000 BC and occupation since the Han Dynasty of 23-220 AD.[385] Formal claims over the islands were made in 1887. Unexplored oil, gas and hydrocarbons beneath the seabed lie behind China's claims and both island groups also contain extensive fishing grounds. The islands are also near primary shipping lanes and their possession would give China influence over traffic, although Beijing states it has no aspiration to interfere with passing vessels.[386] These trade routes across the Sea are crucial for the local and global economies: "over 90% of the world's international trade occurs via commercial shipping and 45% of that tonnage makes its way through the virtually unregulated waters of the South China Sea [… it] is the world's second busiest international sea lane".[387] Any dispute over maritime trade could have an impact on UK economic interests in the region.

264. Both archipelagos are contested by China's neighbouring states and Taiwan. The Spratly Islands are claimed in their entirety by China, Taiwan and Vietnam, and partly by Malaysia and the Philippines. Brunei has established a fishing zone overlapping a reef, but has made no formal claim. The Paracel Islands are occupied by China, and are also claimed by Taiwan and Vietnam. Taiwan's claim is similar to that of China, although its unclear international status complicates the dispute further. Vietnam claims to have "historical evidence and legal foundation to affirm its indisputable sovereignty"[388] over both sets of islands, by discovery and occupation from the seventeenth century and the jurisdiction of its emperors in the nineteenth century. The Philippines argues that due to its discovery of certain islands by a private citizen in 1956, sovereignty lies with itself; gradual occupation through military garrisons led to a 1978 decree formalising its claims over islands and territorial sea jurisdiction. Malaysia's claim stems from a map it first published in 1979 claiming various islands in its territorial waters and continental shelf, and both Malaysia and Brunei base their claims on provisions of the 1992 UN Convention of the Law of the Sea.

265. Although the issue has not specifically been addressed under international law, negotiations have taken place bilaterally and multilaterally, demonstrating, as Dr Cronin told us, that China shows "generally much more moderation and flexibility when there are other incentives to do so."[389] In November 2002, member states of ASEAN and China signed the Declaration on the Conduct of Parties in the South China Sea[390] describing working principles and a structure on which to conduct the dispute, although it is not a legally binding code of conduct.[391] Dr Christopher Hughes also told us that there is a "real issue of friction […] over the South China Sea disputes, which seem to have been shelved for now, and certainly not resolved."[392] However, recent cooperation in oil exploration has seen encouraging developments in claimant relations.

266. We conclude that the confidence-building measures which have taken place are playing a positive role in reducing tensions in the South China Sea and encouraging dialogue. However, we further conclude that the potential for conflict remains. We recommend that the Government set out in its response to this Report its assessment of this complex dispute.

---

101   Ev 112 Back

102   Zheng Bijian, "China's 'peaceful rise' to great power status", Foreign Affairs, September-October 2005 Back

103   Ibid Back

104   Q 5 Back

105   Q 2 Back

106   Ev 121 Back

107   Ev 206 Back

108   Ev 178-9 Back

109   Ev 206 Back

110   "China's global hunt for energy", Real Clear Politics, 6 September 2005 Back

111   Mokhzani Zubir and Mohd Nizam Basiron, "The Straits of Malacca: the rise of China, America's intentions and the dilemma of the littoral states", Maritime Institute of Malaysia, April 2005 Back

112   "China's global hunt for energy", Real Clear Politics, 6 September 2005 Back

113   Ev 213 Back

114   Ev 213 Back

115   Q 12 Back

116   Q 275 Back

117   "China's global hunt for energy", Real Clear Politics, 6 September 2005 Back

118   "China's strategic global influence", China Rights Forum, No 3, 2005 Back

119   Jamestown Foundation, China Brief, Vol V, Issue 21, October 13 2005; China's involvement in Sudan: Arms and Oil, Human Rights Watch, November 2003 Back

120   Ev 206 Back

121   Q 4 Back

122   "China gives Zimbabwe economic lifeline", The Guardian, 16 June 2006 Back

123   Q 288 Back

124   Ev 199 Back

125   "China's nuclear exports and assistance to Iran", Nuclear Threat Initiative Back

126   "China's strategic global influence", China Rights Forum, No 3, 2005 Back

127   "Iran's new alliance with China could cost US leverage", Washington Post, 17 November 2005; and Chietigj Bajpaee, "Setting the stage for a new Cold War: China's quest for energy security", Power and Interest News Report, 25 February 2005 Back

128   Q 59 Back

129   Q 268 Back

130   Ev 156 Back

131   Ev 178 Back

132   Q 142 Back

133   Ev 113 Back

134   Q 3 Back

135   Q 4 Back

136   Q 265 Back

137   Ev 165 Back

138   Ev 123 Back

139   Ev 207 Back

140   Ev 165 Back

141   Q 139 Back

142   Ev 123 Back

143   Office of the US Secretary of Defence, Annual Report to Congress: The Military Power of the People's Republic of China 2005 and US Department of Defence, Quadrennial Defense Review Report, February 2006 Back

144   US Department of Defence, Quadrennial Defense Review Report, February 2006 Back

145   "Intelligence brief: US-China relations", Power and Interest News Report, 26 July 2005 Back

146   "Rumsfeld questions China spending", BBC News Online, 18 October 2005, news.bbc.co.uk Back

147   Office of the Secretary of Defence, Annual Report to Congress: Military Power of the People's Republic of China 2006 Back

148   Q 16 Back

149   Chalmers Johnson, "No longer the 'lone' superpower", ZNet, 15 March 2005; and Q154 Back

150   "The politics of assigning a nuclear carrier to Japan", Japan Times, 9 November 2005 Back

151   Q 139 Back

152   Q 143 Back

153   Ev 166 Back

154   Ev 124 Back

155   Q 276 Back

156   Ev 121 Back

157   Katinka Barysch, Charles Grant and Mark Leonard, Embracing the Dragon, Centre for European Reform, 2005 Back

158   EU-China Summit, Joint Statement, European Commission, 5 September 2005 Back

159   Ev 133 [Foreign and Commonwealth Office] Back

160   Ev 123 Back

161   Ev 133 Back

162   Q 26 Back

163   Katinka Barysch, Charles Grant and Mark Leonard, Embracing the Dragon, Centre for European Reform, 2005 Back

164   Office of the US Secretary of Defence, Annual Report to Congress: The Military Power of the People's Republic of China 2006 Back

165   Foreign Affairs, Defence, Trade and Industry and International Development Committees, First Joint Report of Session 2004-05, Strategic Export Controls, HC 145 para 139 Back

166   Ev 121 Back

167   Q 141 Back

168   Q 1 Back

169   Q 155 Back

170   Q 155 Back

171   Q 240 Back

172   "Whither China?", Speech by Robert Zoellick US Department of State, 21 September 2005 Back

173   Q 278 Back

174   February 2006, Quadrennial Defense Review Report, US Department of Defence Back

175   Ev 157 Back

176   Ev 167 Back

177   Office of the US Secretary of Defence, Annual Report to Congress, The Military Power of the People's Republic of China, 2005 Back

178   2005 Report to Congress, US-China Economic and Security Review Commission, November 2005  Back

179   See above Para 26 Back

180   See above Para 29 Back

181   See above Para 91 Back

182   See above Para 114 Back

183   Q 145 Back

184   Q 145 Back

185   Ev 167 Back

186   Ev 2 07 Back

187   Q 278 Back

188   Ev 118 Back

189   Ev 119 Back

190   Ev 162 Back

191   Principally Article 2(4) Back

192   "The Taiwan Question and Reunification of China", Taiwan Affairs Office and Information Office of the State Council, People's Republic of China, August 1993 Back

193   Ibid Back

194   "White Paper-The One-China Principle and the Taiwan Issue", Taiwan Affairs Office and Information Office of the State Council, People's Republic of China, 21 February 2000 Back

195   "Text of China's anti-secession law", BBC News Online, 14 March 2005, news.bbc.co.uk Back

196   Q 6 [Dr Hughes] Back

197   Ev 179 Back

198   "The Bases for Taiwan's National Sovereignty and Participation in the International Community", Ministry of Foreign Affairs, Republic of China (Taiwan), July 2005 Back

199   Convention on the Rights and Duties of State, Montevideo, 26 December 1933 Back

200   "Comments on Beijing's White Paper on the 'One China Principle and the Taiwan issue", Ministry of Foreign Affairs, Republic of China (Taiwan), 22 February 2000 Back

201   James Crawford, The Creation of States in International Law, Oxford University Press, April 2006, p 219 Back

202   Ev 234 Back

203   "The Bases for Taiwan's National Sovereignty and Participation in the International Community", Ministry of Foreign Affairs, Republic of China (Taiwan), July 2005 Back

204   "Why does the Chinese Government have no objection to non-governmental economic or cultural exchanges between Taiwan and foreign countries?", Ministry of Foreign Affairs, People's Republic of China, 15 November 2000 Back

205   Q 175 Back

206   Foreign Affairs Committee, Tenth Report of Session 1999-2000, China, HC574-I, para 191 Back

207   Ev 164 Back

208   Ev 162 Back

209   Ev 122 Back

210   Q174 [Dr Fell] Back

211   The One If: "the CCP regime has no intention to use military force against Taiwan." The Fours Noes: no declaration of independence; no change in the "national title"; no "state- to-state description in the Constitution"; no referendum to change the status quo. The One Not: no abolition of the National Unification Council nor the Guidelines for National Unification. Back

212   "China brands Chen troublemaker", BBC News Online, 8 February 2006, news.bbc.co.uk Back

213   "President Chen meets UK parliament members", Office of the President of Taiwan, 17 May 2006 Back

214   Q 167 Back

215   Q 167 Back

216   Ev 158 Back

217   "Rice calls for China-Taiwan talks", BBC News Online, 10 July 2005, news.bbc.co.uk; and "President Chen's long trip to nowhere", Asia Times, 13 May 2006 Back

218   Ev 119 Back

219   Q 173 Back

220   Q 173 Back

221   Office of the US Secretary of Defence, Annual Report to Congress: The Military Power of the People's Republic of China 2006 Back

222   "Japan to join US policy on Taiwan", Washington Post, 17 February 2005 Back

223   Q 186 Back

224   Q 186 Back

225   Q 186 Back

226   Q 186 [Dr Fell]  Back

227   Ev 118 Back

228   Ev 118 Back

229   Q 176 Back

230   Q 176 Back

231   "East Asia" Press Notice, Foreign Affairs Committee, 17 May 2006 Back

232   Ev 112 Back

233   Ev 112 Back

234   Ev 76 Back

235   Ev 165 Back

236   Ev 314 [Jenny Warren] Back

237   North Korea's Weapons Programmes: A Net Assessment, International Institute for Strategic Studies, January 2004, p 32 Back

238   Ibid, p 39 Back

239   "N. Korea Declares Itself a Nuclear Power", Washington Post, 10 February 2006  Back

240   North Korea's Weapons Programmes: A Net Assessment, p 7 Back

241   Ibid, p 43 Back

242   Ibid, p 44 Back

243   Ev 305 [Mark Fitzpatrick] Back

244   North Korea's Weapons Programmes: A Net Assessment, p 45 Back

245   Ibid Back

246   Ibid, p 46 Back

247   Ibid, p 46 Back

248   Ibid Back

249   Ev 120 Back

250   Ev 305 [Mark Fitzpatrick] Back

251   "North Korea fires a seventh missile", Financial Times, 4 July 2006 Back

252   "Statement: DPRK Unilateral Missile Moratorium", 24 September 1999, available at www.nautilus.org Back

253   "US turns on missile shield as Korea fears grow", The Daily Telegraph, 21 June 2006 Back

254   Daniel A Pinkston, "Will North Korea Launch a Long-Range Missile?", Center for Non-Proliferation Studies, 16 June 2006 Back

255   Foreign and Commonwealth Office, Press Release, "Foreign Secretary Condemns North Korean Missile Launch", 5 July 2006 Back

256   White House, Press Release, "North Korea Missile Launches", 4 July 2006 Back

257   "North Korea fires a seventh missile", Financial Times, 4 July 2006 Back

258   "Russia summons N Korean Envoy in Moscow", The Guardian, 23 June 2006 Back

259   "North Korean missile test to go unpunished after UN split", The Times, 6 July 2006 Back

260   "DPRK Foreign Ministry Spokesman on Its Missile Launches", Korean Central News Agency of DPRK, 6 July 2006 Back

261   UN Security Council Resolution 1695 (2006) Back

262   "Push to end bitter row on N Korea", BBC News Online, 11 July 2006, news.bbc.co.uk Back

263   "N Korea rejects UN missile call ", BBC News Online, 16 July 2006, news.bbc.co.uk; "Japan prepares N Korea sanctions", BBC News Online, 18 July 2006, news.bbc.co.uk Back

264   Q 201 Back

265   Ev 299 Back

266   Ev 301 Back

267   Q 201 Back

268   Ev 298 Back

269   Aidan Foster-Carter, "A soft landing? North Korea's prospects", Country Forecast Asia and Australasia Regional Overview, Economist Intelligence Unit, April 2006, p 18 Back

270   Ev 120 Back

271   Aidan Foster-Carter, "A soft landing? North Korea's prospects", Country Forecast Asia and Australasia Regional Overview, Economist Intelligence Unit, April 2006; Q 204 Back

272   Ev 299 Back

273   Ev 299 Back

274   Ev 122 Back

275   Ev 305 Back

276   Ev 305 Back

277   Ev 281 Back

278   "Iran acquires ballistic missiles from DPRK", Jane's Defence Weekly, 29 December 2005 Back

279   Q 203 Back

280   Ev 300 Back

281   Q 205 [Dr Hoare] Back

282   Foreign and Commonwealth Office, Human Rights Annual Report 2005, Cm 6606, July 2005, pp 54-55 Back

283   Aidan Foster-Carter, "A soft landing? North Korea's prospects", Country Forecast Asia and Australasia Regional Overview, Economist Intelligence Unit, April 2006, p 16 Back

284   Q 194 Back

285   Q 205 Back

286   The President's State of the Union Address, 29 January 2002, available at http://www.whitehouse.gov; "Rice names 'outposts of tyranny'", BBC News Online, 19 January, 2005, news.bbc.co.uk Back

287   Ev 297 [Hazel Smith] Back

288   Ev 304 Back

289   Q 195 Back

290   Q 198 Back

291   Q 143 Back

292   Aidan Foster-Carter, "A soft landing? North Korea's prospects", Country Forecast Asia and Australasia Regional Overview, Economist Intelligence Unit, April 2006, pp 21-22 Back

293   "N Korea to face Japan sanctions", BBC News Online, 13 June 2006, news.bbc.co.uk Back

294   "Inter-Korean Ties Develop Rapidly since 2000 Summit", People's Daily , 16 June 2003 Back

295   Ev 305 [Mark Fitzpatrick] Back

296   Ev 305 Back

297   Ev 296 Back

298   Ev 297 Back

299   Aidan Foster-Carter, "A soft landing? North Korea's prospects", p 22 Back

300   Ev 191 [Kim Heung-kyu] Back

301   Q 194 Back

302   Ev 293 Back

303   Aidan Foster-Carter, "A soft landing? North Korea's prospects", p 21 Back

304   Q 194 Back

305   Ev 305 [Mark Fitzpatrick] Back

306   Q 184 [Dr Fell] Back

307   Q 194 Back

308   Q 193 [Dr Cronin] Back

309   Ev 179 [Steve Tsang] Back

310   Ev 179 [Steve Tsang] Back

311   Ev 293-4 [Dr Key Young-Son] Back

312   Ev 166 Back

313   Ev 305 Back

314   "United States and the Republic of Korea Launch Strategic Consultation for Allied Partnership", US State Department Press Release, 19 January 2006 Back

315   "A Bumpy Road for the US-ROK Free Trade Agreement", 2 March 2006; "Round One of the US-ROK FTA Talks Sails Through", 15 June 2006, Heritage Foundation Back

316   "South Korea survey angers Japan", BBC News Online, 3 July 2006, news.bbc.co.uk Back

317   Ev 191 Back

318   Ev 294 Back

319   Ev 293 Back

320   Joint Statement of the Fourth Round of the Six-Party Talks Beijing, 19 September 2005, available at http://www.state.gov Back

321   "North Korea - U.S. Statement", US State Department Press Release, 19 September 2005; "Pyongyang: Ending weapons program tied to civilian power", CNN, 19 September 2005 Back

322   David Wall, "North Korea and the 'six-party talks': a road to nowhere", 12 April 2006, openDemocracy Back

323   "DPRK accuses U.S. of tarnishing its world image", People's Daily, 12 February 2006 Back

324   Ev 305 Back

325   Ev 305 Back

326   Q 203 Back

327   Ev 284 Back

328   Daniel A Pinkston, "North Korea's Nuclear Weapons Program and the Six-party Talks", Nuclear Threat Initiative, April 2006 Back

329   Ev 120 Back

330   Ev 297 Back

331   Ev 120 Back

332   HC Deb, 22 May 2006, col 1268W [Commons written answer] Back

333   Ev 176 Back

334   Ev 167-8 Back

335   Q 157 Back

336   Q 157 Back

337   Q 157 Back

338   Minxin Pei, "Simmering fire in Asia: Averting Sino-Japanese strategic conflict", Policy brief, Carnegie Endowment for International Peace, November 2005 Back

339   Q 157 Back

340   Ev 122 Back

341   Q 159 Back

342   Statement by Prime Minister Koizumi, 15 August 2005, Office of the Prime Minister of Japan Back

343   "S Korea snubs Japan over shrine", BBC News Online, 19 October 2005, news.bbc.co.uk Back

344   Ev 157 Back

345   Q 158 Back

346   Q 158 Back

347   Judith Kornberg and John Faust, China in World Politics, (London 2005) Back

348   Ev 122-3 Back

349   Ev 166 Back

350   Q 282 Back

351   Thomas J Christensen, China, the US-Japan alliance and the Security Dilemma in East Asia in The Rise of China, eds. Micheal Brown, et al (London 2000) Back

352   Q 161 Back

353   Conn Halligan, "The Dragon and the Chrsyanthemum", Foreign Policy in Focus, 31 May 2005; Judith Kornberg and John Faust, China in World Politics, (London 2005) Back

354   Q 161 Back

355   Chalmers Johnson, "No longer the 'lone' superpower", ZNet, 15 March 2005 Back

356   Q 158 Back

357   Q 162 Back

358   Q 281 Back

359   Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam Back

360   Ev 169 Back

361   Q 43 Back

362   Q 43 Back

363   Ev 194 Back

364   Q 45 Back

365   Judith Kornberg and John Faust, China in World Politics, (London 2005) Back

366   Ev 237 Back

367   Dmitiri Trenin, "Russia and Global Security Norms ", Washington Quarterly , Spring 2004, 27: 2, pp 63-77 Back

368   Q 17 Back

369   Ev 239 Back

370   Q 32 Back

371   Ev 241 Back

372   "China's global hunt for energy", Real Clear Politics, 6 September 2005 Back

373   Q 15 Back

374   Ev 207 Back

375   Q 33 Back

376   Ev 240 Back

377   Ev 241 Back

378   Ev 278 Back

379   Qq 283-4 Back

380   "India, China, the US and the balance of power in the Indian Ocean", Power and Interest News Report, 20 July 2005 Back

381   "China, India sign an MoU on defence co-operation", Jane's Defence Weekly, 31 May 2006; "On roof of the world, India and China put aside differences to open trade route", The Guardian, 7 July 2006 Back

382   Q 52 Back

383   Q 52 Back

384   John Daly, "Energy Concerns and China's Unresolved Territorial Disputes", The Jamestown Foundation, 7 December 2004 Back

385   "The Issue of South China Sea", Ministry of Foreign Affairs, People's Republic of China, June 2000; "Jurisprudential Evidence to Support China's Sovereignty over the Nansha Islands", and "Basic Stance of the Chinese Government in Solving the South China Sea Issue", Ministry of Foreign Affairs, People's Republic of China, 17 November 2000 Back

386   "The Issue of South China Sea", Ministry of Foreign Affairs, People's Republic of China, June 2000; "Jurisprudential Evidence to Support China's Sovereignty over the Nansha Islands", and "Basic Stance of the Chinese Government in Solving the South China Sea Issue", Ministry of Foreign Affairs, People's Republic of China, 17 November 2000 Back

387   Joshua Rowan, "The US-Japan Security Alliance, ASEAN and the South China Sea Dispute", Asian Survey, vol XLV, No 3, May-June 2005 Back

388   "Vietnam has sufficient evidence to affirm its sovereignty over the Paracel and Spratly", Ministry of Foreign Affairs, Vietnam Back

389   Q 187 Back

390   ASEAN Declaration on the South China Sea, Manila, Philippines, 22 July 2002 Back

391   Clive Schofield, "A Code of Conduct for the South China Sea?", Jane's Intelligence Review, 27 October 2000 Back

392   Q 43 Back

---

Prepared 13 August 2006