Deng Xiaoping and the Transformation of China (91 page)

• The two sides should facilitate trade, air travel, shipping, tourism, and mail between the mainland and Taiwan;

• People from Taiwan are welcome to invest in and carry on business in the mainland;

• After reunification, Taiwan can enjoy a high degree of freedom and maintain its own army; and

• Taiwan's current social and economic system, including private companies and private property, will remain.
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Taiwan did not respond to this overture, however, and relations between China and the Reagan administration remained tense. Knowing it would be fruitless to use military means against a Taiwan that was backed by American power, Deng continued to use the one tool he had, the threat that China would reduce and even end its cooperation with the United States. When told that the United States was prepared to sell some weapons to China, Deng responded
that China would not accept such a deal if it meant that the United States would upgrade the weapons it sold to Taiwan.

Reagan's secretary of state Alexander Haig, accepting an invitation from Deng, arrived in Beijing in June 1981. On June 16, Deng told Haig what he had told others: although China wanted relations with the United States to develop smoothly, the sale of weapons to Taiwan, if it was not handled properly, could cause Sino-U.S. relations to stagnate or even regress.
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Furthermore, he complained to Haig that when China had agreed to normalization, it was told that military sales to Taiwan would be reduced, but the United States had still not done this. In particular, China wanted the United States to stop all sales of military aircraft to the island. Deng was ready to break off relations with the United States if the United States did not reduce arms sales. Haig, convinced that the United States would have to comply in order to ensure Chinese cooperation against the Soviet Union, reassured Deng that for the foreseeable future the United States would continue to sell Taiwan only “carefully selected defensive weapons.”
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Three days after Deng had forcefully presented his views to Haig, President Reagan met with Singapore's prime minister Lee Kuan Yew, whom he had invited to Washington to discuss relations with Taiwan and China. In answer to Reagan's question, Lee Kuan Yew said he believed that the security of Taiwan did not require the proposed sale of U.S. FX-15 fighter jets. At the end of their discussion, Reagan asked Lee Kuan Yew to carry the message to Taiwan President Chiang Ching-kuo that it would be difficult to supply all of Taiwan's requests and that President Chiang should not press for high-tech weapons at the moment, but that he, President Reagan, would not let Chiang down. A few days later, Lee delivered the message to President Chiang.
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Meanwhile, Deng and his colleagues kept up the pressure on the United States. A few weeks after the Haig visit, Arthur Hummel, then dean of the State Department China specialists and U.S. ambassador to Beijing, was handed by Chinese diplomats a démarche saying that if the United States continued to sell weapons to Taiwan, there would be grave consequences for strategic cooperation. In an interview with a Hong Kong newspaper in late August, Deng again warned that Beijing was prepared to let the relationship deteriorate, and in October at the North-South Summit meeting in Cancun, Mexico, Premier Zhao Ziyang told President Reagan that although China wanted to cooperate in efforts against the Soviet Union, the Taiwan issue remained an obstacle to such cooperation. Also while at Cancun, Foreign Minister Huang Hua told Secretary of State Haig that the Chinese wanted a specific
date when the level of arms sales to Taiwan would not exceed the number or quality sold during the Carter administration. He also wanted such arms sales to be reduced each year until, within a specified period, they would end altogether. And the following week, Foreign Minister Huang Hua passed along Deng's request that the United States not conclude any agreement on weapons sales to Taiwan before U.S.-China discussions on military cooperation were completed. The United States accepted Deng's request, and Haig replied to Huang Hua that although the United States could not agree to a cut-off date for arms sales to Taiwan, arms sales would be “restrained and selective” and they would not exceed those during the Carter administration.
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To convey Beijing's continuing frustration at the failure of the United States to reduce arms sales, Premier Zhao Ziyang not only rebuffed President Reagan's invitation to go to the United States to celebrate the tenth anniversary of the 1972 Shanghai Communiqué; he did not even respond to Reagan's letter. Following the Chinese aphorism of killing the rooster to warn the monkey, China downgraded relations with the Netherlands for selling two submarines to Taiwan. In January 1982, the United States sent Assistant Secretary of State John Holdridge to Beijing to head off a further deterioration in relations.
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Although at first Holdridge's delegation was received very coolly, the Chinese became more cordial when Holdridge announced that the United States had decided not to sell FSX aircraft to Taiwan. But Holdridge had his own mandate: he had been told to seek a broader agreement with Beijing on the framework of relations before the United States would decide which weapons systems to sell—or not sell—to Taiwan. He had brought a draft agreement for this framework, but the Chinese considered the initial draft too vague and unresponsive to their concerns. Instead, Beijing demanded that for talks to continue, the United States had to forgo any new transfer of arms to Taiwan.
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The lines had been drawn. And in the early months of 1982 the Chinese press continually attacked the United States for interfering in the Taiwan issue, which the Chinese regarded as a domestic Chinese affair.

Hoping to break the tension, President Reagan suggested that Vice President George H. W. Bush, who had managed to retain cordial relations with Deng and other leading Chinese officials, visit Beijing while on a trip to Asia. The Chinese did not respond at first; only after Bush had visited several Asian capitals did they notify the United States that Bush would be welcome. During his first several days in Beijing, Bush found the Chinese to be adamant on arms sales to Taiwan. Then Deng invited Bush in for a talk. At one point in
the conversation, Deng suggested that he and Bush step into a nearby room for a fifteen-minute conversation with only Ambassador Arthur Hummel and the interpreters present. The small group remained for an hour, during which time Bush and Deng reached an informal understanding that would eventually be incorporated into a formal document on the limiting of U.S. arms sales to Taiwan. Deng knew that he had achieved the best he could hope for: the United States did not stop arms sales to Taiwan, but it placed limits on the sales—and as U.S. sales declined, Deng could be optimistic that in the long run Taiwan would be incorporated as part of China. After their conversation, the invectives stopped and the mood lightened.
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Deng, who for more than a year had behaved like a stern, truculent soldier lecturing American officials, again became a good-humored partner.
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The understanding that emerged from the Deng-Bush conversation became the basis for detailed negotiations between Ambassador Hummel and his counterparts and was incorporated into the “United States-China Joint Communiqué on United States Arms Sales to Taiwan (August 17, 1982).” The agreement, which put a lid on weapons sales to Taiwan, specified that the United States “has no intention of infringing on Chinese sovereignty and territorial integrity, . . . or pursuing a policy of ‘two Chinas’ or ‘one China and one Taiwan.'” It specified that arms sales to Taiwan “will not exceed, either in qualitative or in quantitative terms, the level of those supplied in recent years . . . and that it intends to reduce gradually its sales of arms to Taiwan, leading over a period of time to the final resolution.”
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To calm Taiwan and members of Congress who objected, President Reagan invited thirty senators and representatives for a briefing to persuade them why the agreement did not undercut Taiwan.

When the August 17 communiqué was issued, Deng invited Ambassador Hummel to an informal meeting where he exuded goodwill and congratulated him on achieving the historic agreement. This communiqué became, along with the Shanghai Communiqué of February 27, 1972, and the normalization communiqué of January 1, 1979, one of the three fundamental documents underpinning U.S.-China relations.
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From then until the Tiananmen tragedy of June 1989, it provided a stable basis for the Sino-American relationship. It also paved the way for President Reagan to make a six-day visit to China in late April 1984, when he became the first president to visit China since the establishment of formal diplomatic relations in 1979. During Reagan's trip, Deng and Reagan met for three hours of friendly conversation. After explaining the Chinese position on Taiwan, Deng asked Reagan
to consider the Chinese point of view and not simply be wagged by the tail of Chiang Ching-kuo.
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Reagan, pleased with the visit, remarked that Deng “didn't seem like a Communist.”
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In the mid-1980s, Deng still had a thin reed of hope for resolving the reunification issue before he “went to meet God”: his personal relationship with Chiang Ching-kuo, his classmate at Sun Yat-sen University in Moscow in 1926. When he met Lee Kuan Yew on September 20, 1985, Deng, aware that Lee had seen Chiang recently and that Chiang's diabetes had become serious, asked Lee if Chiang had made any arrangements for his succession. When Lee replied that he could not say who would eventually replace Chiang, Deng said that he feared that after Chiang's death, there would be chaos in Taiwan as forces there attempted to join with parties in the United States and Japan in a quest for independence. Deng then asked Lee to convey his regards to Chiang and to convey his suggestion that the two meet soon. Within a month, Lee flew to Taiwan carrying Deng's message. But Chiang, who retained bitter memories of his many years of dealing with the Communists, said he could not trust them. He declined the invitation to meet.
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Thereafter Deng, already eighty-one years old, had little reason to hope that he would be able to resolve the Taiwan problem. All he could do was to block any move Taiwan made toward independence, thus paving the way for his successors to regain control of the island.

Two years later, in 1987, Chiang Ching-kuo, on his deathbed, abolished the long-standing martial law and legalized political opposition parties, thus creating the basis for the democratization of Taiwan. He also allowed residents of Taiwan, for the first time, to visit their relatives on the mainland, not by direct travel, but rather by transfer through Hong Kong. As people from Taiwan began to visit with relatives on the mainland they also started new businesses there. It was difficult to distinguish between those who had relatives and those who did not, and soon all Taiwanese were allowed to visit the mainland. Deng welcomed the visitors from Taiwan and their business ventures, seeing both as possible steps toward eventual reunification, even if not in his lifetime. As he observed, “If we can't reunify China right away, we will do it in a century; if not in a century, then in a millennium.”
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Resuming Sovereignty over Hong Kong

On May 25, 1975, Deng accompanied Mao to a meeting with Edward Heath, who had served as British prime minister from 1970 to 1974. Mao,
making it clear that the time to resolve the Hong Kong issue had not yet arrived, pointed to Deng and other younger comrades sitting there and said, “The issue is for them to deal with.”
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From the time he returned to work in 1977, Deng took a deep interest in Hong Kong affairs. But when he visited Guangdong with Marshal Ye that year, the focus of their discussions was not resumption of sovereignty, but how Hong Kong could help China in its drive to modernize. Deng realized that China could benefit greatly from Hong Kong's assistance in the areas of finance, technology, and management, and that China would want Hong Kong to remain prosperous even after it resumed sovereignty. The immediate task was to reduce the fear and ill will of the Hong Kong business community resulting from the Red Guards' attacks during the Cultural Revolution. The Red Guards had not only pursued relatives of Hong Kong residents living on the Chinese side of the border; they had invaded Hong Kong itself, terrorizing citizens and arousing public resentment against Mao's leadership.
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In April 1978 Deng set up a Hong Kong and Macao Affairs Office under the State Council with a leading small group headed by Liao Chengzhi. Liao was an excellent choice for the assignment. His family home was in a village near Huizhou, less than fifty miles from Hong Kong. Moreover, he had deep roots in Hong Kong as well as in Japan: he had lived in Hong Kong during the late 1940s, and his cousin was the wife of the chief justice of Hong Kong.

One of Liao's initial assignments was to prepare for and host the first conference on Hong Kong and Macao since the end of the Cultural Revolution. The conference, which lasted nearly a month, focused on eliminating the radical “ultra-leftist” policies that had alienated Hong Kong people. The emphasis initially was on improving relations between China and the business community in Hong Kong and Macao.

In referring to Hong Kong, it was long Beijing's practice to say
Gang-ao
(Hong Kong–Macao), almost as if it were a single word. But to Deng and other Chinese leaders, Macao, the Portuguese colony across the Pearl River delta from Hong Kong, was small and relatively unimportant; the economic dynamism was in Hong Kong, and in effect Macao was already under mainland control, even though the lease to Portugal did not officially expire until 1999. Twice, in 1967 and 1974, Portugal had offered to return Macao to China, and Beijing had concluded an agreement with Portugal outlining plans for its return. Beijing, however, fearing the decision might negatively affect the volatile mood in Hong Kong, had kept that agreement a secret and
publicly stated that it was not yet ready for Macao's return. To Deng, “Hong Kong–Macao” meant Hong Kong.