Return to Transcripts main page

CNN Live Sunday

Hard-Line Diplomacy Could Damage Washington-Beijing Relationship

Aired April 15, 2001 - 17:07   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
STEPHEN FRAZIER, CNN ANCHOR: The Bush administration's tougher stand against China now is meant to send a signal, aides are telling us, that the U.S.-China relationship has been damaged by the standoff. And Beijing's actions now will help to determine whether things improve or actually get worse.

So, joining us for some insight into the U.S.-China relationship, Betty Lieu. She is the South East correspondent and the Atlanta bureau chief for London's "Financial Times," and she's becoming a regular guest with us here; we are glad you joined us one again today.

BETTY LIEU, "FINANCIAL TIMES": Thank you.

FRAZIER: One the things I wanted to ask you was about how this is working out for the leadership in China. The way this played out, you told us, helped to prevent demonstrations in the street. Now, we tend to recall demonstrations as being pro-democracy; which is kind of considered to be a good thing, but not necessarily this time, if I understand you correctly.

LIEU: Not necessarily, I think what China is more concerned about is demonstrations being targeted towards the Beijing government; and that certainly why they've cracked down on, for instance, the Falun Gong movement.

What they wanted to do this time is have demonstrations -- not have demonstrations, but actually have nationalism because of this incident to sort of see this -- use this as a way to sort of create affection for the Beijing government or approval or confidence in the Beijing government.

FRAZIER: Which is important for international relations, because President Jiang Zemin is actually more pro-reform among the leadership, if I understand where his place is within the spectrum of the leadership in China.

LIEU: He certainly is. He's certainly more pro-reform, and so is the premier, Premier Zhu Rongji is also very pro-reform. I think having successfully resolved this situation has certainly galvanized reformists within the Chinese Communist Party and the military, People's Liberation Army and those that are the traditional hard- liners; I think that they have sort of been weeded out from this, kind of excluded -- not excluded, but shut out -- from this because of this resolving of the situation.

FRAZIER: And there's a hard line here, too, I'm sensing, the more I read about this. There are two camps in the United States that were helping to affect the president's decisions. There's the containment crowd, which sees China as a hostile threat that should be hemmed in and faced down, stared down.

And there's the engagement crowd that believes that you don't want to inflame tensions in China; it's just too big to aggravate.

LIEU: Right. There's military hawks and Republican -- sort of conservative economists, I guess you could say, those who want to engage China in trade. You certainly saw the divisions being meted out during the situation and Bush having to conduct a balancing act. In China, as in the U.S., the reformists and certainly, the more moderates have certainly won out here.

FRAZIER: What did you think about some of this hard language that follows the letter of apology? Would there be a sense in China of betrayal or going back to the sentiments expressed in the letter?

LIEU: Well, I think certainly the situation -- we have avoided damage U.S.-China relations by resolving the situation quickly, but at the same time, there's certainly a heightened level of mistrust between the U.S. and China. I think in a sense, you know, essentially, the Bush administration wants to not appear weak.

President George Bush has said that he sees China more as a competitor rather than a partner; he doesn't want to be looked upon as backtracking from that situation or that stance.

FRAZIER: The last time we spoke, we wondered how long it would be before big companies like Motorola or General Motors spoke to their congressmen and said, let's wrap this up and move on.

Now, one Congressman saying today, Senator George Allen of Virginia, this is very important; there are markets in China, offer great promise to farmers and to American business owners, so the word is getting out to people who are a little closer to the trade block.

LIEU: Certainly. And China -- all American companies are hoping -- crossing their fingers that children will enter the WTO later this year. The insurance business in China is projected to grow I believe up to $60 billion for American companies, so there's a lot of potential there.

And certainly U.S. businesses were behind -- were watching closely, the situation, hoping it was going to end peacefully and quickly.

FRAZIER: And that, I'm presuming, one of the bigger issues you cited in our earlier chat before you came on, that China and the United States need to move past this, because there are so many bigger issues they face. What else are the bigger issues?

LIEU: Well, in ten days, we will hear what weaponry the U.S. might sell to Taiwan; there's the WTO; there's the Olympics; Beijing very much wants to be a part of the Olympics, and win the bid for 2008. So those are going to be big issues coming up for U.S. and China.

FRAZIER: Well, those will be occasions to have you back.

LIEU: Thank you.

FRAZIER: Betty Lieu, thanks for joining us on Easter Sunday, and giving up a Sunday on your own, glad to have you once again.

LIEU: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com