THE WHITE HOUSE
Office of the Press Secretary
PRESS BRIEFING BY NATIONAL SECURITY ADVISOR SANDY BERGER, TREASURY SECRETARY BOB RUBIN AND DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL GENE SPERLING
The Briefing Room
3:15 P.M. EDT
MR. LOCKHART: Hello, everybody. Oh, it's a packed house. As promised, the long-awaited briefing on our trip to China. The President's National Security Advisor Sandy Berger will start it off with a preview of the trip, a look at the schedule and at some of the goals that we hope to accomplish on the trip. We'll then hear from Treasury Secretary Rubin on some of the economic elements of the trip. And also the National Economic Council Advisor, Gene Sperling.
MR. BERGER: You'll notice that we delayed this briefing so that you cannot file until the market closes since we have Rubin here. (Laughter.)
Let me first try to put the trip in some perspective and then talk a bit about the agenda and then a bit about the itinerary. And then Secretary Rubin and Gene Sperling will discuss the economic and trade aspects of the trip.
Let me first try to, though, put the trip in some context. Since the beginning of this administration, the President has spoken of a number of fundamental strategic objectives that he has for defining America's role in the world in the next century, one of which is to build a strong bridge to Asia, and in particular to put the U.S.-China relationship on a more solid footing. And the reason for that is because the direction China takes over the next 10 years or 20 years will fundamentally and profoundly affect our interests, our children's future, stability in Asia, peace in the world.
Thus we have a fundamental interest in engagement with China, which does not necessarily mean that we endorse all about China or all of China's policies. Engagement is a vehicle, is a means to both expand the areas of our cooperation and to deal with the Chinese directly, face-to-face, about areas of difference.
I think one needs only to look at the events of the past month in Asia to see the importance of China and the importance of the U.S.-China relationship. With an escalation of tension in South Asia, clearly China, with its unique and complex relationship to both of those countries, is an indispensable part of a process of de-escalation and finding a way down the ladder of tension.
In Korea we have an extraordinary new president, Kim Dae Jong, who has reached out to the North and who seeks to accomplish a reconciliation between North and South, which could profoundly affect Asia. But, again, within the context of the four-party talks that we initiated a few years ago, China will play a very important role in that process.
And then, finally, in the context of the Asian financial crisis, the stability of China's currency, its ability to contribute both economically and financially to the situation in China and in Asia will be very important to the trajectory by which we work our way out of that crisis. So for all of these reasons, this is a very important relationship.
There are also, obviously, areas where we have serious and significant differences with China, such as in human rights, in some of their weapons transactions. But we have found that we have made more progress by looking them in the eye and telling them strongly and firmly what we believe their obligation is to the international community than by seeking to isolate them or seeking to isolate ourselves.
Now, let me talk about the five or six areas where we will concentrate in the meetings with President Jiang and with Premier Zhu Rongji, in particular.
One, is stability in Asia. As I mentioned before, China has been -- played a constructive role in the past several weeks in forging a consensus among the permanent five members of the Security Council on the steps that India and Pakistan must take to stop this escalation and move towards a situation of less tension. And we will be working with the Chinese to try to encourage both the Pakistanis and the Indians to take those steps.
On nonproliferation, I think this is an area where there's been quite remarkable progress in the past four or five years. We've seen China join the Nonproliferation Treaty. We have seen it stop nuclear testing and sign the Comprehensive Test Ban Treaty. Had they not, think about the situation in South Asia right now if China were not adhering to a test ban.
They have indicated and, in fact, complied with a commitment not to provide assistance to unsafeguarded nuclear facilities -- i.e., Pakistan. When President Jiang was here in October, they made a commitment not to provide support to the Iranian nuclear program. They've stopped their supply of anti-ship cruise missiles to Iran. They have indicated that they would adhere to MTCR with respect to missiles. These are all steps that have been the product of engagement and we would hope to continue this progress, particularly in the area of missiles and missile technology, and seek further steps by the Chinese to bring itself wholly in line with the international regimes.
On crime and drug trafficking, this has been an area of growing cooperation between our two countries. We have a DEA office opening in Beijing and have had a growing degree of cooperation in the law enforcement area and hope we will take further steps.
On the environment, Vice President Gore launched an initiative with the former premier, Li Peng, to help China deal with its really daunting environmental problems. It has probably the greatest environmental problems of any country in the world. I think I've said before the number one cause of death in China is from respiratory illnesses that are caused by pollution. And when you get to Beijing, which is a thriving, quite exciting city and you look up in the sky and you can see it looks like perhaps Los Angeles looked 10 years ago or Mexico City.
We will be engaging with the Chinese in a range of clean energy projects, which obviously benefit them and benefit us at the same time. And I'll let Secretary Rubin and Gene address the economic and trade issues.
Let me quickly just walk through the bare bones of the schedule so you can decide how many shirts to pack. We will leave on -- or blouses -- we will leave on Thursday -- I saw the glare.
A week from today, we'll have a 19-hour very pleasant plane ride and arrive in Xian on Thursday evening. As most of you know, Xian was China's capital -- ancient capital -- from 1100 B.C. to roughly 900 A.D., and once rivaled Rome and Constantinople as one of the great and most important cities in the world. It is the home of some of the great excavations of the terra cotta warriors, which we will visit.
We will also -- there will be an arrival ceremony there for the President that I think will be quite colorful. The President will make remarks to the people of Xian and we will tour a local village outside of Xian and speak with a cross-section of village people.
On Saturday, we will arrive in Beijing, there will be an arrival ceremony on the steps of the Great Hall -- on the steps and portico of the Great Hall of the People, which is next to Tiananmen Square. Then there will be a bilateral meeting between President Jiang and President Clinton, a working lunch with President Jiang, a meeting with Prime Minister Zhu Rongji, and at some point, a press availability. The President and President Jiang, presumably, together will have some remarks to the press.
On Sunday, the President will attend -- go to one of the larger churches in Beijing, the Chong Wen Men Church, a Protestant church. Afterwards, he will meet with a group of clerics. The issue of religious freedom has been an important one to the President; he'll be meeting this Thursday, tomorrow, with the three -- Rabbi Schneier and Bishop McCarrick, and Donald Argue, who the President sent as three representatives to China to talk to the Chinese about issues of religious freedom. They will be here tomorrow and this will be a chance to continue that effort.
He will also do some touring on Sunday afternoon, looking at the Forbidden City and the Great Wall, and then will have dinner with President and Mrs. Jiang.
On Monday, the President will give a major speech on the U.S.-China relationship at Beida or Beijing University, followed by a Q&A session with students and faculty. And then we'll leave for Shanghai.
In Shanghai on Tuesday, the President will have a roundtable discussion with a group of young entrepreneurs, some of whom have been featured in recent articles, who are obviously building a new economy in China, and that discussion will take place at the Shanghai Municipal Library, which is the largest library in the world and which is connected by Internet to the New York Public Library.
On Wednesday, there will be a number of events including a meeting with new homeowners in China. There is a program in China that seeks to encourage homeownership. We are assisting them with technical assistance in terms of creating a secondary mortgage market in China, and we will visit some folks that are involved in that.
On Thursday, we will start in Guilin, do an environmental event there with a group of environmentalists from China, and then take a boat ride down the famous Li River, before we head into Hong Kong, where we will have a reception with Hong Kong's Chief Executive, C.H. Tung. The following day the President will make a speech at the Convention Center, meet with political leaders, including Martin Lee. And we will be leaving late Friday night and arriving back on July 4th.
Q There's a news conference.
MR. BERGER: Oh, excuse me, press conference on Friday. You know the schedule better than I do.
SECRETARY RUBIN: Well, I'll comment briefly on some of the economic issues; Gene will pick up on trade.
Let me say the United States has an enormous stake in the economic well-being of China. China, if things go according to most people's expectations, will be the largest economy in the world some time in the first half of the next century. And as I said a moment ago, there's enormous benefit to us in terms of our trade relationship and otherwise in China being successful economically. In that respect, we have been very supportive of China, will continue to be as they make their transition to a market-based economy, and also very supportive of China as they integrate with the world economy.
With respect to the issues they face in going to a market-based economy, we will continue the discussions that we have had in many other fora with Chinese officials about the state-owned enterprises, the reform of that system, the issues around the financial sector, and the challenges they face with respect to their banking sector. It is very much our view that the key for China is to establish the basis for long-term growth, including good economic -- as they have been doing -- strong macroeconomic policy and strong reform and not be especially focused on growth in any given year. This year growth will presumably be somewhat less than had been expected because of conditions in the region.
All of those on our side, economic officials who have met with their economic officials, have come away consistently with being very impressed both with the extent to which and the sense in which their economic officials recognize the challenges that they face and with their commitment to transforming or moving to a market-based economy.
In terms of integrating with the world economy, Gene will cover trade. Sandy mentioned their importance with respect to the Asian financial crisis. We have been in touch with them, we've had discussions with them. I think they have played an absolutely critical role in maintaining their currency, which has been very much in their interest as they've seen it, and I think correctly so, but they're doing so has also been an island of stability in an otherwise very difficult time.
Let me just conclude by saying that over the past two or three years we have developed regular interchange with Chinese economic officials and I think it's been a very useful thing. Treasury has regular interchange now with officials in the Ministry of Finance several times a week. We have the joint economic commission which met recently here in Washington; it meets once a year. We've had several meetings in China, and now we very much look forward to our meetings when we go with the President.
MR. SPERLING: Let me just say a couple words about our trade goals on the trip and over the next week or two. Clearly, open markets and expanding open markets has been one of the three cores of the President's economic agenda, and we feel it is strongly in our national interest to bring China into the global trading system -- not only because of the 400,000 and certainly exceedingly growing number of American jobs that would be dependent on exports to China and Hong Kong, but also because it is, as Sandy suggested, part of our belief that more open markets leads to a more open system, that brings in more free flow of ideas, more people traveling, more people interacting through companies, through e-mail, through the 4 million Chinese that by the year 2000 will be on the Internet. And that a withdrawal from this type of engagement would be harmful not only in terms of economic terms but in those who would like less openness for China.
The President will press during the meeting for China to open its markets, for good service in agricultural, as it engages in the sweeping economic reforms Bob mentioned. And we expect the President to discuss several trade issues, including the current negotiations on China's potential membership in the WTO.
Let me just say, at the moment we have had a team on the ground there led by Deputy USTR Richard Fisher, along with Bob Cassidy, and others. Charlene -- Ambassador Barshefsky is on her way and will arrive tomorrow for meetings with her counterpart, Minister Shi.
At this point I think it is fair to say that over the last couple of years there has been progress in some areas, including having independent judicial review of administrative actions, allowing our businesses to be able to bypass -- or commitment with WTO membership -- of a commitment of our firms' ability to bypass the government and deal directly with Chinese businesses and customers, and some significant progress in closing down pirated factories. In fact, they've closed down 64 factories that engage in pirated CDs or CD-ROMs.
All that said, there are still significant and at times very destructive barriers that are complex and confusing, including high tariffs that make it very difficult for our businesses and our workers to have fair access and a fair shot at doing business. Again, we believe that this is -- more openness will be better for both economies. Some of the examples of where there are problems is that they still have average tariff rates on goods of 23 percent, though as Ambassador Barshefsky discusses with them, we'll be looking not just at the across-the-board tariff rate, but at the tariff rate of key areas such as autos and chemicals where the tariffs have been quite higher than that 23, even double that amount.
China's distribution system also is wanting in many ways, not allowing foreign firms to own and manage distribution networks, wholesaling outlets, or warehouses, and has recently issued a ban on direct selling that affects Revlon, Amway, others doing business there.
In agriculture, while we do have a surplus in our trade with China, U.S. farmers still face very high barriers, and despite our '92 agreement, still face nonscientifically-based restrictions on U.S. wheat, citrus fruit exports.
I think as we go forward, we very much want to work with China to bring them into the WTO, but the ball is very much in their court. And as our position has always been, our standard will be whether commercially viable terms will be -- can be reached, and not those that are just politically convenient.
And again, as I said, Charlene arrives tomorrow, and so those talks will be going on not just -- on trade not just when the President arrives, but serious talk over the next several days.
Q Secretary Rubin, can we ask you about -- do you see today's intervention on behalf of Japan sort of like an emergency patch, the first perhaps of a number of efforts, a bail-out, or is this going to do it?
SECRETARY RUBIN: Well, Sam, I would say this. This is something we've been working on for the last few days and thinking through, and there were many paths we could have taken. We spent a lot of time analyzing this and a fair bit of time talking with people at the Fed about it, one thing and another.
The key in Japan in policy. Their problems are economic, and those problems have gone on for a long time. They've built up and increased over time, and the only answer to those questions in any long-run sense is policy. Having said that, their Prime Minister and Finance Minister, as you know, made announcements this morning. I made a subsequent announcement. And I think in doing that, they gave you a sense of their approach and, in a broad sense, their plans going forward. It is in that context, and in that conjunction, that we made a determination to intervene.
Q Well, with all due respect, the Japanese have, over many decades, made promises about opening their markets, about changing their policy, and it hasn't happened.
SECRETARY RUBIN: I think you've got it right. The absolute key -- it isn't always the case, but it is this time -- the absolute key is that the Japanese government take the necessary actions with respect to their economy, on the fiscal side, and as you know, the Diet last night did pass a substantial fiscal program, but if needed, additional fiscal measures, and, most importantly, I would say at this point, appropriate and effective measures with respect to their banking system, though deregulation and opening markets are also very important.
Q Mr. Secretary, if I could follow up on Sam's question. What was the value of the U.S. intervention and what specifically did we ask for from the Japanese in return for that intervention?
SECRETARY RUBIN: We have had a policy of not disclosing the amounts involved in interventions.
Q The traders are saying it's about $2 billion. Is that -- would you steer us away from that, is that --
SECRETARY RUBIN: I used to be a trader. You want me to say it off the record?
Q I don't think you can be off the record in this case.
SECRETARY RUBIN: I suspect that's probably right. I'll stick with what I said before. We have never disclosed the amounts involved in our interventions.
On the second question, the Japanese government has indicated a course of direction an approach, a set of plans, as I said a moment ago, in their statements. And as you know, there were a number of conversations. But the key is exactly -- we just discussed -- the key is what gets done over time on the very difficult issues they face.
Q The sense of my question, though, sir, is was there a quid pro quo? Did we say look, we can help your currency tonight if you can assure us that you will do x, y, and z.
SECRETARY RUBIN: I think I'd really like to stick with what I've said, for a lot of reasons. But let me just say it again and maybe it will be somewhat responsive. Our intervention was in the context of their announcements with respect to plans and approach and a path going forward. And I think these things are very much integrally related, but the key in the final analysis is what they do with respect to dealing with their issues.
Q Do we have a bottomless barrel here? In other words, if we don't see a performance, that economy is so important to Asia, do we have any choice but to keep on bailing them out?
SECRETARY RUBIN: Sam, the issue isn't our intervention. The issue is what they do. The only way the problems in Japan will get solved is through what Japan does. Having said that, as we have said in many occasions before, and I'll just repeat it again, that we will intervene when appropriate and not intervene when it's not appropriate.
Q Is it stable now, Mr. Secretary, the currency situation? Has this had the desired effect?
SECRETARY RUBIN: It's had an effect.
Q Is it stable enough, or do you imagine another intervention in 48 hours?
SECRETARY RUBIN: I'll stick with what I just said. When we deem it to be appropriate to intervene, we will do so. And if we don't deem it to be so, we will not do so.
Q Can I ask something about China?
MR. BERGER: Why don't we do China, we'll go back -- give him a chance to replenish -- you know, since he financed this intervention himself -- (laughter) -- he has to replenish his financial support.
Q As sort of a parallel for the kind of legislative criticism and action that precedes this summit, has the President ever gotten this kind of a send-off before, and does it inhibit what the President will be able to do while he's in China?
MR. BERGER: I don't believe that it will. I continue to believe that there is -- that most members of Congress and most Americans believe that we should be engaged with China, we should be trying to cooperate while we can and we should be trying to press them where we disagree.
Now, people can disagree about the relative priority of one issue over another. Some would say we should spend more time on nonproliferation. Some would say we should spend more time on human rights. Some would say we should spend more time on trade. I think those are legitimate policy issues. We try to make the best balance we can.
But I think most Americans understand that you cannot turn your back on a quarter of the world's population, a country that is growing very rapidly, and, as Secretary Rubin said, will be the largest economy in the world in the not-too-distant future. The Hill is focused on a series of issues involving our satellite policy to China, which we can get into if you'd like, but I think are relatively narrow issues and, again, legitimate for them to look at them. But I think they were decisions that were made very much in the national interests.
Q Sandy, on a related matter, the President is about to enter into another foreign policy confrontation with Congress when he vetoes the Iran sanctions bill. He signed a lot of these bills before, even if he didn't like them -- Helms-Burton, D'Amato. Now he's changing his tack, even in the face of what looks like to be a certain override. Why is he going to veto this one and he went along with all those others?
MR. BERGER: Well, I think it is likely that he will veto this bill. That would certainly be my recommendation to him. I think it's important for him -- I answer that question, Mara, on two levels. Let me start with the bill itself.
I think the bill is totally counterproductive. This is a bill that seeks to gain restraint on Russian cooperation with the Iranian missile program. Over the past few months we've seen significant effort on the part of the Russians, and the emergence in this new government of people who have taken a sense of responsibility for bringing the errant companies under control. We've seen them promulgate a catch-all regulation, which they never had before, which gives them the legal authority. We've seen very strong statements from President Yeltsin on down. So they're moving in the right direction.
Now, what this bill does, is it says, no good deed goes unpunished; that is, we will take those people who are trying to bring this under control and cut their legs out from under them by saying that the response is that America will impose sanctions on them. I think it is a fundamental, profound mistake.
Second of all, I think that there is a sense that we have perhaps over-used -- reacted too quickly with sanctions as a policy response to problems -- mainly because they're not scored by CBO, and therefore it's easier to do them within the context of the balanced budget. But I think we have to look at the more -- with a greater degree of scrutiny in the aggregate to make sure that we're not piling one of these regimes after another and simply undermining America's influence.
But I would say that's a secondary concern. The real reason why I think he ought to veto this bill is I think it will run directly counter to the purpose we share, which is stopping assistance to the Iranian missile problem.
Q What benefits accrue to the U.S. business community from the President's policy of engagement, and what will his message be to U.S. business leaders when he gives an address to them in Shanghai?
MR. BERGER: I think that a policy of engagement with China is of benefit to all Americans. It's a benefit to Americans who have benefitted from tighter Chinese policies on nonproliferation. It's a benefit to Americans who would like to see the nuclear arms race in South Asia reversed, for which we need Chinese cooperation. I think it's a benefit for the Chinese people, for whom we have advocated greater political freedom and human rights.
To the extent that we can open Chinese markets to American companies -- I think there are about 120,000 jobs in particular that are dedicated to -- that are related to the Chinese market. Our exports to China increased 17 percent this year over last year. But there obviously has to be, as Gene pointed out, a good deal more market opening.
Q Mr. Berger, since you've been with the Clinton foreign policy team from the start, would you trace for us how the President's philosophy on dealing with the Chinese leadership has changed since he accused his predecessor of coddling them?
MR. BERGER: Six years have transpired during that -- since that statement. Things have changed in China I think to some degree. I think we are no less assiduous or vigorous in promoting human rights today than the President's advocacy earlier. I think that he reached the conclusion, as did most members of Congress, that the mechanism that we had used, which was threatening to cut off MFN, essentially threatening to sever our economic relationship, was no leverage on human rights. And I would argue that the policy that we have pursued over the past year or so -- past few years -- has in fact produced results.
Since -- just take the past six months. We've seen two prominent dissidents, Wei Jingsheng and Wang Dan, released from prison -- perhaps the two most prominent Chinese dissidents. Bishop Jin, a very prominent religious figure. We've seen the Chinese agree to sign the U.N. Covenant on Civil and Political Rights -- a very significant step because it will involve monitoring by the United Nations and the obligation of the Chinese to report on their progress.
So I think that we're making more progress by strong advocacy and keeping this very high on the agenda than by earlier efforts that perhaps were more clumsy.
Q Is the President going to speak on Tiananmen Square, and if so, where? And will he be as blunt on that as he has been here? Will he be as blunt there as he has been here?
MR. BERGER: I am sure that the President during the trip will speak about the issue of human rights, about generally the question of political freedom. He feels very strongly that China cannot develop unless its people have the freedom to express themselves politically as well as economically. I am sure that he will address the events in Tiananmen Square.
Q When and where will he do this, and how?
MR. BERGER: I don't know that I can tell you when and where. There are a number of places where the President will speak and this will be one of the things he speaks to.
Q Is a specific event or speech dedicated to the question of human rights? Is there any particular event that --
MR. BERGER: He will address human rights more than once, I'm sure.
Q Secretary Rubin, on the decision to intervene, should that be seen as a fundamental shift in the U.S. strong dollar policy? Can you kind of put it in a little more context for us?
SECRETARY RUBIN: The answer to that is no. I think the strong-dollar policy has served us exceedingly well over the past several years and still does. Having said that, we have said for many, many months now that we were deeply concerned -- we shared Japan's concerns and we were also deeply concerned ourselves with respect to the issues of the weak yen and the weak Japanese economy and the impacts that was having in other parts of Asia.
And as you've seen in the last several weeks, the renewed weakness of the yen has had destabilizing effects on the rest of Asia. The actions that were taken and announced both in Japan and the United States today were very much animated by a concern for Asia, the other parts of Asia, but it has nothing to do with our more general policy with respect to the dollar. It has a great deal to do with our concern about the weakness in Japan's economy and the weakness of the yen.
Q Mr. Secretary, you praised China for resisting the devaluation of its renminbi. Could you tell us what sort of pressure the falling yen has put on the renminbi and also, for that matter, on the Hong Kong dollar? And how long can Americans expect the Chinese to resist those kinds of pressures?
SECRETARY RUBIN: We, as I said a bit ago, -- and I think it's a very positive thing -- have over the last couple years developed a good deal of interchange with Chinese economic officials. And in every discussion that we have had with them, including some very recently, they continue to discuss the stability of their currency in terms of their interests and their calculation of their own interests, and I think rightly their own interests.
So I have not seen any indications in discussions that I've had with them of a lessening of that commitment. We'll be seeing them next week, but I have not seen any lessening of that commitment.
Q Mr. Secretary, the statement that you referred to that Prime Minister Hashimoto turned out, all three of the elements that he described in there as the Japanese efforts to revive the economy are things that he has been saying for many years; some of them he said when he was Finance Minister in 1992. Can you tell us very specifically what he agreed to do and on what timetable, beyond these vague generalities, in the course of the conversations that led to this decision?
SECRETARY RUBIN: David, the object of both his statement and the Finance Minister's somewhat longer statement was to set forth -- and to some extent to rearticulate, though I would say putting all together in one place and talking about dropping the convoy system and the rest -- was to some extent a reaffirmation and maybe to some extent a more forceful statement in a cohesive sense than in the past, with respect to where they plan to go forward.
And the point here was to have a statement of approach and a statement of plans in a general sense. We did, as you know, have a number of conversations -- the President with the Prime Minister, myself with the Finance Minister, and Larry Summers with Sakakibara. But I think the sense of all of that is captured in terms of a general sense of approach and plans in those statements. But the key then becomes their actions and taking the very difficult steps that they're going to have to take to deal with the very large challenges they have. And that is what this is all going to be about in the final analysis.
Q Did you send Secretary Summers to Tokyo or did the Japanese invite him?
SECRETARY RUBIN: I would say that it was an idea that developed -- we've had enormous numbers of conversations over the last few days, including a lot over the weekend -- and it was an idea that developed out of conversations that we had together. I wouldn't say it was necessarily the idea of either one of us particularly.
Q What changed your mind on the subject of devaluation. You're pretty much standard that devaluations do not affect solid change over the long term?
SECRETARY RUBIN: Are you talking about intervention?
SECRETARY RUBIN: Oh, nothing has changed my mind about anything. (Laughter.)
Q What convinced you last night to go ahead with this?
SECRETARY RUBIN: That's a different question. What I have said consistently, and it is my strongly held view, that ultimately currencies follow fundamentals. And that is going to be true in Japan as well and Japan has to deal with its fundamental problems.
I've also said at the same time that there are times when it is useful and appropriate to intervene. And we spent the weekend and then again yesterday and last night evaluating various paths that we could possibly have taken. And it was our judgment that the total package that you've seen was the best path to go and that plan of action was put into effect.
Q What was the down side, sir, had we not intervened and done so last night?
SECRETARY RUBIN: I think the question you had to ask yourself was what is the best -- excuse me -- what are all the pluses and minuses of each of the paths in terms of leading to appropriate policy measures in Japan and also creating stability in the interim as those measures are developed and implemented? And it was really that framework. And then you can look at all the various pluses and minuses around that framework.
Q But were we looking at -- and you'll forgive the colorful metaphor -- but were you looking at a train wreck? Two billion dollars, if that's accurate, it's a lot of money. This is a rarely employed technique. I'm wondering why it seemed so imperative.
SECRETARY RUBIN: Well, without going into the specifics of exactly what the pluses and the minuses were, let me just say that there was a lot of technical work, and there was a lot of market judgment, and there was a lot of appraisal of the general situation. The United States is uniquely situated today to try to be helpful in Asia, as we have been over the last -- what is it -- 10 months now or something since this crisis began. And this seemed to us an appropriate way to be helpful in this circumstance.
Q How close is this Asian crisis to profoundly affecting the U.S. economy?
SECRETARY BERGER: You're seeing significant effects in some sectors already, Sam, and that is why, for example, the agricultural community has been so concerned. Something like, if I remember correctly, 40 percent of agricultural exports -- I'm sorry, agricultural production goes to exports and then 40 percent of those go to Asia, and that's why you've had such strong support in both the House and the Senate, from Senators and Representatives from agricultural states, for IMF funding, because of the critical role that IMF funding plays in trying to maintain a world stability.
I can't tell you what's going to happen going forward other than to say that I think the probability of something major, in terms of the crisis, happening is low. But if a major crisis were to develop, then the effects in our nation could be severe. And it's precisely to avoid that, that the United States has exercised its --has taken action in various ways over the last, roughly a year now. And last night is part of that thrust.
Q Where do you see impacts on the U.S. economy already?
SECRETARY RUBIN: I think that you see it -- my recollection -- and you can check me if I'm wrong in the numbers, but I think I'm roughly right -- is that exports for the first quarter on an annualized basis, were deemed -- were thought to be somewhere around $23 billion less than they would have been to the nations in Asia that are in difficulty. And then if you add Japan, it would --I think it was $20billion to $23 billion or something -- you better check my numbers -- and then another $4 or $5 billion to Japan. But the sector I think that -- at least as I understand it -- the sectors that have felt it most strongly are agriculture and then a lot of the high-tech areas -- chips and things of that sort.
MR. SPERLING: And then to the degree that there's an increase in our trade deficit, almost all of that can be tracked by looking at the decrease in exports to non-Japan or -China Asian economies.
Q When the Vice President was in China, and then again when Jiang came here last fall, they were -- the Chinese got the message that if there was attempts to influence U.S. elections it, would be serious, but the investigation is continuing. Since then we've learned about Johnny Chung's testimony saying he took $100,000 from the Chinese to put into the U.S. political process. How does that change this -- what the Chinese were told previously?
MR. BERGER: Well, I mean, I can't comment on the accuracy of the predicate of the question. That's obviously a matter under investigation by the Justice Department.
Q Do you have access to that information if you need it to make your judgment?
MR. BERGER: We've had -- I think we've had access to information that we -- that is relelvant to national security issues. I would expect -- let me say this, when President Jiang was here, when I was in China, when Secretary Albright was in China, we have in each case raised with the Chinese these allegations. They have denied them very vigorously. We have encouraged them to cooperate fully with the Justice Department. And I would expect that we would do the same -- we would do so in the context of this trip, as well.
Q Sandy, there were some discussions with the Chinese about formally joining the missile technolgy regime and some other export control agreements. Do you expect some of those to be signed or reached during the President trip? And how will that affect some of the criticism that's being leveled up on the Hill about missiles and satellite exports?
MR. BERGER: Well, clearly, one of the issues that we are discussing with the Chinese continually is nonproliferation. And I went -- earlier, went through the, I think, rather considerable number of things the Chinese have undertaken and are complying with over the past four or five years. I think an area where further attention is appropriate is in the area of missile technology. They have, back in, I believe, '94, undertaken to comply with the MTCR guidelines, but there is also -- which involves missiles -- but there's also something called the MTCR annex, which is essentially a list of all sorts of components and technologies that could be used in missiles. They have not subscribed particularly to that list. I don't know whether that will happen in connection with this trip; it will be something we talk to them about.
Sometimes we find that the results of these trips with the Chinese happen after we leave. I think that you saw, for example, after Jiang left and went back to China -- the release of Wei Jingsheng, the release of Wang Dan. And so hopefully there will be some things that will happen in connection with the trip, and hopefully there will be some things that will become apparent in the weeks and months thereafter.
Q It's my impression that the Chinese are the ones that wanted this trip moved up in timing. Could you explain to us what they are looking for, what's in it for them, and what specific agreements they'd like from us?
MR. BERGER: Well, I don't know -- I think -- let me tell you from my perspective why this was moved up, at least; I can't speak for them. Ambassador Sasser came in to see me, I think back in the early part of the year, and he said that he thought it would be advantageous for us to move up the summit for a couple of reasons. Number one, there was a certain degree of momentum that came out of the Jiang summit. There was a different kind of mood in the relationship, much more candor.
I find that, for example, when I was just in China talking about human rights. It used to be when you raised human rights with the Chinese, you got a lecture about why it was none of your business. That's no longer the case; they engage. They may not do everything you want them to do -- and basically, he was saying that he thought we should take advantage of that by moving the summit up. He also felt that the summit, as a stand-alone visit as opposed to simply an add-on to the APEC meeting, would be more effective. And I thought his advice made sense and recommended it to the President.
Q The Paula Jones case is widely believed to be the reason -- or at least reported to be the reason the summit was moved up by the United States side. Are you denying that that was any factor in the decision?
MR. BERGER: That was not a factor in my decision to recommend to the President that he move up the trip. And I'm not aware of anything else.
Q You're speaking only for yourself?
MR. BERGER: Yes, but I'm not aware of any other factors. But I can't prove a negative.
Q Sandy, you talked about the lectures the Chinese used to give, but if I remember, Jiang gave precisely that lecture to all of us and to the American people when he was here last October -- I'm sorry, you worry about just tokenism. These were two very high-profile dissidents, but they haven't been followed by others, and the vast majority of dissidents are still in jail, right?
MR. BERGER: A couple of things. Number one, I think that this is not simply about one or two individuals. It has to ultimately move towards more systemic change on the part of China. And it's something that we will encourage them to undertake. As they embrace the rule of law more fully -- as they are doing in some areas of Chinese life -- that rule of law has to be embraced just as strongly and firmly in the area of personal rights and personal liberties.
So we're very pleased that Wei Jingsheng and Wang Dan and Bishop Jin and others have been released. There are others who are less well known. But we don't consider that to be the end of the game, as far as we're concerned. We want to continue to press and push for further change.
Q Will he meet with any dissidents over there?
MR. BERGER: We will be with a broad cross-section of people while we're in China, in small groups and large, and clearly the President will speak his mind and hope and expect others will as well. And we will do and act and say what we think will be most effective to promote the cause of human freedom and human rights.
Q So the answer to that question was no, to Mara's question.
MR. BERGER: No, the answer is not no. I think the answer is that we will take those decisions and act in a way that we think is most effective.
Q Sandy, regarding arms sales to Taiwan, China used to link the proliferation issue with U.S. arms sales to Taiwan. Can you clarify the United States' position on this, arms sales policy to Taiwan? Will there be any change, or will there be any secret deal?
MR. BERGER: No, no secret deal, no change. Our policy with respect to arms sales to Taiwan are dictated by the Taiwan Relations Act, by the communiques, and we will not take any action during this trip that will undermine Taiwan.
END 4:05 P.M. EDTY