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How -- and why -- do you deal with a regime that would deploy its own armed forced to clear peaceful demonstrators from the heart of the capital city?
Doug Paal was a Special Assistant to President George H.W. Bush during the June 4, 1989 Tiananmen Square crackdown and from that position orchestrated the U.S. response. Senior Director Paal explains President Bush's unique personal history with many in the Chinese leadership and how shared anti-Soviet and nonproliferation goals provided a foundation for interacting with the Chinese Communist Party after Tiananmen. Then, in the George W. Bush Administration, he represented the United States on Taiwan and explains how the election of the opposition party there challenged U.S. policy in the region.
James Green: Welcome to the U.S.-China Dialogue Podcast from Georgetown University.
This podcast series explores diplomacy and dialogue between China and the United States during the four decades since normalization of relations in 1979. We'll hear from former ambassadors, Cabinet secretaries, and White House advisors -- who will share how they shaped the course of the most complex relationship in international diplomacy today.
I'm your host, James Green. Today on the podcast, we talk with Douglas Paal.
When the Chinese People's Liberation Army marched into Tiananmen Square on June 4, 1989, it was a shock to many Americans. The Chinese leadership’s decision to use tanks and hardened troops against unarmed demonstrators seemed to go against the tide of history as Communist regimes in Eastern Europe were falling and even the once-mighty Soviet Union beginning to open up.
The U.S. president at the time of the Tiananmen crackdown was George H.W. Bush, who had served as the chief of the U.S. Liaison Office in Beijing earlier in his career, so had a special connection to China and the Chinese leadership. Here's President Bush reacting to those events in Tiananmen Square.
George H.W. Bush (audio): “During the past few days, elements of the Chinese Army have been brutally suppressing popular and peaceful demonstrations in China. There’s been widespread and continuing violence, many casualties, and many deaths. We deplore the decision to use force and I now call upon the Chinese leadership publicly, as I have in private channels, to avoid violence and return to their previous policy of restraint.”
James Green: The crackdown called into question the previous decade of U.S.-China rapprochement, built on a foundation of anti-Soviet collective action and a normalization of China's foreign policy. The senior White House foreign policy official at the heart of how to orchestrate a U.S. response to the crackdown was Doug Paal. Paal was someone who was not surprised that the nationwide protests ended in bloodshed in the spring of 1989. Paal had served as a senior intelligence analyst covering China before joining the Reagan White House, and then served as a Special Assistant to President George H.W. Bush on East Asia.
In our conversation, this Brown and Harvard grad describes the delicate diplomacy before and after Tiananmen. Paal explains the rationale for maintaining lines of communication with the Communist leadership despite U.S. outrage over the civilian deaths around Beijing and the ensuing political clampdown. At the end of our conversation, Paal talks about his service as the top U.S. representative to Taiwan in the George W. Bush administration; he unpacks why Taiwan will remain a critical issue for how the United States will deal with the People's Republic of China for future generations.
Doug, thanks so much for taking time. Before getting to your long career working on Asia policy in government and in the think tank world, I just wanted to ask you at a personal level, you went to Brown, which is my alma mater, at a time before Ira Magaziner was there and kind of changed the-
Doug Paal: Oh, he was there with me, actually.
James Green: I just wonder, you went to Brown, and then Harvard after, first of all, what was the university like then? But then second of all, how did you end up doing East Asian history at a time when maybe that wasn't so popular?
Doug Paal: Well, looking back you may not feel the immediacy of it, but the Vietnam War, the protests against the war, really were the story of my time in university. It was 1965 to 1969, and the US had the initial thrust into Vietnam under Kennedy, and then the souring on the Vietnam War that took place under Johnson. And protests mounted every year. But finally, my last year there, 1970, the huge rallies took place in Providence, and not just Providence, across the country.
So, people were preoccupied with the war. The reason I was there supposedly from '65 to '69 but graduated in '70 was I had interrupt student service from an illness that I suffered. So, I lost a semester. When you do that and you're of draft age, you had discontinuous education and therefore you're draftable, you can be pulled out of school. And so, my personal level of interest went way up. And what were we doing in Vietnam? Why were we there?
So, I started packing courses, there was a History of Southeast Asian Studies taught by a former diplomat and longer professor from Cornell background, Lee Williams, on Southeast Asia. But his own background really was China too. And so, you start talking to him about Southeast Asia and he kinda gravitates you back. And the war was, in many ways justified in terms of preventing domino effect of the spread of Chinese communism through Southeast Asia. I said, let's learn more about China. Then I started taking more courses on that and language, as well. Had some good teachers along the way. And that's where my interest really took off.
James Green: Fascinating. So then, you graduated, moved on to graduate school, and then went to go work for the U.S. government.
Doug Paal: Well, I was yanked out of graduate school to be drafted. And in preference to being drafted I joined the Navy, went to the officer's candidate school. The Navy treated me very well. I went off to Vietnam serviced out of a ship based in Yokosuka, Japan, but on the coast of China, and did funny things. I remember one of my favorite episodes was, we were down there shortly after Kissinger had met with the North Vietnamese in Paris a few times. And just on the eve of the elections in 1974, the midterms, he announced that we had “peace at hand.” Actually peace wasn't really immediately at hand, but it was useful politically at the time.
And we were told to make nice to the Chinese ships that were coming down to supply the North Vietnamese to keep the war going. So, one of my jobs was to pull alongside with our ship, a Chinese ship, and say, "By the way we see you're offloading stuff into Vietnam. We mean you no harm. President Nixon wants to have a good relationship with Premier Zhou,” blah blah blah. But we're gonna be firing shells over your ship to try to destroy the things you're offloading. But please excuse us as we do so."
James Green: Wow.
Doug Paal: (laughs)
James Green: Fascinating. And so, what year was that?
Doug Paal: That was 1974.
James Green: So really quite towards the end of the regime. fascinating. And then from there, back to graduate school-
Doug Paal: Back to graduate school. Yes, yes. And in graduate school I was married to a foreign service officer who was based out of Washington. And we had to figure out what our respective careers might be. Then, and I think still shamefully today, people in the government have a hard time making tandem careers work. And we were trying to make it work. And then I was approached by CIA, there was an opening that had been created, in analysis at CIA. They needed to fill it.
There'd been a longstanding fight at CIA between those who believed the Sino–Soviet split was a deception by the two adversaries of the United States, and those who believed that there was a real Sino–Soviet split and there was an opportunity to seize there. This was, you know this is as late as 1976 they were still having this fight.
James Green: Wow, even that late there was that debate.
Doug Paal: It's hard to believe looking back, if you're a China watcher, that that was still going on. Anyway, they needed someone to come in who was not part of that debate. They picked me and I went in. And I was kind of unaware of the environment I was going into, but that's where I got started doing day-to-day analysis on what's happening on Chinese foreign policy and Chinese leadership politics.
James Green: Well, one of the things I wanted to ask you about was in the mid '80s, was the kind of pre-Tiananmen crackdown and then the post-Tiananmen crackdown. The pre-Tiananmen crackdown and kind of preparations for visits then. The ones that stick in my mind is Yang Shangkun who came in 1987. Could you just talk a little bit about who he was, and why he as coming, and what your role is in that visit?
Doug Paal: Well it's interesting you mention that one, 'cause I keep a photo of it on my office wall. It was such an interesting visit. Yang came and he had a delegation of people with him, all of whom remained very important figures for the next fifteen years. There's a lot of continuity in the Chinese system, generally speaking. And so, these became the basis for longstanding relationships both, sometimes amicable, and sometimes adversarial, but still, we knew each other pretty well at the end of all those years.
And Yang brought that team along. Vice President Bush was going to be the one who really laid his hands on the visit, 'cause he was so interested in China on his own. And he took over the then-Presidential yacht, Sequoia, and invited Yang, an army officer, to come spend time on the boat. And on a personal level, Chinese military, with army backgrounds, tend to do very poorly on things that float. They tend to get seasick, and the like. And they quite worried about that.
But Yang got on the boat, they got over their trepidation's, the later President, then Vice President Bush, laid on the charm very heavily, very friendly. And it opened everybody up. And Yang went on to describe his revolutionary history in intimate detail over the dinner table, among all those people.
Unfortunately, the only people at the dinner table were not expert in Chinese Party history. So, we got secondhand descriptions, that were completely misleading, about what Yang had said. Now I wish we were more technically proficient and had put some microphones under the table, but we didn't do that. It was a social occasion. That was a missed opportunity to understand a very important part of Chinese revolutionary history.
James Green: Hmm. Wow. And so, from just stepping back and explaining who Yang Shangkun was, and why he was coming-
Doug Paal: Well Yang was very key in keeping the PLA behind Deng Xiaoping. Later on, he and Deng Xiaoping had a breakdown. He became the nominal President of China and he and his brother, Yang Baibing, I believe, wanted to apparently, according to the allegations later leveled against them, had tried to manipulate behind the scenes against the plans that Deng Xiaoping had for Party leadership succession. And he was maneuvering around Beijing.
And Jiang Zemin and others came in to Deng Xiaoping and reported this to him. And it led to a big cleaning out of Yang's office in Zhongnanhai and at the Central Military Commission. And Yang was then history. But he went a long way before ambition got the better of him.
James Green: Fascinating. So, in the run up to 1989, Yang Shangkun comes, as you say Vice President Bush hosts, having served as the head of Liaison Office in Beijing, was seen as kind of an old friend of China. And so, I'm sure they're very pleased to kind of have that interaction.
Doug Paal: Well, you know, President Bush thought it was a good relationship. And when he became President in early '89, there was going to be an early trip in his first year to Japan because the Emperor Hirohito had passed away. And they had saved the services so that the the new American President could come and attend as part of the high-profile US-Japan relationship.
And President Bush wanted, on top of that, to have one last chance to go see, as he put it, "my old friend Deng Xiaoping," who was already up into his eighties and was in the process of relinquishing power gradually. And so, he arranged to also after the funeral to go on to Beijing. And President Bush, in his usual way, he wanted to have a big event to mark the occasion. He wanted to have a rodeo-themed, him being from Texas, a rodeo-themed banquet and invite all sorts of people. And Yang Shangkun would be his counterpart, his major guest at the dinner.
James Green: And just stepping back, and your role at that moment, you were the person in charge of-
Doug Paal: Well, I was at the NSC, but I was not put in charge of that visit.
Because we had a new National Security Council leadership, they wanted a guy in my office, my boss, Karl Jackson, to take personal responsibility. So, I was put back to the second line on things like, who do you invite to the dinner, and stuff like that.
James Green: Got it.
Doug Paal: And then the dinner invitations went out, and the Embassy had recommended, and no one had objected, to including on the list a physicist named Fang Lizhi who was, for those who don't have the context, he was the Chinese Sakharov. He was the man who was the dissident intellectual leader in China. And he was invited to the dinner. And the Chinese learned of that and were very unhappy. And they had come to the decision that if Fang Lizhi was going to be there, Yang Shangkun was not going to attend the dinner. You don't attend banquets honoring your adversaries is the thinking.
And so, Fang Lizhi was on his way and all kinds of interference was thrown up by Chinese security forces to make sure he never got there. And when they were sure he wouldn't get there, then Yang would deign to show up for the barbecue. I mean if it weren't so serious, you'd say it was like a Hollywood comedy of errors.
In the end, Fang was rejected from the party by the authorities. He came to the U.S. residence of the ambassador looking for safety. He was turned away at first, and then the U.S. went out and found him and brought him back. And he became a long-term house guest. He became a refugee inside the Embassy residence for some months, as we went through a tough period leading up to and through the Tiananmen incident in June 1989.
James Green: So, on Tiananmen, as the events unfolded and students, and then others, came to the Square, and then the Party had a couple of internal decisions as to how to brand these events. What was your role back in Washington, and who were in communication with in the field, but then also here in DC?
Doug Paal: Well, it was interesting, I went out to do the advance for President Bush's visit to Beijing. Advance work is making sure there's a blood supply, and where the local hospitals are, and who's gonna be at the meetings. It's very routine stuff. And in the process of which, I was invited by one of the officers at the Embassy with whom I had a longstanding relationship, to take a long walk outside somewhere where we would not be overheard.
And, this person very foresightedly said, as an economic analyst at the Embassy, he'd been out in the factories and he said the country was seething with feelings of exploitation and anti-corruption. And that person said to me at the time, "This city is about to blow up."
James Green: And this is early in 1989?
Doug Paal: This is late February 1989.
And so, I came back to Washington and I filed a report on that, and said, "There's some pretty turbulent stuff going on out there. And it's not being reported by the Embassy formally."
James Green: Hmm. Interesting.
Doug Paal: So, I thought that was a tremendous insight. I probably should have done more with it, but I didn't. And planning went ahead to have the President go there. And the crowds were just assembling as President Bush arrived. And, because the premise for the diplomat activity that year was that the new leader in Russia, Gorbachev, had agreed to resolve the so-called “three obstacles” to better China-Soviet relations. So, he pulled his fleet out of Vietnam. He pulled his forces out of Mongolia and off the border. And the resolved some Afghanistan activities that China had objected to, the invasion of Afghanistan.
And so, Deng Xiaoping was prepared to receive Gorbachev in Beijing. The world press was coming to Beijing, 'cause they all wanted to cover this major event of the reduction in tensions between Russia and China. And when President Bush got to Beijing, Deng Xiaoping wanted a very clear message to get across, that whatever may happen to resolve these obstacles between Russia and, China, that it was not going to lead to some new entente or alliance between those two against the U.S.
James Green: That is, the U.S.-China relationship would remain strong even as the Sino–Soviet relationship got closer.
Doug Paal: And so, Deng Xiaoping went into a long discussion of the history of Russian-Chinese relations, and how Russia had dismembered the northeastern parts of China, seized territory from Mongolia, and had left a long legacy of unresolved issues that would not go away just because they've taken care of the three international issues that had been on China's list of obstacles to improve formal relations with Moscow.
James Green: This is what Deng Xiaoping had told U.S. President Bush-
Doug Paal: He told Bush this, yes.
James Green: ...that even though relations with Moscow were warming, from Beijing's point of view, they were still a need for a close relationship with the U.S.?
Doug Paal: That was correct, yes.
James Green: And so, students filled the Square. I'm back to April, May, June 1989. there was a decision of the Party leadership to declare the protests counterrevolutionary, that didn't seem to stop the protests; in some ways seemed to kind of egg them on. What was the level of interest back here in Washington, and how did you see your role in kind of trying to figure out what U.S. policy should be?
Doug Paal: Well, you mentioned the students, but I think having students protest is something that's not really new in China. There's that's kind of a natural outlet in Chinese politics that students will be given a little more leeway to express themselves and they'll sober up when they get older, that sort of thing.
But what really disturbed the Communist Party was that the workers were coming out. And it was that same thread that I got from the officer in the Embassy earlier, which is, people on the shop floors of China felt they were being exploited. You know, properties were being no longer assigned, they were being rented to people. And to pick up your key for a rental you have to put five $100 bills in the hands of the official who had the key. So petty corruption was really irritating a lot of people in Beijing.
Moreover, there was some inflation, a freeing up of market prices had allowed a lot of ordinary consumables to increase tremendously in price or become unavailable in the market. And so, there's a seething resentment there. And it's when those people came to the Square and joined with the students, that the Party got nervous and started to move towards declaring it a counterrevolutionary movement, and then raising the stakes and the tensions very high for this.
We were watching it from the NSC point of view, and through the US intelligence community, very closely, observing the military movements. There were all sorts of counterindications that Beijing military district commander earlier on said that he did not want to put armed troops against the people of Beijing. He was removed, as you would expect.
Then, Deng Xiaoping appealed to the commanders in the military districts outside Beijing to send troops. And we started seeing flights, and trainloads, and truckloads of troops coming. And each commander around the rest of China knew that this was a time to show his patriotism or his loyalty to Deng Xiaoping. So, when they got the message that they had to send forces, they did.
And it became a kind of loyalty test inside the Communist Party. The Party split dramatically. A relatively small group supported the premier, Zhao Ziyang, who had been a kind of reformist figure, but who, in those reforms, had allowed these price increases and other things that were feeding discontent. So, even those who wanted the reforms were feeling he wasn't doing the job as well as he could. So, his own coalition wasn't as strongly backing him as would have been the case.
And then he was up against what they call the, the “Eight Worthies” or the “Eight Sages.” There are eight old members of the Party who would meet with Deng Xiaoping at his residence. Not in formal party meetings, but as keepers of the flame of the original revolution. And they were very conservative, and very much in favor of declaring the movement on the streets to be counterrevolutionary and taking military action.
And when, finally, Zhao Ziyang, in a conversation with Gorbachev, allowed that all of us could see, to be said publicly, or at least in diplomatic conversation, that in fact Deng Xiaoping was in charge and he was not in charge as the Premier of the country. Then, that was considered an act of disloyalty and became the pretext for him to be placed into long-term house arrest. And then the policy was turned over to, Premier Li Peng, who was prepared to take a very hardline approach. He declared martial law for Beijing, and the rest was the unfolding of history.
James Green: Right. And you had mentioned Fang Lizhi coming to the ambassador's residence and being a long-term resident there at this time. I know there was a fair amount of diplomatic effort to try to resolve that.
Doug Paal: The Fang Lizhi case is…American embassy residences are not designed to have long term guests of dissidents. The famous one was Cardinal Mindszenty in Budapest, and he was there for something like thirty years. And it was always a bone in the throat of U.S. relations with Hungary, certainly during the period when they were part of the Soviet Empire.
And Fang Lizhi was with our embassy. And our goal was to get him out safely as soon as possible. We had a change of ambassadors from Winston Lord to James Lilley. Jim Lilley was personally close to President Bush, had a lot of trust from President Bush towards Jim. Jim was a very experienced case officer from the CIA over many years, imaginative guy who knew China well, raised in China, spoke good Chinese.
Doug Paal: And, in many ways, given the hand that was dealt him as the new ambassador there, probably couldn't have asked for a better guy to be on. Plus, during the actual events of Tiananmen, he really rallied the Embassy forces to feel that someone was taking care of them. And when they occasionally even under strafing gun fire.
James Green: Right.
Doug Paal: And certainly, felt confined on the streets of China, in their homes. So he was a great moral leader in that. But he was also very clever at trying to find ways to get Fang Lizhi out of the country without losing our dignity. And he started issuing reports, and we've never really understood how valid they were, that Fang was experiencing cardiac difficulties. We made sure the media found out that he had heart problems.
And this created more global sympathy for him. Eventually, Jim was able to arrange, during a very brief window of tolerance from the Chinese leadership, for Fang to get on a plane and go off to the U.K. And there were some terms for this, like he wouldn't criticize the U.S., et cetera, or wouldn't criticize his Chinese hosts. But those were all, you know, clearly just face-saving terms.
And they were gonna be taken out of the Embassy, to the airport, and gotten out of China as fast as possible, before that window of tolerance closed. But even as he was leaving, we were able to detect that people who opposed his exile from China, were trying to stop the car from getting to the airport.
So, it was a Perils of Pauline kind of chase, right to the airport. But Lilley succeeded in captaining that effort successfully and getting Fang Lizhi out. Of course, when Fang landed in- in the U.K., he immediately denounced President Bush. As this is often been our case. It was not a generous act that was well paid with gratitude.
James Green: So, the troops march into downtown Beijing June 3rd, June 4th. Mop-up operations, as you alluded to, gunfire, some of which ended up towards residences where we had diplomats and there were other diplomats living. June 5th, you come into the office, what are you trying to do at that moment?
Doug Paal: Well, the first thing we did was, we called an interagency meeting ask our legal advisors: what does the law require under these circumstances? And then to ask our people in relevant political jobs, this is the policy level, assistant secretary level, what do we recommend to our bosses as the way forward? As you can imagine, the Sunday talk shows were just full of “tear up everything we've ever done with China.”
And President Bush had a very strong view that the relationship that had been built up in adverse times had served American interests, and it shouldn't just be cast away, that we had to find an appropriate way to express American unhappiness with what happened, but at the same time not throw the baby out with the bath water, to use a trite phrase.
And so, we had an interagency meeting on the 5th, I believe it's the 5th, not the 6th, and the first thing that happened is the representative of the Department of Defense said, "We are willing surrender our defense relationship." It was the PLA, it was the instrument of suppression on the streets of Beijing, and the appropriate way to respond to that is to end those programs that we were talking about a few minutes ago, the Peace Pearl, and other cooperative programs.
Now some of those we would like to have continued, but this was sacrificed right away to try to deal with the heat felt from Congress, the media, public opinion about how China had disappointed our hopes for a more reformist and tolerant country. And so, that was the first step. And then over the ensuing months, over the prior ten years of normal relations with China, starting with the Carter administration, they worked very hard to build interaction activities between every American institution and every Chinese counterpart, from the National Institutes of Health, to the Defense Department, to Commerce Department, to Education.
And everyone had a budget for that activity, small, but it was symbolic. Well, the next eight, nine months were spent losing those budgets in reviews in committees of Congress. And so, what was a fairly rich, superficially rich, array of arrangements between the U.S. and China were one-by-one peeled back 'till we had almost nothing. And so, bureaucratically, this was the beginning of a significant build down of the U.S.-China relationship. Much more so than we've seen so far in under the Trump administration, which has been also taking a very strong ax to existing arrangements.
James Green: And under that cloud, what was the Chinese efforts with the United States? What was China looking for, and what were their interactions like? You must have interacted with their ambassador here?
Doug Paal: No. We were going to see the ambassador saying, "Look, we have no more channels, nobody's talking to anybody. We can't get people to answer phones. But I came to your house to ask you, what's going on? How can we do better on this?" And he said, "Everything depends on the eight old men in Beijing. And they're not interested."
James Green: Wow.
Doug Paal: "They're not interested in trying to build relations. And so, we don't have anything to work with." President Bush has famously sent Brent Scowcroft, his National Security Advisor, and Deputy Secretary of State Larry Eagleburger to China a couple weeks after Tiananmen to say, "Guys, you Chinese, you Deng Xiaoping, have interfered in our internal relations. We were kinda getting along with you, but you had this event. We didn't create this event, you did. Give us some way out of this, release some of these people you've arrested, lower the guard, stop jamming Voice of America, do some things that would be important."
And that visit didn't really accomplish much except to make the Chinese realize that Bush was not their enemy, that there may be something to work with. And then not much happened after that. Subsequently, Richard Nixon, together with an advisor to Jimmy Carter, Mike Oxenberg, went off to China, I think it was September of '89, and said-
James Green: That sounds right.
Doug Paal: “What can we do to start putting this back together? I, Richard Nixon, have invested a lot in this relationship, and here's this guy from Jimmy Carter who normalized relations, how can we get things on a more solid base?” And as I recall, Deng Xiaoping said, "Look, we want to restore the relationship as much as possible. And here is the basis for a deal where you will help to re-stimulate investment in China, and normal commercial relations," which were in peril because we had annual reviews of our trade status between China and the U.S.
And China would meet our concerns on, in prisoners, VOA, and stuff like that. That came back, it was reported to President Bush. And he said, "Okay. I want Brent Scowcroft and Larry Eagleburger to go back and see what they can work out. So, in December-
James Green: So, a second-
Doug Paal: A second trip. This one was not kept secret at the time. And they went into China. I was with them. And we had long talks with Li Peng and Jiang Zemin who had been put in place, plus Deng Xiaoping. And the message was, “yes we're gonna start to meet these concerns on both sides.” And it seemed to have been we had an agreement on a number of steps that would be taken. And over time the more steps taken, the more confidence we could rebuild, in each other. And the first steps were to start with prisoners and Voice of America jamming, as I recall.
And then, right after we got back to the United States, the security authorities in Romania arrested, and then executed, the then-dictator of Romania, Ceaușescu, and his wife. The eight old men in Beijing saw the film of the machine gunning of those two leaders, and they put themselves in a similar position, and things really hardened fast. And all of the communication links, and the promises that had been made just weeks before disappeared. And we were reduced to really no communications between the two sides.
James Green: Wow. And then, I think in about '91 is when Secretary Baker makes his trip to China?
Doug Paal: Right. Baker was going out to the, I think it was the APEC meetings. And it seemed odd that at this point we still had not had any, you know ... Baker and Bush had announced there would be no part of the initial reaction to Tiananmen, we would cease official delegations to China. But it seemed that we would go so long, we have to at some point resume more normal relations. And I sent a message, or a memo to the President through Brent Scowcroft, and said, "Maybe we should take advantage of Jim Baker going out there to make this happen." And I'm confident that Secretary Baker was not happy, that he was the first to go in there. And I was sent along with him to make sure I understood how unhappy he was.
But he did what he was asked to do by his boss, the President, which was to be the first to go back into China. And to try to establish some basis that had been lost for the previous two years. And that was quite a dramatic trip, flying in. There had been a considerable amount of discussion among people from State Department, and on the ground with the Embassy, over links that probably could be observed by the Chinese, that we ought to have Baker meet with some dissidents at the Embassy, much as was normally done in Moscow at the residence with Russian dissidents.
But the Chinese, intolerance for that was a lot higher than the Russian intolerance. I remember as we landed the aircraft at the official airport and went into Beijing, I think there was a PLA trooper about every nine meters along the way. Completely unnecessary show of force. When we were at the state guest house between meetings, I went off to a marketplace, and someone-
James Green: So, did you guys stay at the Diaoyutai state guest house?
Doug Paal: We stayed at the Diaoyutai state guest house.
James Green: Which is the state guest house in the west side of Beijing often used for foreign delegations.
Doug Paal: Right. And that's where you have your meetings and things, or many of the meetings.
And, I went off to the Dongfang market, which was still in existence back then. And every poor peasant who wanted to come up and talk to me, try to sell me a stone or something, was carted off by the police 'because they were so afraid somebody would somehow meet someone they shouldn't meet out on the streets. It was a very intense period.
It led to a meeting between Secretary Baker and…We were trying to find international issues of common concern that would provide some basis, and Baker being the Secretary of State, had broad ranging concerns about the Middle East and all. China had been upsetting us because it was selling contracts to sell missiles to Iraq and Iran, and we wanted to get them to top. And eventually it actually worked as a policy.
But the first real senior serious engagement on this was Baker in the meeting room with Premier Li Peng. And it had all been arranged in advance that Li Peng would say certain words, and it meant that they were not gonna sell these missiles anymore. But in the actual meeting he just couldn't bring himself to say it. And the different Vice Ministers and others would pop up and say, "What the Premier meant to have said was, the following." And Baker was getting more and more impatient. I loved it. He's a terrific negotiator, very admirable figure. And I remember him giving the signal to start the engines on the airplane, I'm outta here. And suddenly Li Peng had a change of-
James Green: This is in the middle of the meeting?
Doug Paal: In the middle of the meeting (laughs).
James Green: He was clearly frustrated. For those who haven't been, can you just describe what a meeting looks like with the Premier?
Doug Paal: Well it's, these long banquettes with chairs set up. And they tend not to look you in eye. They have papers in front of them, which they prefer to stare at. If not that, they blankly look off into the distance. So, it's an extra-human kind of engagement, especially in those days. It's a little better now, but it's still essentially the same format. The chairs are much more comfortable these days 'cause there's more money in China to buy better chairs.
But in those days that was a very cold meeting. It was a lot of people in the room, because there are a lot of equities at stake, and it was the first chance really anybody had had to meet at this level in a long time. So, they all wanted to be there and do their part. But Li Peng was especially a cold and difficult individual. That was his calling card in the Chinese system, he was a son of a bitch. And, that's what he played.
James Green: And so, in this meeting, Baker signals that he wants the engines to be turned on. And you guys are considering how to get straight from the meeting to the airport.
Doug Paal: Right.
James Green: And then, somehow Li Peng gets the hint?
Doug Paal: And then Li Peng got the hint, and he said, okay here are the words. And in the end, they stopped selling those missiles. And we talked earlier about Yang Shangkun. Yang Shangkun and his family were, we believe, really profiting from these sales. Lots of the children of the elite in Beijing were involved in these overseas military sales, 'cause it was a logical place for their parents to insert them to become traders of official goods. And so that was the case. And this had been a big issue for us. We were trying to keep the levels of violence in the Middle East from starting to threaten Israel, Saudi Arabia, and others, with these missile capabilities. And in fact, it was successful.
James Green: And, on that, what do you think made it successful? The constellation of China wanting to get in the good graces of the international community, their concern about what was happening to the PLA becoming less professional, wanting to please the United States in some way? What kind of combination of things do you think worked?
Doug Paal: Well, I think you've touched on two of them, I mean the theory about PLA being less professional, that may have been a concern, but it didn't come through to us. I think the embarrassment of officials having their kids identified really hurt them, their international reputation. 'Cause it had fed back in the Chinese system, people were mumbling about profiteering by the elite who was supposed to be serving the people, not serving themselves.
And also, I think that they gradually bought into the notion that they should not be supporting Iranian moves towards nuclear capabilities, chemical weapons for these people. For a few years, during the '80s, it as a tremendous profit source. The Iran-Iraq war allowed China to feed stock into both places and make good money of it. But it turned out that would have repercussions on other interests. And I think, certainly in the case of Deng Xiaoping, he was persuaded that the international cost to China wasn't worth the short-term profit. Even though even members of his family were profiting from this trade.
James Green: Fascinating. So, then Deng has his Southern tour in '92 and reform moves forward. You’re at the end of your time at the White House, how were U.S.-China relations as you left there?
Doug Paal: Well, we were leaving the White House because Bill Clinton had defeated Bush, and he had done that, among other things, by saying that he was not gonna coddle the butchers of Beijing. And when he came into office, he announced a policy of no trading with China until they released political prisoners, which was an ill-advised choice of policies, because it was unlikely to be successful.
And that given the pressures of American business interests not to be excluded from the Chinese market, that it was not sustainable, and proved not sustainable 14 months later, or 15 months later when President Clinton had to reverse himself. Not a proud moment, and should never have been put in that position by the people who advised him on that policy, at the time, as many of us said.
But going out of office, it was all basically a downer. There were really not much. Chinese were expecting the Clinton people to come in, and they were hoping that like previous presidents, and certainly Reagan was a good example of this, on the campaign trail you speak tough rhetoric, but when you get into office you have to take into account pragmatic considerations. And China was looking for signs for pragmatism from the Clinton administration and finding few. And so, it was a low period.
James Green: Wow. Excellent point. I wonder if we can just move forward to your time in the Bush administration, when you went to Taiwan to be the Director of AIT. First, could you just explain what AIT is-
Doug Paal: Sure, sure.
James Green: ...and then, could you explain how you ended up out there? At the time, you might not recall, I was on detail to the NSC and brought you in for a meeting with National Security Advisor Rice as a kind of farewell for her giving you your marching orders as it were-
Doug Paal: Yeah.
James Green: ...or really a catch up moment before you went off to Taipei. But could you just explain kind of what AIT is, and then what your role was going out there?
Doug Paal: Well, the American Institute in Taiwan, AIT, was created by an act of Congress, with some conspiracy from the Carter administration, but not a lot, in 1979, to make sure that the substantive relations and the symbolic relations between the people of Taiwan and the United States were not lost in the rush to normalize relations with the mainland.
The Carter administration had submitted some draft legislation, but I have to give a lot of credit to members of Congress who took it much more seriously, and really wanted to institutionalize and to make sure those agreements signed in the past as treaties between states would continue to be enforced even though we no longer recognized Taipei as the capital of a separate state.
And so, the AIT was a corporate entity created in Virginia that was supposed to be the representative of the US. And its budget would come from the State Department. So, it was still connected to the government, and Congress still had a finger on the pulse, but it had the fig leaf of separation from the government that this corporate structure had.
And we had a succession of people in those jobs as Director of AIT over the years. We moved our facilities from the Embassy proper to an old officer's club that was being repurposed as the AIT quarters. And everybody there was forced to resign from the government in the early days. And the first people who did this were very brave, because they lost all their pension rights and things, but they were loyal to service. And went in and tried to make the best of it.
And eventually Congress stepped in with some guidance from different administrations, to try to make whole the people who had sacrificed in the early days, and to make it more routine for people to be assigned to Taipei. And over time, very gradually, always with a lot of resistance internally and externally, the functions of AIT have become more and more like a normal embassy. All the while maintaining this fig leaf that it's somehow not official.
James Green: I wonder, before going to your experience of heading AIT and working with the Chen Shui-bian administration and trying to advance US interests. Before that, could you just kind of compare the politics and interaction of a society like Taiwan, which has this Leninist background under the KMT and yet, as you say, under the DPP, became much more pluralistic. How would you compare that kind of interaction with the interaction with the communists in Beijing, and those goals, and their method of dealing with the United States?
Doug Paal: Well, it's hard to describe in a few words. There are many complementarities and many big distinctions. The two KMT leaders of Guomindang nationalist leaders of the late '90s, early 2000s, were first Lee Teng-hui who was a native Taiwanese, and educated at Cornell University, and Lien Chan, who went to the University of Chicago for his Ph.D. and was also a native Taiwanese.
But they had absorbed many of the Leninist characteristics of the party structure in order to rise in the party. And so, you can never draw a really clear line between how they operated and how the people on the mainland operated. The DPP is much more street driven, much more movement driven, more volatile. A good rally, or a good opposition action, or a defeat in some local election can really have a huge impact on the pecking order within the Minjindang. Whereas the KMT just doesn't seem to change no matter what happens, because they've got their Leninist structure, and the guy at the top controls the money, he controls the jobs, and keeps things going.
So, they really are two different cultures competing for public attention.
James Green: Right. And so, you get to Taipei, and how did you see your role as advancing US interests, and then Chen Shui-bian's in power, how did that relationship work?
Doug Paal: Well, in the first months of Chen Shui-bian's time in office, it should be said that, he got the nomination to be President because his own party thought he could not possibly win. Because the KMT had such a dominant position in local governments, they controlled the purse strings for all sorts of neighborhoods around, and they also paid money to people to vote in those days. The zoulufei, the walking around money.
And so, the DPP didn't think they had a chance to win, so they thought they'd sacrifice Chen Shui-bian, and then the better candidate would have a chance later. But nobody had bet on the fact that KMT would split, and James Soong, Song Chuyu, had decided he was gonna run against Lien Chan. And so, when they had the final vote, Chen Shui-bian won with only 37% of the total vote.
James Green: And so, Lien Chan was the Nationalist, the KMT nominee.
Doug Paal: Right.
James Green: And James Soong had split apart from the party.
Doug Paal: Yeah. He had been the Governor of Taiwan province, but he had been a popular Governor of Taiwan province, handing out goodies, and building schools, and things. And so, they split the pro-KMT Nationalist vote, and Chen Shui-bian was able to win with a low plurality. And so, coming into office like that, he was very amenable to conversations with our representative, at that time it was Ray Burkhart, was a AIT representative. And he had free access to Chen Shui-bian and his key people.
And the first test of a new President in Taiwan, especially one coming from the opposition party, was what would he say at his inaugural ceremony? What would be the themes that would be signaling to Taiwan people, to the United States as their major patron, and to China as their major adversary for managing those complex relationships?
And he was very amenable to suggestions on the speech. Among the phrases he included in his speech was talking about a “future One China.” For China the notion that One China, not Two Chinas, not Taipei and Beijing, but One China is out there somewhere in the future, it keeps them in the game. They're willing to play along if you don't reject the notion of One China. If you talk about Taiwan independence, or Two Chinas, then you lose them and they become more agitated, the nationalist sentiment rises in China, and leaders are tested by how much they oppose that.
And so, not to test the leader, Chen Shui-bian accepted that he would put this phrase, "A future One China," in there. And in other ways over the following year he was fairly careful. He brought in former Nationalist ministers and military people to staff his government. That was a good thing for continuity of management. He didn't have a deep bench of professional bureaucrats and minister-type political people to bring into office. So, it served his interest, but it also sent a signal to the US and to China that there was more continuity than change, and therefore you don't have to get too upset about this election. That was the first year.
But the sad thing is that China was still in a bad mood about all of this. They had unwisely, in 1996, in opposing Lee Teng-hui's election, and in 2000, opposing Chen Shui-bian's election, had resorted to threats and intimidation, public threats and intimidation, which had the counterproductive effect on Taiwan voters of annealing their support for the person China was attacking. They had not unlearned that lesson by 2001, 2002. And so, China was still not seizing the opportunities that had been put in front of them by the future One China phraseology that Chen Shui-bian was willing to give them.
James Green: You're saying that first year of the Chen Shui-bian administration?
Doug Paal: That first year, China just didn't show any give at all. And for a leader in Taipei, why should I keep doing this if it's not gonna reward me any?
James Green: A democratically elected leader who has constituents.
Doug Paal: Right, who's gotta go on to other elections all the time.
And so, as it happens, I arrived in July of 2002. And the first weekend I was there, Chen Shui-bian decided he wasn't gonna play the game along with the Americans anymore, he was gonna start stirring public sentiment up against China. And he gave a speech which talked about China and Taiwan being on opposite sides. And it kind of surprised us. We didn't see it coming. We learned that virtually every Saturday there would be a rally somewhere, and Chen Shui-bian would go to the rally, and make another surprising statement without telling us in advance.
So, a lot of my job in the first few months there was to try to reestablish the principle of no surprises. If you're gonna do something, at least let us know in advance so I don't have to get a call from the White House saying, "What the hell was that all about?" when I get up on a Sunday morning. And, so that was a big part of the problem.
They always respected the US relationship. They all had some connection. Chen Shui-bian was not educated in the U.S., but many of the people around him were. And they cared what the US thought. They had friends in the U.S. Congress and elsewhere, whom they wanted to stay on the right side of. And, President George W. Bush had very early on signaled that he was gonna be the friendliest President to Taiwan in quite a few years and he meant it.
And he felt that he was somehow being let down by Chen Shui-bian, that it had been very personal. And this got worse over the time I was there because Chen decided that, for domestic political purposes, picking fights with China was better for him than to make nice to China. China, in the process, went through an evolution and became less hostile and threatening, but it was hard to notice from Taipei. It was a very gradual process.
James Green: So, when you left Taipei, what was your feeling? I mean it was a difficult relationship, the U.S.-Taiwan relationship, during your tenure there. You made, amazing efforts at kind of trying to bridge that. When you left, what was your feeling?
Doug Paal: Well, it was very much a job. When I arrived in Taipei, we really didn't report back. I mean, it was an outpost.
James Green: Mm-hmm (affirmative).
Doug Paal: We did not report back to Washington what was going on in because we didn't think anybody was interested. The major American and other foreign media had kind of left. Most of them felt it was better to put someone in Shanghai or Beijing to report on what was happening in China. And they would parachute in to Taipei occasionally before an election, and talk to a couple sources, and report thinly on what was happening.
So, I felt it was really important to sort of lift the level of understanding. So, we really pumped up our reporting of what was in the Taiwan media, and pumped up our reporting of contacts with political and other figures, so that people would get a sense of the stakes in Taiwan back home. That was a major accomplishment; not the sort of thing that ever gets cited in a history book, but I felt the difference. And I hope my successors would try to do that. They were not as committed to it as I was, but they didn't have to deal with the critical transformation that I had to deal with, where we were really in the dark about Taiwan for the most part in Washington.
And we've lifted the level of it now. We're still, there's only one major media that has a reporter in Taipei today, and that's the Financial Times, not an American newspaper. And the attention to Taiwan is vulnerable to surprises because we're not there. We don't have our hands on the pulse of the place. And we've just seen, in this last week, an election in Taiwan that, despite expectations on the mainland, and Washington, and elsewhere, that the Guomindang was out for a long time because of internal fractionation and loss of ideas and generational change.
Nonetheless, the KMT has had a number of its candidates reelected back into office. And people were surprised. But it shows that there's a deep conservatism among Taiwan voters. That when people come in and they go too far toward the mainland, or too far away from the mainland, they're gonna lose the support of the voters who have a more pragmatic middle of the road approach. And in recent times I think the U.S. has been leaning more toward the incumbent government and has not prepared itself for the likelihood that incumbent government may be dumped by the voters in Taiwan.
James Green: And then you'll have to deal with the new administration.
Doug Paal: Mm-hmm (affirmative).
James Green: I wonder if we could end with this. You've had this long career here at a think tank, at Carnegie, at the White House, at AIT. And you've dealt with China and with a number of other allies and friends in the region. What do you think you've learned about negotiating with China, or dealing with China on a range of different issues, that can help us going forward, of this is a country we're gonna have to deal with on a lot of different issues?
Doug Paal: People have tried to point fingers and blame or ask, “why did we allow China to get so strong?” I don't think we were gonna get in the way of China getting strong. It was going to happen anyway. And now we have to develop the right ways to accommodate our interests to the increasingly felt interests that China will have in its neighborhood.
And, we've been inclined to fall back on the Cold War model of doing an iron curtain approach to sort of shut down; this simply is not feasible. If you look at Chinese high-tech industries, who are the investors in those high-tech industries? Sure, there's some Chinese, there's some Japanese, but a hell of a lot of Americans are invested in those things, and pension funds.
So, when you say we want to cut Alibaba down and not let it get into our markets, there are Americans who will be affected by that. And by the same token, we have relationships with the countries that neighbor China, and they all have not binary relations, yes or no with China. Vietnam, for example, has a long history of adversarial relations on borders and other matters. But they also have a long history of economic interdependence. And they can't sacrifice either of those. They have to try to pursue both. We're gonna have to learn how to pursue both ourselves, too.
Now you asked about negotiations. The one thing I've learned is, you have to prepare negotiations with China, and you have to create conditions that really leave no option but the one you want them pass through. And if you can't get to that point, don't have the negotiation.
James Green: Don't sit down and prepare-
Doug Paal: Don't sit down when you're not ready.
James Green: Mm-hmm (affirmative).
Doug Paal: But you want to make sure that all the doors you don't want them to go through are locked, and you stand and hold a glass in an open hand of welcome to them going through the door you want them to go through. That was certainly the case going back some of the arms controls issues we've had with missile sales and other things with China, that we had to make it so unpleasant to pursue alternatives that they would then turn to what we wanted them to do.
And then we would make them feel as good as we can about accepting that alternative. Forcing them to swallow bitter medicine is not gonna get you to get them to swallow. You've got to sweeten the pot somewhere.
James Green: Doug Paal, thanks so much. I really appreciate your time and your wisdom on this.
Doug Paal: Thank you for the thoughtful questions.
James Green: Doug Paal, speaking with me from Washington, DC. You’ve been listening to the U.S.-China Dialogue Podcast from Georgetown University. I’m your host, James Green.