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US-China tensions

US panel calls for 'ambassador-grade' envoy in Taiwan

Report sets stage for Biden administration faced with more belligerent China

A U.S. congressional panel is urging legislators to make policy changes that grapple with a more assertive and influential China.   © Reuters

WASHINGTON/NEW YORK -- The director of the de facto U.S. embassy in Taiwan should be confirmed by the Senate to bolster ties with the self-ruled island, a congressional advisory panel said Tuesday, as it warned of a growing threat of China potentially employing military means to pursue unification.

The move would place the director of the American Institute in Taiwan on a similar level as an ambassador. The report's recommendations are expected to color President-elect Joe Biden's policies concerning China.

The influential U.S.-China Economic and Security Review Commission, a bipartisan group that monitors the effect of Sino-U.S. relations on national security, said in its annual report that Congress should strengthen its support for Taiwan. The U.S. operates the American Institute in Taiwan, a body that is the de facto U.S. embassy for the territory. Congress should enact legislation that makes the institute's director subject to advice and consent by the Senate, the commission, or USCC, said.

"It would strengthen congressional oversight and place emphasis on U.S.-Taiwan relations through the vetting of candidates during a confirmation hearing in a way that doesn't alter the U.S.'s position as articulated on the Taiwan Relations Act," Carolyn Bartholomew, vice chairman of the USCC, said on Tuesday. "And it would reaffirm Congress's right to provide advice and consent on Taiwan policy as established."

The institute has served as a thruway for U.S.-Taiwan exchange. The director is currently appointed by the U.S. secretary of state, and the selection is not subject to confirmation by the Senate.

The U.S. has not recognized Taiwan as a sovereign state since it cut off diplomatic relations in 1979. If this change in appointing the director is implemented, Taiwan could potentially attain a higher status on the international playing field.

Joe Biden meets with Chinese President Xi as U.S. vice president in Washington in 2015. Tensions between the two nations have risen greatly since then, requiring the U.S. to harden its policies.   © Reuters

"It's part of our constant thinking in these report recommendations for ways to reduce the isolation of Taiwan, only as [China] is constantly trying to increase it," said James Talent, a former senator and a USCC commissioner. "We thought this was a way to signal American support without changing the underlying diplomatic status."

Both Bartholomew and Talent said their recommendations do not create an ambassadorial position. They still think of it as a director position.

"I think we all support increased economic engagement with Taiwan, we have some very important technological relationships," said Robin Cleveland, chairman of the USCC. "In terms of a free trade agreement itself, we have a number of differences among the commissioners and have not taken a position on that specifically."

"[But] we've got a lot of reasons that we want to increase that economic engagement," Cleveland continued.

Taiwan could gain clout for strengthened relations with other nations, countering the string of countries that have cut off relations with Taipei in recent years amid pressure from China.

It is all but certain that China will push back against any proposal that attempts to bring Taiwan closer to normal nation status. The U.S.-China Economic and Security Review Commission, or USCC, also recommends that Congress include Taiwan in multilateral efforts to strengthen supply chain cooperation.

The USCC said in its report that heightened military activities around Taiwan this year "signals to both Taipei and Washington [Beijing's] resolve to achieve unification."

The Taiwan section of the report referenced the national security law imposed this summer on Hong Kong by Beijing. This move "proved that Chinese leaders are determined to pursue their political objectives without concern for their existing commitments or the reputational costs they might incur by violating them," the report says.

The national security law, among other events this year, "underscored the urgency of ongoing discussions in Washington over whether the United States should alter its long-standing policy toward Taiwan and how China's annexation of the island could affect U.S. national security interests," the report adds.

This language indicates the USCC has heightened concerns that Chinese President Xi Jinping will potentially adopt hard-line tactics toward Taiwan -- up to and including armed unification of the island.

The administration of President Donald Trump has upgraded relations with Taiwan amid hard-line policies against China. Under Trump, the U.S. and Taiwan have opened up economic dialogues for the first time. Health and Human Services Secretary Alex Azar flew to Taiwan in August, making him the highest-ranking U.S. official to visit the island since official diplomatic relations were cut off. Taiwan's mood has been welcoming of the Trump administration's stance.

Biden's team faces the difficult decision of whether to keep drawing closer to Taiwan. The incoming administration is looking to cooperate with China on climate change, North Korea's nuclear weapons program, and on military disarmament. In that light, Biden may end up deciding against provoking China by way of Taiwan.

Meanwhile, the USCC report highlighted China's expanding influence in the United Nations, citing Beijing's "coercive means" of influencing votes by member nations. The paper recommends that the State Department prepares an annual report detailing Chinese activities within the UN.

The report additionally recommends that Congress instructs the administration to remove barriers for Hong Kongers to receive U.S. visas to escape China's "political persecution."

The report also touched on issues unrelated to Taiwan. It raises concerns that instability in Chinese financial markets will affect investors in the U.S. To understand the risks in the Chinese market, it called on the U.S. government to set up an institution to analyze China's economy and financial markets.

The report proposes that Congress establish in the U.S. Department of Commerce's Economic Analysis Bureau a unit to analyze Chinese economic data such as gross domestic product, government debt, nonperforming loans and information on shadow banking.

The coronavirus pandemic has hit the Chinese economy, the report notes, making it even more difficult for it to reduce debt loads and eliminate bad debt which further exacerbates the risks that are already buffeting financial markets.

The Trump administration has taken a tough stance, asking Chinese companies listed on the United States to undergo the same rigorous audits as American companies. Biden has also maintained a strict stance toward China, and the financial sector is likely to continue to be a focus of the U.S.-China tensions.

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