U.S. and Hong Kong (1985-1997)

ROTH 10/15 PRESS CONFERENCE AT WORLD ECONOMIC FORUM

Following is the transcript of the press conference:

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PRESS CONFERENCE BY STANLEY ROTH
ASSISTANT SECRETARY OF STATE
FOR EAST ASIAN AND PACIFIC AFFAIRS
AT THE WORLD ECONOMIC FORUM
HONG KONG
October 15, 1997

MR. ROTH: One purpose of my trip to Hong Kong was to participate in the World Economic Forum, in which I made two presentations and participated in some of the events and had an opportunity to meet with several of the leaders and ministers attending to discuss various issues. My other purpose in coming to Hong Kong, of course, was to get a sense of how the situation is progressing following the historic reversion on July 1st. Although I've been to Hong Kong many times over the past 17 years, this is the first opportunity that I've had to come back since July 1st, and so I wanted to come early in my tenure as Assistant Secretary to get a better understanding for myself of the situation here. Without any further ado, let me simply open it up for questions.

Q: Are you concerned that the recent regional economic problems could cause a slow-down in the liberalization process (inaudible) . . .?

ROTH: I think the problems we have seen are precisely because the region does not have the mature financial institutions -- and I'm not speaking about Hong Kong: let me make that clear. Some of the other places do not have the mature financial institutions to go along with the relatively high rates of growth that they've enjoyed for the past decade or so. So I believe that a cold-headed assessment would suggest that there is a need to move forward more rapidly rather than to retreat.

Q: (Inaudible)

ROTH: I don't have a crystal ball. A lot of my... I believe what will happen is that if we can get a handle on a short-term problem -- and for example if the IMF mission to Indonesia is successful prior to the APEC Leaders' Meeting -- then I think that there is a much greater chance that the leaders, when they get together, will be able to focus not so much on the immediate aspects of the problem but rather on a more long-term response, which of course is to move ahead with reform and liberalization.

Q: Mr. Roth, you met yesterday with some Hong Kong politicians, some of whom urged the Administration to raise human rights during the upcoming Sino-American Summit in Washington. I wonder what your response was to them and whether the Administration feels that any progresses have been made in China in moving the human rights record.

ROTH: That was one of the easier questions that I was asked in the course of the visit, because there was always our intention to raise human rights as one of the many issues on our agenda with China during President Jiang's State visit to the United States at the end of this month. So I just gave a simple answer to the politicians with whom I met.

In terms of progress on the issues themselves, we are not at the summit yet, we are still hard at work in terms of our negotiations with the Chinese, so I would not want to characterize the outcome of the summit prior to the conclusion of these negotiations. I'm hopeful that we will make at least some progress in this area.

Q: My second question is: Could you give us an update on the status of the four-party peace talks with North Korea and what is the Administration doing to try to restart these talks?

ROTH: Sure, I think the fairest characterization would be that the preparations are suspended. What this means is, we remain committed, as do our allies -- the South Koreans, and our friends, the Chinese, remain committed to this four-party process. As far as we're concerned, the ball is in the North Korean court, that it is up to them to come back to the table. We have made it very clear that we are not willing to pay a large price up-front simply to get North Korea to the peace table in terms of mass of amount of assistance. Nor are we willing to have a very detailed and a provocative agenda that prejudges the outcome of the talks. But we remain deeply committed to the cause of peace and reunification on the Korean peninsula, and we are anxious to see the talks resumed and we hope that the North will respond.

Now that Kim Jong Il has assumed the formal position as General Secretary, we are hopeful that in this post-succession period, that it will be easier for North Korea to resume the negotiations.

Q: I just want to know that, you come at this time to Hong Kong, what's your impression of Hong Kong after the handover?

ROTH: I am always leery of trying to reach sweeping conclusions after less than 48 hours in any country and trying to overstate one's impressions. Nevertheless, I don't think it will surprise you to say that the initial impression is that, in most regards, it is the same Hong Kong that it was when I was here prior to July 1st. Clearly, it is economically quite prosperous; clearly, many of the negative outcomes that certain people had feared have not materialized in terms of, for example, demonstrations have still been permitted. I've read some rather dramatic criticism of the Chief Executive and the government. In the press there is not press censorship. The Chinese military has certainly confined itself to its barracks and behave very responsibly, no evidence of repression. So in most aspects, I think you would say that Hong Kong is Hong Kong, and that the reversion has accomplished its main objective, which was continued business as usual.

The one controversial issue at the moment, of course, is the preparations for the elections where there is, of course, a hot dispute between the different political parties about the system and the preparations for these elections, and I think there the position of my government is quite clear. We have consistently spoken up in favor of free and fair and fully representative elections, and we have urged the authorities to undertake such a process.

Q: I'd like to ask you about the APEC Leaders' Meeting in November. There are three things going on now and left some people in Asia to suspect that there is really not much going on, it is extremely quiet this year. One, you have the intense focus from the U.S. on the summit with China, with regard to the focus on the fast track trade negotiations, with Latin America, and I think in Southeast Asia, there was some concern the U.S. wasn't more directly involved with the bailout . . . What will be U.S. try to accomplish at APEC and how do you see APEC evolving in the short term in the next two years. What will you look forward to in terms of concrete (inaudible) . . .?

ROTH: Your question somehow presumes that APEC in an American show and that the only thing that matters is what the United States wants to accomplish there. I would suggest that APEC is a rather vigorous collection of 18 economies with a lot of very outspoken leaders, and so it is not just the American agenda that counts. Having said that, let me also say that I expect a rather different Leaders' Meeting this year than any of the previous meetings. In the past, I think it was very possible for the leaders to leave many of the specifics to the various ministerial meetings. As you know, there is a blizzard of ministerial meetings as finance ministers, there are foreign ministers, there are trade ministers, a lot of very important detailed work gets done by those ministers and the leaders have been able to get together and talk not only about the big picture, but about the future. And so you've been able to talk about the vision, like trade and investment liberalization by 2010, 2020, and sectoral liberalization and harmonization, all the big steps that APEC has been about.

I think that we face a rather different atmosphere in the Asia-Pacific region this year. It is a region that has some economic difficulties, and not quite as confident as in the past. We have seen, of course, the financial developments in Southeast Asia. We've seen the lowest level of economic growth in Japan since the 1970s. We've seen something of an economic difficulty in South Korea despite the relatively robust growth rate of, I guess, around 5 or 5 and a half percent. But major concerns about the banking system and the collapse of some of the conglomerates. When you put all these together in the aggregate, I think you get a picture of a region that isn't quite as buzzing or booming as the normal image of Asia has been for the past few years. And I think it is only obvious that when the leaders get together, they are going to talk about what to do about this. I think a lot of the specifics will depend on what happens in the next five weeks, in particular what happens with this IMF mission, with respect to Indonesia and whether that helps to stabilize not only the rupiah but some of the neighboring currencies if an agreement is reached. And if not, there will be some talk about is there a need for better monitoring, is there a need for better regional activism in terms of trying to prevent situations like happened in Thailand and elsewhere in the region, and there may be some talk about resources as well.

Let me just add . . . I shouldn't suggest that the traditional agenda has fallen off the map. There will still be quite a lot of talk among the ministers about sectoral liberalization and moving ahead in some the specific sectors. But for the Leaders' Meeting in itself, I think there will be a somewhat more problem-driven discussion based on the events in the region. They may also choose to discuss something about the regional implications of the forest fires in Indonesia and whether there is a role for APEC in terms of an environmental response. That is at least conceivable to me that there will be a topic of discussion.

Q: What's your reaction to Dr. Mahathir's recent comments that world currency speculation should be banned outright and that the Indonesian and Malaysian currencies have been targeted by a Jewish conspiracy because those are Moslems countries? Has there been any official reaction, and what is your personal view on this?

ROTH: Of course, that characterization is utter nonsense, and there is no one in the region who takes that seriously. I think it is an embarrassment. Furthermore, I think it has hurt Malaysia, that we have seen a direct correlation between some of these outrageous allegations and the fall in the currency in Malaysia, as well as the stock market. And I hope we've come to the end of these type of comments so that we can deal with the more basic issue, which is how to cope with these region-wide currency problems we are facing.

Q: Regarding the elections in Hong Kong next year, is your government regarding it as a fait accompli, or are you making your concerns known to the Administration here?

ROTH: We continue to make our concerns known at the highest level. President Clinton did that during C.H. Tung's visit to Washington, as did my boss, Secretary of State Madeleine Albright. Yesterday, I met with the Chief Executive, and I also expressed our concerns about the process and our desire to see it as fully representative as possible and on as expedited a schedule as possible. As you know, the Chief Executive has been emphasizing that this is a 10-year process and at the end of it, that there will be universal suffrage and direct election of officials. We keep saying that we hope that there can be as rapid progresses possible on the path towards full democratization. In the meantime, we continue to press for fully representative procedures.

Q: I just want if you could tell us what you think the implications are for the WTO deadlines for financial sector liberalization of the Southeast Asian crisis?

ROTH: The best I can say is I hope not, that I think again, as I said in response to the first question, if we can come up with the international community and the IMF and come up with a response to some of the immediate problems the decline of some of the currencies -- most notably the rupiah -- I think this will then leave the leaders much freer to discuss the big picture, of which the WTO agreement is one aspect. I think that the crisis has underlined precisely the need for these type of agreements and for these types of reforms, and I'm hopeful that the result will therefore be to promote rather than to hinder the reforms. But it is a little early to give you a prediction.

Q: I just want to know who did you meet in the past two days? Are there any government officials beside the Chief Executive Tung Chee-hwa?

ROTH: Sure, I met with quite a few government officials, including Anson Chan as well as with the Chief Executive and several of the cabinet secretaries, and probably a dozen additional officials socially at several various meals and social events . . . quite a few government officials as well as members of representatives from the various opposition parties, a large number of businessmen, trying to get around as much as one can in two days.

Q: Mr. Tung has made very clear that he has no intention to speed up the democratic process in his five-year term. So will President Clinton take the opportunity to urge President Jiang to speed up the democratic process in Hong Kong?

ROTH: Frankly, I believe that this would not be an appropriate topic for President Clinton to take up with President Jiang. I think that we should take up the electoral arrangements with the Special Administrative Region and with the Chief Executive, not with Jiang Zemin. Those decisions are made in Hong Kong, not in Beijing -- certainly not in Washington.

Q: What is the U.S. reaction, if any, to the European Union's communique on an agreement with China and WTO and (inaudible) yesterday or the day before . . . (inaudible?

ROTH: I'm afraid I'm not briefed. I haven't seen it since I've been here. I can't comment.

Thank you very much.

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