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TalkBack Live

Spy Plane Standoff: What Should the Bush Administration Do Next?

Aired April 2, 2001 - 3:00 p.m. ET

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

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We had two Chinese F-8 fighters approach our EP-3. There was a collision. They made contact and it was enough damage for our aircraft to need to land in the People's Republic of China.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: This could be another episode in a series of problems that we've having in our relations with China.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

ADM. DENNIS C. BLAIR, U.S. PACIFIC COMMAND: I would say it's an accident. It's not a normal practice to play bumper cars in the air.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think our American Navies reconnaissance plane always come to China's -- intruding into China's air to (UNINTELLIGIBLE) the intentions of our Chinese military.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

RET. REAR ADMIRAL ERIC A. MCVADON, U.S. NAVY: The Chinese intercept of these routine flights have become more aggressive recently, and we had recently protested and said that they were making it dangerous.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Every new president gets tested very early to see how they're going to react.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm troubled by the lack of a timely Chinese response to our request for this access.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is a very important test for our relationship.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The Chinese government I would say deeply suspicious and skeptical of the Bush administration.

(END VIDEO CLIP)

BRIAN NELSON, GUEST HOST: Is it all a political game? Is China testing U.S. strength and resolve? If so, how should the U.S. respond? What do you think the relationship between the two countries should be?

Hello, and welcome to TALKBACK LIVE. I'm Brian Nelson in for Bobbie Battista. The U.S. remains somewhat in the dark right now about what happened to the crew of a U.S. spy plane that collided with a Chinese fighter jet this weekend.

And let's get up to date on this developing story now. We're joined by CNN national correspondent Eileen O'Connor, who's with us live from the Pentagon.

Eileen, bring us up to date. Was that plane in Chinese air space? Was it spying?

EILEEN O'CONNOR, CNN NATIONAL CORRESPONDENT: Well, it is a spy plane, although the Pentagon does not like to call it a spy plane. It is a surveillance plane that has enough electronic equipment on board to basically, as one Pentagon official told me, vacuum up every kind of electronic communication that is in the area.

No, it was not over Chinese air space. Pentagon officials and the Chinese agree it was over international waters. But when two F-8 Chinese fighters went up to intercept this EP-3 plane, then there was some kind of problem. And what the Chinese are saying is that the EP- 3 plane collided with an F-8 fighter, but U.S. officials say that's highly unlikely. And they say military procedure is that the lighter, faster planes should be watching out for this slower plane.

In any event, the EP-3 plane was damaged, had to make a May Day call, an emergency landing at Hainan Island, Chinese territory. The F-8, by the way, the fighter plane, we do not know where that is and the pilot is missing.

Chinese officials say that the EP-3 then landed without their permission onto Chinese territory. And according to a source telling CNN in China they did board that plane. Pentagon officials, though, have not confirmed that they did board the plane, but they do say that the crew itself is being held separately from the airplane right now, Brian.

NELSON: Eileen, let's get some of the facts sort of solidified first. The Chinese claim that this plane was in Chinese air space. Is that right? And this is something that's been disputed by the U.S. and other countries?

O'CONNOR: No. The U.S. Pentagon officials say that this plane was over international waters. And the Chinese come up to intercept it to see what it is doing. And the Chinese say that after this collision, then it went into Chinese air space. And it was then that they also made this May Day call, and then of course, went down onto Chinese territory.

NELSON: What does the Pentagon say about the previous instances of this kind of near pass that the Chinese fighter jets are making at U.S. planes?

O'CONNOR: Well, in fact, they've complained in recent months, Brian. They say that these intercepts -- while very usual with this kind of thing where another country's plane will come up to intercept an airplane that is close to their territory to see what it's doing, while these kinds of things are usual, they say that the Chinese have been very aggressive in recent months. And they, in fact, they say have complained on a working level, i.e. a diplomatic level, to Chinese authorities that perhaps an accident like this might occur.

But again, you know, Brian, once that plane landed, the United States insists that it was still sovereign U.S. territory, the plane itself, and enjoyed sovereign immunity and should not have been boarded. And they say that if the Chinese did board that plane, then they violated international law.

Also, I might add that Pentagon officials say that the crew is trained in procedures to destroy this sensitive equipment and information that was clearly on board this aircraft. And that would include shredding of paper, basically even taking a hammer to some of these computers and axes and also can include ejecting some of this equipment out of the plane before it lands in a place where this sensitive equipment might be compromised.

NELSON: How much time was there from the time of the accident to the time when the plane landed? How much time in a sense when -- did the crew have to do this kind of work?

O'CONNOR: Well, not much. And that is the problem. And according to Pentagon officials, they don't know if that mission to destroy some of this sensitive equipment was, in fact, at all accomplished because they did get a communications from the pilot, a May Day call, and that the pilot was going to be landing on Hainan Island. And they also, as he was landing, he did communicate that everyone was OK and they were safe. But after that, they don't know anything else. And, again, there are U.S. diplomats on the ground trying to gain access to the crew and to the airplane. And as you heard President Bush earlier, demanded that the Chinese give a prompt response and allow access to the crew to ascertain their safety, but also to find out what happened according to them, Brian.

NELSON: I'm curious about what kind of information could have been gleaned if any -- one of the Chinese military experts were to able to get on that plane while it was on the ground. What would they learn even if some of the material wasn't destroyed?

O'CONNOR: Well, I mean, they can learn how the United States is listening in on Chinese communications and how they might be descrambling some of these communications. I mean, this plane has been described to me as an airborne national security agency, an airborne NSA. It has very sophisticated equipment on it, multiple what they call watch stations. There was a crew of 24 on board. That shows you how much equipment there was to man on this. And this is very sophisticated. They basically can eavesdrop on all sorts of electronic communication. And just knowing how they're eavesdropping is very valuable to the Chinese.

NELSON: Now is it acceptable practice for many countries to tolerate a U.S. spy plane of this nature to be passing alongside its borders, picking up all kinds of information while it goes? Is this sort of the norm...

O'CONNOR: Tolerate?

NELSON: Yes, tolerate. Since it's international waters, they in a sense have to tolerate it until they send a military plane out like the Chinese did. And since it's in disputed territory -- let's go with the U.S. version: It was in international waters. So how many other nations tolerate this kind of, how shall we call it, unofficial spying?

O'CONNOR: Well, they tolerate it. Do they like it? No. Many nations have to tolerate it. And these -- there are 11 of these type of EP-3 planes within the Navy that they have worldwide with these kind of missions. And so, obviously, they're flying over a lot of different territories. They've flown, in fact, in support in Bosnia and other areas, but it's a thing that countries have to tolerate unless they want to cause an international incident.

NELSON: Let's see if we have a question from our audience for Eileen. Anyone here? Ma'am?

UNIDENTIFIED FEMALE: Yes, you said that they had contact with the crew when they landed. Has there been any contact since then?

O'CONNOR: No, they have not. That is what the U.S. diplomats are trying to do is gain access to the crew to determine if they are being held safely. Now according to U.S. officials, they're being told that the -- and Chinese officials are saying they're holding the crew members separately from the airplane and separately themselves. But, again, U.S. officials have said that they do not know that for sure. They only know about their last communications with the crew. And at that time, the crew said that everyone was fine and that they were landing safely. But again, they haven't had any accidents.

NELSON: Eileen, we've got a question on the phone from Billy.

Billy, go ahead.

CALLER: Yes. I was wondering who's guarding our plane and are the Chinese getting any intelligence from our plane by being -- sitting there and no one guarding it? And also, why hasn't our president given them 24 hours to release our boys and get them home?

O'CONNOR: Well, clearly, the president has asked for prompt response, but this is very, very sensitive. And as you know, U.S. Chinese relations are strained over many different areas. The Chinese are holding an American green card holder right now that the United States is protesting about that. The Chinese are upset with the United States over military sales to Taiwan. So the president is demanding that they be seen promptly by U.S. diplomats and return promptly. But again, they're trying to work this out through lower level diplomatic channels.

As for who's guarding the plane, well, the Chinese, of course, have access to the plane. And Pentagon officials, State Department officials and the president are saying, "Look, under international law, this is sovereign territory. This plane should not be boarded." And it is pretty much Chinese respect for international law that will prevent them from boarding that plane, and also, you know, the fear of any damage that boarding the plane could do to relations. But again, I must say that a source -- a Chinese source is telling CNN in China that, in fact, Chinese officials did board the plane, but also, Pentagon officials say they do not have independent confirmation of that.

NELSON: But we have no idea of knowing what's going on with that plane right now.

O'CONNOR: No, we don't.

NELSON: We've got a question up here. Is it Mark?

MARK: Mark from Indiana, yes. Eileen, given the fact that the Chinese are admitting that the incident occurred in international air space, and that our aircraft only entered the air space when it was in distress, what kind of rationale do they have for holding the plane and the crew at all?

O'CONNOR: Well, they are saying that, in fact, it was the EP-3 that collided with the F-8. And they are also saying that it landed in -- on Chinese territory without the permission of China. So that is, according to them, the justification. But Pentagon officials believe that that is not a case that an international court would respect. But again, this is different points of view. NELSON: All right, Eileen O'Connor, let's thank her at the Pentagon. Thank you very much, Eileen.

(APPLAUSE)

O'CONNOR: Thank you.

NELSON: And TALKBACK LIVE is going to take a short break. Eileen O'Connor is just finishing. And do you think China is a friend or a foe to the United States? Take the TALKBACK LIVE online viewer vote at cnn.com/talkback. And the AOL keyword is CNN.

Coming up next, troubles made in Taiwan. We'll be right back.

(COMMERCIAL BREAK)

NELSON: Hi, welcome back. And joining us now are Frank Gaffney, the former assistant secretary of defense and currently the director of the Center for Security Policy. That's in Washington. And Marc Ginsburg, a former ambassador to Morocco. And Mr. Ginsburg was also the senior adviser to the Gore-Lieberman campaign on international and defense policy. He's currently the managing director and CEO of North Star Equity Group.

Gentlemen, thank you for being with us.

FRANK GAFFNEY, FORMER ASSISTANT DEFENSE SECRETARY: Thank you.

AMBASSADOR MARC GINSBURG, FOREIGN POLICY ADVISER: Good to be here, Frank.

NELSON: Let's start -- Mr. Gaffney, first of all, I want to read one e-mail here, and then we're going to take a call. You'll see the political angle to this. The first e-mail is: "Obviously, China is taking advantage of this spy plane incident to test the new administration in Washington." That comes from John. We've also got on the phone Joseph in Virginia.

Joseph, go ahead with your question.

CALLER: I don't really have a question. I just have a comment. The Chinese government is doing this because, first of all, there's a power struggle in the Chinese government right now. Jiang Zemin, the president, he wants to stay in power, so he wants to act tough so he can get support from the military.

Secondly, they want to have some bargaining chips with Americans. That's why they're creating this crisis because Americans -- they do not wants Americans to sell destroyers to Taiwan or getting them tough on WTO. Or also, they don't want them to support Taiwan in any sense. So that's just my comment. I think the Bush government should act tough, but leave a door open for Chinese -- for the Chinese government to back down. Thank you.

Brian: all right. Thank you.

Thank you Joseph.

And Michael in Arlington has an e-mail here. He says, "This is the president's first big test. We are China's best customer when it comes to trade. I don't think they will bite the hand that feeds them." So there a lot of diplomatic and political angles to this story.

Let's begin with you, Mr. Gaffney. What's your view on this and where do you stand?

GAFFNEY: Well, I think these are very pertinent observations. We've got clearly a new president in this country. We've got a Chinese leadership that is, in fact, trying desperately to hold onto power. Not just Jiang Zemin I believe but the Communist party itself is facing a degree of restiveness at home that we haven't seen in some time. And it's not uncommon for these sort of authoritarian regimes, Communist regimes in particular to use external affairs, even those that they provoke, as a justification for maintaining discipline or even repression at home.

But I think the main message here is that the United States has no alternative but to respond in a very firm way. I think it would be a terrible mistake for us to accommodate China by not providing the arms that Taiwan needs to defend itself by ceding to really China the notion that this is its sphere of influence and it wants us to stay out of it.

NELSON: Mr. Ginsburg, firmness was not the hallmark of the Clinton administration's relationship to China. Is it time for a change?

GINSBURG: Well, I don't believe that this new administration was elected with a mandate to reignite the Cold War either with China or with Russia. We have some major disagreements with China. And indeed, the administration has -- is approaching U.S.-China relations in way that's converse than the Clinton administration. The Clinton administration seemed to portray relations as a priority. And this administration is placing military challenges as a priority.

And let me explain what I mean. One of the most important decisions that the administration has to face is a decision whether to sell enhanced conventional arms to Taiwan. The Clinton administration postponed that decision last April, and here it's sitting in this administration's lap. The Chinese government has sent a variety of high-level officials to Washington in recent days to try to convince the administration not to do this. And perhaps the Chinese are calculating that by holding onto to this plane, they could extract a quid pro quo from the administration on issues such as Taiwan, arms sales, et cetera. But we run the danger here of miscalculating by not engaging China across the board on a variety of issues that are necessarily going to challenge U.S.-China relations for years to come.

NELSON: Is there a tradeoff in this confrontation here between selling U.S. armaments to Taiwan versus selling jeans and other consumer items to China? There's a billion-dollar -- a billion-plus market there. And is that not what is holding back some of our diplomacy?

Most of the sales are actually coming this way. It's the jeans that are manufactured in China that are being bought by us.

NELSON: You're right.

GINSBURG: This is why we have something of the 50, and depending on who you talk to, an $80 billion trade deficit with China. But the problem as I see it is, yes indeed, the Clinton administration portrayed at the top of the agenda and subordinated everything else to it.

This administration is trying, I think, to reestablish a degree of balance that recognizes that, yes, trade can be important, can even be beneficial to this country. It's not necessarily so as we see in this kind of episode. But we also have to take into account behavior that China's engaged in, not at least of which, by the way, is buying billions of dollars worth of arms from the former Soviet Union that were designed to kill Americans. This is the kind of emerging threat to this country that I think we cannot ignore.

NELSON: Gentlemen, if this confrontation gets out of hand, how big a problem can it be between these two countries? What's the worst-case scenario?

GAFFNEY: Well, there's a terrible worst-case scenario, and that is one of the great unknowns in U.S.-China relations is: What happens if the Taiwanese decide to pursue the democratization process, which by the way, all Americans should commend? Further, as an excuse to, in effect, abrogate the one China policy that has guided U.S.-China relations since President Nixon's trip to China in 1972.

Clearly, we have an obligation under the Taiwan Security Act to defend Taiwan. At the same time, to what extent can -- will the United States intervene militarily to defend Taiwan in the event of an attack?

Likewise, we have had problems with China over a variety of other issues including its proliferation of nuclear weapons and weapons of mass destruction. We obviously have a major problem with the Chinese over whether or not this administration is going to build a national missile defense or a theater missile defense system for Taiwan. Indeed, one of the reasons why the Chinese are so upset over the possible sale of destroyers with aegis anti-ballistic missile management systems on them is because that poses in their minds a threat and poses to be a theater missile defense system for it.

GINSBURG: No, it's a protection of Taiwan. This is not a threat to China. This is protecting Taiwan against the mass missiles that are now pointed at it by China. This is a question of I think standing with democracy, yes, and avoiding miscalculation. The danger here is that the Chinese will calculate on the basis of how we respond to this crisis or their capture or their imprisonment of American citizens or other provocations that the United States is going to back away rather than stand with its democratic allies and interests in the region. That's the formula for war. GAFFNEY: Brian, the real goal here and the real concern that I have is that when you see this across the board so far in what is the early days of this administration, there are ideological divisions that are arising with respect to the engagement of this administration abroad, whether it be with Russia, China, Northern Ireland, the Middle East. There are clear demarcations that are being set up. And the president came into office saying that he was going to reverse the Clinton administration's attitude towards China and treat it as a competitor and not as a partner. And at the same time, he's sending signals on national missile defense, et cetera, that suggests that ideology is going to drive the administration's policies.

NELSON: Gentlemen, gentlemen, hold your fire. We're going to take a short break and be back with TALKBACK LIVE in just a moment. And we've got some e-mail as we go out: "We got caught and we're paying the price. If China had a spy plane 70 miles off of the coast of Miami, I hope my government would shoot it out of sky." That comes from Mark in West Palm Beach. TALKBACK LIVE will be right back.

(COMMERCIAL BREAK)

NELSON: And welcome back to TALKBACK LIVE. I'm Brian Nelson. Let's go to Heidi in New York. She's got a comment or a question -- Heidi.

CALLER: Thank you. If the circumstances were reversed, what would American policy be? For instance, if a Chinese surveillance crew was forced to land on one of the islands of Hawaii, would we be connecting them with their superiors in 15 minutes of landing and or forcing them to abandon their plane?

NELSON: All right, that's a good question. Gentlemen.

GAFFNEY: ... opportunity to defect, which they may want to do. I don't think that's true of many of the American servicemen they have now if any.

NELSON: But isn't there some sort of protocol? Is there some sort of international protocol?

GAFFNEY: There is, in fact, an international agreement, which the Chinese are signatories to and we are as well to offer assistance to any aircraft in distress, whether they land in a secret air field or a commercial air field. As long as they signal that they're coming in on an emergency basis, our responsibility would be as the Chinese is today: to relinquish the plane and the personnel as soon as possible. And they are not doing it.

GINSBURG: But there's another issue here that goes -- this is not an isolated incident. And I point out, it almost seems to be a game of bumper cars in the air going on between U.S. and Chinese aviation, military aviation over the last few months. And that raises a more fundamental question of what is the motives of the Chinese to be tailing our surveillance planes as much as they have with the protests that are being filed? There's obviously concern on the part of the Chinese for a variety of reasons including perhaps a signal to us over military issues in the Taiwanese straits. As you also know, the only comment that came out of Beijing was a fairly strong comment stating that this plane was violating international -- Chinese air space. And indeed, the Chinese at times have claimed all sorts of international -- of space both on the sea and above the Spratly Islands and other islands that they can vis-a-vis other countries like the Philippines.

GAFFNEY: Yeah, but that's the problem.

NELSON: Gentlemen, let me ask you...

GAFFNEY: That's precisely the problem, that this space, this middle kingdom's zone of influence is expanding and it is increasingly, I believe, expanding in a way that is inconsistent with American security interests. And I think contesting it firmly is the only way to avoid future misunderstandings and probably conflicts.

GINSBURG: But Frank, we can't really...

NELSON: All right, gentlemen, just on that point, if this plane is not returned in the next two days, what are President Bush's options?

GINSBURG: Well the options -- the options to me are very straightforward. First of all, there are certain things that he can do vis-a-vis our diplomatic relations with China. He can, first of all, call for the immediate return. He can recall our ambassador and file other protests. But, frankly, given the range of options, the fact that the plane is on the ground and under Chinese control, I dare say there's very little else that can be done other than maybe to involve other disinterested parties to intervene on our behalf.

NELSON: Mr. Gaffney, can the president get stronger than that?

GAFFNEY: I think so. I think what is underway in the Pentagon right now long before this episode was a review of our military posture. And I think what's coming out is increasingly an awareness that China is the emerging threat to our interests internationally. And I believe that what will come out of that policy review and reflection on this episode is that the U.S. government has to take a very different approach towards China. And I think that ought to be no longer aimed at legitimating the Chinese Communist government but trying to help bring about its removal, in effect, through the democracy process in China. We have to encourage that and our policy can help.

NELSON: Sounds like the policy of containment. Gentlemen, thank you very much for being with us. Frank Gaffney and Ambassador Ginsburg, we appreciate you being with us here today.

Coming up next, do countries need enemies? We will don our Cold War parkas and find out right after this break.

(COMMERCIAL BREAK) NELSON: Hi, welcome back to TALKBACK LIVE. I'm Brian Nelson in today for Bobbie Battista. And joining us this half is John Fund, editorial page writer for "The Wall Street Journal" and also Christopher Hitchens, the columnist for "The Nation" and "Vanity Fair." He's also the author of a soon-to-be-published book about Henry Kissinger. Gentlemen, thank you for being with us.

Is this the first big test for George W. Bush?

JOHN FUND, "THE WALL STREET JOURNAL": Oh, absolutely. And clearly we're going to have an interesting contrast between some of the more moderate elements in the State Department and some of the more hawkish elements in the Defense Department, and I think that they can agree on this, thought, that there may be some residue of anti- Americanism left in China.

That's entirely understandable, given that we bombed their embassy a couple of years ago, but this is a highly unfriendly act. This goes against all international law protocols, and for a country that wants to join the World Trade Organization and host the 2008 Olympics, combined with its horrific human rights record, which we're going to be writing about in tomorrow's "Wall Street Journal," the detention of various American citizens or green card holders, it's clearly not going to help China usher itself into the world family of nations.

NELSON: Mr. Hitchens, do you think it's quite that simple or do you think maybe, as some believe, the Chinese just are a slow-plodding diplomatic group and they take their time in something like this, in fact, may not know what to do?

CHRISTOPHER HITCHENS, "THE NATION": Well, first of all, I don't think it's the first test. I think the first test was related and ancillary. It was North Korea, a close neighbor of China, and the site of an evolving rapprochement with the South, which President Bush decided he didn't believe, or in fact, more or less admitted he hadn't known about until he doubted its existence.

I think that probably hasn't helped condition the atmosphere between the two countries. I believe, though, that this is a mere blip. I mean, I can -- I'm not a predictor, but I promise you that those crew members will be home soon and I don't know how badly damaged the plane is, but the Chinese are not going to try to hold on to anything major.

It just shows, I think, in a very sharp relief the speed with which, and Mr. Fund mentioned the incident with the embassy, the speed with which a relationship that isn't really all that warm -- it's intimate but not warm -- can go bad. And it also exposes a terrible fact about United States policy, which is something very seldom discussed which is the dirty secret of the United States.

In many, many theaters of the world, the Middle East, the Mediterranean, Latin America, Africa, the United States of America sells arms to both sides in a quarrel and then tries to pose as the mediator and then wonders why its mediation doesn't work. Well, one reason why it doesn't is because it relies on the military-industrial complex, to use an old Republican vulgarism, to shape its policy.

FUND: Well, the more important military-industrial complex that's relevant here is the fact that China, which, of course, has been selling arms and even nuclear weapons materials to Iran and Pakistan and various other rogue terrorist nations, they clearly have a problem because their military is far more important in that society, in that country, than our military is here. Christopher, you'd have to agree with that.

HITCHENS: I don't disagree with it, but I think you'll be compelled to agree with me that the relationships between the military-industrial complexes of the two countries are becoming rather warm, too. Just take, for example, the tremendous lobbying in the last administration, which "The Wall Street Journal" also noticed, by American missile companies and aerospace companies like Loral, who were prepared to kick in large sums of money to President Clinton's election in order to induce him to decouple human rights considerations from relations with China on a commercial basis. That's the most notorious example...

(CROSSTALK)

NELSON: Gentlemen, I want to take...

HITCHENS: ... the other fact, I gather it's true, the United States Army has just decided to buy its uniformed from a Chinese sweat shop...

NELSON: Gentlemen, let's take a -- let's take a question from our audience here for a moment, gentlemen -- Terry.

TERRY: This is a question for John. China has a lot of human rights issue problems, and what makes us think that all of sudden they're going to turn around and do what we want them to do after all their abuses to human rights?

FUND: Well, that's why we have international law, which is -- these are agreements that are signed by authoritarian governments as well as democracies, and they are supposed to govern behavior regardless of whether or not the people in that country have a say in the governing of that nation.

And international law says, and the Chinese admit that this was 60 or 70 miles off their coastline, international law says that an airplane that lands under distress is sovereign. You cannot board it. You cannot confiscate it. You cannot examine it, and you must turn over the personnel immediately. And all of this been violated. Now, there seems to be no plausible explanation, since there is modern communications in China, why we can't have access for three days to our personnel.

NELSON: All right Lori in Florida has got a question -- Roy, I'm sorry. Roy, go ahead.

ROY: Yes, bottom line, what is the probability of military conflict with China as currently dictated by the current Chinese political agenda?

FUND: Oh, I don't think so at all. I think clearly this is rattling our cage and trying to show us who's boss and basically risking the trade relation that they had with us, thinking that commerce is going to be more far more important to us than human rights or diplomacy, and given the Clinton administration's record over the course of the past eight years, that wouldn't be a bad bet. But it might be a different bet with this administration.

NELSON: Is there going to be a fissure within the White House and within the Republican Party on this simply because there's a whole group, let's call it the business group within the Republican Party, wanting to sell to China, and then there's an ideological right-wing group that wants to sort of rewrite the Cold War and view China as that Communist giant again that has superseded the old Soviet Union?

FUND: Well, there's one agreement that I think both sides can have, and that is that you have to trust people. If you're going to have business relationships with or if you're going to have diplomatic or military relationships with them, there has to be trust, and if you're going to blatantly violate international law, it calls into question whether or not they can be trusted to be in accord with the World Trade Organization, which they want that join. So on that, I think both halves are in perfect agreement. You have to be able that trust your partner.

NELSON: I have an e-mail here: "I'm sure that the Chinese are going through that plane as we speak."

FUND: They already have.

NELSON: "Sovereign rights on that plane don't mean a thing. The U.S. has ignored that rule, as has everyone else when it suits its needs." That's from Jeff in Ringe, New Hampshire.

We've got a question here -- sir.

UNIDENTIFIED MALE: Well, it's not a question, it's a comment, and the comment is that no matter what is happening right now, we have keep an open line of communication with them, because the bottom line is still we need their help and they need ours. Trade is needed between the companies, so no matter what happens.

HITCHENS: And you could add to that, what John Fund already mention, because the Chinese do want the Olympics in Beijing. They do want to World Trade Organization, all the rest of it. This -- I assure you, this will be a blip.

What isn't a blip is the following: The Chinese military "White Paper" that was published at the end of last year describes the United States what they call its hegemonic policies in the region, not without some justification, as the main threat. And then this month, I think it was this month. Yes, this month, they announced 17 percent increase overall in defense spending, which I think startled the White House quite considerably. They hadn't expected such a big hike. But it is -- this remember, don't ever let yourself forget, is American policy coming back to you. The sinews of war and the sinews of militarism in China are being supplied under what used to be called most-favored nation status and now permanent normal trade, completely decoupled, politically, by Congress, by both parties, and under both presidencies from any consideration of human rights. We've given up the right to talk to them in that way in favor of the right to sell them anything we like and buy from them anything we want...

NELSON: Good point.

HITCHENS: ... on WTO firms.

NELSON: Good point.

HITCHENS: This is a policy of selling dragon's teeth, and it's the same as selling arms to both sides of the Middle East, same as selling arms to Greece and Turkey.

NELSON: All right, I've got to take a break. We've got to take a break. A quick comment from Mitch from New Mexico.

MITCH: I think that if they don't return the plane, we should start cutting off their trade. That's very important to China. They need money to buy weapons and develop weapons, and I think we should take a move in that direction.

NELSON: All right, thank you. We'll take a short break, be right back here on TALKBACK LIVE.

(COMMERCIAL BREAK)

NELSON: In 1998, a nuclear missile expert who fled from China to the U.S. returned to his homeland after being promised safety. Hua Di, who wrote articles about China's military, was arrested upon his return, and was sentenced to 10 years for disclosing state secrets.

And welcome back TALKBACK LIVE. Here's an e-mail from Kathy in Pittsburgh. She says: "This administration has gone so far -- has so far made enemies of our former friends. My advice is to tread lightly."

Let's go to Carl in B.C., British Columbia -- Carl.

CARL: Yes, our current policy is to balance the desire of China and the needs of Taiwan in our sales to Taiwan. But the one things that we could to do to really scare the Chinese would be to say if you don't return our plane very quickly, we'll just sell the Taiwanese whatever they want, which be with good for ourselves, good for our industry, and also the most moral thing to do, since Taiwan is a democracy just trying to prevent an invasion from the mainland.

NELSON: All right, well, then, the flip side of that coin, John Fund. If they do take, send the plane back, does that -- would that prevent us from selling the Aegis to Taiwan? I mean, is it a quid pro quo here? FUND: No, nor should you because this is not negotiable. This is international law. We had former Democratic Senator Bob Kerrey into the paper today to give an interview, and he said, look, one of the political ramifications of this is going to be Taiwan gets whatever it wants now. That's off the table.

So, that's not an issue. And outlaws make their own laws and if the Chinese hold those people much longer, they're are basically going to be lawless and we cannot negotiate with them. The Chinese Foreign Ministry statement says, you know, we need to have further negotiations about all of these matters while they're holding our 24 people. Well, pretty soon, those people are going to be hostages, and we can't negotiate at all and that's when this crisis gets deeper.

NELSON: OK, we've got a question here from the floor. Matt from South Carolina.

MATT: The Clinton administration seemed a little more good feelings with China. Now, the Bush administration is a little more aggressive. Why do you feel this has been different?

NELSON: Gentlemen, either one of you take it -- Christopher?

HITCHENS: Well, the Clinton administration reaped a tremendous harvest of political donations from companies doing business with China and did decide, I've said this already, but did decide to formally separate the issues of China's democracy and Chinese human rights from all commercial and sales questions.

But it did that, don't forget, with the overwhelming support of Republican Party in the Senate and the House and in some ways, it did that -- in doing that, it reverted to the policy it had criticized when President Bush Senior followed such a policy. These fluctuations are very minor, just as the fluctuations John Fund was just mentioning are very minor.

Of course, the Taiwanese were going to get the Aegis system. Anyway, there's no Republican president who's going to tell the American defense industry it can't sell the Aegis system to Taiwan.

NELSON: But Christopher, let me ask you a question ...

HITCHENS: ... the fact is -- come the full after...

(CROSSTALK)

HITCHENS: ... there's a summit in Beijing, there'll be a whole new package of sales to China, mainland to make nice on that, and then overarching all of this, incredibly, is an even huger boondoggle, the mad intention of the administration to build what it calls a Star Wars -- well, what we call a Star Wars, what it calls a ballistic missile defense system.

NELSON: All right, let me interrupt -- Christopher.

HITCHENS: Which the Chinese and Russians and everyone else regard as a first strike system, which it is.

NELSON: Is this -- John Fund and Christopher, both of you, is this reliving the Cold War? Are we attempting to recreate it? I think that's the concern.

FUND: No, no, of course not.

NELSON: Not just this incident, but also this country's approach to North Korea?

FUND: No, it's a healthy dose of realism. We're going to run a piece in the paper later this week from a German doctor that who spend 18 months in North Korea, just left a few months ago, and describes the most horrific an barbaric dictatorship imaginable. And, of course, a dictatorship that can only survive if it blackmails the West for hard cash.

So, this is a dose of realism. This is not the Cold War. You know, since the Chinese tried to subvert our 1996 elections, and as Christopher pointed out, engaged in all of these commercial relationships, we have looked away from some of the things the Chinese do. I think we can have a healthy trading relationship, but it has to be one with our eyes open and not closed as they were during the Clinton years.

NELSON: All right...

HITCHENS: How realistic -- I didn't spend 18 months in North Korea. I admit that I'm one of the few reporters to have been there recently. It's certainly true that it's the most appalling despotism, and also that it's implodes because of famine.

FUND: That's why it's dangerous. It imploding...

HITCHENS: Partly dangerous, but look, it's -- is that music drowning me out?

NELSON: All right, gentlemen, I'm sorry. We got to break. We'll be back in a moment.

HITCHENS: Can I hold that thought?

NELSON: When we come back after the break, you got your chance. TALKBACK LIVE will be right back.

(COMMERCIAL BREAK)

NELSON: Welcome back to TALKBACK LIVE; I'm Brian Nelson. Let's go back to one of our guests who had a comment and was interrupted -- Christopher.

HITCHENS: I was just going to say that Kim Jong II, the new leader of North Korea, has been pressed by the Chinese to respond to South Korean overtures, has visited China a couple of times, has always asked to be taken to see the free trade zones around Shanghai and elsewhere. It shows every sign, in other words, the responding -- he really has no choice but to do, his regime is imploding -- to overtures from the West and from South Koreans that were going really pretty well, and are still being persisted in by the European Union, even though George Bush Jr., our current president, recently said that he thought the North Koreans were not complying with their agreements.

There's only one. And they are complying with it. Ask the State Department and the Defense department what they were able to confirm. Nobody knows why the president suddenly, unilaterally, inarticulately, and ignorantly decided to stall the process of reconciliation in Korea...

(CROSSTALK)

HITCHENS: Excuse me?

FUND: He probably read his intelligence briefings which I know tell a different story, so does the German doctor, which...

HITCHENS: He gave no sign -- your being much too generous -- he gave no sign of having read any such thing.

NELSON: OK, gentlemen, we are running out of time here.

(CROSSTALK)

NELSON: Gentlemen, I want to get our poll in before we run out of time. This poll was taken on-line today and we're going to take a picture of it, and you can see the results of it.

The question was: Is China a friend of the United States or a foe of the United States?

As you can we, 13 percent of our respondents -- that's 99 votes -- said that china was a friend; 87 percent -- 654 votes -- said it was a foe of the United States.

We have a couple questions from here in the audience. Steve, up here.

STEVE: We need to recognize China as a major superpower growing in importance and I think we also need to recognize that the trade policy is very unbalanced and it's really helping them to build their military infrastructure.

NELSON: OK, and we have a quick question from Matt; I'll just go up to you, Matt; very quickly.

MATT: I was wondering if we need to increase military spending because, I mean, this is about the third incident in the last three weeks that the military has had like an international incident and should we increase military spending? Have we cut it too much at this point? What needs to be done?

NELSON: About 15 seconds, gentlemen; quickly. FUND: China is neither a friend nor a foe. It's a competitor and we need to view it like that; we need to have a healthy relationship, but jaundice one.

NELSON: OK, Christopher?

HITCHENS: It's a potential foe and it has been built up with American trade and military policy. And by the way, there's going to be no reduction in military spending; you can relax about that.

NELSON: OK, I want to thank our audience today for being a great group of people; thank you for being with us.

And thank you to our guests: Christopher Hitchens and our other guest, John Fund. Thank you, for being with us, both you and we will be back again tomorrow at 3:00 p.m. Eastern time. I'm Brian Nelson in for Bobbie Battista, we will see you then.

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

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