SPARROUGH: What do you see as the national priorities of the current Chinese leadership?

PEI: The current Chinese leadership continues to believe that their national priority is to develop the economy, is to achieve economic modernization, or to acquire so-called comprehensive national power--

Which first and foremost, depends on China’s economic strength.

SPARROUGH: Does that mean the Taiwan unification is definitely a secondary priority?

PEI: Yes. Even though, rhetorically, the Chinese leadership keeps saying that they cannot delay indefinitely the topic, the issue of reunification with Taiwan.

In reality, there are enormous obstacles that will continue to make such reunification a very remote possibility.

SPARROUGH: The impression in the American media is that reunification takes priority over economic development and modernization. Is the American media wrong about that, do you think?

PEI: Completely. I think the American media has bought line, sink and hooker, yes. Yeah, I think the American media has bought line, sink, and hooker from the Taiwan PR people.

Because the Taiwan PR people are very interested in creating an atmosphere of alarm, about China’s imminent desire to reunify with Taiwan. Because if you look at what has been happening over the last decade, it is Taiwan that has been trying to change the status quo, not China.

But because Taiwan has a very effective PR machine, it wants to portray China as the actor in this game that is most interested in changing the status quo.

SPARROUGH: Does Taiwan therefore do this to get American backing, and American arms?

PEI: Oh, yes, I think there’s no question about this. They want to win international sympathy for the island; they also want to win not just American arms, but an American security guarantee, which means they want Americans to fight for Taiwan, if there is a war with China.

SPARROUGH: You give the impression that the Chinese on the mainland are very patient about reunification.

PEI: Well it seems, I think the Chinese remained quite patient, until 1995, when Taiwan’s president Lee Teng-hui, made a trip to Cornell, not just a trip (inaudible)-

But at his speech, in his speech at Cornell, he said things that appeared to the Chinese leadership suggestive of a pro-independence agenda, and a complete abandonment of the one China principle.

As you know, the one China principle has been the foundation of the relationship between the mainland, Taiwan and the US.

SPARROUGH: If Taiwan moves away from that one China principle, would you say that Beijing would risk their economic development and modernization, because they would have to take a military move? And that military move certainly would have economic repercussions.

PEI: Well, I think this question is very, very complex. The answer is complex, too. If Taiwan moves away from the one China principle, it has already moved away-

But we don’t know where it is moving to. So what will precipitate a Chinese military reaction really depends on where they’re moving to.

Now, I think Taiwan is somewhere between moving away from the one China principle, and moving to formal independence.

So in this gray area, there are a lot of risks of a military conflict. But until Taiwan moves to a formal de jure independence status, China is unlikely to take large-scale military action.

Of course, we do not preclude Chinese intimidation, such as staging military exercises, simply to disrupt financial markets and Taiwan’s trade activities.

SPARROUGH: So you’re saying that China, if there is a de jure--

PEI: Oh, there’s no question. There will be--

SPARROUGH: Then you have to do something?

PEI: They will not only have to do something, they will do something very, very quickly. I would expect a formal state of hostility to exist within 48 hours. If, for example, if they, if Taiwan wants to hold a public referendum to determine the island’s status, I think China will initiate military action, before the holding of the referendum.

SPARROUGH: Good, I’m glad you used China in there, because you were using they in the beginning, (inaudible) but you speak that they would have to take some action.

How, how do you judge the military tradition in China? Are they traditionally militarily expansionist? There is talk about not only do they threaten Taiwan, but they have designs on creating a (inaudible) sphere of influence in East Asia--

A cowering, cowering Japan and removing American influence in the area.

There is again, in the media, and some political officials in this country believe that China is an expansionist power, that they want to cower Japan, and remove American influence from East Asia.

Is this your reading of Chinese foreign policy?

PEI: Well, I think it all depends on how you define expansionism. Studies of Chinese military involvement abroad, or around its peripheries, show that military action, Chinese have taken in the past has mostly occurred in areas where China has historically considered part of its territory.

In other words, territorial disputes account for probably seventy-five percent of China’s border wars, with India, with Vietnam, with Russia, or with the former Soviet Union, and of course, vis a vis Taiwan.

And if you look at existing Chinese disputes with its neighbors, all of them involve territorial disputes. So if you say that territorially, or at least China is a power that has to dream of ambition to reclaim its historical borders, in that sense, I think you may certainly regard China as an expansionist power.

As far as China’s role in East Asia is concerned, this is not a settled question within China. There were debates about this issue; of course, I think given the historical bad blood between China and Japan, Beijing certainly does not have any wishes to see that Japan becomes at some point, the preeminent power in East Asia.

And they would like to use the American influence to check Japan’s potential hegemony. But also, because America’s implicit security commitment to Taiwan, China feels very, very uncomfortable about having American forces in East Asia.

They view that American presence there is an obstacle to China’s goal of national reunification with Taiwan. So it’s this, a lot of complexity involved, and you cannot say that the Chinese have an unambiguous desire to throw the Americans out of East Asia.

As I see a lot of mixed emotions, in the current thinking of the leaders in Beijing.

SPARROUGH: Switching now to the United States, given that complexity, and it is complex, in East Asia, and the relationship between Japan, Taiwan, and the mainland, what role do you see for the United States to help bring about the peaceful reconciliation between Taiwan and the mainland? And then I'll ask you later about Japan.

PEI: I think current American policy is probably the only choice to maintain peace and stability, and prosperity in that part of the world.

Because that policy is built upon the so-called on China principle, but also the peaceful resolution principle.

On the one hand, it deters Taiwan from moving toward formal independence; on the other hand, it deters China from using military force to regain Taiwan.

That policy has come under a great deal of attack, because critics, especially the Republicans, believe that this policy is not workable anymore.

But I have not heard any feasible alternative to this policy. If, for example, as some of the Republicans suggest, the US abandoned the one China principle, the only prospect I can see is that China will break off relations with the US.

And you are going to see low-level military conflict, in the Taiwan Strait, and (inaudible) not something the US will regard as desirable.

SPARROUGH: A related question to that; would the same outcome occur if as you mention, there are forces, not only Republican, there are some Democrats--

PEI: Democrats, yeah, a few Democrats.

SPARROUGH: Right, fewer Democrats. If this group successfully pushes for advanced weapons sales to Taiwan, the Aegis destroyers, and medium-range air to air missiles, (inaudible) missiles, what would be the effect of that on US-mainland relations?

PEI: Several things. First of all, it is doubtful whether weapons sales alone will increase Taiwan’s security. Military experts who have studied Taiwan’s military acquisition from the US have concluded that Taiwan’s military has had a very hard time absorbing these high tech weapons.

And also, large item purchases would certainly divert Taiwan’s security resources away from certain areas, to other areas.

It’s not, I think, an open and shut case, that Taiwan's purchase of Aegis systems will increase the island’s security. I think those purchases, as they have been made in the past, are geared toward provoking Beijing, geared toward establishing a formal military alliance with the US, rather than increasing power and its own security needs.

Taiwan’s real goal is to drive the US into fighting a war with China. Let’s be open about this. Their leaders have not concealed this political game, objective.

I think it’s up to the Americans to decide whether they want to be played by the Taiwanese. On the other hand, I think you may have no short term crisis occur, as a result of those purchases--

You are going to see an arms race. I think China, mainland China and Taiwan are already engaged in a very wasteful and deadly arms race. Taiwan purchases American F-16s, Chinese mainland military purchases Sucoy (phonetic) 27s, Sudhi (phonetic), and Taiwan purchased Patriot missiles-

The mainland Chinese military purchases (inaudible) three hundred. So you’re going to see a lot of purchases. I think the only people that would benefit would be the defense contractors in the US, and the Russian military contractors.

SPARROUGH: You mentioned Chinese developing missile deployments, short range, medium range, both ballistic and cruise.

What usefulness do these missiles have?

PEI: Well, China does not have cruise missiles yet, with the kind of main attack, tomahawk (inaudible) cruise missiles yet.

The Pentagon expects China to have large cruise missiles in about five years. But China, the only weapon system China now has, that can attack Taiwan, without having any real defensive system against them, are short-range missiles.

Even with those short-range missiles are not nearly accurate, and their supply is limited, their goal is really to disrupt, to cause maximum damage in Taiwan’s communications, power generation sectors.

Because China’s tactic is not to take Taiwan in the short term physically, because they don’t have the capabilities; their goal is to make it impossible for Taiwan to function as a society, as an economy, as several hundred short-range missiles, probably can do a lot of damage.

SPARROUGH: So you take the military threat as credible?

PEI: As credible, of course, yes. And obviously, China can certainly increase its production of those missiles dramatically, if it’s, after (inaudible) economy it can certainly devote a significant amount of resources to do so.

That’s why I’m saying that no amount of American weapons sales will increase Taiwan’s security, because China can jack up its military output very, very quickly, to overwhelm the defense.

SPARROUGH: That’s terrific. I would probably argue a little bit with you on the missiles. I think they’re an intimidation--

PEI: Oh, yeah.

SPARROUGH: Because even precision guided missiles, they have four hundred now, missiles.

PEI: (inaudible) announcement that China is entering national mobilization. That will cause maximum disruption in Taiwan.

SPARROUGH: Sure. Wouldn’t they have to develop, though, a amphibious or airborne assault--?

PEI: --developing something which is more cost-effective, that is long-range rockets. It’s not (inaudible) hundred-some miles (inaudible) if they develop something that they can shoot fifty miles, they can put them on ships.

SPARROUGH: Yep.

PEI: Turn them into (inaudible), because they can block the Strait, no American ships can go in there.

SPARROUGH: It put its warships in the Strait anyway, the (inaudible)--

PEI: Did we? Well it all depends on what the sort of a, I think it would be a lot, the Chinese would be smart to fight a long war of attrition.

Because politically, I do not think the US can sustain a ten-year war.

SPARROUGH: But the United States will just have to resupply Taiwan with munitions--

PEI: Okay, why (inaudible) will be blown up, and, and it’s (inaudible).

SPARROUGH: Our airlift capacity is huge!

PEI: No, airlift capacity, Taiwan has only three (inaudible) fourteen military airports, and two civilian airports, and they all would be within that range.

And Taiwan is ninety percent dependent on, the ninety-nine percent, a hundred dependent on imported oil. So it’s, it’s just, what we can talk about preventing China grabbing Taiwan, there’s not much to defend (inaudible).

SPARROUGH: American Air Force is designed to land on highways.

PEI: I’m saying that--

SPARROUGH: Certainly it would just be--

PEI: What kind of weapon would you, because at that point you need to supply Taiwan with attack weapons.

SPARROUGH: We have better long-range, air to air missiles than China does. And it wouldn’t be a fair fight, by the way, with the MRAMs (phonetic).

And giving Taiwan the MRAMs would give them enormous advantage. And their F-16s are better than the-

PEI: No, the Chinese have good long-range rockets.

SPARROUGH: Yes, no question about it.