Category Archives: China

President [George H.W.] Bush called me Monday morning, June 5th [1989]. Earlier that day in Washington, in his first official comment on the crackdown, the president had announced a ban on new weapons sales and suspension of military contacts. In our phone conversation, I told President Bush that things were pretty calm on the ground but that my main concern was the safety of American citizens in Peking, particularly American students living at Peking universities that were the locus of the student movements.

At the U.S. Embassy, we were already getting heat from the American press, which had gathered en masse in front of the embassy at 7 that morning, clamoring to know how the embassy was going to safeguard the lives of Americans in Peking. Fortunately for the U.S. government, McKinney Russell, a career officer at the old United States Information Agency, was an experienced hand. Russell knew that any story, once the fighting subsides, becomes a local story. He had called me at about 6:30 a.m. that morning, and we got our cue cards together. Yes, we assured the journalists, we had scouted out evacuation routes and organized buses to get students out of harm’s way and take them to hotels or to the embassy. We fended off the hungry journalists, but we knew they would be coming back for more.

At this point, I should have put into place a general evacuation order as some other embassies had done, in particular the Japanese and French Embassies. I would have saved myself a lot of headache, but we went about it piecemeal. We started evacuating students on Monday, and on Tuesday embassy personnel started calling all Americans to urge them to leave Peking. But we waited until Wednesday, June 7, to inform American residents of a voluntary evacuation procedure for all Americans. Initially, I relied on the Consular Section, which has the responsibility for the welfare of American citizens, to do the calling and planning. Later, at [military attaché Jack] Leide’s suggestion, I switched the evacuation planning to the military attaché’s office because, as military men, they were better organized to handle this sort of crisis operation.

[Assistant military attaché] Larry Wortzel’s frustration over delays was the catalyst for the change. On June 8, after scouting evacuation routes and informing American citizens of collection points, Wortzel returned to the embassy prepared to lead a convoy of embassy vehicles at 11 a.m. But he discovered that little progress had been made in assembling the convoy. Diplomats and others were haggling over insignificant details, like who would drive which car. Wortzel stormed out of the room, cursing a blue streak. He bumped right into me. Ten minutes later, I found Wortzel in his office. I dumped the batch of motor pool keys on his desk. “You are in charge,” I said. “Get this convoy out of here in 30 minutes.”

The delays brought all sorts of opprobrium down our–largely, my–head. Disgruntled Americans gave the media the story they wanted: The American government wasn’t performing well in a crisis. Stories appeared in the stateside press about the embassy’s “failure” to assist U.S. citizens trying to get out of China. Magnifying the “failure” was news footage from Peking that showed a city under lockdown with the possibility of more clashes. There was talk of civil war between branches of the Chinese military, which had different views of the crackdown. The reports were wrong. At the embassy, we knew from accurate reporting by Wortzel that rumors of a split in the PLA were overstated. It turns out that a Canadian military attaché, who had never been trained in ground combat, asserted to the press that civil war between ground troops was imminent. The attaché had looked at tanks facing outward on a highway overpass with guns pointed in three directions and come to his erroneous conclusion. This fueled the rumor mill racing around Peking and over the airways.

Nevertheless, despite our best efforts, I was behind the curve. Hysteria set in on the other side of the Pacific Ocean. Our Citizen Services Center started getting about 2,000 calls a day from Americans concerned about family members in China, and politicians in Washington excoriated the Bush administration for failing to act to protect Americans. I had people badmouthing me in Peking and all over the U.S.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2005), pp. 324-326

Economic historian Niall Ferguson contrasts Europe and China in today’s LA Times.

EUROPEAN UNION finance ministers went to China last week. Their trip may shatter the complacency that seems to pervade European capitals these days. “Wake up and smell the coffee” is what we like to say here in the U.S. when we encounter complacency. But it’s the Chinese green tea that the Europeans need to wake up and smell….

Today, as a result of reforms dating to the late 1970s, China has the most dynamic economy in the world and quite possibly in all history. Europe, by contrast, is fast becoming the “sick man” of the developed world — a title held until recently by Japan.

Over the last decade, according to the International Monetary Fund’s latest World Economic Outlook report, growth in the core economies of the EU that make up the Eurozone has been a sluggish 2% per year. Growth in China has been more than four times faster. In dollar terms, China’s gross domestic product is already about one-fifth the size of the Eurozone. Project those growth rates forward and China could overtake the Eurozone within 30 years.

Europe’s sluggish growth is only one of several reasons why China’s leaders rank the EU significantly behind the United States in the global pecking order. Leave aside the two other big reasons, lack of military clout and lack of significant energy reserves, both of which make Russia seem more important to Beijing than Europe. And purely as a potential market for China’s exports, Europe seems less promising than China’s own Asian neighbors.

via RealClearPolitics

In Taiwan I had to get used to the unusual situation of conducting diplomacy in a country with which America wasn’t supposed to have diplomatic relations. To wit, at AIT [American Institute in Taiwan] we were officially consultants under contract to the State Department working in an unofficial capacity at a nonembassy to advance America’s interests in Taiwan. It was a mouthful, and the semantics and diplomatic gyrations that American representatives in Taiwan had to go through were at times humorous, at times frustrating.

Starting with the mundane, we had to develop a new vocabulary to conduct diplomacy. The embassy became an institute in 1979, and I was its second director, following veteran diplomat and fellow China hand Chuck Cross. At the institute, there were no American flags flying, no national days celebrated, nor Marines in red, white, and blue. Instead of a political section, we had a general affairs section or GAS, perhaps an appropriate acronym for political reporting. Rather than a consular section, there was a travel service section. In our daily lives, we had to be careful to adhere to certain rules. If I were addressed by a Taiwanese journalist as ambassador, I had to ignore him. If at some function or performance we were seated in the special section reserved for diplomats, we had to suggest that this was not quite right. Most of the time we ended up sitting there anyway. Should the agressive Taiwanese press have caught wind of any protocol slipup on our part and used it to trumpet recognition of an upgrading of the relationship, we would have caught hell from both Washington and Peking.

The most frustrating part was that we were prohibited from meeting with Taiwanese Foreign Ministry and Defense officials as well as with the president himself in their offices, nor could they visit us in ours. We could meet with a designated group of Taiwanese foreign service officers who staffed AIT’s counterpart organization on the Taiwan side. But we had to transact the majority of our discussions in other venues, like restaurants, country clubs, golf courses, and private homes. Perhaps the most serious casualty of such restrictions was our waistlines. Dinners and cocktail parties–the staple of most diplomatic posts–took on added importance in Taiwan. A rich Chinese diet can wreak havoc with an American-fed body, as it did with mine.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2004), pp. 238-239

On the business front, the trip with [George H.W.] Bush [in 1977] was more of a success. Hugh Liedtke, the chairman of Pennzoil, met with Minister of Foreign Trade Li Qiang, and during a meeting with Deng Xiaoping at which Bush and I were present, Bush made significant headway in persuading Vice Premier Deng to allow American oil companies to work in China. At that point in 1977, Deng, who had been restored to his posts earlier in the year with the help of powerful backing in the military, was about a year away from introducing his initial plans for economic reform in China. An old oil man himself; Bush “sold” Deng on the concept of a “risk contract” in which U.S. companies would assume the significant costs of exploration for oil in places like the South China Sea and then share the proceeds from production if oil were discovered. Deng liked the idea because it would allow China to bring into the country free of charge the technology and capital needed to exploit oil resources and then still share in the profits. Deng also knew that his own oil people had oversold him on their capabilities, leaving China with semi-submersible rigs that no one knew how to use and jack-up rigs that had turned over in the Gulf of Bo Hai in northeast China. The concept of “risk contracts” became the basis for joint ventures in oil exploration between the United States and China.

Bush’s meeting with Deng built on the acquaintance they had formed during his posting in China and laid the foundation for future meetings, including two more in the next three years that I would also be privileged to attend. In spite of their diminished political statures in 1977–Bush being out of power and Deng having just returned to his government posts from being temporarily purged–I believe that Bush and Deng sized each other up as future leaders. Just as former President Nixon and Henry Kissinger had forged personal ties with Deng’s predecessors, Mao and Chou En-lai, Bush was developing a relationship with Deng that eventually became critical in sustaining U.S.-China ties in troubled times and advancing them in better times. When the two men ascended to the tops of their respective governments, their personal connection facilitated a blending of American and Chinese interests into a workable formula. This congeniality of leaders at the highest levels is, I believe, one of the keys to managing the Sino-American relationship.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2004), pp. 203-204

Maybe not just the Sino-American relationship.

One of my biggest operations involved ensuring a “favorable” outcome in the elections to the National Assembly in 1967. With more attention being focused on the war in Southeast Asia and with the National Assembly in Laos starting to play a larger political role in the country, we thought it was important for Vang Pao to have more of a say in the political governing of the country. We figured out whom to support without letting our fingerprints show. As part of our “nation building” effort in Laos, we pumped a relatively large amount of money to politicians who would listen to our advice. In the election, “friendly” politicians won fifty-four of fifty-seven seats. Ambassador Sullivan referred to me as Mr. Tammany Hall, an allusion to New York City’s prodigious Democratic vote-getting machine of the late nineteenth century.

With the CIA’s mission expanding so rapidly, our intelligence gathering and reporting efforts boomed. As CIA personnel, we had better access to parts of Laos than our State Department colleagues. In fact, few Foreign Service officers were even allowed to visit places like Long Tieng. The major exception was Ambassador Sullivan, who oversaw the whole military effort in Laos. But other than him, during my time in Laos, only a handful of State Department personnel made it up to Long Tieng. Sometimes, we were in the awkward position of “outreporting” our State Department colleagues in the embassy, who were supposed to be the experts in designated fields such as the Lao economy, politics, and culture. In some cases, their best sources for information turned out to be our paid agents. We had to be discreet in handling such touchy situations. Since I had worked with many of the Foreign Service officers at other posts in Asia, I was given the job of smoothing ruffled feathers. Sometimes I succeeded. Sometimes I failed.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2004), p. 120

Hong Kong was the best listening post into “Red China.” It was, as the long-distance telephone ad used to say, “The next best thing to being there.” The island-colony was roiling with action in 1953. Unlike on Taiwan, there were many trade and transportation links to the mainland, and because of its location, Hong Kong was a crossroads for Chinese of all stripes. It was a base for agents from China and Taiwan and, therefore, served as one of the few places where the two sides could rub elbows, and, if the situation called for it, pass on communications to each other’s governments. Wealthy capitalists from Shanghai sought refuge in Hong Kong after the Communist revolution and spent much of their time trying to find a way off the island. Furthermore, refugees were streaming in from the mainland. Since 1949, more than one million Chinese had arrived in the city and its surrounding territories. There were an estimated 300,000 squatters in Hong Kong and its territories. Most of the refugees, the majority of whom were farmers and laborers from southern China, came in search of work and a better livelihood. Amazingly, with its improving economy and free enterprise methods, Hong Kong was able to accommodate most of them….

I started out working with the Pao Mi Chu, Taiwan’s intelligence apparatus. I worked under “deep cover,” meaning that I kept my true identity a secret from the Chinese people with whom I worked. I used aliases when I contacted agents or met with counterparts in Taiwan intelligence. The one I used most often was “John Wright.” I would meet with agents in hotel rooms or in safe houses, apartments that had been scouted beforehand to make sure they were not under surveillance by the Communists’ huge underground apparatus in Hong Kong. We debriefed refugees and travelers to China, placed agents on ships going to Chinese ports, and helped establish a base in Macao to take advantage of the flow of Chinese between Macao and the mainland….

In the course of my work, I was learning that we could accomplish far more by debriefing travelers or people returning from China than we could by planting frightened resident agents in the country. The resident agents naturally tended to be fearful of getting caught. Travelers, on the other hand, moved more freely and without that fear. Using debriefings, I started to gather useful information for the CIA about what was going on in China. Unfortunately, in those days CIA was obsessed with the idea of a resident agent with a radio no matter what the level of his access or his ability to survive. They focused on process over substance.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (Public Affairs, 2004), pp. 84-86

By the 1950s, Yale had a long association with U.S. government intelligence collection. After all, Nathan Hale (“I regret that I have but one life to give for my country.”) was Yale’s first unsuccessful spy. Because of their high intelligence caliber and language abilities, Yale graduates were considered attractive candidates for intelligence work. Yale had played a part in the formation in 1942 of the Office of Strategic Services (OSS), which was created to carry out intelligence gathering and paramilitary operations against Germany and Japan. From Yale’s class of 1943 alone, … at least forty-two young men had entered intelligence work, with most going to the OSS. Many of these men stayed on after the war and helped form the core of the new Central Intelligence Agency, which took over the duties of the OSS in 1947.

The connection between Yale and the new CIA started at the top. Yale’s president for most of the time I was there, Charles Seymour, was on close terms with Allen Dulles, a top OSS official in World War II and after 1953 the head of the CIA. Seymour’s daughter actually worked for the OSS in Europe during the war. During my time at Yale, recruiters on campus for the CIA included the varsity crew coach as well as eminent professors.

One of those professors invited me to see him on a fall day in 1950. He ushered me to sit down in his dark, wood-paneled study. It was late afternoon, and the room was in shadows. The walls of the study were lined with leather-backed volumes on Renaissance history, the Chinese classics, and English literature. The professor smoked a pipe. Between puffs, he made his pitch. Even though I barely knew who he was, he clearly knew of me and what I had been doing at Yale. “You were born in China. Your family saw the collapse of China,” he started out. “And here at Yale you are a Russian major?” he asked quizzically. He tried to dissuade me from a career in the diplomatic service or corporate world by mentioning that I hadn’t taken any business or accounting courses at Yale. The State Department, he told me, was stuck in cement. “Look at what you are interested in and consider intelligence. It’s a growth industry.” He then talked about the crucial role intelligence had played in past wars and the exciting nature of the work. He explained that people were needed who had been exposed to foreign environments. I was sold even before he got to my personal qualities. “Besides,” he added, “You are a leader. As captain, you turned the soccer team around.”

Like so many of my fellow students at Yale, including an English major and wrestler from Wallingford, Connecticut, named Jack Downey and a sophomore from South Bend, Indiana, named George Witwer, I was excited by the prospect of an adventurous career and by the idea that I could contribute to efforts to stem the tide of communism. It was a good cause, and I believed that the United States and its values were worth fighting for. In the foreword of that same 1951 classbook in which Peter Braestrup gave voice to ambivalence on campus was a chilling sentence: “We face the realization that the very civilization we have trained ourselves to foster has been placed on the verge of destruction. The challenge to each of us as individuals cannot be over- emphasized.” I quickly signed up for the CIA. So did about a hundred of my classmates.

SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (PublicAffairs, 2004), pp. 69-71