Amid its intensive efforts to raise money overseas to help pay for military operations in the Persian Gulf, the Bush administration recently turned down an unsolicited offer by Taiwan to contribute roughly $100 million to the United States.
Although the United States needs the money, the administration wants to avoid antagonizing China, which holds one of five permanent seats with veto power on the U.N. Security Council and so far has gone along only hesitantly with U.N. resolutions on the gulf crisis. China strongly opposes any U.S. action that could be seen as conveying official recognition of Taiwan's Nationalist government.
Two weeks ago, President Bush and national security adviser Brent Scowcroft held an unannounced meeting at the White House with Han Xu, China's former ambassador to the United States. Han, who is a long-time friend of Bush, traveled from Beijing to Washington seeking a renewal of high-level contacts between the United States and China and a lifting of the curbs on World Bank loans to China.
Taiwan's offer of financial help to the United States was made during a recent visit to Washington by Vice Foreign Minister C.J. Chen, according to diplomatic sources. While Saudi Arabia, Kuwait, Japan and Germany have offered billions, Taiwan's offer of $100 million is larger than that of most other nations. For example, South Korea, which is larger and more populous, has offered $50 million in cash and $70 million in materiel and services over a two-year period.
A spokesman for Taiwan's office in Washington, the Coordination Council for North American Affairs, declined to confirm or deny that the $100 million offer had been made, terming it "a sensitive issue."
But the spokesman added: "Speaking hypothetically, even if we did make an offer and it was turned down, we should be understanding. . . . The administration seems to appreciate the efforts the communist Chinese regime has shown, particularly since they sit on the Security Council."
The White House did not respond to a query about Taiwan's offer. A senior U.S. official, while declining to comment specifically on the offer, acknowledged that Taiwan officials "have indicated they wanted to be helpful."
"It was at their initiative," the official said. "Whatever they have done has been something they wanted to initiate."
When Treasury Secretary Nicholas F. Brady traveled to Asia to seek financial help for the Persian Gulf operations, he stopped in Japan and South Korea, but not Taiwan, whose $64 billion in foreign-exchange reserves rank behind the United States and Japan as third-highest in the world. The United States broke off diplomatic relations with Taiwan when it restored ties with the People's Republic of China in 1979.
According to knowledgeable sources, when Vice Minister Chen offered the money to the Bush administration, U.S. officials suggested that the regime should instead give the money to Egypt, Jordan and Turkey, the three Middle Eastern countries that have been most financially pressed by the gulf crisis.
A few days ago, Taiwan Foreign Minister Frederick F. Chien announced in Taipei that Taiwan had decided to give $30 million -- a much smaller sum than was offered to the Bush administration -- to the Middle Eastern countries hurt by the crisis.
One source familiar with the $100 million offer said the administration turned Taiwan down in part because it does not want to become a financial clearinghouse for international funds in the gulf crisis. However, the source acknowledged that the administration also rejected the offer for foreign-policy reasons -- primarily its desire to avoid further clouding the unsettled U.S. relations with China.
During the gulf crisis, China has pleased the Bush administration by supporting all of the U.N. resolutions on Iraq, including one that indirectly authorizes the use of force to enforce the international embargo.
However, Chinese officials have raised doubts about whether they would endorse any military action by a multinational force if the embargo fails to pressure Iraq to withdraw from Kuwait.