Annual Report 2006

The United States-China Policy Foundation

Washington, D.C.

From the President... As we end our 11th year at the U.S.-China Policy Foundation, I want to take the opportunity to share some of my thoughts, ideas, and goals with you. To begin, I want to extend my heartfelt gratitude to our dedicated board and staff members. Their contributions and hard work are responsible for creating the successful organization we have today. Despite our shoestring budget, our team selflessly offers its time, skills, and knowledge because it believes in our mission. We here at the foundation understand the importance of promoting U.S.-Sino cooperation and will continue to make that our priority.

The year 2006 was very eventful. Our programs and activities have flourished over the past 11 years, but some of our proudest and most important achievements occurred this year. I do not want to itemize them, but I would be remiss if I neglected to mention some of our proudest moments.

First, and most importantly, on April 20 the U.S.-China Policy Foundation was fortunate enough to co-host a dinner honoring the president of the People’s Republic of China, Hu Jintao, during his first visit to the United States since becoming president in 2003. President Hu visited Seattle, Washington, D.C., and Connecticut. USCPF was proud to be a member of the coordinating committee that organized the dinner in honor of President Hu during his visit to Washington. This prestigious event was held at the elegant Wardman Park Marriott Hotel, and more than 900 distinguished guests from the political, business and non-profit sectors attended. At the dinner, President Hu reiterated China’s desire to form stronger relations with the United States while promoting economic development at home.

Second is the annual Policymakers Seminar and Trip to China. Every year we recruit congressional staff members interested in U.S.-China relations to attend a series of lectures before traveling to China to meet with their counterparts. In the 10 years since the program was introduced, more than 150 congressional staffers have said the program helped them gain a better understanding of China.

The year culminated with our annual gala held on December 5 at the historic Willard Intercontinental Hotel. It was an honor to have the event hosted by Chinese Ambassador Zhou Wenzhong and receive many distinguished guests such as members of congress and congressional staff, U.S. government officials, foreign embassy officials, and corporate executives. I was delighted by the support given by so many major U.S. corporations. The gala made it abundantly clear U.S.- China relations are moving in a positive direction.

Other notable events included a dinner and reception for the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products, which allowed American and Chinese business executives to meet in an intimate setting and pave the way for a positive visit for President Hu. This past summer we also completed a pilot program, the first of its kind, which sent nine teachers to China to study the education system as well as Chinese history and culture.

The past year has been filled with exciting programs, activities and trips. We are working on important events for the next year, including arranging a business delegation to be sent to China. In the past 11 years, I have personally witnessed the changes in attitude and policy toward China. Although China’s rising global importance is one of today’s hottest topics, I find support for advancing U.S.-China cooperation is under-funded and under-recognized. As a small non-profit organization, we are facing greater competition as China’s influence grows. That is why your support is invaluable to our continued existence. The USCPF owes a great debt of gratitude to our individual, foundation and corporate donors who enable us to host these great programs and support our efforts to promote greater understanding of U.S.-China relations.

Chi Wang, Ph.D.President and Co-Chair

Dr. Chi Wang, President and Co-Chair of the U.S.-China Policy Foundation, delivers closing remarks at the annual gala dinner

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Front Cover: Pottery Court Lady, the Tang Dynasty (618 A.D.-906 A.D.), China, from the collection of Chi Wang

China Chamber of Commerce for the Import and Export of Machinery and Electronic Products Reception and Dinner USCPF held a dinner and reception in honor of a delegation, which consisted of over 100 CEOs from major Chinese companies, from the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products at the Willard Intercontinental Hotel in Washington, D.C. The CCCME delegation was part of a broader delegation that included Vice-Premier Madame Wu Yi and Chinese Commerce department officials. The delegations traveled throughout the U.S. to meet and sign deals with new and old American business contacts. Occurring just two weeks before Chinese President Hu Jintao’s visit, the delegation paved the way for a positive visit.Keynote Speakers: Ms. Yao Wenping, head of the delegation and Vice President of the China Chamber of Commerce and Ambassador Chas W. Freeman, Jr., co-chair of the U.S.-China Policy Foundation, former Assistant Secretary of Defense, former ambassador to Saudi Arabia,

Dr. Chi Wang, Ms. Yao Wenping and Ambassador Chas Freeman at the CCCME Reception

Program Report

President Hu Jintao of the People’s Republic of China and Dr. Chi Wang, President and Co-Chair of USCPF

Dinner Honoring President Hu JintaoThe U.S.-China Policy Foundation (USCPF) co-hosted a dinner and reception for Chinese President Hu Jintao during his first visit to the U.S. as president. During the dinner, President Hu addressed various policy issues relating to the U.S.-China relationship and stressed China’s desire to form stronger relations with the U.S.Co-Hosts: U.S.-China Business Council, National Committee on U.S.-China Relations, and the United States Chamber of Commerce (April 20, 2006)

Special Events

USCPF Annual Gala DinnerUSCPF, with over 250 distinguished guests, celebrated its 11th Anniversary at the Willard Intercontinental Hotel.Host: Chinese Ambassador Zhou Wenzhong (December 5, 2006)

Ambassador Zhou Wenzhong addresses guests at the USCPF’s Annual Gala Dinner

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Delegation of Chinese Press Secretaries The USCPF hosted a luncheon for a delegation of 19 Chinese press secretaries of different Ministries of the State Council at the National Press Club. USCPF also arranged for the delegation to attend training classes at The George Washington University. (October 20, 2006)

19 Chinese Press Secretaries at a luncheon in their honor

Policymakers Seminar Series and Trip to China provides a selected group of congressional staffers with the opportunity to enhance their understanding of China and the complexity of U.S.-China relations (May-August, 2006)

Policymakers Seminars

China Past and Present Dr. William Johnson, Former Head of History Department and Co-Director of Sigur Center for Asian Studies, George Washington University -Dr. Johnson described the two competing traditions in Chinese history, State Nationalism and Liberal Nationalism, and their impact on China’s historic events and politics. These traditions, and the tensions caused by them, will interact with the international environment to shape the future of China. (May 12, 2006)

China’s Domestic Political System Dr. Paul Heer, Senior China Analyst at the Central Intelligence Agency -Dr. Heer described the structure of Chinese leadership and discussed the past and present trends in Chinese domestic politics and their impact on economic growth. Despite growing institutionalization, the government is still deferential to the Chinese Communist Party, which depends on economic growth as a source of legitimacy. (June 2, 2006)

China’s Security Interests Admiral Eric McVadon, Director of Asia-Pacific Studies for the Institute for Foreign Policy Analysis of Cambridge, Massachusetts, and Washington, D.C. and former U.S. defense and naval attaché at the American Embassy in Beijing -Admiral McVadon provided an insightful presentation focused on the ‘bigger picture’ of East Asia’s new security architecture, the shifting dynamics of power and relationships where China is now a major player in that architecture, and the question of Taiwan. (June 16, 2006)

Economics and U.S.-China Trade, Dr. Pieter Bottelier, adjunct Professor at Johns Hopkins University, SAIS and a Senior Advisor at the World Bank-Dr. Bottelier gave a historical overview of China’s economy

and growth strategy. China’s economic success has been fueled by its high domestic rates of saving and investment. China’s fantastic economic growth, however, has not come without a price; China’s economic growth has created immense social inequality and a reliance on investment and foreign capital inflows. Bottelier concluded with the assertion that despite some negatives, the U.S. economy as a whole has benefited from China’s economic growth. (June 30, 2006)

China’s New Leadership Dr. David M. Lampton, Director of China Studies at the Johns Hopkins School of Advanced International Studies and Director of China Studies at the Nixon Center -Dr. Lampton’s lecture focused on China’s new leaders and their objectives. The new generation of Chinese leaders are dramatically different than previous generations. Not only are the new leaders much more educated, they also tend to be technocrats and pursue a factual and pragmatic approach to internal and external affairs.(July 14 2006)

Policymakers delegation attend a meeting at the Ministry of Foreign Affairs in Beijing

Dr. Lampton lectures the Policymakers on China’s New Leadership

U.S.-China Exchange ProgramsAnnual Report- Page 3

Policymakers participants in Beijing

U.S.-China Relations Ambassador Stapleton Roy, Managing Director of Kissinger Associates, Inc. and former ambassador to the People’s Republic of China, Singapore and Indonesia -The U.S.’s influence in Asian affairs is waning as Asian nations are becoming more dominant in regional affairs. China’s economic growth and political reform have contributed to a strong China with heavy influence in regional issues. China still, however, faces a myriad of domestic problems that may infringe on China’s foreign policy, thus negatively affecting international development and relations. (July 28, 2006)

Policymakers Trip to China -In August, the USCPF took a group of 12 congressional staffers on a week long trip to Beijing, Xian and Shanghai where they met with Chinese officials, business leaders, lawmakers, and scholars. Some highlights of the trip include: meetings at the U.S. Embassy in Beijing, the Ministry of Foreign Affairs, and the Shanghai Stock Exchange and a visit to Xian’s Children’s Welfare Institution, a special center for orphans and disabled children. The participants also toured historical Chinese landmarks such as the Forbidden City, the Great Wall, the Terracotta Warriors and the Wild Goose Pagoda in order to expand their knowledge of Chinese history and culture. At the end of the trip, the members of the delegation were asked to write a report expressing their newfound knowledge of China. As result of the trip and lecture series, the congressional staffers felt better equipped to provide relevant and accurate information to members of congress regarding policies relating to China. (August 9-16, 2006)

American Teachers Delegation Trip to China began with a two-week workshop in 2005 consisting of lectures, films, and discussions and ended with a two-week trip to China in 2006. The teachers spent two weeks traveling to Beijing, Xian and Shanghai, where they met with officials from the Chinese Ministry of Education, toured local schools, met with local teachers and well-known university professors and scholars and visited several important cultural sites. The delegation was composed of nine high school teachers from the Washington D.C., area, and its purpose was to provide teachers who teach courses on history, art, geography, etc. relating to China an opportunity to explore in depth China’s rich historical and cultural traditions and help the participants formulate strategies and materials for teaching about China in their own classrooms here in the U.S. (June 21- July 7, 2006)

The American Teachers Delegation at Qianmen middle school in Beijing

Students met with the American Teachers Delegation at a middle school in Beijing

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General Marshall, Chiang Kaishek and Madame Chiang photographed during his mission to China

General George C. Marshall Event celebrating the opening of a photo and art exhibit commemorating General Marshall’s Mission to China. The event was held at Dodona Manor, the Marshall’s home in Leesburg, Virginia. Keynote Speaker: Dr. Chi Wang, President and Co-Chair of USCPF and Professor at Georgetown UniversityHost: The George C. Marshall International Center (May 18, 2006)

Defense Delegation USCPF arranged for a Senior Defense Studies Delegation Trip to China to discuss China’s defense budget. After the delegation returned, an extensive report on their findings was published by USCPF. (November 4-11, 2006)

A Delegation from China Educational Association for International Exchange met with congressional staff. Host: The U.S.-China Policy Foundation

Members of the Senior Defense Studies Delegation traveled to China to discuss China’s defense budget Breakfast for Ambassador Wang

Yunxiang USCPF welcomed Ambassador Wang Yunxiang of the Chinese People Institute of Foreign Affairs (CPIFA) at the Monacle Restaurant in Washington, D.C. (December 8, 2006)

The Washington Journal of Modern China resumes publication Dr. Marcia Ristaino

joined the journal as the new editor. The Washington Journal of Modern China, published by USCPF twice yearly, is a scholarly journal on modern Chinese culture, economics, history and U.S.-China relations. (Spring/Summer 2006)

The Washington Journal of Modern China, published by USCPF

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Reception for Professor Zhan Furui, the newly appointed director of the National Library of China, in San Francisco during the annual meeting for the Association for Asian Studies. During the meeting, Dr. Chi Wang and Dr. Zhan Furui also announced the establishment of the Chinese Materials Service Center (CMSC) at the National Library of China in Beijing.Opening Remarks: Dr. Chi Wang, President of the USCPF and Professor at Georgetown University Host: The U.S.-China Policy Foundation (April 6-8, 2006)

Professor Zhan Furui, director of the National Library of China, speaks to other guests at a reception in his honor

USCPF Hosts Dinner for a delegation from the China Education Association for International Exchange. (September 22, 2006)

Defense Related-Spending in China: A Preliminary Analysis and Comparison with American Equivalents by Dennis J. Blasko, Chas W. Freeman, Jr., Stanley A. Horowitz, Evan S. Medeiros, and James C. Mulvenon. This publication was the result of a U.S. delegation led by Ambassador Chas Freeman, Jr., Co-Chair of USCPF, to Beijing to participate in a Track II exchange on the subject of Chinese and U.S. defense budgets. (May 2007)

Publications

Founding Members

The Honorable John H. HoldridgeThe Honorable Arthur Hummel, Jr.

Honorary Chairman

Mr. Maurice R. (Hank) Greenberg

Executive Board

The Honorable Donald M. AndersonAdmiral Dennis BlairThe Honorable Chas W. Freeman, Jr.†Dr. Bates GillThe Honorable Herbert HorowitzDr. Robert KappDr. David M. LamptonDr. Kenneth LieberthalMr. Leo A. Orleans*The Honorable James Sasser

The Honorable J. Stapleton RoyDr. Richard SolomonDr. Wang Chi† *

Honorary Advisors

The Honorable Max BaucusThe Honorable Dianne FeinsteinThe Honorable Barbara Hackman FranklinSenator Chuck HagelFormer Secretary of State Alexander Haig

Advisory Board Members

General John C. PhillipsDr. John Young

†Ambassador Freeman and Professor Wang are Co-Chairs of the Foundation. *Denotes Founding Member of the Foundation

Dono

rs 2006 ContributorsCorporate and Foundation DonorsFreeman FoundationFedExUPSPhoenix Satellite Television Barbara Franklin EnterprisesMiller + Martin PLLC

Individual DonorsDonald Anderson Chas W. Freeman, Jr.Bates GillLawrence E. GillespieMartha M. Holdridge Herbert E. Horowitz Betty Lou HummelWilliam Johnson Robert KappFredrick C. LaurenzoEric McVadonKah Meng Ng

Leo OrleansJohn PadenJohn Phillips Sheldon L. Ray David M. Schwartz Grace L. ShuNolan SkluteRichard SolomonDavid and Penny YaoChi Wang

USCPF Annual Gala ContributorsSponsor: $20,000 and overFedExLas Vegas Sands CorporationDr. Chi Wang

Supporter: $10,000-19,999AmgenAnheuser-BuschThe Hershey Company

IBMStonebridge International LLCUPS

Donor: $5,000-9,999DaimlerChrysler CorporationHong Kong Economic and Trade OfficeMicrosoft CorporationPepsiCo InternationalWal-Mart Stores, Inc.

Contributor: $2,000-4,999AirbusCargill, Inc.China Telecom USA CorporationMei Ling Tong Lee and Kam Keung LeeUnited Airlines

Other: $100-999Jim ClarkeLeo A. OrleansMadelyn RossMinnie TangDavid Y. Yao

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As a non-profit 501(c)(3) organization, all contributions to the USCPF are completely tax-deductible and are always used to support our worthy and cost effective-programs. All contributors will be identified in the subsequent USCPF newsletter.

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The U.S.-China PoliCy FoUndaTion

316 Pennsylvania avenue, seWashington, DC 20003

tel: 202-547-8615Fax: 202-547-8853

Web: http://www.uscpf.orgemail: usCPF@usCPF.org

Program assoCiates:tessa Klein

Kelsey stramPe

bonnie berry

researCh assoCiates:DaviD Canes

gao Qing