I. The Security Situation

Peace and development remain the two major themes in today's world. The trend toward multi-polarity and economic globalization is gaining momentum, and the international security situation, in general, continues to tend toward relaxation. Relations among big powers are complicated, with many interwoven contradictions and frictions. However, drawing on each other's strength, cooperating with and checking and constraining each other remain a basic feature of their relationship. The vast number of developing countries, with great potential for growth, are an important force in promoting the establishment of a fair and reasonable new international order, and in safeguarding world peace and development. Science and technology are making progress with each passing day, and economic ties between countries have become ever stronger. Economic development, scientific and technological innovation, and the growth of aggregate national strength remain the priorities for many countries. Worldwide, the forces for peace are prevailing over the forces for war. A new world war will not break out for a fairly long time to come.

The security situation in the Asia-Pacific region has been on the whole stable. Many Asian countries, particularly the East Asian countries, have tided over the financial crisis and their economies are steadily recovering with bright prospects. It is the policy options of most countries to rejuvenate their economies, and enhance dialogue and cooperation. They will continue to develop state-to-state relations in accordance with such principles as sovereign equality and non-interference in the internal affairs of other countries. A number of countries have consistently stood for peaceful settlement of disputes, and engaged themselves in security dialogues in a variety of forms, at different levels and through different channels. All this has helped enhance mutual understanding and trust. The cooperation among ASEAN, China, Japan and the Republic of Korea (10+3) is steadily developing in the economic and financial field. The tense situation on the Korean Peninsula is markedly easing off. China and Viet Nam have signed a land border treaty. The situation in the South China Sea remains generally stable.

However, in today's world, factors that may cause instability and uncertainty have markedly increased. The world is far from peaceful. There is a serious disequilibrium in the relative strength of countries. No fundamental change has been made in the old, unfair and irrational international political and economic order. Hegemonism and power politics still exist and are developing further in the international political, economic and security spheres. Certain big powers are pursuing "neo-interventionism," "neo-gunboat policy" and neo-economic colonialism, which are seriously damaging the sovereignty, inde-pendence and developmental interests of many countries, and threat-ening world peace and security. The United Nations' authority and role in handling international and regional security affairs are being seriously challenged. Under the pretexts of "humanitarianism" and "human rights," some countries have frequently resorted to the use or threat of force, in flagrant violation of the UN Charter and other uni-versally recognized principles governing international relations. In particular, the NATO, by-passing the UN Security Council, launched military attacks against the Federal Republic of Yugoslavia, producing an extremely negative impact on the international situation and relations between countries. A series of negative developments have occurred in the area of arms control and disarmament. In particular, a certain country is still continuing its efforts to develop and introduce the National Missile Defense (NMD) and Theater Missile Defense (TMD) systems, which have undermined the international community's efforts to stem the proliferation of weapons of mass destruction and to promote disarmament. As modern science and technology and economic globalization continue to develop, competition among countries has become fiercer than ever before. Financial and economic risks are increasing, and economic security has become a concern for all countries. As the gap in development and the disparity between rich and poor countries continue to widen all over the world, particu-larly between the South and North, polarization has become an increasingly serious problem.

Local wars and armed conflicts have increased again, with conflicts and turbulence caused by ethnic, religious, territorial, resources or other factors cropping up one after the other. Some countries have continued to enlarge military blocs, strengthen military alliances and seek greater military superiority. This has seriously affected world security and stability. Divisive, terrorist and extremist forces of every description have continued to endanger the international community, and global problems such as the environment, narcotic drugs and refugees have become increasingly prominent.

There are new negative developments in the security of the Asia-Pacific region. The United States is further strengthening its military presence and bilateral military alliances in this region, advo-cating the development of the TMD system and planning to deploy it in East Asia. Japan has passed a bill relating to measures in the event of a situation in the areas surrounding Japan. All this goes against the tide of the times. Joint military exercises have increased in the region, to the detriment of trust between countries. The uncertain factors af3fecting security on the Korean Peninsula continue to exist, and the situation in South Asia remains unstable. Encroachments on China's sovereignty and interests in the South China Sea are not infrequent, and some extra-regional countries are attempting to interfere in this issue.

The Taiwan Straits situation is complicated and grim. Lee Teng-hui flagrantly dished out his "two states" theory in an attempt to split the country. The new leaders of the Taiwan authorities have adopted an evasive and obscure attitude to the one-China principle. Separatist forces in Taiwan are scheming to split the island province from China, in one form or another. This has seriously undermined the preconditions and foundation for peaceful reunification across the Straits. This is the root cause of tension across the Taiwan Straits. The United States has never stopped selling advanced weapons to Taiwan. Some people in the United States have been trying hard to get the Congress to pass the so-called Taiwan Security Enhancement Act. And some are even attempting to incorporate Taiwan into the US TMD system. The newly revised Guidelines for US-Japan Defense Cooperation has failed to explicitly undertake to exclude Taiwan from the scope of "the areas surrounding Japan" referred to in the Japanese security bill that could involve military intervention. These actions have inflated the arrogance of the separatist forces in Taiwan, seriously undermined China's sovereignty and security and imperiled the peace and stability of the Asia-Pacific region.

The world is undergoing profound changes which require the discard of the Cold War mentality and the development of a new security concept and a new international political, economic and security order responsive to the needs of our times. The core of the new security concept should be mutual trust, mutual benefit, equality and cooperation. The UN Charter, the Five Principles of Peaceful Coexistence and other universally recognized principles governing international relations should serve as the political basis for safeguarding peace while mutually beneficial cooperation and common prosperity its economic guarantee. To conduct dialogue, consultation and negotiation on an equal footing is the right way to solve disputes and safeguard peace. Only by developing a new security concept and establishing a fair and reasonable new international order can world peace and security be fundamentally guaranteed.

China's fundamental interests lie in its domestic development and stability, the peace and prosperity of its surrounding regions, and the establishment and maintenance of a new regional security order based on the Five Principles of Peaceful Coexistence. China will continue to develop friendly relations and cooperation with all other countries. It will make unswerving efforts to safeguard and promote the peace, stability, prosperity and development of the Asia-Pacific region in particular and the world in general.