Good afternoon. Before I begin to take your questions I'd just like to make a few points.

First, I am here at the direction of President Bush and Secretary Powell, and at the invitation of the Chinese Government, to review our on-going program of cooperation to counter terrorism around the world. We are discussing how to deepen and expand that cooperation.

My visit is a part of a continuing dialogue. This is the third time that I've met my counterpart, MFA International Organizations Department Director Li Baodong. It is our first meeting since our Presidents Bush and Jiang decided at the APEC meeting in October to formalize a process of bilateral counterterrorism consultations.

In my meetings yesterday and today, we decided that our formal counterterrorism consultations should occur semiannually. This does not preclude frequent, in fact even daily, contacts at the experts and working levels, and both sides recognized the need for continuous discussions between Chinese and U.S. officials. As an example we agreed to establish a U.S.-China Financial Counter-Terrorism Working Group and a small group of Chinese experts will visit the U.S. in early 2002 pursuant to this initiative.

For the record, I am leading an inter-agency delegation with representatives from a number of Executive Branch agencies, including members from the FBI, the Department of Defense and the Department of Treasury. The composition of the Chinese delegation parallels that of ours.

On substance, it is clear to me that the strong support of top leaders in both the United States and China has already fostered a robust, multi-faceted and evolving partnership designed to confront a common threat that we face, that is global terrorism. It was clear in my discussions that the Chinese leadership, along with counterparts at my level, share our resolve in shutting down the global terrorist network linked to Osama Bin Laden and his al Qaida organization.

The United States is pleased with the support we have received from China in the aftermath of the September 11 attacks. The Chinese Government quickly declared that China and the United States faced a common threat. The Chinese Government has responded quickly and positively to specific requests for assistance, and also took steps on its own to protect its borders and respond to that common threat. In the weeks and months since, building on this foundation, we have materially increased our cooperation in a number of important areas. These include close coordination at the United Nations, sharing of information and intelligence, law enforcement liaison, and the monitoring of financial assets. This week, both sides agreed to continue and strengthen our efforts in all of these areas.

Along these lines, I am glad to report that the Chinese Government has agreed to give positive consideration to the establishment of a Legal Attache Office in our Beijing Embassy. We anticipate posting FBI personnel to that office if approved, which will greatly improve the efficiency of our law enforcement cooperation.

Ladies and gentlemen, I am ready now for your questions.

Question: Does America consider East Turkestan organization a terrorist organization? And did you touch upon the situation of Moslems in Xinjiang? And do you suspect that there is terrorist money hiding in China or Hong Kong or Macau? Thank you.

Answer: No, the U.S. has not designated or considers the East Turkestan organization as a terrorist organization. We did have discussions about Chinese citizens from western China who have been involved with the Taleban and Al-Qaida in Afghanistan and the fact that these individuals were among some of those that have been captured during our military operations there.

In our discussions we discussed the fact that while these people are indeed involved in terrorist activities in Afghanistan that the legitimate economic and social issues that confront people in Northwestern China are not necessarily counter-terrorist issues and should be resolved politically rather than using counter-terrorism methods.

Question: And what about the banking? Is China hiding terrorist money?

Answer: Not that I'm aware of. In fact we've been cooperating very closely with the Chinese on terrorism financing as we've cooperated with other nations throughout the world.

Question: Can you give us a little more information about this FBI office? Just similar to offices that the FBI would have opened up in places like Moscow, Budapest.

Answer: Exactly.

Question: So nothing dramatically new about this?

Answer: When the President announced our campaign against terrorism he said that it was going to be a very unique campaign from what people had generally seen in any sort of campaign. As a retired military officer, it's generally the case that when people think of campaigns, they think of military campaigns. The President said that this campaign would use diplomatic, economic, law enforcement and intelligence capabilities, as well as military capability, of the United States and our partners as we took on this worldwide menace called terrorism. And a very, very important part of the campaign is law enforcement cooperation. And we've had excellent law enforcement cooperation with our Chinese partners over the years. We think this will enhance our ability to have that law enforcement cooperation with a permanent office here in Beijing and, as I mentioned in my statement, we understand that the Chinese government is giving very positive consideration to our request.

Question: Just to confirm, that would mean that this office would not be dealing solely with counter-terrorism; it would be dealing with any number of issues involving...

Answer: Law enforcement cooperation. Exactly.

Question: Within the last week or so the Chinese have made it very clear that while they're willing to support the United States in its military effort in Afghanistan, they will not support any kind of unilateral military effort by the United States in other areas. What they really said was, if you've got to do it somewhere else, do it via the UN. I wondered if you had conversations about this with your counterparts and if you can clarify their attitude about that?

Answer: Our focus right now is on rooting out Al-Qaida and we've got a lot of work to do with regard to not only our military operations but our diplomatic, law enforcement, and intelligence operations as we work with our partners around the world to take down Al-Qaida and its cells that are operating from our estimate in more than fifty countries around the world. We did not have discussions about anything other than working on the current problem and that is Al-Qaida and the challenge that Al-Qaida presents for our current campaign.

Question: These Chinese nationals that have been captured in Afghanistan, did China ask for information on these? About how many of them have been captured in Afghanistan? Has China asked for them to be handed back?

Answer: They've not asked for them to be handed back. We are still sorting through the battlefield in Afghanistan at this point in time. But in time, we will sort through who is there and work through our processes of dealing with people that we have captured and eventually make a decision in terms of how their cases will be handled.

Question: Can you give a rough number?

Answer: Not at this time.

Question: At every opportunity, the Chinese brand the Uighar separatists, the East Turkestan, all of these guys, they use the term terrorist and they do everything they can to persuade anyone who'll listen that this is a terrorist group and they complain that the United States and other nations might use a double standard in talking about their problems in Xinjiang. Did you guys agree to disagree on this? How did you handle this apparent disagreement?

Answer: Our President, when having this discussion in Shanghai, I think was very clear on what the U.S. position is and that is that we accept the fact that there are people from western China that are involved in terrorist activities in Afghanistan and that terrorist actions have occurred. We don't believe, though, that all of the people of western China are indeed terrorists and we do think that the legitimate social and economic challenges that people face need to be dealt with politically and not necessarily though counter-terrorism means.

Question: Could you give us some specific examples of ways that China has been helpful in routing out Al-Qaida both in Afghanistan and around the world? I don't (think) we've ever heard of an Al-Qaida group inside of China so when you say intelligence sharing or law enforcement work, what exactly is there to talk about?

Answer: Well certainly the area in which the Chinese have been most helpful to the coalition against terror has been in its diplomatic support. China was a very, very important part of the UN's effort to pass UN Security Council Resolution 1373, which we believe is precedent setting in its impact on terrorists and their operations around the world. They've been good partners, as have others with us, as we've looked to the reconstruction or reformulation of the Afghan government after the military conflict there. So certainly, we have stood, as President Jiang Zemin told our President, side-by-side diplomatically in this campaign against Al-Qaida and the Taleban in Afghanistan. We have had on-going information sharing and I'm not going to go into the specifics of that except to say that information-sharing and law enforcement cooperation by China, as well as other countries, have been instrumental in our ability to reach out and arrest, and hopefully disrupt the activities of, Al-Qaida cells in some fifty countries around the world.

Question: Are there any Al-Qaida cells in China? Is there any evidence of that?

Answer: I'm not at liberty to divulge in which countries are operating which cells only to say that there are an excess of fifty cells around the world and we're working with governments around the world to disrupt those cells where we know they exist.

Question: I want to understand the details of the meeting with General Xiong Guangkai?

Answer: The meeting we had with the General was part of my effort to reach out to all elements of the Chinese government in this counter-terrorism dialogue. For the specifics of that meeting, I would refer you to the Chinese Ministry of Defense. The key part of this campaign is that it takes our military, our law enforcement, our intelligence, and our diplomatic entities to work together. I want to emphasize the need for working together with all those elements within China as we prosecute our campaign against terrorism around the world.

Question: From the Los Angeles Times. About the Legal Attache Office you mentioned that they're considering, did China ask for any kind of reciprocal agreement or anything else that they would like to establish in their embassy in the United States?

Answer: No, not at this time. Although certainly we would welcome Chinese law enforcement presence in Washington as part of the coordination that's required among law enforcement people around the world.

Question: I'm with the Israeli newspaper Yedioth Ahronoth. I was wondering first if the subject of the Middle East came up in the talks and if China said anything about the definition of terror and its view, in light of the past week when it's avoiding calling the suicide bombings in Israel terrorist acts?

Answer: We did not discuss the Middle East specifically.

Question: And not a definition of terror? What China says is terror?

Answer: I don't mean to speak for the Chinese Government. You'd probably best address that question to the Chinese Ministry of Foreign Affairs. There is a sense around the world that one is looking for a worldwide definition of terrorism. This is very difficult to develop. We have said that rather than fight over a definition, let's look at reality. We can see terrorism when it occurs and we know it occurs and that's what we're talking about.

Question: Financial Times. Could you give a few more details about what these FBI officers will be doing here? Will they be forging links with the Ministry of State Security in China? What laws will they be attempting to enforce? Will it be purely border areas or terrorism or what exactly?

Answer: The FBI has had a long history around the world under Director Freeh and continuing under Director Muller to expand its law enforcement cooperation around the world. Crime, in many cases, knows no border in the 21st Century. Our FBI has found the need to work more effectively with international law enforcement, just as it works with state and local law enforcement within our own country, to share information, to follow leads, to help conduct investigations that are of interest to the FBI in countries overseas or to assist other countries (that have law enforcement interests in the United States) to meet their law enforcement needs. This has been ongoing for the last five years. We do have a legal office in Hong Kong, but we believe, given the nature of our relationship from a law enforcement point of view, that we'd like to have that relationship here in the capital, in Beijing, and we've made that request to the Chinese Government.

Question: With all due respect, this announced 'active Chinese consideration' of an FBI office here, I think that's an issue that goes back to sometime in the Clinton Administration. How is this pledge to 'actively consider' any different from previous pledges to 'actively consider'?

Answer: Well, I wasn't here during the Clinton Administration, so I can't answer that question. All I know is that in the spirit in which we've come to improve our cooperation we're very pleased that the Chinese Government at this time has decided to actively consider our request and we're optimistic that that request will be approved.

Question: Associated Press. Did North Korea enter into your discussions at all? Sales of North Korean weapons, biological chemical warfare, those sorts of things?

Answer: Not specifically, no.

Question: I'm from Yomiuri Shimbun in Japan. Could you define or describe the present relationship between your country and China after two months after the September incident?

Answer: Well, given the fact that I am not the Assistant Secretary for East Asian and Pacific Affairs, Jim Kelly would probably not want me to describe anything more than what I am competent to describe, which is our counter-terrorism relationship. Our counter-terrorism relationship has been solid. It has been a partnership of shared interest in seeing terrorism as a threat to both of our countries and wanting to work together, as our Presidents announced in Shanghai, towards eliminating this evil from our world. We're very satisfied with that cooperation and, indeed, hope that it will expand in the future as we continue to see the opportunities where we can work together to solve the terrorism problem that we both face.

Question: From ABC News. I'd like to know more information about what the U.S. expectation is about what the work of the Financial Monitoring Working Group would be? And if you have any evidence or any indication of whether Chinese banks here or abroad are wittingly or unwittingly being used by terrorist to transfer funds as some press reports were saying earlier.

Answer: I'll answer your second question first and then I'll answer your first question. No, I don't have any specific information that Chinese banks are or have been used. Our effort with the Chinese is the same effort that we're making around the world. That is to work with all nations of the world to improve their financial intelligence efforts to identify and disrupt terrorist financing using their banking and money laundering laws and that sort of thing.

What we agreed to do with this working group is to compare notes on how we can do that more effectively and how China might learn from what we've already experienced in the U.S. in applying our financial laws in fighting terrorism. It's toward a cooperative improvement between both of our sides in terms of how we approach this business. It's no different here in China than what we're going to be offering through the UN, once the Counter-Terrorism Committee completes its work under the UN Security Council Resolution, to the entire world.

We believe that financial surveillance, the surveillance of financing of terrorism, is going to be essential in eliminating terrorism as a threat. It's that aspect and it's the law enforcement arresting people, running joint cases, and sharing intelligence that will help us close the seams that terrorists operate in.

Afghanistan was a sanctuary. Bin Laden and Al Qaida were able to do what they were able to do against the world because they were allowed to operate with immunity within Afghanistan. We don't want terrorists to be able to operate with immunity anywhere in the world. We want their activities scrutinized. We want them scrutinized by law enforcement, intelligence and finance. We want people worried about where they are, so we can locate them and disrupt them. 1373 is the mechanism through which much of this will be done, in addition to the UN Security Council Resolutions, the twelve that concern terrorism and UN Security Council Resolution 1333 which is specifically focused on the Taliban and Al Qaida.

Question: Was there any discussion of proliferation issues, particularly China's assistance to Pakistan in missiles?

Answer: We didn't discuss specifics of proliferation, although certainly the proliferation of weapons of mass destruction is a concern for us from a counter-terrorism point of view. We already know that bin Laden has expressed a desire to obtain chemical or biological weapons. Certainly, given what he did on 9/11, we have no reason to believe that if he did obtain them, that he wouldn't use them. From a counter-terrorism point of view, non-proliferation is a very, very important issue that we discussed and how that fits into the counter-terrorism challenge that the world will face in the coming months and years.

Question: With the Economist. Did any of the Chinese officials that you met with draw any connections between the fact that the U.S. has become a target of terrorists with U.S. policies in the Middle East or more broadly in the Islamic world? Any suggestions that policy modifications in those regions could lessen U.S. exposure or suggestions that U.S. policies have contributed to the fact that terrorism has taken place.

Answer: First, in answer to your question, no, we did not discuss that. Second, it has been our view and we have categorically rejected any association between U.S. policy in any area of the world and the evil that occurred on 9/11. There can be no linkage between that kind of behavior and any government's policy in the world.

Question: Middle East News Agency. Do you differentiate between terrorists and defending an occupied country? What's the difference between a terrorist organization and any organization defending its country against occupation? Thank you.

Answer: Well, I'm not going to get into that age-old debate that has been going on, that one man's terrorist is another man's freedom fighter. We don't believe that the use of indiscriminate violence by organizations against innocent civilians is justified. Regardless of what the cause is.

Question: How about governments?

Answer: I'm not going to get into a debate over the governmental use of governmental power. We define terrorism in terms of organizations that use terror indiscriminately against innocent civilians. That debate has been ongoing. It will continue long after this press conference. If we talk about the Middle East, we want the violence to stop because we believe that when the violence stops that the protagonists in the conflict can sit at the table and discuss a future that sees a secure Israel and a Palestinian state. That can't happen, regardless of how you define who's doing the shooting, until the violence stops. So, let's focus on the violence, and, specifically, let's focus on the fact that given what's happened in the last few days in the Middle East that we believe that Chairman Arafat has a responsibility to not only arrest those that are responsible for the evil that occurred in Jerusalem against innocent civilians in a plaza, but to dismantle the mechanisms that allow those people to operate.

Question: CNN. Two questions. When do we expect the Legal Attache to take his post here? Second, does the United States regard China as a country which produced biological and chemical weapons? And, if so, did that come up in your discussions on the proliferation of weapons of mass destruction?

Answer: That's not an issue that was part of our discussions today. Again, I mention that we're very pleased with where we are in terms of our request that is being considered by the Chinese Government. I can't predict for you when that will be, only the hope that it will be soon. I have time for one more question.

Question: From the BBC. You've talked earlier on about China and the United States having a shared interest, standing shoulder-to-shoulder in the face of this common threat. As far as I'm aware, Al Qaida and Osama bin Laden have never made any threat towards China. China, as far as I know, has never been a target of international Islamic terrorism. It's easy to see where America is coming from on this, but it's difficult to see where China is coming from. There is the strong suspicion amongst many of us that China wants some sort of quid pro quo on this and that it's asking for something in return for its cooperation. My question is, is China asking for something form the United States, particularly on the question of Xinjiang, of ethnic separatism? Is it asking the U.S. to turn a blind eye to some of the things that it does? What are you hearing from the Chinese? What do they want in return?

Answer: Well, I don't accept your original premise. There were three Chinese citizens that died in the World Trade Center. They along with 78 other countries of the world have a reason to be against terrorism. But even if that hadn't occurred, any nation that saw what happened on the eleventh of September, saw humanity threatened. The humanity that they represent in their government is the same humanity that we represent in our government. It's our sense that the Chinese leadership does understand that this type of evil is something that threatens them as well as us.

The United States of America has not changed its values in this campaign against terrorism. We continue to hold very dearly our concerns about human rights and all the other issues that we had before 9/11 and this campaign won't change that. We do believe that the events of 9/11 have caused many nations to consider terrorism and its threat to them, although not professed by any group, as being a threat to humanity. Many have joined this coalition for that very reason, because this kind of evil cannot be allowed to fester.

There were many nations that thought it was only America that was threatened by radical Islamic terrorism. That's not true. The world is threatened by this and that's the call of our President to the world to put aside whatever political differences we have, to understand that this is a menace that we must take on. Our country has been very, very gratified by the response that we have received from the world. Not for quid pro quo, but in understanding the nature of this menace and the need to eliminate it from the face of the earth.

I thank you, ladies and gentlemen, for your time. Thank you very much.