[Congressional Record Volume 140, Number 67 (Wednesday, May 25, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 25, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                CHINA'S MOST-FAVORED-NATION TRADE STATUS

  Mr. BOREN. Mr. President, very soon and no later than June 3, 
President Clinton will make a decision on China's most-favored-nation 
[MFN] trade status with the United States. Last year, the President 
issued an Executive order extending MFN to China for 1 year and 
conditioning its renewal in 1994 on progress in the area of human 
rights. At the time, I had expressed reservations about conditionality. 
I believed that conditioned MFN was an inappropriate tool to promote 
human rights and could harm our relationship with China--and harm that 
very cause. Now after an annual review, we are faced with the same 
dilemma as last year. Inevitably, we will be confronted with the same 
problem next year if we continue the present course.
  The dilemma we, in America, face is this: How do we effectively 
encourage democratic principles and basic individual rights in a 
country that has often ignored these values? Do we recognize the great 
complexities of the task with a policy that appreciates the breadth of 
the Sino-American relationship? Or do we resort to rhetoric and hollow 
policies that marginalize our influence and endanger the progress 
currently taking place in China?
  The answer is clear. In my view, this is the time for the President 
to embark on a new relationship with China, recognizing that as we take 
the long view, looking towards the next century, there is no bilateral 
relationship more important to us, as well as to the rest of the world, 
than the relationship between the United States and China.
  There is a natural warmth and friendship between the peoples of the 
United States and China that presents an opportunity for positive, 
natural relationships. On the other hand, a souring of relations 
between the United States and China could present a greater threat to 
the world than that ever presented by the cold war between the former 
U.S.S.R. and the democratic nations. We must immediately lay the 
groundwork for a dialog that appreciates the realities of today with 
challenges of tomorrow. We should not take the first steps toward a 
fuller relationship by reextending MFN and delinking human rights from 
the MFN debate.
  For too long, American policy toward China has been one-sided. After 
World War II, our policy was to isolate the Communist mandarins from 
the community of nations. During detente, our goal was to exploit the 
rivalry between Beijing and Moscow. Now, with a new, yet undefined 
global order, we must pursue a course that neither ignores our many 
common interests we have with China nor exaggerates one consideration 
over another.
  By now, we are all aware of the increasing economic ties between the 
two countries. Over 550 U.S. companies have wisely entered the fastest 
growing market in the world. With over a billion potential consumers 
and a growth rate in 1993 of 13 percent, China is poised to become the 
largest global economy, our entrepreneurs and workers cannot afford to 
ignore this country.
  Yet, trade between our countries does more than enrich businesses. 
For China to succeed in today's economic arena, it must carefully study 
its largest market: the United States. They must know our business 
practices and understand the way of life of our consumers. As they 
learn about our business culture, they are exposed to our political 
ideas and our democratic values. As the Chinese try to maintain their 
economic growth, they allow foreign firms to establish a presence in 
previously closed communities.
  The link between economic reform and democratic progress is not an 
illusory one as I saw in my own visits to China and to the Republic of 
China or Taiwan a couple of years ago. China is following the same 
successful models of the Republic of China and South Korea. Both the 
ROC and South Korea once had authoritarian governments which pursued 
economic development as a way to gain global prominence. While their 
GNP increased and the standard of living improved, a middle class was 
created that demanded political freedom along with its new purchasing 
power. These countries could not continue their economic growth without 
responding to the wishes of the people who were vital to the economy's 
success. Today, democracy is increasingly a reality in these countries.
  Key to their progress toward democracy was America's unfailing 
support of their economic programs. We did not revoke MFN or condition 
it with human rights. Rather, we encouraged trade, diplomatic ties and 
educational exchanges. We helped create a socioeconomic environment 
that allowed political reforms not only to take hold but to succeed. We 
must now apply the lessons we learned in South Korea and in Taiwan to 
China.
  This is not to say that the transition will be immediate. Instead, we 
must realize that China's transformation to a market economy is related 
to democratic change, and the forces against trade liberalization are 
the same forces against a pluralistic society. Make no mistake. China 
is about to enter one of the most tumultuous times in its history since 
the cultural revolution. When China's 90-year-old leader, Deng 
Xiaoping, can no longer lead his country, it will experience an event 
it has rarely handled peacefully: the transfer of power. Already, 
factions with conflicting views of China's role in the world are 
maneuvering to capture control of the Government.
  If we wish to prevent the return of a Maoist society and an 
oppressive regime, we must side with the forces of reform. These forces 
include the student leaders who boldly opposed the oncoming tanks in 
Tiananmen Square and who now work in multinational companies. They are 
even the generals in the People's Liberation Army who are the silent 
partners in joint ventures with foreign companies. They are the people 
who would be most hurt by the rejection of MFN. These leaders for 
economic reform would blame the United States for the recession that 
would surely follow in their country.
  The ones who would benefit most from a contentious Sino-American 
rivalry are the forces of oppression and totalitarianism. They are the 
party bosses who falsely dream that they can export to the West without 
importing Western ideas. They are the PLA officers that wish to return 
to the old days when they oppressed the workers. Empowering these 
forces impedes economic reform and stops democratic changes.
  More importantly, the political and social upheaval that would follow 
a denial of MFN would have immediate consequences in America's 
diplomatic and security efforts in that region.
  For example, China has particular influence over North Korea. As 
Defense Secretary Perry has stated, North Korea's nuclear development 
program represents the most immediate threat to regional stability, 
American interests and the lives of the 36,000 American troops 
stationed in Korea. Its nuclear capability is frightening; its threat 
to attack the South is, we must assume, real. If we wish to solve the 
North Korean problem peacefully, we must have the cooperation of the 
Chinese. No other country has the influence that China has with North 
Korea. They are historic allies and active trading partners. Yet, if we 
revoke MFN, we invite China to use its Security Council position to 
veto any U.N. action and block any multilateral efforts to stop North 
Korea's nuclear buildup. This is too high a price.
  Revoking MFN threatens a variety of our national interests. Our work 
to stop China from selling arms to rogue countries and testing its own 
nuclear weapons could be threatened. With its permanent seat in the 
U.N. Security Council, China could menace America's multilateral 
initiatives in Bosnia, Haiti, and Rwanda. Our expertise in 
environmental cleanup is vital to averting the ecological disaster 
afflicting the most populous country. The fate of Hong Kong, long an 
entrepot for American and foreign businesses to the mainland, would 
become uncertain once it reverts to China in 1997. We cannot expect 
their cooperation in any of these areas if we destroy our economic 
relations with them.
  If we extend MFN unconditionally, I have no illusions that China will 
instantly convert to our positions and cooperate fully in these 
efforts. Many of these issues will continue to be points 
of disagreement between two sovereign nations. Yet, we can remove MFN 
as a potentially debilitating source of conflict. As much as possible, 
we need China to be a partner, rather than a radicalized adversary.

  Some argue that we can protect our interest while promoting human 
rights by conditioning MFN through some modified policy. They believe 
that we can target sanctions against goods from state-owned or PLA 
industries, while allowing products from private industries to come 
into our market unrestricted. This suggestion would not work. First, 
China could always reclassify every product as privately made without 
truly changing the structure of its economy. Second, customs officials 
who would be responsible for administering this policy have already 
conceded that enforcing such a program would be impossible. Finally, it 
would be seen as a thinly veiled attempt by this country to continue a 
policy that is fundamentally ineffective.
  Further, as appealing as it sounds to strike against state owned or 
military goods, let us consider this. China's economic system is a 
complex one, unlike any Western structure. The Government and the PLA 
own hotels, truck and shipping companies and shoe factories. However, 
they employ and involve in these enterprises not just soldiers and 
bureaucrats, but factory workers and company executives as well. It is 
not practical to try to separate artificially the specific roles played 
by those leading China's transition to a market economy.
  Instead, we should look to the many proposals offered by my 
colleagues in Congress and elsewhere. These proposals promote human 
rights without destroying our relations. We should create a special 
bilateral or multilateral human rights commission. Western and Asian 
societies have different understandings and expectations of human 
rights. We need to create a meaningful dialog to understand better each 
other's values. Our efforts to help the International Red Cross need to 
continue. Often it is the most effective group in defending the rights 
of political prisoners. Unilaterally, we can place more human rights 
officers in our Chinese Embassies and consulates. Doing so would send 
an important signal about our continued vigilance.
  We need to ensure that Voice of America and Radio Free Asia--one of 
the nonmandatory areas of progress in the Executive order--are 
transmitted without interference. These were important tools in the 
cold war and can be useful now, allowing Chinese in urban and remote 
areas to tune into the larger world.
  We should also strengthen existing international exchange programs 
and create new ones to send Americans abroad and Chinese here. Just 
recently, the newly created National Security Education Program [NSEP], 
a program I originally proposed, announced that 43 American 
undergraduates and graduates will study in China. The NSEP will augment 
venerable program such as the Fulbright and the Marshall scholarships. 
Similarly, we need to encourage Chinese students to study here.
  Removing MFN as an issue would allow the United States to push the 
Chinese to open their markets and enforce their intellectual piracy 
laws which are costing American businesses an estimated $800 million a 
year. Earlier this month, the USTR ignored the Special 301 trade law 
and delayed citing China as a violator of intellectual property rights 
laws because the timing was too close to the MFN decision. Some in the 
administration feared that China would retaliate by imprisoning 
political opponents and thereby damage the administration's attempts to 
gain more human rights concessions before June 3. Special 301 is an 
effective tool that has worked in the past. We should be using it 
instead of the heavy-handed tool of MFN.
  We should also continue to press the Chinese to adhere to 
nonproliferation treaties which they have signed. We were right to 
impose sanctions last year when they were found to have sold missiles 
to Pakistan. We should be ready to do so again, if they continue this 
unacceptable behavior.
  Should the President delink human rights from MFN, both countries 
must be certain of the message of this action. To China, let them know 
our country will continue to press for human rights and internal 
reforms. Our goals have not changed, only our means. To the United 
States, let us understand that we can promote our values and ideals 
without destroying our interests or disrespecting a proud culture. Our 
responsibilities have not ended, they have only begun.
  Now is not the time to isolate China, politically or economically. 
Instead we should take this historic opportunity to build a lasting 
peace and a thriving partnership. If we do not, then we are simply 
asking for unforeseen economic and foreign policy problems. As I said, 
the Chinese-American relationship will be the most crucial bilateral 
relationship the United States will have in the 21st century. We should 
now construct a policy worthy of both nations.
  I thank the Chair.
  Mr. NUNN addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Georgia 
[Mr. Nunn].
  Mr. NUNN. I thank the Chair.

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