[Congressional Record Volume 140, Number 108 (Monday, August 8, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       UNITED STATES-CHINA TRADE

  The SPEAKER pro tempore (Ms. Schenk). Under the Speaker's announced 
policy of February 11, 1994, and June 10, 1994, the gentlewoman from 
California, [Ms. Pelosi] is recognized for 60 minutes as the majority 
leader's designee.
  Ms. PELOSI. Madam Speaker, I am pleased to yield to the gentleman 
from Indiana [Mr. McCloskey].
  (Mr. McCLOSKEY asked and was given permission to revise and extend 
his remarks.)


        appointment of kenneth starr as whitewater investigator

  Mr. McCLOSKEY. Madam Speaker, I very much thank the gentlewoman from 
California for her generosity. She is one of my real heroes in so many 
areas.
  Madam Speaker, it is bizarre, if not downright partisan, for a U.S. 
Court of Appeals panel, including two Republican judges, to abruptly 
anoint former Bush administration Solicitor General Kenneth Starr to 
reinvestigate the Whitewater matter. Think of it. Mr. Starr has been a 
top lawyer for the Bush administration, and since then, almost more 
than anyone, but not quite as much as some, he is manifestly on the 
record against President Clinton.
  Former special prosecutor Robert Fiske, also a Republican, was widely 
praised for his integrity and skill. Perhaps most importantly, he had 
conducted the investigation fairly and thoroughly by all accounts. I 
might say he went in there with strong support from nearly all elected 
Republicans that I know of.
  Congress has also begun a far-reaching examination of this matter. 
Some Members are questioning witnesses in a manner more appropriate for 
the Spanish Inquisition.
  After nearly a year, the Whitewater hearings and investigations were 
on the verge of concluding with literally no stone unturned. Now Judge 
Starr has the opportunity to reexamine this entire matter in what seems 
likely to draw the alleged problems which may or may not have occurred 
with Whitewater, further into the headlines in an election year. This 
appears to be a greater priority than examining whether any laws or 
regulations may or may not have been broken.
  Mr. Starr had previously publicly commented on another legal 
challenge to the President, and is on the record as proposing to file 
an amicus curiae brief against the President's position. While he may 
be a friend of the court, he is currently on the record as being no 
friend of the President.
  Perhaps most telling, there is no indication of procedural or 
substantive error in Mr. Fiske's investigation. Rather there could be a 
``perceived'' conflict, the judges said.
  The Special Counsel Act should not be the Washington 
Lawyers Financial Relief Act. The material examined by Mr. Fiske should 
not be casually tossed aside and the entire expensive process reopened.
  It is a reasonable conclusion that the appointment of Judge Starr as 
new special prosecutor has the appearance of a calculated move to 
create controversy, to harass the President, to draw this matter out 
forever, and to wring every conceivable drop of partisan gain out of 
the Whitewater affair.
  What are the Republican Members doing with ex parte contacts with the 
Federal judges on the appeals panel? Madam Speaker, is not this 
apparent interference with the judicial system perhaps worthy of 
investigation?
  I thank the generous gentlewoman from California again for yielding.
  Ms. PELOSI. Madam Speaker, tomorrows the House will take up the issue 
of United States-China trade. I am pleased to come to the floor this 
evening to urge my colleagues to support H.R. 4590, legislation which I 
introduced with Majority Leader Gephardt, Majority Whip Bonior, ranking 
member of the Committee on Foreign Affairs, the gentleman from New York 
[Mr. Gilman] a leader on the Republican side, the gentleman from 
Virginia [Mr. Wolf] a champion for human rights throughout the world, 
and I might say over 100 or our colleagues who have joined in 
cosponsoring the legislation, both Democrats and Republicans, including 
the gentleman from Indiana [Mr. McCloskey], I am proud to say.

                              {time}  2000

  Madam Speaker, before I talk about the legislation and the issue, I 
want to take the opportunity once again to thank our many colleagues 
for the reception that they have given to those of us who have been 
promoting this legislation.
  It is a very serious issue. A great deal of research has been done on 
it. We have been working on it for 5 years, and our colleagues, both 
Democrats and Republicans alike, have been very serious in the approach 
that they have taken, very receptive, as I said before, in listening to 
why we think this legislation is important, and I want to go into some 
of that this evening.
  Some say, ``Why are we taking this up again this year?'' Well, we 
must, because each year, contrary to impressions that others wish to 
create that MFN for China is automatic each year, the President must 
request a special waiver to grant MFN to China.
  Our legislation, the Pelosi-Gephardt-Bonior-Gilman-Wolf, et cetera, 
et cetera legislation has taken the benefit of the research and the 
work that we have done over the past years to this year have a very 
focused and targeted compromise legislation which would remove MFN, 
that is, preferential trade treatment, special tariff reductions, 
remove that privilege from the products made by the Chinese military, 
especially the People's Liberation Army.
  First of all, let me say this, I will go into more detail about the 
Chinese military later. Over the years, especially the past 5, three 
issues were the leading concerns of the Members of Congress in our 
relationship with China. While we had a long litany of concerns, the 
three major ones centered around the violation of human rights in 
China, both religious and political freedom, workers' rights, et 
cetera, the proliferation of weapons of mass destruction to 
unsafeguarded countries, unfair trade practices of the Chinese which 
have led to an enormous trade deficit between the United States and 
China.
  Where these three issues come together is on the issue of the Chinese 
military. Who can forget the dramatic scene in Tiananmen Square 5 years 
ago, when Americans and other freedom-lovers throughout the world 
received inspiration from the lone man before the tank? At that time we 
all pledged to associate ourselves with the courage and the aspiration 
and the love of freedom of that lone man before the tank. The tank, of 
course, is the Chinese military.
  The Chinese military, which occupies Tibet, which rolled over 
dissidents in Tiananmen Square, and which conducts a lively trade in 
weapons to unsafeguarded countries, and a trade to the United States in 
consumer products that we will learn about later, but the Chinese 
military does not just sell weapons or AK-47 rifles, which a couple of 
million have been sold in the United States in the last couple of 
years, but also sells consumer products ranging from stuffed animals, 
clothing, household appliances. The list goes on and on. We will go 
into the list in a little bit.
  First, I would like to talk about the issue of trade and why it is of 
concern to colleagues in this House. The CIA, in an unclassified report 
about 2 weeks ago, stated that China's surplus that they enjoy with the 
United States, therefore, a deficit which we suffer with them, will be 
at a minimum $28 billion for 1994. Others project it to go over $30 
billion, but the conservative estimate is $28 billion for this year. 
That $28 billion does not include advantages China has in trade by 
other violations to our trade, like transshipments, using prison labor 
for export, piracy of our intellectual properties and the rest.
  But it does take into consideration the violation of putting up 
barriers to United States products going into China. I think it is 
interesting for the American people to note that this is an issue where 
we talk about human rights and proliferation, but is a very major jobs 
issue for the American people.
  And why is that? Because the United States allows China to send into 
our markets in a very preferential way 40 percent of all of China's 
exports to the world. Forty percent of all of China's exports to the 
world come to the United States with preferential tax treatment.
  The U.S. exports about $450 billion in trade, a little more than $450 
billion in trade last year we exported. Of that, less than 2 percent, 
1.9 percent, less than 2 percent of our trade was allowed into the 
Chinese markets because of these barriers to market access. And so 
while there are those who say, ``Well, we should grant MFN 
unconditionally and universally across the board to the Chinese,'' 
they, indeed, do not in fact and in practice grant MFN to us. They 
allow in some products like aerospace, wheat, refrigeration, some 
electronics and telecommunications products, but by and large most 
products made in America are not allowed into the Chinese market.

  Indeed, they welcome some American brand names, but they insist that 
those products be made in China by Chinese workers.
  And so we have on the legal side, on the recorded side, shall I say, 
the side that we can measure, a $28 billion to $30 billion trade 
deficit this year, not counting the other violations.
  One of them that I want to go into is the issue of intellectual 
property. In our State of California, Madam Speaker, intellectual 
property is competitive, what makes us competitive in the world, 
software, throughout the State, technology, high-tech business, but 
also in the entertainment business in southern and northern California 
both, and I guess you could say more in southern California.
  The head of the International Phonographic Society has said that 
unless China is reined in in its piracy of intellectual property, in 
his case the cassette industry, the cassette industry will be 
destroyed. The piracy is going at such a rate that China now not only 
pirates the intellectual property and copyrights for its use, but is a 
major exporter of United States intellectual property, that is, the 
piracy, the theft of the intellectual property, and then the 
reproduction of it and the export of it.
  This will cost us billions of dollars in revenues and hundreds of 
thousands of jobs, but more importantly, it is about the future, 
because so many times we have heard over and over that the United 
States will be competitive in world markets not by making labor-
intensive products that can be more cheaply made abroad, but because of 
our superiority in producing intellectual property in the areas, as I 
say, across the board in software and in the entertainment industry.
  So we have serious concerns about China's treatment of United States 
products and whether they allow them in. Mostly they do not. And the 
one that they pirate and then in turn export do a grave disservice to 
our relationship. More importantly, they steal U.S. jobs.
  A couple of points I want to make about the trade. In 2 or 3 years, 
the CIA report said, in the next few years, China will surpass Japan in 
having the largest trade deficit with the United States. It is growing 
at a more rapid rate than the Japanese trade gap and it, as I say, in a 
few years will surpass Japan. It has this rapid rate, and it has had an 
increase of 700 percent, the trade gap with China, 700 percent since 
1987.
  Now, I want to move on to human rights. All of us saw, once again, 
the brave courage of the young people in Tiananmen Square who built the 
Goddess of Democracy modeled off of our own Statue of Liberty, the 
quote from Thomas Jefferson and the Bill of Rights, and who, in turn, 
then lost their lives.
  Why are human rights important to us? Because we are the United 
States of America, and because we are the champions of freedom 
throughout the world, and because even when other countries may not 
want to step up to the plate, we, as our forefathers stated, are the 
custodians of freedom at home and a friend of freedom abroad.
  So when a country does not treat its people with respect, we should 
speak out, and we should, if we have other leverage, as we do in the 
case of China, say it is very important to us, so important to us is it 
that we are willing to use trade sanctions in order to associate 
ourselves with the moderates and pro-reformers and those who respect 
the religious and political freedoms of the people of China and 
exercise sanctions against China.
  It is also important in terms of jobs, because people, countries, 
regimes that do not respect the rights of their people will not respect 
workers' rights, and as workers' wages are not allowed to rise with 
productivity, that is an unfair competition for the American worker.
  So let us be clear that a country that suppresses its people's 
rights, be they religious, political, workers' rights, also is placing 
our American workers at an unfair disadvantage when we must compete 
with those countries.
  I wanted to just in the interests of time be brief in just quoting a 
few organizations who have commented on the state of human rights in 
China since President Clinton announced his decision regarding China 
MFN at the end of May.

                              {time}  2010

  The U.S. Catholic Conference states that there are increasing reports 
that China is cracking down harder on nonapproval religious gatherings 
and is giving more legal power to Public Safety Bureau officers to 
conduct raids, make arrests and impose fines. ``I urge your vote on 
H.R. 4590.'' This same letter from the Most Reverend Daniel Reilly, 
chairman of the Committee on International Policy of the Department of 
Social Development for World Peace of the U.S. Catholic Conference of 
Bishops, also states that, ``Religious liberty in China has been a 
long-time concern of ours, and we are deeply troubled by reports of 
continued religious persecution there.'' I could go into great detail 
on the religious persecution, but in the interest of time I will pass 
on to a letter we received from the Campaign for Tibet.
  In this letter the Campaign for Tibet says,

       The Chinese Government and the army continue to disregard 
     the basic rights of the Tibetan people and clearly have taken 
     no substantive steps to protect against religious and 
     cultural heritage. In addition, the Chinese Government has 
     refused to respond to the Dalai Lama's efforts to commence 
     substantive negotiations on the future of Tibet. The United 
     States, more than any other nation, has the ability to 
     pressure China to come to the negotiating table with the 
     Dalai Lama or his representatives. In order for China to take 
     the U.S. fffort seriously, a strong message must be sent that 
     China cannot have the sort of relationship they would like 
     with the U.S. until they make progress on Tibet. H.R. 4590 
     helps send this message. I am writing to urge you to support 
     H.R. 4590.

  Tibet is important because in our legislation, as I mentioned 
earlier, we target MFN for the Chinese military and it is indeed the 
Chinese military which brutally occupies Tibet. In supporting the 
Chinese military, as American consumers are unwittingly doing and they 
taxpayers are doing by giving them a trade break, we are in turn 
helping to subsidize the occupation of Tibet, the repression of the 
people in China and indeed weapons proliferation program.
  The Chinese military is also responsible for overseeing many of the 
Chinese prison camps, known as logi. These detainees who have been sent 
there as political prisoners, will join millions of others in Chinese 
prison camps. Last week the Chinese labor activities indicate that five 
people were arrested because of their participation in organizing 
unofficial workers organizations. As I mentioned, when they go there, 
they will join millions of others in these prison camps.
  Forced labor remains a fact of life for China's political dissidents. 
Then these low-wage products made by people in these unfortunate 
situations once again is unfair competition to the American worker. It 
is bad enough to complete with law-wage, workers than it is to compete 
with no-wage workers, and of course there is the human rights issue 
also.
  I want to call our colleagues' attention and yours, Madam Speaker, to 
a ``Dear Colleague'' from our fellow Representative, Lane Evans, 
entitled ``China's Gulag Prison Products for Export.''
  It is against American law for exports made in prison camps to come 
into the United States. Indeed, China is violating that law, and we can 
document fully for those colleagues who want more information exactly 
what those products are and where they are sold in the United States, 
even though the administration has chose to ignore that.
  Our colleague, Mr. Wolf, sent a ``Dear Colleague'' letter recently, 
the other day actually, in which he says, what do all these goods have 
in common? Plastics and plastic articles, wood, paper, apparel, 
footwear, glass, iron, steel, arms and ammunition, mechanical 
appliances, copper, furniture and lamps, lighting fixtures? This is a 
partial list of goods made by forced labor in the Chinese logi, the 
prison factories. The Chinese military exports them to the United 
States to earn hard currency. That is the target of our MFN revocation.
  There are those in the Congress who have said it is not possible for 
us to target these because it is not enforceable.
  Well, Madam Speaker, I did want to call once again to our colleagues' 
attention a chart made by the Defense Intelligence Reference Theory, 
China's defense industrial trading company. I will place it right here 
in front of the tanks, the man before the tanks.
  This is a chart, and there is software to go with it in the computer 
which can tell the Office of Customs what the companies are that are 
fronts for the People's Liberation Army and the state council. If I may 
just read from the chart for a moment, Madam Speaker, the chart 
identifies the relationship among import and export organizations in 
China's defense industrial complex. These organizations are key to 
supporting the uniformed services and China's industrial base and 
acquiring military and dual-use technology. They market products 
abroad, earn foreign currency to support defense-related research, 
development, and operations. The poster depicts commercial companies 
under the two main hierarchies of the defense complex, the uniformed 
services of the People's Liberation Army, under the direction of the 
military commission and defense-related industrial ministry under the 
direction of the state council.
  The PLA operates import and export companies, markets products; the 
PLA runs factories. In addition to military equipment in existing 
stocks, the defense industrial ministry concentrates on new 
manufactured products and technology transfers both to and from China.
  The companies depicted are established and charted to conduct 
business in the international market. Many have offices overseas. While 
they are profit-oriented and are the key means for the defense complex 
foreign exchange earnings they are the primary conduit for acquisition 
of new and advanced technologies.

  I want to repeat that, Madam Speaker, because I think it is very 
important. While they are profit-oriented and are the key means for the 
defense complex foreign exchange earnings, they are also the primary 
conduits for the acquisition of new and advanced technologies.
  I mentioned earlier that one of the few things that the Chinese allow 
into China's market--technology and electronics--it is just this 
technology transfer that should be of concern to us for at least two 
reasons; one being that with technology transfer, eventually it will 
become production transfer, and that means jobs going overseas that 
spring, frankly, from our own intellectual property developing the 
technology.
  The other concern about is that this technology can be used to 
develop more dangerous weapons for sale into unsafeguarded countries as 
the Chinese are engaged in right now.
  As we are talking about the military, I want to talk about why we 
think it is an appropriate target.
  My colleague, Representative Markey, and I sent a ``Dear Colleague'' 
to Members of the House today which discusses some of the concerns that 
we have about China's proliferation record. Three areas of concern: 
Proliferation, China's military buildup, and support for North Korea.
  China's military companies have sold billions of dollars of ballistic 
missiles to the Middle East, and in the words of the CIA Director 
Woolsey, China is Iran's principal nuclear supplier.
  China's military companies have sold nuclear missile technology to 
Pakistan, including bomb designs and enough weapons-grade uranium for 
two weapons. This is alarming because we have known about the others 
and this is relatively new.
  Cambodian Government sources say according to their intelligence 
sources, as recently as March, China sold $18 million worth of arms to 
the Khmer Rouge, yes, the same Khmer Rouge still under the leadership 
of Pol Pot, in violation of the Paris Accord which was coauthored and 
signed by Beijing.
  I will submit for the record more information on China's testing of 
nuclear weapons and the fact that their defense budget is growing by 20 
percent this year, alone among the nuclear powers in the world, China's 
defense budget is increasing.
  It also has purchased billions of dollars of highly sophisticated 
military equipment.
  Others will say many countries export these kinds of dangerous arms. 
Not necessarily.
  The point here is that this proliferation is to countries which are 
not safeguarded, they are unsafeguarded countries. Some of them are 
countries which have embargoes from most of the other countries in the 
world, like Iran and certainly selling to the Khmer Rouge is something 
that is unique to China.
  But very alarming is the relationship of China and North Korea. In 
June the Chinese high command met with their counterparts in the North 
Korean military and following the meeting the statement that came out 
was, the Chinese representative, that our countries are ``as close as 
lips and teeth.''
  In addition, to that, the word on the meeting, as was reported in the 
press in Asia, and I can document that for the record, Madam Speaker, 
was that China pledged 82,000 troops in case of war to the North 
Koreans and that in case of U.N. sanctions against North Korea, China 
promised food and energy credit assistance to help North Korea have 
some staying power throughout the prospective embargo. It has not been 
placed on them.
  If the Defense Intelligence Agency analysts are correct, the Chinese 
military has aided development of North Korea's new TD-2 missile by 
transferring advanced missile technology to North Korea.

                              {time}  2020

  That is why we do not see why American consumers and taxpayers should 
subsidize the Chinese military, the same military for massacre in 
Tiananmen Square, the brutal occupation of Tibet, the sale of weapons 
into unsafeguarded countries.
  Sad to say, or just anecdotally, Madam Speaker, that, after the 
Tiananmen Square massacre, where thousands of young people were killed, 
the Chinese military sent the bill for the bullets of the dead young 
people to their families for them to pay for the bullet that killed 
their children. They also sent watches to the soldiers who crushed the 
peaceful demonstrators, and they also sent a message to the world, that 
they, because they have purchasing power, do not expect to have any 
sanctions.
  As I said earlier, how people treat their own people is important to 
us for practical reasons in terms of our own workers' rights and the 
competition we put American workers in, and, if a country refuses to 
give access to their markets to American products, and if a country 
further violates our trade relationship by violating trade agreements, 
and if a country uses prison labor for export, and if a 
country transships products through other countries in order to avoid 
U.S. quotas, that is unfair to the American worker.

  Every job in China trade is important, and certainly those associated 
with Boeing, and those associated with McDonnell Douglas, and those 
associated with export of grain to China, and some technology, et 
cetera; they are all important, but, the calculations of those who say 
we should not do any sanctions on China, they say that China trade 
produces over 150,000 jobs in the United States. But that is on the 
plus side. On the minus side of the ledger, using their same 
calculations, we lose 500,000 jobs in our trade with China.
  Another point I want to make is that earlier I mentioned that I was 
concerned about technology transfer and the production transfer to 
China by United States companies doing business there, and I want to 
call to our colleagues' attention a wire story in A.P.'s wire story 
today.
  Date line Beijing.
  The Boeing Company said today it will invest $600 million in a plant 
in China to build tail sections for its 737 jet liners and $100 million 
for a spare parts center and training program.
  Ron Woodard, president of Boeing Commercial Airline Group, Airplane 
Group, also said that China was a possible production site for the 100-
seat passenger plane Boeing hopes to manufacture for Asian markets.
  I say to my colleagues, ``You may recall that there was an 
announcement a week or two ago about Boeing getting the opportunity to 
develop this 100-seat passenger plane, and now we are seeing, by their 
own statement, that they hope to manufacture it, that China was a 
possible production site for that.''
  Seattle based Boeing is China's leading supplier of passenger planes. 
The announcement came 2 months after President Clinton said extending 
MFN to China won't depend on improvements in its human rights efforts. 
United States firms like Boeing lobbied against the linkage saying they 
could not make long-range plans because of the annual debate over MFN.
  This is quite a step. It is really unfortunate news for the American 
worker because all along the bill of goods that was being sold 
literally and figuratively to the American consumer and worker was that 
we were transferring jobs that were labor intensive, low-skilled jobs. 
Boeing has said in this article:
  Our thinking is once that is built, this new factory they are 
building, Chinese industry will be able to build anything to world 
standards.
  So, we see the transfer of technology, and we see the seeking out of 
low cost-wages, even for jobs that we thought were jobs in the present 
and are jobs in the future.
  I mentioned how the trade deficit was growing, and I want to make 
another point that the CIA report makes. It says that while the shoes, 
and clothing, and games, and toys had held their own, increased a 
little bit in terms of their export to the United States, the biggest 
increase was in the exporting from China to the United States of 
technology, electronic, those kinds of products which now make up 6.5 
percent of the United States market. This is also something that I 
think we should be very concerned about.
  Madam Speaker, I consider myself an advocate of free trade. I 
represent a city that was built on trade. Our history is from the early 
days of the clipper ships in San Francisco carrying goods to and from 
our great country from the Golden Gate. I voted for NAFTA. I supported 
President Bush in some of his trade legislation. But this is not about 
free trade. This is about unfair trade practices. The unfair, the big, 
surplus that China enjoys gives us some leverage to say:
  ``Respect your people. Respect your workers so that our workers will 
be in fair competition.''
  There are those who say that trade is everything, and that if we have 
a great deal of trade, it will lead to political reform. To those I say 
what Deng Xiaoping himself said. He said to those who say that economic 
reform will lead to political reform, I say that it will take dozens of 
generations. Deng went on to say that he will deal harshly with any who 
wish to hasten that process.
  Madam Speaker, we Americans do not really believe in trickle-down 
liberty. We believe that it is written on the hearts of men, and, as 
our Declaration of Independence states, we hold these truths to be 
self-evident, that every man is created equal and endowed by his 
creator with certain inalienable rights, and among those are life, 
liberty and the pursuit of happiness.
  We cannot make the world right every place in the world and be, as 
some people say, ``the policemen of the world'', but where we have 
economic leverage and where the trade situation is so unfair 
to the American worker because of the repression of people of China and 
repression of workers we have a responsibility to say that in order for 
us in our relationship with any country to make the world safer, the 
trade fairer, and the political climate freer, we have a responsibility 
to do it. We reject the notion of trickle-down liberty. We want to add 
luster to the words and actions of our Founding Fathers of our country, 
and with that I think our Members have an opportunity to do so tomorrow 
and vote ``yes'' for 4590.
  Tomorrow I will continue with the Hamilton bill.

                          ____________________