[Congressional Record Volume 142, Number 72 (Tuesday, May 21, 1996)]
[House]
[Page H5305]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         FACTS REGARDING UNITED STATES-CHINA TRADE RELATIONSHIP

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentlewoman from California [Ms. Pelosi] is recognized 
during morning business for 5 minutes.
  Ms. PELOSI. Mr. Speaker, yesterday President Clinton announced that 
he was going to request a special waiver from Congress to grant 
unconditional most-favored-nation status to China. As Members know, Mr. 
Speaker, in the Congress of the United States there is concern about 
the United States-China relationship in regard to human rights, 
proliferation of weapons of mass destruction, and trade. The President 
said yesterday that renewing MFN was about our economic future. On the 
basis of trade alone, I would like to address some conclusions that the 
President drew.
  I think, Mr. Speaker, that if for a moment we can put aside, which is 
difficult to do, our concerns about human rights and proliferation and 
Taiwan and Hong Kong and Tibet, major issues of concern to this 
Congress, and just talk about trade, I do not believe that the renewal 
of unconditional MFN status is justified. So while people say to us 
that we are sacrificing U.S. jobs to promote human rights, that is 
simply not the case.
  First, I would like to present some of the basic facts of the United 
States-China trade relationship. The emphasis of supporters of 
unconditional renewal of MFN status for China is not unexpectedly 
focused on our exports to China, it is important also to focus on 
China's exports to the United States. While overall United States 
exports to China have tripled in the last 10 years, United States 
imports from China have grown by 11 times, resulting in a trade deficit 
with China that has grown from $10 million in 1985 to $35 billion in 
1995. $35 billion.
  Another alarming feature of this trade pattern is the 4-to-1 ratio of 
what we buy from China to what they buy from us. The United States is 
China's largest export market, with over a third of their exports 
coming into our market with preferential trade treatment. Our products, 
by and large, are not allowed into the Chinese market. These barriers 
to market access contribute to the trade deficit.
  And lest we think that the nearly $12 billion of exports that we send 
to China is a big number, consider this China, with 1.28 billion 
people, buys just under $12 billion. Taiwan, with 23 million people, 
buys nearly $20 billion from the United States. So the access to the 
Chinese markets is a major obstacle in our trade relationship.

  I know we also hear people who propose unconditional MFN status and 
talk about the 180,000 to 200,000 jobs that are connected with exports 
to China. These are important jobs and we must respect that fact, but 
let me just briefly go into why we cannot allow that couple hundred 
thousand jobs, however significant, to be a barrier to many more jobs 
that should spring from our trade relationship.
  We should all be concerned about the harm to our economy of the 
ongoing practice of the Chinese of violating our intellectual property 
rights. The trade deficit I referred to before of $35 billion does not 
include the billions of dollars that the Chinese have pirated in our 
intellectual property.
  We are told regularly by economists and we, in turn, tell our labor 
force that while manufacturing jobs go offshore, our intellectual 
property is our international comparative advantage. It is the genius 
of America that arises from the great democratic tradition of freedom 
of expression and freedom of thought. In a very real way, with the 
Chinese continuing practices and patterns of theft of our intellectual 
property, the Chinese are stealing our economic future.
  I disagree with the President that China is our economic future. The 
Chinese regime is under the present practices, stealing our economic 
future. In China it is possible to buy $12,000 worth of pirated United 
States software on a CD-ROM for $10. Pirated versions of Windows 95 
were available in China before the real thing was released in the 
United States.
  More importantly, the production of stolen intellectual property in 
China is not only for domestic consumption; it is used for export. The 
domestic capacity is about 7 million units and the production capacity 
is about 150 million units per year. So the Chinese are in the business 
of stealing our intellectual property not only for domestic consumption 
but for export.
  And the piracy does not stop at software. There are reports of 
pirated raw materials, like integrated circuits from China, showing up 
in Paraguay for distribution throughout the Americas.
  I do not have time to go into more detail on that. I want to commend 
the administration for issuing a list of sanctions and, hopefully, they 
will follow through with that.
  The last point I have time to make is the issue of technology and 
production transfer. Many people know that production is going 
offshore. What we must recognize is that the Chinese insist on the 
technological transfer as well. So we will have, for example, Boeing 
closing a factory in Wichita, KS, for the manufacture of the tail 
section of a 737, and that production going to Chinese workers making 
$50 a month. And the Chinese have the technology transfer.
  So it is the barriers to our products, the ripping off of our 
intellectual property, and the transfer of our technology that rob our 
economy of jobs. Our economic future is at risk in this relationship. I 
urge our colleagues to focus on these numbers. More to come.

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