[Congressional Record Volume 142, Number 136 (Friday, September 27, 1996)]
[Extensions of Remarks]
[Pages E1758-E1759]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             SOUND ADVICE ON UNITED STATES-CHINA RELATIONS

                                 ______
                                 

                             HON. TOBY ROTH

                              of wisconsin

                    in the house of representatives

                      Thursday, September 26, 1996

  Mr. ROTH. Mr. Speaker, as we consider our future trade relations with 
China, I would like to bring to my colleagues' attention to an 
excellent speech on the issue by former Secretary of Commerce Barbara 
Hackman Franklin.
  Secretary Franklin not only has long experience in United States 
trade policy, but she also has particular expertise in United States-
Chinese relations. That is why the Heritage Foundation asked her to 
make a special address on this subject.
  In her remarks, Ms. Franklin emphasized that our relationship with 
China has come to a critical point. She urged us to consider the long 
term implications of our annual fight over MFN. Further, Ms. Franklin 
described the significant changes occurring in China and the impact of 
trade investment on those changes.
  As Ms. Franklin pointed out, China is rapidly becoming a global 
economic power, making it crucial that the United States have a 
consistent, long-range strategy for stable, constructive relations.
  Barbara Franklin has made a major contribution to a better 
understanding of our relationship with China as well as the 
implications of MFN for our national interest. I am including a summary 
of her speech in the Congressional Record and I urge my colleagues to 
read it carefully.

  Summary of Remarks Given by the Honorable Barbara Hackman Franklin--
                      ``China: Friend or Enemy?''

  (Prepared by the staff of the Committee on International Relations)

       The bilateral relationship between the U.S. and China is 
     one of the most important in the world today. We have come to 
     a critical point, where a better understanding between the 
     two countries has become crucial for a stable and predictable 
     relationship for the future.
       Change in China is occurring at a tremendous rate and the 
     result of China's transition can affect the U.S. for many 
     reasons. China has the largest population and standing army 
     in the world. It also is strategically positioned in the 
     center of Asia and is a permanent member of the U.N. Security 
     Council, giving China the power to veto decisions in the U.N.
       China's growing economic clout is significant for the U.S. 
     as well. Currently, China is rated as the third largest 
     economy in the world, behind Japan and the U.S., and 
     predictions of China's future economic growth show that 
     within the next 15 years it has the potential of becoming the 
     world's largest economy. This has become important for the 
     U.S. because China is the largest market in the world for 
     aircraft, telephones, construction equipment, agriculture 
     products, and increasingly for consumer goods. We can see 
     that China is a market for many of the products sold by the 
     U.S. and, more importantly, the figures show that the demand 
     in China continues to grow rapidly.
       At the same time, we cannot ignore the vital concerns many 
     people have brought up about the problems with human rights 
     abuses, nuclear proliferation, and protection of intellectual 
     property rights in China. Our increasing trade deficit has 
     also caused a great deal of anxiety in the U.S., along with 
     the question of both Taiwan and Hong Kong and the 
     intentions of China's military. Many goals are being set 
     by the central government and provinces, ranging from 
     expanding education to strengthening China's agriculture 
     to meeting the basic needs of the Chinese people, to help 
     alleviate the problems and issues that China faces.
       Threatening to deny MFN status should not be used as a 
     means of addressing these concerns. Congress should renew MFN 
     for China. Denying MFN status to China or attaching unrelated 
     conditions does not make any sense for many reasons. The 
     economic consequences would be profound, as denial of MFN 
     would hinder trade and increase tariffs and costs for U.S. 
     companies doing business in China. A negative message to the 
     Asia-Pacific region would also result, where there is already 
     concern about whether the U.S. is going to withdraw. Denying 
     MFN would also harm the economies of Taiwan and Hong Kong 
     and, as previously stated, would not correct or erase any of 
     the concerns we have with China. Furthermore, the time has 
     come

[[Page E1759]]

     to make MFN for China permanent as our strategic and economic 
     relationship with China is too important to continue this 
     heated and controversial debate every year.
       It is also important to note that, currently, the U.S.-
     China relationship is at one of its all-time lowest points. 
     It is characterized by distrust and misunderstanding, 
     stemming in large part from the inconsistent actions of the 
     Clinton Administration in its policies toward China. Many in 
     China's government have interpreted our mixed messages as a 
     policy of ``containment'', which has led to feelings of 
     resentment against the U.S., as well as confusion on the part 
     of the Chinese about what we really mean. We need a strategic 
     framework for our relationship. Clear objectives and 
     expectations for our relationship must be articulated to the 
     Chinese. Dialogues at the highest levels should be used as 
     means by which we can express and push for the goals we have 
     set to achieve. Areas of common interest and agreement, such 
     as commercial relations, provide a good foundation from which 
     we can build.
       The U.S. should actively encourage China's economic reform 
     process as well as that country's integration into the world 
     community. The U.S. should help to bring China into the WTO 
     on acceptable terms; that way we can pursue our trade agenda 
     multilaterally as well as bilaterally. The U.S. needs to 
     focus on consistent actions that courage the Chinese to move 
     forward instead of publicly shouting at them, as the Clinton 
     Administration has been doing. We need to stay engaged with 
     China, to use our best diplomatic judgment and skill, to 
     disagree and be tough-minded when we must, while keeping our 
     eye on the goal of achieving a working relationship.
       The attitude of the U.S. toward China and the tone of the 
     U.S.-China government relationship can have an influence on 
     which way things go. But using trade as a weapon to address 
     the concerns will not eliminate the problems and may only 
     punish U.S. exports more than they hurt China. Therefore, we 
     must look at the long term, instead of being short sighted, 
     and adopt a consistent policy towards China that intelligibly 
     addresses our concerns and objectives. The future 
     relationship is at hand and if we continue our current, 
     inconsistent approach to China, there is no telling what will 
     result. This is a gamble the U.S. and the world cannot afford 
     to take.

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