[Congressional Record Volume 143, Number 83 (Monday, June 16, 1997)]
[Extensions of Remarks]
[Pages E1215-E1217]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         UNITED STATES-CHINA RELATIONS: THE CASE FOR ENGAGEMENT

                                 ______
                                 

                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                         Monday, June 16, 1997

  Mr. HAMILTON. Mr. Speaker, last week the Asia Society sponsored a 
major conference here in Washington on the subject of ``China, Japan, 
and Korea: Challenges for United States Business and Policy in 
Northeast Asia.''
  The Asia Society deserves commendation for organizing a conference on 
this important topic. The Asia Society is known throughout the country, 
and indeed throughout the world, for both its efforts to foster a 
better understanding of Asia, and its attempts to bring this 
understanding to a broader audience here in the United States. Last 
week's conference represented another attempt to fulfill this latter 
task.
  I was privileged to address this conference on the subject of United 
States-China relations. The Congress later this month will engage in a 
very important debate on the future of China's trade status--a debate 
that could set the tone for United States-China relations for many 
years to come.
  Given the importance of the coming debate, I would like to place my 
comments before the Asia Society in the Record, in the hope that my 
colleagues might find them of some use as they look forward to 
congressional consideration of China's trade status.

The United States and China: The Case for Engagement--Remarks by Lee H. 
                 Hamilton--Asia Society--June 11, 1997

       One big question of the coming decade is: Where is China 
     going? Will China become a rival or even a threat to the 
     United States? Or will it choose to cooperate, to participate 
     in global political, economic, and security regimes, and 
     abide by international norms and rules of behavior?
       This is not an academic question. How China evolves over 
     the next decade will profoundly affect our economic, 
     political and security interests around the world. If China 
     becomes a threat to the United States, our defense budget 
     will go up, tensions in Asia will rise, and Asia's remarkable 
     prosperity will be at risk.
       If China and the United States keep their relationship on 
     track, peace and security in Asia will be strengthened, the 
     prospects for humans rights will be enhanced, and Asia's 
     remarkable economic growth can continue.
       China is emerging as a great power. We could not halt that 
     evolution if we wanted to. But we can and should try to shape 
     the kind of power China will become. We can try to ensure 
     that China is integrated into the world community, rather 
     than isolated from it.
       At the heart of this debate, indeed every foreign policy 
     debate, is one central question; what is the U.S. national 
     interest?
       Our overriding interest is to have sound relations with 
     China.
       China is, after all, the world's most populous country--it 
     has grown by 400 million people since Richard Nixon visited 
     in 1972--and possesses one of the world's largest economies.
       With the world's largest standing army, China's actions 
     have a direct bearing on peace and stability throughout East 
     and Southeast Asia.
       As a permanent member of the United Nations Security 
     Council, China is not only a key country in Asia, but has a 
     significant impact on U.S. interests around the world.
       U.S. efforts to halt the spread of weapons of mass 
     destruction in Iran, North Korea and elsewhere can succeed 
     only if China cooperates with us and the rest of the 
     international community.
       In the economic front, American exports and American jobs 
     are dependent upon sound relations with China. Last year we 
     sold nearly $12 billion of goods to China. These exports 
     supported 170,000 high-wage American jobs.
       Our two countries, despite our differences, share many 
     interests: a stable, peaceful, and prosperous East Asia; a 
     global economy characterized by predictability, reduced trade 
     barriers, and widely-accepted rules; stopping the spread of 
     weapons of mass destruction; and avoiding a regional arms 
     race or even a new cold war.


                  The Mood Today: A New Anger at China

       This is the most difficult bilateral relationship to 
     understand and to manage, even in the best of times--and 
     right now we are in the midst of another China-bashing 
     season.
       Many Americans are angered by China's human rights 
     practices; its proliferation of nuclear and chemical weapons 
     technology and components; its sales of missiles; its 
     bullying of Taiwan and oppression of Tibet; its trade 
     practices, which have led to a huge bilateral trade 
     imbalance; and reports of illegal campaign contributions to 
     U.S. candidates.
       Citing these concerns, politicians and pundits have 
     identified China as America's next adversary. They have 
     concluded that China will never play by the rules, and it is 
     useless to try to integrate it into global political, 
     security, and economic regimes.


                     Is China a Threat to the U.S.?

       But is China a threat? I believe there is no basis for 
     believing that China will pose a serious threat to the U.S. 
     any time soon. China is simply not in our league.
       In 1995, China's GDP stood at $698 billion. Ours was ten 
     times that size. The disparity in GDP per capita is even more 
     striking: $620 for each Chinese, $27,000 for each American.
       The military imbalance is as stark: China has fewer than a 
     dozen intercontinental ballistic missiles; we have 755; China 
     has roughly 300 strategic nuclear warheads; we have more than 
     11,000; China has no aircraft carriers; we have 12; China has 
     approximately 50 top-of-the-line warplanes; we have more than 
     3,400; China lacks the ability to project military power much 
     beyond its borders.

[[Page E1216]]

       This overwhelming American military edge is likely to 
     persist: present U.S. defense spending outstrips Chinese 
     spending by a factor of 8\1/2\ to one. In short, a Chinese 
     threat to U.S. security interests just doesn't stand up to 
     scrutiny.


                          defining Engagement

       Instead of viewing China as a threat, we should seek it as 
     an opportunity. China is an emerging superpower. The correct 
     policy approach is to engage China, not isolate it.
       Engagement is not endorsement. It is not alliance. It is 
     certainly not appeasement. It means actively engaging China 
     to resolve our differences. It means standing up for U.S. 
     interests when consultations and negotiations are not 
     fruitful, even when this creates tensions in the 
     relationship. This is what the Clinton Administration did: 
     when it sent two aircraft carrier groups into the Taiwan 
     Strait last year; when it threatened to impose sanctions 
     because of Chinese violations of intellectual property 
     rights; and when it imposed sanctions on Chinese companies of 
     their violation of U.S. non-proliferation laws.


                    Engagement Serves U.S. Interests

       I support a policy of engagement, not as an end in itself, 
     but as a tool to promote U.S. interests, including our human 
     rights concerns. It has produced tangible benefits for the 
     United States. Because of engagement: China has helped to 
     reduce tensions on the Korean peninsula, perhaps the most 
     dangerous place in the world today; China has moved in our 
     direction on non-proliferation. It has committed itself to 
     international nonproliferation rules by signing the Nuclear 
     Nonproliferation Treaty, the Comprehensive Test Ban Treaty, 
     and the Chemical Weapons Convention; China worked 
     constructively with us in the United Nations Security Council 
     in the Gulf War, and on many peacekeeping efforts since then; 
     China cooperates with us on terrorism, the environment, 
     public health, alien smuggling, and on illegal narcotics--all 
     matters with a direct impact on our well-being.
       Engagement has not solved all problems. But it offers a 
     better prospect for achieving U.S. policy objectives than 
     isolation or containment.


                           MFN and Engagement

       Granting China normal trading status--as we have done for 
     17 years--is a natural consequence of our policy of 
     engagement. It is the routine way nations conduct trade. All 
     of our major trading partners enjoy this non-discriminatory 
     tariff treatment.
       But on Capitol Hill, opponents of engagement are gearing up 
     for an all-out attack on the President's decision to extend 
     normal trading status for another year.
       The decision to grant normal trading status is not simply a 
     narrow trade issue. It represents a fundamental choice--a 
     choice between engagement and containment.
       To revoke normal trade relations would be to declare 
     economic warfare against China, and it would make a policy of 
     engagement impossible. It would disrupt the cooperation we 
     already enjoy and end the chances of greater cooperation.


                MFN Not a Referendum on Chinese Behavior

       The upcoming vote on China's trade status should not be a 
     referendum on whether we approve or disapprove of Chinese 
     behavior. No one disputes that China does things we find 
     highly objectionable--and will surely continue to do so. 
     Supporters and opponents of a normal trade relationship with 
     China share the same goals. The debate is about the best 
     method to achieve these goals.
       Revoking normal trade relations is too blunt a tool for 
     achieving our goals--indeed, it would be counterproductive. 
     We have more effective ways to influencing China's behavior: 
     targeted sanctions; public embarrassment; Radio Free Asia 
     broadcasts; force deployments; and tough, effective and 
     sometimes secret diplomacy.
       Normal trade relations with China is a way of protecting 
     U.S. interests and promoting American ideals--not a way to 
     confer a seal of approval on China.


                          MFN and Human Rights

       Revoking normal trade relations will not achieve our human 
     rights goals. Obviously China continues to fall short of our 
     hopes in the area of human rights. China today is an 
     oppressive society where political expression is severely 
     circumscribed and the rights of the individual are 
     subordinated to the well-being of the state--as defined by a 
     self-selected party elite.
       But a policy of engagement offers a better hope of prodding 
     China into more acceptable behavior than a policy of 
     isolation or containment.
       The lesson of the past quarter century in China--and the 
     lessons of South Korea, Taiwan, and other former 
     authoritarian countries that have evolved into democracies--
     is that the best way to promote human rights is for the 
     United States to stay engaged.
       That is why many of those who care deeply about freedom in 
     China--Wei Jingsheng, Martin Lee, and many of the Tiananmen 
     Square dissidents, for instance--advocate the renewal of MFN. 
     That is why many Christian religious leaders--in the United 
     States as in China--support MFN. That is why Presidents of 
     both parties, ever since President Nixon first visited China 
     in 1972, have endorsed a policy of engagement. The 
     overarching reality is that the human rights situation is 
     improving because we have followed a policy of engagement, 
     and will continue to improve if we stay engaged.


                MFN Revocation Will Damage Human Rights

       Those who advocate the withdrawal of normal trade relations 
     say this action will further human rights in China. But they 
     offer no evidence--because they have no evidence.
       To the contrary, there's plenty of evidence to show that 
     revoking normal trade relations would only make things worse. 
     China is a great nation with an ancient culture and a proud 
     tradition. It is, moreover, a nation immensely conscious of 
     slights--real and imagined--suffered at the hands of the 
     West.
       I cannot imagine that China would buckle under the threat 
     of MFN withdrawal--any more than we would back down in the 
     face of a comparable threat.
       A direct challenge by the United States is likely to make 
     human rights conditions in China worse: Do MFN opponents 
     really think an isolated China would be more likely to 
     respect the rights of its people? That a return to the cold 
     war of the 1950s and 1960s would promote human rights?
       Are human rights advanced if, as a consequence of a 
     deteriorating U.S.-China relationship, China: sells more 
     missiles to Pakistan? steps up its nuclear cooperation with 
     Iran? encourages North Korea to threaten the peace of the 
     Korean peninsula? or bullies Taiwan?
       The human rights situation is not good today, but China is 
     light years ahead of where it was 25 years ago, when 
     President Nixon first visited. While political expression 
     remains severely circumscribed, personal freedoms for the 
     average Chinese--choice of employment, place of residence, 
     freedom of movement--are greater than ever before. And 
     Chinese are now voting in village elections.
       China is still evolving. In another decade, it will be 
     vastly different, just as the China of 1997 is dramatically 
     different from the China of 1972. But these changes have not, 
     and will not come overnight. They will be less likely to come 
     at all if we isolate ourselves from China.
       The way to improve human rights in China is to stay 
     engaged, encourage the trends already underway, and make 
     certain that the Chinese understand that they will enjoy a 
     full relationship with the United States only when they stop 
     oppressing their people.


                       MFN and the Trade Deficit

       The $38 billion trade imbalance is another source of 
     tension in U.S.-China relations. Yet revoking normal trade 
     status will not reduce this deficit.
       Terminating MFN will create considerable economic pain for 
     American workers, manufacturers, and consumers. But it will 
     not bring jobs and production back to the United States, 
     because there are other countries that, like China, can 
     produce labor-intensive goods more cheaply than we can.
       Rather than revoking MFN and closing off trade, we should 
     concentrate on opening China's market.
       First, we need to continue to use our trade remedy laws--
     including targeted sanctions--to persuade China to lower 
     import barriers and end unfair practices. This approach 
     worked last year when we persuaded China to crack down on 
     counterfeit music recordings, computer software, and videos. 
     It worked again when we won market access provisions for our 
     textiles. We should not hesitate to use this tool whenever it 
     is needed.
       Second, we need to bring China into the WTO on tough 
     commercial terms.
       The United States should insist that China abandon its 
     discriminatory economic and trade policies as a condition for 
     joining the WTO. Once China becomes a WTO member, it can be 
     challenged in WTO dispute-settlement proceedings if it fails 
     to live up to its commitments.


                       The Risks of Revoking MFN

       Those who favor cutting off normal trade relations with 
     China do not spell out the consequences. Ending normal trade 
     relations and ending America's quarter century of engagement 
     with China would damage U.S. interests in China, in the 
     region, at home, and around the world.


                              Inside China

       Within China, abandoning engagement--as ending normal trade 
     relations would surely mean--would undermine the stature and 
     influence of those Chinese we most want to support--
     reformers, students, intellectuals, and entrepreneurs. It 
     would strengthen the hand of reactionary elements in China: 
     the army, the bureaucrats and government functionaries, and 
     the hardline communists. It would slow the flow of western 
     culture and ideas into China. It would destroy the little 
     influence we now have on the Chinese leadership, and 
     eliminate any incentive for them to abide by global norms. 
     And as we have seen, it would almost certainly make the human 
     rights situation there worse, not better.


                             In the Region

       In the region, Hong Kong and Taiwan--who wholeheartedly 
     support the continuation of MFN--would suffer economically 
     because they benefit from U.S.-China trade. They might also 
     suffer direct political or military pressure from China as 
     well.
       If America abandoned the policy of engagement, regional 
     tensions would rise. Our allies in the region would lose 
     confidence in our judgment and our ability to play a 
     constructive role in East Asia. Unsure of our allies, we 
     would have to increase our defense expenditures in the 
     region, The region could embark upon a destabilizing arms 
     race, and make a new cold war more likely.

[[Page E1217]]




                                At Home

       Ending normal trade relations would also severely impact 
     the United States. We would lose markets for $12 billion 
     worth of U.S. exports, which support 170,000 high-paying 
     American jobs. It would mean higher prices for Americans who 
     shop for low-cost imports.
       It would deny us access to China's huge market, not only in 
     the present, but for the foreseeable future. And faced with 
     the need for higher defense expenditures, our hopes for 
     balancing the budget and dealing with our domestic problems 
     would evaporate.


                            Around the World

       Ending normal trade relations has international 
     consequences as well. We would lose the support of one of the 
     five permanent members of the United Nations Security 
     Council, which would have a significant impact on U.S. 
     interests around the world.
       U.S. efforts to halt the spread of weapons of mass 
     destruction in North Korea and elsewhere would be set back.
       We would no longer count on Chinese help on regional 
     security issues, or in addressing transnational issues such 
     as narcotics trafficking, environmental degradation, or 
     international crime.


             Importance of a Smooth Transition in Hong Kong

       The debate over China's trade status is not occurring in a 
     vacuum, of course. The other major China-related event that 
     will take place in the next few weeks is Hong Kong's 
     reversion to Chinese control. I have been watching the 
     transition process in Hong Kong with keen interest--and with 
     a mixture of hope and concern. It is critical that the 
     transition go smoothly.


  Hong Kong transition will have great impact on U.S.-China Relations

       The Hong Kong transition will have a great impact on how 
     most Americans view U.S.-China relations. If the transition 
     goes well, this will sustain political support in the 
     Congress and throughout the country for a policy of 
     engagement with China. But if the transition goes badly--if 
     Americans see television pictures of people being led off in 
     manacles, and read news reports that suggest that Hong Kong's 
     unique way of life is being threatened--then support for 
     engagement will falter.
       The Chinese leadership understands this. But I am less 
     confident that those who wield power in Beijing will be able 
     to exercise the necessary discipline, restraint and 
     flexibility if--as is possible--the July 1st transition is 
     met with public demonstrations and protests.
       I'm equally worried about the long term outlook--the 
     potential erosion of Hong Kong's freedoms over the next few 
     years.


                     Concerns About the Transition

       But the die is not yet cast for Hong Kong. China has taken 
     a number of encouraging steps. It has approved Hong Kong's 
     continued participation in international organizations. It 
     will continue to link Hong Kong's currency to the U.S. 
     dollar, and preserve Hong Kong's substantial foreign exchange 
     reserves. It will keep Hong Kong's respected civil servants 
     in place.
       The key question, of course, is whether China will honor 
     its pledges to uphold the 1984 Sino-British Joint 
     Declaration--whether it will abide by its promise to 
     establish and maintain ``one country, two systems.''


   What the U.S. Can Do to Enhance A Successful Hong Kong Transition

       None of us can answer that question today, just as none of 
     us knows what Hong Kong will be like 3 or 5 or 10 years from 
     now. The chief actors, of course, will be China and Hong 
     Kong. But there are things the United States can do to 
     increase the likelihood that the Hong Kong of the 21st 
     century will retain the vitality and opportunity and freedom 
     it enjoys today.
       First, in all our dealings relating to Hong Kong, U.S. 
     officials should underscore our deep commitment to freedom 
     and democracy there.
       Second, we should give Hong Kong's new chief executive some 
     running room, so he is not immediately caught between those 
     who say he must work with China and those who say working 
     with China is impossible.
       Third, we should refrain from threatening China, although 
     we must not shrink from stating our views.
       Fourth, we should firmly and repeatedly state our 
     expectation that China abide by the Joint Declaration 
     especially as it applies to civil liberties, rule of law, 
     basic freedoms, and true autonomy.
       Fifth, we should let the new authorities know we expect 
     them to surpass Hong Kong's record in the rule of law, the 
     honestly of the civil service, and the impartial 
     administration of government.


          Implications of the Hong Kong Transition for Taiwan

       The Hong Kong transition also has implications for Taiwan. 
     China understands that if the transition goes well, this will 
     make the question of Taiwan's eventual reunification with 
     China infinitely more manageable.
       If for no other reason than this, Beijing has every 
     incentive to make the Hong Kong reversion succeed. So do the 
     other members of the Asia-Pacific community. The unsettled 
     relations between Beijing and Taipei pose one of the most 
     serious threats to peace and stability in East Asia. If a 
     successful Hong Kong reversion helps to dampen tensions 
     between China and Taiwan, then we all benefit.


                               Conclusion

       Maintaining sound relations with China is essential for 
     achieving a wide range of U.S. foreign policy objectives--
     including regional peace and stability, prosperity for our 
     Asian friends and ourselves, and improved conditions inside 
     China itself.
       If we are to have sound relations with China, we must 
     maintain normal trading relations. We must approve MFN for 
     another year.
       But that is only the beginning. U.S. policy toward China 
     will require a steady and skillful hand over the long haul. 
     We should not delude ourselves or engage in false 
     expectations. We can expect rough patches along the way. 
     Success will require a consistent policy, principled stands 
     on key issues, and patient diplomacy aimed at finding 
     solutions, not aggravating tensions. It will also require a 
     China willing to abide by international rules and norms.
       I want to leave you with two thoughts.
       First, we cannot isolate China. We could not build a 
     coalition to contain or isolate China if we tried.
       No one would support us.
       We can disengage from China. But China is too big and too 
     important for us to isolate successfully. If we try, we will 
     only isolate--and hurt--ourselves.
       Second, if we treat China as an enemy, it will become our 
     enemy. Our hand should remain open.
       Thank you.

       

                          ____________________