[Congressional Record (Bound Edition), Volume 146 (2000), Part 11]
[Senate]
[Pages 15843-15845]
[From the U.S. Government Publishing Office, www.gpo.gov]



             PERMANENT NORMAL TRADING RELATIONS WITH CHINA

  Mr. BAUCUS. Mr. President, I would like to speak a few words on a 
matter that will be coming before this body, I hope, later this week; 
that is, beginning the process of the United States agreeing to extend 
permanent normal trading relations status with China.
  I would like to step back for a few moments and reflect a bit on its 
significance and on its implications. The irony is that we are even 
talking about this today because I think the bill to

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grant China PNTR has the strong support of at least three-fourths of 
the Senate. It is deeply in our national interest. I wish it had been 
passed some time ago. Actually, we should have passed it months ago. 
Instead, we have had to struggle to find time to consider it in this 
chamber. We are now approaching the eleventh hour of this session of 
Congress with a week left this month and a few weeks in September.
  I personally believe this issue should have been handled differently. 
We should have brought it up much earlier. But later is better than 
never. I am glad we are finally approaching the denouement.
  For over two millennia, China was ruled by a series of imperial 
dynasties. The last Emperor was overthrown in 1912. Warlords, 
dictators, and the Japanese military then took over parts of the 
country at various times.
  In 1949, the Chinese Communists took control of the entire Chinese 
mainland. Chiang Kai-shek and his supporters were forced to flee to 
Taiwan. Then followed three decades of absolute, totalitarian, 
Communist rule by Mao Zedong.
  To oversimplify, in 1979, Deng Xiaoping signaled the beginning of the 
end of Marxist-Leninist-Maoist ideology as the underlying construct of 
the Chinese economy, polity, and society.
  Another critical turning point was Deng's so-called ``Southern 
Journey'' in 1992. He visited Shenzhen, other parts of Guangdong 
Province, and Shanghai. On that journey, he advocated more economic 
openness, faster growth, and more rapid progress toward a market-based 
economy.
  For the next two decades, we witnessed both progress and retreat in 
China's economic and political developments. Dramatic opening to 
foreign products and foreign investment. Yet a continuing government 
effort to maintain control over telecommunications.
  The massacre of students at Tiananmen Square in 1989. Yet relatively 
unfettered access today by many Chinese to the Internet. Repeated 
violations of contract sanctity. Yet the development of domestic stock 
markets and Chinese companies placing issues on foreign stock 
exchanges.
  The battle in China between the forces of reform and the forces of 
reaction continues. No one can predict how it will end, or when. But it 
is certainly in the vital interest of the United States to do 
everything we can to support those who favor reform over 
totalitarianism. Those who favor private enterprise over state-owned 
enterprises.
  That means we must work to incorporate China into the international 
community. We need to engage China with the goal of promoting 
responsible behavior internally and externally. Encouraging them to 
play by international rules. Integrating the Chinese economy into the 
market-driven, middle-class, participatory economies of the West.
  Economic reforms never have an easy time. And the forces in China 
that want to maintain the status quo are strong.
  But, economic reform, moving to a market economy, transparency, 
direct foreign investment, listing of companies on overseas markets. 
Progress in all these areas is of vital importance to the United States 
as they relate to stability in China, accountability, and the 
development of a middle class. China's entry into the WTO will help 
anchor and sustain these economic reform efforts and empower economic 
reformers. China will not become a market-driven economy overnight. But 
it is in our interest that they move in this direction. And the WTO 
will help the process.
  Around the world, we have seen that economic growth leads to the 
development of a large and strong middle class. Eventually, the middle 
class makes demands on political leaders for greater participation, 
accountability, and openness. It takes time. For example, eighty years 
ago, the Kuomintang, the KMT, was created by the same Soviet advisors 
who created the Chinese Communist Party. Fifty years ago, the KMT 
massacred Taiwanese citizens. Twenty years ago, the KMT still ruled 
Taiwan under martial law. Yet Taiwan just held its second truly 
democratic election.
  There are many other examples. Look at Korea. A quarter of a century 
ago, the Korean government tried to murder the dissident Kim Dae Jung. 
Now, President Kim Dae Jung has begun to transform Korea's economic 
structure. He has traveled to Pyongyang in one of the most remarkable 
initiatives in modern world history. He is worried about being turned 
out of office in the next democratic election; such is the way of 
democracy.
  The Philippines in 1986, Thailand in 1990, Indonesia in 1999. They 
all showed us the power of the development of a middle class. There is 
nothing fundamentally unique about China that makes a similar type of 
change impossible, or even improbable, over time.
  Once China joins the WTO, China will be accountable for its behavior 
to the outside world, for perhaps the first time in history. The 
dispute settlement system at the WTO is far from perfect. Many members 
are working to open up dispute settlements and make it more available 
to the outside world. I have been among its most vociferous critics. 
But WTO dispute settlement will allow other countries to examine 
Chinese domestic economic practices.
  It will force China to explain actions that other members believe 
violate global rules for the first time in world history. When a 
violation is found, it will put pressure on China to change and comply 
with the internationally accepted rules of the WTO. Not a perfect 
organization, but certainly better than none. This type of external 
scrutiny of China is virtually unprecedented. It has implications that 
may go far beyond trade, as China learns about the need to respect the 
rule of law among nations.
  Let me turn to Taiwan for a moment. Taiwan will accede to the WTO 
very shortly after China does. What will happen when both enjoy full 
membership?
  They will participate together, along with all other WTO members, in 
meetings ranging from detailed technical sessions to Ministerial level 
gatherings. There will be countless opportunities for interaction at 
many levels. Under the WTO's most-favored-nation rule, they will have 
to provide each other the same benefits that they grant to all other 
members. That is a very important principle. Taiwan's current policy 
limiting direct transportation, communication, and investment with the 
mainland will not stand up to WTO scrutiny. Each will be able to use 
the WTO dispute settlement mechanism against the other. They will have 
to meet directly and deal with economic differences in a peaceful way.
  Presumably, either could take reservations, such as a national 
security exception, against the other in certain areas. That is a 
decision still to be made. But, no matter what, membership in the WTO 
and WTO-induced liberalization will increase and deepen ties between 
Taiwan and the PRC in trade, investment, technology, transportation, 
information, communications, and travel. And that has to contribute to 
the maintenance of peace across the Taiwan Strait.
  China is emerging from one hundred and fifty years of national 
torpor. How we in America, and how the leadership in China, manage this 
relationship will set the stage for regional and global politics, 
security, and economics for decades to come.
  We must make a profound choice. Do we bring China into the orbit of 
the global trading community with its rule of law? Or do we choose to 
isolate and contain China, creating a 21st century version of the cold 
war in Asia?
  It is a truism in international relations that rising powers have 
proven to be the most dangerous. Germany at the end of the 1800s and 
the Soviet Union in the 1940s. But this is not 1900 or 1945. As the 
world has become smaller for us because of revolutions in information, 
transportation, and production, so for China has the world come closer.
  China is not our enemy. China is not our friend. The issue for us is 
how to engage China, and this means engagement with no illusions. 
Engagement with a purpose. How do we steer China's energies into 
productive, peaceful

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and stable relationships within the region and globally? For just as we 
isolate China at our peril, we engage them to our advantage.
  Incorporation of China into the WTO, and that includes granting them 
PNTR, is a national imperative for the United States.
  I yield the floor.
  The PRESIDING OFFICER. The distinguished Senator from West Virginia 
is recognized.

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