[Congressional Record (Bound Edition), Volume 146 (2000), Part 7]
[Extensions of Remarks]
[Pages 9226-9227]
[From the U.S. Government Publishing Office, www.gpo.gov]



              PERMANENT NORMAL TRADE RELATIONS WITH CHINA

                                 ______
                                 

                           HON. DOUG BEREUTER

                              of nebraska

                    in the house of representatives

                         Tuesday, May 23, 2000

  Mr. BEREUTER. Mr. Speaker, on Wednesday this body is scheduled to 
consider H.R. 4444, the legislation that would provide the People's 
Republic of China with Permanent Normal Trade Relations (PNTR) status 
in the context of China's accession to the World Trade Organization. 
This Member believes that Sino-American relations are increasingly 
problematic and uncertain. China is not our enemy, though certain 
forces in the U.S. and China want it to be. China is certainly not our 
strategic partner, either. China is a strategic competitor with whom 
responsible engagement and cooperation is necessary to ensure peace and 
stability in the East Asia region.
  This Member believes that the forthcoming vote on PNTR will have 
significant ramifications for Sino-American relations and how 
successfully we manage the challenges posed by China. It is in this 
regard that this Member recommends the following article from the 
Financial Times, a respected international newspaper, which provides an 
insightful analysis of the impact of the PNTR vote.

                [From the Financial Times, May 18, 2000]

Trade Status May Hold the Key to End of Roller-Coaster Ride in US-China 
                              Relationship

                            (By James Kynge)

       The last 21 years of US-China relations have been a roller 
     coaster ride. Periods of bright optimism have swiftly 
     subsided into mutual acrimony and, in 1996, a military stand-
     off in the Taiwan strait. But rarely, if ever, has a 
     potential tear in the fraying fabric of bilateral ties been 
     so visible--and avoidable--as now.
       The decisive test will come next week, when the US House of 
     Representatives votes on President Bill Clinton's proposal to 
     safeguard China's US exports against possible discrimination 
     by giving it permanent normal trade relations (PNTR) status. 
     The proposal, which would abolish Congress's annual review of 
     China's trade status, is prompted by the country's imminent 
     admission to the World Trade Organization.
       If Congress rejected PNTR, China could still enter the WTO 
     but foreign diplomats and Chinese officials say rejection 
     could cause a rupture in relations with the US more enduring 
     and perilous than that which followed NATO's bombing of 
     China's Belgrade embassy last year.
       The most obvious impact would be felt by US corporations 
     exporting to and operating in the world's most populous 
     country. Beijing would be likely to exercise its right, under 
     WTO rules, to deny them the unprecedented trade 
     liberalisation and market access concessions that it has 
     promised to make once it joins the WTO.
       Adding insult to injury, the European and other companies 
     that compete so intensely with US companies in China would 
     enjoy the full benefits of the WTO package. ``[It] would be 
     absolutely disastrous for US companies. There is no other 
     word for it. Disastrous,'' said a US executive.
       US multinationals are not the only potential victims. For a 
     Chinese leadership facing crucial challenges at home and in 
     foreign policy, a congressional ``no'' would deal a harsh 
     blow to the very people seen as relatively pro-US, reformist 
     and supportive of a faster integration into the wider world.
       Zhu Rongji, the premier, has already endured the opprobrium 
     that flows from being seen as too pro-American. His political 
     career languished for several months last year after he 
     returned from Washington having failed to clinch a WTO deal 
     despite offering concessions so deep that many Chinese saw 
     them as ``traitorous''.
       This time, Mr. Zhu, President Jiang Zemin and hundreds of 
     other lower level officials who have displayed their 
     reformist colours are potentially vulnerable.
       This is mainly because one of the main arguments that 
     reformers in China employed last year to persuade 
     conservatives of the wisdom of WTO accession was that it 
     would mean the end of an annual review of Beijing's human 
     rights record in the U.S. Congress. If PNTR is not awarded, 
     the review--an annual humiliation for Beijing--would stay.
       Sandra Kristoff, a former White House staff member and now 
     senior vice-president of New York Life, said after meetings 
     in Beijing this week that there was potential for the whole 
     U.S.-China relationship to become unhinged. ``[If there is a 
     no vote] there would be no way that we could convince them 
     that this does not mean that the U.S. wants to contain 
     them,'' she said.
       A resurgence of resentful nationalism, evident in Beijing 
     after the Chinese embassy bombing, could add to the already 
     unstable mix of emotions that conditions China's responses on 
     Taiwan, diplomats said. Beijing has sworn to prevent Taiwan 
     independence, by using force if necessary.
       To many Chinese officials, U.S. hostility towards Beijing 
     and Taiwan's steady drift towards independence are two sides 
     of the same coin. Thus any hopes of the U.S. acting as an 
     honest facilitator for talks between Taipei and Beijing would 
     be undermined if PNTR was rejected.

[[Page 9227]]

       From the perspective of China's economic reforms, however, 
     the effects of a decision not to award PNTR are less clear. A 
     recent acceleration in free market reform is being driven by 
     the prospect of WTO accession and by the objective 
     requirements of an economy in urgent need of restructuring.
       Neither of these two factors would, in theory, be affected 
     by a refusal to normalise trade relations with the U.S. But 
     in practice, there are distinct risks.
       One is that conservatives and military hawks, empowered by 
     a rupture in relations with the U.S. could convince Mr. Jiang 
     to stall WTO accession and defer some of the more painful and 
     controversial aspects of reform.
       Such a scenario is far from unthinkable. Mr. Jiang is a 
     master of compromise politics, and there is already some 
     internal opposition to crucial reforms that appear to be 
     whittling away the economic power base of the Communist 
     party.
       Perhaps that is one reason why Chinese dissidents such as 
     Dai Qing are so in favour of PNTR. ``Permanent normal trade 
     relations would send the Chinese people a powerful message: 
     the most powerful industrialised nation today will work with 
     the Chinese people to build a new world order,'' said Mr. 
     Dai.

     

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