    [Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (2000, Book I)]
    [February 24, 2000]
    [Pages 296-300]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks to the Business Council
    February 24, 2000

        Thank you, Ralph, and good morning. I
    want to begin by asking if the microphone's too loud, so--can we turn it
    down just a little bit? That's good. I'm delighted to be here. I know
    you just had a good panel on the economy. And I wanted to talk mostly
    about China today, but I would like to mention just a couple of other
    matters very briefly.
        First of all, you've already talked in some detail about the
    question of how to keep the economy going. And I don't have much to add
    to what I'm sure Secretary Summers said, except I would like to just
    make three points very briefly. Number one, I think it is terribly
    important that we continue to pay the debt down and for reasons that you
    understand. But it's an enormous hedge against the necessary borrowing
    by business to continue to invest and continue to grow. And whatever the
    Fed does, the interest rate structure will be lower than it otherwise
    would be, not only now but for perhaps decades in the future. So I think
    it is a critically important thing. And I think it's important that
    people understand this. I've seen all kinds of articles in the papers
    saying I've adopted Coolidge economics, but I don't think so. We're
    continuing to invest robustly in our people and our future. But I think
    it's important.
        The second point I want to make is, I think it is even more
    important that we continue to invest in the education and skills of our
    people. A lot of you are heavily involved in trying to make our
    elementary and secondary schools better. We have a proposal now before
    the Congress to make college tuition tax deductible, which would
    functionally open the doors of 4 years of college to every American,
    with the other increases we've made in the Pell grants and other things.
    But I think we need to do more on this, particularly with people who are
    already in their young adult years who are out there and not either
    employed or are underemployed. I think that's important.
        And the third thing I would say is, many of you have helped us on
    this new markets initiative, but I hope all of you will. Some of you
    have been involved in our Welfare to Work Partnership, which has 12,000
    companies now and has hired hundreds of thousands of people from welfare
    to work. And reports indicate that they're doing quite well.
        But I think when you consider the fact that telecommunications,
    among other things, enables us to bring economic opportunities to rural
    areas--and in the worst case, some of our Indian reservations still have
    unemployment rates that are around 70 percent--there are real
    opportunities there for noninflationary growth if we can figure out how
    to do it. I don't want to minimize the risk. I'm trying to get Congress
    to pass some legislation that would give significant tax credits to
    minimize the risk of private sector investment in these areas, but I
    think they are profoundly important.

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        And as I said, I know a lot of you have been involved in this
    already, but this is the only chance we've had, I think, in my adult
    lifetime to genuinely bring free enterprise to people in places that
    have been left behind. And it's an opportunity I think we ought to take,
    and I also think it would be good for the overall economy.
        Now, I want to talk a little about China today, because I think it
    is the most important question that the Congress will take up in the
    first half of this year. And I realize that in many ways I may be
    preaching to the choir, but I think it's important that we all
    understand not that this is a good thing to do but that it is an
    essential thing to do.
        For 30 years now, every single President, without regard to party,
    has worked for the emergence of a China that contributes to the
    stability, not the instability, of Asia; that is open to our products
    and to our businesses; that allows people access to ideas and
    information there; that upholds the rule of law at home and adheres to
    the rule of law around the world.
        We have a big stake in how China evolves. We have, after all, fought
    three wars in Asia in the 20th century. And the path China takes to the
    future will either illuminate or cast a great shadow far beyond its
    borders. I think we all know that. Therefore, it is clear that the more
    we can promote peace and stability in Asia by helping the right kind of
    China to develop, the more America's interests and values will be
    served.
        The WTO agreement with China helps to advance all these goals in
    unprecedented ways. It's the kind of opportunity that comes along once
    in a generation. If we seize it, a generation from now people will
    wonder why the debate was hard at all. If we don't, we'll be regretting
    it for a generation.
        I don't think there's any question that this is in America's
    economic interests. The agreement requires China to open its markets on
    everything from agriculture to manufacturing to high-tech products. All
    we do is simply agree to maintain market access already given to China.
    For the first time, our companies will be able to sell and distribute in
    China products made by American workers here at home. It strengthens our
    response to unfair and market-distorting trade from China, from import
    surges to forced technology transfers to protection of intellectual
    property.
        One of the things I am quite sure that many Members of Congress
    still do not know is that this agreement actually contains bilateral
    protections that we don't now have to deal with problems like import
    surges, and it's important that they know that.
        If you think about what this agreement could mean to our economy, we
    could start with agriculture. From corn to wheat to barley, tariffs are
    cut by two-thirds, and our farmers get full access to a fifth of the
    world's population. It's little wonder that the pay stubs at the
    Farmland Institute read, and I quote, ``China will account for nearly 40
    percent of the future growth of American agricultural products.''
        With regard to our telecommunications industry, those of you in that
    business know that China has the largest potential market in the world,
    and only 5 percent of it has been tapped. This agreement will allow our
    firms, which are already leading the world, access to the other 95
    percent.
        With regard to the auto industry, tariffs will fall by nearly 75
    percent. The requirement that we rely on Chinese distribution is
    eliminated, as is the requirement that we have to transfer our
    technology, I think a very important advance secured by Ambassador
    Barshefsky and Mr. Sperling in this agreement. For the first time,
    American manufacturers will be able to sell American-made cars in China,
    to set up their own distribution centers, to run their own service
    shops, to provide their own financing to consumers. That means we'll
    sell more American cars and auto parts there and have more jobs here at
    home.
        Most Members of Congress don't question the economic benefits.
    Critics are more likely to say things like this: ``China is a growing
    threat to Taiwan and other neighbors. We shouldn't strengthen it.''
    ``China is a drag on labor and environmental market rights, and if you
    put them in the WTO, they will block further progress on those issues.''
    Or, ``China is an offender of human rights, and we shouldn't reward
    it.'' Or, ``China is a dangerous proliferator. We shouldn't empower
    it.''
        Now, all these concerns, I believe, are legitimate. The question is
    whether they will be advanced or undermined by the decision Congress
    will make and America will make on letting China into the WTO. I believe
    to set this up as a choice between economic rights and human rights or
    economic security and national security

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    is a false choice. I believe that this agreement is vital to our
    national security and that every single concern we have will grow
    greater and the problems will be worse if we do not bring China into the
    WTO. So I believe this agreement promotes not only the economic
    interests of the United States but progress toward positive change in
    other areas in China.
        For the past 20 years, China has made progress in building a new
    economy. It's lifted more than 200 million people out of absolute
    poverty. It's linking so many people through its wireless communication
    network that it's adding the equivalent of a new Baby Bell every year.
    But the system still is plagued by corruption. Less than one-third of
    the economy is private enterprise. The work force, meanwhile, is
    increasing by about 12 million a year. At least 100 million people in
    China are still looking for work, and economic growth has slowed just
    when it needs to be rising.
        So the leaders of China actually face quite a dilemma in making this
    decision to go for WTO membership. They realize that if they open their
    markets to global competition, they risk unleashing forces that are
    beyond their control: unemployment, social unrest, demands for political
    freedom. This is a big decision in a country that time and again has
    suffered more from internal chaos and disintegration than from external
    threat.
        But they have concluded that without competition from the outside,
    China will simply not be able to attract the investment or build the
    world-class industries they need to thrive in a global economy. So with
    this agreement, Chinese leaders have chosen to embrace change. They are
    highly intelligent people. They know exactly what they're doing, and
    they're prepared to take a risk that will require them to change as
    well.
        So the real question for America is, now that they have decided to
    take their risk, do we want to walk away from our decision? Do we want
    to risk a total rejection of the profound decision and choice they have
    made? I think it would be a terrible mistake. We need to embrace their
    decision, not only for our own interests but for the long-term interests
    of the world.
        The WTO agreement advances our interests by encouraging China to
    meet, not muzzle, the growing demands of people for openness. Rather
    than working from the outside in, it will work from the inside out, as
    all profound change has to do.
        Let me just make a few points about this. First, having China in a
    rule-based system increases the likelihood that China will follow the
    rules of the road in terms of the international economy. Under this
    agreement, for the first time, some of China's most important decisions
    will be subject to the review of an international body. It means China
    is conceding that governments cannot behave arbitrarily at home and
    abroad, that their actions are subject to international rules.
        Opponents say that doesn't matter, because China will just break its
    promises. But if that were to happen, our differences can no longer be
    ascribed to U.S. bullying. This time it will be 135 nations making
    collective judgment. Look, nobody agrees with the WTO all the time. I
    don't agree with their FSC decision. I presume most of you don't. And
    we'll have to work with Congress to try to figure out whether there is a
    WTO-consistent way for us to continue to play on a level playing field.
    But having a system of rules is, nonetheless, profoundly important.
        Second, the agreement will obligate China to deepen its market
    reforms and intensify the process of change. A decade ago, China's best
    and brightest college graduates sought jobs in the Government and large
    state-owned firms or universities. More and more now, they're starting
    their own companies or choosing to work for foreign-invested companies,
    where generally they get higher pay, a better work environment, and a
    chance to get ahead based on merit, not politics. That process will also
    accelerate if China joins the WTO.
        Third, this agreement has the potential to help open China's society
    in noneconomic ways. In the past, virtually every Chinese citizen woke
    up in the morning in an apartment or house owned by the Government, went
    to work in a factory or farm run by the Government, read newspapers
    written by the Government. The state-owned workplaces operated the
    schools where they sent their children, clinics where they got health
    care, the stores where they bought food. The system was a big source of
    the Communist Party's power. The meager benefits provided were a big
    source of the loyalty it commanded.
        Now, with lower tariffs and greater competition, China's state
    sector will shrink, the private sector will expand. In that way, the WTO
    will

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    speed a process that is removing Government from vast areas of people's
    lives.
        It will also increase access to communications dramatically. A year
    ago, China had 2 million Internet addresses. Now it has 9 million. The
    agreement will bring the information revolution to cities and towns all
    across that vast nation it hasn't reached yet. And as the Chinese people
    see how the world lives, they will seek a greater voice in shaping their
    own lives. In the end, China will learn what people all over the world
    are now learning: You can't expect people to be innovative economically
    while being stifled politically.
        Bringing China into the WTO doesn't guarantee, of course, that it
    will choose a path of political reform. But by accelerating the process
    of economic change, it will force China to confront the choice sooner in
    ways that are more powerful, making the imperative, I believe, the right
    decision.
        Of course, bringing China into the WTO is not, by itself, a human
    rights policy or a political rights policy for the United States. The
    reality is that China continues today to suppress voices of those who
    challenge the rule of the Communist Party. It will change only by a
    combination of internal pressure for change and external validation of
    the human rights struggle. So we must maintain our leadership in the
    latter even if the WTO agreement contributes to the former.
        That's why we sanctioned China as a country of particular concern
    under the International Religious Freedom Act last year, why we're once
    again sponsoring a resolution at the U.N. Human Rights Commission
    condemning human rights abuses there. We'll continue to press China to
    respect global norms on nonproliferation, and we'll continue to reject
    the use of force as a means to resolve the Taiwan question. We'll also
    continue to make absolutely clear that the issues between Beijing and
    Taiwan must be resolved peacefully and with the assent of the people of
    Taiwan.
        We must not and we cannot rely solely on the invisible hand of the
    market to do all our heavy lifting in China, and neither should the
    private sector. For all of us, including the business community,
    permanent NTR must mean a permanent commitment to positive change in
    China.
        But to even get that opportunity, we've first got to sell this
    agreement to the Congress, and we can't underestimate how hard it will
    be. I want you to know that I will push as hard as I can to secure
    agreement as quickly as possible. I made that clear in the State of the
    Union Address, in my press conference at Davos. Last week I started
    meeting with Members of Congress, and those meetings are continuing. You
    will get a full-court press from our administration, ably led by
    Secretary Daley.
        Now, I know you realize the stakes here. If China doesn't approve
    permanent normal trading relations, we risk losing the full benefits of
    China's WTO membership. In a global market economy, your companies would
    be shut off from a fifth of the world, while your European, Japanese,
    and other competitors would take advantage of the benefits we went to
    the trouble to negotiate. Failure would also send a signal to the world
    that America is turning inward. It would be, I believe, a devastating
    setback to our vision for the future.
        Now, I think it's important that we be honest with the Congress and
    the country on one thing. We don't know--you don't know and I don't know
    what choices China will make over the next decade. We can't control the
    choices they make, but we can control the choice we make; that's all we
    can do. And all my experience, not only as President in dealing with
    China but as a person who has lived more than half a century in dealing
    with human nature, indicates that this is a time for the outstretched
    hand in constructive partnership.
        And I believe--I will say again--if we pass this up, we will regret
    it for a generation. And all of our successors and interests will be
    paying a price far greater than economic, because of our rejection. We
    cannot allow this effort to fail.
        We face a choice between a Chinese market open to American products
    and services or closed to us--and only to us; between speeding the
    opening of China's economy or turning our backs; between a China that is
    on the inside of an international system looking out or on the outside
    looking in.
        Let me just make one other comment about this. Some of our friends
    in the labor community, with whom I have great sympathy, say that, well,
    if you put China in the WTO, it will make it even harder for legitimate
    labor and environmental issues to be raised, because we know where they
    stand. Look, I just went to Seattle and met with the people in the WTO.
    That's

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    a hard sell no matter who's there, and it won't change substantially if
    China's there. That's just not a vital argument, given where all the
    other countries are. That is not accurate.
        A lot of you don't even agree with me on that, but I can just tell
    you, whether you agree or not, the membership of China in or outside the
    WTO, given the perceived interest of the other developing countries that
    are going to be in the WTO on these issues, will not materially change
    what the WTO does on that over the next decade. I feel very strongly
    about that.
        So we've got a simple choice to make. And the first thing we have to
    do is to make it clear that there will be a vote on this and that we
    want the vote as quickly as possible. And no one should take a pass.
        I know that--I met with a lot of Republican members who were very
    concerned about the religious liberty issue. I can just say--a lot of
    you may know this--but the religious groups with whom I have met, who
    have been involved in China for years, who have been doing their
    missionary work there for years, are overwhelmingly in favor of this.
    The forces that genuinely and sincerely advocate religious freedom and
    then oppose this agreement are overwhelmingly people who have not been
    involved in China, with the Chinese, seeing how the society works.
        So I really believe this is a choice for America between fear and
    hope. They made a decision, and anybody who understands anything about
    Chinese history knows that these people are very deliberate, highly
    intelligent, and aware of the consequences of the decision they have
    made. And they have decided to bear the risks of becoming part of a more
    open society. They know it will require them to change in ways that they
    have not yet come to terms with.
        We have the strongest economy we have ever had. We are the world's
    only superpower, and whenever we walk away from an opportunity to lead
    the world toward greater integration and cooperation, as I believe we
    did with the Comprehensive Test Ban Treaty, we bear a particular
    responsibility for future adverse consequences.
        So I ask you to help me with Members of the Congress, without regard
    to party, based on the national interest, the clear economics, and going
    beyond the economics. This is a profoundly significant decision for the
    United States. It will affect our grandchildren's lives, and we dare not
    make the wrong decision.
        Together, we can make sure it comes out all right. You can help us
    pass this, but it can't be a casual effort. It's not going to be a
    casual effort with me, and it can't be with you. And even if your
    companies don't have any direct stake in this, as an American you have a
    huge stake in it. As a citizen of the world--and most of your companies
    are citizens of the world--you have a huge stake in it. I'll do whatever
    I can. I implore you to do the same. And we'll have a good time at the
    signing ceremony.
        Thank you very much.

    Note: The President spoke at 11:45 a.m. at the Park Hyatt. In his
    remarks, he referred to Ralph S. Larsen, chair, Business Council. The
    President also referred to FSC, the foreign sales corporation provision
    of U.S. tax law.