[Weekly Compilation of Presidential Documents Volume 29, Number 21 (Monday, May 31, 1993)]
[Pages 984-988]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Report to the Congress on Most-Favored-Nation Trade Status for China

 May 28, 1993

    Pursuant to section 402(d)(1) of the Trade Act of 1974 (hereinafter 
``the Act''), having determined that further extension of the waiver 
authority granted by section 402(c) of the Act for the twelve-month 
period beginning July 3, 1993 will substantially promote the objectives 
of section 402, I have today determined that continuation of the waiver 
currently applicable to China will also substantially promote the 
objectives of section 402 of the Act. My determination is attached and 
is incorporated herein.

Freedom of Emigration Determination

    In FY 1992, 26,711 U.S. immigrant visas were issued in China. The 
U.S. numerical limitation for immigrants from China was fully met. The 
principal restraint on increased emigration continues to be the capacity 
and willingness of other nations to absorb Chinese immigrants, not 
Chinese policy. After considering all the relevant information, I have 
concluded that continuing the MFN waiver will preserve the gains already 
achieved on freedom of emigration and encourage further progress. There, 
thus, continues to be progress in freedom of emigration from China; we 
will continue to urge more progress.

Chinese Foreign Travel Policies

    In FY 1992, 75,758 U.S. visas were issued worldwide to tourists and 
business visitors from China, a 35 percent increase over FY 1991 and a 
76 percent increase over FY 1988. Foreign travel by Chinese-government 
sponsored businessmen alone increased by 48 percent in FY 1992, 
reflecting Deng Xiaoping's policies of accelerating China's opening to 
the outside world.
    In FY 1992, 18,908 student visas (including exchange students) were 
issued, a decline from FY 1991 of 14 percent but still 8 percent greater 
than FY 1988. The decline was probably the result in part of a recent 
new directive requiring Chinese college graduates educated at state 
expense to work for five years before applying for privately-funded 
overseas study. A drop in funding from recession-strapped U.S. schools 
and relatives may also have played a role.
    Chinese students continue to return from overseas for visits without 
any apparent problem. With the exception of student activist Shen Tong, 
we are not aware of any case in which Chinese living in the U.S. who 
returned to China for visits after June 1989 were prevented from leaving 
again. Shen was detained in September 1991 and then expelled from China 
two months later for trying to establish a Beijing chapter of his Fund 
for Chinese Democracy.

[[Page 985]]

Human Rights Issues

    As detailed in the Department's annual human rights report, China's 
human rights practices remain repressive and fall far short of 
internationally-accepted norms. Freedoms of speech, assembly, 
association, and religion are sharply restricted.
    China understands that the Clinton Administration has made human 
rights a cornerstone of our foreign policy. We have already repeatedly 
raised our concerns with the Chinese authorities and we intend to press 
at every opportunity for observance of internationally accepted 
standards of human rights practice.
    We have made numerous requests for information on specific human 
rights cases. China has provided information on some of these cases but 
further and more complete responses are necessary. The Chinese recently 
released, prior to completion of their sentences, several prominent 
dissidents whom we had identified on lists provided to them. These 
included not only Tiananmen-era demonstrators but also Democracy Wall 
(circa 1979) activists. We hope this is the first step toward a broad 
and general amnesty for all prisoners of conscience.
    The Chinese promised then Secretary Baker in 1991 that all Chinese 
citizens, regardless of their political views, have the right to travel 
abroad. The only exceptions are citizens who are imprisoned, have 
criminal proceedings pending against them, or have received court 
notices concerning civil cases. A number of prominent dissidents, 
despite long delays, have been able to leave China. Some others have 
not. Those who have been able to obtain exit permits in the past year 
include labor leader Han Dongfang, writers Wang Ruowang and Bai Hua, 
scientist Wen Yuankai, journalists Wang Ruoshui, Zhang Weiguo, and Zhu 
Xingqing, and scholar Liu Qing. Others, like Hou Xiaotian, Yu Haocheng, 
and Li Honglin, continue to face difficulties in obtaining exit 
permission. We continue to press the Chinese on these and other cases.
    Our goal is the release of all those held solely for the peaceful 
expression of their political and religious views. In November 1991, the 
Chinese confirmed to Secretary Baker the release of 133 prisoners on a 
list presented them earlier in June of that year. Since then, the 
Chinese have released additional political prisoners, including Xu 
Wenli, Han Dongfang, Wang Youcai, Luo Haixing, Xiong Yan, Yang Wei, Wang 
Zhixin, Zhang Weiguo, Wang Dan, Wang Xizhe, Gao Shan, Bao Zunxin, and a 
number of Catholic clergy and lesser known activists. We continue to 
press for a general amnesty and for permission for international 
humanitarian organizations to have access to Chinese prisons. We have 
also pressed for improvement in the conditions of those in Chinese 
prisons.
    China has recently and for the first time admitted publicly that 
domestic human rights policies are a legitimate topic of international 
discussion. China has hosted human rights delegations from France, 
Australia, the U.K., and Germany. China sent several delegations to the 
U.S. and Europe, as well as Southeast Asia, to study foreign human 
rights practices and issued a ``white paper'' maintaining that basic 
human rights are observed in China and arguing that a country's human 
rights record should be viewed in light of its own history and culture. 
We reject this limited definition of human rights but believe it is a 
significant step forward that China is willing to debate human rights 
issues with its international critics.
    The U.S. continually raises with the Chinese government the need for 
protection of Tibet's distinctive religion and culture. We are concerned 
about China's heavy-handed suppression of political demonstrations in 
the Tibetan Autonomous Region. Demonstrations, on a smaller scale than 
in past years, continue to result in instances of brutal beatings and 
long detentions. China has admitted some foreign observers to Tibet and 
to the main Lhasa prison. Diplomatic reports state that the Chinese 
Government is providing funds for rebuilding monasteries and that monks 
are now provided more leeway in their religious practices. In recent 
years, an increasing number of non-Tibetan Chinese have moved to the 
Tibetan Autonomous Region in search of economic opportunity. We will 
continue to monitor closely reports that the PRC is encouraging 
involuntary emigration by non-Tibetan Chinese to areas traditionally 
settled by Tibetans. So far, we have

[[Page 986]]

found no evidence of a Chinese government policy to this effect.

Nonproliferation Issues

    China's support for global nonproliferation initiatives has 
increased substantially since the beginning of 1992. In March 1992, 
China acceded to the Nuclear Non-Proliferation Treaty (NPT) and adhered 
to the Missile Technology Control Regime (MTCR) guidelines and 
parameters. In January 1993, Beijing became an original signatory to the 
Chemical Weapons Convention (CWC). China now is a party to all of the 
leading nonproliferation agreements. These commitments have influenced 
Chinese behavior: Beijing has refrained from selling certain sensitive 
items because of proliferation concerns, and nonproliferation as an 
issue appears to receive more senior consideration in Chinese policy-
making circles.
    At the same time, certain sensitive Chinese exports raise questions 
about PRC compliance with these commitments. At present, the greatest 
concern involves reports that China in November 1992 transferred MTCR-
class M-11 missiles or related equipment to Pakistan. Such a transfer 
would violate China's MTCR commitment and trigger powerful sanctions 
under U.S. missile proliferation law. There also are reports that China 
is exercising inadequate control over sensitive nuclear, chemical, and 
missile technology exports to countries of proliferation concern. Even 
if these sales do not violate PRC obligations, they raise questions 
about China's appreciation of the importance of preventing the 
proliferation of weapons of mass destruction and their ballistic missile 
delivery systems.
    We are also concerned that China has withdrawn from the Middle East 
arms control (ACME) talks. The U.S. holds that, as a permanent member of 
the UN Security Council, China has a special responsibility to continue 
in these talks.
    Seeking full Chinese compliance with multilateral obligations and 
support for international nonproliferation goals is a top Administration 
priority. The U.S. is prepared to employ the resources under U.S. law 
and executive determinations--including the imposition of sanctions--if 
the PRC engages in irresponsible transfers.

Trade Issues, Including Prison Labor

    Reciprocal granting of MFN tariff status was a key element cementing 
the normalization of Sino-U.S. relations by providing a framework for 
major expansion of our economic and trade relations. In 1992, bilateral 
trade topped $33 billion, with Chinese exports of $25.8 billion and U.S. 
exports of $7.5 billion. China was our fastest growing export market in 
Asia in 1992 as U.S. exports to China rose by 19 percent. In turn, the 
United States remains China's largest export market, absorbing about 30 
percent of China's total exports.
    China maintains multiple, overlapping barriers to imports in an 
effort to protect non-competitive, state-owned industries. China also 
has recognized that its development goals cannot be achieved without 
gradually reducing protection and opening its domestic market to the 
stimulus for change brought by import competition.
    Our market access agreement, signed October 10, 1992, if implemented 
by the PRC, will increase opportunities for U.S. exports by phasing-out 
70 to 80 percent of China's non-tariff trade barriers over the next four 
years. The regular consultation process required by this agreement 
allows us to monitor implementation and take appropriate action should 
China violate its commitments. Progress has been made in opening the 
market to U.S. products but we still need to resolve several issues 
regarding implementation.
    Recently, the Chinese have indicated an interest in doing more 
business with U.S. companies. As U.S. corporate executives are arriving 
in droves to explore new commercial opportunities in Beijing, at least 
eight Chinese delegations have been or will soon be dispatched to the 
U.S. with orders to ``buy American''. These missions have the potential 
to generate billions of dollars of export of aircraft, autos, 
satellites, oil drilling equipment, aviation electronics, wheat, 
fertilizer, and other U.S. products.
    Still, the large and growing U.S.-China trade deficit is 
unacceptable. The over $40 billion trade surplus China has accumulated

[[Page 987]]

with the United States since June 1989 has been very destructive to 
American industries, particularly the textile and footwear sectors, 
resulting in the loss of American jobs. It is therefore essential that 
the PRC implement the market access agreement we have negotiated, which 
would produce a much greater equilibrium and fairness in Sino-American 
trade.

Prison Labor

    China officially banned the export of products produced by prison 
labor in October 1991. In August 1992, we signed a Memorandum of 
Understanding under which the Chinese agreed to investigate cases we 
presented and to allow U.S. officials access to suspect facilities in 
China.
    The U.S. has presented the Chinese government information on 16 
cases of alleged use of prison labor. The Chinese have reported back on 
all 16 cases, admitting that in four cases they were forced to correct 
the fact that prisoners were being used to produce goods exports in 
violation of Chinese law. U.S. officials have visited three prisons and 
have standing requests to visit five others, including a revisit to one 
facility.
    In the past two years, U.S. Customs has aggressively expanded its 
enforcement of U.S. laws banning the import of prison labor products. 
Customs has issued over twenty orders banning suspected Chinese goods 
from entering the U.S., achieved one court conviction of a U.S. company 
for importing prison made machine tools and seized suspected equipment 
in another case.
    Since the Prison Labor Memorandum of Understanding was signed last 
August, there has been no indication that goods allegedly produced by 
prison labor have entered the U.S. Talks with China will continue on the 
full enforcement of the provisions of the prison labor MOU.

Conditions for Renewal in 1994

    China has made progress in recent years in the areas of human 
rights, nonproliferation, and trade. Nevertheless, I believe more 
progress is necessary and possible in each of these three areas. In 
considering the optimal method of encouraging further progress on these 
issues, I have decided to issue the attached Executive Order which 
outlines the areas in the field of human rights with respect to which 
China, in order to receive positive consideration for a renewal of MFN 
in 1994, will have to make overall, significant progress in the next 12 
months.
    In considering extension of MFN, we will take into account whether 
there has been overall, significant progress by China with respect to 
the following:
    --Respecting the fundamental human rights recognized in the 
      Universal Declaration of Human Rights, for example, freedoms of 
      expression, peaceful assembly and association.
    --Complying with China's commitment to allow its citizens, 
      regardless of their political views, freedom to emigrate and 
      travel abroad (excepting those who are imprisoned, have criminal 
      proceedings pending against them, or have received court notices 
      concerning civil cases).
    --Providing an acceptable accounting for and release of Chinese 
      citizens imprisoned or detained for the peaceful expression of 
      their political views, including Democracy Wall and Tiananmen 
      activists.
    --Taking effective steps to ensure that forced abortion and 
      sterilization are not used to implement China's family planning 
      policies.
    --Ceasing religious persecution, particularly by releasing leaders 
      and members of religious groups detained or imprisoned for 
      expression of their religious beliefs.
    --Taking effective actions to ensure that prisoners are not being 
      mistreated and are receiving necessary medical treatment, such as 
      by granting access to Chinese prisons by international 
      humanitarian organizations.
    --Seeking to resume dialogue with the Dalai Lama or his 
      representatives, and taking measures to protect Tibet's 
      distinctive religious and cultural heritage.
    --Continuing cooperation concerning U.S. military personnel who are 
      listed as prisoners of war or missing in action.
    --Ceasing the jamming of Voice of America broadcasts.
    The Administration will also use tools under existing legislation 
and executive de- 

[[Page 988]]

terminations to encourage further progress in human rights.
    In addition, I wish to make clear my continuing and strong 
determination to pursue objectives in the areas of nonproliferation and 
trade, utilizing other instruments available, including appropriate 
legislation and executive determinations. For example, various 
provisions of U.S. law contain strong measures against irresponsible 
proliferation of weapons of mass destruction and nuclear weapons 
technology. These include missile proliferation sanctions under the 
National Defense Authorization Act. Using these tools as necessary, we 
will continue to press China to implement its commitments to abide by 
international standards and agreements in the nonproliferation area.
    In the area of trade, the Clinton Administration will continue to 
battle for full and faithful implementation of bilateral agreements with 
China on market access, intellectual property rights, and prison labor. 
Section 301 of the 1974 Trade Act is a powerful instrument to ensure our 
interests are protected and advanced in the areas of market access and 
intellectual property rights. The Administration will also continue to 
implement vigorously the provisions of the Tariff Act of 1930 to prevent 
importation of goods made by forced labor.