[Weekly Compilation of Presidential Documents Volume 34, Number 28 (Monday, July 13, 1998)]
[Pages 1312-1317]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to the Business Community in Hong Kong Special Administrative 
Region, China

July 3, 1998

    Thank you very much. To Jeff Muir, and Victor Fong, thank you both 
for your fine remarks and for hosting me. I thank all the members of the 
Hong Kong Trade Development Council and the American Chamber of Commerce 
for making this forum available, and so many of you for coming out on 
this morning for what will be my last public speech, except for my press 
conference, which the members of the press won't permit to become a 
speech, before I go home.
    It has been a remarkable trip for my wife and family and for the 
Senate delegation and members of our Cabinet and White House. And we are 
pleased to be ending it here.
    I want to say a special word of appreciation to Secretary Albright 
and Secretary Daley, to Senator Rockefeller, Senator Baucus, Senator 
Akaka, Congressman Dingell, Congressman Hamilton, Congressman Markey, 
and the other members of the administration and citizens who have 
accompanied me on this very long and sometimes exhausting but 
ultimately, I believe, very productive trip for the people of the United 
States and the people of China.
    I'm glad to be back in Hong Kong. As I told Chief Executive Tung and 
the members of the dinner party last night, I actually--I may be the 
first sitting President to come to Hong Kong, but this is my fourth trip 
here. I was able to come three times before, once with Hillary, in the 
period which we now refer to as back when we had a life--[laughter]--
before I became President. And I look forward to coming again in the 
future.
    I think it's quite appropriate for our trip to end in Hong Kong, 
because, for us Americans, Hong Kong is China's window on the world. I 
have seen remarkable changes taking place in China, and since the 
possibilities of its future--much of which clearly is and for some time 
has been visible here in Hong

Kong, with its free and open markets and its vibrant entrepreneurial 
atmosphere.

[[Page 1313]]

    Devoid of natural resources, Hong Kong always has had to fall back 
on the most important resource of all, its people. The entrepreneurs, 
the artists, the visionaries, the hardworking, everyday people have 
accomplished things that have made the whole world marvel. Hong Kong 
people have dreamed, designed, and built some of the world's tallest 
buildings and longest bridges. When Hong Kong ran out of land, the 
people simply went to the sea and got more. To the average person from a 
landlocked place, that seems quite stunning.
    I thank you for giving me a chance to come here today to talk about 
the relationship between the United States and all of Asia. I have had a 
great deal of time to emphasize the importance of our future ties with 
China, and I would like to reiterate them today and mention some of the 
points that the two previous speakers made. But I would like to put it 
in the context of the entire region. And after all, it is the entire 
region that has been critical to the success of Hong Kong.
    We have a fundamental interest in promoting stability and prosperity 
in Asia. Our future is tied to Asia's. A large and growing percentage of 
our exports, our imports, and our investments involve Asian nations. As 
President, besides this trip to China, I have been to Japan, Korea, 
Indonesia, the Philippines, Australia, and Thailand, with more to come. 
I have worked with the region's leaders on economic, political, and 
security issues. The recent events in South Asia, in Indonesia, in 
financial markets all across the region remind the American people just 
how very closely our future is tied to Asia's.
    Over the course of two centuries, the United States and Asian 
nations have built a vast, rich, complex, dynamic relationship--forged 
in the beginning by trade, strained on occasion by misunderstanding, 
tempered by three wars in living memory, enriched by the free flow of 
ideas, ideals, and culture. Now, clearly, at the dawn of the 21st 
century, our futures are inextricably bound together--bound by a mutual 
interest in seeking to free future generations from the specter of war. 
As I said, Americans can remember three wars we have fought in Asia. We 
must make it our mission to avoid another.
    The cornerstone of our security in Asia remains our relationship of 
longstanding with five key democratic allies: Japan, South Korea, 
Australia, Thailand, the Philippines. Our military presence in Asia is 
essential to that stability, in no small measure because everyone knows 
we have no territorial ambitions of any kind.
    Nowhere is this more evident than on the Korean Peninsula, where 
still every day, after 40 years, 40,000 American troops patrol a border 
that has known war and could know

war again. We clearly have an interest in trying to get a peace on the 
Korean Peninsula. We will continue to work with China to advance our 
efforts in the four-party talks, to encourage direct and open dialog 
between North and South Korea, to faithfully implement the agreement with 
North Korea to end their nuclear weapons program, and to insist that North 
Korea do the same.

    I am encouraged by the openness and the energy of South Korea's new 
leader, Kim Dae-jung. Last month, in an address to our Congress, he 
said, ``It is easier to get a passerby to take off his coat with 
sunshine than with a strong wind.''
    Of course, our security is also enormously enhanced by a positive 
partnership with a prosperous, stable, increasingly open China, working 
with us, as we are, on the challenges of South Asian nuclear issues, the 
financial crisis in the region, the Korean peace effort, and others.
    Our oldest ties to Asia are those of trade and commerce, and now 
they've evolved into some of our strongest. The fur pelts and cottons 
our first traders bought here more than 200 years ago have given way to 
software and medical instruments. Hong Kong is now America's top 
consumer for cell phones. Today, roughly a third of our exports and 4 
million jobs depend on our trade to Asia. As was earlier said, over 
1,000 American companies have operations in Hong Kong alone. And as 
we've seen in recent months, when markets tremble in Tokyo or Hong Kong, 
they cause tremors around the world.
    That is why I have not only sought to ease the Asian economic 
difficulties but to institutionalize a regional economic partnership 
through the Asian Pacific Economic Council

[[Page 1314]]

leaders meetings that we started in Seattle, Washington, in 1993, and 
which in every year since has advanced the cause of economic integration 
and growth in the region. That is why I'm also working to broaden and 
deepen our economic partnership with China and China's integration into 
the world economic framework.
    It clearly is evident to anyone who knows about our relationship 
that the United States supports China's economic growth through trade. 
We, after all, purchase 30 percent of the exports of China, far more 
than any other country in the world, far more than our percentage of the 
world's GDP.
    We very much want China to be a member of the World Trade 
Organization. We understand the enormous challenges that the Chinese 
Government faces in privatizing the state industries and doing so at a 
rate and in a way which will permit people who lose their jobs in the 
state industries to be reintegrated into a changing economy and have 
jobs and be able to educate their children, find a place to live, and 
succeed in a stable society.
    So the real question with this WTO accession is not whether the 
United States wants China in the WTO. Of course, we

do. And the real question, in fairness to China, is not whether China is 
willing to be a responsible international partner in the international 
financial system. I believe they are. The question is, how do you resolve 
the tension between the openness requirements for investment and for trade 
through market access of the WTO with the strains that are going to be 
imposed on China anyway as it undertakes to speed up the economic 
transition and the change of employment base within its own country?

    We are trying to work these things out. We believe that there must 
be an end agreement that contains strong terms that are commercially 
reasonable. We understand that China has to have some transitional 
consideration because of the challenges at home. I think we'll work this 
out. But I want you to understand that we in the United States very much 
want China to be a member of the WTO. We would like it to happen sooner, 
rather than later, but we understand that we have not only American but 
global interests to consider in making sure that when the whole process 
is over that the terms are fair and open and further the objectives of 
more open trade and investment across the world.
    I also would say in that connection, I am strongly supporting the 
extension of normal trading status, or MFN, to China. I was encouraged 
by the vote in the House Ways and Means Committee shortly before we 
left. I hope we will be successful there. I think anything any of you 
can do to support the integrity of the existing obligations that all of 
us have including and especially in the area of intellectual property, 
will be very helpful in that regard in helping us to move forward.
    In addition to trade and security ties, the United States and Asia 
are bound by family ties, perhaps our most vital ones. Seven million 
Americans today trace their roots to Asia, and the percentage of our 
citizens who are Asian-Americans is growing quite rapidly. These roots 
are roots they are eager to renew or rebuild or to keep. Just last year 
3.4 million Americans traveled to Asia; 7.8 million Asians traveled to 
the United States. Thousands of young people are crossing the Pacific to 
study, and in so doing, building friendships that will form the 
foundations of cooperation and peace for the 21st century. All across 
the region we see evidence that the values of freedom and democracy are 
also burning in the hearts of the people in the East as well as the 
West. From Japan to the Philippines, South Korea to Mongolia, democracy 
has found a permanent home in Asia.
    As the world becomes smaller, the ties between Asia and the United 
States--the political ties, the family ties, the trade ties, the 
security ties--they will only become stronger. Consider this one little 
statistic: In 1975 there were 33

million minutes of telephone traffic between the U.S. and Asia; in 1996 
there were 4.2 billion minutes of such traffic, a 127-fold increase. That 
doesn't count the Internet growth that is about to occur that will be truly 
staggering.

    Now, the result of all this is that you and I in our time have been 
given a remarkable opportunity to expand and share the storehouse of 
human knowledge, to share the building of wealth, to share the fights 
against disease and poverty, to share efforts to protect the 
environment, and bridge age-old

[[Page 1315]]

gaps of history and culture that have caused too much friction and 
misunderstanding.
    This may be the greatest moment of actual possibility in human 
history. At the same time, the greater openness, the pace of change, the 
nature of the global economy, all these things have brought with them 
disruption. They create the risk of greater gaps between rich and poor, 
between those equipped for the information age and those who aren't. It 
means that problems, whether they are economic problems or environmental 
problems, that begin in one country can quickly spread beyond that 
country's borders. It means that we're all more vulnerable in a more 
open atmosphere to security threats that cross national borders, to 
terrorism, to drug smuggling, to organized crime, to people who would 
use weapons of mass destruction.
    Now, how are we going to deepen this relationship between the U.S. 
and Asia, since all of us recognize that it is in our interest and it 
will further our values? I believe there are three basic lessons that we 
can learn from the immediate past that should guide our path to the 
future.
    First, building economies and people, not weapons of mass 
destruction, is every nation's best path to greatness. The vast majority 
of nations are moving away from not toward nuclear weapons, and away 
from the notion that their influence in the future will be defined by 
the size of their military rather than the size of their GDP and the 
percentage of their citizens who know a great deal about the world.
    India and Pakistan's recent nuclear test, therefore, buck the tide 
of history. This is all the more regrettable because of the enormous 
potential of both countries. The United States has been deeply enriched 
by citizens from both India and Pakistan who have done so very well in 
America. They and their relatives could be doing very well at home, and 
therefore, could be advancing their nations' cause around the world. 
Both these countries could achieve real, different, fundamental 
greatness in the 21st century, but it will never happen if they divert 
precious resources from their people to develop nuclear and huge 
military arsenals.
    We have worked hard with China and other leading nations to forge an 
international consensus to prevent an intensifying arms race on the 
Indian subcontinent. We don't seek to isolate India and Pakistan, but we 
do seek to divert them from a self-defeating, dangerous, and costly 
course. We encourage both nations to stop testing, to sign the 
Comprehensive Test Ban Treaty, to settle their differences through 
peaceful dialog.
    The second lesson that we should take into the future is that 
nations will only enjoy true and lasting prosperity when governments are 
open, honest, and fair in their practices, and when they regulate and 
supervise financial markets rather than direct them.
    Too many booming economies, too many new skyscrapers now vacant and 
in default were built on shaky foundations of cronyism, corruption, and 
overextended credit, undermining the confidence of investors with 
sudden, swift, and severe consequences. The financial crisis, as all of 
you know far better than I, has touched nearly all the nations and 
households of Asia. Restoring economic stability and growth will not be 
easy. The steps required will be politically unpopular and will take 
courage. But the United States will do all we can to help any Asian 
government willing to work itself back to financial health. We have a 
big interest in the restoration of growth, starting the flows of 
investment back into Asia.
    There is a very limited time period in which we can absorb all the 
exports to try to do our part to keep the Asian economy going. And while 
we may enjoy a brief period of surging extra investment, over the long 
run, stable growth everywhere in the world is the best prescription for 
stable growth in America.
    We are seeing some positive steps. Yesterday Japan announced the 
details of its new and potentially quite significant banking reform 
proposals. We welcome them. Thailand and Korea are taking decisive 
action to implement the IMF-supported economic reform programs of their 
countries. Indonesia has a fresh opportunity to deepen democratic roots 
and to address the economic challenges before it. Thanks to the 
leadership of President Jiang and Premier Zhu, China has followed a 
disciplined, wise policy of resisting

[[Page 1316]]

competitive devaluations that could threaten the Chinese economy, the 
region's, and the world's.
    Even as your own economy, so closely tied to those of Asia, 
inevitably feels the impact of these times, Hong Kong continues to serve 
as a force for stability. With strong policies to address the crisis, a 
healthy respect for the rule of law, a strong system of financial 
regulation and supervision, a commitment to working with all nations, 
Hong Kong can help to lead Asia out of turbulent times as it contributes 
to China's astonishing transformation by providing investment capital 
and

expertise in privatizing state enterprises and sharing legal and regulatory 
experience.

    The final lesson I believe is this: Political freedom, respect for 
human rights, and support for representative governments are both 
morally right and ultimately the best guarantors of stability in the 
world of the 21st century. This spring the whole world looked on with 
deep interest as courageous citizens in Indonesia raised their voices in 
protest against corruption and government practices that have brought 
their nation's economy to its knees. They demonstrated for change, for 
the right to elect leaders fully accountable to them. And in just 2 
weeks the universal longing for democratic, responsive, accountable 
government succeeded in altering their political future.
    America will stand by the people of Indonesia and others as they 
strive to become part of the rising tide of freedom around the world. 
Some worry that widespread political participation and loud voices of 
dissent can pull a nation apart. Some nations have a right to worry 
about instability because of the pain of their own past. But 
nonetheless, I fundamentally disagree, especially given the dynamics of 
the 21st century global society.
    Why? Democracy is rooted in the propositions that all people are 
entitled to equal treatment and an equal voice in choosing their leaders 
and that no individual or group is so wise or so all-knowing to make all 
the decisions that involve unfettered power over other people. The 
information age has brought us yet another argument for democracy. It 
has given us a global economy that is based on, more than anything else, 
ideas. A torrent of new ideas are generating untold growth and 
opportunity, not only for individuals and firms, but for nations. As I 
saw again in Shanghai when I met with a dozen incredibly impressive 
Chinese entrepreneurs, ideas are creating wealth in this economy.
    Now, it seems to me, therefore, inevitable that societies with the 
freest flow of ideas are most likely to be both successful and stable in 
the new century. When difficulties come, as they do to every country and 
in all ages--there is never a time that is free of difficulties--it 
seems to me that open debate and unconventional views are most likely to 
help countries most quickly overcome the difficulties of unforeseen 
developments.
    Let me ask you this: A year ago, when you celebrated the turnover 
from Great Britain to China of Hong Kong, what was everybody buzzing 
about after the speeches were over? Will this really work? Will this 
two-system thing work? Will we be able to keep elections? Will this 
work? How many people were off in a corner saying, you know, this is a 
pretty tough time to be doing this, because a year from now the whole 
Asian economy is

going to be in collapse, and how in the world will we deal with this? When 
you cannot foresee the future and when problems coming on you have to bring 
forth totally new thinking, the more open the environment, the quicker 
countries will respond. I believe this is profoundly important.

    I also believe that by providing a constructive outlet for the 
discontent that will always exist in every society--because there is no 
perfect place, and because people have different views and experience 
reality differently--and by finding a way to give everybody some sense 
of empowerment and role in a society, that freedom breeds the 
responsibility without which the open, highly changing societies of the 
21st century simply cannot succeed.
    For all these reasons, I think the forces of history will move all 
visionary people, including Asians, with their legendary assets of hard 
work, intelligence, and education, toward freer, more democratic 
societies and ways of ordering their affairs.
    For me, these lessons we must carry forward into the new century. 
And in this time of transition and change, as we deepen America's 
partnership with Asia, success will

[[Page 1317]]

come to those who invest in the positive potential of their people, not 
weapons to destroy others. Open governments and the rule of law are 
essential to lasting prosperity. Freedom and democracy are the 
birthrights of all people and the best guarantors of national stability 
and progress.
    Now, as I said, a little over a year ago, no one could have 
predicted what you would have to endure today in the form of this 
crisis. But I am confident Hong Kong will get through this and will help 
to lead the region out of it, because of the lessons that I have just 
mentioned, and because they have been a part of the fabric of your life 
here for a very long time.
    For years, Hong Kong people have enjoyed the right to organize 
public demonstrations, due process under law, 43 newspapers and 700 
periodicals, giving life to the principle of government accountability, 
debate, free and open. All this must continue. The world was impressed 
by the record turnout for your May elections. The results were a mandate 
for more democracy, not less, and faster, not slower strides toward 
political freedom. I look forward to the day when all of the people of 
Hong Kong realize the rights and responsibilities of full democracy.
    I think we should all pledge, each in our own way, to build that 
kind of future, a future where we build people up, not tear our 
neighbors down; a future where we order our affairs in a legal, 
predictable, open way; a future where we try to tap the potential and 
recognize the authority of each individual.
    I'm told that this magnificent convention center was built in the 
shape of a soaring bird on a patch of land reclaimed from the sea. It's 
an inspiring symbol of the possibilities of Hong Kong, of all of Asia, 
and of our relationship with Asia. Just a couple of days ago, Hong Kong 
celebrated its first anniversary of reversion to China. I am going home 
for America's 222d anniversary tomorrow.
    May the future of this special place, of China, of the relationship 
between the United States and China and Asia, soar like the bird that 
gave life to this building.
    Thank you very much.

Note: The President spoke at 10:42 a.m. in the Hong Kong Convention 
Center. In his remarks, he referred to Jeff Muir, chairman, American 
Chamber of Commerce in Hong Kong; Victor Fong, chairman, Hong Kong Trade 
Development Council; Chief Executive C.H. Tung of Hong Kong; and 
President Jiang Zemin and Premier Zhu Rongji of China.