Buying Technology and Clout

May 16, 1993|By MARTIN C. EVANS

HONOLULU. — Honolulu.-- For auto workers in Baltimore, lathe operators in Louisiana and aeronautical engineers in Seattle, the Chinese are offering visions of Christmas in May. With a checkbook fattened by its booming economy, China is negotiating mega-deals across America, agreements that would provide a welcome boost to businesses banged around by the slow economy.

What kind of deals? How about an order for 4,600 cars from each of America's Big Three auto makers, worth a cool $160 million? How about an order for $200 million in oil drilling equipment from companies in Louisiana, Texas and Washington? How about contracts for a whopping $800 million for 21 Boeing jetliners, the largest foreign order for U.S. aircraft this year, and as much as $800 million more for satellite equipment built by Hughes Aerospace?

But although the ink on the contracts says the Chinese are shopping for technological improvements, it is political clout that they are really after. They are hoping to pressure the Clinton administration into extending China's most-favored-nation (MFN) status, which allows China to sell goods in the United States more competitively than it could without the friendly trade arrangement.

They are trying to overcome opponents in the United States, who say that the favorable arrangement should be withdrawn until China stops its human rights abuses at home and halts its sale of weapons to unstable areas such as the Middle East.

To insulate MFN from attack, Beijing is acting like a pork-barrel politician, hoping that grain deals in the Midwest and auto and technology purchases from around the country will knit together a broad coalition of support from businesses and labor in cities and rural areas.

The deals are contingent on the continuation of China's trade status, meaning millions in profits, labor contracts and tax revenues would be lost if MFN is withdrawn. Trade with China is responsible for 150,000 jobs in the United States, according to trade experts.

Should the United States withhold China's favored status in order to pressure China on domestic and foreign policy?

For Mr. Clinton, who has until June 3 to decide, this is no easy decision. Mr. Clinton is already being viewed as anti-business for moving too quickly to raise taxes and too slowly to cut the deficit. He cannot relish turning down business in an already weakened U.S. economy.

But to extend the trade agreement, President Clinton would have to disown Candidate Clinton, who during last year's presidential race delighted in accusing George Bush of turning a blind eye to the rights issue. Weakened by his loss in Congress over his job stimulus package, Mr. Clinton would not like to appear to be waffling.

Some congressional leaders are pressing legislation that would end China's favorable trade status in June, 1994 unless Beijing agrees to release its political prisoners, to halt its efforts to

suppress Tibetan independence, to stop selling products made by prison labor and to comply with international restrictions on missiles and on nuclear and chemical weapons.

Loss of MFN would jeopardize China's $19 billion trade surplus with the United States, a key source of hard currency China has depended on for its modernization.

"The Chinese have a long way to go toward living up to human rights standards," said Rep. Nancy Pelosi, D-Calif., a sponsor of legislation that would limit China's MFN status.

Michel Oksenberg, a China specialist and president of the East-West Center in Honolulu, said the Clinton administration is still making foreign policy decisions regarding China on an ad hoc basis, rather than from within an overall policy structure which would make subordinate decisions more predictable and consistent.

Nonetheless, experts at the center believe that Mr. Clinton -- who during the campaign characterized Mr. Bush's decision to extend MFN as "yet another sad chapter in this administration's history of putting America on the wrong side of human rights and democracy" -- will leave the trade pact intact.

China is guilty of human rights violations on a massive scale. China, which occupied independent Tibet in 1950, has more recently increased its efforts to wipe out Tibetan culture by mass relocations of Han Chinese, China's predominant ethnic group, into eastern Tibet. Human rights organizations report hundreds of incidents of the torture of Tibetans for speaking with foreigners and "spreading counterrevolutionary propaganda."

Chinese political dissidents are still harassed and hundreds or thousands remain jailed following the 1989 Tiananmen uprising. Prison labor is exploited to produce goods for commercial sale.

Analysts in the United States and leaders in Asia say China's determination to keep MFN has brought it deeper into the world community, providing a useful incentive in goading the Chinese to improve its human rights record.

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