U.S. firms in China cool to idea of conduct code

May 22, 1994|By Robert Benjamin | Robert Benjamin,Beijing Bureau of The Sun

BEIJING -- The American business community fears President Clinton may end up punishing it for Chinese human-rights abuses by forcing U.S. firms here to adhere to a conduct code.

The conduct code reportedly is one of the options under consideration by the president as he seeks a way to renew China's most-favored-nation trade status with the United States.

The code might require U.S. firms to comply with specific labor and environmental standards, raise human-rights concerns within China and report to the U.S. government on human-rights conditions here.

This step might seem relatively harmless. But American business leaders here say it's not needed, would put them at a severe disadvantage in China and might ask them to act as agents for the U.S. government. It also might force them to violate Chinese laws against political activity.

"It's a bad idea," says Philip S. Carmichael, president of the American Chamber of Commerce in Beijing.

"It's fundamentally misconceived to blame American companies for the deeds of the Chinese government. It's also not clear it would lead to any improvements."

Large U.S. firms generally enjoy a reputation here for providing relatively good workplaces, training, wages and opportunities for advancement. Political control over their workers' lives tends to be relatively less.

Many U.S. firms already have their own worldwide ethics, labor and environmental codes that they try to follow here.

"American companies really are the white hats in this investment environment," says Anne Stevenson-Yang, director of the U.S.-China Business Council's Beijing office. "They do things by the book. Life here is so much better for the employees of American companies."

By contrast, some Hong Kong- and Taiwan-funded companies, particularly in southern China, have been criticized for operating hazardous sweatshops that, in some cases, resulted in lethal fires. Conditions at some Japanese factories have occasionally prompted strikes by their Chinese workers.

"We're already a force for positive change in China," said Mr. Carmichael.

"Our biggest impact is when we employ people, teach them, reward them for their performance and ask them to meet our high ethical standards. Why should we be stigmatized by a code of conduct?"

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