A China Policy That Makes Us Feel Righteous

May 26, 1994|By GEORGE F. WILL

WASHINGTON — Twelve months ago President Clinton declared that unless China quickly made ''overall, substantial progress'' regarding respect for human rights, he would impose a $10 billion tax on American consumers and abolish approximately 170,000 American jobs. He did not say it that way, but those would be among the effects of revoking China's ''most favored nation'' trading status.

The very vocabulary of this controversy is as perverse as the probable consequences of revocation. The phrase ''most favored nation'' suggests the bestowing of a moral benediction. But Iran and Libya are among the 182 nations with MFN status. China's MFN status is at issue because of a 1974 law designed to force freer emigration from the Soviet bloc. The law requires annual review of human rights in nations with ''non-market economies'' seeking MFN status.

China got such status in 1979. After the 1989 Tiananmen Square massacre, Congress passed legislation revoking China's MFN status, but President Bush vetoed the legislation. Candidate Clinton attacked Mr. Bush for ''coddling'' dictators and last year adopted unusually detailed criteria China had to meet to retain MFN. China has not even pretended to comply. Now President Clinton must retreat, fudge or, by revoking MFN, sacrifice the nationalinterest in the interest of sparing himself the embarrassment of retreating or fudging.

Without MFN, tariffs on imports from China would soar to the prohibitive levels of the 1930 Smoot-Hawley Act. That would cause Americans to pay an extra $10 billion in higher tariffs or more expensive alternative products, and approximately 170,000 U.S. jobs would be lost because of the closing of China's market to U.S. exports.

Booming China is the largest potential market for almost everything. It plans to spend $90 billion on telephone services by the end of this decade and $40 billion on 800 civilian aircraft by 2010. More than 550 U.S. companies have offices in China and the $3 billion that U.S. firms have invested there is just the thin end of a potentially enormous wedge. In California (54 electoral votes) more than 400 companies have joined in warning Mr. Clinton that 35,000 jobs might perish if China loses MFN status. Florida (25 electoral votes) exported $200 million worth of goods to China last year.

President Clinton, who has an appetite for fudge, may try revoking MFN only for, say, state-run enterprises. But Sen. Max Baucus, D-Mont., says that plan presupposes a bright line that cannot be drawn:

''In China, ministries run firms for profit. They start joint ventures with foreigners. Their bosses go into business for themselves. Even in theory, we have no way to draw the line between 'public' and 'private.' And if we could, the Customs Service could never carry it out in practice without total Chinese cooperation.''

Revoking MFN would end, for the foreseeable future, Americans' participation in China's development. And what good would come of that? There is no reason to think China will behave better because the U.S. government forces it to buy more from European and other nations. Therapeutic foreign policies -- those designed to improve other nations -- may be luxuries the United States can afford occasionally, but not if those policies are therapy only for Americans, allowing them to feel righteous.

This is a particularly unpropitious moment for the United States to risk a radical reduction in its ability to influence the course of China's evolution.

China, which is on the verge of a power struggle over the successor to 89-year-old Deng Xiaoping, has the world's largest army, is revising its military doctrine from mere territorial protection to power projection, and is stockpiling ballistic-missile technology and Russian specialists.

Granted, prosperity and entrepreneurial ferment do not necessarily produce open societies or democratic politics. However, the prerequisites for democracy include private property to sustain the individual's sphere of autonomy and zone of privacy, and the rule of law, especially contract law. China should be improved by increasing involvement with America's business culture.

Furthermore, the Soviet Union did implode because of the state's terminal stupidity. A modern, fast-moving, knowledge-based economy requires a broad dispersal of decision-making because government cannot know enough to allocate resources rationally. The Soviet state was running a command economy and was becoming steadily more ignorant of the increasingly complex world.

American policy cannot control China's destiny, but neither can China's government: The forces erupting through widening fissures in the system of state control are too powerful. Regarding MFN policy, Americans should listen to those who have moral standing to bet that trade will subvert tyranny: Wang Dan, a student leader of the demonstrations that preceded the 1989 massacre, and many other Chinese dissidents want MFN retained.

George F. Will is a syndicated columnist.

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