If timing is everything, then China's Premier Zhu Rongji is out of luck. Certainly, he couldn't have picked a worse time for his U.S. debut. Alleged illegal Chinese campaign financing, spying at U.S. nuclear labs, and human rights abuses have Congress and both Republicans and Democrats angry at China. In his travels, Zhu will be the lightning rod for much of that anger.
But American policymakers would do well to realize that Zhu arguably has done more to transform China for the better than any living Chinese leader. Credit Zhu with reining in runaway inflation and bad loans years before a similar crisis brought the rest of Asia to its knees. Credit him with putting a new tax system in place. Zhu paved the way for privatizing China's housing market, pushed for new regulations for the country's once-reckless stock markets, slimmed down China's bloated bureaucracy by one half, and moved to extract the military from hundreds of businesses. He's the one who has made the central bank more independent, forced banks to assess risk before lending, and pressured lackluster state enterprises to step lively--or risk closure. These are major accomplishments that move China toward a freer economy.
To further this goal, Zhu has pushed China to make the compromises necessary to gain entry into the World Trade Organization. China's reformers make the point that opening the country to foreign competition is a surefire way to force state enterprises to get their act together--and fast. The WTO is key to this strategy.
For the U.S., Zhu is a man Washington can, and should, do business with. While China's dismal record in human rights and other areas won't disappear overnight, Zhu is doing his best to transform China's economy--and that will change the nature of the country over time.
The politics of China's bid for entry into the WTO are as treacherous in Beijing as they are in Washington. Zhu faces growing opposition to his reforms, as millions of unemployed people, laid off as companies restructure, flood the countryside and cities. Hardliners in the military, government bureaucracy, and communist party would benefit from a failed U.S.-China summit.
For that reason, the U.S. shouldn't alienate the one man who is changing his country for the better. China appears to have agreed to nearly all the changes demanded by the U.S. in exchange for entry into the WTO. There are serious political and military issues between Beijing and Washington that need to be resolved. But on the economic front, the Clinton Administration should have the political courage to acknowledge China's new commitment to opening her markets. By guiding her into the wto, the U.S. has an opportunity to promote market democracy in China--and help the global economy at the same time.