A New China Policy For A New China

The U.S. needs a China Policy for the 1990s. For too long, Washington has perceived China narrowly, as a card to be played against the Soviet Union during the cold war, a huge foreign market, or, since the Tiananmen Square massacre, a violator of human rights. As Congress debates whether to curb China's Most Favored Nation trade status unless Beijing improves those rights, Washington continues to define U.S.-China relations in constricted terms.

The dramatic changes sweeping through China today augur well for a broader, more sophisticated American foreign policy for the world's most populous nation. China is building a new kind of capitalism that is boosting economic growth at a double-digit clip, propelling the country into Big Power status.

China-style capitalism is revolutionizing the economy, but change will come slower to politics. The Communist Party shows no signs of giving up power. At the same time, local party cadres in the provinces are busily transforming themselves into prosperous business executives, running state-owned but market-oriented companies. Alongside them, a private business class is emerging. If political change is to come to China, they would be the vanguard.

The rise of Chinese capitalism offers a chance for the U.S. to broaden its agenda with China and build a partnership that deals not only with rights but also with trade, investment, regional security, and arms exports. A policy that combines political, military, and economic relations is now possible, and the Clinton Administration should seize the day.

For their part, the Chinese want access to U.S. markets for their exports and for American technology. China is also desperate to get into the General Agreement on Tariffs & Trade. Mexico was able to put 1,000% tariffs on Chinese imports with impunity recently because China is outside the GATT circle.

Instead of engaging in perennial debates over MFN, American foreign policy toward China should be redrawn along the following lines:

-- Guide China into the international arena, especially GATT. In exchange, the U.S. should pressure Beijing to allow the Red Cross access to political prisoners, press for release of specific dissidents, and end exports of prison-made products.

-- Make contact with China's new political leaders, both in Beijing and in the provinces. Once China's old men in Beijing pass on, the U.S. would be well placed with the next generation.

-- Muscle China to balance its $18 billion trade deficit with the U.S. Beijing should comply with existing agreements to expand access to its markets and sharply boost imports of American goods and services. Washington should threaten to impose stiff tariffs under Section 301 of U.S. trade law if China doesn't act.

-- Resume military contacts with the People's Liberation Army, broken off after Tiananmen Square, in exchange for restraint on the export of Chinese missiles to the Middle East and other hot spots.

Engaging China in a series of relationships has a greater chance of expanding American economic interests and maintaining a crucial measure of political influence than isolating the awakening giant. This is one opportunity Washington should not waste.

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