China: Under the Glare of the Olympic Torch

By Laura D'Andrea Tyson

With remarkably muted outcry from the human-rights community, China recently won its controversial bid to host the 2008 Olympic Games. The International Olympic Committee awarded the Games to China despite relentless pressure from Beijing on disciples of the Falun Gong, a recent crackdown on newspapers, and the high-profile arrests of foreign scholars. Does the IOC decision, like the decision to grant normal trading relations to China and to accept China into the World Trade Organization, mean that the U.S. and the rest of the world are condoning human-rights violations in China? Are moral concerns taking a backseat to greed in foreign policy as global companies vie for a share of China's markets? I don't think so.

Refusing China's Olympic bid might have been a dramatic expression of moral outrage over the human-rights abuses of China's government. Yet it would have done nothing to improve either the economic or political prospects of average Chinese citizens. Paradoxically, hosting the Games is likely to be a boon for China's citizenry and a headache for their leaders. Preparation for the Games will require infrastructure and environmental upgrading that will improve the lives of millions of Chinese. Indeed, these investments will be so large that they may well add nearly half a percentage point to China's annual growth rate over the next several years. The timing of this additional growth couldn't be better, as it coincides with the painful economic adjustments confronting China upon its accession to the WTO.

But hosting the Olympics will bring more than just economic rewards for the Chinese people. In the seven years of preparation before the Games and during the Games, the Chinese leadership will find itself in the glare of the international spotlight. Thousands of journalists from around the world will be scrutinizing all aspects of life in China, including human-rights practices that violate both the country's laws and international norms. Chinese leaders will have difficulty hiding from this scrutiny, and if they try to do so they will sacrifice a historic opportunity to bolster China's reputation and strengthen its links with the rest of the world.

Critics of the IOC's decision to award China the 2008 Olympics point to the ill-advised decision to award Germany the 1936 Olympics. But this is misleading. China's current leaders are reformers who sought the Olympics to promote economic and political change. A better comparison is the IOC's selection of South Korea for the 1988 Olympics, which proved to be a major catalyst for democratic transformation there.

Withholding the Olympics from China--like withholding normal trade relations or WTO membership from China--would be another misguided attempt at using sanctions to alter a nation's behavior or overthrow its leadership. Careful empirical analysis by the Institute of International Economics confirms what many policymakers know from experience: Sanctions, even when they enjoy multilateral support from a number of nations, rarely achieve their objectives--and unilateral sanctions almost never do. But politics drive the U.S. government to overlook this lesson in the case of Cuba, another country with a hateful human-rights record.

BAD LAW. President Bush recently announced that he will follow President Clinton's example and temporarily waive Title III of the Helms-Burton Act, a 1996 law that allows U.S. companies to sue foreign companies using private property seized by the Castro government. Helms-Burton is bad law. It explicitly imposes American law beyond America's borders and is abhorred by our European allies, who have repeatedly threatened retaliation if it is enforced. By waiving enforcement, President Bush wisely avoided damaging our broad strategic relations with Europe.

But in a move to appease the Cuban voting bloc in Florida just days before his Helms-Burton announcement, President Bush ordered stricter enforcement of the U.S. trade embargo to combat the "tyranny that rules Cuba today." The short-sighted domestic political logic behind this statement was apparent. But its economic logic is flawed. Like most unilateral economic sanctions, the U.S. trade embargo of Cuba is neither effective nor fair. Under the banner of human rights, it undermines the rights of the Cuban people to adequate nutrition and health care. Meanwhile, after nearly 40 years of U.S. efforts to topple him, Fidel Castro remains firmly in control. In the process, he has become the world's poster child--or old man--for the failed logic of economic sanctions.

A key goal of U.S. foreign policy should be the peaceful and stable transition of such countries as China and Cuba to more democratic, market-oriented societies. By encouraging the cross-border flow of information, fostering economic opportunity for average citizens, and bolstering the voices of reform, the IOC's decision to award the 2008 Olympics to China serves this goal. America's trade embargo of Cuba and President Bush's pledge to strengthen it do not.

Laura D'Andrea Tyson is dean of the Haas School of Business at the University of California at Berkeley.

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