Friday, October 31, 1997

Giving China rope to hang us with

By Linda Chavez

Jiang Zemin knows what he wants out of this week's visit to the United States: respect, legitimacy and the lifting of a 12-year-old ban on the transfer of U.S. nuclear technology to China. And President Clinton has promised to deliver all three.

But what is not clear is what the United States gets in return. The Sino-American relationship to date has been decidedly one-sided, with China getting most of what it wants -- trade, investment, technology -- and the U.S. getting little except a huge $40 billion trade deficit, no improvement in China's human rights record and promises that Beijing may honor its treaty obligations.

So why is the world's only superpower kowtowing to one of the world's last remaining Communist dictatorships? Good old-fashioned capitalist pressure, that's why.

American businesses see China as a huge, new potential market for everything from Fords to french fries. With 1.2 billion people, China is more populous than most of the rest of the industrialized nations combined. And because China's economy has more than quadrupled in the last three decades, at the fastest rate of growth in the world, companies here believe the Chinese will soon be able to afford to buy our products.

Several corporate heads attended the White House state dinner Wednesday, cementing their already cozy relationships with China's rulers, and today, Jiang visits the New York Stock Exchange and dines again with corporate scions.

As the Washington Times recently reported, dozens of deals between Beijing and American companies were announced just days before Jiang landed in Honolulu. Aetna won the right to sell insurance in China. Atlantic Richfield Co. expanded its $1 billion investment in China by signing a new agreement with the state-owned China National Offshore Oil Corp. to develop three natural-gas fields in the South China Sea. Boeing Co. expects to receive a Chinese commitment for $1.5 billion in new aircraft during Jiang's visit. Ford Motor signed a pact to build 150,000 cars and 60,000 vans in China, an agreement it reached only after conceding that it will give its technology to the state-owned Jiangling Motors Corp. as part of the deal. General Motors will sell $200 million in new car kits to its Chinese joint-venture partners over the next two years, bringing to $1.6 billion its exports to China.

In all, China made commitments for some $4 billion in U.S. goods or joint ventures.

But despite the obvious benefit to bottom-line profits for American corporations, these deals are often far less favorable to American business interests -- much less national interests -- than they might seem. While China apologists in the United States often claim that these joint ventures and investments are proof that China has abandoned its socialist heritage in favor of free-market capitalism, the truth is far more complicated.

Many of these ventures involve Chinese companies that are state-owned or state-controlled, hardly an example of Adam Smith's "invisible hand." Without a proper legal system to protect U.S. business interests, it is unclear that these American investments will turn out to be as safe as outside investors hope.

But whatever the danger to U.S. businesses, the real problem in the one-sided relationship Jiang is promoting on his trip here this week is that it may harm American security interests. For years, China has been a major exporter of missiles and nuclear technology to countries hostile to the United States, including Iran and North Korea, despite treaty obligations that are supposed to prohibit such transfers. Now, based on a weak promise that it won't sell Iran any more cruise missiles or transfer dangerous nuclear and chemical weapons technology to the rogue nation, China has received a commitment that it will receive U.S. civilian nuclear technology that has been restricted by law from getting for more than a decade. (Iran is so cash poor right now, it probably can't afford to buy what China's selling anyway.)

Congress could still block the deal by a two-thirds vote, but don't bet on it. China's interests are likely to be promoted through the halls of Congress by American business lobbyists eager to secure new contracts.

Lenin always said that we capitalists would happily sell Communists the rope with which to hang us. China may yet prove him right.

Creators Syndicate, Inc.