Two years after the bloodshed on Tiananmen Square, the battered relations between Washington and Beijing should be improving. Instead, they keep eroding. American trade officials complain about China’s use of prison labor to produce cheap exports. U.S. businessmen chafe under the restrictions of a closed economy with an expanding trade surplus. Congress is in an uproar over China’s record on human rights, and last week the Bush administration pointedly warned Beijing against selling ballistic missiles to Syria and Pakistan. In this climate, George Bush soon must decide whether to keep China on the list of most-favored trading partners for another year. If China shows “no willingness to work with us on those kinds of issues,” says a senior administration official, “that’s going to make it tough.”
The stakes go far beyond the $370 billion in direct U.S. investment in China. Also at risk are 20 years of Washington’s efforts to bring China around to a more Westernized view of the world. For Beijing it’s a matter of $15 billion a year in sales to America-25 percent of all exports-and a symbolic bond conferring equal partnership in the modern world. China insists that it will not let the United States push it around. Last week Prime Minister Li Peng warned that if Washington removes China’s most-favored-nation (MFN) trading status, “Sino-U.S. relations will be harmed severely.”
The dialogue seems to grow more strained by the day. For some time Western officials have pressed the Chinese about reports of products-ranging from plastic sandals and sneakers to farm machinery and truck parts-made by prisoners and dumped into the export market. Beijing first angrily denied the charges. But faced with a damning report by the human-rights group Asia Watch, the government hinted it would stop shipping the products to the United States.
Secret trials of Tiananmen dissidents reportedly continue-despite Beijing’s vehement denials. Bush issued a symbolic rebuke, meeting privately in mid-April with the Dalai Lama, the exiled spiritual leader of Tibet and the personification of human-rights abuses in China. Recently Beijing made a curt bow to U.S. concerns, releasing a prominent legal scholar and a labor-union leader.
The trade dispute is almost as intractable. In 1990, the U.S. trade deficit with China reached $10.4 billion; this year it is expected to rise to $15 billion-second only to the U.S. deficit with Japan. For years China has filched foreign technology, paying scant attention to trademarks and patents-resulting in losses of more than $400 million to American computer software makers in 1990. Finally, late last month, the U.S. trade representative ordered an investigation into violations of intellectual copyrights on products such as books and video games.
Most worrisome to Washington are reports of Chinese arms proliferation. They include alleged sales of uranium and heavy water to Argentina, South Africa and Brazil. According to U.S. intelligence sources, China is negotiating the sale of M-11 missiles, capable of carrying chemical and nuclear warheads, to Pakistan. A reported deal with Syria would provide M-9 missiles, a longer-range forerunner of the M-11, by the year-end.
U.S. pressure can’t stop the Chinese. It can only send them a message. The president recently canceled sales of U.S. satellite components to Chinese military companies-two of which make missile parts. Last week Bush dispatched Under Secretary of State Robert Kimmitt to Beijing to warn China’s leaders not to consummate missile deals with Syria or Pakistan-as well as to remind them that MFN renewal would “be made in a political context of concerns about human rights, nonproliferation and trade,” as Kimmitt told reporters. Back home, Congress is losing patience. Liberals and conservatives have teamed up behind legislation to deny MFN. Rep. Nancy Pelosi, a California Democrat, says it should be extended-but conditioned on “significant progress” on human-rights abuses. “We want to use MFN for leverage,” she says.
Bush, a former ambassador to Beijing, feels frustrated with China’s recent performance, say close aides. But whatever impatience he may feel is cushioned by deep affection for Beijing. After the Tiananmen crackdown he took a lot of heat for his mild sanctions-“reasoned, careful action,” as he put it-to preserve Sino-U.S. relations. His rebukes of China-meeting with the Dalai Lama one day, banning the satellite sale another-have cunningly preserved the option of extending MFN. No one knows whether he’ll renew it. But aides predict he won’t abandon his old friends.
