Stanley O. Roth
Assistant Secretary for East Asian and Pacific Affairs
U.S. Department of State
Speech Before the Washington State China Relations Council
Seattle, Washington, April 5, 2000
A Strategy for the Future:
U.S.-China Relations and China's WTO AccessionIntroduction
It is a pleasure to be here with you this evening. Seattle and the Northwest is where American Asia policy is not simply made, you are where it happens with business, immigration, and a variety of people to people contacts. It was therefore no coincidence that the President chose to open a new chapter in our Asia policy in Seattle seven years ago when the President invited other Asian and Pacific leaders to Blake Island for the first annual leaders meeting of APEC, the Asia Pacific Economic Cooperation Forum. It was a proclamation, loud and clear that the United States was part of the Asia Pacific region, a proclamation that folks in Seattle clearly understand. We are here this evening to discuss another topic that makes sense to Seattle -- the United States commitment to grant Permanent Normal Trade Relations to China when it accedes to the World Trade Organization.
I would like to begin with an acknowledgement: I agreed to talk to this audience about China's WTO accession with some reluctance. Clearly this is a critically important issue for U.S.-China relations. I have little to say about this accession that you do not know already, either on the WTO or the economic implications of PNTR for China or for the United States.
I tried to think what I could share with you to earn this delicious meal and all of your attention without putting you to sleep on a full stomach. I decided that, rather than talking trade, I would like to put China's entry into the WTO and the upcoming vote by the United States Congress on PNTR into the context of our overall policy toward China.
A Policy Approach
As the presidential campaign season accelerates and the rhetoric heats up, you are hearing increasingly that the Administration does not have a China policy. I am here to tell you that this Administration has a clear and consistent China policy. I would like to enunciate that policy at three levels:
- What is our basic objective in our relations with China?
- What is our strategy to achieve that objective? And, finally,
- What tactics are we using to accomplish our strategy and reach our objective?
Having done that, I would like to consider briefly why, I believe, China's accession to the WTO serves the interests of the United States and why the United States Congress should authorize the President to grant Permanent Normal Trade Relations as soon as possible.
To put it in a nutshell: Our Objective is a strong, stable, prosperous and open China, one which respects and builds upon the diverse views and strengths of its own people. Our Strategy is to integrate China into regional and global institutions, helping it become a country that plays by the accepted international rules, cooperating and competing peacefully within those rules. "Engagement" is the coherent set of tactics to accomplish this strategy, working with China at every level and at every available opportunity to manage, if not resolve, specific differences and identify and expand issues on which we take a common approach.
Why do we want a strong, stable, prosperous and open China?
Since this question is at the heart of U.S. policy, I would like to take a moment to consider why this kind of China benefits, rather than threatens U.S. interests.
A strong China is a unified nation, confident of its ability to defend its borders and its interests. It works with its neighbors and partners to foster stability in the Asian Pacific region and beyond. It cooperates with others to counter transnational problems such as narcotics trafficking and environmental degradation. A strong China has a dynamic economy, which offers its citizens an improving standard of living, attracts imports and investments, and exports competitively. A strong China is not only secure and prosperous itself, but it increases the security and prosperity of its neighbors.
To ask why we want a stable China almost answers the question by itself. Just to begin with the obvious, China has the largest population of any country in the world, over 1.2 billion people, and it adds over 12 million people -- equal to the population of New England -- to the workforce every year. The country stretches from rain forests in Guangxi to the deserts in Xinjiang to the steppes of Inner Mongolia. It borders thirteen countries -- from Russia to India to Burma. If you add to that its maritime claims, it touches Japan and many of the countries of Southeast Asia. This enormous country can be a tremendous source of stability or chaos which could determine the future of the Pacific and thereby the peace and prosperity of our own country.
Why do we want a prosperous China? China is an enormous and growing economic power. Though many parts of its economy remain backward, it is already our eleventh largest trading partner. Over the last twenty years, it has lifted 200 million people out of absolute poverty. China adds enough phone lines every year to form a new Baby Bell in the U.S., and it has the largest wireless communications network in the world. Over the past year, the number of Internet connections in China has more than quadrupled from 2 million to 9 million. This year, that number is expected to reach over 20 million. All of this bespeaks tremendous export and investment opportunities for American technology companies.
Finally, an open China is one that welcomes diversity and change, encouraging the best ideas from both its own people and the international community. It not only respects freedom of thought, expression and religion, but it also recognizes that these freedoms benefit both its people and the government by ensuring that the best new ideas emerge and that old ideas are challenged and reconsidered. It welcomes new technologies, which expand the development and exchange of information and ideas. Finally, an open China is one which celebrates and learns from the diverse strands of its rich history and culture.
To consider this question in another light, imagine the alternative of a weak unstable China. Even as China strives to grow stronger and more stable, the specter of failure is not far distant. China faces enormous economic challenges. Pervasive rural poverty is fueling a flood of job-seeking migrants to cities, where many will remain unemployed, living on the streets and surviving by crime. In these cities, they will breathe air so dirty that one quarter of all deaths of Chinese over the age of five comes from chronic respiratory disease, five times the U.S. rate. If China succeeds, it will become the center of an increasingly prosperous and stable region. If it fails, it could flood its neighbors, and even the United States, with desperate migrants seeking opportunities elsewhere. And, it could feel the need to engage in military and nationalistic excesses to maintain internal support in the face of economic and social failure. In short, it is a weak and unstable China that threatens American interests much more than a strong and stable China.
What is our integration strategy?
To foster a strong, stable prosperous and open China, we have undertaken a strategy of encouraging China to expand its integration into the global community. We are working with China and with other countries that share this objective, to identify areas where our interests overlap or conflict. We then identify bilateral and multilateral venues in which we can encourage China to join the United States and others in addressing these interests in three broad areas -- "values," economic, and security.
China has a choice in my view. First, it can revert to the traditional attitudes of the imperial Middle Kingdom, one which makes its own rules, disdains the rules agreed to by others and which therefore could be a threat to others. Alternatively, China can be a country that plays by the accepted international rules, cooperating and competing peacefully within those rules
Ultimately, this is China's choice. Neither we nor other nations can make that choice for it. We can influence it only on the margins by helping to shape the environment in which China chooses. The most basic, and harmful, way in which we could shape China's environment is by preemptively concluding that China was an enemy. If we did so, the results would be self-fulfilling.
It is worth recalling that our country has faced this choice before in other contexts. At the end of World War I, we got it wrong, and we got another war. At the end of World War II, Roosevelt and Truman and Marshall showed the statesmanship to integrate rather than isolate our former enemies. Today, we have an opportunity to help integrate a growing power into the network of global institutions without the devastation of war but with the opportunities of peace.
To do that, we must first encourage a China that is more "open," that is more welcoming and tolerant of values and concerns of others, whether those others are its own citizens or other countries and societies. Improvement of human rights has been, and will remain, a vital part of our engagement with China. Just last week, the Secretary of State underscored the importance she attaches to this endeavor by travelling from the President's trip in South Asia to Geneva for one day to deliver a speech in support of a resolution, which we introduced at the United Nations Conference on Human Rights annual meeting, that expresses the concern of the United Nations members over human rights abuses in China.
Next, we must integrate China into the community of economies that agree on the rules of trade and investment. To do that, for over a decade we have encouraged China to play an active role in the Asia Pacific Economic Forum, or APEC. Here the Asian Pacific economies cooperate to expand trade and investment, eliminate barriers, and improve their capabilities to seize the new opportunities which technology will offer businesses and workers over the coming generation. This common endeavor of the Asian Pacific nations is both making the region more competitive and building momentum for coming rounds of WTO negotiations. It also serves to enhance the compatibility of China's economy with WTO norms, a subject I will discuss in a few moments.
Finally, we want to bring China into the global and regional institutions that help preserve peace. In this, the security arena, I would like to mention a forum little known outside of government circles, the ASEAN Regional Forum or ARF. ASEAN, as some of you may know, is the Association of Southeast Asian Nations, a grouping formed by five countries shortly after the Vietnam War, which has now expanded to ten members, encompassing nations from Burma to the Philippines and Indonesia. The ARF was formed to enable a security dialogue between ASEAN and other countries with interests in the region, including China, the United States, Japan, Korea, Canada and Australia.
Just to give you some sense of the importance of the ARF in dealing with China, I would like to explain how this forum has enabled a reduction of tensions between China and the nations of Southeast Asia over conflicting claims to the islands and resources of the South China Sea. These disputes have intensified in the last few years as China and some Southeast Asian nations have built structures on various reefs and atolls to strengthen their territorial claims.
In 1995, China built a small facility on Mischief Reef, which is also claimed by the Philippines. This significantly increased tensions. We raised the issue at the ARF forum in order to open dialogue to reduce tensions and discuss the concerns of claimant nations and others like Japan and ourselves who rely on maritime traffic through the South China Sea.
Last year, ASEAN and China began to discuss a Code of Conduct to further reduce tensions in the South China Sea. At the same time, the Philippines has opened bilateral Negotiations with China to seek a peaceful resolution to disputes over Mischief Reef and other activities in areas claimed by both countries.
How do we pursue this strategy through engagement?
A moment ago, I defined "engagement" as working with China at every level and at every available opportunity to manage, if not resolve specific differences and identify and expand issues on which we take a common approach. Engagement has been an effective tool to advance our strategy to achieve our objectives. Many critics have belittled engagement, saying it is no substitute for a full policy. They're right in that. They just need to broaden their vision to see the policy "why" behind the engagement "how."
Let me illustrate briefly for you the multiplicity of levels and topics on which we engage China.
The highest level of engagement is the series of periodic summits between the President and the Chinese leadership. Such summits can break deadlocks and achieve progress at critical junctures. To illustrate the role of summits, I would like to draw your attention to a meeting you might not have noticed, between President Clinton and Jiang Zemin at the APEC Leaders Meeting in Auckland last September. Bilateral relations were at a low ebb. The bilateral agreement on WTO accession had eluded us the previous spring; the tragic accidental bombing of the Chinese Embassy in Belgrade last May had soured the mood between our two sides. This meeting went a long way toward putting the bombing behind us. It set the stage for negotiations on payments for the damage to the Chinese embassy and to our diplomatic facilities in China. Finally, these talks opened the way for the successful conclusion of our bilateral WTO negotiations last November.
The next level at which we engage China is in meetings between members of our Cabinet and their counterparts in Beijing. Over a period of thirty days beginning last month and continuing through the middle of April, five members of the Cabinet will have visited China. Each visit has been targeted to advance U.S. interests in specific areas.
The first of these visits was by our Ambassador to the United Nations, Richard Holbrooke, who traveled to Tokyo and Beijing to discuss the need for UN reform, which the Congress has stipulated as a prerequisite for full funding of our dues to the United Nations.
Last week, National Security Advisor Sandy Berger traveled to Beijing to discuss overall U.S.-China relations, specific bilateral issues such as WTO accession and human rights, regional security issues and, of course, Taiwan.
Secretary of Education Riley also visited China last week in an effort to deepen our education cooperation with China. In Beijing, he renewed an agreement on Fulbright and other exchanges that assist a free flow of ideas between our two societies.
Later this month, Secretary of Commerce Daley and Secretary of Agriculture Glickman will lead separate Congressional delegations to China which will enable Senators and Congressmen to better evaluate the impact WTO accession will have on China and on U.S. interests in China. At the same time, these two visits will provide opportunities to advocate for commercial and agricultural sales.
Even when you see no headlines about meetings between U.S. and Chinese leaders or cabinet officials, there is a continuing series of meetings occurring at what we like to call the "working level." In each case, these meetings are targeted to advance specific U.S. national interests. Let me start by discussing what is sometimes the most controversial type of meeting -- between military officers of our two countries. So often we see commentaries in various papers about how China is becoming our next enemy. Why then do we meet with the Chinese military?
Such visits accomplish two purposes. First of all, they "de-demonize" the United States. Senior generals of the PLA are perhaps the most insular element of the Chinese leadership, the most likely to believe the U.S. has a strategy to achieve hegemony over Asia and to weaken China. Hundreds of Chinese officers have traveled to the U.S. in recent years and discovered that their suspicions are not true, that their counterparts in the United States military have no such interests. Second, such visits are one of the most effective ways to improve deterrence. The PLA remains a manpower intensive infantry force with technology 20 or more years behind the U.S. If you have ever watched flight operations on the deck of a nuclear carrier or seen an armor exercise in the California desert, you can imagine the impression it makes on a Chinese general. It makes deterrence real.
Those who do not understand engagement would characterize it as "appeasement", but I hope it is already clear that our engagement of China is results oriented. We are engaging China to advance specific objectives of the United States, objectives which serve all of our interests. Sometimes, a meeting will conclude with a dramatic event that provides results. More often, the results are not immediately apparent, but dialogue can and does effect change. Let me give you a few examples.
-- Nonproliferation
While China once had a policy of proliferating dangerous technologies to rogue nations, now it is publicly committed to halting proliferation. Its nonproliferation record is not perfect, but it is easy sometimes to forget how far it has come. The critical point is that we have succeeded, through engagement, in beginning to change the way China thinks about security. China now recognizes that it has a stake in global and regional security, an interest which is threatened by the proliferation of weapons of mass destruction, whatever short-term commercial interest might be advanced by the sale of these destructive technologies. As a result, it has signed the Comprehensive Test Ban Treaty, and signed and ratified the Nonproliferation Treaty and the Chemical Weapons Convention.
For that reason, China took a lead among the Permanent Five Members of the Security Council in opposing the nuclear tests by India and Pakistan and in urging both sides not to test again but to sign on to the Comprehensive Test Ban Treaty. China has also agreed to halt the sale of anti-ship cruise missiles to Iran, missiles that threaten the safety of U.S. naval ships in the Persian Gulf. This was a decision which improved the security of the region and advanced U.S. objectives in the region, but equally important made sense for China, which needs security in the Gulf because it must import crude oil from the Middle East to fuel its own growing economy.
-- Environment
Once China criticized U.S. calls for improved protection of the environment as a subterfuge to keep China poor. As its own economic growth has clouded its cities with soft coal smoke from electrical power plants and with auto exhaust emissions, as its people's health has deteriorated from polluted water supplies, China has recognized that it needs to improve its environment.
For that reason it has sought out American expertise. Premier Zhu Rongji joined Vice President Gore last April to co-chair the third session of the U.S.-China Forum on Environment and Development. As part of this effort, we have agreed on a $100 million Clear Energy Program under which the Ex-Im Bank will finance U.S. environmental exports to China, particularly in the areas of energy efficiency, renewable energy and pollution reduction. The EPA and the California Air Resources Board are providing equipment and technical assistance for an Urban Air Quality Monitoring Program in China.
-- Reducing Tensions on the Korean Peninsula
The post-WWII history of the Korean Peninsula illustrates what can happen in Northeast Asia when the U.S. and China are estranged, and what can happen when we cooperate to achieve common goals. Fifty years ago the U.S. and China fought on opposite sides of the Korean War. For decades afterward, the PRC was regarded as North Korea's staunchest ally. Even after China established diplomatic ties with the ROK in 1992, China maintained close ties with North Korea.
Despite China's continued close ties Pyongyang, the U.S. and China have in recent years cooperated to maintain peace and stability on the Peninsula. Let's be crystal clear here: China pursues its own interests in this region, but when we share goals and we are willing to work with Beijing, the PRC can play a helpful role in achieving key U.S. priorities. It is difficult to gauge the level of Beijing's influence on North Korea, as well as to know just how the PRC brings its influence to bear. We nevertheless believe that China, because it seeks to maintain stability on the Peninsula and avoid conflict there, supports improved U.S.-DPRK relations and has played a positive role in seeking to restrain and moderate Pyongyang's behavior in areas of concern to the U.S. China and the U.S. have also cooperated closely in the Four Party Talks among the U.S., the ROK, China, and the DPRK, which are designed to reduce tensions on the Korean Peninsula and to replace the armistice with a permanent peace treaty.
The WTO -- Advancing United States Policy Toward China
Now let me dip my toes gently into trade policy. I will not attempt to recite the specifics of the WTO agreement which Amb. Barshefsky reached with China. I suspect some of you know these details far better than I. Let me simply note two general characteristics of the agreement:
1. This deal does nothing to improve the access of Chinese companies to the United States market. Regardless of whether China joins the WTO, regardless of whether the United States Congress grants Permanent Normal Trade Relations to China, Chinese companies will have the same access to the American market which they have had.2. This deal will significantly advance opportunities for American companies to export goods and services to China. When China joins the WTO, China will reduce tariffs on a wide range of manufactured goods by 50 percent or more over the first five years of its membership in the WTO, and will either eliminate or greatly reduce other import barriers. China will make the largest tariff cuts in U.S. priority goods. Chinese will eliminate export subsidies for cotton and other agricultural goods, making U.S. goods more competitive against Chinese exports in other markets. Finally, China will eliminate all tariffs on computers, semi-conductors and other high-tech products.
In trade terms, then, the case is clear: China's WTO accession overwhelmingly benefits the United States. There is one large caveat: we will not enjoy these benefits unless the Congress grants permanent NTR to China upon its accession to the WTO. If it does not, these advantages, so skillfully negotiated by Amb. Barshefsky and her team, will go only to our competitors in other nations. They will be able to sell their services to China, while we will not. They will be able to use WTO mechanisms to resolve disputes with China, while we will not. Clearly, that makes no sense.
Now, let's look at China's WTO accession as a part of our results-oriented engagement of China. As I said at the beginning, our strategy is to encourage the integration of China with the rest of the world in order to secure our objective -- that is a strong, stable, prosperous and open China. Our objectives can best be met by a China that is increasingly integrated into the world economy, that benefits by playing by the rules of the game, by adhering to the rule of law.
This is what I call a "win win win" situation. China and the Chinese people benefit by WTO entry. The United States and our companies and people benefit by our interaction with a more stable, open and prosperous China. Finally, our strategy of integrating China through engagement wins, because we have shown that we can reach mutually beneficial agreements even in times of significant difficulties. That means we will have the prospect of better success as we continue to work on the rest of our agenda, from nonproliferation to human rights.
Conclusion -- Twenty Years From Now
If our policy toward China continues to work -- and that means China enters the WTO and we grant China Permanent Normal Trade Relations -- a prosperous China will be less likely to threaten its neighbors because it depends on their trade and investment. It will be more likely to control proliferation of weapons of mass destruction because they could undermine China's own security interests. A prosperous China, integrated into the global system, will be more dependent on the rule of law and upon the free flow of information. Both of these will help in the long run to advance the power and the rights of its own citizens.
China, by entering the WTO, has agreed to play by the rules. That is fundamentally in our economic, strategic and values interest. If the Congress refuses to grant permanent NTR, it will be saying "no" to such a China. How can that advance our interests?
Not only the government of China, but also the people of China will benefit from its entry into the WTO. The Chinese people will enjoy new sources of employment, higher standards of living, more access to cheaper high quality goods and services. How much influence will the United States have with the people of China if we try to block their enjoying these benefits? Conversely, how much greater influence will we have if American companies, the American government and the American people take the lead in opening the door for China into this new world?
Thank you.
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