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FUTURE OF UNITED STATES-CHINA POUCY Y4.F 76/1 :C 44/27 Future of Unitei Stites-China Folic... wi^AKINGS dUiiNi' BEFORE THE SUBCOMMITTEES ON ECONOMIC POLICY, TRADE AND ENVIRONMENT; INTERNATIONAL INTERNATIONAL SECURITY, ORGANIZATIONS AND HUMAN RIGHTS; AND ASL^ AND THE PACIFIC OFTHE COMMITTEE ON FOREIGN AFFAIRS HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION MAY 20, 1993 Printed for the use of the Committee on Foreign Affairs U.S. GOVERNMENT PRINTING OFFICE 71-343CC WASHINGTON : 1993 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-043307-X FUTURE OF UNITED STATES-CHINA POUCY Y4.F76/1;C 44/27 future of United Stites-Ckina folic... dUiiM HEARINGS BEFORE THE SUBCOMMITTEES ON ECONOMIC POLICY, TRADE AND ENVIRONMENT; INTERNATIONAL INTERNATIONAL SECURITY, ORGANIZATIONS AND HUMAN AND RIGHTS; ASIA AND THE PACIFIC OPTHE COMMITTEE ON FOREIGN AFFAIRS HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION MAY 20, 1993 Printed for the use of the Committee on Foreign Affairs ^^6W ^'^ '^^M^, '^^^^c •^W. "*<^^f?^. U.S. GOVERNMENT PRINTING OFFICE 71-343CC WASfflNGTON : 1993 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-043307-X COMMITTEE ON FOREIGN AFFAIRS LEE H. HAMILTON, Indiana, Chairman SAM GEJDENSON, Connecticut BENJAMIN A. OILMAN, New York TOM LANTOS, California WILLIAM F. GOODLING, Pennsylvania ROBERT G. TORRICELLI, New Jersey JAMES A. LEACH. Iowa HOWARD L. HERMAN, California TOBY ROTH, Wisconsin GARY L. ACKERMAN, New York OLYMPIA J. SNOWE, Maine HARRY JOHNSTON, Florida HENRYJ. HYDE, Illinois ELIOT L. ENGEL, New York DOUG BEREUTER, Nd)raska ENI F.H. FALEOMAVAEGA, American CHRISTOPHER H. SMITH, New Jersey Samoa DAN BURTON, Indiana JAMES L. OBERSTAR, Minnesota JANMEYERS, Kansas CHARLES E. SCHUMER, New York ELTON GALLEGLY, California MATTHEW G. MARTINEZ. California ILEANA ROS-LEHTINEN. Florida ROBERT A. BORSKI, Pennsylvania CASS BALLENGER, North Carohna DONALD M. PAYNE, New Jersey DANA ROHRABACHER, California ROBERT E. ANDREWS, New Jersey DAVID A. LEVY, New York ROBERTMENENDEZ, New Jersey DONALD A. MANZULLO, Illinois SHERROD BROWN, Ohio LINCOLN DIAZ-BALART, Florida CYNTHIA A. MCKINNEY, Georgia EDWARD R. ROYCE, California MARIA CANTWELL, Washington ALCEE L. HASTINGS, Florida ERIC FINGERHUT, Ohio PETER DEUTSCH, Florida ALBERT RUSSELL WYNN, Maryland DON EDWARDS, California FRANK MCCLOSKEY, Indiana THOMAS C. SAWYER, Ohio (Vacancy) Mjchael H. Van DUSEN, ChiefofStaff Richard J. Garon, Minority ChiefofStaff Anne Grey, StaffAssociate Jo Weber, StaffAssociate Mickey Harmon, StaffAssociate "iv^* ^!%-»c^' (II) . .^.i s,0' -».^. -fj \ k^ _.«. Subcommittee on Economic Policy, Trade and Environment SAM GEJDENSON, Connecticut, Chairman JAMES L. OBERSTAR, Minnesota TOBY ROTH, Wisconsin CYNTHIA A. McKINNEY, Georgia DONALD A. MANZULLO, Illinois MARL\ CANTWELL, Washington DOUG BEREUTER, Nebraska ERIC FINGERHUT, Ohio JAN MEYERS, Kansas ALBERT RUSSELL WYNN, Maryland CASS BALLENGER, North Carolina HARRYJOHNSTON, Florida DANA ROHRABACHER, California ELIOT L. ENGEL, New York CHARLES E. SCHUMER, New York John Scheibel, StaffDirector Edmund B. Rice, Republican ProfessionalStaffMember Kathleen Bertelsen, Professional StaffMember Donna LaTorre, ProfessionalStaffMember Peter Yeo, Professional StaffMember subcommntee on international security, international organization and Human Rights TOM LANTOS, California, Chairman HOWARD L. BERMAN, California DOUG BEREUTER, Nebraska GARY L. ACKERMAN, New York OLYMPL\ J. SNOWE, Maine MATTHEW G. MARTINEZ, California CHRISTOPHER H. SMITH, New Jersey FRANK MCCLOSKEY, Indiana DAN BURTON, Indiana THOMAS C. SAWYER, Ohio Robert King, StaffDirector Michael ENNIS, Republican Professional StaffMember Kenneth R. Timmerman, Professional StaffMember Beth L. Poisson, Professional StaffMember Maryanne Murray, Professional StaffMember Subcommittee on Asia and the Pacific GARY L. ACKERMAN, New York, Chairman ENI F.H. FALEOMAVAEGA, American JAMES A. LEACH, Iowa Samoa DANA ROHRABACHER, California MATTHEW G. MARTINEZ, California EDWARD R. ROYCE, California ROBERT G. TORRICELLI, New Jersey TOBY ROTH, Wisconsin SHERROD BROWN, Ohio ERIC FINGERHUT, Ohio Russell J. Wilson, StaffDirector James McCormick, Republican ProfessionalStaffMember Robert M. Hathaway, Professional StaffMember David S. Adams, Professional StaffMember Lisa C. BERKSON, Professional StaffMember (in) CONTENTS WITNESSES Page DonaldAnderson, president, UnitedStates-China Business Council 10 Phillip Fishman, Assistant Director, International Affairs Department, Amer- icanFederation ofLaborand Congress ofIndustrial Organizations 13 Hongda HarryWu, executive director, LaogaiResearchFoundation 16 Hon. JamesA. LUley, formerAmbassadorto China 37 Liu Binyan, publisher, ChinaFocus 52 Robin Munro, research associate,Asia Watch 54 GaryMilhollin, director,Wisconsin Projecton NuclearArms Control 69 ThomasW. Robinson, president,AmericanAsianResearch Enterprises 72 APPENDIX Prepared statements: DonaldAnderson 97 PhillipFishman 101 JamesA. Lilley 106 Liu Binyan 113 RobinMunro 123 GaiyMilhollin 135 Prepared statement of Hon. Tom Lantos, including a chronology of Chinese missiles sales, compiled by the staffofthe Subcommittee on International Security, International Organizations and HumanRights 152 Statementsubmittedforthe recordbyTimothyV.McCarthy, SeniorResearch Associate, Program forNonproliferationStudies 167 Bombs From Beijing, A Report on China's Nuclear and Missile Exports, by GaryMilhollin and GerardWhite,May 1991 172 (V) FUTURE OF UNITED STATES-CHINA POLICY THURSDAY, MAY 20, 1993 House of Representatives, Committee on Foreign Affairs, Subcommittees on Economic Policy, Trade and Envi- ronment; International Security, International Organizations and Human Rights; and Asia and THE Pacific, Washington, DC. The subcommittees met, pursuant to call, at 9:30 a.m. in room 2172, Raybum House Office Building, Hon. Sam Grejdenson (chairman of the Subcommittee on Economic Policy, Trade and Environ- ment) presiding. Mr. Gejdenson. The subcommittees will come to order. I am pleased to call to order today's joint subcommittees hearing on the future ofU.S.-China relations. Since the pro-democracy movement in China was cruelly crushed 4 years ago, the Subcommittee on Economic Policy, Trade and En- vironment has held seven joint hearings on U.S.-China relations. The subcommittee also helped craft the 1989 China sanctions pack- age, which substantially scaled back our political, economic, and security relations with Beijing. I also join with my colleagues year after year in supporting legis- lation that places tough conditions on China's Most Favored Nation status. I continue to believe there are no markets so immense that we should set aside the values that hold us together as a nation. Unfortunately, the previous administrations followed a line ofap- MFN peasement, repeatedly vetoing the conditions bill. As a result of the deadlock on this issue between the White House and the Congress in the past, America has not had a unified and coherent China policy. Our country's ability to achieve trade and non- proliferation objectives with China has suffered greatly. With the election of President Clinton, however, the deadlock is coming to an end. We are fortunate to have an administration that believes in challenging China's gross violations ofhuman rights, its unwillingness to open its markets and its refusal to abide by arms MFN control regim.es. President Clinton has agreed that status is an appropriate tool to attain these objectives. Congress can and should work with the President to quickly es- tablish a unified and forceful China policy. Toward that end, I believe the President should administratively impose conditions on MFN China's status. The President should require that China use substantial progress in meeting these conditions over the next year MFN in order to retain status. I also believe the conditions the (1) MFN President places on for China should primarily focus on human rights concerns. MFN In order to receive status next year, China should achieve substantial progress in preventing gross violation ofhuman rights, releasing all political prisoners, preventing exports of prison labor products, allowing international inspection ofChinese prisons, end- ing religious persecution and lifting constraints on freedom of the press and peaceful assembly. In addition, China should be required to live up to their promise to abide by both the missile control regime and the nuclear control treaty. The Clinton administration should explore other levers to achieve these objectives as well. First, enforcement ofexisting sanctions should be strengthened. The Bush administration repeatedly waived these sanctions, sending consistently the wrong signal to Beijing that it was business as usual. I may be willing to explore, however, the possibility of linking some of these sanctions to im- prove Chinese behavior on the international front. Second, the Customs Service should increase its effort to prohibit Chinese forced labor products from entering the United States. The State Department must demand that the Chinese live up to their commitment under the memorandum of understanding on prison labor. China's current unwillingness to abide by these agreements is unacceptable. American companies and workers who have to compete with low wages across the globe are ready to accept that, but they cannot be asked to tolerate competition from slave labor. Third, the United States should demand further access to the Chinese market. We have a massive trade deficit in China which exists because ofdistortions, not because ofreal competitive advan- tages. The Clinton administration should demand the Chinese live up to the provisions of the 1993 section 301 trade agreement. The United States currently runs its second largest trade deficit with China. Section 301 should be used again to achieve greater market access. Fourth, the United States should immediately upgrade its relations with Taiwan. Given its commitment to democracy and its de- clining trade deficit with the United States, we should stop treating Taiwan like a second class country. We should work with our GATT partners to ensure that GATT is accepted as soon as pos- sible. These four actions together constitute the beginning of a more assertive and constructive American policy toward China, by rees- tablishing the direct link between MFN and human rights and by demanding that China live up to its international responsibilities. I am confident the United States can play a constructive role in bringing about change to the mainland. I thank the witnesses and look forward to hearing their testi- mony. I am particularly thrilled to have Harry Wu here with us. It seems to me that the United States cannot give up the fight against this injustice and intolerance. Although the difficulties we face on the European continent, due to the changes in the former Soviet Union, seem to overwhelm us, it seems to me that that is not an excuse or a reason to abandon the people in mainland