China’s MFN Status with the U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kerry Read

Mr. Sciuto TH 300-2

April 18^th, 2006

 

 

Bibliography

 

1. Cozic, Charles P. U.S. Policy toward China. Greenhaven Press Inc. San Diego, California, 1996.
2. Devenny, Patrick. “China’s Secret War.” Front Page Magazine 31 March 2005
3. Lilley, James R. and Wendell L. Willkie II. Beyond MFN: Trade with China and American Interests. American Enterprise Institute Press, Washington D.C., 1994.
4. Roth, Stanley O. Statement before Committee on Ways and Means on Renewing China’s MFN status 17 June 1998
5. Stark, Pete. Statement before Committee on Ways and Means on Opposing Renewal of China’s MFN status 17 June 1998
6. Torr., James D. China. Greenhaven Press Inc., San Diego, California, 2001.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In 1972, Richard Nixon became the first President of the United States to visit China. He met with Mao Tse-tung, seeking to establish good relations with the People’s Republic of China, despite their Communist government. Since then, relations between the two powerful nations have never been very good due to many things and no permanent trading agreements have been made. The President has had to decide whether to renew Most Favored Nation status with China every year and there are many arguments for and against doing so.

One main argument for ending MFN status with China is its disregard for humans’ rights. In 1979, the One-Child Policy was passed, limiting each married couple only one child; if an unmarried woman got pregnant she had to get an abortion and some woman were forcibly sterilized. In October 1997 at an international conference, Beijing officials showed off their “latest family planning weapon: a mobile abortion unit…inside [the white van] was a bed, suction cups, and a body clamp.”[1]

The Chinese government argues that these steps are necessary to prevent over-population. They have a limited number of resources and the more people there are, the quicker those resources will run out. They also claim it gives more opportunities to women allowing them to “learn science…take part in economic and social developments and increasing their overall status.”[2]

The National Labor Committee did a report on factory workers in China and found that sometimes workers are forced to work overtime, working anywhere from 60-90 hour work weeks, usually work 6 days out of the week for about 21 cents an hour with no benefits, workers can be fined for discussing factory conditions, and there are no independent human rights organizations or unions to try and gain rights for them.[3] Workers, most of whom are women, must live in cramped and dirty dorms and live off of a thin, rice gruel; they don’t know about any rights they have and don’t mind the poor conditions because at least they have a job.

Another big disregard for humans’ rights was the incident at Tiananmen Square when many peaceful college students and others gathered to protect and were killed by the Chinese army. They were denied their basic right of free speech and were killed for speaking their mind.

On June 17, 1998, Californian Congressman Pete Stark, strong advocate of universal health coverage, freedom of choice, and workers’ rights, addressed Committee on Ways and Means to discontinue MFN status with China. He stated, “The Chinese leaders have abused the rights of their people in large part because it has been to their economic advantage to do so. The US must not continue to abet China in abusing their people for the sake of economic growth… By denying MFN status, Congress will disapprove of China's labor practices that contribute to their growing economy.” [4] Once the disapproval was shown and China lost a very big trading company, they may feel compelled to make more improvements in area of humans’ rights.

Another argument to revoke MFN status is China’s growing military and the possible threat they provide to the U.S. and the rest of the world in the future. Eastern Russia feels threatened by China because they are greatly outnumbered in population and army size. China has the largest standing army in the world. Japan and China continually have disputes over land in Asia such as Outer Mongolia, and several islands in the Pacific, such as the Diaoyutai (Senkaku) islands. Japan and Taiwan, much smaller than China, fear an eventual military uprising and land grab by China soon. The U.S. too suspects an eventual military standoff between the two great nations. The U.S. has had good trading relations with Taiwan since Nixon’s visit to China, and the U.S. still recognizes it as its own country. China still feels Taiwan belongs to them, and this is an ongoing dispute.

Also from Stark’s address, he states many facts about China’s growing arms usage and dealings he got from CIA reports. Some of them state, “China, has 13 Inter-Continental Ballistic Missiles capable of reaching U.S. cities…in 1992, sold 34 nuclear capable M-11 missiles to Pakistan… and is the most significant supplier of Weapons of Mass Destruction-related goods and technology to foreign countries.”[5] They also further instigated the growing feud between Pakistan and India by supplying Pakistan with nuclear arms and threatening India with nuclear weapons of their own.

A further threat to the U.S. is continued Chinese espionage in not only the business realm, but also in military. Pirated movies and cheap reproduction of patented goods really hurts the U.S. economy and those individual businesses; China’s black market and street side vendors are loaded with these pirated goods. FBI assistant director Dan Szady spoke at the National Intelligence Conference of an estimated 3000 Chinese business in the U.S. that are merely a front to steal illegal and protected technology and transferring it to China, mainly targeting labs and universities. One example is of Martin Shih, owner of Night Vision Technology and other Silicon Valley businesses, who in 2002 was caught giving Chinese scientists the latest American advances in the field of night vision.

 

One reason for maintaining MFN status with China is that it really has anything special about it. There are only a handful of other nations in the world who do not hold this status with the U.S. some of which are North Korea, Cuba, and Serbia, for obvious reasons. It is just a courtesy thing granted to your allies out of respect, one little bonus is that the trading tariffs between the two nations is a little cheaper. Taking away the status would insult China and make it seem like we are totally against them and are trying to change them like we are with North Korea, when actually we have been good allies with them for a long time.

Another major reason for keeping MFN status is that it is greatly beneficial to the U.S.’s economy. We obviously maintain great trade with China, who has the largest growing economy worldwide, but we also keep our sphere of influence in the Pacific. At the same meeting as Pete Stark, Assistant Secretary of State for East Asian and Pacific Affairs Stanley Roth argued for renewal of MFN status because, “The U.S. itself is as much a Pacific nation as it is an Atlantic one…we maintain a sizable military presence in Asia; enjoy a vibrant network of mutual security alliances with Australia, Japan, the Philippines, Republic of Korea, and Thailand, and have significant economic ties with most countries in the region.”[6] If the U.S. called off relations with China, there’s a chance they could loose their footing in the Pacific and in the rest of Asia due to the growing power of China.

Also, a large chunk of U.S. imports come from China, due to the large number of American based companies with factories located there. Taking away those factories, hurts both nations’ economies because U.S. is denied its cheap labor and China looses tax money and dues paid to keep factory there. The U.S. also, in 1997, exported 13 billion dollars worth of goods to China made by about 170,000 jobs. Revoking status endangers these jobs and all the profit they make.

Taking away MFN status would most likely do nothing to improve their current state in humans’ rights and in terms of their arms proliferation and military spending; it would probably give them more cause to further ignore humans’ rights and see the U.S. as an enemy on the economic and militaristic level. China has actually made many improvements in those areas. For example, China has played a key role in negotiations between North and South Korea, encouraging North to come to Geneva and negotiate, hosting a few meetings in their country, and donating the most food and fuel to the people of North Korea.

China also has plans in the making to change their economy from a command economy into a market one, much like that of the U.S. They will be able to carry out with these plans if their economic growth and profit can be sustained. Breaking off friendly trade agreements with China would severely hurt their economy and ultimately their chances to carry out this plan and therefore the people would only get poorer.

They are growing greatly in the field of humans’ rights as well. In the past few years, China has released many political dissidents formerly imprisoned due to the continued U.S. criticism of the government’s actions. With urging from the U.N., China signed the U.N. Covenant on Economic, Social, Civil, Political, and Cultural Rights to give the people more freedom and protection to exercise those rights. Another big freedom the government is starting to allow is the freedom of religion. They hosted a delegation of big U.S. religious leaders a few years back and have had several follow up meetings to discuss the people’s religion. Before, Christianity was strictly outlawed, then it was allowed to some extent with close government supervision, now religious freedom is growing and people are a little bit freer to practice their faith. However, even MFN renewal advocates admit all is still not well. Roth explains, “This is not to suggest that human rights abuses in China are a thing of the past…but the steps they have taken in the course of a few months are nonetheless noteworthy, even if systematic changes to protect fundamental rights remain inadequate.”[7] So all is still not perfect, but it is improving, and will continue to improve if economy is growing and has means to do so.

One final reason for renewing MFN status is that the status should be strictly economical. The U.S. has no right to interfere with how another country’s government works, how they operate their military (as long as it is not threatening), or how their social system works. Chalmers Johnson, President of Japan Policy Research Institute, argues that “much of tension in U.S.-China relations is due not to China’s actions, but rather to Americans’ unease with China’s emergence as a great power.”[8]

 

In May 2000, Congress granted Permanent Most Favored Nation status to China, instead of having to renew it each year. All of the arguments listed previously are still concerning issues when discussing relations with China today and must be watched closely and improved upon.