Unchanging China Analysis

~Table of Contents~
Article 1: Unchanging China, News Analysis by David Shapinsky, ABC
News. 11/20/99
Article 2: WTO Entry Mixed Blessing for China, By John Leicester,
Associated Press Writer. 11/21/99
Article 3: The Imperial Dragon, By Terry McCarthy, Time Magazine.
11/29/99
Conclusion
Bibliography
Article #1
After rather lengthy negotiations between the United States and China, there has
been a trade agreement reached between the two countries. China has agreed to enter
into the World Trade Organization(WTO). This along with U.S. Deputy Assistant
Defense Secretary Kurt Campbell’s visit to China in an attempt to mend relations
damaged by the U.S. bombing of the Chinese Embassy in Belgrade, marked a good series
of events for U.S. and Chinese relations. The article also shows that the relationship
between these two countries still needs work which cannot be done with ease.

A century ago, the U.S. fought off rival countries in a battle for economic
influence in China. The 20th century began with U.S. Secretary of State Jon Hay arguing
that whoever understood China ?has the key to world politics for the next five centuries.?
Yet, according to the article, foreign policy experts agree that most Americans see what
they want to see. Harvey Sicherman, President of the Foreign Policy Research Institute
put it nicely in the article, ?The pattern of our policy toward China is a series of illusions
punctuated by unpleasantries.?
Professor Michael Hunt, an historian of U.S.-China relations points out, ?We
really invest a lot of hopes in China, we do this repeatedly, and they’ve really been
crushed. They are so much an expression of our own needs and our own expectations.?
Take the idea of the China market. One Far-Eastern expert proclaimed at the end
of the last century, ?No other market in the world offers such vast and varied
opportunities for the further increase of American exports.? Take that comment with this
one by the U.S. chamber of Commerce about the recent progress made, ?This is really a
landmark opportunity to open up China’s vast market to American companies.? These
expectations could be dangerous, points out the author. The market might not even
materialize into what many are predicting it to be. To achieve the ?dream? of a
billion-plus consumers of American products, China will have to raise the average
income of its citizens which is no easy or short-term task. Such changes cannot happen
overnight, China’s move toward a market economy will require ?systematic
improvement? at all levels of society according to the author.
One of the grandest illusions of Western Policy has been the reasoning that it can
single-handedly change China. For more than a century Western missionaries,
businessmen, and advisers have come to China believing in their ?superiority? over the
nation. This arrogance was present because they possessed advanced technical skills and
a sense of moral rightness. These Westerners thought they should be welcomed and
listened to immediately. When the Chinese went their own way, these same Westerners
felt betrayed by the entire nation of China. The author points out a specific example of
this occurring in 1949. When the Chinese Communist forces finally took over the
mainland and established the People’s Republic, many Americans engaged in a
witch-hunt over who had ?lost China?, as if China was a thing that could be lost and also
as if the United States had any control over the destiny of such an ancient and populous
nation.

A key to this historical arrogance is the American idea that market forces can
rapidly transform an authoritarian government into a model democracy. U.S. trade
negotiators still argue the current trade pact between China and the United States will
help the Chinese achieve, in their words, ?greater freedom and greater global prosperity.?
Robert Dallek, a foreign policy expert and presidential historian, says ?Americans often
think the end of such development is something that looks like the United States.? This
is an idea that goes way back to the 19th Century. According to Dallek, ?Chinese
movement toward democracy may never come about or even come near to what we think
it should be.? And if it does, ?It will be their kind of capitalism, their kind of
democracy.?
The author’s points seem clear in that although much progress has been made in
recent weeks, there is still a lot of work to be done. Yadong Liu, a former official in the
Chinese Foreign Ministry, agrees with the author and does not see China’s recent
development as leading to the end of conflict with the United States. He emphasizes
China’s nationalism by claiming that , ?Both the leadership and population in general are
still driven by desire to restore China to what it was hundreds of years ago,? before it was
dominated by a series of foreign powers, including the United States.

The author thinks of this nationalism as more of a ?self defensive? form of
nationalism. It seems as if anything happens, whether it is large or small, it can easily
irritate the Chinese if they believe it is insulting or humiliating towards them. This helps
to explain why the U.S. bombing of the Belgrade embassy touched off a number of
protests against the United States. For Americans, says the author, ?The danger is that
we become too mesmerized by our own success.? And by doing so, ?We miss the
realities that actually shape the future.? He makes it clear that if we expect too much out
of this current trade agreement, it will only put off implementing it fully.

The author’s points can be used when looking at trade dealing with China in a
business and market situation. Although much progress has been made, it is still up in
the air as to who got the better deal. If eventually U.S. firms are able to export or sell
their products to the entire Chinese population, there are unlimited possibilities. With a
massive population, and a better economy on the way, China would be and ideal location
to sell your product.

This still remains to be in the future according to the article. It will take some
mending of issues for the Chinese to even consider the U.S. for major importing and
exporting. Time will also determine if China will ever reach their goal to have an equal
trading relationship that the U.S. has with other countries around the world through the
World Trade Organization.

Article #2
The article starts out with an image of Chan Yinmiao, a carpenter sitting by the
side of the road on a Beijing overpass, waiting in the wind for work. When the author
mentioned the breakthrough trade deal his government struck with the United States
recently, Chan brightens up. Chan’s family lives hundreds of miles away in eastern
China where they cultivate rice. He hopes the trade deal will open up lucrative export
markets especially for their crop. ?The more the market opens, the more opportunities
we’ll have to make money.? Chan claimed.

Obviously this excitement regarding the new trade deal extends beyond those who
hope to measure its benefits in dollars, cents, and improved trade figures. The deal did
mark a major milestone in China’s campaign to join the World Trade
Organization(WTO). Some have hoped that entry in the trade group that makes the rules
for world trade will also spur improvements in human rights, legal reforms, and
eventually, progress towards a democratic government. The author reasons that an
economic opening will hopefully bring about a political opening in a country desperately
in need of both. Also, a free and private economy forms the base for a democratic
system, so it will make China’s government and legal system evolve toward democracy.

President Clinton and his supporters have argued that growing trade, foreign
contacts, and the World Trade Organization’s rules on fair competition will open markets
and legal processes will help bring China closer to other international countries. A major
part in the deal between China and the U.S. involved the investment of China’s
telephones and Internet networks, not allowed under the initial deal, but will make both
networks cheaper and available to more Chinese, thus increasing the amount and flow of
information throughout the world.

Other, more social changes could occur because of the new deal are, more
Western movies will bring more new ideas, more foreign lawyers and businessmen who
will expect Chinese courts to enforce contracts could advance rule by law, rather than by
bureaucrats. Also, foreign investments will create more new jobs, offering a wider range
of employment opportunities.

Wang Shan, a political commentator and author believes that the Chinese leaders
have not clearly considered the social changes that entrance into the WTO could bring,
?They are not sufficiently prepared for the pressures on Chinese society,? he said.
?Chinese leaders feel that entering the WTO will promote Chinese exports, open up
world markets, and attract investments. But Americans feel that once China enters this
system great changes will occur in Chinese society, including political and social
changes.?
The author goes on to express other concerns that the Chinese have about this
new entrance into the WTO. Specifically that trickle-down civil rights improvements
through increased trade will come too slowly and that foreign governments will have to
pressure China over its human rights record to bring about deeper change. Lin Mu, a
one-time aide to former Communist Party leader Hu Yaobang, elaborates on the subject
of social change, ?It’s an idle dream for the American government to think it can
improve the human rights situation with economic cooperation.?
The article again shifts to other possible drawbacks that China’s new membership
to the WTO could hold within it. Initially jobs could become scarcer as ailing state firms
and inefficient family farms give in to the new foreign competition. China’s state-run
media has been selling the WTO deal to the public all along, but does officially admit
that millions of people could be thrown out of work, including more than nine million
people associated with agriculture. And even though China has negotiated for WTO
entry for 13 years, its social security system remains very unsophisticated. With these
factors combined, surely there will be a rise in the already common worker’s protests that
have prompted a police crack down on such incidents.

A major point the author displays in the article is the issue regarding the
exploitation of workers in China. Long-term labor activists fear that because the
communist government bans independent trade unions, jobs generated by increased
foreign investment could lead to this greater exploitation of the workers. Already tough
and unsafe factories prevail in provinces all over China. In the province of Guangdong
which is the southern economic powerhouse that handles forty percent of China’s foreign
trade, the rights of the worker has extra significance because the province stands to
benefit quite nicely through the WTO entry.

Han Dongfang a veteran Chinese labor campaigner who lives in forced exile in
Hong Kong because China won’t let him return to the mainland sums up the issue on
worker exploitation, ?You can say they provide job opportunities. But the people who
work there are not ?people’, they’re ?labor.’ They have no rights to speak out about their
conditions, wages, or benefits.?
It’s clear that the author wants to emphasize that working conditions in China will
not get better, but possibly even get worse. He clarifies that without the right for workers
to set up unions, job opportunities brought by the WTO could turn workers into slaves.
Under those conditions, there is no way that anyone can claim that the WTO will in any
way benefit human rights in China.

In terms of a business standpoint, this article shows how the deal between the
United States and China could end up producing more bad press for human rights in
China. According to this article, the cons certainly outweigh the pros regarding China’s
new membership into the WTO. American companies thinking about trading with China
should definitely give notice to the production facility as well as the establishment of
employees in order to make sure they are not being exploited. The exploitation of
workers does not sit well with anyone in the United States, and any correlation between
your company and a company that offers no rights to its workers could mean withdrawal
of investors, workers, and most importantly consumers.
Article #3
This article focuses on China’s current president, Jiang Zemin, and the role he
played in China’s recent agreement with the United States to join the World Trade
Organization. The agreement made with the U.S. will open China to free international
trade for the first time in history. Along the way, the 73 year-old Jiang had to practically
?move mountains? of conservative opposition in China where he is trying to change the
relationship between Beijing and Washington DC. The deal was unprecedented for
China, but had equal importance to Jiang himself.
Jiang dealt with the United States in a profound way, waiting for United States
President Bill Clinton to call him twice before backing the deal himself. When American
negotiators arrived in Beijing, Jiang kept his distance from the discussions, instead he
sent Premier Zhu Rongji to work out the details. Once the deal was signed however,
Jiang kept with his emperor mentality and assumed direct contact with the negotiators.
An advocate of technology, Jiang seems to be the right man for China going into the 21st
century. Yet he doesn’t quite have the imperial status in the eyes of the Chinese. In
Beijing, the WTO celebration was poorly choreographed and lacked a certain greatness
to it, and Jiang’s speech didn’t hold the people’s attention for long at all.

Despite these flaws, Jiang clearly strives to be as imperial as he can possibly be,
perhaps join the ranks of suck emperors as Mao Zedong and Deng Xiaoping. But in
China’s long history, an Emperor needs to inspire awe, with a little bit of fear mixed into
his subjects. Jiang isn’t quite there but tackling such a large subject as world trade is a
good place to start. Jiang is not one to start breaking up the entire system however which
he leaves to Premier Zhu. It was Zhu who traveled to the United States in April in an
attempt to strike up talks concerning WTO. He failed only because the White House at
the time thought it would be ?politically unwise? to sign such an agreement at that point
in time. Jiang simply sat back, gained concessus back in China, and then awaited for
President Clinton to approach him. It was through this consensus that Jiang had
established that the negotiations were a success.

The author’s main points concern Jiang and his dilemma. The dilemma that he is
a prisoner of the Chinese Communist Party that he is leading fifty years after its
revolution. The communist party is one that is empty of vision, worried about unrest, out
of touch with the younger generation that concerns itself more with money than ideology.
It seems that the harder Jiang tries to impress the citizens of China, the less interested
they become.

He certainly acknowledges the fact that economic development is need in China,
but being open politically is just simply not an option he has. Even immediately after the
WTO deal was signed, members of Falun Gong, a banned meditation cult were being
arrested. It is clear that Jiang wants to help China prosper, it might just take a little
longer than he had hoped.

The World Trade Organization or WTO has its headquarters in Geneva,
Switzerland. It currently has 135 countries with membership. The WTO is the successor
of the General Agreement on Tariffs and Trade formed in 1947. Once limited to goods,
the WTO’s aim has been extended to include intellectual property and trade in services.
The organization’s task is to administer and enforce the trade agreements made by
member nations, ensuring the flow of goods and services. Its rulings are law among all
of its members.

In terms of a business/market situation, here is a breakdown on who got the better
deal between China and the United States. In Telecommunications, China will let
telecom firms, including U.S. giants such as AT;T, have new, though still limited access
to its domestic market. The winner in this case are the U.S. telecom firms by a long shot.
They will be able to sell their voice and data services to the Chinese which is a huge
market. In farming, China said it would cut tariffs on farming goods to less than 15% by
the year 2005. That should give many Chinese access to new foods from all over the
world. Farmers in the U.S. will be the winners in this respect because they can expect to
sell much more to China. In the steel industry, China agrees its state-owned and
subsidized steel industry will not dump tons of cheap products onto crucial U.S. markets.
There really in no clear winner in this agreement, China will sell more cheap steel
overseas while U.S. firms will still have to compete world wide. Finally, in the textile
industry the Chinese textile plants will be able to sell their products anywhere around the
world. China is clearly the winner here, in this respect the WTO is like a dream come
true. For the U.S. plants, the cheap Chinese exports will be a nightmare.

Conclusion
The World Trade Organization is going to produce many opportunities for the
entire nation of China. For the first time in its history, China will be able to share its
resources and receive resources from all around the world. The only mistake we can
make regarding this situation is to push our (the U.S.) democratic views upon them while
we trade with them. The politics in China will not change overnight and they probably
will not change in the next ten years. It is extremely important that we respect that China
will do what is best for itself throughout the course of trading, which I believe it will do.
Another major concern involving China and the WTO is the issue of worker’s rights.
Attention has to be kept in regards to this touchy subject, but again, the world must
realize that it can’t impose moral laws as well as trade laws in a different country. I hope
that China does focus on the bettering of working conditions and I also hope that the
majority of jobs, especially agricultural, can be saved in some fashion. I believe that
China will succeed in this new trade agreement, and hopefully the rest of the world can
benefit as well. It might be rough going at first, but only because it will be new to such a
historic and old nation as China. I realize that old habits are particularly hard to break,
but I am confident that under President Jiang Zemin, that China will prosper
economically and socially under this new agreement.

Bibliography
Bibliography
Shapinsky, David. Unchanging China. ABCNews.com. November 20, 1999.

Leicester, John. WTO Entry Mixed Blessing for China. Associated Press.
November 21, 1999.

McCarthy, Terry. The Imperial Dragon. Time Magazine. November 29, 1999.
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