The New China Lobby

Article excerpt

Just before the November election, concern about foreign influence over U.S. trade policy suddenly emerged amid revelations that the Clinton campaign had accepted (and then returned) illegal donations from wealthy East Asian nationals. But as the media focused on the connections of one fundraiser to the White House and the debate became tinged with xenophobia, a bigger story of influence-peddling got lost: the role of multinational corporations that nominally fly the American flag.

Nothing reveals this pattern better than the recent history of the U.S. relationship with China. China has been under fire for violations of both human rights and commercial rights. It routinely ignores intellectual property protections, and it closes its domestic market to much that the U.S. might export. By 1995, China's trade surplus with the United States had ballooned to an embarrassingly high total of $34 billion, heading upwards. [See Chalmers Johnson, "Breaching the Great Wall," page 24.] Yet the renewal of China's most favored nation (MFN) status was easily approved by Congress in 1996, and its membership in the World Trade Organization will likely follow. Bipartisan trade policy takes it for granted that integration of China into the global trading system serves both U.S. and Chinese interests, with surprisingly little attention to the terms of engagement. The real issue, however, is not whether China, with its 1.2 billion citizens, should be admitted to the global trading system, but whether that admission should be essentially unconditional. Thanks to the new China lobby the interest of U.S. firms in China's cheap labor has overwhelmed all other concerns.

THE POWER BEHIND MFN

The power of the new China lobby was evident in Beijing last March 7, when more than 100 representatives of major U.S. firms held their annual conference under the auspices of the U.S.-China Business Council. Delivering his first major speech since taking office just weeks before, U.S. Ambassador James Sasser told them that the Clinton administration was counting on aggressive pressure from business to secure renewal of MFN status for China. "[Sasser] also suggested that CEOs make personal calls on Congress when they wish to relay their concerns on major China-related issues, such as MFN," reported the China Business Review, the bimonthly magazine of the U.S.-China Business Council. "Nothing," he said, "makes an impression on a member of Congress like a visit or phone call from a CEO from the member's district or state."

Of course, the Fortune 500 companies that comprise the U.S.-China Business Council--led by Boeing, Motorola, Caterpillar, AT&T, and the American International Group (AIG)--hardly needed Sasser's encouragement. They have been working the halls of Congress intensely since the 1972 opening to China by President Nixon. Lured by the prospect of 1.2 billion low-wage workers and eager consumers, America's corporate elite have done a fine job unofficially representing the Chinese government in Washington.

Even as Sasser spoke, the lobby's troops were being mobilized back in Washington. A coalition of America's largest companies, drawing on their experience in the battle over the North American Free Trade Agreement (NAFTA), had already begun to rally trade associations, lawyers, and corporate officials for the perennial battle to assure that China continue to receive the benefits of MFN. The business lobbyists were worried that, however unlikely, a coalition of labor, consumer, environmental, and human rights groups in Washington, joined in odd alliance with the dwindling remnants of the right-wing Taiwan lobby, might manage to raise a brouhaha about China and win a House of Representatives vote later in the year revoking MFN.

Three months before the vote, the omens were not good. China, unpredictable as always, had roiled the situation by firing missiles in the Taiwan straits on the eve of elections there. …