The China Question - Page 4


Tough Battles Ahead?

Given the importance technology companies are placing on this market, however, its no wonder business leaders are concerned about the potential fallout from any deterioration in U.S.-Chinese relations.

Some say there is reason to worry. PNTR only passed the House after months of lobbying by the business community and arm-twisting by the Clinton administration and Republican leaders in Congress, in the face of stiff opposition from labor, environmental and human rights groups.

Supporters argued that Chinas accession into the WTO provides an opportunity to level the playing field for U.S. companies currently denied the access to the Chinese market that Chinese products enjoy in the U.S.

With approval of PNTR under their belt, supporters of expanded trade with China were optimistic that they would have little trouble gaining support for a one-year extension of Chinas NTR status. In fact, Rep. Robert Matsui, D-Calif. — a senior member of the House Ways and Means Committee, which handles trade issues — said he had hoped that Chinas critics could be persuaded against offering a motion to block NTR this year.

Now, Matsui and others worry that some lawmakers who reluctantly voted for PNTR will switch sides.

"I thought before it would be easy and it would pass rather handily," Matsui said. Now he believes the House could actually vote against a one-year extension of NTR. He said it is essentially a "free vote" for House members because even if the House votes against NTR, it is highly unlikely the Senate will follow suit. And even if it does, Bush would most likely veto such a measure.

"It certainly stirred up some concerns . . . that some members of Congress had before they took a vote on China PNTR," Seiffert said.

Matsui and others said they are worried about the message such a vote would send to China.

"It throws a wrench in the entire trade negotiation process," said Dave McCurdy, a former Democratic member of the House who now heads the Electronic Industries Alliance.

While they expect a tougher fight, McCurdy and others said that at the end of the day they do not believe Congress will block an extension of NTR.

"There are plenty of things we can do to annoy [China] short of trade," such as pushing to deny Beijings bid to host the 2008 Summer Olympics, said James Lewis, director of technology policy at the Center for Strategic and International Studies.

Still, Chinas detractors may have other targets, such as legislation to reauthorize the Export Administration Act, which is moving through the Senate. The bill outlines procedures for placing export controls on products that have both commercial and military uses, and could become a magnet for anti-China amendments.

"Theres no question that this latest incident has provided fresh fodder for the people in Congress who are viscerally anti-China," said Rice of the Coalition for Employment Through Exports. "I think its inevitable that we will see anti-China amendments pop up later this spring and into the summer."

Senate Intelligence Committee Chairman Richard Shelby, R-Ala., was one of a handful of senators who blocked the export bill from coming to the Senate floor last week, saying it was the wrong time to bring this measure to the floor given the heightened tensions with China. "Im sure the Chinese leaderhship cant believe its luck," Shelby said. "The Senate is now rushing to open the floodgates for technology [China] needs to upgrade its military."

"Is it one more arrow in the sling of those who say you cant deal with China?" Yes, McCurdy said. But he added: "Do I believe it will stop them [the Export Administration Act or NTR]? No."