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Office of the Press Secretary
For Immediate Release March 8, 2000


Paul H. Nitze School of Advanced International Studies
Washington. D.C.

3:50 P.M. EST

THE PRESIDENT: Thank you very much, President Brody, Dean
Wolfowitz. I thank all the members of our administration who are here
-- Secretary Daley, who is coordinating our efforts in the Congress;
Secretary Summers; Secretary Glickman. I want to say a special word of
thanks to Ambassador Barshefsky and National Economic Advisor Gene
Sperling who negotiated this agreement with China and run the last drop
of blood out of it. And my National Security Advisor, Sandy Berger, I
thank him for his great advocacy. Ambassador Holbrooke. To our OPIC
President George Munoz.

I would also like to acknowledge the presence of a very
important member of our economic team, Lael Brainard, because her mother
works here at SAIS, and I want her mother to know she's done a good job.
(Applause.) She may never speak to me again, but her mother will be
happy. (Laughter.)

I want to thank all the distinguished people in the audience
who care so much about China, and the faculty and the students here of
this magnificent institution. And I want to thank my longtime friend,
Lee Hamilton. If I had any respect for this audience, I would just ask
you to wait five minutes, I'd run out and copy his speech, hand it to
you. He said exactly what I wanted to say in about 2,000 fewer words

I also want to say, President Brody and Dean Wolfowitz, how
much I appreciate the involvement of Johns Hopkins and the School for
Advanced International Studies in China, in particular, at this moment
in history; and for giving me the chance to come here and talk about
what is one of the most important decisions America has made in years.

Last fall, as all of you know, the United States signed the
agreement to bring China into the WTO, on terms that will open its
market to American products and investment. When China concludes
similar agreements with other countries, it will join the WTO. But, as
Lee said, for us to benefit from that we must first grant it permanent
normal trading status -- the same arrangement we have given other
countries in the WTO.

Before coming here today, I submitted legislation to Congress
to do that, and I again publicly urge Congress to approve it as soon as

Again, I want to emphasize what has already been said.
Congress will not be voting on whether China will join the WTO.
Congress can only decide whether the United States will share in the
economic benefits of China joining the WTO. A vote against PNTR will
cost America jobs, as our competitors in Europe, Asia and elsewhere
capture Chinese markets that we otherwise would have served.

Supporting China's entry into the WTO, however, is about more
than our economic interests. It is clearly in our larger national
interest. It represents the most significant opportunity that we have
had to create positive change in China since the 1970s, when President
Nixon first went there, and later in the decade when President Carter
normalized relations. I am working as hard as I can to convince
Congress and the American people to seize this opportunity.

For a long time now, the United States has debated its
relationship with China through all the changes, particularly of the
last century. And like all human beings everywhere, we see this
relationship through the prism of our own experience. In the early
1900s, most Americans saw China either through the eyes of traders
seeking new markets, or missionaries seeking new converts. During World
War II, China was our ally. During During World War II, China was our
ally; during the Korean War, our adversary. At the dawn of the Cold
War, when I was a young boy, beginning to study such things, it was a
cudgel and a political battle -- who lost China? Later, it was a
counterweight to the Soviet Union. And now, in some people's eyes, it's
a caricature: Will it be the next great capitalist tiger with the
biggest market in the world, or the world's last great communist dragon
and a threat to stability in Asia?

Through all the changes in China and the changes in our
perception of China, there has been one constant: We understand that
America has a profound stake in what happens in China and how China
relates to the rest of the world. That's why, for 30 years, every
President, without regard to party, has worked for a China that
contributes to the stability of Asia, that is open to the world, that
upholds the rule of law at home and abroad.

Of course, the past that China takes to the future is a choice
China will make. We cannot control that choice, we can only influence
it. But we must recognize that we do have complete control over what we
do. We can work to pull China in the right direction, or we can turn
our backs and almost certainly push it in the wrong direction.

The WTO agreement will move China in the right direction. It
will advance the goals America has worked for in China for the past
three decades. And, of course, it will advance our own economic

Economically, this agreement is the equivalent of a one-way
street. It requires China to open its markets, with a fifth of the
world's population -- potentially, the biggest markets in the world --
to both our products and services in unprecedented new ways. All we do
is to agree to maintain the present access which China enjoys. Chinese
tariffs, from telecommunications products to automobiles to agriculture,
will fall by half or more over just five years. For the first time, our
companies will be able to sell and distribute products in China made by
workers here in America, without being forced to relocate manufacturing
to China, sell through the Chinese government or transfer valuable
technology -- for the first time. We'll be able to export products
without exporting jobs.

Meanwhile, we'll get valuable new safeguards against any
surges of imports from China. We're already preparing for the largest
enforcement effort ever given for a trade agreement.

If Congress passes PNTR, we reap these rewards. If Congress
rejects it, our competitors reap these rewards. Again, we must
understand the consequences of saying no. If we don't sell our products
to China, someone else will step into the breach, and we'll spend the
next 20 years wondering why in the wide world we handed over the
benefits we negotiated to other people.

Of course, we're going to continue our efforts not just to
expand trade, but to expand it in a way that reinforces our fundamental
values and, for me, the way the global economic system must move. Trade
must not be a race to the bottom, whether we're talking about child
labor or basic working conditions or the environment. The more we avoid
dealing with these issues, the more we fuel the fires of protectionism.
That's why we'll continue our efforts to make the WTO itself more open,
more transparent, more participatory, and to elevate the consideration
of labor and environmental issues in trade.

But most of the critics of the China-WTO agreement do not
seriously question its economic benefits. They're more likely to say
things like this: China is a growing threat to Taiwan and its
neighbors; we shouldn't strengthen it. Or, China violates labor rights
and human rights; we shouldn't reward it. Or, China is a dangerous
proliferator; we shouldn't empower it.

These concerns are valid. But the conclusion of those who
raise them as an argument against China-WTO isn't. China is a one-party
state that does not tolerate opposition. It does deny its citizens
fundamental rights of free speech and religious expression. It does
define its interests in the world sometimes in ways that are
dramatically at odds from our own. But the question is not whether we
approve or disapprove of China's practices. The question is, what's the
smartest thing to do to improve these practices?

I believe the choice between economic rights and human rights,
between economic security and national security, is a false one.
Membership in the WTO, of course, will not create a free society in
China overnight, or guarantee that China will play by global rules. But
over time, I believe it will move China faster and further in the right
direction -- and certainly will do that more than rejection would. To
understand how, it's important to understand why China is willing to do
what it has undertaken to perform in this agreement.

Over the last 20 years, China has made great progress in
building a new economy, lifting more than 200 million people out of
abject poverty; linking so many people through its new communications
network that it's adding the equivalent of a new Baby Bell every year.
Nationwide, China has seen the emergence of more than a million
nonprofit and social organizations, and a 2,500 percent explosion of
print and broadcast media.

But its economy still is not creating jobs fast enough to meet
the needs of the people. Only about a third of the economy is private
enterprise. Nearly 60 percent of the investment and 80 percent of all
business lending still goes toward state-owned dinosaurs that are least
likely to survive in the global economy and most likely to be vulnerable
to corruption.

Much of China's economy today still operates under the old
theory that if only they had shoveled coal into the furnaces faster, the
Titanic would have stayed afloat. It is ironic, I think, that so many
Americans are concerned about the impact on the world of a strong China
in the 21st century. But the danger of a weak China was set by internal
chaos and the old nightmares of disintegration. It's all so real, and
the leaders of China know this as well.

So they face a dilemma. They realize that if they open
China's market to global competition, they risk unleashing forces beyond
their control -- temporary unemployment, social unrest, and greater
demand for freedom. But they also know that without competition from
the outside, China will not be able to attract the investment necessary
to build a modern, successful economy. And the failure to do that could
be even more destabilizing with more negative consequence.

So with this agreement, China has chosen reform, despite the
risks. It has chosen to overcome a great wall of suspicion and
insecurity and to engage the rest of the world. The question for the
United States, therefore, is, do we want to support that choice or
reject it, becoming bystanders as the rest of the world rushes in. The
would be a mistake of truly historic proportions.

You know, as we debate about China here -- and we love to do
it; it absorbs a great deal of our time and energy -- it's easy to
forget that the Chinese leaders and their people are also engaged in a
debate about us there. And many of them believe that we honestly don't
want their country to assume a respected place in the world. If China
joins the WTO, but we turn our backs on them, it will confirm their

All I can say to you is that everything I have learned about
China as President and before, and everything I have learned about human
nature in over half a century of living, now convinces me that we have a
far greater chance of having a positive influence on China's actions if
we welcome China into the world community, instead of shutting it out.

Under this agreement, some of China's most important decisions
for the first time will be subject to the review of international body,
with rules and binding dispute settlement. Now, opponents say this
doesn't matter, China will just break its promises. Well, any of you
who follow these WTO matters know that China is not the only person that
could be accused of not honoring the rules-making process. If any of
you happen to be especially concerned about bananas and beef, you could
probably stand up and give a soliloquy on that. And now we in the
United States have been confronted with a very difficult decision,
because they've made a decision that we think is plainly wrong, in an
area that affects our export economy.

But I will say this: We're still better off having a system
in which actions will be subject to rules embraced and judgments passed
by 135 nations. And we're far more likely to find acceptable
resolutions to differences of opinion in this context than if there is
none at all.

The change this agreement can bring from outside is quite
extraordinary. But I think you could make an argument that it will be
nothing compared to the changes that this agreement will spark from the
inside out in China. By joining the WTO, China is not simply agreeing
to import more of our products; it is agreeing to import one of
democracy's most cherished values -- economic freedom. The more China
liberalizes its economy, the more fully it will liberate the potential
of its people -- their initiative, their imagination, their remarkable
spirit of enterprise. And when individuals have the power not just to
dream, but to realize their dreams, they will demand a greater say.

Already, more and more, China's best and brightest are
starting their own companies, or seeking jobs with foreign-owned
companies, where generally they get higher pay, more respect, and a
better working environment. In fits and starts, for the first time,
China may become a society where people get ahead based on what they
know rather than who they know. Chinese firms, more and more, are
realizing that unless they treat employees with respect, they will lose
out in the competition for top talent. The process will only accelerate
if China joins the WTO, and we should encourage it because it will lift
standards for Chinese workers and their expectations.

There's something even more revolutionary at work here. By
lowering the barriers that protect state-owned industries, China is
speeding the process that is removing government from vast areas of
people's lives.

In the past, virtually every Chinese citizen woke up in an
apartment or a house owned by the government, went to work in a factory
or a farm run by the government, and read newspapers published by the
government. State-run workplaces also operated the schools where they
sent their children, the clinics where they received health care, the
stores where they bought food. That system was a big source of the
Communist Party's power. Now people are leaving those firms. And when
China joins the WTO, they will leave them faster.

The Chinese government no longer will be everyone's employer,
landlord, shopkeeper and nanny all rolled into one. It will have fewer
instruments, therefore, with which to control people's lives. And that
may lead to very profound change.

A few weeks ago, The Washington Post had a good story about
the impact of these changes on the city of Shenyang. Since 1949, most
of the people of Shenyang have worked in massive, state-run industries.
But as these old factories and mills shut down, people are losing their
jobs and their benefits. Last year, Beijing announced it was going to
be awarding bonus checks to Chinese citizens to celebrate China's 50th
anniversary under communism. But Shenyang didn't have the money to pay,
and there was a massive local protest.

To ease tensions, the local government has given the people a
greater say in how their city is run. On a limited basis, citizens now
have the right to vote in local elections -- not exactly a democracy;
the party still puts up the candidate and decides who can vote, but it
is a first step. And it goes beyond Shenyang. Local elections now are
held in the vast majority of the country's 900,000 villages.

When asked why, one party official in Shenyang said, "This is
the beginning of a process. We realize that in order to improve social
control we have got to let the masses have a say." Well, sooner or later
that official will find that the genie of freedom will not go back into
the bottle. As Justice Earl Warren once said, "Liberty is the most
contagious force in the world."

In the new century, liberty will spread by cell phone and
cable modem. In the past year, the number of Internet addresses in
China has more than quadrupled from 2 million to 9 million. This year,
the number is expected to grow to over 20 million. When China joins the
WTO, by 2005, it will eliminate tariffs on information technology
products, making the tools of communication even cheaper, better, and
more widely available.

We know how much the Internet has changed America, and we are
already an open society. Imagine how much it could change China.

Now, there's no question China has been trying to crack down
on the Internet -- good luck. (Laughter.) That's sort of like trying
to nail Jello to the wall. (Laughter.) But I would argue to you that
their effort to do that just proves how real these changes are and how
much they threaten the status quo. It's not an argument for slowing
down the effort to bring China into the world, it's an argument for
accelerating that effort. In the knowledge economy, economic innovation
and political empowerment, whether anyone likes it or not, will
inevitably go hand in hand.

Now, of course, bringing China into the WTO doesn't guarantee
that it will choose political reform. But accelerating the progress,
the process of economic change, will force China to confront that choice
sooner, and it will make the imperative for the right choice stronger.
And, again, I ask: If China is willing to take this risk -- and these
leaders are very intelligent people, they know exactly what they're
doing -- if they're willing to take this risk, how can we turn our backs
on the chance to take them up on it?

Now, I want to be clear. I understand that this is not, in
and of itself, a human rights problem. But, still, it is likely to have
a profound impact on human rights and political liberty. Change will
only come through a combination of internal pressure and external
validation of China's human rights struggle. We have to maintain our
leadership in the latter, as well, even as the WTO contributes to the

We sanctioned China under the International Religious Freedom
Act last year. We're again sponsoring a resolution in the U.N. Human
Rights Commission condemning China's human rights record this year. We
will also continue to press China to respect global norms on
nonproliferation. And we will continue to reject the use of force as a
means to resolve the Taiwan question, making absolutely clear that the
issues between Beijing and Taiwan must be resolved peacefully and with
the assent of the people of Taiwan. There must be a shift from threat
to dialogue across the Taiwan Strait. And we will continue to encourage
both sides to seize this opportunity after the Taiwan election.

In other words, we must continue to defend our interests and
our ideals with candor and consistency. But we can't do that by
isolating China from the very forces most likely to change it. Doing so
would be a gift to the hard-liners in China's government, who don't want
their country to be part of the world -- the same people willing to
settle differences with Taiwan by force; the same people most threatened
by our alliance with Japan and Korea; the same people who want to keep
the Chinese military selling dangerous technologies around the world;
the same people whose first instinct in the face of opposition is to
throw people in prison. If we want to strengthen their hand within
China, we should reject the China-WTO agreement.

Voting against PNTR won't free a single prisoner, or create a
single job in America, or reassure a single American ally in Asia. It
will simply empower the most rigid anti-democratic elements in the
Chinese government. It would leave the Chinese people with less contact
with the democratic world, and more resistance from their government to
outside forces. Our friends and allies would wonder why, after 30 years
of pushing China in the right direction, we turned our backs, now that
they finally appear to be willing to take us up on it.

I find it encouraging that the people with the greatest
interest in seeing China change agree with this analysis. The people of
Taiwan agree. Despite the tensions with Beijing, they are doing
everything they can to cement their economic ties with the mainland and
they want to see China in the WTO.

The people of Hong Kong agree. I recently received a letter
from Martin Lee, the leader of Hong Kong's Democratic Party, who has
spent a lifetime struggling for free elections and free expression for
his people. He wrote to me that this agreement, "represents the best
long-term hope for China to become a member of good standing in the
international community. We fear that should ratification fail, any
hope for political and legal reform process would also recede." Martin
Lee wants us to vote in favor of PNTR.

Most evangelicals who have missions in China also want China
in the WTO. They know it will encourage freedom of thought and more
contact with the outside world. Many of the people who paid the
greatest price under Chinese repression agree, too. Ren Wanding is one
of the fathers of the Chinese human rights movement. In the late 1970s,
he was thrown into prison for founding the China Human Rights League.
In the 1980s, he helped lead the demonstration in Tiananmen Square. In
the 1990s, he was thrown in prison yet again. Yet, he says of this
deal, "Before, the sky was black; now it is light. This can be a new

For these people, fighting for freedom in China is not an
academic exercise or a chance to give a speech that might be on
television. It is their life's work. And for many of them, they have
risked their lives to pursue it. I believe if this agreement were a
Trojan Horse they would be smart enough to see it. They are telling us
that it's the right thing to do, and they are plainly right.
(Applause.) Thank you.

So if you believe in a future of greater openness and freedom
for the people of China, you ought to be for this agreement. If you
believe in a future of greater prosperity for the American people, you
certainly should be for this agreement. if you believe in a future of
peace and security for Asia and the world, you should be for this
agreement. This is the right thing to do. It's an historic opportunity
and a profound American responsibility.

I'll do all I can to convince Congress and the American people
to support it. And, today, I ask for your help. Thank you very much.

END 4:17 P.M. ES

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