Clinton Legacy Watch # 9: The New ‘China Syndrome’ — Legitimating Corrupting Cynicism

(Washington, D.C.): As Chinese
President Jiang Zemin’s makes his victory
lap around the United States this week,
certain nagging questions occur: What if
the real motivation for the 21-gun
salutes and lavish feting of one of the
“Butchers of Beijing” is not
really the Clinton Administration’s
enthusiasm for an appeasement policy
dubbed “engagement,” or even
its slavish pursuit of foreign sales on
any terms?

What if it amounts to the ultimate
quid pro quo for China’s help to the 1996
Clinton-Gore campaign, or perhaps in its
aftermath, a form of hush money for
keeping Charlie Trie and his damning
secrets away from U.S. investigators?
Could President Clinton be that cynical,
that self-absorbed, that indifferent to
long-term national interests that China
seems determined to threaten?

The ‘Engagement’ Speech

Unfortunately, everything about the
Sino-U.S. relationship at the moment
reeks of cynicism. Take Mr. Clinton’s
speech Friday at the Voice of America, a
speech designed to justify his policy
toward the People’s Republic. Throughout
his remarks, the President described the
“common interests” the United
States has with China in a manner
seemingly designed to mislead the
American people about the extent to which
Beijing has been assiduously jeopardizing
those interests.

For example, Mr. Clinton spoke of a shared
stake in “stability” in the
Persian Gulf, as though China has not
been selling Iran advanced anti-ship
cruise missiles and weapons of mass
destruction — military
capabilities sought by Tehran precisely
for the purpose of exercising a
destabilizing control over Western oil
supplies. He applauded China’s
participation in a series of arms control
agreements governing nuclear, chemical
and biological weapons and ballistic
missile technology, without mentioning
that the Chinese government has
been violating every one of
those accords.

And Mr. Clinton pledged
“intensified” law enforcement
cooperation with China to fight
“drug-trafficking and international
organized crime.” Since this
Administration never misses an
opportunity to exploit children, he used
the fact that “too many of our
children are still killed with guns, too
many of our streets are still riddled
with drugs” to establish a certain
moral equivalency with China and
rationalize a redoubled, joint effort to
fight these plagues.

Curiously, he failed to mention that
Wang Jun — the well-connected Chinese
tycoon brought by Mr. Trie to one of the
President’s White House fund-raising
coffees — has been associated with
gun-running (remember the AK-47s used to
shoot up the LAPD a few months back?) and
drug-smuggling in this country. We have
already seen one federal
“sting” that might have
demonstrated Beijing’s complicity in such
operations compromised by a leak,
apparently from a State Department
source. It is hard to fathom how
more “cooperation” with Chinese
authorities will result in anything other
than an improved ability on the part of
the PRC’s suppliers of guns and drugs to
avoid interception by American
authorities.

The Faustian Nuclear
Cooperation Deal

Similar cynicism is at work in Mr.
Clinton’s expected certification that
Beijing is no longer contributing to the
proliferation of weapons of mass
destruction, a precondition to sales by
the U.S. nuclear power industry of its
wares to China. This certification is
predicated on a new round of
“assurances” that it will stop
proliferating, assurances that are worth
no more than the ones previously offered
and repeatedly violated. The
simple fact is that the PRC is — and
will remain — up to its eyeballs in
trade in dangerous technologies
in order to: earn hard currency and/or
access to oil; increase its influence in
strategic locales; and create conditions,
for example in the Persian Gulf, that
will divert American forces and attention
from the sphere of influence China seeks
to carve out in Asia.

The corrupting effect of such cynicism
is also evident in the other side of this
transaction. On offer from American
industry will be the fruits of
roughly $1.1 billion worth of U.S.
investments in a new generation of
inherently safe nuclear power
technologies — some $350
million of which have come from the
taxpayer, the rest from the private
sector. A chilling article in Saturday’s Washington
Post entitled “China Plays
Rough: ‘Invest and Transfer Technology,
or No Market Access,'” describes how
American companies are being forced to
transfer state-of-the-art manufacturing
know-how and hardware to the PRC if they
want to do business there.

The following are among the critically
important insights in this article by
Paul Blustein:

“…China runs its economy
according to very different rules
from those prevailing elsewhere
in the world. And more than ever,
foreign firms seeking access to
its fast-growing market of 1.2
billion people find themselves
subjected to extraordinary
demands by Chinese state planners
to hand over valuable technology
and job-generating investments,
especially in sectors that
Beijing views as strategically
important, such as autos,
aerospace and electronics.
Companies that balk simply lose
out to competitors.

“Consider an account by
Clyde Prestowitz, president of
Washington’s Economic Strategy
Institute, of a discussion he
witnessed a few months ago among
top executives at a company he
would identify only as one of the
nation’s 50 largest
manufacturers, which was planning
to build a major facility in
China instead of the United
States.

“Production wouldn’t be
cheaper overall in China, the
executives concluded; it would be
more expensive. The quality
wouldn’t be better; it would be
worse. The products wouldn’t be
sold to Chinese buyers; they
would be exported. “So the
obvious question was, ‘Why put it
in China?'” Prestowitz
recalled. “And the answer
was, ‘Well, because we’ve got big
plans for China, and the Chinese
want this kind of investment, and
they’re pressuring us.'”

“Such pressures might be
expected to ease as China grows
more prosperous and is integrated
into the global economy. Instead,
they are intensifying, according
to business representatives who
negotiate with Beijing. Chinese
authorities ‘have taken a
markedly harder line than in
previous years’ in insisting on
state-of-the-art technology from
foreign companies, according to
an article earlier this year in
the China Business Review by two
Beijing-based lawyers, Douglas C.
Markel and Randy Peerenboom.

“The gains [from a company
transferring technologies as part
of a long-term strategy to
improve future exports] are far
less clear when a government such
as China’s demands investments
and technology transfers as a
condition of doing business
within its borders. Although many
governments require job and
technology transfers when they
buy, say, fighter planes for
their militaries, no country
makes such demands across as wide
a variety of industries as China
does.

“‘It troubles me a lot,’
said a senior Clinton
administration official,
who spoke on condition of not
being identified. ‘It’s one thing
if I’m, say, Boeing, and I decide
to manufacture in a foreign
country on a consensual basis for
purely commercial reasons. But
when it’s a matter of government
policy, where the government of
the country involved is saying
that to sell here, you have to
locate here, and give us
technology — then I’m concerned.
It’s blackmail.‘

“… One Beijing-based
attorney for major foreign
companies [said:] ‘A few months
ago, one of our clients had set
up a factory, and hadn’t even
gotten around to transferring all
the technology, when they learned
that their Chinese partner —
actually, another company in the
same group as their partner —
was manufacturing the same
product, using the same
technology that had already been
transferred.'”

It is absolutely predictable that
this practice by China of ripping-off
U.S. technology will occur with respect
to any new reactor technology, as well.
China’s vaunted $60 billion market for
U.S. nuclear products will be filled with
this country’s technology, all right,
but supplied by indigenous Chinese
copy-cats. It is a measure of the
desperation of the U.S. nuclear power
industry that it is willing to risk its
seed corn on so uncertain a venture.
Since that seed corn has been
substantially developed at public
expense, however, the decision as to
whether it will be made available for
expropriation by the Chinese government
should be a matter not just for corporate
board rooms but for rigorous debate in
Congress.⁽¹⁾

Who’s Transforming Whom?

The last refuge of the China appeasers
is that, if individual transactions are
not accruing to the national benefit then
at least they are cumulatively helping to
transform the PRC by dint of the exposure
to Western values and institutions that
goes along with access to the American
market. As one of the shrewdest and most
critical observers of the Clinton policy
toward the PRC — the New York Times’
former editor and nationally syndicated
columnist, A.M. Rosenthal — noted this
past July, however, the practical effect
of this new “China syndrome” of
cynicism and the corruption it breeds in
high places is very different:

“The men of the [Chinese]
Politburo know [the United
States’] heavy-duty thinkers
still have not grasped the new
historic reality that Beijing has
brought about: China is
remodeling America.
Beijing has changed the thinking
and behavior of America’s
President, political parties, top
business executives, journalistic
and academic seers, even of the
guardians of its security. Most
delicious to the Communists,
China has reshaped and diminished
the value America places on
itself — its democratic and
religious values, even its
military security values.”⁽²⁾

Chris Cox — Keeper of the
Flame

Fortunately, some
American leaders are still resisting the
new “China syndrome.” One of
them, Rep. Christopher Cox — whose
courageous, principled leadership in the
Congress will be recognized tomorrow
night when he receives the Center for
Security Policy’s prestigious
“Keeper of the Flame” award —
is spearheading legislation aimed at
thwarting some of China’s most abusive
practices. Among the key elements of the
Cox initiative known as the “Policy
for Freedom” bill, are:

• A bill (H.R. 2647) that would deny
  normal commercial status to the
  People’s Liberation Army.
  The PLA controls and operates
  hundreds of companies in the
  United States as fronts for
  technology diversions and thefts,
  espionage as well as for the
  purpose of raising revenue to
  support military operations and
  modernization.
• A bill (H.R. 2386) which
  stipulates that the United States
  shall help Taiwan
  develop and deploy an effective
  theater missile defense system,
  the need for which has been made
  obvious by the PRC’s repeated
  launches of ballistic missiles
  into the waters off Taiwan’s
  ports.
• A bill (H.R. 2190) to require
  regular, unclassified reports
  about Communist Chinese
  espionage in the United States,
  including industrial and
  commercial theft, propaganda and
  intelligence efforts and attempts
  to manipulate American elections.
• A bill (H.R. 2232) that would
  fund the expansion of
  broadcasting to China by Radio
  Free Asia from a few
  hours each day and limited
  coverage to 24-hours-a-day and
  nationwide coverage in each of
  the major dialects. Such
  programming by Freedom Radios has
  proven itself in Eastern Europe
  and the Soviet Union to be a
  powerful and cost-effective
  instrument for exposing their
  audiences to factual information
  and Western values conducive to
  democratic change.
• A bill (H.R. 2195) to enforce and
  improve monitoring of the
  existing ban on slave
  labor products — some
  of which continue to be exported
  from the PRC’s Laogai gulag to
  the United States.
• A bill (H.R. 967) to underscore
  America’s commitment to religious
  freedom in China by
  barring travel to the U.S. by
  Communist officials who engage in
  religious persecution. And,
• A resolution by the House of
  Representatives (H.Res. 188) that
  calls on the Clinton
  Administration to enforce
  the Iran-Iraq Arms
  Non-Proliferation Act of 1992.
  Ironically, this law was
  originally co-sponsored by
  then-Senator Al Gore and requires
  the President to sanction any
  nation that transfers
  “destabilizing numbers and
  types” of advanced
  conventional weapons to Iran.
  China has reportedly transferred
  over 60 lethal C-802 anti-ship
  cruise missiles to Iran over the
  past three years, but the
  Administration has refused to
  apply the Act’s sanctions.

Other Worthies

Senate Intelligence Committee
Chairman Richard Shelby (R-AL)
has expressed entirely appropriate
concern, given Beijing’s past track
record, about accepting at face value
Chinese assurances regarding their future
non-proliferation policies. Senator
Thad Cochran (R-MS) is tying to
stop the sales of powerful U.S.
supercomputers to China’s nuclear weapons
and other military facilities. Sen.
Lauch Faircloth (R-NC) has just
introduced important legislation, the
“U.S. Market Security Act of
1997″ (S.1315) to ensure
closer monitoring of Chinese (and other
foreign entities’) efforts to penetrate
the U.S. bond and equities markets. Senator
Connie Mack (R-FL) has authored
companion legislation to Rep. Cox’s
initiative which promises sweeping policy
changes. And Sen. Arlen Specter
(R-PA) and Rep. Frank Wolf
(R-VA) are leading an initiative that
would penalize China for its systematic
persecution of religious minorities.

The Bottom Line

It can only be hoped that such voices
will be heard above the din of cynical
appeasers and corrupt sycophants likely
to be much in evidence during President
Jiang’s official meetings and his public
appearances this week. If so, Jiang may
take back an impression of America that
is different from that of a nation of
kow-towing capitalists and cynical
politicians, that is more consistent with
the proud and principled traditions of
the United States and that is far more
conducive to international peace and
stability on terms with which the
American people can live.

– 30 –

1. See the Casey
Institute of the Center for Security
Policy’s Perspective
entitled Lying for Dollars:
Expected Clinton Certification on P.R.C.
Proliferation Would Demean U.S., Disserve
Its Interests ( href=”index.jsp?section=papers&code=97-C_140″>No. 97-C 140, 18
September 1997).

2. See the
Center’s Decision Brief
entitled A.M. Rosenthal
Dissects China’s ‘Remodeling of America’
(No. 97-D 92, 8
July 1997).