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While much of the world's attention has turned to Europe, the D-Day celebration, and the triumph of our values over tyranny in the long Cold War, we must not waver in the challenge of advancing those same values - freedom and prosperity - in Asia, and especially in China. It is in this region that many of the profound challenges to America's national interest can be found; it is in this region that our generation's progress will in large part be measured.

A 21st-century economy is taking shape in China. China, last year, was the world's fastest growing economy, a market for $8 billion worth of American-produced goods, and the source of 150,000 American jobs. China has an atomic arsenal and a veto in the U.N. Security Council; it is a major factor in Asian and global security. We share important interests, such as a nuclear-free Korean peninsula and sustaining the global environment. And it is here, in China, where the human march of freedom must cover some of its most difficult remaining ground.We won the Cold War by realistically and persistently balancing the security, economic and moral interests of the United States. We will protect our interests and make progress in China by doing precisely the same thing.

Our challenge is how to trade with China without trading away our ideals; how to help economic growth lead to greater individual freedom; how to advance our interests in a more open China while recognizing other substantial interests in China and throughout Asia.

That is why I have renewed China's MFN (most-favored-nation) trading status and embarked on a new course to support forces of constructive change in China while strengthening the U.S.-China relationship.

Last May, I issued an executive order conditioning future renewal of China's MFN on overall progress regarding seven aspects of its human rights performance. After years of argument and veto, we no longer had two China policies - one from the Congress and one from the president - but a single, American policy toward that nation.

The executive order, together with expanded high-level contacts with China over the year, bore some fruit. The Chinese resolved urgent emigration cases we have called to their attention and are permitting inspection visits concerning Chinese exports produced with prison labor.

The government released Wang Juntao and Chen Ziming, two of the most important dissidents from the Tiananmen Square era, along with several prominent religious prisoners. It provided us with an accounting of some other prisoners. China has engaged in serious conversations with the International Committee of the Red Cross about allowing prison visits. The Chinese government has voiced its acceptance of the Universal Declaration of Human Rights, and they have begun technical talks with us about ending the jamming of the Voice of America.

I welcome these steps - but I do not believe they constitute sufficient progress. To say otherwise would not honestly or accurately reflect the situation in China. Although China released some dissidents, it failed to release many more, and during the same period, arrested or detained other Chinese who appear to be guilty of nothing more than peacefully expressing their views. And there has been little or no progress regarding protection for Tibet's distinctive religious and cultural heritage.

While the executive order and our other efforts clearly produced results that made a genuine difference in some people's lives, linking human rights to MFN has taken us as far as it can. Because of the progress China has made in a time of political turbulence and difficulty, very few advocates of human rights have called for a total lifting of MFN. But some still propose targeted but sweeping sanctions or linking human rights to our annual MFN review.

I believe such approaches are less likely to advance the cause of human rights in China and more likely to undermine our own interests there than the approach we are pursuing. Annual debates linking MFN to human rights threaten to block needed progress on security and economic issues while yielding little if any further progress on human rights.

We must pursue our human rights agenda with China in a way that does not isolate China from us. We can't help change human rights in China if we're not there. The best way to do this is with more direct and targeted means to achieve continued improvements. Therefore, we will pursue a new and vigorous program to support those in China working for democracy and human rights, delinked from MFN.

- We will tell freedom's story to the people of China. We will launch Radio Free Asia, increase the Voice of America's radio broadcasts to China and inaugurate a weekly VOA television program to report on developments in China.

- We will support others who stand for the dignity of the Chinese people. We will encourage American non-governmental organizations to give assistance, where it is desired and can be lawfully received, to the many new private organizations working in China to advance the cause of human rights.

- We will encourage the business community to work for progressive change. We will ask American business leaders to join us in developing a voluntary set of principles regarding the activity of American firms doing business with or in China, so that their presence will do more to improve working conditions, expand the access of Chinese people to information and otherwise enhance human rights conditions in China.

- We will engage others - in the United Nations and elsewhere - in the efforts to improve human rights in China. This approach will help us to emphasize that human rights are universal standards, not American-imposed ideas.

- As appropriate, we will maintain the pressure of sanctions to combat continuing human rights abuses. We will extend the sanctions imposed by the United States as a result of the events in Tiananmen Square. I am also banning the import of munitions, principally guns and ammunition, from China.

I believe the course I have chosen gives us the best chance of advancing all of America's interests with China. We will have more contacts, more trade, more international cooperation, and more intense and constant dialogue on human rights issues.

We must see our relations with China within the broader context of our interests in the Asian Pacific region, of which America is an integral part.

In three decades and three wars during this century, Americans fought and died in the Asian Pacific to advance our security and our ideals. The goal of promoting more open societies abroad - advancing democracy, human rights and an evolution toward market economics - is deeply embedded in our nation's history, ideals and security. The actions I have taken with regard to China are in the long-term interests of both the United States and China. I am confident that they will prove to be the best way to advance the cause of human rights.