President Clinton has launched a campaign to renew most-favored-nation trade status for China, calling it "a simple judgment."
"We're more likely to have a positive influence on China by engaging them than we are by trying to isolate them," the president said Monday.He commented on the issue during an Oval Office picture-taking session and later in a speech to business leaders.
The U.S. Chamber of Commerce said it supports Clinton's decision for another one-year extension of MFN status but would prefer a permanent grant of trade privileges.
In Beijing, Chinese Foreign Ministry spokesman Shen Guofang said, "We believe this is a wise decision." He said China would expand trade with other countries if MFN is not renewed and pronounced it "fundamentally unacceptable" to connect renewal with Hong Kong's change of sovereignty.
Calling the trade status a "mutually beneficial, normal arrangement," Shen told reporters "China will not accept attaching any conditions to it."
"In the interest of the people in both countries, the U.S. Congress should not unnecessarily obstruct or even abolish most-favored-nation status because to do so would be bad for both sides," he said.
Shen said the annual debate "does not benefit the building of long-term, normal, stable trade relations" and called for MFN to be extended long-term.
"Completely resolving most-favored-nation status for China would provide a favorable atmosphere and positive conditions for the smooth development of China-U.S. economic and trade relations," he said.
Sen. William Roth Jr., R-Del., chairman of the Senate Finance Committee, also welcomed Clinton's move but said, "Due to the reversion of Hong Kong to Chinese sovereignty, alleged campaign financing improprieties (by China) and a host of other issues, this year's debate promises to be the most heated in many years."
House Speaker Newt Gingrich, while supporting continuation of China's trade status, said he was "disappointed" by a series of actions or inactions by Clinton.
Gingrich, R-Ga., cited the relaxation of trade restrictions on supercomputers with military applications, a lack of sanctions for transferring weapons of mass destruction to other countries and a failure to "demand full cooperation from the Chinese government in the ongoing foreign money corruption probe" involving U.S. campaigns.
The United States buys about 30 percent of China's exports every year, but some critics argue that the United States should link China's trade privileges to improvements in human rights, a ban on arms sales to Iran and Pakistan and a smooth transition in Hong Kong.
"There are those who believe that our differences are so profound we would get our way more . . . if we cut off all trade contact," the president said. "I believe that is wrong and we're going to have a big debate about it in the Congress."
Since 1980, every president has sought and won the renewal of most-favored-nation trade privileges for China, allowing it to export goods to the United States under the lowest possible tariffs.
Despite the "most-favored" tag, only a handful of nations are not extended the status by the United States.
The renewal for China, like most other countries, was routine until the 1989 Tiananmen Square massacre of pro-democracy demonstrators. When Congress balked and tried to set strict conditions on the renewal that year, then-President George Bush used his veto to maintain China's trade benefits.