American University Library

CHINA AND THE ISSUE OF MOST-FAVORED-NATION STATUS:
1989-1992 by
Sally Bryant submitted to the
Faculty of the School of International Service of The American University in Partial Fulfillment of the Requirements for the Degree of
Master of Arts in
International Affairs

Signatures^of Committee: Chair:

Dean of the College

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Jfrnveuy )f

Date
1993
The American University Washington, D.C. 20016

AMERICAN UNIVERSITY LIBRARY

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CHINA AND THE ISSUE OF MOST-FAVORED-NATION STATUS:
1989-1992
BY
SALLY BRYANT
ABSTRACT

Since the June 1989 Tiananmen Square Incident Sino-American relations have been strained, especially human rights issues. This paper examines the sources of the conflict and its effect on America’a China policy. Finding a consensus on how best to handle a country like China that is repressive, Communist, and often at odds with the United States has been difficult. Thus, the Bush Administration and Congress have struggled for the leading role in forming U.S. policy toward China. Both sides differ on how change can be most effectively accelerated in an authoritarian state like the PRC. Bush believes in active diplomatic engagement with China, while Congress feels passing legislation conditioning China’s MostFavored-Nation status is the appropriate method. However, recent improvements in China’s human rights have led President-elect Clinton to support unconditional MFN. Thus, there is a new consensus that American economic involvement in China promotes the process of economic and political reforms.

ii

TABLE OF CONTENTS

Abstract

ii

v

List of Tables

INTRODUCTION Chapter
1
1. HISTORY
U.S. View
7
Reagan Administration Bush Administration
2. BACKGROUND TO THE CURRENT DEBATE

OVER MFN FOR CHINA

28

Other Trade Arrangements Trade Act of 1974 Tiananmen Square Incident Initial Reaction
3. HUMAN RIGHTS
Human Rights
42
Human Rights In China The U.S. View Chinese Student Movement Abortion and Forced Sterilization Chinese Dissidents Tibet iii

PART TWO:
CONTINUATION OF CHAPTER THREE

The Baker Visit Prison Labor Exports Congressional Action S. 2808 Presidential Election Memorandum of Understanding

4. CONCLUSION

95

REFERENCE LIST

110

LIST OF TABLES

1. China's Statistics

18

20
2. U.S. Investment Position Abroad, by Country: 1980 to 1989

3. U.S. Government Foreign Grants andCredits,

1946 to 1989

21

29 30 37
4. MFN Duty Rates 5. Top 25 U.S. Imports from China in1990 6. Population and Area

v

INTRODUCTION

In the three years since the incident at Tiananmen
Square friendly relations between the United States (U.S.) and the People's Republic of China (PRC) have been strained. Citizens of the United States were appalled as they watched on television the Chinese Red Army massacre students of the Chinese democracy movement in Beijing on June 3-4, 1989. After viewing these events first hand, the American public became critical of the Chinese government. Accordingly, the American revulsion from the incident has broken down the previous decade-long consensus on China policy in the United States, and the issue has dictated the PRC policy of the United States ever since.

Since Tiananmen Square, the Bush Administration and
Congress have struggled for the leading role in forming U.S. policy toward China. There has been the presumption in foreign policy that the President sets the long-term and short-term objectives of the United States. Instead of speaking of "U.S. foreign policy" Americans talk instead of Nixon's foreign policy, Reagan's, or Bush's. Thus, the President represents American interests abroad. However, in a break from past procedure, Congress has attempted in the

last few years to shape the post-Tiananmen Square relationship with China. This paper examines the sources of the conflict, its consequences for the formulation and conduct of foreign policy, and its effect on the China policy of the United States.

This executive-legislative conflict has its roots in the Constitution of the United States. The powers granted by Article two give the President the role of Commander in Chief of the military, the power to appoint ambassadors, negotiate and ratify treaties, and receive ambassadors from foreign nations. In Article one, however, Congress can regulate intrastate and international commerce and taxes which apply to Most-Favored-Nation (hereafter MFN) status. Thus, Congress has the right to use trade as a vehicle to become involved in foreign policy issues.

In the 1970s Congress sought new avenues to become involved in foreign policy, especially in the area of human rights. Through its power to control trade, legislators exercised their rights to restrict (or grant) trade preferences, or imposes trade sanctions to exert influence over countries that are thought to abuse human rights. By passing the Trade Act of 1974 Congress spoke out against Soviet emigration laws which barred Soviet Jews from resettling in Israel. Included in the act was the Jackson-

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Vanik Amendment, which made MFN status contingent upon the liberalization of communist policies regarding emigration. In subsequent years, trade has become a tool by which Congressmen have guaranteed to U.S. allies special economic privileges to American markets, while imposing penalties on its Cold War enemies, particularly the Soviet Union and the PRC.

When China received MFN status in 1980, the issue of its human rights violations grew markedly more important to Congress. Nonetheless, until June 1989 growing PRC economic and political liberalization under the leadership of Deng Xiaoping blunted American criticism of Chinese human rights practices.1 During the 1980s, both Congress and Presidents Reagan and Bush extended MFN annually to China with little acrimony.

However, the incident at Tiananmen Square in June 1989 opened a floodgate of criticism from the American people and government in regards to China's human rights abuses. President Bush and his aides on the National Security

^ecil V. Crabb, Jr., and Pat M. Holt, Invitation to Struggle
4th edition (Washington, DC: Congressional Quarterly Press, 1992): 249.

3

Council took the lead in formulating the U.S. response.2 President Bush believes the correct China strategy (and one he has followed since being elected in 1988) is "'engagement:' high-level consultations, his personal touch and the expansion of economic contacts."3 In Congress Bush's position is supported by Republican Leader Senator (Sen.) Bob Dole, R-Kan., Minority Whip Alan K. Simpson, R- Wyo., and Sen. Max Baucus, D-Mont.

However, Bush's engagement policy with Beijing is perceived by many members of Congress as one of a "hands off" policy to human rights. It is felt that extending MFN to China with the knowledge of its poor performance in regards to human rights issues does not live up to U.S. law or supposed devotion to human rights issues. The main opponent of Bush's China policy on Capitol Hill is Senate Majority Leader George J. Mitchell, D-Maine.

Senator Mitchell and other liberal democrats such as
House Majority Leader Richard A. Gephardt, D-Mo., Representative (Rep.) Stephen J. Solarz, D-N.Y., Rep. Nancy

2Robert G. Sutter, "American Policy Toward Beijing, 1989-1990:

the Role of President Bush and the White House Staff," Journal of Northeast Asian Studies Vol. IX, No. 4 (Winter 1990): 3.

3"Back From China," editorial from The Washington Post. 19
November 1991, 20 (A).

4

Pelosi, D-Calif., and Rep. Donald Pease, D-Ohio, have been frustrated with the Bush Administration's policy of engagement with the Chinese. This main group of liberal Democrats are joined by conservative Republicans Sen. Jesse Helms, R-N.C., Sen. Malcolm Wallop, R-Wyo., and Sen. Mitch McConnell, R-Ky., in opposing MFN. Thus, this unusual liberal democrat-conservative republican coalition have banded together to try to get legislation passed placing conditions on or withdrawing MFN altogether because of Beijing's human rights record (liberals) and anti-communism
(conservatives).

Therefore, this congressional focus on human rights differs in emphasis from the Bush Administration's priority of engagement with the Chinese government. However, the ironic component of this is that both Congress and the Bush Administration, "say they have exactly the same goal: to enhance the prospects of China's moderates without totally isolating the current Chinese government."4 Hence, this argument over whether to place conditions on or withdraw MFN altogether for the PRC raises a question that has shaped American foreign policy since the first World War: What is the best way to deal with a country that is repressive,

4Rochelle L. Stanfield, "It's Beiiina's Move." National Journal
Vol. 22, No. 8 (24 February 1990): 446.

5

dictatorial and often at odds with the United States?
Hence, this important question is at the heart of the controversial human rights issues that have shaped the U.S.- China relationship since the Tiananmen Square Incident of June 1989. There are many vital reasons for this new U.S. emphasis on human rights ranging from moral outrage over the Tiananmen Square Incident, the end of the cold war, and a new American emphasis on democracy. These reasons have accentuated the human rights disputes between the U.S. and the PRC, which consist of: the Chinese student movement, abortion and forced sterilization, Chinese dissidents, Tibet, and prison labor exports.

Of course, the U.S. debate over these problems in regards to MFN turns on one point: will denial of MFN induce the Chinese government to behave more responsibly? This question is the most important issue affecting U.S.- China relations since June of 1989. Hence, this paper examines in detail the effect these important human rights disputes between the U.S. and the PRC have on the overall relationship.

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CHAPTER ONE
HISTORY
The U.S. domestic reaction to the Tiananmen Square
Incident has been interdependent on variables relating to the shared history between the two countries. During the Chinese Civil War of 1946-1949 the United States supported Nationalist Party leader Chiang Kai-shik. Chiang did lead the legitimate government of China at that time and was a faithful ally of the United States. Nonetheless, the American policy of support for the Nationalists was more complicated than it appeared. Chiang was believed by the Americans to be a trusted friend in the struggle against communism. This view was held even though the American White Paper on U.S.-China policy put out in 1949 acknowledged that Chiang's Nationalist Party was corrupt and not supported by the majority of the Chinese people.5 Nevertheless, even when the truth was known about Chiang, President Truman and the U.S. government were disappointed when the Chinese revolution came to power under Mao Zedong

5Witold Rodzinski, The People's Republic of China (New York; the Free Press, 1988): 28.

7

in October 1949.

After this victory by the Chinese communists Chiang and his followers took refuge on the Chinese island of Taiwan off the coast (previously called Formosa). Occupation of Taiwan by Chiang left territorial unification and the Chinese Civil War unfinished for the PRC. In addition, American support of this combined with ideological differences made mainland China believe it had little choice but to ally itself with the Soviet Union. This alliance was formalized with the signing in 1950 of the Sino-Soviet Treaty of Friendship. To the PRC "this pledge represented a significant enhancement of its security at a time of high cold-war tension, and a means of balancing against what it saw as the major threat to its survival, the United States."6

Of course, this Chinese perception of an American threat was furthered by the Korean War conflict. When the North Koreans invaded South Korea in June 1950 Truman ordered the U.S. Seventh Fleet to patrol the Taiwan Strait

Rosemary Foot, "New Light on the Sino-Soviet Alliance:
Chinese and American Perspectives," The Journal of Northeast Asian Studies Vol. X, No. 3 (Fall 1991): 17.

8

as a "neutralization" move.7 However, when the 1953 Korean truce was signed Taiwan was still under the military protection of the United States. So, Taiwan's de facto independence was sealed early on by U.S. military protection.® Obviously this U.S. intervention created an unstable situation in Asia and negatively affected the Sino- American relationship.

view

From the U.S. side, the communist takeover of China of
1949 was not perceived as a Chinese achievement, but an American "loss."9 In fact, it became a popular debate among foreign policy experts whether China was squandered through misrepresentation, deliberate treason, or failure to provide crucial military and financial aid.10 Whatever the cause, U.S. politicians and the general public was threatened by communism in general because of tensions with the Soviet Union (USSR) and Warsaw Pact nations; consequently, the