At The East Asian Institute
REMARKS BY SAMUEL R. BERGER- ASSISTANT TO THE PRESIDENT FOR
NATIONAL SECURITY AFFAIRS ON CHINA
East Asian Institute Columbia University New York, New York
fitting, at a time when our nation is debating an agreement
that will affect our relationship with China for years to
come, to come to a place that has contributed so much to our
understanding of Asia and its role in the world.
who graduate from Columbia in two weeks enter a world where
globalization not only has shrunk the map; it fundamentally
has altered how the world works. Today, it is defined as much
by global markets as geopolitics, megabytes as megatons.
comes as no surprise that the debate over whether we will
give China permanent normal trade relations status -- called
PNTR -- and support its entry into the World Trade Organization
is seen by many as essentially a trade debate: Will our workers
benefit or won't they?
gain jobs or lose them? Will our economy reap the rewards
or suffer the consequences? In part, that is what the debate
is about. I believe the answers to those questions are clear.
we negotiated requires China to open its markets in sweeping
ways to our products and services. Chinese tariffs, from telecommunications
to agriculture, will fall by half or more over the next five
years. For the first time, our companies will be able to sell
and distribute products in China made by workers in America,
without being forced to move factories to China. We will have
much better access to a market of over a billion people; that
will mean more American exports, growth and jobs. At the same
time, this agreement provides safeguards for American producers
against any surges of imports in our market from China.
we give in return? All we agree to do is maintain the market
access we already offer to China and treat China the same
as the other 132 WTO members whose trade status is not subject
to yearly renewal. That's it. We do not lower our tariffs
one cent. We do not in any way, shape or form make it easier
for China to sell products in America. And we do not give
up any safeguards that protect our market now.
mind: China will enter the WTO whether we pass PNTR or not.
What the Congress must decide is whether America will enjoy
the benefits of the agreement we negotiated, or whether we
will forfeit those benefits to our competitors in Europe and
Japan. The issue is whether, having opened the door of the
world's largest market, we are simply going to hold it open
for our competitors or walk in ourselves.
that rejecting PNTR for China is simply a vote for the economic
status quo. I disagree. In the global economy, companies must
produce for global markets to remain competitive. When your
competitors have that advantage over you, standing still means
falling behind. One-third of America's new jobs in this decade
have been tied to exports - and 96 percent of our customers
lie beyond our borders. We cannot afford to take our prosperity
for granted; it depends on what we do, not who we are.
the economic arguments for PNTR are overwhelming. But they
are only part of the reason why we should move forward. For
this is a national security issue as well. What is at stake
here is not only how we build our economy but also how we
build a safer world. Remember: we have the luxury to focus
on expanding prosperity and seeking new markets today because
the hard-won victory in the Cold War made possible a world
largely at peace, a world in which our values of democracy
and openness are ascendant. But this is not a world without
dangers. And that is especially true in Asia -- with tensions
across the Taiwan Straits, on the Korean Peninsula, in South
Asia, and elsewhere.
States is a Pacific nation. We have fought three wars in Asia
in the 20th Century. Our future is tied to Asia. And the stability
of Asia -- economically, politically and militarily -- is
inextricably entwined with the stability and direction of
China. As China develops over the next decade, the path it
illuminates or the shadow it casts will be felt far from its
will write that future as it answers some fundamental questions:
It has extended some freedoms -- but will it gain the stability
that can only come from respecting human rights and permitting
opposing political voices to be heard? It is reforming its
economy -- but will it unleash the essential forces necessary
for sustained growth in the information age -- namely access
by its people to knowledge and encouragement of innovation?
It has become engaged in the world -- but will it make a broad
commitment to work within the global system and do its part
to address global challenges such as the spread of weapons
of mass destruction and climate change? It is growing stronger
-- but will it use that strength to build a more secure Asia,
or to threaten the freedom of its neighbors?
are the real questions for us today: How will China evolve,
both internally and in the way it relates to the world? And
how do we best encourage China to evolve in a constructive
direction? It is my strong conviction that approval of PNTR
and accession to the WTO will make China more likely to emerge
as a more open, stable, cooperative nation that plays by the
rules of the international system and provides greater freedom
to its people. If we reject PNTR, I am equally convinced that
we will subvert that goal and damage our national security.
in the United States debate the future of our relationship
with China, we must remember that there is also a struggle
about the future going on today in China. To understand it,
we have to understand the profound challenges facing this
enormously complex country.
today is certainly not an open society, but it is more open
than it was two decades ago. 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. In ways
that are incomplete, but nonetheless
millions of ordinary Chinese citizens, the changes within
China have given its people greater scope to live their lives.
economy still is not creating jobs fast enough to meet the
needs of its people. Only a third of the economy is private
enterprise. Today, $300 billion worth of products -- an amount
equal to one-third of China's gross domestic product -- sits
in Chinese warehouses because they are so poorly made. Meanwhile,
at least 100 million people are looking for work. And every
year, 12 million more jobs must be created for people entering
reform-minded figures in the Chinese leadership who negotiated
China's entry into the WTO are not blind to these realities.
They realize that if they open China's antiquated market to
global competition, they risk unleashing forces beyond their
control -- more unemployment in the short term, perhaps even
social unrest and greater demands for freedom. But they have
decided that without competition from the outside, without
opening their markets, without building their future in cooperation
with others, China will not be able to build a modern, successful
economy. By agreeing with us to join the WTO, they have made
a choice with profound and potentially very positive consequences.
of all, that choice can change the way China relates to the
entry into the WTO -- into the global economy -- will enmesh
China into an international system that will hold it to rules
and laws universally applied. In fact, for the first time,
some of China's most important decisions will be subject to
the review of an international body, with binding settlement
procedures to resolve disputes. Opponents say that none of
this matters because China will break its promises. The fact
is, for the most part, when China has entered into a global
treaty regime, its record of compliance is quite good. This
is true for the Biological Weapons Convention, the Chemical
Weapons Convention, the Nuclear Non-Proliferation Treaty,
and the Comprehensive Test Ban Treaty. China has strengthened
its export controls over
materials as a result of these treaties. We still have serious
problems with some of China's sales, particularly of missile
technology, where China is not bound by any international
obligations. But overall, China has shown that it is far more
likely to abide by international norms when it is operating
within an international system that it has embraced. And if
China does not comply with all of its WTO obligations, its
actions will be subject to rules accepted and judgments enforced
by 135 nations. So it is profoundly in our interest to embrace
China's entry into the WTO by passing PNTR.
with us on the terms of their entry into the WTO, China also
has chosen the path of more constructive relations with the
United States. A stable, cooperative, clear-eyed relationship
with China increases the likelihood that we can cooperate
-- bilaterally, in the UN
Council and elsewhere -- on such crucial issues as nonproliferation,
regional security, peacekeeping, human rights and arms control.
We should have no illusions: problems with China will not
disappear, but stabilizing U.S.-China relations contributes
to the conditions necessary to deal directly with issues of
deep concern to us. We will help do that if we now approve
especially important for our ability to play a constructive
role on the issue of Taiwan, particularly at this critical
time. Since 1979, we have tried to maintain stability across
the Taiwan Strait, by recognizing one China, encouraging a
peaceful resolution of differences,
dialogue. China, Taiwan -- and our relationship with both
-- have benefited.
the newly-elected President of Taiwan, recognizes this reality.
He knows that good U.S.-China relations are vital for Taiwan's
own security because each benefit from a stable environment.
PNTR also is very important for Taiwan economically. Taiwan
from China and benefit from a strong Chinese economy. When
China joins the WTO, so will Taiwan. With both in the WTO,
economic ties will grow, and so will the costs of confrontation.
It is important to understand that Taiwan supports China's
membership in the WTO, and is urging us to grant PNTR.
of all, China's choice to join the WTO will help change China
internally -- hardly overnight, but over the longer-term.
To join the WTO, China has agreed to stop protecting its state-owned
industries from competition. Why is that important? In the
past, virtually every
citizen woke up in an apartment or house owned by the government,
went to work in a factory or farm run by the government and
read newspapers published by the government. State-run workplaces
operated the schools where they sent their children, the clinics
health care and the stores where they bought food. That system
has been an important source of the Communist Party's power.
Now, it is shrinking. And when China joins the WTO, the state
sector will shrink faster as the private sector grows stronger.
This will speed the removal of government from vast areas
of people's lives. In important ways, it will take the command
and control out of communism.
many of China's best and brightest are starting companies,
or seeking jobs with foreign-owned companies, where they generally
get higher pay, more respect, and a better working environment.
That causes Chinese companies to improve the benefits they
offer their workers to stay competitive. This process will
accelerate as China opens its markets. That is the surest
way to improve labor standards in China.
same time, these changes have increased labor and political
activism, and demands for greater representation and accountability.
Last year alone, there were more than 120,000 labor disputes
across China. In some places, the government has responded
by cracking down. But in others, it has responded by giving
people a greater say. Local elections are now held in most
of China's 900,000 villages, and have been introduced in some
cities as well. In many places, workers are taking grievances
to court - and winning. This is the start of a process of
economic and social change that we should welcome and encourage
by embracing China's entry into the WTO.
the WTO, China's reform-minded leaders have also chosen to
accelerate the information revolution within China. In the
past year, the number of Internet addresses in China has more
than quadrupled from two million to nine million. This year,
that number is expected to grow
20 million. When China joins the WTO, it will eliminate tariffs
on information technology products, making the tools of communication
even cheaper, better and more widely available. The four major
Internet providers in China just announced that this year,
they will pour more than $1 billion into improving Internet
just the Internet. Today only one in eight Chinese have a
telephone. But just last week, as these changes gain momentum,
authorities gave approval for China's mobile phone providers
to offer access to more than 40 million new subscribers --
which is expected to grow to 100 million by year's end. When
the Chinese people can easily communicate with each other
and with people around the world, they will have gained an
essential ingredient for freedom. And cutting-edge American
information technology companies will have a chance to contribute
to that process only if we pass PNTR.
are no guarantees about the future that will come with China's
entry into the WTO with U.S. participation. It depends on
decisions that its leaders and people are yet to make. There
is no assurance that they will choose political reform. But
by accelerating the process of economic change, China will
be forced to confront that choice sooner, and the imperative
for the right choice will be stronger.
people agree we should let China into the WTO, but believe
we should wait until China changes before we approve PNTR.
But if I am right that joining the WTO and opening its economy
will promote change in China, then the United States should
be an instrument of that change, not a bystander.
argue that we need an annual vote in the Congress to keep
the pressure on China to improve human rights or religious
freedom. But for 20 years in a row, this vote simply has affirmed
our trading relationship with China. It has become a contentious
ritual, not an instrument for change. But that does not mean
that trade should be a sufficient human rights policy or that
we should let up the pressure on China to improve human rights.
That's why we sanctioned China under the International Religious
Freedom Act last year. That's why the State
issued another tough report on China's human rights record
this year. That's why two weeks ago, we sponsored a resolution
in the UN Human Rights Commission condemning China's record,
even when many of our friends were unwilling to do so. Reform
in China will come only through a combination of internal
change and external validation. We must contribute to both.
today that China's membership in the WTO and a vote in favor
of PNTR will encourage the right kind of change both within
China and in how China interacts with the world. At the same
time, I am deeply concerned that rejection of PNTR will have
serious and substantial consequences for our national security.
PNTR is a risky proposition. Rejection will set off a downward
spiral that could disrupt stability in Asia, diminish the
chance of dialogue across the Taiwan Strait, and deflate hopes
for a more constructive relationship between the U.S. and
China. Rejecting PNTR would be the worst possible blow to
the best possible hope we have had in more than 30 years to
encourage positive change in China.
it will hurt the forces within China that are trying to open
that country to change, and help those determined to oppose
change at any cost. The very same interests in China most
threatened by the decision of its leaders to accept the WTO
reforms and open their economy
the hard-liners on China's course in the world. These are
the ones who've argued that cooperating with the US is a mistake;
who are ready to settle differences with Taiwan by force;
who have the most at stake in selling dangerous technologies
around the world. In their view, China should respond to the
pressures of globalization by hunkering down instead of opening
the WTO agreement we negotiated is so manifestly in our economic
interest, the Chinese government and people simply will not
believe we rejected it for economic reasons. They will suspect
that rejection of PNTR is a strategic decision -- whether
it is or not -- to pursue a course of confrontation, contention,
and containment. And if we treat China as an adversary, we
are more likely to make it so, and we will find ourselves
confronting each other across Asia and the world.
would we be more secure five or ten years down the road taking
that path? What message would we be sending China about the
benefits of making concessions to the United States? What
kind of progress do you think we would make in China on labor
or the environment? What kind of cooperation do you think
we would get on critical issues such as proliferation, arms
control, and peacekeeping? That too is what is at stake in
consequence of rejecting PNTR is that it could weaken China
in ways that would harm our interests. If reformers in China
are dealt a blow and China turns inward, economic and environmental
degradation would deepen. The hard-line leadership would likely
stoke anti-Western nationalism to cope with the resulting
social and political strains. In the face of internal decline,
uncertain Chinese authorities are more likely to clamp down
and lash out. If we've learned anything from Japan's long
recession and Russia's economic troubles, it is that the
of great nations can pose as big a challenge to America as
consequence of rejecting PNTR would be to increase tensions
and instability between China and Taiwan at a critical time.
China's suspicions about our motives would increase and our
ability to play a positive, stabilizing role would decrease.
That is not in Taiwan's interest. That is not in China's interest.
And that most certainly is not in our interest.
rejection of PNTR would weaken the United States throughout
Asia. Every country in the region supports our taking this
action. All our friends and allies in Asia regard U.S.-China
relations as critical to the future stability, prosperity,
and peace of the region. All look to us to strike the right
balance -- to avoid the twin threats of Chinese weakness and
leaders could well regard American rejection of PNTR as a
sign that America no longer recognizes the basic requirements
of our role as a leader in. Because many countries would see
these developments, at least in part, as a result of American
short-sightedness, we could end
reluctant and uncertain friends. Japan and the Republic of
Korea would be particularly apprehensive under these conditions.
and more broadly, I believe rejection of PNTR would send a
jarring signal to friends and allies in the world that America
is turning inward; that ironically, at the moment of our greatest
strength and prosperity, we chose to retreat instead of lead.
If America is seen as an increasingly unreliable, increasingly
unilateral nation, our capacity to lead on a broad range of
issues -- from arms control to global poverty to peacemaking
-- would be compromised. That would be a deep self-inflicted
before us could not be more clear, or consequential.
China's membership in the WTO and approving PNTR; by strengthening
the reformers instead of the hard-liners in China; we have
a chance to encourage the best possible outcome: a China with
a leadership that finds strength in partnership with its people
and the world. Rejecting PNTR, on the other hand, wouldn't
free a single prisoner in China, or create a single job in
America, or reassure a single American ally in Asia. It simply
would empower the most rigid, nationalistic elements in China.
And our friends and allies would wonder why, after 30 years
of pushing China in the right direction, we turned our backs
when it finally appeared to be willing to undergo many of
the reforms we have been urging.
that the path China takes to the future is a choice only China
can make. We cannot control that choice, we can only seek
to influence it. Granting China PNTR won't create a perfect
China and it certainly won't put an end to all of our concerns.
But it will increase the
of a future of greater openness and freedom for China. It
will contribute to a more peaceful and secure Asia. And it
will help create a future of greater peace and prosperity
for the world our children will inherit.
an historic opportunity. It's the right thing to do. I hope
our Congress will agree.