Seize the Moment

by Richard Nixon

  In order to influence China’s evolution toward political and economic progress, the United States should work along four fronts:

  Increase U.S. economic engagement in China. We should not stand idly by as the future of China’s dual economy hangs in the balance. Examples of state-imposed economic irrationality still abound in China. Today, state-owned or state-regulated enterprises produce more than two thousand brands of cigarettes, while private firms are permitted only thirteen. Battles between the center and provinces and localities over fiscal policy result in arbitrary taxation. Local governments strike deals with the provinces about how much they will hand over, and in turn the provinces make deals with the center, which results in wildly inconsistent payments, particularly between centrally planned and more market-oriented regions. In an isolated China, stop-and-go cycles of reform and retrenchment will enable the state sector to consolidate its position. If we remain engaged in China, we can play a critical role in helping the private economy gradually eclipse the state sector.

  In this respect, the most counterproductive thing we could do would be to revoke China’s most-favored-nation trade status. Despite its elitist tone, MFN status is a routine international allowance conferred by the United States on all but a few hostile international outlaws such as North Korea, Vietnam, and Libya. Since the 1980 ratification of the Sino-American trade agreement, the President must certify annually that China—as a nonmarket economy—fulfills legal requirements on immigration practices and human rights. Under MFN status, Chinese goods can compete in the U.S. market under the same terms as those of any other country. Without it, China would face punitive tariffs that would undercut its exports and halt some altogether.

  Many human rights advocates argue that this should be the price we exact for Tiananmen Square. But the United States cannot effect positive change by ruining China’s economy. The withdrawal of MFN status would most hurt not those in power but rather those who depend on the freemarket sector. China’s transition toward a market economy has made steady progress, though with some digressions. Foreign trade and investment have been the driving forces behind the growth of the private sector. If the United States revoked MFN status, tariffs would skyrocket on the goods such as textiles, shoes, and toys that are primarily produced by private enterprises. Coastal provinces, such as Guangdong near Hong Kong and Fukien near Taiwan, that have served as the beachhead for free-market economics would suffer the worst blow. Higher tariffs would send Guangdong’s 65 million people—who represent only 6 percent of China’s population but who produce one-third of the country’s exports—into an economic nosedive.

  A revocation of MFN status would devastate Hong Kong, a conduit for over 70 percent of China’s exports. Skyrocketing tariff rates would cause up to a 50 percent drop in these exports, costing Hong Kong thousands of jobs and 2.5 percent of its GNP. To accelerate China’s evolution toward a market economy, we must do nothing that would jeopardize Hong Kong’s role as a model for the mainland, particularly in light of the scheduled termination of British control in 1997. Once withdrawn, MFN status cannot easily be reissued. Since political pressures would mount to keep the sanctions in place until all human rights issues were resolved, they would become an open-ended policy. In the meantime, the sanctions would inflict irreparable damage to the economy of Hong Kong.

  Repeal of MFN status for China would actually help the Chinese hard-liners turn the clock back on the economic revolution started by Deng. Many whose power depends on the state sector would like to see the free-market experiment collapse, particularly if the West unwittingly conspired in destroying private and semiprivate firms. In addition to hurting American investors and trade companies, denying MFN status would undercut the political positions of the pro-reform elements in the Chinese government and the Communist party, whose rise to power represents the sine qua non of political reform. In trying to punish China’s hard-line leaders, we would punish the Chinese people more. Instead of helping the cause of human rights, we would hurt it. We must face up to the fact that there would have been no demonstrations in Tiananmen Square in 1989 had we not opened the door to China in 1972. It would be a tragic mistake to close that door now.

  This does not mean that we should ignore unfair Chinese trade practices or reject any use of our economic power in our relationship with China. Beijing’s estimated $15 billion trade surplus with the United States in 1991—which was second in the world only to Japan’s—stemmed in large part from prohibitive trade barriers. Eighty consumer products cannot be imported at all. Others, such as automobiles, motorcycles, and appliances, face astronomical tariffs and bureaucratic red tape. Auto importers, for example, must provide two free samples, pay about $40,000 for “testing,” and subsidize a trip by Chinese officials to inspect the factories where the cars are built. In addition, U.S. companies lose about $400 million each year in copyright and patent royalties for such products as software because China fails to protect intellectual property rights.

  Our response, however, should not be across-the-board tariff increases but rather more discriminating tactics such as blocking China’s entry into GATT or cutting back China’s export quota under the International Multifibre Agreement of 1974, which regulates all textile imports into the United States. If we want to have an impact on the changes occurring in China, we should not pull the plug on trade. Increasing economic progress will bring progress on human rights and civil liberties.

  Foster peaceful political change. Some human rights advocates argue that the United States should adopt a tougher policy toward China to punish its leaders for the massacre in Tiananmen Square. While we should strongly condemn China’s human rights abuses in all appropriate forums, we must recognize that our only viable strategy to promote political reform—continued economic and political contact—will work only in the longer term. If we adopt either policy extreme—handling Chinese leaders with kid gloves or striking them with an iron fist—we will fail. Though we might be frustrated with the slow pace of change, economic reform without political reform is ultimately unsustainable, as the cases of South Korea and Taiwan demonstrated.

  Our moral outrage over Tiananmen Square is not a policy. The question we face is whether any of our interests—not only national security but also human rights—would be advanced by isolating China and backing its leaders into a xenophobic corner. They would not. A quarantined China may make us feel better temporarily, but it would do nothing for the people suffering in China, whom we are ostensibly trying to help. If we isolate China, the psychological damage to those pushing for greater reform within China would be irreparable.

  Moreover, sustained pressure works. Progress will not come instantly or easily. But China has already taken several significant though inadequate steps. Some political dissidents, including Fang Lizhi, have been released, and many have received far lighter sentences than they would have without American leaders lodging public and private complaints and private human rights organizations watching over China’s track record. While we lack the power to make Beijing capitulate on every case, we have the leverage to extract incremental concessions. If we use our ultimate weapon—total economic sanctions—we will squander our greatest asset for only marginal returns. Sanctions held in reserve are more powerful than sanctions put in place.

  Chinese hard-liners have accused the United States of conspiring to subvert their rule and promote democracy through “peaceful evolution.” In response, they seek to close the door to the outside world. They might even welcome political, if not economic, isolation. They thrive on isolation because it means guaranteed and unquestioned power for them. They know that before our opening in 1972, there was no reform whatsoever, economic or political. They recognize that contact with the West stimulates pressures for political reforms that threaten their power. Rather than playing into their hands, we should promote peaceful change, just as we do in other countries around the world.

  First, we should resume the high-level dialogue between China
and the United States. The fact that we are meeting is not as important as what we say during the sessions. Legislative-branch leaders and executive-branch officials should go to China. Tough language on human rights and political reform should always be included in their talking points. In particular, we must strongly condemn the abuse of political prisoners in forced labor programs. The Chinese will not welcome their remarks, but the hard-liners must understand that the way they treat their own people is a legitimate international concern. We should not facilely judge China by the American standard of democracy, but its current human rights violations are beyond the pale. At the same time, we should not suspend our relationship because of the human rights issue. If we had always refused to deal with leaders who violated human rights, there would have been no opening to China in 1972.

  Second, we should increase, not decrease, cultural and educational exchange programs with China. Contact with the West has been a major impetus for peaceful change. Without these programs, the ideas of inalienable rights and popular self-government that fueled the democracy movement would have remained largely unknown in China. Although the Tiananmen Square demonstrations overlapped with Gorbachev’s visit to Beijing, his reforms were not their inspiration. It was not accidental that the symbol the Chinese students and workers chose for their cause strikingly resembled our Statue of Liberty.

  Third, we should open up two new international broadcasting stations—Radio Free China and Radio Free Tibet—to provide these nations with independent information and commentary. The repression at Tiananmen Square dealt a serious but not fatal blow to the pro-democracy movement. It has been forced to lie dormant until a future moment of opportunity. As the revolutions in Eastern Europe proved, however, that moment will eventually come. In the meantime, we can assist the forces of freedom best through broadcasts of news and information, not just about the world at large, but particularly about the internal situation in China. It is significant, incidentally, that during the coup attempt in the Soviet Union broadcasts by Radio Liberty provided important information about developments to the people who played a role in mobilizing resistance to it. Because the Voice of America is part of the U.S. government and because its charter limits its programs to warmed-over international news and trivial rock-and-roll shows, the new station for China must be an independent organization patterned on Radio Free Europe and Radio Liberty.

  The people of Tibet represent a separate case. Conquered by the Chinese in 1950, occupied brutally by troops who killed thousands, desecrated local cultural and religious sites, and denied reasonable demands for autonomy, Tibetans have elicited much sympathy but little support from the outside world. The outrage over the brutal killings of peaceful demonstrators in Lhasa in March 1989 quickly faded after the massacres in Beijing in June. While there is a limit to what we can do, we should do more than we have done. In addition to raising the issue of Tibet in bilateral talks, we should establish Radio Free Tibet so that its people, though isolated, will no longer feel abandoned.

  Make China pay a price for geopolitical irresponsibility. The United States must apply discriminating pressure on China to alter those foreign policies that threaten our interests. Until its recent decision to sign the Nuclear Nonproliferation Treaty, China acted as the developing world’s nuclear door-to-door salesman. China’s announcement is an encouraging first step, but we must watch its actions as well as its words. If Beijing fails to curtail its sales of not only nuclear technologies but also ballistic missiles, we should take actions against them through multilateral organizations and inflict costs for such irresponsibility by placing embargoes on the high-tech items China wants to import.

  At the same time, we should not overreact and should provide rewards for changes in Chinese policy. If we isolate China economically, politically, or diplomatically, Beijing will have no incentive to curtail its destabilizing foreign policies in Cambodia and elsewhere. On the contrary, that might even create greater incentives for China to seek export earnings through irresponsible weapons sales. If China uses its leverage to rein in North Korea’s nuclear aspirations—which represent a menace in East Asia comparable to those of Saddam Hussein in the Middle East—we should reward Beijing by loosening access to the high-tech exports China needs.

  Enhance Taiwan’s international political standing. Since 1979, the United States has maintained only informal relations with the government in Taipei through the U.S. Institute in Taiwan, an organization officially separate from but fully funded and staffed by the State Department. In the Shanghai Communiqué of 1972, we recognized the fact that both Beijing and Taipei viewed Taiwan as part of China but unequivocally expressed our support for a peaceful settlement of the unification issue. While we should not alter the fundamental pillars of our policy, we should consider certain steps that will raise Taiwan’s international standing. For example, Taiwan’s application for membership in GATT should be approved based on its formidable economic achievements, not on the status of Beijing’s application. Since Hong Kong already belongs to GATT, the free-market and democratizing Chinese regime on Taiwan should no longer be denied membership.

  To assume its rightful place in the world, China must modernize. It cannot succeed without contact with the countries of the West, but its success depends ultimately on the Chinese people themselves. We should provide moral and material support to those who favor economic and political reform, but we must not try to force through changes before China itself is ready to make them work. Our two countries have very different political systems, economies, cultures, and even national interests. China will reform, but change must come from the Chinese, in their own way, according to their own traditions, and at their own pace. This change will be brought about by the two-thirds of China’s population who were born after the 1949 revolution. They have no memories of warlords, foreign exploitation, wartime occupation, or civil war. Instead, they will be influenced by the success not only of the West but also of their neighbors in Taiwan and Hong Kong. At this defining moment, America should not walk away.

  After forty years of competing for top billing among the major powers in the world Communist movement, China finds itself starring in a one-man show. The fall of Communist systems around the world has raised the hopes of the Chinese people and the fears of the Chinese leadership. In the August 1991 revolution, the Chinese people witnessed the overthrow of the world’s first Communist government. The Chinese leaders interpreted the same event as the consequence of Moscow’s fatally flawed policy. Gorbachev allowed political liberalization but stumbled in economic reform. Deng promoted economic reform but stifled political change. With the demise of Soviet communism, the Chinese hard-liners may escalate their repression and retreat further into isolation. It therefore becomes doubly important that the United States and the West maintain economic contacts with Chinese society in order to nurture the growth of peaceful change.

  It is imperative that we work with China as an equal partner rather than work against China as a bitter enemy. To restore the momentum to our crucial bilateral relationship requires skillful statesmanship by leaders on both sides. Despite Tiananmen Square, the United States should reestablish a working relationship in order to move forward in all areas of common interest. Until China redresses the worst of its human rights violations, however, our two governments can be partners but they cannot be friends. While we cannot yet be friends, we cannot afford to be enemies. We must avoid the animosity and isolation of the first twenty years of our relationship, which produced two Asian wars that cost both our nations dearly. But the burden for resurrecting the close cooperation we had before June 1989 lies in Beijing, not Washington.

  The Great Wall of China is one of the Seven Wonders of the World. While it is difficult enough to be heard when you are inside the wall, it is impossible to be heard when you are on the outside. Cooperation might work only slowly in bringing about change, but isolation would not work at all. In the long run, China will become part of the great changes that have
swept Communist regimes from power in Eastern Europe, the Soviet Union, and the underdeveloped world. It will not be able to cling to the failed revolution of communism if it continues to have contacts with the new revolution of freedom. Because of the communications revolution, instead of going through or burrowing under the Great Wall, ideas will travel into China over the Great Wall—and no ideological SDI exists to shoot them down.

  The Chinese are a great people with an incredibly rich cultural heritage. When Europe was mired in the Dark Ages, China was the most advanced nation in the world. In the eighteenth century, Voltaire called it “the finest, the most ancient, the most extensive, the most populous and well-regulated kingdom on earth.” We need only see the economic miracles that Chinese people have achieved in Hong Kong, Taiwan, Singapore, and in their overseas communities all over the world to appreciate the enormous potential of the over 1 billion people in China itself once their energies are unleashed from the dead hand of Communist economic and political repression.

  Almost two centuries ago, Napoleon observed, “China? There lies a sleeping giant. Let him sleep! For when he wakes, he will move the world.” The giant is awake. Which way he moves the world will primarily depend on the Chinese people but will also depend on us. To isolate China now would be a historical tragedy of inestimable magnitude.

  • • •

  With the world’s attention riveted on Soviet actions in Europe, Moscow’s policies along the Pacific rim have traditionally been overlooked. A longtime expansionist power in the region—the Russian flag flew over settlements in Alaska in 1784 and California in 1811—the Kremlin never slackened its eastern push into the Pacific. As a Eurasian power, it has treated Europe as its most visible front, but Asia has always been an equally vital one.