U.S. panel calls for tougher China policy

0 Comments | Asian Political News, July 22, 2002

WASHINGTON, July 15 Kyodo

A bipartisan congressional group proposed Monday a set of recommendations calling for a tougher U.S. trade and security policy for China because Beijing threatens to check U.S. power in Asia.

The U.S.-China Commission said China's economic integration with its neighbors in East Asia raises the prospects of an Asian economic area dominated or significantly influenced by China.

Congress should encourage the current administration to consult other Asian countries in order to assess and make recommendations on the so-called ''hollowing out'' of neighboring economies amid growing inflows of investment into China, the commission said in its first annual report.

''We are also concerned over China's impact on other Asian economies, particularly the Japanese, but also ASEAN (Association of Southeast Asian Nations) and Taiwan, and call for fuller consultations between the U.S. and our Asian friends and allies,'' Richard D'Amato, the commission's chairman, said at a press conference.

The commission recommended creating a corporate reporting system that would gather data to allow a more comprehensive understanding of U.S. trade and investment with China. The reporting system, it said, should include reports from U.S. companies operating in China, specifically relating to information about technology transfers and investments.

The commission also expressed concern about the growing U.S. trade deficit and called for China's full compliance with its commitment to terms of its entrance into the World Trade Organization.

For example, the report said Congress should renew Super 301 trade-retaliation provision of the U.S. trade law and requested the U.S. administration to identify and report on tools that would be most effective in gaining access to Chinese markets.

U.S. policy of economic engagement with China rests on a belief that the transition to a free market economy and the development of the rule of law in China's business sector would likely lead to more political and social openness and even democracy, the report said.

But these are hypotheses, and many leading experts are convinced that certain aspects of the U.S. policy of engagement have been a mistake, it said.

On the security side, the commission said China fails to control the export of dual-use items that contribute to the proliferation of weapons of mass destruction and their delivery system.

China is exporting technology for weapons of mass destruction to terrorist-sponsoring states such at North Korea, Iran, Iraq, Libya, and Sudan, it said.

The commission recommended President George W. Bush be provided an extensive range of options to penalize foreign countries for violating commitments or agreements on proliferation involving weapons of mass destruction and technologies and delivery systems relating to them.

China's leaders, the report said, believe that the United States is a declining power with important military vulnerabilities that can be exploited.

''China aspires to be a major international power and the dominant power in Asia. To that end, China is actively pursuing a multipolar world where it could align with other rising powers such as Russia, Japan and Europe in order to check U.S. power,'' according to the report.

The commission, created in 2000 to consider U.S. economic and security policies toward China, has six Republicans and six Democrats who are appointed by Congress for their China expertise.