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The China Challenge

Granting permanent normal trade relations to China could be the Trojan Horse that ultimately undermines America workers' livelihoods.

May 21, 2000|Kevin Phillips | Kevin Phillips is the author of "The Politics of Rich and Poor." His most recent book is "The Cousins' Wars: Religion, Politics and the Triumph of Anglo-America."

WASHINGTON — The real issues in this week's congressional vote on U.S. trade relations with China have as much--maybe more--to do with human rights in New York, North Carolina and California as in Beijing, Tibet or Mongolia. Global wage pressures already figure in the increasing economic inequality and poverty rates in U.S. cities.

The real long-term threat to U.S. national security may well come if legislation granting permanent normal trade relations to China passes, despite the Washington bluster about the dangers if it fails. China, unlikely to seriously democratize, is emerging as the chief U.S. foreign rival of the 21st century. Beijing's plans for restoring China's greatness rest, in part, on securing U.S. technology and conducting the trade equivalent of guerrilla warfare according to the writings of Sun Tzu: war without fighting.

For all these reasons, outmaneuvering China should be a key goal in U.S. politics and foreign policy. If the Democratic White House and the GOP congressional leadership are captives of business and trade lobbies, then the independent parties should hammer the issue. The stakes are that important--and then some.

Visions of dollar signs dancing along the Great Wall explain why U.S. business is so eager for Congress to approve permanent normal trade relations with China, eliminating such inconveniences as annual reviews of China's human-rights behavior. With 1.3 billion people, China is a large market for U.S. products, even if few corporations have made much money there yet. Greed has already produced a frantic corporate courtship of China, a juggernaut of business pressure on Congress and specious arguments that trade leads to democracy and peace. Don't quibble, the lobbies argue: Just say "yes."

What proponents don't discuss is that China is the world's biggest pool of cheap labor. Worse, a large percentage of Chinese manufacturing is controlled by the army, the so-called People's Liberation Army. The army even has dozens of companies in the U.S. importing Chinese goods on a large scale to earn dollars for military weapons. Some manufacturing takes place in guarded camps. Obviously, these are not practices that could survive serious annual human-rights checkups.

But such rights never seemed to matter in China, where 3,000 years of history show no concept of individual rights or freedom of expression, though the Chinese invented paper and printing. Pro-favored-nation talk from the White House about encouraging democracy is naive. Current protesters in China, such as the Falun Gong, have little to do with Western-style democracy but rather fit in the tradition of millenarian escapism, like the Taiping revolt, suppressed in the mid-19th century. What does recur in Chinese history is ambition for preeminence, ethnocentricity and hostility toward foreigners that turns into xenophobia. If the advent of radio in the 1920s and '30s did not bring stable democracy and human rights to an embattled, suspicious Germany, it is unwise to assume great things from the Internet in China.

But even if U.S. politicians can shrug off the fate of workers and rights in China, they cannot shrug off the fate of U.S. workers. For the last quarter-century, rising trade and globalization have become principal factors in the stagnation of U.S. manufacturing wages since 1975.

China's role in this cannot be isolated, but Chinese wages are one-tenth to one-twentieth of those paid in the United States, and Chinese products are flooding U.S. markets. In 1998, the last year for which figures are available, China imported $14 billion worth of U.S. goods but sent $71 billion into our markets, the largest trade deficit the U.S. had with any nation.

These statstics hang like a guillotine over the U.S. work force. The ability of U.S. companies to dump American workers and move plants to Mexico, already a drain, is a drop in the bucket compared with the possibility of large-scale U.S. corporate outsourcing to China--and using that as a club over employees in U.S. wage negotiations.

But wait a minute, the skeptic will say, unemployment is 3.9%. We're not losing jobs, at least not yet. No, but the job profile in the U.S. is stratifying. The jobs for the top 1%, 5% or 10% are terrific, but many who used to be in the middle are in trouble now that the once-reliable jobs of steelworker, junior supervisor and secretary are being replaced by positions in food service, temp agencies, security or retail, along with the explosion of openings for gardeners, drivers and nannies.

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