United States Trade China

A Barbie doll is for sale at the Anaheim Toys "R" Us store in a bright cardboard-and-cellophane box labeled "Made in China." The price is $9.99. But how much will China make from the sale of the pert fashion doll marketed around the world by Mattel Inc. of El Segundo? About 35 cents, according to executives in the Asian and American toy industry--mostly in wages paid to 11,000 young peasant women working in two factories across the border from Hong Kong in China's Guangdong province.

Zhang Jiazhen, director of Shanghai People's Printing Factory No. 8, already had laid off 400 people, one-third of his payroll, and spent $20 million upgrading his 68-year-old factory, the city's third-largest. Despite the actions, unusual in China, Zhang found himself facing a manager's dilemma of too little cash and expertise to prepare for China's entry into the World Trade Organization. So he turned to a Western company, Avery Dennison Corp.

The News: President Bush has recommended extension of China's most-favored-nation (MFN) low-tariff trade status with the United States. But Congress could impose a cutoff or insist on conditional renewal. Bush's announcement last week came just days before today's second anniversary of the Chinese government's violent crackdown on pro-democracy demonstrators in Beijing, and it is certain to face opposition.

James Lee strolled the aisles of the Wal-Mart Supercenter, passing Korean televisions, Chinese packaged noodles and a glistening seafood display overflowing with such fresh fish as two whole sharks. He was on a quest for "Made in the USA" labels. Lee stopped for a moment, then brightened. "Sunkist oranges," he said triumphantly. And there was more: "Act II popcorn. I'm helping develop a market for that in China. I think it could be very popular."

President Clinton, abandoning a central foreign policy principle of his Administration, announced Thursday that he has decided to "de-link" China's privileged trading status from its human rights record. While acknowledging that China "continues to commit very serious human rights abuses," Clinton said that he has come to believe that broader American strategic interests justify the policy reversal.

Contrary to the upbeat White House commentary, the failure of U.S. and Chinese negotiators to bring China into the global trading system this week threatens to doom China's prospects for entering the World Trade Organization this year. Chinese negotiators don't want to jeopardize their fragile financial system or the economic health of such key sectors as textiles. Their U.S. counterparts are mindful that a deal could face an array of political opponents.

"It is like sending an icon to be mass produced," says Virginia Gunn, a quilt historian. "The Smithsonian should be above those things." "This was a one-of-a-kind piece," says Hazel Carter, a quilting expert. "If it weren't the Smithsonian, we wouldn't be so upset. They are supposed to be guarding our American treasures." The Great Quilt Debate is on.

In its current, determined effort to persuade Congress to extend U.S. trade benefits for China, the Bush Administration has argued repeatedly that the United States maintains most of the sanctions that it imposed upon the Chinese regime two years ago. "We continue today to impose most of the sanctions we began in the wake of the Tian An Men massacre," Deputy Secretary of State Lawrence S. Eagleburger recently told Congress.

Snowballing anti-China sentiment on Capitol Hill could deal a death blow to an industrial development project that supporters say would create hundreds of jobs for U.S. workers at the Port of Long Beach. In coming days, the Senate will debate a legislative proposal that would bar Cosco, a shipping company owned by the Chinese government, from leasing a significant portion of what was once the Long Beach Naval Station. The prohibition already has been adopted by the House.

President Clinton's top trade negotiator said Sunday that a newly signed textile pact with China laid the basis for expanded bilateral textile trade. "This is a solid agreement that meets our critical objectives," U.S. Trade Representative-designate Charlene Barshefsky said in a statement. China and the U.S. signed the agreement in Beijing earlier in the day in an eleventh-hour deal that ended the threat of a transpacific trade war and was hailed by both sides as a breakthrough.

With a government undercover agent playing the role of a nervous arms dealer, the Customs Service arrested two U.S.-based businessmen--including the owner of a Compton freight company--on suspicion of conspiring to smuggle high-tech military code devices to China, the agency said Wednesday.

The Chinese government sent a team to the U.S. to buy Boeing Co. aircraft, one week after officials said the country would accelerate plans to purchase planes. The officials plan to buy about $2 billion worth of Boeing planes on their trip, said Wang Zhezhao, a spokesman for Shandong Airlines Co. Shandong Air has plans to buy two Boeing 737s of its own through a share sale in China.

It should have been Qualcomm Inc.'s time for celebration. One of China's leading telecom firms recently signed $1.5 billion in contracts for equipment using the San Diego firm's wireless standard. That move by China Unicom is the most positive sign yet that Qualcomm's code division multiple access technology--known as CDMA--has a profitable future in China, which has an exploding mobile phone market now dominated by Europe's competing GSM system. The current success has been a long time coming.

Marjorie Yang is ready for Asia's future. As head of a high-end textiles business strung across China and four other countries, she will save time and money once Beijing loosens its grip and allows entrepreneurs like her to freely move goods around the country. "It's going to benefit everyone doing business in China," she said.

The new U.S. trade representative met here Tuesday with his Chinese counterpart for the first time, raising hopes that both sides were ready to accelerate China's entry into the World Trade Organization. But no breakthrough came after initial talks between Robert B. Zoellick, the highest-ranking Bush administration official to visit China, and Foreign Trade Minister Shi Guangsheng.

Three years ago, Republicans in Congress launched a ferocious attack on President Clinton for approving the export of satellites to China in a way they said harmed America's security. Now, with a Republican in the White House and a satellite industry complaining of lost business, Washington is singing a different tune. Amid the furor of the late 1990s, the Republican Congress enacted legislation making it harder for companies to win government approval of satellite exports.

The Chinese have landed here to a warm welcome. But just to be on the safe side, Dave McMahen decided not to fly the Chinese flag outside the motor scooter factory. After surviving for decades on the fortunes of poultry, Russellville, population 21,000, is now the unlikely home of what appears to be mainland China's first U.S. factory built from the ground up.

It was one of the regular staples of President Clinton's campaign for the White House: attacking the Bush Administration for "coddling the dictators of Beijing." Along with that denunciation came Clinton's oft-proclaimed endorsement of congressional efforts to make the annual extensions of China's trade benefits in this country conditional on improvements in Beijing's human rights, trade and arms-export policies.

President Bush on Friday said that extending normal trade relations with China for another year would signal U.S. desire to help the Chinese join the international trading system, boost economic development and gain greater freedom. The president sent the China trade measure to Congress on Friday, moving to keep relations with Beijing on an even keel. He had announced his decision to extend the trade provision in a speech Tuesday in Los Angeles. Rep.

President Bush said Tuesday that he will renew for another year the provisions that give China the same trade advantages that the United States gives most other nations. In a speech on trade and energy to the Los Angeles World Affairs Council, Bush presented the decision as one that will help bring democracy to China. "Open trade is a force for freedom in China, a force for stability in Asia and a force for prosperity in the United States," he said.