April 7, 2000

MEMORANDUM TO: OPINION LEADERS

FROM: GARY SCHMITT

SUBJECT: China and WTO

The Clinton Administration and the Wall Street Journal, leading advocates of China’s entry into the World Trade Organization, have both admitted uncertainty about China’s commitment to economic reform.

In editorials and news articles published today, the Wall Street Journal reported that the Chinese government has criticized or fired four prominent Chinese academics noted for their support of privatization and political reforms. According to the Journal, an official party newspaper this week attacked the four for promoting western ideas and reiterated support for Marxism as China’s leading ideology. Similarly, President Jiang Zemin last weekend delivered a speech to party cadres warning against the “strategic plot” to “Westernize and divide our nation.”

The Wall Street Journal also reported remarks of Commerce Secretary William Daley in Beijing to prepare for an upcoming visit by a U.S. congressional delegation. On the question of whether China would live up to its promises to undertake the legal and economic reforms necessary to open up its markets, Secretary Daley admitted that he was not sure: “That’s the $64 billion question, or $69 billion, or whatever our trade deficit with China is.”

President Clinton has made bold claims that China’s accession to the WTO will bring about significant economic and political change. With its agreement on WTO, the President says, “China has chosen reform, despite the risks.” According to his own Commerce Secretary and the Wall Street Journal, that’s not exactly true.

As the Journal itself pointed out in a previous editorial (“Trading Places,” January 31, 2000), the trade generated by China’s entry into the WTO “serves America’s foreign policy goals” only if it forces Beijing “to cede more and more control over Chinese lives back to the Chinese themselves.” But, as China’s current behavior and past practices suggest, this is more a hope than a fact. Shouldn’t the decision by the United States to give China permanent low-tariff access to our markets be based on something more concrete than that?