The Bush Administration’s Shrinking Chinese Sanctions Policy

(Washington, D.C.): According to an unclassified U.S. government cable (attached) obtained by the Center for Security Policy, the Bush Administration has surprised the Peoples’ Republic of China by agreeing to initiate new discussions of China’s "accession" to the General Agreement on Tariffs and Trade (GATT). According to this astonishing cable, the U.S. government wants these discussions to begin almost at once, namely on September 11th or 12th in Washington. The PRC currently enjoys "observer" status in the GATT (General Agreement on Tariffs and Trade) and is seeking full membership.

"It is simply unconscionable that the United States would be prepared to reward the Chinese government for its continuing, brutal repression by initiating discussions of the PRC’s membership in the GATT," said Frank J. Gaffney, Jr., director of the Center. "This action is morally repugnant to all Americans who were outraged at the bloody suppresion of the democratic movement in China — sentiments vividly expressed in the tough sanctions legislation adopted by the House of Representatives and the Senate."

"Under any circumstances it would be bad policy to allow a communist government with a centrally controlled economy to join an international organization based on free market and free trade principles," Gaffney said. "Under present circumstances, however, it is an absolute travesty. On the one hand, it serves to prop up the reprehensible Li Peng regime, undercutting those seeking reform in China. On the other hand, it signals to the Soviets, the Cubans, the East Germans and other totalitarians facing similar domestic pressures that there are no serious — or lasting economic — costs for responding with force."

Unfortunately, the Administration’s GATT initiative comes hard on the heels of several other misguided Western decisions, including:

• The July decision to exempt from the military sanctions imposed on China the delivery of four new 757-200 jets whose navigations systems are controlled items. Similar civilian jetliners were reportedly used by the Chinese government to ferry troops into Beijing prior to the Tiananmen Massacre.

• Secretary of State James Baker’s decision to abrogate the president’s policy suspending high-level talks between U.S. and PRC officials. This modest U.S. sanction was jettisoned on 31 July when he met with China’s Foreign Minister Qian Qichen at the opening of the Cambodia Peace Talks in Paris.

• U.S. Ambassador James Lilley’s highly-visible participation in ribbon-cutting ceremonies in early August at the opening of the Tianjin industrial development zone project. Lilley has since participated in numerous other trade-related ceremonies.

• The Bush Administration’s failure to condemn Japan’s precipitous decision to resume in mid-August a multi-billion dollar foreign aid package to the PRC.

• A syndicated loan of $200 million raised in Europe and Japan and announced today to finance the purchase of a Boeing 747-400 airliner. The only "penalty" involved for China in attracting the loan was an interest rate hike of 1/2 of 1 percent over the London Interbank offered rate (the cost of funds) than that enjoyed by the PRC prior to the Tiananmen Square massacre.

In July, the Center cautioned against such decisions in a paper entitled: Western Corporations’ ‘Short March’ Back to China: Bad Business, Awful Public Relations, Dangerous Policy. Copies of this analysis may be obtained by contacting the Center.