Statement by Press Secretary Fitzwater on the Renewal of Most-Favored-Nation Trade Status for China

The President informed the Congress today that he will extend China's most-favored-nation (MFN) status for another year. In notifying Congress of his decision, the President emphasized that he remains deeply concerned about human rights violations in China.

The President found the MFN decision to be an extremely difficult one. He is personally disappointed that the Chinese Government has not taken more decisive steps to demonstrate a commitment to internationally accepted human rights. While there have been modest gestures, such as lifting of martial law and renewing our consular access in Tibet and the release of 211 more detainees, these are clearly inadequate. The United States and many other Western countries and the President himself have repeatedly called upon China to initiate a process leading to real improvements in human rights. The President nonetheless concluded that not to renew MFN would harm rather than help U.S. interests and concerns. He also is determined to help and not harm the people of China, who aspire for a better and more open life.

Extending MFN will substantially promote freedom of emigration, the objective of section 402 of the 1974 Trade Act and an explicit requirement for China's continuing eligibility for most-favored-nation status. China has continued to permit emigration to the United States without interruption over the past 12 months. Approximately 17,000 Chinese nationals received U.S. visas to emigrate from the mainland in 1989, most for the purpose of family reunification.

The commercial opportunities created by MFN trade status give millions of Chinese workers and thousands of enterprises a stake in China's market-oriented reforms and opening to the West. They also make possible a wide range of contacts with Americans and American institutions that expose Chinese students, workers, teachers, and officials to our free enterprise system and political values. MFN status is essential for maintaining our commercial relationship with China and to avoid a costly trade war that will hurt business interests and consumers in both countries. In 1989 U.S.-China trade amounted to $18 billion, and China was our 10th largest trading partner worldwide.

MFN also bolsters confidence in Hong Kong's free enterprise economy, which is heavily dependent on U.S.-China trade and the health of industries in southern China. Not to continue MFN for China would deliver a terrible blow to Hong Kong, costing as many as 20,000 jobs and reducing the colony's GNP by as much as 2.5 percent. Hong Kong should not be the innocent victim of our disappointment with the Chinese administration.

We have also heard support expressed for continuation of China's MFN status from Taiwan, the United Kingdom, the Republic of Korea, Japan, and others in the Asian-Pacific region.

As we approach the anniversary of the tragedy in Beijing, we pay tribute to its victims by continuing to sustain as high a level of people-to-people contact and commerce as we can. The U.S. Government intends to press vigorously during the coming year for significant improvement in China's human rights practices. We want to see China's people enjoy the full scope of human rights to which people all over the world are entitled.

In the notification to Congress, the President reaffirmed that the sanctions against China he authorized in June 1989 remain in force. They include suspension of arms exports, the suspension of high-level government exchanges, and opposition to all multilateral development bank loans to China except those aimed at addressing basic human needs. U.S. policy remains that normal relations with China are not possible until China takes further major steps to respect human rights and returns to the path of reform.