Salon Newsreal | Cap in hand

T A B L E+T A L K
Are unions taking over politics in America? Join the debate in the Politics area of Table Talk

D A I L Y+Q U O T E
Maureen on Monica

R E C E N T L Y
Monica vs. Maureen
By Carol Lloyd
While a New York Times columnist denounces Lewinsky's willingness to expose her lips and legs, her own newspaper takes cheaper shots at the First Intern's private parts
(06/18/98)
Gloves come off in Starr-Brill slugfest
By Jonathan Broder
The war of words between Kenneth Starr and Steven Brill escalates, as the independent counsel fires off a 19-page letter and the magazine editor shoots back
(06/17/98)
Fallout from Content bombshell
By Jonathan Broder
A federal judge summons Kenneth Starr's team to her chambers after he admits in Content magazine that he and a top aide have leaked "extensively" to favored members of the press
(06/16/98)
Noble words, empty deeds
By Lonny Shavelson
The war on drugs will fail so long as the victims don't get help
(06/15/98)
Powerless in Kosovo
By Loren Jenkins
For the West, saber-rattling is cheap, but action is unlikely
(06/12/98)
- - - - - - - - - - - - - - - -
Browse the
Newsreal Archives
- - - - - - - - - - - - - - - -

spacer

CAP IN HAND | PAGE 1, 2
- - - - - - - - - -
More immediately important is what the U.S. and China can or should do about Asia's worsening economic crisis, which has now embroiled the giant economy of Japan. Earlier this week, China demonstrated its clout by warning that unless action was taken to support the falling Japanese yen -- sending Wall Street into a tailspin -- Beijing would devalue its own currency, the yuan, to keep its exports competitive with those of Japan.
According to U.S. Treasury sources, it was China's warnings, which prompted fears of more economic turmoil in Asia, that convinced Treasury Secretary Robert Rubin to spend some $2 billion to bolster the falling yen, reversing his earlier policy of nonintervention. Clinton is expected to ask the Chinese to refrain from further threats of devaluation at least until after Japan's July 12 elections, after which U.S. officials hope the Japanese government will take strong measures to resolve the country's massive banking crisis.
Knowing that it needs China as a bulwark against further economic turmoil in Asia, the Clinton administration will argue forcefully for another annual extension of China's Most Favored Nation trade status. While Clinton already has granted China MFN status, it must pass Congress, where the issue is particularly contentious this year because of the controversies over the administration's transfer of missile technology and allegations of Chinese interference in U.S. elections.
"It's a very sensitive time," Susan Esserman, an official with the U.S. Trade Representative's Office told a congressional hearing Wednesday. "Revoking MFN would worsen the Asian financial crisis," she said, warning that such a move would add 44 percent to the price of Chinese imports for U.S. consumers. Stanley Roth, the undersecretary of state for East Asian and Pacific affairs, told the same hearing that failure to approve MFN will "affect our relations with China across the board ... eliminating the prospects for future progress."
That argument resonates with Republicans whose business constituency is becoming increasingly reliant on China trade. Rep. Bill Archer, R-Tex., chairman of the House Ways and Means Committee, compared any revocation of China's trade status to "pouring gasoline on a four-alarm fire." Rep. Jennifer Dunn, R-Wash., agrees with the administration about China's role as an economic stabilizer. China trade is increasingly crucial to her Seattle-area district, and her defense of administration policy reflects the evolving political dynamic of the China question.
But the GOP is hardly united on the issue. Opponents such as Rep. Gerald Solomon, R-N.Y., insist China's MFN status be revoked, charging it "has led directly to the bankruptcy of our proliferation policies." And while Solomon's remarks echo those Republicans who have been hammering the administration for compromising national security and violating campaign finance laws, opposition to renewing China's MFN status is by no means a partisan affair. Rep. Pete Stark, D-Calif., whose Northern California district has a large number of Chinese-Americans, says bluntly: "The Chinese government is barbaric. They have no desire or intention to change. They release a few dissidents and put 10 more in jail. They laugh at us and mock us ... They want us to buy their cheap sneakers and T-shirts."
There are signs that critics of Clinton's China policies are having an impact. On Thursday, administration officials confirmed a New York Times report that the White House was "rethinking" a $750 million sale of communications satellites to China. Clinton approved the sale -- one of the biggest deals yet between the U.S. and China -- in 1996, but Pentagon and State Department officials are now questioning it because of the satellites' possible military application.
Such "rethinking," on top of human rights and weapons proliferation concerns, could bring a distinct chill to Clinton's summit with Chinese leaders. And that may be the price he will have to pay for his commerce-driven approach to U.S.-China relations.
"Every leader has to reexamine certain policies," says Benjamin Schwartz, professor emeritus of Chinese government and history at Harvard University. "The fact is there has been too much of an emphasis on economic relations with China. Clinton has made a cult of business interests, and it has led to an emphasis on trade over everything else in our relationship. There are other considerations that have to be taken into account."
SALON | June 19, 1998
Jonathan Broder is Salon's Washington bureau chief.

T A B L E+T A L K Are unions taking over politics in America? Join the debate in the Politics area of Table Talk D A I L Y+Q U O T E Maureen on Monica R E C E N T L Y Monica vs. Maureen By Carol Lloyd While a New York Times columnist denounces Lewinsky's willingness to expose her lips and legs, her own newspaper takes cheaper shots at the First Intern's private parts (06/18/98) Gloves come off in Starr-Brill slugfest By Jonathan Broder The war of words between Kenneth Starr and Steven Brill escalates, as the independent counsel fires off a 19-page letter and the magazine editor shoots back (06/17/98) Fallout from Content bombshell By Jonathan Broder A federal judge summons Kenneth Starr's team to her chambers after he admits in Content magazine that he and a top aide have leaked "extensively" to favored members of the press (06/16/98) Noble words, empty deeds By Lonny Shavelson The war on drugs will fail so long as the victims don't get help (06/15/98) Powerless in Kosovo By Loren Jenkins For the West, saber-rattling is cheap, but action is unlikely (06/12/98) - - - - - - - - - - - - - - - - Browse the Newsreal Archives - - - - - - - - - - - - - - - -
		CAP IN HAND \| PAGE 1, 2 - - - - - - - - - - More immediately important is what the U.S. and China can or should do about Asia's worsening economic crisis, which has now embroiled the giant economy of Japan. Earlier this week, China demonstrated its clout by warning that unless action was taken to support the falling Japanese yen -- sending Wall Street into a tailspin -- Beijing would devalue its own currency, the yuan, to keep its exports competitive with those of Japan. According to U.S. Treasury sources, it was China's warnings, which prompted fears of more economic turmoil in Asia, that convinced Treasury Secretary Robert Rubin to spend some $2 billion to bolster the falling yen, reversing his earlier policy of nonintervention. Clinton is expected to ask the Chinese to refrain from further threats of devaluation at least until after Japan's July 12 elections, after which U.S. officials hope the Japanese government will take strong measures to resolve the country's massive banking crisis. Knowing that it needs China as a bulwark against further economic turmoil in Asia, the Clinton administration will argue forcefully for another annual extension of China's Most Favored Nation trade status. While Clinton already has granted China MFN status, it must pass Congress, where the issue is particularly contentious this year because of the controversies over the administration's transfer of missile technology and allegations of Chinese interference in U.S. elections. "It's a very sensitive time," Susan Esserman, an official with the U.S. Trade Representative's Office told a congressional hearing Wednesday. "Revoking MFN would worsen the Asian financial crisis," she said, warning that such a move would add 44 percent to the price of Chinese imports for U.S. consumers. Stanley Roth, the undersecretary of state for East Asian and Pacific affairs, told the same hearing that failure to approve MFN will "affect our relations with China across the board ... eliminating the prospects for future progress." That argument resonates with Republicans whose business constituency is becoming increasingly reliant on China trade. Rep. Bill Archer, R-Tex., chairman of the House Ways and Means Committee, compared any revocation of China's trade status to "pouring gasoline on a four-alarm fire." Rep. Jennifer Dunn, R-Wash., agrees with the administration about China's role as an economic stabilizer. China trade is increasingly crucial to her Seattle-area district, and her defense of administration policy reflects the evolving political dynamic of the China question. But the GOP is hardly united on the issue. Opponents such as Rep. Gerald Solomon, R-N.Y., insist China's MFN status be revoked, charging it "has led directly to the bankruptcy of our proliferation policies." And while Solomon's remarks echo those Republicans who have been hammering the administration for compromising national security and violating campaign finance laws, opposition to renewing China's MFN status is by no means a partisan affair. Rep. Pete Stark, D-Calif., whose Northern California district has a large number of Chinese-Americans, says bluntly: "The Chinese government is barbaric. They have no desire or intention to change. They release a few dissidents and put 10 more in jail. They laugh at us and mock us ... They want us to buy their cheap sneakers and T-shirts." There are signs that critics of Clinton's China policies are having an impact. On Thursday, administration officials confirmed a New York Times report that the White House was "rethinking" a $750 million sale of communications satellites to China. Clinton approved the sale -- one of the biggest deals yet between the U.S. and China -- in 1996, but Pentagon and State Department officials are now questioning it because of the satellites' possible military application. Such "rethinking," on top of human rights and weapons proliferation concerns, could bring a distinct chill to Clinton's summit with Chinese leaders. And that may be the price he will have to pay for his commerce-driven approach to U.S.-China relations. "Every leader has to reexamine certain policies," says Benjamin Schwartz, professor emeritus of Chinese government and history at Harvard University. "The fact is there has been too much of an emphasis on economic relations with China. Clinton has made a cult of business interests, and it has led to an emphasis on trade over everything else in our relationship. There are other considerations that have to be taken into account." SALON \| June 19, 1998 Jonathan Broder is Salon's Washington bureau chief.