Chinas Anti-Secession Law Stirs Unease in Washington


December 2004. Visitors to the Military Museum in Beijing walk past a Chinese Hongqi-2 missile. Concerns over a regional arms race have overshadowed U.S.-China relations in recent months. Photo: AFP/Frederic J. Brown

WASHINGTON—Opposition in the United States Congress to China's trade and economic policies has grown stronger since Beijing passed its anti-secession law against Taiwan in March, experts have told RFA in a series of recent interviews.

U.S. lawmakers, industry associations, and top administration officials have already raised a number of trade and economic concerns with Beijing, ranging from textile exports to currency valuation to China's rising demand for imported oil.

But analysts say that reactions in Washington have intensified since the National People's Congress passed the anti-secession law, authorizing Beijing to use military force if Taiwan takes constitutional steps toward declaring independence.

"You know, if there were people in China who wanted to do something that could really damage both Chinese-American relations but also raise all of these issues in tandem—they couldn't have done a better job than having this anti-secession bill pass when it did," Norman Ornstein, a congressional expert and resident scholar at the American Enterprise Institute in Washington, told RFA reporter Michael Lelyveld.

"It really was unfortunate timing, and it did bring the Taiwan issue into this," Ornstein said.

Fears of a trade war

Lowell Dittmer, a China scholar and political science professor at the Berkeley campus of the University of California, warned of the dangers of a trade war between China and the United States.

If there were people in China who wanted to do something that could really damage both Chinese-American relations but also raise all of these issues in tandem—they couldn't have done a better job than having this anti-secession bill pass when it did.

"We seem to be moving toward the passage of some very severe legislation invoking sanctions on trade with China. It's part of a generally more skeptical attitude toward China in the light of the anti-secession legislation, I think, toward Taiwan, which makes China appear more threatening to Taiwan and threatening to peace in the Taiwan Strait," Dittmer told RFA.

"So, this does not serve China's interests well. It's rather likely to get out of hand and perhaps precipitate some sort of reciprocal trade war between China and the United States, which would be very dangerous."

The U.S. Congress took steps toward slapping double-digit tariffs on imports from China earlier this month, citing the country's refusal to revalue its currency. U.S. trade groups have complained for years that China keeps the value of the yuan artificially low to give an unfair edge to its exports by making them cheaper abroad.

Critics say the currency, which remains pegged to the dollar, has been undervalued by as much as 40 percent. The U.S. trade deficit with China soared to a record U.S.$162 billion last year.

Heightened security concerns

China has so far refused to revalue the currency or allow it to float in free trade, citing a need to keep its markets stable and avoid risks for its banks.

Now, the anti-secession bill has prompted Beijing's critics in Congress to raise concerns about China's spending on arms, and fears for stability in the Taiwan Strait, too.

Members of both parties are also concerned about China's efforts to lift the European Union's arms embargo, which has been in place since the Tiananmen Square crackdown on pro-democracy demonstrators in 1989.

"I think before, for most people really the argument about China being a security threat was pretty much in the background," Adam Segal, senior fellow in China studies at the Council on Foreign Relations in New York, told RFA in a recent interview.

"Everyone realized that China was not going to be a peer competitor for the U.S., at least for the next two decades. But the anti-secession law and the conflict over Taiwan...brings to the forefront the argument that China...can threaten the U.S. in a number of scenarios, especially around Taiwan," he added.

China sticks to currency peg

President George W. Bush's administration has backed the EU's recent decision to keep the arms ban in place, but it has also tried to pursue a more diplomatic approach than China's critics in Congress on trade issues.

At a meeting in Washington on April 16, finance ministers from the Group of Seven leading industrialized nations called on China to take quick action toward more flexibility in exchange rates.

But China's State Council said it plans to keep the yuan "basically stable," despite the pressure, Xinhua reported.

Some trade issues, like textile imports, have come to a head because China has increased its exports in some categories by up to 1,500 percent since January, when the decades-old system of quotas expired.

The surge prompted the U.S. government to launch an investigation on April 4 that could lead to temporary quotas on Chinese-made shirts, trousers, and underwear. U.S. manufacturers are pushing for similar safeguard limits on 14 categories of Chinese textiles and apparel.

China 'needed' on Iraq issue

But other issues like the complaints about currency, which have been around for a long time, have also been linked by foreign policy questions in Congress.

"I think we're beginning to see a convergence of all these disparate policy conflicts that you mentioned—trade, currency, and security issues, Taiwan—that are all beginning to be picked up by certain elements, different elements, disparate elements in Congress, and an increasing willingness in Congress to question the administration on China policy," said Segal.

Dittmer agreed. "Once these things make the public arena, they do tend to get linked, and you have purely economic issues being linked with security issues and broader worldwide, international repercussions," he told RFA.

Ornstein said that many of the sponsors of trade legislation on China have a long history of both security and human rights concerns.

"And for many of them, it's been an unease that because we need the Chinese—we needed the Chinese for some time not to make any trouble for us because we've been spread pretty thin with Iraq, and we've needed the Chinese to intercede on our behalf with North Korea—that we've given them a pass when it's come to things like the dollar and a number of the more sensitive trade issues," he said.

"And now you're getting people rising up and saying, we're not going to do that any more."

Original reporting by Michael Lelyveld. Mandarin service director: Jennifer Chou. Produced for the Web in English by Luisetta Mudie.


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