One Billion Customers - James McGregor [23]
The members of the foreign business community soon began to complain to their governments about ignored contracts and blocked access to Chinese markets. American businesses especially found the U.S. government was far more interested in the strategic relationship created by the American presence in China than business concerns. When Reagan’s new secretary of state George Shultz visited Beijing in February 1983, he was showered with complaints from American business executives. One irate businessman pointed out that the governments of Japan and Europe were much more responsive to the needs of their businesses in China than was the American government.
“Why don’t you move to Japan or Western Europe?” Shultz snapped.
Then came June 4, 1989, and the Tiananmen Square Massacre, followed by a brutal crackdown on the Chinese citizenry. Executives and employees of foreign companies jammed flights out of China, fleeing the danger and disorder. The few passengers on incoming flights were overseas Chinese business executives from Taiwan, Hong Kong, and Southeast Asia. They, too, were outraged, but they also sensed an opportunity. They figured that the Communist party would soon have things under control and would be offering good deals, since China desperately needed a few friends. A few Western companies took the same approach. Motorola got permission for a wholly owned telecom equipment facility in Tianjin, just southeast of Beijing.
Other foreigners soon returned, spurred by the relatively gentle treatment China received at the hands of President George H. W. Bush. Bush had run the U.S.-China liaison office in 1974–75, and he now ran China policy out of the Oval Office. While he froze the U.S. military relationship with China and imposed some economic sanctions on all weapons and many technology products, his priority was to keep the relationship with China stable. Bush believed it was delusional to try to “contain” China. China was an unstoppable growing power that needed to be befriended and steered in the right direction. His focus was to keep the governments talking and to promote increased business ties.
Congress, however, wasn’t nearly as inclined to let Tiananmen slide by. China’s most favored nation (MFN) status required annual congressional renewal. Thus the June deadline for renewal became an annual China frustration festival involving intense lobbying by the U.S. business community to fend off legislative maneuvers to try to kill MFN or add conditions. Presidential aspirant Bill Clinton was squarely in the camp of legislators who wanted to punish China. During his winning campaign he berated Bush for “coddling dictators” in Beijing. The former Arkansas governor came into office with a domestic focus and a constituency of labor and human rights groups that wanted to use U.S. clout to force political and legal changes in China.
Clinton’s “foreign policy” toward China consisted of a mishmash of demands gathered from various U.S. advocacy groups. Bush had successfully deflected legislation that would have imposed conditions on China’s MFN renewal, but Clinton, pressed by advocacy groups, signed an executive order that gave the Chinese leadership one year to improve its human rights policies or face losing MFN status.
Suddenly China’s leaders saw history repeating itself. Once again the diplomats and merchants had opened the way for the