One Billion Customers - James McGregor [24]
Deng’s southern tour and proclamations triggered the fastest and most ferocious gold rush that China had ever seen. In 1993, China signed nearly eighty-five thousand contracts with foreign investors representing $111 billion in investment. The chief executives of hundreds of the world’s largest companies rushed to Beijing, Shanghai, and Hong Kong. The Hong Kong property tycoons awoke from their slumber and began scribbling blueprints for billions of investment in Mainland China hotels, office buildings, shopping centers, and Western-style luxury suburban estates.
When Secretary of State Warren Christopher went to Beijing in March 1994 to determine if China had made “overall, significant progress” on the issues in Clinton’s executive order, Chinese authorities greeted him by arresting more than a dozen Chinese dissidents. Premier Li Peng, who loved to snarl and swagger when meeting with American officials, taunted Christopher with reports from the Chinese embassy in Washington that said Congress and the U.S. business community would prevent Clinton from canceling China’s MFN. “China will never accept America’s concept of human rights,” Li said.
Christopher got another blunt warning about threatening China’s MFN status at a Beijing breakfast meeting with the American Chamber of Commerce in China. The executives told him that the United States was essentially holding a gun to its own head. If China’s MFN status were revoked, U.S. duties for Chinese products would soar, pricing Chinese exports out of the U.S. market. China’s economic clout, the business executives warned, was now sufficient that the retaliation against U.S. businesses in China could threaten the global competitiveness of many. AT&T couldn’t be blocked from a market that was building the equivalent of one Bell South system each year and GM couldn’t hand Volkswagen and Toyota a market of a billion people that was just beginning to own cars. If the administration wanted to improve human rights in China, they said, let Chinese students flood into U.S. universities and allow U.S. business to penetrate deep into China’s business and social culture.
Christopher realized that China’s position in global commerce had shifted dramatically in the decade since Shultz had told the American businessmen in Beijing to move to Europe or Japan if they didn’t like U.S. policy. Less than three months after Christopher’s visit, Clinton executed an abrupt about-face and canceled the linkage between MFN and human rights. “We have reached the end of the usefulness of that policy, and it is time to take a new path,” he said.
Pushing for Change
With business booming, China had applied in July 1986 to join the General Agreement on Tariffs and Trade, or GATT, which later became the World Trade Organization. The United States and other nations that traded extensively with China badly wanted to integrate China into global commercial law and regulation. Foreign businesses continually found access to China blocked by Chinese bureaucrats citing neibu (“internal”) regulations that the foreigners weren’t allowed to see. At the same time, Chinese companies were becoming increasingly bold in stealing foreign intellectual property and churning out fake, foreign, brand-name products. It was becoming common for a foreign company to send a prototype to a Chinese factory for production only to find that the Chinese company had registered the Chinese product patent and design rights for itself.
By early