China – PNTR

The China Lobby is on the march — and posing serious problems to citizens in the United States and China alike.

Big Business is pulling out all the stops to encourage Congress to grant Permanent Normal Trade Relations (PNTR, formerly known as permanent most favored nation) status.
The many corporations that have endorsed PNTR are primarily interested not in making goods in the United States for export, but in investing in China, where they can sell services to the Chinese and make goods for the Chinese and the U.S. markets.

Of course, U.S. companies are already moving to China in large numbers. But the investor guarantees connected to a PNTR deal would speed the migration — and the migration of well-paying factory jobs.

It is true, as PNTR proponents argue, that much of this investment — especially by financial and service companies — will be to serve the Chinese market. But it is equally true that these investments will do almost nothing to create jobs in the United States. New Citigroup branches in Shanghai, or Aetna’s expanded ability to insure businesses in China, will do very little to create jobs in New York or Connecticut.

Much of the investment will shift jobs from the United States to China, especially in the manufacture of goods like clothing, auto parts and consumer electronics. PNTR will exacerbate the trend of U.S. factories shutting down, moving to China, and then exporting their goods back to the United States.

Why does this happen? The story is familiar. U.S. businesses, or their contractors, can pay dramatically lower wages and get away with far inferior working and
environmental conditions in China than they can in the United States.

How big are the savings? Here are some wage figures recently published by the New York City-based National Labor Committee: Workers making Kathie Lee handbags for Wal-Mart in China are earning 3 cents an hour. Nike contract workers putting in 11 to 15 hours a day are earning 20 to 22 cents an hour. Some women sewing Nike bags are making as little as 8 cents an hour. Workers making Huffy bikes, Timberland shoes, Alpine car stereos and RCA televisions are earning as little as 22 to 27 cents an hour — well below a living wage.

Before the PNTR vote, corporations should be asked to release their plans for new factories in China, so the public and Congress can consider the PNTR issue with full knowledge of the consequences of passage.

If the Chinese were to benefit from PNTR, the issue might be more complicated. But it is not the case that further opening to the United States and the West will bring prosperity and good times to China.

The phase out of price supports and protections for farmers will throw 10 million peasants off the land, according to Chinese government estimates. Competition from foreign businesses will likely lead to a wave of state company layoffs, downsizing and bankruptcies, throwing millions more out of work and undermining the social protections that many Chinese companies now provide to their employees.

Passage of PNTR will also eliminate a crucial lever to advance democracy and human rights in China. Wei Jingsheng, one of China’s leading democracy activists, explains that the annual Congressional review of China’s human rights record plays an absolutely crucial role in restraining the Beijing government from committing even more egregious human rights abuses.

Listening to Wei should put to rest the fallacious claims of PNTR proponents that removing pressure on the Chinese government will somehow improve its human rights practices.

Many of these basic facts are not in dispute.

If PNTR passes Congress, it will not be because of proponents’ substantive arguments. It will be because the Chamber of Commerce, the National Association of Manufacturers, the Business Roundtable, the insurance industry, the auto makers and many others donated enough money, hired enough lobbyists, paid for enough advertising and — in combination with the Republican Congressional leadership and the Clinton White House — twisted enough arms and cut enough deals.

If PNTR is defeated, as it should be, it will be because labor, consumer, environmental, human rights and other citizen groups joined together to refused to let the China Lobby steamroll Congress. The key vote in the House of Representatives may be as early as May 25. To see how you can help stop PNTR, see <www.tradewatch.org>.