The Economy

The China Game Plan

Dec. 21, 2004

Billions of dollars in business are at stake.

Borrowing a tactic from last month's NCAA basketball tournament, the Clinton Administration is applying a full-court press as it drives to gain Congressional approval of permanent normal trade relations (PNTR) for China. "A vote against PNTR will cost America jobs, as our competitors in Europe, Asia, and elsewhere capture Chinese markets that we otherwise would have served," cautions President Clinton. Between 1991 and 1998, the last full year for which U.S. Commerce Dept. country data are available, U.S.-China trade advanced to US$85.4 billion from $25.3 billion, a 238% increase. Continuation of this impressive trade trend line is at stake in the upcoming vote. "Failure to approve PNTR closes the door on U.S. trading opportunities while the rest of the world benefits from access to the huge China market," emphasizes Dennis Slater, president of the Construction Industry Manufacturers Assn., Milwaukee. Commerce Secretary William M. Daley, the political master who secured Congressional approval for NAFTA in 1993, is leading the Administration's approval effort on and off Capitol Hill. Other prominent players include U.S. Trade Representative Charlene Barshefsky and Treasury Secretary Lawrence H. Summers. However, with anti-China sentiment running high among lawmakers, there's no assurance that this core of Cabinet superstars can slam-dunk an Administration victory. A couple of guys named Clinton and (Al) Gore probably need to be in the game as well. "Whether the China vote succeeds or fails depends on the president and vice president," stresses Fred Webber, president and CEO of the Arlington, Va.-based Chemical Manufacturers Assn. (CMA). "For it to succeed, they are going to have to provide strong and convincing leadership." In the meantime, there's no question but that Washington is playing in a high-stakes bilateral business game -- particularly for U.S. manufacturers in the electronics, aerospace, and chemical industries. PNTR "will induce the greater opening of a market of 1 billion people to [the] American high-tech industry, providing potent new fuel for the very industry that has been the prime engine of America's current unprecedented prosperity," believes William T. Archey, president and CEO of the American Electronics Assn., Santa Clara, Calif. "We estimate that China will purchase 1,800 aircraft over the next 20 years, worth $125 billion," says John W. Douglass, president and CEO of the Washington-based Aerospace Industries Assn. Recent U.S.-China aerospace trade hasn't exactly been shabby, either. The U.S. exported $3.73 billion worth of aerospace goods to China in 1998, generating an estimated 45,600 jobs for U.S. workers. China is a $90 billion market for chemicals, with U.S.-China trade topping $3.4 billion last year, notes CMA's Webber. By CMA's calculations, the U.S. posted a chemical-trade surplus of $526 million with China in 1999. Overall, however, the U.S. runs a sizable deficit, with imports from China outvaluing exports five to one in 1998. "A lot of members of Congress may still believe that [PNTR] is a vote to allow China into the WTO [World Trade Organization]," notes Michael E. Baroody, senior vice president for policy, communications, and public affairs at the National Assn. of Manufacturers, Washington. "The reality is that China will join the WTO no matter what we [in the U.S.] do. The question is whether we choose to sit out the race to enter the world's biggest consumer market," he stresses. "Passing PNTR ought to be job one for this Congress," insists Thomas J. Donohue, president of the U.S. Chamber of Commerce, Washington. "This vote is about whether we take advantage of an unparalleled opportunity for our [U.S.] companies and our workers. Or [whether] we sit on the sidelines and watch numerous foreign competitors eat our lunch." Within the next 30 days or so, Congress is slated to decide whether or not PNTR for China will be on America's commercial menu. Approval in the Senate seems likely. But House approval remains uncertain.

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.