China Sends Huge Trade Vanguard To Pressure the US

BEIJING is wielding its most powerful weapon, trade, to keep relations with the United States on course.

Beginning Monday, a senior Chinese delegation will barnstorm major US cities for two weeks, dangling trade and investment goodies before American officials and businesspeople divided over China's most-favored-nation status and its reentry into the General Agreement on Tariffs and Trade (GATT).

Representing the largest Chinese trade initiative ever in the US, the contingent will meet senior US commerce officials, court investment in 800 projects ranging from airports and power stations to petrochemicals and livestock breeding, and cut deals worth hundreds of millions of dollars, Chinese trade officials say.

The trip is aimed at stepping up pressure on the Clinton administration to renew China's low-tariff trading privileges in June and to promote Beijing's application to rejoin GATT. The US has pegged extension of trade privileges to improving China's human rights record. China has said it will retaliate against US businesspeople if the trade status is not renewed.

The US is also withholding endorsement of China's bid to rejoin GATT by 1995, contending that Beijing has not made enough of a transition from socialism to a market economy. Washington wants a safeguard system to protect the US and European markets from China's dumping of cheap exports.

China wants controls on US technology exports lifted, financing of US government feasibility studies resumed, risk guarantees for US investment in China extended, and preferential construction loans by the American Import and Export Bank granted.

The centerpiece of the delegation's visit will be a trade summit in Washington between Chinese Trade Minister Wu Yi and US Commerce Secretary Ron Brown. ``Such actions will help further tap the vast potential of China's imports from the US and US investment in China,'' Ms. Wu told the New China News Agency.

China, whose GATT application has been held up by members' concerns for eight years, is pushing aggressively to rejoin this year.

To ease its entry, China already has agreed to trim by two-thirds the more than 50 products needing export licenses, including electronics and machinery. Over the next four years, China would phase out all import quotas, trade officials have said.

Export controls, mostly on industrial raw materials, also have been cut. But quotas are still imposed on 38 items and nearly one-third of China's exports require government licenses. This year, China has pushed through tax, currency, foreign exchange, and banking reforms to fulfill GATT demands.

Western analysts say China's ruling Communists are using free trade to legitimize their market reforms and their own hold on power. ``GATT membership gives Beijing symbolic and also real benefits,'' a Western economist says. ``Rejoining GATT would boost international recognition of China's economic reforms and thus, the legitimacy of the Beijing leadership.''

GATT also is regarded as a weapon against what the Chinese consider American ``special trade discrimination'' in threatening trade cutbacks if human rights abuses are not ended. Contending that the annual debate over China's most-favored-nation status runs counter to the spirit of GATT, China hopes improved international trade status will pressure Washington to end the linkage of trade to human rights.

But the arrest of dissidents, including China's most famous activist, Wei Jingsheng, complicates the US decision over low-tariff trading privileges as well as China's proposed GATT membership, Western analysts say.