US-Sino Relations Face More Tests

FLUSHED with victory over American threats to pull Chinese trade privileges, Beijing's Communist leaders will confront the United States with renewed pugnacity on other issues, Chinese and Western analysts predict.

On May 26, President Clinton extended China's most-favored-nation (MFN) trading status, retreating on his pledge to punish Beijing for continuing serious human rights abuses.

And, in a step aimed at furthering US business in China, the president severed the link between human rights and trade. That policy triggered a bitter war of wills between Washington and Beijing during the past year and endangered the $40 billion trade between the two countries.

While renewing China's tariff treatment has smoothed Sino-American ties for now, other roadblocks could soon complicate the often-volatile relations between the two countries, other analysts say.

Also, some Chinese political observers warn that the emboldened authorities, fearing that a tide of public discontent could sweep them from power, could take even tougher measures against dissidents who continue to challenge their control.

``Chinese authorities regard Clinton's decision as a big victory of theirs and a failure of the China policy of the United States,'' a senior Chinese policy adviser in Beijing says. ``They may conclude that in dealing with Western countries, especially the US, a tough stand will not only make them look good internationally, but also enhance their reputation domestically.

Other trade problems

``The Chinese Communist Party is good at turning disadvantage to advantage,'' he says. ``One should never underestimate this ability of theirs.''

A host of other trade problems with the US still simmer. Other flashpoints include China's resistance to liberalizing intellectual property rights and labor practices; the further opening of its market, the fastest growing in the world; and Beijing's aggressive push to rejoin the General Agreement on Tariffs and Trade (GATT) by early next year, when the replacement World Trade Organization is launched.

The US and some European countries are blocking China's application to reenter GATT until Beijing provides more property and labor protections and allows more market access for agricultural and other products. In extending China's MFN tariff treatment, Clinton did ban Chinese arms and ammunition in what Chinese analysts consider a largely symbolic move to save the administration's credibility.

One Chinese political observer said the ban will hurt big arms producers that ship most of the estimated $200 million in arms exports to the US, but the overall impact will be minimal.

Although China has launched a campaign against fake Western products and has toughened penalties, Beijing could face new sanctions at the end of June if it balks at new steps to protect international patents and copyrights.

``The MFN [decision] may have put out one bush fire, but others are smouldering and could become even more intense,'' a Western diplomat in Beijing says.

Some say MFN promotes change

Many Chinese intellectuals heralded the decision as a step toward further economic reforms and bringing Western influence to China, even though progress on human rights has been minimal. In recent months, China had released several prominent dissidents, but detained and pressured many others spearheading labor unrest and public discontent over rising prices and widening income gaps.

Broadening contacts with the West is the best means to promote political change now in China, they say. ``This renewal was a good decision for China,'' one dissident says. ``Economic development is the only way for China to change slowly. China cannot change amid a storm and survive.''

But other activists expressed disappointment that the US was surrendering its leverage over China's human rights behavior. They predicted that, amid fears over growing social unrest, the authorities will continue to be tough against dissidents led by Wei Jingsheng, the most prominent human rights figure in China today, who was for a long time the focus of an international campaign for his release.

Mr. Wei, who was freed last year after almost 15 years in prison for his pro-democracy activities, is currently under detention and is rumored to face the possibility of new imprisonment. He enraged Chinese officials by trying to organize workers in a new popular movement following his release, holding frequent interviews with foreign journalists, and meeting John Shattuck, a senior US diplomat in charge of human rights, in February to press the US to use its trade clout to free more political prisoners.

``The policy toward activists could become even more repressive if the activists keep on stinging the authorities,'' a Chinese analyst says. ``The party can't afford to become less repressive and more tolerant. For the disintegration of the former Eastern European countries and the former Soviet Union has taught them a lesson. One can never expect liberalization within the Party so long as the senior leaders who fought to win state power are still alive.''