Bobert, howcome you keep knocking companies when you have your own? Is it one that maximizes profits and minimizes costs or is it one of those philanthropic ones?

October 10 2000         China-PNTR Enacted
This Act was a crucial step to complete a major trade goal of the Clinton-Gore Administration, opening China's markets to American manufactured goods, farm products and services by allowing China to become part of the WTO, forcing it to slash import barriers against American goods and services. The United States agreed to maintain market access policies we currently apply to China.

http://www.pbs.org/wgbh/pages/frontline/shows/walmart/china/trade.html

In the late 1990s, Washington was a sharply divided political city, but there was a growing consensus on one big issue. Most Republicans and Democrats agreed that trade with China would be a boon for America.

President Clinton summed up the mainstream consensus in Washington with a message to Congress in the spring of 2000. In a letter circulated to House members, he wrote, "China with more than a billion people is home to the largest potential market in the world… If Congress makes the right decision, our companies will be able to sell and distribute products in China made by American workers on American soil, without being forced to relocate manufacturing to China. …We will be able to export products without exporting jobs."

Clinton was pushing Congress to permanently normalize trade relations with Beijing, helping to ease China's entry into the World Trade Organization (WTO). Big business was furiously lobbying Capitol Hill in favor of the legislation. It saw China, with its 1.2 billion consumers, as a vast new emerging market and many parts of Corporate America wanted a piece of the action.

Just weeks before the legislation received the president's signature, Robert Burt, chairman of the Business Roundtable, an association of CEOs of leading American corporations, spoke boldly about the future. "This historic legislation will be remembered as the key that opened the door for America to sell its products and services to the world's largest emerging marketplace," he declared.

Other executives around the U.S. were equally strong in supporting U.S. trade with Beijing, and China's efforts to get into the WTO because they reasoned that China would then be required to play by the same trading rules as the WTO's other members. Moreover, as Europeans rushed to do business in China, American corporate captains did not want to be left behind. They worried that unless the U.S. backed the move, they would lose out to the Europeans, a worry Chinese officials played upon effectively from time to time during the 1990s.

On Capitol Hill, legislation to normalize trade with China got overwhelming bipartisan support in the Senate, where it passed, 83 votes to 15. Even in the House, where Democrats were split on the issue, the president received support from three-quarters of the Republicans, and the legislation passed by a wide margin, 237 to 197.

President Clinton signed the legislation at the White House in early October, and China joined the WTO 14 months later, on Dec. 11, 2001.

So How Did the U.S. Trade Opening with China Work Out?

For many, America's trade with China has not lived up to the enthusiastic advance billing from the Clinton administration, its Republican supporters on Capitol Hill and Corporate America.

Expanded trade with China has, in fact, been a blessing for large U.S. multinationals like Boeing, Caterpillar, and Cargill, which had trumpeted the prospect of a massive Chinese market for American products and services. China is the world's fastest growing market for commercial aviation, and needs billions of dollars worth of airplanes from Boeing. Its growing infrastructure has been a boon for companies like Caterpillar, which produces tractors and other heavy equipment. And it is importing billions of dollars worth of farm products, a boon to companies like Cargill. Last year, China bought $2.9 billion worth of soybeans -- the top U.S. export crop to China. China also has proven to be a growing market for U.S.-made fertilizer and chemicals.

But China has been a tougher market to crack for smaller and mid-sized American companies, like those selling bicycles, vacuum cleaners, and lawn mowers, who face stiff price competition from Chinese manufacturers of these products. And they also face discriminatory rules, burdensome red tape, language difficulties, and a population that earns only a fraction of what U.S. consumers make, and therefore lacks the purchasing power to buy consumer goods made in America.

Yvonne Smith, the communications director at the Port of Long Beach, literally sees the imbalance in U.S.-China trade. She reports that through Long Beach alone, the U.S. is importing $36 billion in goods yearly from China and exporting just $3 billion. By her account, the mix of products is very unfavorable to the U.S.

"We export cotton, we import clothing," Smith reports. "We export hides, we bring in shoes. We export scrap metal. We bring back machinery. We're exporting waste paper, we bring back cardboard boxes with products inside them."

Overall, the U.S. trade deficit with China reached a record $124 billion dollars in 2003 and the figure is headed even higher this year. Today, U.S. imports from China outpace U.S. exports to China by more than five to one, and the deficit shows no signs of abating.

These deficits are much larger than the trade deficits that the United States experienced in the 1980s and 1990s with Asian trading partners such as Japan. Put in historical perspective, America's current trade deficit with China is roughly double what it was at its height with Japan in the mid-1980s, when trade frictions between the U.S. and Japan led Sen. Lloyd Bentsen (D-Texas) to famously declare on the floor of the U.S. Senate: "We're in a trade war, and we're losing it."