Copyright 2000 The National Journal, Inc.
The National Journal
May 20, 2000
SECTION: FOREIGN AFFAIRS; Pg. 1594; Vol. 32, No. 21
LENGTH: 1641 words
HEADLINE:
Door-to-Door Diplomacy
BYLINE: Karen Lee Scrivo
HIGHLIGHT:
China has done little lobbying on
the trade measure, but its
corporate friends have taken up the slack.
BODY:
Few Chinese officials are knocking on
Capitol Hill doors to plead
their nation's case for granting China permanent
normal trade
relations with the United States. But Avon Products, the
employer
of roughly 3 million Avon ladies, is using its skills as perhaps
the most famous door-knockers in the world to lobby for the trade
measure.
During the months preceding the
congressional vote on the
trade measure, the Chinese government has mostly
abstained from
the lobbying aimed at Congress. China's efforts have been
limited
to official speeches and trips to Washington by government
leaders from Hong Kong, which has enjoyed a fair degree of
autonomy as a
Special Administrative Region since the British
government turned control
over the former crown colony to China
in 1997.
China can assume a low profile because U.S. businesses
with offices
and operations in China have been lobbying undecided
lawmakers. In mid-May,
17 executives with the American Chamber of
Commerce in Hong Kong, or AmCham,
and three others with the U.S.
Chamber of Commerce in Shanghai, contacted
130 congressional
offices and urged lawmakers to vote for the China trade
bill.
AmCham focused its efforts on undecided House members.
"It's in the interest of the United States for China to
join
the World Trade Organization. It will create American jobs,"
said Frank
Martin, AmCham's president. Moreover, the group has
tried to clear up the
misperception that a rejection of the trade
bill would block China's entry
into the WTO. "Whether or not the
United States approves, China will accede
(to the WTO) when two-
thirds of the other countries approve," Martin said
in a
telephone interview from Hong Kong this month. "What the vote is
about is the annual review of normal trade relations (with the
United
States). Therefore if we do not approve, China can invoke
Article 13 of the
WTO and exclude the United States from the
benefits ... of reduced tariffs."
Congress votes to renew normal trade relations with
China
every year. Some analysts have seen the annual debate as a way of
pressuring China to reform its policies on human rights, arms
proliferation, and the environment.
The majority
of AmCham's 2,500 members are U.S.
corporations, but Hong Kong-based
companies and foreign
businesses with operations in China also belong to the
group. Its
membership is split between multimillion-dollar companies and
smaller enterprises.
Avon Products, a
manufacturer and distributor of beauty
products, has played an active role
in AmCham's campaign. After
China and the United States signed the WTO
agreement in November,
the China division of New York City-based Avon
Products Co.
hosted a seminar for corporate executives on the accord in
Guangzhou, a city not far from Hong Kong. During congressional
briefings, an Avon China executive based in New York City
emphasized
that Chinese employees of foreign companies benefit
from high pay, exposure
to international training and technical
standards, and the open discussion
of issues, said Paul Mandry,
Avon's vice president for legal and government
affairs/Asia-
Pacific. Avon China executives have not come to the United
States
to lobby Congress on the issue, Mandry said, because it was
deemed inappropriate and inefficient. The company has also
supported the
lobbying efforts of the United States-China
Business Council and the U.S.
Direct Selling Association.
Avon started operations
in China in 1990. Avon China is
based in Guangzhou and has branch offices
throughout the country.
It opened a Beijing branch in 1996, becoming the
first direct-
sales company with a license to operate in the capital. In
1998,
Avon opened a manufacturing plant in the southern city of Conghua
to support its expansion plans. But in April 1998, the Chinese
banned
door-to-door sales, which forced Avon to operate only as a
wholesale and
retail business. Still, Avon's annual sales in
China are approximately $ 100
million, Mandry said.
China's ban on direct
marketing means no more "Avon
ladies" pitching cosmetics on people's
doorsteps. During the
early 1990s, many Chinese women were willing to spend
more than
half their factory-worker salaries to buy the company's beauty
products. Avon products remain available at beauty boutiques,
department
stores, and kiosks. The company's sales, however, are
limited largely to
cosmetics, because Chinese law permits
foreign-owned companies to sell
products made only in China. If
the WTO admitted China, Mandry said, the
country would have to
permit direct selling.
Business interests such as Avon that would benefit
financially from
increased opportunities in China say the trade
bill would also promote
social change in the Asian nation. "If we
do not keep open the door through
trade, it will be a serious
deterrent to China," Mandry said. "We (in
business) are
interested in environmental issues, human rights, and
religious
freedom, but we see progress being made."
AmCham's Martin conceded that concerns about human rights
and
religious persecution are valid. But, he added, the question
is, how can the
United States influence China? "The annual debate
on normal trade relations
status has not resulted in a change of
their behavior," he said. "It's made
it more difficult." If the
United States denies permanent normal trade
relations with China,
he predicted, "any dialogue on human rights will come
to an end.
There will be no opportunity to resolve valid concerns."
Sun Changqing, Avon China's vice president for
corporate
affairs, said that China's entry into the WTO would encourage
change in China. "It is good for the Chinese to open up and
communicate
with the rest of the world, to come into the
international community," the
Beijing native said in an interview
during an April visit to Potomac, Md.,
where his wife and teenage
son live.
Why isn't
the Chinese government taking its case to
members of Congress? The Chinese
Embassy referred the question to
its congressional affairs office, which did
not return repeated
telephone calls. "The Chinese are not good at PR games,"
said
Bruce Dickson, the director of the Sigur Center for Asian Studies
at George Washington University.
In February,
Beijing hurt its own case on Capitol Hill by
releasing a "white paper" that
threatened military force if
Taiwan puts off indefinitely talks about
reuniting with the
mainland. China's crackdown on the Falun Gong religious
group
also hurt China's image. But the Chinese are "completely
unconcerned," Dickson said. "Their attitude is, 'Taiwan is a
domestic
issue, so butt out. Falun Gong is a domestic issue, butt
out.' "
Chinese officials wanted to keep a low profile and
to let
U.S. business interests make the case for the trade bill,
AmCham's Martin said.
Former House Ways and
Means Committee member Bill
Frenzel, R-Minn., who is a guest scholar at the
Brookings
Institution, says that Beijing's decision to adopt a low profile
is probably the best approach. "During NAFTA (North American Free
Trade
Agreement), Mexico was seen as trying to buy the noble U.S.
Congress by
hiring lobbyists," Frenzel said. "That's how efforts
by the Chinese would be
considered."
Minxin Pei of the Carnegie Endowment
for International
Peace, a Washington think tank, said the Chinese are
realists
about the upcoming vote. "The deal will benefit the United States
more than China. If it's not passed, it will be America's
problem," he
said. "China will get into the WTO anyway and will
tell the United States
that 'you will not enjoy the benefits.' "
In China,
some people oppose membership in the WTO
because it would force factory
closings and would increase
agricultural imports. The military, meanwhile,
fears that
economic turmoil could jeopardize national security. A February
report by the Chinese Academy of Social Sciences concluded that
joining
the WTO would enhance China's economic efficiency, but
warned that many
noncompetitive enterprises would suffer.
Hong Kong
officials are less reticent about lobbying. In
April, Hong Kong's Chief
Executive Tung Chee-hwa met with
President Clinton, Secretary of State
Madeleine K. Albright, and
National Security Adviser Samuel R. "Sandy"
Berger. He also
visited Capitol Hill. The Hong Kong Economic and Trade
Office in
Washington, however, emphasized that Tung was not representing
Beijing.
The Hong Kong executive has stressed
the importance of
the upcoming vote for U.S. businesses and international
trade.
Both permanent normal trade relations and China's entrance into
the WTO are "not simply about business opportunities," but also
about
"strengthening economic stability in the region, ensuring
differences on
trade issues are resolved sensibly, (and)
developing the global economy on
responsible, rules-based
principles," Tung said at a U.S. Chamber of
Commerce lunch held
in Washington last month.
In
early May, Hong Kong Democratic Party leader Martin
Lee buttonholed members
of Congress, telling the lawmakers that
granting PNTR would
be the best way to introduce the rule of law
to China.
China-watchers agreed that Beijing was smart to let Hong
Kong
officials and U.S. businesses-not China-make the case that
the trade
agreement would benefit American industry and
consumers. "It's not effective
to let a skunk in. Everyone can
smell it," says Stephen Jerome Yates, a
China expert at the
Heritage Foundation, a conservative think tank.
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