On July 22nd, the House of Representatives voted down a resolution which would have revoked Communist China’s U.S. taxpayer-subsidized trade. Opponents of the measure whipped up fears that revocation of Normal Trade Relations (NTR, formerly called Most Favored Nation status) would threaten the free market and endanger 200,000 U.S. jobs which depend on the current $18 billion which the U.S. exports to the People’s Republic of China each year. But the bill’s sponsor, Representative Dana Rohrabacher (R-CA), noted that the current policy of NTR status for China “provides that we can subsidize [corporate] investment in China by the American taxpayer.” Indeed, close to half of all American exports to China are subsidized at taxpayer expense, directly or indirectly.

The U.S. government’s Export-Import Bank reported in its 1998 Annual Report that the exposure of its various trade subsidies in China amounted to $5.9 billion of our $18 billion annual trade with China, including nearly $1.4 billion in entirely new loan guarantees and special political insurance awarded during the 1998 fiscal year. The U.S. taxpayer-subsidized Asian Development Bank and World Bank awarded $1.5 billion and $2.4 billion, respectively, in new loans to China during the same fiscal year. Much of that money was awarded to American businesses in the form of contracts upon which these American businesses had bid. Even the U.S. Overseas Private Investment Corporation (OPIC), which had previously denied subsidies to China for obvious reasons of risk, awarded $4.5 million in political risk insurance recently to a Rhode Island firm so that it could build a motorcycle plant in China.

In short, few private companies are dumb enough to make a deal with a gangster government without guarantees of profit. The few non-subsidized American exports to China are heavily weighted in military-related industries such as satellite technology, and have resulted in threatened U.S. national security. Representative Cliff Stearns (R-FL) noted that as a result of loose technology trade restrictions with China, the Chinese government “has stolen U.S. satellite missile technology, [and] has targeted 13 of its 18 intercontinental ballistic missiles at the United States of America.”

The effort by Congressman Rohrabacher to revoke NTR was preceded by an intense lobbying campaign against the measure by many of the same tax-fattened corporations which benefit from the subsidies. “The reason these powerful business lobbies are pushing for normal trade relations status is that it will permit wealthy financial interests to invest in China with the benefits of subsidies provided by the American taxpayer,” Rohrabacher explained. The Business Roundtable, loaded with executives of corporate beneficiaries of China trade subsidies, pulled out all the stops in an expensive advertising campaign on behalf of China. The U.S. Chamber of Commerce and other business groups were also “lobbying hard” on behalf of China, according to a July 26th Associated Press dispatch, engaging in “face-to-face meetings on Capitol Hill … running ads in local newspapers, and encouraging business leaders back home to call their legislators.”