First, let me say how pleased I am to be speaking on America's relations with China here at The Heritage Foundation. Heritage has a long tradition of involvement, through its Asian Studies Center in particular, with the Far East, as well as a long and distinguished record defending the principles of free trade. What is more, Ed Feulner's ideas, published in two opinion pieces, have been the inspiration for a number of ideas in the bill I am going to talk about today.

Of course, I don't have to tell anyone here that free trade is important to both economic growth and human freedom. The question, in my opinion, is how we can best put these principles into action in our relations with the People's Republic of China, a nation that is making progress in the area of free markets but that continues to inflict significant abuses on its own people.

As with so many other issues, it is perhaps best in discussing our problems with China to begin by turning to the wisdom of President Ronald Reagan. When President Reagan visited China in 1984, he declared that "Economic growth and human progress make their greatest strides when people are secure and free to think, speak, worship, choose their own way and reach for the stars." While China has made great strides since Ronald Reagan spoke those words, it is clear today that the people of China are not free to think, speak, worship, or choose their own way.

The question is how the United States, a nation conceived in liberty, should respond to continuing violations of basic human rights in China, as well as other troublesome actions on the part of the Chinese leadership. Religious persecution, abuses against minorities, coercive family planning, military threats and weapons proliferation, and attempts to improperly influence American policy--all of these actions have been and continue to be undertaken by the Chinese government. And all of them must stop.

One thing is clear: As the world's leading democracy, the United States cannot simply look the other way, ignoring the Chinese government's record on human rights. And, despite the real and measurable expansion of some freedoms in China, very serious problems remain. Amnesty International has said of China: "a fifth of the world's people are ruled by a government that treats fundamental human rights with contempt. Human rights violations continue on a massive scale."

In addition, there have been numerous reports of religious persecution in China. For example, Tibetan abbot Chadrel Rinpoche was in charge of the original search in that country to find the child whom the Tibetans consider the reincarnation of the Panchen Lama--the second holiest Tibetan Buddhist Lama and second highest religious leader for Tibetans. The abbot refused to cooperate with Chinese officials in finding a pliable government pawn to play the role of the Panchen Lama. As a result, he was detained in Beijing, then disappeared for more than a year. He was officially labeled a criminal by the government. He finally resurfaced recently, as the government sentenced him to six years in prison.

The people of Tibet have been subject to particularly harsh abuse from the Chinese government because their form of the Buddhist religion is so closely tied to their independence movements--movements that have met with brutal suppression. Allow me to quote from a 1997 Human Rights Watch/Asia report:

In May [1994], a ban on the possession and display of Dalai Lama photographs led to a bloody confrontation at Ganden and to searches of hotels, restaurants, shops, and some private homes. Over ninety monks were arrested; fifty-three remained in detention as of October, despite Chinese official reports that none of [those] arrested were still being held. At least one person and perhaps two others are known to have died in the melee.

But Tibetan Buddhists are not the only people of faith who face persecution at the hands of the Chinese government. Under a 1996 state security law, all religious institutions must register with the state. Those who do not so register must operate underground and face the government's wrath. Human Rights Watch/Asia reported recently that

Unofficial Christian and Catholic communities were targeted by the government during 1996. A renewed campaign aimed at forcing all churches to register or face dissolution resulted in beating and harassment of congregants, closure of churches, and numerous arrests, fines, and sentences. In Shanghai, for example, more than 300 house churches or meeting points were closed down by the security authorities in April alone.

In addition to religious persecution, there are other troubling issues of moral conscience. I am referring in particular to the Chinese government's birth control policies. Chinese authorities claim that family planning is voluntary in that nation. Yet, according to Amnesty International, birth control has been compulsory since 1979. As a result:

• Pregnant women with "too many" children have been abducted and forced to have abortions and/or undergo sterilization;

• Pregnant women have been detained and threatened until they have agreed to have abortions;

• "Above quota" new-born babies have reportedly been killed by doctors under pressure from officials;

• The homes of couples who refuse to obey the child quotas have been demolished;

• Relatives of those who cannot pay fines imposed for having had too many children have been held hostage until the money was paid; and

• Those helping families to have "above quota" children have been severely punished.

These facts indicate an often brutal disregard for the rights of conscience, for the sanctity of marriage and family, and for human life itself. They are evil acts, nothing less than government-perpetrated evil.

Let me now shift to the military sphere. Here we see Chinese government practices that include military intimidation and the selling of advanced weaponry to rogue states. For example, on the eve of Taiwan's elections in 1996, China engaged in threatening missile firings unnecessarily close to Taiwanese cities. The Taiwanese were not cowed; they are a brave people. But these provocations came soon after China's 1995 military exercises and missile launches in direct proximity to Taiwanese territory. They have led the Taiwanese people to consider whether they need nuclear weapons to defend their homes.

In addition, the Chinese government has threatened international stability through its weapons sales to regimes, including Iran and Iraq, that sponsor terrorism and pose a direct threat to American military personnel and interests. Most dangerous has been the Chinese willingness to supply the Iranians with the technology and basic materials for their own chemical weapons program. These weapons pose a direct threat to American troops, as well as stability and peace in the Middle East.

And the Chinese government has taken other actions directly opposed to American interests. Companies controlled or influenced by the People's Liberation Army have been caught smuggling guns into this country, as well as engaging in other improper activities. Moreover, allegations of Chinese involvement in our political system are disturbing, particularly considering the implications that this has for our relations with that country. These allegations may involve both civil and criminal violations of our laws, violations perpetrated by individuals associated with the Chinese government.

This is a damning list of abuses, a list that cries out for action. As the world's sole remaining superpower--and, perhaps more important, as the birthplace of liberty and individual rights--the United States has a duty to uphold the principles of liberty wherever possible.

In response to the serious problems I have raised, some have called for an end to China's most favored nation trading status with the United States. In fact, the debate has focused almost exclusively on MFN. I believe that that is the wrong approach. I support a one-year extension of MFN for China. Why?

First, because it is the best policy for American consumers. Those consumers will have a wider choice of affordable goods with MFN than without it. To revoke MFN would be to increase tariffs on goods purchased by the American people. It would amount to a tax hike, and I am not in favor of tax hikes, particularly those imposed on the basis of another government's behavior.

Second, I am convinced that revoking MFN would target the wrong parties for punishment. We should keep in mind that it is not the people of China with whom we have a quarrel; it is their government. Trade and U.S. investment in China have a positive effect in providing more opportunities for average Chinese citizens. Even in the short term, we should not underestimate trade and investment's positive impact. According to Heritage's own Stephen J. Yates, in China, "employees at U.S. firms earn higher wages and are free to choose where to live, what to eat, and how to educate and care for their children.... This real and measurable expansion of freedom does not require waiting for middle-class civil society to emerge in China; it is taking place now and should be encouraged."

Third, I am convinced that terminating MFN would be damaging to the people of Hong Kong, currently involved in a transfer of power from British to Chinese rule. All of us in Congress are concerned that China may violate the 1984 Sino-British Joint Declaration and squash freedom, both economic and political, once Hong Kong again comes under Chinese rule. With 35,000 U.S. citizens and 1,000 U.S. firms in Hong Kong, America must be certain that China honors its agreement. And we must remain watchful over the coming months and years.

However, in formulating U.S. policy with regard to Hong Kong, we must remember that repealing MFN for China will hit Hong Kong hard. Hong Kong Governor Chris Patten has said that rescinding MFN would devastate Hong Kong's economy. "For the people of Hong Kong there is no comfort in the proposition that if China reduces their freedom the United States will take away their jobs." It is not good policy to attempt to help Hong Kong by taking an action that is opposed by the people of Hong Kong.

I have another important reason for supporting a one-year extension of MFN: American jobs. Using the Commerce Department's rules of thumb, U.S. exports to China account for roughly 200,000 American jobs. Should we stop doing business with China, I have no doubt but that other nations will step in to take our place, and to take jobs now occupied by Americans both here and in China. Thus, by revoking MFN, we would not significantly punish the Chinese government, but we would visit hardship on our own workers.

Rather than eliminate jobs and stifle growth through increased tariffs, it would be better to take actions showing our displeasure with the Chinese government while encouraging China to become a more free and open society. I believe that Members of Congress and people in the foreign policy community can agree on the need for strong American actions responding to human rights abuses in China. That is why I have introduced the China Sanctions and Human Rights Advancement Act. I am convinced that Members on both sides of the MFN debate can agree that the sanctions I am proposing today are necessary and justified, and that they will be effective.

The goal of these sanctions will be to show our disapproval of Chinese government actions while at the same time encouraging worthwhile economic and cultural exchanges--exchanges that can lead to positive change in China. This legislation would focus on (1) whom the United States allows into the country from China; (2) U.S. taxpayer funds that subsidize China; (3) U.S. government votes and assistance in international bodies that provide financial assistance to China; (4) targeted sanctions of Chinese government-sponsored companies'; and (5) measures to promote human rights in China.

Let me be specific. Under my bill, the U.S. government would take the following actions:

First, it would prohibit issuance of U.S. visas to human rights violators. U.S. visas would no longer be granted to Chinese government officials who implement and enforce Chinese laws and directives that persecute religious groups. Specifically, this targets high-ranking officials of the state police, the Religious Affairs Bureau, and China's family planning apparatus. The same would go for all those involved in the massacre of students in Tiananmen Square. Written notice from the President to Congress, explaining why the entry of such individuals overrides our concerns about China's human rights abuses, would be required before they could enter the United States.

Second, the bill would prohibit direct and indirect U.S.-taxpayer financed foreign aid for China. We can no longer ask U.S. taxpayers to subsidize a leadership and government with which we have so many serious disagreements.

Between 1985 and 1995, the United States supported 111 of 183 loans approved for China by the World Bank group, and 15 of 92 loans that the Asian Development Bank approved for that country. In 1996 alone, the United States gave $700 million to the International Development Association, or IDA, a part of the World Bank group. During that year, the IDA loaned China $480 million. In addition, the U.S. government is providing assistance through international family planning institutions that support China's coercive reproduction policies.

Under my bill, U.S. representatives would be required to vote "no" on all loans to China at the World Bank, Asian Development Bank, and International Monetary Fund. An exception would be made in the case of humanitarian relief in the event of a natural disaster or famine. In addition, for every dollar a multilateral development bank or international family planning organization gives to China, my bill would subtract a dollar in U.S. taxpayer funding to those bodies. Instead of raising taxes on Americans by revoking MFN, we should be cutting taxpayer subsidies to the Chinese government. Simply put, our taxpayers should not be financing current Chinese government policies.

Although we are standing on principle, we know from past experience that these measures will be more effective with help from our allies. That is why the bill requires the President to begin consultations with these allies on enacting similar measures, and for the President to report to the Congress on the progress of those consultations.

Third, the legislation includes actions targeted at companies associated with the Chinese military. There is increasing concern in America about Chinese companies backed by the People's Liberation Army. My bill would require the U.S. government to publish a list of such companies operating in the United States. That would allow informed consumers and other purchasers to choose whether they wish to do business with such companies.

Most troubling have been the actions of two Chinese companies: Polytechnologies Incorporated, known as POLY, and NORINCO, the China North Industries Group. On May 22, 1996, officials from the U.S. Customs Service and Bureau of Alcohol, Tobacco, and Firearms arrested seven individuals and seized 2,000 Chinese-made AK-47 machine guns. On June 4, 1996, a grand jury in the U.S. District Court for the Northern District of California indicted these seven individuals, along with seven others not in the United States, for violating 12 different sections of federal law, including conspiracy, smuggling, and unlawful importation of defense articles. Leading executives of POLY and NORINCO, as well as Chinese government officials, were indicted. The People's Liberation Army owns a majority share of POLY, while NORINCO's operations are overseen by the State Council of the People's Republic of China.

And who were to be the ultimate purchasers of the AK-47s and other military hardware? According to federal agents, California street gangs and other criminal groups. Worse, undercover agents were told by a representative of POLY and NORINCO that Chinese-made hand-held rocket launchers, tanks, and surface-to-air missiles could also be delivered.

This type of activity cannot be tolerated. These companies need to be held responsible for their actions. Under my bill, for a period of one year, POLY and NORINCO will not be allowed to export to, or maintain a physical presence in, the United States. Senator Mike DeWine (R-OH) plans to introduce a separate bill that will target these two companies, and I applaud him and Representative Chris Cox (R-CA) for their leadership on this issue.

These tough measures are both justified and necessary. But even as we implement them, we should not cut off valuable interchange with China. We must always be open to more contact and exchange of ideas with the Chinese people. That is why the legislation calls for a doubling of current U.S. funding for student, cultural, and legislative exchange programs between the United States and the People's Republic of China, as well as doubling the funding for Radio Free Asia and programs in China operated through the National Endowment for Democracy.

In addition, adopting a measure advocated by Representatives Frank Wolf (R-VA) and Chris Smith (R-NJ), the bill requires additional and extensive training for U.S. asylum officers so that they can better recognize signs of religious persecution. The legislation would require an annual report by the President on whether there has been improvement in China's policy of religious toleration and in its overall human rights record, including during the transition in Hong Kong.

The sanctions would sunset after one year. This will allow Congress to evaluate the situation to determine whether, and in what form, sanctions should be continued. In my judgment, the combination of these sanctions and a one-year extension of MFN offers the best approach to change the behavior of the Chinese government.

These measures will direct punishment where it belongs: with the Chinese government, not the Chinese people. By refusing to allow known violators of basic human rights to enter this country, we can signal our revulsion at these practices. By refusing to use taxpayer money to subsidize Chinese activities, we can show our disapproval of their military actions and make them choose between prosperity and belligerence. By banning Chinese companies from this country for attempting to sell weapons to violent street criminals, we can show our willingness to defend our streets and our insistence that the Chinese government cease its intrusive, illegal practices.

Through this legislation, America can stand with the Chinese people and stand by the principles of political, religious, and economic liberty on which our nation was founded. In introducing this bill, I am attempting to deliver a simple message to Congress: Let's not punish American and Chinese families by raising tariffs. Instead, let's punish specific abuses and encourage the further development of the economic and political liberties we cherish.

It is my firm belief that we serve the cause of liberty best when we serve it most consistently. By maintaining free trade, while showing our disapproval of tyrannical practices, we stay true to our principles. We make it possible for liberty to spread while maintaining our own economic freedom intact. We should demand no less from our government, or any other.