Indeed, they have increased since President Bill Clinton s trip to China in mid-1998, when the previous attempt to move the negotiations forward failed. The pace of China s economic growth has slowed substantially, increasing the challenge the regime faces in restructuring its state-owned industrial sector. That process already has brought unprecedented high levels of unemployment and related social unrest, leading Premier Zhu and other Chinese leaders to selectively moderate the pace of domestic economic reform with the deepening Asian crisis. The leadership s increasing emphasis on political stability in 1999, the year marking the tenth anniversary of the Tiananmen crisis and the fiftieth anniversary of the founding of the People s Republic, has diminished the regime s appetite for opening its markets further to foreign competition. The United States also faces more constraints in reaching an agreement.
China is close to overtaking Japan to become our largest trade deficit partner.
The mounting deficit heightens political pressure in the United States to make expanding access to China s domestic market a precondition for a WTO agreement. Moreover, concern over increased Chinese human rights violations, a perception of an increased Chinese missile threat against Taiwan, and allegations that the Chinese stole sensitive nuclear weapons designs from the United States are likely to magnify congressional scrutiny of any WTO-accession package for China. The bilateral trade deficit of the United States with China has grown every year since 1985. That is only a few billion less than the deficit registered with Japan, our largest trade-deficit partner. U.S. officials, notably Commerce Secretary William Daley, repeatedly have cited the bilateral deficit as evidence of the closed character of the Chinese economy.