The affirmative vote on Permanent Normal Trading Relations (PNTR) with China should, I believe, be given a grudging welcome. Grudging, because I believe the softening effect such relations will have on China’s behavior, both internal and external, have been much overstated. Welcome, because there probably will be some such effect none the less; or, if there is not, at least no harm will have been done.

In the matter of trade between the U.S. and China, the starting point for any discussion must be the huge asymmetry in numbers. In 1998 the U.S. bought nearly a third of China’s exports; China purchased less than three percent of ours. Even more striking, in view of the vicissitudes in the U.S.-China relationship these past few years, has been the growth in China’s dependence on the U.S. market: in 1988 we took only a sixth of their exports (whose actual volume was, of course, much less then).

China’s leaders do not smile when they contemplate these facts. The numbers mean that China is economically dependent on the U.S. Since, following the death of Marxism as a state ideology, the leaders’ sole hope for legitimacy with their own people rests on continuing to deliver economic progress, they are politically dependent on the U.S., too. This is a distressing state of affairs for China’s leaders. Whatever fragments of ideology still remain in their minds, they are all of them prickly nationalists. They share with all their people the desire to see China rich and strong. But that is their second priority; the first— which is not shared with their people— is regime survival, and regime survival demands continuous economic growth, and a healthy trade relationship with the U.S. The leadership is therefore locked into a relationship they do not much care for but, for reasons of self-preservation, cannot repudiate.

The debates on PNTR and WTO membership have concentrated on the issue of whether more open trade with the world in general and the U.S. in particular will help nudge China towards political liberalization. I do not think we can know the answer to this question. There are no historical precedents. If China’s political and military leadership could be depended on to behave rationally, as variables in an economist's model, increased trade would surely lead to political softening; but if China’s leadership could be thus depended on, the history of the last 50 years in China would look very different. I do believe, however, that the current level of dependency on the U.S. is good for the people of China and the "three ‘T’s" (Tibet, Turkestan and Taiwan) in proportion as it is vexing to the Communist leadership. It does not make them more liberal; but it places restraints on how illiberal they can be.

That "good" is relative, of course. The physical assaults on the culture and religion of the people of the western regions, and the verbal assaults on Taiwan, will continue at more or less the current level of ferocity— which is to say, a level not found in either the internal or external dealings of civilized nations. It is even possible they may even increase, now that the modest leverage of Congressional MFN renewal is gone. The following should, however be noted. First, while the Jackson-Vanik amendment (requiring annual renewal of MFN status) was in place, the cycles of repression and relaxation in China followed the fortunes of the various factions in China’s leadership much more closely than they followed U.S. policy. In these months leading up to the PNTR vote, in fact, there has been a major ideological clampdown, driven by swelling unrest among workers in rust-belt industries in China. Second, while China has been loud and ferocious in denouncing the party platform of Chen Shui-bian, victor in the Taiwan elections this March, China has not actually done anything belligerent. Compare 1996, when much lesser provocations had the Chinese lobbing missiles into the Straits of Formosa. This more muted approach is not unrelated to the trend I noted in the second paragraph above. Regime survival overrides the need to appease western human-rights lobbies; but it also overrides the demands of the most belligerent factions in the Chinese military.