Bank on Prosperity to Foster Human Rights : China: Keep its trade status intact. It’s not in our interest to alienate this most important key to a peaceful Asia.

As he turns his gaze across the Pacific, President Clinton confronts two critical issues that are far more pressing than the Japanese trade surplus: What to do about renewing China’s most-favored-nation trade status this summer in the face of continuing human-rights violations, and whether to cut back the U.S. military presence in Asia, as we are in Europe. Clinton must move deftly on both of these issues so that we do not disrupt the stability of a prospering East Asia at a time when so much of the rest of the world faces increasing turmoil.

While there has been substantial economic reform in China, there has been hardly any political reform. The question is what to do about it.

What we should not do is revoke China’s most-favored-nation status. President Bush vetoed such attempts several times. He was right to do so. I hope Clinton will do exactly the same if such a measure comes to his desk, as is expected soon.

To understand why the most-favored-nation status should not be revoked, we need to look at what has happened elsewhere in Asia, for example in Korea and Taiwan. Economic progress leads inevitably to political progress, because with economic progress, a society must open up. As that opening takes place, pressures for freedom mount.

Churchill once said that Russia feared our friendship more than our enmity. That applies to the hard-line leaders in China today. A dictatorship cannot survive without secrecy. But a free market that decentralizes decision-making and multiplies the flow of information leads inexorably to the end of secrecy. It means inevitably that there will be more and more contact with the outside world. That contact makes it impossible for a dictatorship to survive.

But why do we need good relations with China today? Why do we so fear offending China’s leaders if the Cold War is over and we no longer need China to help balance an aggressive Soviet Union?

We did not open relations with China in 1972 just because of the Russia problem. That was part of it. But even if there had been no aggressive Soviet Union, it was right to go to China for several reasons.

China is a huge country with a huge population. There is no question that, within the next century, it will become an economic and military superpower with whom it is vitally important to maintain a relationship. China has a veto in the U.N. Security Council and is a key player in such hot spots as North Korea and Southeast Asia, where the United States has little influence.

Despite these important facts, the United States will always be concerned with the issue of human rights in China. However, in expressing our concerns, we should not take actions that will make the plight of the Chinese people worse rather than better or that will weaken the private sector. The growth of economic freedom in China is the best way to produce political freedom. Only when prosperity becomes widespread will respect for human rights on a similar scale be possible.

The Great Wall of China is very thick. It is difficult enough to be heard when you are inside the wall; it is impossible when you are outside it. Economic and diplomatic isolation of China certainly is not in America’s interest or in the interest of improving human rights.

China’s emergence as an ever-more-important power in Asia underlines a transformation there that will rival the vast changes that have taken place in Europe since the end of the Cold War.

During and immediately after World War II, there was a sterile debate among American foreign-policy experts between “Europe-firsters” and “Asia-firsters.” That debate did not make any sense then, and it makes no sense at all now with the end of the Cold War.

Anyone who has any doubt about the U.S. role in Asia should remember that three of the four wars we were involved in during this century were in Asia. In this period after the Cold War, it may be necessary to keep adequate forces in Europe, but it is indispensable to keep the current level of forces in Asia.

Consider, for example, the case of Japan. There are those who say that the Japanese are rich enough to defend themselves. “Bring our men home,” they say, so that we can cut our defense budget. Let us see where that leaves Japan: facing Russia, no longer communist but still a nuclear superpower; facing China, which has the capability of becoming a nuclear power; and facing North Korea, which is trying to become a nuclear power.

What will the Japanese do then? They will surely be pressed to make the terribly painful decision to go nuclear. We cannot allow that.

I know there are others who might say, “Why does the United States continue to have these burdens in the world? After all, the Cold War is over. Let somebody else step up and assume the burden that we have carried for the past 45 years.” But if not us, who? The Japanese? The Chinese? The Russians? The Germans?

The answer is self-evident that none of these powers has the world leadership capacities that America does. And let us also remember that in Asia, for geographic and historical reasons, America is the only power that is not considered a potential threat to any other nation in the area.

There is no question that the United States has the means to lead, in Asia and elsewhere in the world. As economist Herb Stein has observed, while we are not rich enough to do everything, we are rich enough to do everything important. There is also no question that we are worthy to lead, although to deal with the challenges of the post-Cold War world we must take steps to make our country even stronger by reforms in health care and education and by creating more jobs.

The question is whether we have the will to lead. Now that we have achieved the defeat of communism, can we ensure the victory of freedom?

The 20th Century will be remembered as a century of war. Only if the United States leads the way will the 21st Century be a century of peace and freedom.