Delegates See China Visit as a Golden State Opportunity : Trade: Californians accompanying commerce secretary hope to strike deals and strengthen ties on the closely watched trip.
Of the 25 executives accompanying Commerce Secretary Ronald H. Brown on his trade mission to China today, nine are from California--and all are looking at the trip as a chance to cement deals, prospect for new ones and strengthen trade ties that promise to create new jobs in the state.
What they don’t want to do is talk about anything that might get in the way of such deals--such as linking commerce with changes in China’s policies on dissidents, labor union activists, child labor or the environment. They’ll leave that to Brown, who has promised to “raise human rights issues in the appropriate way in the appropriate forum.”
But observers on both sides of the Pacific will be watching the trip carefully. It is the first by a Cabinet member since the Clinton Administration extended China’s most-favored-nation trade status, or MFN, in May over protests from human rights groups, which said the move was a tacit endorsement of that nation’s repressive policies.
The Administration denies that, arguing that strengthening ties is the best way to effect positive changes in the populous nation.
“The President indicated when he made his announcement on May 26th that one of the reasons for the decision (on MFN) was that we believe that we can have more impact on issues like human rights in China if we are commercially engaged,” Brown said at a news conference in Washington on Wednesday.
It is a position the traveling executives, eager to tap into China’s vast potential markets, have backed wholeheartedly.
“In the long run, when the middle class emerges and develops in China as economic development progresses, we will see the society open up,” said David K. Lam, president and chief executive of Expert Edge Corp. in Palo Alto and a member of Brown’s delegation. “The middle class will naturally move in that direction and demand a more open society.”
Critics are not so sure.
“It remains to be seen . . . how they are going to express human rights concerns in an effective manner and in a way that avoids the pitfalls of quiet diplomacy . . . which has been a spectacular failure in influencing the Chinese government’s human rights practices,” said Richard Dicker, associate counsel with Human Rights Watch in New York City.
In any case, for the lucky executives chosen to accompany Brown--especially those heading small businesses--the trip will mean a big boost in prestige and a chance to rub elbows with high-ranking officials.
The business men and women in the delegation represent a broad range of leaders in industries considered crucial to China’s future. That nation’s economy is growing at a torrid pace, and it must upgrade its manufacturing plants, telecommunications, power plants, airports, roads and other infrastructure with the help of the West.
Many of the chosen firms already do business in China. The disproportionate representation of California companies is a sign of the state’s importance in the emerging trade relationship.
In addition to being diverse ethnically, the delegation also includes firms--such as Atlantic Richfield Co. and SCEcorp--whose political action committees have been big contributors to Democratic Party causes.
Aside from exploring new deals, Brown’s mission is intended to address nagging problems such as intellectual property rights protection and access to Chinese markets. The United States says its trade imbalance with China reached $23 billion last year.
The Times reported Wednesday that the Administration is considering lifting most of the remaining economic sanctions against China stemming from the 1989 crackdown on democracy protests in Tian An Men square. Later in the day, Brown said there were no plans to lift the sanctions during this trip.
Some of the California companies expect to close deals while in China. Tandem Computers Inc. of Cupertino will sign a contract with China Great Wall Industries Corp. to resell its computers in China, a deal that could be worth tens of millions of dollars over the next several years, said Tandem President Jimmy Treybig.
Grigsby, Brandford & Co., a San Francisco investment bank, will be signing a contract for the second phase of a joint venture construction project for the Port of Miami with a Chinese maker of cranes, a deal worth $24 million, said Calvin Grigsby, president and chief executive. The firm will also be looking at ways to finance major construction projects in China through public financing, a concept that is still new to the communist nation, he said.
Others firms are going along to cultivate new business.
John Bryson, chairman of SCEcorp, Southern California Edison Co.'s parent, would like the company’s Mission Energy subsidiary to take part in building power plants in China, a spokesman said.
Arco Chairman Lodwrick Cook, meanwhile, will explore further energy-related projects, possibly a joint venture on a refinery. Arco is already a partner in the development of the massive offshore Ya-cheng natural gas field, with the first natural gas to be delivered to Hong Kong in 1996, spokesman Albert Greenstein said.
Irvine-based AST Research Inc., already the No. 1 purveyor of personal computers in China, wants to get its machines into Chinese schools, an immense new market, said Chairman Safi U. Qureshey. He said an advisory education council in Shanghai, China’s largest city, recently recommended placing AST computers in about 450 schools there.
Expert Edge, which produces software to help manufacturers of sophisticated equipment deal with customers, sees a market in providing software to aid in aircraft maintenance at China’s many airports.
“We’re exploring a joint venture of some kind,” said Lam, a native of China who was raised in Vietnam and Hong Kong and immigrated to the United States nearly 30 years ago.
Systems Integrated, an Orange-based maker of automation control devices for power generation and other purposes, would like to sell its equipment to be used in new water management systems. The company has already sold equipment for use in Chinese hydroelectric power plants, President Susan Corrales-Diaz said.
Human rights activists have called on Brown and the business leaders to make sure the issues are not forgotten in the rush for new business.
Human Rights Watch met with Jeffrey Garten, undersecretary for international trade, earlier this month to urge Brown to raise questions about what it calls the “deteriorating human rights situation” in China and the treatment of specific dissidents, such as opposition leader Wei Jingsheng.
Last September, Wei was released after 15 years in prison but was taken back into custody in April after talking with foreign journalists.
Dicker also urged U.S. companies to adopt policies regarding the ethical treatment of their Chinese employees to avoid situations like that of Gao Feng, a Christian activist and employee of Chrysler Corp.'s Jeep plant in Beijing, who was suspended from his job after being taken into custody for conducting a private religious service observing the anniversary of the Tian An Men protests. After pressure from international groups, Gao was reinstated.
But executives seemed reluctant to commit themselves to any rigid code of ethics, arguing that they already adhere to internationally recognized practices.
“People do want to work for multinational companies all over the world because of the standards and ethics we follow,” AST’s Qureshey said. “That is what really creates long-term, positive change.”
Federal News Service contributed to this report.