Anti-China Mood Troubles U.S. Businesses

Allegations of foreign meddling in U.S. political campaigns have triggered a wave of anti-China sentiment and turned doing business with China into a high-risk occupation.

U.S. companies are being attacked as tools of the Chinese government. Politicians are being criticized for meeting Chinese business people. And in Long Beach, a modest port development project involving a shipping line owned by the Chinese government has become a target of congressional scrutiny and a nationwide hate mail campaign.

As the mood in Congress worsens, the prospects for granting China permanent most-favored-nation trade status and membership in the World Trade Organization--long regarded as steps that would help bring China into the international community--grow increasingly slim.

Figures as diverse as House Minority Leader Richard A. Gephardt (D-Mo.), who on Thursday reintroduced legislation requiring congressional approval of China’s admission to the WTO, and conservative columnist Patrick J. Buchanan are campaigning against granting China those trade privileges.

American business feels caught in the middle.

“If you’re selling to China, you’re out there in a big way,” said Peter Bowe, president of Baltimore-based Ellicott Machine Corp., a dredging machine manufacturer that exports to Asia. “If the U.S. is out there, you’re out there. And you’re either kissed or kicked.”

Anti-China sentiment in the United States has ebbed and flowed for decades. The angry reaction to such developments as China’s high-tech piracy, a $39.5-billion trade surplus with the U.S. and now, alleged influence-peddling, is probably predictable.

But never have the implications been so great for U.S. business and economic interests. The gradual opening of China’s enormous market has created a land rush among aerospace, chemical, automotive, energy and other industries increasingly dependent on growth overseas. Any threat to the U.S.-China relationship looms especially large in California, whose economy is closely tied to Asia.

That has made the emotional rhetoric surrounding the Port of Long Beach controversy and other U.S.-China issues troublesome to many, who fear it could lead to a disengagement from commercial ties and result in long-term damage to relations between the two nations.

“China presents no danger to the United States unless we create a danger,” said Burton Levin, a former U.S. consul general in Hong Kong and now a professor at Carleton College in Northfield, Minn. “And that’s the direction I fear it’s going.”

China’s critics represent an eclectic coalition of special-interest groups, from environmentalists, labor leaders and human rights activists to neo-isolationists and anti-Communists. Articles painting China as the global threat of the ‘90s have appeared recently in the liberal New Republic and the conservative Washington Standard as well as Foreign Affairs, the bible of foreign policy discourse.

The anti-China drumbeat spread from Beltway chatter in Washington to talk-show fodder earlier this year when an FBI report surfaced that accused the Chinese government of trying to influence U.S. policy by illegally funneling money into political campaigns.

China vehemently denies the allegations of influence-peddling, which have yet to be proved.

David Tang, a Seattle attorney who specializes in China trade, said China’s critics are casting too wide a net by treating all Chinese economic activity as suspect.

“Our elected leaders are going to be very reticent, very hesitant, to meet with any foreign businessmen and hesitant to meet anybody from the Asian community for fear they may be tainted,” Tang said.

Indeed, Vice President Al Gore’s trip to China this week has become highly sensitive, given charges that the White House was the target of Chinese influence-peddling. But Gore’s office on Friday denied reports that he had considered skipping a ceremony announcing the sale of Boeing 777s during his visit.

In the past, the White House has happily taken credit for U.S. airplane sales abroad because they often create jobs--and political benefit--back home.

As he headed for Asia on Saturday, Gore said he plans to discuss the influence-peddling issue with Chinese officials. “I will of course discuss every issue that has potential impact on the relationship between our two countries,” Gore told reporters as Air Force Two headed into Elmendorf Air Force Base in Alaska for refueling en route to Tokyo. But he stressed: “This is not what this trip is about.”

Asked if he believes that the accusations will seriously affect U.S.-Sino relations, Gore said: “I hate to use a cliche: Time will tell.”

Frank Martin, president of the U.S. Chamber of Commerce in Hong Kong, said he fears that the political heat is causing U.S. politicians to pull back from Asia at a time when they need more, rather than less, exposure in the region. He said his office has been contacted recently by politicians debating the wisdom of traveling to Hong Kong and China in the current political climate.

Meanwhile, promoting business in Asia has become a high-wire act. “Things we thought we could count on are totally off kilter,” said a Washington consultant who works with U.S. businesses abroad.

Failure to win permanent most-favored-nation status for China would be a blow to U.S. business leaders, who argue that the current system of reviewing China’s trade status annually wreaks havoc on their long-term planning and disrupts the overall relationship.

“Up until last fall, many of us still thought [permanent most-favored-nation status] was a possibility, but now the situation has just deteriorated too far,” said Douglas Paal, president of the Washington-based Asia Pacific Policy Center.

While U.S. executives share these concerns in private, they are increasingly wary of taking them public. Yet they bristle at the notion that business people are untrustworthy participants in the debate. They argue that American executives have had more on-the-ground experience with China--from personal contacts with powerful leaders to transforming state-owned companies into free-market operators--than anyone else in the U.S.

“The notion that the business sector is now disqualified from having views or supporting those views . . . is absurd on the face of it,” said Robert Kapp, president of the Washington-based U.S.-China Business Council.

In Long Beach, a plan to lease an abandoned Navy base to China Ocean Shipping Co., or Cosco, for a 145-acre container terminal--previously opposed on environmental grounds--has now become a lightning rod for sometimes ugly anti-China sentiment.

Port officials are fighting efforts by columnist Buchanan and others who claim that approving the lease would be tantamount to turning over Long Beach to the Chinese military. Cosco, which has been calling on Long Beach since 1981, is China’s state-owned carrier.

U.S. Reps. Randy “Duke” Cunningham (R-San Diego) and Duncan Hunter (R-El Cajon) have asked the Navy to halt the project until Congress can review the security implications.

Staffers at the port have been on the receiving end of a barrage of hate mail and critical letters and faxes over the past two weeks.

One staffer was spat at during a public meeting, and others have been called “traitors” and “Commie lovers.”

Times staff writer Elizabeth Shogren in Alaska contributed to this report.

* HONG KONG OUTLOOK: Residents are optimistic about the economic future but less so when it comes to politics. A14