Gore Visit Is Step in Right Direction for China Trade

For eight years, U.S. corporate giants have watched with frustration and envy as top leaders from rival industrial countries traveled to China and returned home laden with lucrative contracts, while American leaders took the moral high ground and stayed home.

German Chancellor Helmut Kohl has been to China twice. Two Canadian prime ministers, two Japanese prime ministers and a host of chiefs of state and heads of government from other European, South American and Asian countries also have called on the Chinese leadership, usually carting off signed business deals at the end of the visits. French President Jacques Chirac is due here in May.

But Tuesday was revenge time for American business. Vice President Al Gore--the highest-level U.S. official to visit China since President Bush did just before the 1989 Tiananmen Square crackdown--looked on approvingly as executives for General Motors and Boeing signed agreements worth more than $2.4 billion to American companies.

Investigations in Washington probing China’s role in illegal political contributions seemed very far away on the crisp Beijing spring day as the U.S. executives celebrated a return to business as usual between the world’s richest and the world’s most populous countries. “We’re back to where we used to be in the relationship,” asserted Ron Woodard, president of Boeing’s commercial airplane group.

At a news conference following the contract-signing ceremony at the Great Hall of the People, an event also witnessed by China Premier Li Peng, Boeing gave details of its agreement with Air China, the country’s flagship carrier. In addition to the purchase of five 777 jetliners worth an estimated $659 million, Woodard said the aircraft deal includes spare parts, bringing the total package close to $800 million.

In another conference room in the China World hotel, GM Chairman and CEO John F. Smith Jr. described his company’s $1.57-billion joint venture to produce Buicks in Shanghai. Smith predicted that the agreements with state-owned Shanghai Automotive Industry Corp. will generate $1.6 billion in exports for the United States over the next five years.

By 1998, Smith said, GM hopes to be producing 100,000 V-6 Buicks to compete with German Audi and Chinese-design Red Flag cars in the fledgling luxury car market.

“This project is a critical element in GM’s total global network and is the largest in GM’s Asia-Pacific region,” Smith said.

The American commitment to the Chinese market was not limited to the Boeing and GM announcements. In yet another conference at the hotel, California-based Intel Corp. hosted a presentation of its new products. In another room, American Standard staged a seminar to introduce its Trane air-conditioning units.

Although the Boeing and GM deals had been in the works long before the five-day Gore visit, which began Monday, the U.S. executives praised the vice president and the Clinton administration for supporting their efforts.

“We were already in pretty good shape with the agreement,” said Smith, who spoke glowingly of the long-term potential of the China market. “But the circumstances of Al Gore’s visit obviously provided the catalyst to bring it together and have the signing ceremony. The visit kind of wrapped things up.”

By participating in the Boeing and GM signings, Gore sent a message to Chinese leaders that the administration previously has sent to leaders of Japan and other countries: that private U.S. businesses enjoy the support of their government.

“There is something of a vestigial organ at work here,” said Anne Stevenson-Yang, representative of the U.S.-China Business Council in Beijing. “China finds it very hard to give up the Ming Dynasty tradition in which China’s international relations are those of a sovereign to tributary nations. As long as those tributary nations show respect, then China is willing to engage in economic relations.”

Delays in the approval of aerospace, automotive and other pending U.S. deals with China often have been blamed on frictions between the two countries over such issues as film and software piracy. But observers here say visits like Gore’s can put commercial deals over the top.

“In the protocol of commercial diplomacy, something has been missing here for the Americans the past eight years,” said Laurence Brahm, a Beijing-based business consultant and author. “The Gore visit is not necessarily a breakthrough, but it is a step in the right direction.”

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ON TRACK: Gore reassured Chinese officials on the countries’ ties. A10.