MFN for P.R. of China

Senator Lock Smith

Smith Office

Capital Hill

No. 134, Washing gton Boulevard

Washington D.C. 903576

Tel: 345-468-5959

Date: July 5,1999

Mr. Richard Williams

Abacus Group of America, Inc.

350 Fifth Avenue

new York 10118

Re: MFN for P. R. of China

Dear Mr. Williams:

Thank you very much for contacting me to express your concern over the extension of Permanent National Treatment or the Most Favored Nation (MFN) status to the People’s Republic of China (PRC).

The United States must condemn in the strongest possible terms the brutal suppression of the demostrations in Beijing in June, 1989. The sanctions implemented since then prohibiting exports of defense-related items, suspending military cooperation, opposing any further liberalization of export controls, opposing all loans from development banks unless they directly promote basic human needs, suspending the activities of the Overseas Private Investment Corporation, and extending student visas were, I believe, appropriate because they were targeted at the Beijing leadership and PRC military rather than the country as a whole.

However, the President and Congress decided not to withdraw Most Favored Nation status for China last year becarse it was generally felt that this would hurt the Chinese people, especially in the exportoriented coastal regions, more than it would hurt the leadership. Further, ending MFN would have devastated Hong Kong, which has a strong representative government and practices free trade. The Hong Kong service economy is based largely on Chian trade; ending MFN would have undermined it when it is already facing serious questions about its future.

The President recently decided to grant MFN to China and Congress now has the opportunity to review this decision. The United States has an obligation to stand by the courageous people in the pursuit of democratic freedoms in China. We must support their right to speak freely and demonstrate against their government. The economic relationship between the United States and China must not benefit the leadership in Beijing, but at the same time we should keep in mind the interests of the Chinese people, the US businesses, and our allies in the region.

Thank you once again for expressing your concerns on this important subject. I will keep your views in mind when this comes before the Senate meeting, June 29,2000.

Yours sincerely,

Lock SmithUnited States Senator