Biggest China Boosters: Boeing, GM, Motorola

The $100,000 that China allegedly channeled through a Democratic Party insider to try to influence US policy is pocket change compared with the war chest of the real China lobby: US business interests.

Last week, the multimillion-dollar lobby again mustered its forces for the annual tug of war to win renewal of China's most-favored-nation (MFN) trade status. Opponents in Congress have 90 days to reject President Clinton's recommendation of June 5 to extend China's privileges.

The pro-China business coalition is one of the most powerful in Washington and shows the growing role of US interest groups in shaping American foreign policy.

With an aggressive lobbying effort on Capitol Hill and campaign contributions amounting to tens of millions annually, it has helped win renewal of MFN for China each year since 1989 despite opposition based largely on Beijing's poor human rights record, say congressional sources.

Most recently, the big firms have been reaching beyond Washington's Beltway. Across the country, they are orchestrating a push by thousands of subcontractors, businesses, and local officials to promote preferential trading status as a catalyst for progressive change in China.

"Engagement with China is the best way of ensuring that we continue the sorts of economic and political improvements we've seen," asserts Bill Morley, director of congressional affairs for the US Chamber of Commerce, which represents 200,000 member firms.

Indeed, so influential is the business lobby - led by Boeing, General Motors, Eastman Chemical, and Motorola - that Beijing has assumed a low-profile, ringside posture, analysts say.

"Chinese officials decided that Beijing's interests would be better served by allowing US business groups to speak for themselves," according to the Congressional Research Service (CRS). China is not one the top 10 countries lobbying in Washington.

Given Beijing's lack of popularity with the American public, the low-key strategy is probably more effective, the CRS report concludes. Behind the scenes, however, Beijing quietly wields the stick of trade retaliation and the carrot of a vast domestic market to goad US firms to do its bidding.

"If we deny China MFN it would be viewed as an aggressive act and an act of economic warfare," warns Calman Cohen, co-chairman of the Business Coalition for US-China Trade. The organization of nearly 80 trade groups and companies is a driving force promoting MFN for China.

Overall, China accounts for less than 2 percent of total US exports, but trade groups contend commerce with Asia's largest country is linked to some 200,000 American jobs. The number of small and medium US firms selling goods to China is increasing, according to the National Association of Manufacturers.

Nevertheless, the biggest US stakeholders in China are large companies such as Boeing, considered the leading player of the pro-China business lobby.

In the past five years, 1 in every 10 Boeing commercial planes - or an average of $2 billion worth of aircraft each year - has been sold to China. Over the next 20 years, Boeing officials estimate that China will purchase an additional $125 billion in new airplanes, becoming the largest market for planes outside the United States.

To protect its interests, Boeing in 1995 took the lead in organizing the China Commercial Normalization Initiative, a long-term, "grass-roots" campaign now active in 30 states aimed at winning China permanent MFN status as well as entry to the World Trade Organization (WTO).

Under the initiative, Boeing and other firms act as "state captains" responsible for winning over congressional delegations, say industry experts. For example, Boeing handles Washington and Kansas, while Motorola takes Illinois and Texas.

When key debates arise such as MFN, the captains rally to promote commerce with China by writing op-ed pieces, staging forums, and holding meetings with visiting lawmakers. This week, a group from the California Coalition for US-China relations arrived in Washington to lobby their state congressional delegation.

Increasingly, pro-China businesses are going beyond trade in an attempt to counter criticism of China by opponents of MFN including human rights advocates, labor unions, and some Christian groups.

Washington lobbyists and local business groups are now working to counter charges of religious persecution in China that last year helped mobilize right-wing Christian groups against MFN.

"We are not apologists for China," says Mr. Cohen. "Having said that, there is a religious revival going on in China with ... millions of Christians. There is real progress."

Apologists or not, the lobby has so far steamrolled human rights advocates who seek to place conditions on US-China trade.

"The corporate lobby ... is where our policy is being determined," says Ken Silverstein, author of a book on lobbyists called "Washington on $10 Million a Day."