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US Fed Chairman Supports New Trading Status for China
Permanent normal trade ties with China will expand opportunities for US firms in the huge Chinese market, Federal Reserve Chairman Alan Greenspan told a key US lawmaker in a letter released Monday.
"Passage of PNTR (permanent normal trade relations) ... will facilitate a further opening of China's market to US producers," Greenspan said in a letter to Representative James Leach, chairman of the House banking committee.
"I believe extending PNTR to China and full participation by China in the WTO (World Trade Organization) is in the interests of the United States," Greenspan wrote in the letter, dated May 5 and released Monday by Leach.
The Clinton administration has launched a big compaign to garner support for PNTR in the House of Representatives, which is scheduled to vote on the measure in the week of May 22.
The measure faces stiff opposition from members of Democratic Party, who want to preserve the annual Congressional review of China's trade status as a means of pressuring China to improve labor standards.
But offering normal trade relations to China on a permanent basis is necessary if a landmark market-opening agreement signed last November by Washington and Beijing is to be implemented.
In exchange for cutting tariffs and eliminating other barriers to commerce, the United States agreed to back China's admission to the World Trade Organization.
"China, with a population of 1.25 billion people, has an economy that when measured taking into account the purchasing power of alternative currencies is larger than that of Japan and may be approaching that of the US economy," Greenspan wrote.
But China's accession to the WTO and tighter trade relations with the United States will also "work to strengthen the rule of law within China and to firm its commitment to economic reform," Greenspan added.
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