- The Washington Times - Wednesday, July 13, 2005

Over the last four years much of this country’s foreign-policy apparatus, members of Congress and the media have been fixated on Middle East challenges, and for obvious reasons. Encouraging the spread of democracy in that region and winning the fight against Islamic terrorists is this generation’s “world war.” It may determine if our very way of life endures — no small stake.

But singular focus on the Middle East detracts from another part of the globe that significantly affects U.S. interests — the People’s Republic of China (PRC) — a nuclear power, with the world’s third largest economy and a population of 1.3 billion people, more than four times that of the United States. Yet in the past few months, China has catapulted back to the congressional front burner. In addition to the Bush administration’s high-level delegation meetings this week in Beijing, Congress is also shining a bright light on the Sino-American relationship this summer — call them the “Chinese Checkers,” lawmakers doing their part to understand and oversee bilateral relations.

Some think these steps represent inappropriate congressional interference; others believe even tougher actions are required. Neither is exactly right; nor are they completely wrong. Congressional jawboning can have the same impact as bilateral trade agreements or Rose Garden signing ceremonies. Leveraging without a law can effect change and promote U.S. interests if done wisely.

Concerns in Congress about the PRC’s relationship with the North Koreans on nuclear proliferation, as well as its own, human rights and economic activities are not new. More recently, however, two issues related to China’s economic activities have been the focus of the congressional crucible — its currency policy and the proposed acquisition of the American oil company Unocal by the Chinese National Oil Corp. (CNOC).

No thermometer is necessary to gauge the heat produced by CNOC on the Hill. Right before Congress left for the July 4th break, the House overwhelmingly adopted a bipartisan resolution expressing concern about CNOC’s bid. The House held its first hearing yesterday and also passed an amendment to the Treasury appropriations bill denying funds to the Committee on Foreign Investment in the United States (CFIUS), an executive-branch agency that reviews potential mergers for national-security concerns, by a lopsided vote of 333-92.



The Senate was also poised to vote later this month on legislation to impose a 27.5 percent tariff on Chinese imports, unless China raised the value of its currency (the Yuan). But Sens. Charles Schumer, New York Democrat, and Lindsay Graham, South Carolina Republican, the architects of the bill, agreed to give the administration until later this year to work with the PRC to boost the yuan’s value.

Relations with the Chinese are no Goldilocks tale, but congressional activities to this point are “just about right.” Lawmakers should understand all the energy and national security implications of selling a major American oil company to a state-owned Chinese firm. Toward that end, Congress should hold oversight hearings on the sale — a move that will illuminate Americans, not threaten free traders.

Federal Reserve Chairman Alan Greenspan did just that recently at a Senate Finance Committee hearing when he questioned if inflating the yuan would really help U.S. manufacturers, arguing that boosting the currency would only decrease PRC imports into this country and raise them from other Asian nations.

Revaluing their currency not only makes Chinese goods more expensive but also might accelerate the current buying spree of dollar-denominated American companies by the Chinese — consequences better understood by encouraging legislative debate and investigation, not by squelching it.

The point is bilateral relations with the Chinese are complex; Congress needs to understand all the economic tradeoffs, including lost export opportunities for American aerospace, high tech and agriculture companies/workers and the increase in U.S. consumer prices if a trade war started. The “Chinese Checkers” can contribute to starting a trade war, but they can also help prevent one by investigating and helping their constituents understand the intricacies of Chinese relations, economically and militarily.

Congress should be partners, not wallflowers, in this superpower dance. And lawmakers can and will do so without formally legislating — by using hearings, and other forms of nuanced leverage that can also effectively promote U.S. interests. The Checkers can show their constituents and the PRC that this is a complicated chess match — and certainly no game.

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