The liberalization of China’s economy in 1978 set in motion a new dynamic in US-Sino relations in which economic affairs became the central feature of the bilateral relationship in the denouement of the Cold War. Relative to national security issues, Congress exercises considerably greater latitude on economic issues. Despite this reality, China has historically relied on the US executive branch and US multinationals eager to enter the Chinese market to advocate on its behalf to Congress. Up to the establishment of permanent normal trading relations with China in 2000, the country could count on the support of industrial giants including Boeing, General Motors, and Caterpillar to sway Congressional opinion each time China’s status came up for renewal. Until as late as the late 1990s, China’s Washington embassy had only one official devoted to congressional affairs.
Increasingly, however, China has had to look to its own initiative as three important shifts began to diminish its traditional allegiances. First, the ballooning US trade deficit with China and its topping of the United States as the world’s largest manufacturer made it an important flash point in US politics due to the weakness of the US economy. This has put pressure on the executive branch, which has historically been more moderate in rhetoric and approach.
Second, increased efforts by Chinese companies to directly acquire US assets or enter the US market have similarly heightened political tensions, particularly when potential national security interests are called into play.
Third, US multinational firms have become less willing to exercise their influence on behalf of China as they have become increasingly disillusioned by restrictive market access. In most cases, this criticism has been discreet, conducted through trade groups, because companies fear that open criticism of China would subject their firms to hostile treatment. General Electric CEO Jeffrey Immelt’s comment in 2010 that China had become hostile to foreign multinationals and that he was looking for opportunities elsewhere was shocking not for his thinking, but for his willingness to give voice to it.
Taking the initiative
China’s first major effort to strengthen its influence in Washington in the 1990s became embroiled in scandal amidst allegations that agents working on behalf of Chinese interests attempted to illegally direct campaign contributions to the Democratic National Committee during the 1996 elections. The motivating factor behind China’s 1990s push to influence US politics was President Clinton’s yielding to congressional pressure to grant then Taiwanese president Lee Teng-Hui a visa to attend a class reunion at Cornell University over Beijing’s strong protests. Despite being labeled a “private visit,” it was widely perceived as a diplomatic coup for Taiwan.
It was then that the Chinese government began to develop proposals to deepen its understanding of and ability to promote its interests with Congress and the American public, particularly Chinese Americans, according to a Senate report published in the aftermath of the campaign finance scandal. While legal for foreign governments to promote their interests through lobbying, public relations, and other political activities, these activities must be registered; it is illegal for foreign agents to attempt to influence US elections through campaign contributions. Twenty-two individuals were ultimately convicted in what was dubbed “Chinagate.”
Since the controversy, China has been sensitive to the fact that too strong of an engagement, particularly aggressiveness in legitimate lobbying spending, could prompt a political backlash. Thus, while China has retained the prominent Washington lobbying firm Patton Boggs at a $35,000 per month retainer, the country has appeared to mostly take the lead directly. In 2008, it opened a new $200 million embassy in Washington and substantially expanded its legislative affairs section. During his tour in Washington, Chinese ambassador Zhou Wenzhong visited some 100 senators and representatives in their districts. Within ten years China has progressed from near ignorance of Congress, to clumsy engagement, and now considerable sophistication. “They have built up a very nuanced understanding of how Congress works,” one official told Reuters.
The 2011 bill sponsored by Ohio senator Sherrod Brown that threatened to subject the exports of any nation with a “fundamentally misaligned” currency to steep countervailing duties was an opportunity for China to demonstrate its newly sophisticated lobbying presence at work. According to Reuters, the Chinese embassy’s congressional liaison team made a full-play effort against the bill, meeting with important aides, making phone calls, speaking to the White House, and drawing on lobbying firm Patton Boggs. It also demonstrated that, for now, China’s traditional reliance on the executive branch and American multinationals was not yet exhausted. The Obama administration maintained a conspicuous silence on the bill and more than 68 organizations, including the US-China Business Council, Boeing, and Honeywell, registered to lobby the bill, according to First Street Research Group. Despite these efforts, the bill was passed in the Senate on a 63-35 vote. It was prevented from coming to a vote in the House of Representatives by Speaker John Boehner – closer to a draw than outright victory on a bill that brought with it the risk of launching a trade war.
Finding a place for Congress at the table
Positively for US-Sino relations, several members of both houses of Congress have sought to deepen and facilitate a more productive dialogue. Republican Senator Mark Kirk of Illinois has been responsible for the founding of both the House and Senate’s US-China Working Group. “Across the board, the US and China continue to grow interdependent every day and we need a nuanced policy that reflects this 21st century reality. At the same time we need to create a space for senators to hold open and frank dialogue with Chinese leaders on areas of disagreement,” Kirk said at the time. In 2011, on the sidelines of the US-China Strategic and Economic Dialogue, which was organized by the executive branch, Chinese Vice Minister of Foreign Affairs Dai Bingguo met with the Senate group while the House group met with Vice Premier Wang Qishan.
Limited direct engagement with Congress, while consistent with most countries’ practice, is inappropriate for one of China’s strategic importance. Congress will continue to play a more involved role in US-Sino bilateral relations than is typical of relations with most countries. While at times the threat of Congressional action is an important back-up to its primary oversight role in international relations, the risk is that, if not moderated, Congress may become a source of unnecessary instability in the world’s most important bilateral relationship. Congress is justified in criticizing the array of subsidies which benefit Chinese exporters at the expense of American firms just as it is right to continue to be a vocal defender of human rights. Yet the brinksmanship which has marked much of Congress’ recent actions towards China is unsettling. Such actions cannot credibly be said to be in the United States’ interests and diminishes the leadership role of the executive branch. Likewise, China must act with greater maturity in its engagement with the executive branch. Regular cessation of bilateral contact as an act of protest by China undermines the executive branch and emboldens Congress. If there is no strong executive branch relationship for Congress to jeopardize, it is less restrained from its worst impulses.
A stronger China lobby is in the interest of both nations if it can effectively moderate the momentum towards counterproductive confrontation and restores the executive branch’s more measured leadership in US-Sino affairs.
This article appears in the March 2013 issue of China Hands.