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last year. Maintaining MFN promotes our freedom of emigration and travel objectives.
Commercial Relationship Promotes Reform.
Foreign trade and investment keep China open to the outside world and support the economic forces that have been driving political and social change and encouraging a loosening of state control and more personal freedom. Withdrawing MFN would have the greatest adverse impact on Chinese in the most dynamic, market-oriented coastal regions. These and other groups who depend on a healthy commercial relationship to justify business, social and academic contacts with the U.S. would be affected. Hardline, xenophobic elements in China will use MFN withdrawal to justify restrictions on these contacts and a tougher, less responsive position on issues of concern to us.
Other Means Available to Pursue U.S. Interests.
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The U.S. has set the agenda for improving the bilateral relationship and has engaged the Chinese -- with tangible results - on key issues of concern, including human rights, nonproliferation, prison labor exports, and trade issues. Eliminating what the Chinese consider to be a fundamental pillar of the economic relationship MFN trade status will seriously erode, if not destroy our ability to engage the Chinese on these issues. The president has a broad range of authority to take additional action in specific areas of concern and is prepared to do so when it serves U.S. interests. MFN withdrawal is not the appropriate tool to use in pursuing these disparate interests.
A Trade War Will Hurt U.S. Business and Consumers.
Raising tariffs on Chinese products will provoke trade retaliation. This will put at risk 5,000 million dollars (1990) in U.S. exports, including wheat (511 million dollars), aerospace (749 million dollars), computers and electrical machinery (860 million dollars), fertilizer (544 million dollars), cotton (259 million dollars), and wood products (281 million dollars). Since no other country would face retaliation for withdrawing MFN, U.S. business would be placed at a competitive disadvantage. Trade actions on both sides could also adversely affect over 4,000 million dollars in U.S. investment in China. Without MFN, U.S. consumers would pay substantially higher prices for Chinese-made clothing, footwear, toys, tools, and electronics.
A Constructive Relationship With China Serves World Peace.
A nation of over one billion (1,000 million) people that is a permanent member of the U.N. Security Council and has influence throughout the developing world, China has an essential role to play in promoting global peace and stability. China's support in the U.N. helped maintain international solidarity in confronting Iraq. Engagement with China is also serving U.S. interests in promoting peace in Cambodia and the Korean peninsula.
CHINA'S EMIGRATION AND FOREIGN TRAVEL POLICIES
Emigration
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- China's relatively free emigration policies have continued since the renewal of MFN status in 1990. In FY 1990, 16,751 U.S. immigrant visas were issued in the PRC. The U.S. numerical limitation test for immigrants from China was fully met.
-- The principal restraint on increased emigration continues to be the capacity and willingness of other nations to absorb Chinese immigrants, not Chinese policy.
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