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Zhu Speaks to Kresge Audience On Sino-American Relationship

By Kevin R. Lang

On the final day of his six-city U.S. tour, Premier Zhu Rongji of the People’s Republic of China discussed trade relations and educational cooperation between the United States and China before a full-capacity Kresge Auditorium audience, Wednesday.

Much of Zhu’s address focused on Sino-American trade relations, notably the substantial U.S. trade deficit. Zhu downplayed the issue, noting that the total U.S. deficit with all nations was less than $200 billion last year. While this figure may seem large, Zhu said, it amounts to less than two percent of the U.S. Gross National Product. “This is very common in many countries,” Zhu said, speaking with simultaneous English translation. “This is not such a serious problem.”

Trade deficit values inconsistent

Zhu also noted that U.S. and Chinese figures regarding the deficit are more than $30 billion apart.

“I’m not trying to comment on which number is the more accurate,” Zhu said. Zhu discussed a Stanford University study which found that both nations use inconsistent methods regarding shipping and insurance on imports and exports, and that neither accounts for value added in Hong Kong to Chinese products. The actual U.S. trade deficit is most likely around $36 billion, Zhu said.

Zhu attributed the deficit less to prohibitive trade regulations than to changes in the U.S. manufacturing scene over the past few decades. Chinese exports to the United States are primarily labor-intensive consumer goods which are no longer produced elsewhere, Zhu said. “This type of import has absolutely no competition in the U.S. market,” Zhu said. “These consumer goods -- you wouldn’t be able to find anyone to manufacture them in the United States.”

As labor costs increased in other nations, Zhu said, manufacturing shifted to China. Thus, while the U.S. trade deficit with China increased, it decreased proportionately to other nations.

Zhu discussed a study he conducted in 1987 while he was Executive Vice Minister of the State Economic Commission. Zhu looked into athletic shoe exports to the United States from Nike, Reebok, and Adidas, among other companies, and found that shoes costing $20 to make were sold for $120 in the United States. Only two dollars of that money actually went to Chinese workers and managers, Zhu said. Much of the total cost went to the U.S. and other nations where raw materials and components were produced.

Despite his defense of the current deficit situation, Zhu said that “China will do its best to improve this trade balance.”

Zhu wants WTO membership

Zhu also discussed some of the major concessions China has made to secure admission to the World Trade Organization. WTO membership would help promote market competition and improve China’s national economy, according to Zhu. He also thought that “without China’s participation, the WTO will not be representative enough.”

Zhu argued that the U.S. should implement the free trade it advocates elsewhere when dealing with China, calling the restrictions placed on exports to China too strict. He cited examples including satellite and computer technology that the United States would not allow to be exported, arguing that such limitations hurt China’s economic growth.

In trade negotiations with President Clinton last week, restrictions were lifted on wheat and citrus fruits, among other U.S. exports. “But ladies and gentlemen, can the Chinese people only live on citrus and wheat?” Zhu asked. China wants U.S. trade to improve the quality of life, Zhu said.

At the close of his address, Zhu assured the U.S. of China’s good intentions and friendly relations. “China is your trustworthy friend, “ Zhu said. “China will never be a threat to the United States.” Zhu cited the history of Sino-American relations since President Nixon as a sign of progress. “This marks a new stage of development for U.S.-China relations,” Zhu said.

Zhu evades human rights issues

Zhu expressed his willingness to discuss controversial issues with U.S. leaders, including human rights, Tiananmen Square, the Dalai Lama, and Kosovo. “I am willing to come here and talk about some of these issues,” Zhu said. “I want to come tell you what the real picture is.” However, Zhu declined to discuss these issues at MIT after they were repeatedly brought up on each of his U.S. stops in Los Angeles, Denver, Chicago, and New York.

After concluding his address, Zhu took questions from the audience in Kresge. The first audience member, Edward Wang G, acted as representative for Xu Jin, the daughter of political prisoner Xu Wenli. He questioned the premier when Xu Wenli, a Beijing democracy activist jailed for the past 12 years, would be released from prison. Zhu responded by joking that frequent discussions about human rights during his U.S. trip had given him blisters on his mouth. However, he added, “we acknowledge that we still have shortcomings” regarding human rights. Zhu finished by saying that the public forum was “not the time or place for me to go into details.”

The second question came from an alumnus of Tsinghua University who asked about China’s development in the areas of science, technology, and education. “The investment we have put into this effort has been unprecedented in its scope and size,” Zhu responded. “Basic education is a very important component of this.”

Zhu commented on China’s lack of managers, accountants, and securities experts, noting that he would like to see MIT help in training high-level managers through the Sloan School. One of the day’s more humorous moments came when Zhu mentioned that Tsinghua’s accounting school is looking for a dean, and members of the MIT community were invited to apply for the job. “I promise I will pay what you are paid here,” Zhu said in English.

The third and final question came from MIT Professor of Brain and Cognitive Sciences Mary C. Potter, who co-chaired the recent Institute committee investigating gender discrimination in the school of science. Potter asked how China was assuring equal use of female talent and ability.

“I am very much in favor of equality between men and women,” despite the contrary Chinese tradition of a male-dominated society, Zhu said. He cited State Councilor Madame Wu Yi, who accompanied him on his U.S. tour, as an example of gender equity in China’s government. Referring to the WTO talks, Zhu said that “in this round of negotiations, she was the Premier, and I was the Vice Premier.” As he finished his comments, Zhu joked that “at home, I am totally an obedient servant of my wife.”

Audience welcomes Zhu

Zhu arrived via motorcade around 11:00 a.m., and was escorted into Kresge by President Charles M. Vest, who discussed the lack of Sino-American relations during the Cold War, and the progress made since then. “Leaders of China and the United States have torn away many of the barriers that once separated us,” Vest said.

A large group of students from Tsinghua University cheered Zhu’s frequent references to the university, from which Zhu himself graduated with an electrical engineering degree in 1951. Zhu mentioned that while he studied there, Tsinghua was known as the “MIT of China”. Tsinghua used photocopied versions of texts from MIT, Zhu said, but “whether they were pirated copies or not I do not know.”The issue of Chinese firms pirating U.S.-made software was brought up during Zhu’s visit.

Zhu said that he has always wanted to study at MIT, but he did not want to ask for an honorary degree. “I don’t want to be accused of making a political contribution,” Zhu said, referring to the allegations that President Clinton took campaign donations from Chinese intelligence officials. Zhu said that he regretted missing MIT the last time he was in the Boston area for a 1984 address at Harvard.

Chair of the Faculty Lotte Bailyn opened the morning’s event by appealing to the audience for restrained behavior. Bailyn recognized the conflicting opinions regarding such issues as Taiwan, Tibet, and human rights, but encouraged respectful treatment of the Premier.

Before Zhu arrived, Professor Edward S. Steinfeld of the Sloan School of Management spoke about current Sino-American relations. Steinfeld noted that Zhu’s visit was especially appropriate since he is dean of the Tsinghua University business school, a sister school with Sloan. However, regarding such issues as espionage and human rights, “I think, at least on the surface, these are not particularly heady times,” Steinfeld said. “These problems are different from the problems China faced in the past.” China’s main economic issue today, Steinfeld said, is managing and governing a complex market economy.

A chief goal, Steinfeld said, remains membership in the World Trade Organization. “China has reversed the situation and made concessions that few if any experts had expected,” Steinfeld said. “The concessions China is making are painful.”

Visit merits high security

Security personnel for the address included MIT, Cambridge, and State police, Middlesex County sheriffs, and members of the Secret Service. The Stratton Student Center, athletic buildings, and Amherst Alley were completely shut down for Zhu’s address, with access to some dorms limited to Memorial Drive. A sharpshooter was also spotted on the roof of the Johnson Athletic Center.

In order to access to Kresge, people were required to endure repeated checks of photo identification, a pass through a metal detector, and searches of all bags. Despite the generally high security, general audience ticket numbers were not checked with lottery lists. Some students reportedly purchased their tickets from students who received tickets through the lottery.

In addition, a large police presence was required to control the thousands of pro- and anti-China protesters on Massachusetts Avenue and Memorial Drive.

Karen E. Robinson contributed to the reporting of this story.