TEXT: EIZENSTAT TO VISIT CHINA, HONG KONG MARCH 2-7
(Cites need for progress in number of key areas)

Washington -- Domestic support for U.S. engagement with China depends on progress resolving a number of irritants between the two countries, Under Secretary of Commerce Stuart Eizenstat says.

Eizenstat made the remarks to reporters February 27, just ahead of his visit March 2-7 to Beijing, Shanghai and Hong Kong.

He said the U.S. public and its representatives in Congress expect progress in opening China's markets to imports, reducing the U.S. trade deficit with China and improving China's human rights record.

"Without continued and visible progress, it will be much more difficult to sustain a forward-looking policy of comprehensive engagement," Eizenstat said. "It is critical the Chinese understand this."

He noted the 17-percent increase in the U.S. trade deficit with China in 1996 while the level of U.S. exports to China stagnated. Continued lack of "effective and sustained market access" to China for U.S. products, he said, could jeopardize domestic U.S. support for a wider range of ties with China.

Also, he said, the United States expects China's cooperation on Korean security issues and on Hong Kong's reversion to Chinese sovereignty without impairing its stability or prosperity.

Following is the text of Eizenstat's remarks that opened the briefing:

(begin text)

Thank you for coming in today. I wanted to briefly go over my upcoming visit to China, let you know what I will be doing there and then answer some questions you may have.

I will be in Beijing for Sunday through Tuesday meeting with government leaders including my counterpart MOFTEC Trade Vice Minister Sun Zhenyu. I then travel to Shanghai to open the U.S. Commercial Center as well as meet with local leaders. My final stop will be in Hong Kong on Friday, March 7, where I will meet with Hong Kong officials. In each stop I will also be meeting with the U.S. business community.

My trip to China, which comes at the heels of Secretary of State Madeline Albright's visit last week and precedes the visit of the vice president later this month, is symbolic of the Clinton administration's recognition of the importance of our bilateral relationship with China.

This is an important time in our relationship and an important period for both countries. The United States prepares for a new century under the leadership of President Clinton. And China faces the future in the post-Deng era.

While there are clear differences and disagreements between the U.S. and China, it is important to acknowledge that an open, prosperous, stable China integrated into the world community is in our own national interest. This is why the president has pursued a policy of engagement with China. There are a number of reasons why he has followed such a course.

First, the United States has a strong economic interest in China's development. Today, thousands of U.S. jobs depend on exports to China. China's economic potential is both enormous and well known. Second, the United States has a broad range of security and political interests with China, from human rights to non-proliferation to maintaining a stable, peaceful and prosperous Asia. Our interests are not simply bilateral -- indeed, our bilateral interests have become global interests. Third, the United States has a deep cultural stake in relations with China -- we can learn from China's thousand years of history and culture. Further cultural exchanges will deepen both our ties and our understanding and provide a foundation for closer relations.

President Clinton emphasized many of these points in his State of the Union Address, as did Secretary of State Albright this week. They have indicated that we must keep our interests in view, manage our differences in a way that does not sacrifice them, and recognize China's evolving place in the world.

There is a range of opinion in the United States, in Congress and among the American people, that view developments in China and our overall relations with everything from optimism and hope for the future, caution and sometimes bewilderment, and in some cases, outright opposition. The evolution of the relationship may explain why.

When President Nixon opened relations with China 25 years ago, the United States had a clear and easily understandable strategic rationale for this historic move -- the Soviet Union. Throughout the 1970s and 1980s, containing the Soviet Union by virtually any means necessary was the overriding national security concern. China played a key strategic role in that objective, a role clearly understood by U.S. elected officials and the American people alike. The dismantlement of the Soviet Union changed the dynamics of and rationale for the Sino-US relationship, a relationship no longer based almost entirely on security concerns.

Next week, I will raise literally dozens of issues with senior officials in the Chinese government. No single issue is more important than explaining to the Chinese that continued support for U.S. engagement with China depends on the American people and the Congress seeing progress and results. Continued support for commercial engagement depends a great deal on China's efforts to open its market and make progress on human rights. Over the next few months, if progress is made in certain key areas -- market opening, the growing U.S. trade deficit, human rights, the transition in Hong Kong, cooperation in the Korean peninsula -- it will impact positively on the level of support for our present policies. Without continued and visible progress, it will be much more difficult to sustain a forward-looking policy of comprehensive engagement. It is critical the Chinese understand this.

The Trade Agenda

In viewing China's economic transformation and eventual entry into the world order, economic opportunities must be widely perceived in the United States as equitable and balanced; otherwise China may come to be seen more as an economic challenger than as an economic partner. Nowhere is this more apparent than in the midst of our most dynamic dialogue under engagement, our expanding trade agenda.

Reducing our growing deficit with China, the highest in the history of our relationship and second only to our deficit with Japan, and negotiating a sound, commercially viable WTO package are two factors of immense importance in how we view China and prospects for better relations.

They also relate to our greatest concern on the trade side, namely, effective and sustained market access (our deficit with China this year was 17 percent above last year). Without it the deficit will continue to rise, creating an even more inequitable trade picture, and jeopardize domestic support for continued engagement. And, without meaningful commitments to reduce trade barriers consistent with norms and obligations under the WTO, market access will be elusive at best.

The administration has made important strides in key trade areas -- intellectual property rights and textiles in particular. These are important signs that China wants to remain engaged and make progress.

I will also discuss with government officials ways we can move forward on commercial cooperation through the U.S.-China Joint Commission on Commerce and Trade (JCCT).

I will travel to Shanghai to open the U.S. Commercial Center. The center, one of only three such facilities in the world (the others are in Sao Paulo and Jakarta), is unprecedented in China. The Commercial Center, which is structured to house various governmental, academic and business trade groups and organizations, represents highly integrated business networks that leverage resources and extend the range of state-federal support available in one location. No other foreign government has been granted permission to establish a similar facility. This presence will greatly extend the reach and ability of small businesses by providing businesses infrastructure and services that only large businesses can afford.

As you also know, the nature of the reversion of Hong Kong to Chinese sovereignty, is an issue of great significance.

I will be clear in my meetings in Hong Kong next week -- we want the transition to go well, and our business community remains confident in the process. Further I will highlight factors we believe will keep Hong Kong stable and prosperous. Our counsel general in Hong Kong and the many U.S. business people in Hong Kong have described these well. These factors include a solid legal system; transparency of governmental institutions; protection of civil liberties; free trade and noninterventionist economic policies; an open and aggressive press; and cultural and academic freedoms. An open Hong Kong does reflect our core economic values. But Hong Kong cannot remain a vibrant financial center without attracting investment.

We have an interest in ensuring a smooth transition guided by accepted norms and obligations. We have a responsibility to protect U.S. interests in Hong Kong for the reasons I outlined, and investment requires openness, stability and certainty.

(end text)