After a long, public debate, the House of Representatives took the first step toward granting China Permanent Normal Trade Relations (PNTR) status earlier this week. By a 237-197 margin, the House approved PNTR on May 24; the Senate is expected to do the same next month. This will end the annual ritual of Congress threatening to withdraw NTR -- formerly known as Most Favored Nation -- status from China and will advance China's membership in the World Trade Organization (WTO). Assuming that the United States is willing and able to invest the time and effort to ensure that China lives up to its WTO obligations, this should be a positive step for U.S. policy toward China.

Unfortunately, the debate leading up to the PNTR vote is likely to have a lasting negative impact upon U.S. policy toward China. Proponents (and opponents) frequently resorted to gross exaggerations to make their case. This has created expectations on the part of the public and Congress that are certain to shattered by the reality that even with a "yes" vote on PNTR, China is certain to continue to pose a challenge to U.S. interests on many fronts.

The limits of business and the Internet

One of the claims that the White House and some in the corporate community have made ad nauseum is that WTO membership will bring increased Internet access to China, which will, in turn, accelerate the pace of democratization and social change.

This claim suffers from several weaknesses. First off, many, if not most, Chinese students, academics and professionals already have access to the Internet. Certainly, the Internet is an important channel of communication, and those interested in reform can use it, but it has real limitations. Chinese authorities have vigorously sought to restrict access to Web sites, control e-mail and prosecute those who use the Internet to spread information Beijing does not want publicized. WTO membership will likely bring new Internet providers into China, but it will not end the Chinese government's effort to control information flow to its citizens via the Internet. President Clinton argues that China's efforts to control the Internet was like "trying to nail Jell-O to the wall"; he neglects to note, however, that, at least for the time being, the Jell-O is sticking.

Another related argument advanced by proponents of PNTR is that increasing commercial contact with western business helps to liberalize China. There is likely some truth to this claim. The business presence does provide one link to the West and exposes Chinese citizens to ideas they might not otherwise encounter. Most western companies operating in China, however, do so to make a profit, not to conduct an ongoing campaign for democracy and civil rights.

Further, most are anxious to curry favor with Beijing, which generally means not "rocking the boat" by encouraging activists and the like.

Western companies have had a growing presence in China for nearly two decades. Trade and investment continue to expand at a near exponential rate. Nonetheless, the U.S. State Department noted in its report on human rights in China that repression of political and religious groups, torture and illegal imprisonment have recently risen. Whatever the long-term relationship, it is clear that a Western business presence does not guarantee reform in China.

Trade is no panacea

On the trade front, advocates of PNTR have argued that bringing China into the WTO will reduce the growing U.S. trade deficit with China. Again there is some truth to the claim, but also a lot of exaggeration. WTO membership should create new opportunities in China for U.S. exporters, but, as a study by the U.S. International Trade Commission noted this summer, the short-term impact of China's WTO membership is likely to be an increase in the U.S. trade deficit with China, not a decrease. Once in the WTO, China will benefit from increased access to the U.S. textile and apparel market, which is likely to more than offset U.S. export gains in the short run.

Beyond that, gains in U.S. exports depend upon China actually implementing its WTO commitments and not devaluing its currency. China has an atrocious record of keeping its trade commitments in bilateral trade agreements; subsequently we can expect problems convincing China to implement its WTO commitments as well. Those with good memories might recall that Mexico was rocked by the "peso crisis" -- which led to a sharp peso devaluation -- shortly after NAFTA passed Congress; the result was that the projections of U.S. trade gains proved greatly exaggerated. China has a long history of devaluing its currency for trade gains and has been hinting at a new devaluation for two years. A new devaluation would hardly surprise most China observers.

Finally, proponents of PNTR have also argued that a China that is more commercially connected with the rest of the world through trade and investment is less likely to be a threat to peace. Here again, there is likely a kernel of truth. Economic ties do create a disincentive to war or other disruptive behavior. Still, the second largest source of investment into China is nearby Taiwan. Based upon China's recent invasion threats, it seems that the billions of dollars Taiwan has sent to the mainland have not been sufficient to quell the aggressive urges of the Chinese military. No one can be certain that trade and investment -- by themselves -- will be sufficient incentives to stop the Peoples' Liberation Army from undertaking military adventures in Taiwan or elsewhere. China must continue to be considered a potential military threat to U.S. interests for the foreseeable future.

The risks of hyperbole

There seems an unpleasant tradition of lies and exaggerations in American political debates. Perhaps the practice is so common that Americans have come to automatically discount claims made in a political context. Unfortunately, the public is unlikely to reject the recent debate on China PNTR to the degree it deserves. China is the most difficult and complex challenge currently faced by U.S. foreign policy. In the PNTR debate, the public and Congress were assured that China's new trade status will solve problems from human rights to Taiwan. Passing PNTR is a good decision, but the expectations that have been raised in this debate are greatly exaggerated and will prove impossible to fulfill. In fact, the short-term future of U.S.-China relations promises to rocky and likely to contain a number of setbacks.

In a few years, a new U.S. president is likely to have to explain to an increasingly frustrated public and Congress why the United States continues to face a high trade deficit with China, why China continues to deny its citizens human rights and why it continues to pose a threat to its neighbors, particularly Taiwan. Hopefully, that president will be able to frame a policy toward China that is balanced and realistic without raising unfulfillable expectations. If he is not, the future of U.S.-China relations looks rocky indeed.