With regret, I dissent from this Report. On the whole it fails to present a fair and objective analysis of the U.S.-China security relationship. Instead, by consistently seeing the glass as half empty rather than half full, the Report ignores progress made over the past twenty years, adds to the level of paranoia about China in this country, and contains recommendations that could make that paranoia a self-fulfilling prophecy.

In fairness, the Chinese provide ample incentive for a negative Report. They are far from democracy and a market economy and are making little progress toward the former and irregular progress toward the latter. Market access problems and failures of intellectual property protection abound. An accurate description of China is that it is a work in progress. Unfortunately, this Report ignores the progress, holds the Chinese to a higher standard than we hold others, fails to understand that U.S. and Chinese geopolitical interests in the region will inevitably diverge regardless of what kind of government China has or what kind of economic policies it pursues, and assumes a static U.S. policy incapable of taking the initiative in the relationship. The Report spends virtually all its space describing Chinese past actions that have damaged our relationship and future actions that would make it worse and only rarely focuses on the more important question of how we can make it better.

The Report’s tilt is embodied in its perspective and tone. It consistently implies the Chinese deserve blame for acting in their own interest rather than ours. It is ironic that the Report implicitly criticizes the Chinese for viewing the U.S. as a hegemon at the same time it presents a view of U.S. interests in Asia that can only be described as hegemonic. The Commission majority has bent over backwards to avoid describing the Chinese as a "threat;" yet the belief that they are permeates every chapter. At the same time, the Commission majority implicitly but clearly would abandon the policy of engagement that has characterized the last five administrations in favor of a policy of suspicion driven by preparation for a variety of worst-case scenarios. In doing so, the Report ignores or denigrates the positive role of American business in bringing free market principles and American democratic values to China. Ironically, the Report criticizes China’s efforts to prevent these influences from spreading, thus acknowledging their significance, while it discourages American companies from expanding their activities.

The truth is our bilateral relationship is doomed to be difficult. We vie for influence in the region. This is neither unnatural nor unusual and should not be justification for demonizing China and turning our relationship into a struggle between good and evil.

One of the main reasons for our concern — barely noted in the Report — is the sheer size of the Chinese economy. The Western market system has no experience absorbing a new entrant of such enormous productive capacity. Instead of looking at that seriously, the Report attempts to blame China for virtually every economic problem the U.S. has, ignoring the fact our manufacturing base has been eroding; the trade deficit has been growing; and the dollar has been too strong for a long time for reasons that have little to do with China. In fact, China is pursuing policies that Japan, Korea, Taiwan, Malaysia, and others have pursued for years. The difference, again, is not policy but the size of the economy. The U.S. has spent very little time analyzing the problem from that perspective and is largely unprepared to deal with rapid Chinese growth. Unfortunately, this Report adds heat rather than light to the debate by focusing on short term protectionist solutions rather than recommending a coherent program for staying ahead technologically — "running faster" — in the long term.

There are many recommendations in the Report that are objectionable, but space does not permit either a full list or detailed comments on them. Some highlights:

• Chapter Six’s added disclosure requirements will politicize and thereby destabilize the capital markets, and by extension, the dollar, and encourage capital flight at a particularly critical time for our economy.

• Other proposals, such as those for a legislated corporate code of conduct and a corporate investment reporting requirement are administratively burdensome and confusing and will make the American business community assume the costs of our foreign policy. As with unilateral sanctions, which the Report also favors, these provisions disadvantage the American business community, cede the playing field to our European and Asian competitors who cheerfully pick up what our companies leave behind, and do not help us achieve our policy goals. Another good example is the recommendation that satellite sanctions continue, which only serves to put another nail in the coffin of our commercial communications satellite industry, the inevitable consequence of which will be that the U.S. industry will fall behind Europe’s, and our military satellite capabilities will be compromised as well.

• These unilateral policies almost always fail because they ignore the realities of commerce in a globalized world. Worse, their effect is to deter American companies from doing business in the target country, in this case China, thus preventing the kind of economic engagement that I believe will ultimately lead to a more democratic China

• Finally, the portion of Chapter Ten that discusses technology transfers, particularly computers, reflects a Cold War mentality that ignores both the spread of these technologies over the past decade and their importance in bringing freer communication and information to the Chinese people. Similarly, the recommendation that the Administration consider controlling exports of some internet-related items reflects both ignorance of the technology and a lack of appreciation of the importance of Internet access in promoting freedom in China.

In conclusion, although the final version of the Report is an improvement over earlier drafts, I must nevertheless dissent because it chooses simplistically to blame China for too many of our problems and misses the opportunity to focus constructively on how this relationship can be improved.