Politics-asia

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DANIEL TAUB

Staff Reporter

L.A.’s largest trading partners are all Asian countries. While their respective economic conditions play a big role in the fate of the local trade community, politics can be just as important. The following is a look at the relationships between the United States and some of its largest trading partners in Asia.

China

When Chinese Prime Minister Zhu Rongji visited the United States this spring, there was a sense of optimism in political and economic circles even though the two nations failed to reach an immediate agreement over China joining the World Trade Organization.

But that optimism quickly deflated when NATO forces accidentally bombed the Chinese Embassy in Belgrade last month, killing three and injuring 20. The bombing spurred several days of protest in Beijing and was followed by a congressional report that alleged Chinese spying at U.S. nuclear facilities. There also are ongoing questions concerning Democratic fund raising and accusations that U.S. satellite companies have been sharing sensitive information with China. Pirating of U.S. films and software also has been a problem.

For all that, it’s still widely believed China eventually will join the WTO. China certainly has a strong desire to do so as a way to alleviate its own economic problems, and many in the U.S. political and business communities want it to happen. It’s just a matter of when, many say.

The Clinton administration and many members of Congress are moving to a position of being “less sentimental, less knee-jerk, less reactionary,” said Steve Clemons, vice president of New American Foundation, a Washington think tank.

“I think what you’re going to get is kind of a continued muddle,” he said. The U.S. and China are “building a relationship that reflects the complexity of things and is far more realistic. But that doesn’t mean we’re just going to walk down the aisle with China on WTO.”

Hong Kong

Hong Kong, which became a part of China once again in 1997, also has been somewhat tainted by the findings of the congressional report, which suggests that Hong Kong has been a stop-off point for spies traveling between the United States and China.

Still, U.S.-Hong Kong relations have not suffered from serious problems under the “one country, two systems” rule that was established when Hong Kong rejoined China a system that has given Hong Kong a large amount of economic independence.

“It’s basically the way it was before,” said Marcus Noland, senior fellow at the Institute for International Economics in Washington. “There are no real outstanding bilateral issues with the United States. The main problem that Hong Kong faces is not reversion to China; the real problem is digging out from the Asian financial crisis.”

Still, Clemons said, the United States is keeping a close eye on the amount of control China exerts over its reclaimed province. “I think China is trying to be very, very careful of not screwing up Hong Kong,” he said.

Japan

The U.S. relationship with Japan is relatively stable. That was made apparent last month when Japanese Prime Minister Keizo Obuchi’s visit to Washington produced little news either positive or negative.

Economic issues, however, continue to plague Japan. Its industrial production has seen steep declines, and a recent resurgence in the country’s economy has been has been largely a result of government stimuli such as loans and financing.

The most contentious part of the U.S.-Japan relationship involves the two countries’ respective militaries. The U.S. had been pushing for Japan to strengthen its commitment to supporting the U.S. in times of war. Obuchi succeeded in passing a measure through Japan’s parliament strengthening the Japan-U.S. security pact, with Japan agreeing to provide logistical support to U.S. troops stationed in Asia in the event of a conflict.

The military issue will likely arise again next year during the Group of Eight conference in Okinawa, Japan, where Japan is expected to push for a consolidation of U.S. forces in the country.

Clemons said the large growth Japan saw in the first quarter might actually be a negative for Japan, since it could take pressure off Japanese government officials to do more to spur the economy’s recovery something U.S. Treasury Secretary Robert E. Rubin has demanded as well.

South Korea

A critical issue facing U.S.-South Korea relations is breaking up the chaebol the large, family-controlled conglomerates with close ties to the government that long have dominated the business landscape.

U.S. firms have made attempts to buy up pieces of those companies for example, Ford Motor Co. and General Motors Corp. made bids for auto maker Kia Motors Corp. But upon close examination, they have discovered the financial situations of those companies to be more troubling than originally advertised.

“There have been some disappointing experiences,” Noland said.

Nevertheless, Clemons said, the breakup of the chaebol likely with heavy involvement of U.S. companies willing to buy up pieces of them is necessary for South Korea to remain a strong economic force. If the breakup is not done now, “then economic forces will do it for them later,” he said. “And that will be a tougher adjustment because it will be far more severe.”

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