Greenspan backs Clinton on China

Key Congress vote on trade with China is looming

Alan Greenspan, the head of the US central bank, the Federal Reserve, has backed legislation to give China permanent trade privileges.

It is unusual for the Mr Greenspan to speak on trade policy issues, but he described the China vote as one with "profound implications."

Greenspan rarely speaks on trade issues

"The outcome of the debate on permanent normal trade relations with China will have profound implications for the free world's trading system and the long-term growth potential of the American economy," Mr Greenspan said at a press conference with President Clinton at the White House.

The President, who is making support for the trade bill the top priority of his remaining months in office, said: "We all know when Chairman Greenspan talks, the world listens. I just hope the Congress is listening today."

Supporters and opponents of the legislation alike are describing next week's vote as one of the most important in generations.

It will determine US attitudes towards protectionism and free trade.

Bill passes first test

A key US Congressional committee has already given its support to the bill which would clear the way for Chinese membership of the World Trade Organisation.

But many Democrats are wary of supporting the legislation against fierce union opposition.

The vote in the House Ways and Means Committee paves the way for a further vote by all members of the House of Representatives and Senate next week.

For now, that vote looks too close to call, at least in the House of Representatives.

The business community has had to counter criticism of China

The latest poll shows a virtual dead-heat between firm supporters and opponents, with almost 80 Congressmen describing themselves as undecided.

The legislation is in response to last year's trade deal between Washington and Beijing, which granted improved access to American goods in China in return for US support for China's membership of the World Trade Organisation.

Nationwide debate

President Clinton, who is stepping up his campaign to gain support for the bill, plans a nationwide television speech on Sunday to argue his case.

The president, who has been facing determined opposition within his own party, said: "I believe that a No vote invites a future of dangerous confrontation and constant insecurity.

"It also by the way forfeits the largest market in the world for our goods and services and gives Europe and Japan all those benefits we negotiated to bring American jobs here at home."

His campaign is being backed by business leaders who have organised coast-to-coast lobbying efforts.

However, the two leading Democrats in the House, Representatives Richard Gephardt and David Bonior, have opposed the bill.

Most Republicans, however, led by presidential candidate George W. Bush, are backing the trade deal.