China had staked its national honor on the Olympics contest. Now its humiliating defeat threatens to throw an even deeper chill over Washington’s already frosty relations with Beijing. Last June President Clinton renewed China’s most-favored-nation (MFN) trading status–but warned Beijing to clean up its human-rights act or face higher tariffs on its exports to the United States in 1994. In August Washington slapped economic sanctions on China, which it said sold components for M-11 ballistic missiles to Pakistan, in violation of a treaty banning such sales. A week later Saudi Arabian inspectors, reportedly working on Washington’s behalf, boarded a Chinese cargo ship that Washington claimed was carrying chemicals used to make poison gas. U.S. officials charged that China planned to sell the chemicals to Iran.
The inspectors found nothing. U.S. sources tell NEWSWEEK that they acted on tips from informants who may have been double agents, sent by Beijing to mislead the Americans. “It was a sting,” one source said, aimed at discrediting U.S. intelligence. And last Friday tensions rose further when the State Department insisted that China was about to explode a nuclear device, which would end a world moratorium on such tests.
In its exasperation with Washington, Beijing might now restrict the movement of U.S. journalists, hinder the repatriation of illegal Chinese immigrants or make life difficult for American companies in China. “I won’t be surprised if I find more obstacles in my day-today work,” one American businessman in Beijing said. China might also toughen its stance in Sino-British talks over the 1997 return of Hong Kong, which resume this week. And now that the West may not be scrutinizing human rights as closely as it did during the run-up to the 2006 Olympics, China may feel freer to crack down on its democracy activists. “The U.S. is running out of leverage,” says Hong Kong-based humanrights advocate John Kamm. With its Olympics dreams shattered, Beijing has run out of another reason to heed Washington’s wishes.
