Interview With The Los Angeles Times, Bloomberg Business News, & Business Week

Office of the Press Secretary
(Xian, China)

For Immediate Release

June 19, 1998

The Oval Office

3:44 P.M. EDT

Q I wanted to talk to you a little bit, to startwith, about the differ in reasoning between the 1995 intervention forthe dollar and the 1998 intervention for the yen. In '95, thethought was that the dollar was out of line with the economicfundamentals, and therefore needed to be supported. In thisparticular case we have the yen, which doesn't really seem to be outof sync with the fundamentals in the Japanese economy. And, yet, wewent in to intervene. Can you explain to me what the differentreasoning is?

THE PRESIDENT: Well, first of all, I think the yenwould be out of line if you look at the fundamental productivecapacity and the strength of the Japanese economy and the prospect ofgenuine reform of the financial institutions and appropriate economicpolicy. So that when the Prime Minister had agreed to put out thestatement being clearer and more specific than before about the kindsof things that the Japanese government was prepared to do in thoseareas, particularly around the institutional reform, we thought itwas the appropriate thing to do -- especially since a continuedmovement in the other direction in our view would have beenunnecessarily destabilizing and out of line with what we think is thereality of the Japanese economic capacity.

Q Let me just follow up this way, if I could.Obviously, what needs to happen in order for Japan to have a recoverywould be that the Japanese people need to open their wallets andstart spending. Is there anything that you can do to help Hashimotoinspire them to do that?

THE PRESIDENT: I don't know. But I think that in orderto get them to change their well known habits for incredible savings,even when it's not the right thing to do, they have to first of allhave confidence in the long-term security and stability of theJapanese economy.

And so I think, you know, the reform of the financialinstitutions, the sense that the world believes the Japanese policyis moving in the right direction I think will at least inspire agreater degree of confidence in the Japanese people to do that. Partof what has caused the recent difficulties was the movement of moneyout of Japan by Japanese citizens. In these other countries it'snormally what foreign investors do or don't do. And so we hope thatthis will contribute to that.

Now, in terms of changing the normal habits of Japaneseconsumers that have built up over decades and that were forged at atime when they did need an extremely high savings rate, that issomething that will probably have to take place more within theirborder than as a result of discussion among the Japanese themselves.But first things first, you have to get the right framework beforepeople could be asked to do that.

Q Bringing the currency question around to China,China has been making noises that it might not be able to hold theline on devaluation. I was wondering how worried you are about thatand what you might be able to do in the upcoming summit to ease theirconcerns or to help solve that?

THE PRESIDENT: Well, first of all, I think it's clearto everyone that they don't want to devalue and they've been takingextraordinary actions to avoid devaluation. And I think in so doingthey have helped to contain and to stabilize the situation in Asia.And they deserve credit for that. And I personally appreciate it.

I think the most important thing is to try to alter theconditions which if they continue to worsen would make them feelcompelled to devalue. And I think from our point of view that theyhave to make the policy call. The best thing we can do is to workwith them, with Japan and with others to try to change the conditionsso that they will -- that the pressure to devalue will decrease,rather than increase.

Q Mr. President, if I could ask broadly about yourChina policy. How at this point, as it's evolved, how does yourpolicy now differ from the policy followed by the Bushadministration? And how do the Republican criticisms of it -- dothey differ from the ways in which the Democratic Party and you inthe '92 campaign criticized the Bush administration's policy?

THE PRESIDENT: Well, first of all, I never felt that itwas wrong to engage China. I never criticized any President forgoing to China. I always think you're better off talking wheneverthere's a possibility of advancing the ball, if you will.

I thought it was important after Tiananmen Square thatthe United States be clear, unambiguous and firm; and to the extent Ithought the signals were not as clear or unambiguous as they shouldhave been, I tried to make that plain. Some people I think concludedfrom that that I thought we ought to, in effect, launch a policy ofisolation and try to contain and isolate the Chinese and that thatwould be the best way to get change. I never believed that.

And the reason I'm going to China now is that I thinkthere have been a lot of positive changes in the last six years. No,we don't have all the problems solved, we still have differences withthem over human rights, over religious rights, over economic issues.In some ways we've made the most progress in the nonproliferationarea.

But if you look at what's happened in the five and ahalf years I've been President, at the work the -- you know, theChinese agreeing to sign the Comprehensive Test Ban Treaty; acceptingthe Missile Technology Control guidelines; agreeing not to cooperatein nuclear matters with India and with unsafeguarded facilities,including those that are in Pakistan; they're a member of the NPT. Ithink we've made significant progress, even in the area of humanrights. We've seen the release of Wang Dan, Wei Jingsheng, BishopJin.

And I hope there we will get a real resumption of ourdialogue. I hope this whole legal system's cooperation will continuewhere I think we can have a big impact in a positive way, in the wayChina evolves legally and the way it deals with not just commercialmatters, but also with matters of personal freedom. We've clearlyhad a lot of security cooperation on the Korean Peninsula and Chinahas led these five-party talks in the aftermath of the nuclear testson the Indian subcontinent.

So I think that this trip is coming at a time when therehave been substantive changes which justify the kind of measured,principled engagement strategy we've followed and I think it's morethan justified. And if you ask me how it compares with the previouspolicy, I would say that it may just be the passage of time, but Ithink there are more elements to our policy. We're about to open aDEA office in Beijing. And as I said, I hope very much that as aresult of this trip we'll wind up with a genuinely invigorated humanrights dialogue and perhaps an NGO forum on human rights.

I don't think there's any ambiguity here about theextent to which we have tried to put all the elements of ourengagement in China into our policy and pursue them all in the way wefeel would be most effective.

Q And the Republican criticisms?

THE PRESIDENT: Well, I think some of them areconsistent, some of them -- some of the members of the House, forexample, in the Republican Party, have had a consistent posture onChina. Some of it may just be election year politics. But towhatever extent it exists, I think that I should listen to whateverthe critics say and see whether or not they're right about anyspecific things they say.

But on the larger issue of our engagement in China, Ithink most Americans agree with me; and the most important thing isI'm convinced it's in the interest of the United States and I'm goingto pursue it as clearly and effectively as I can.

Q One of the things that the critics always point to,however, is the trade deficit with China; particularly that ourexports to China dropped below $1 billion in April. Do you have astrategy? Obviously there's going to be a yawning trade gap asthings happen in Asia. Do you have a strategy to sort of combat theisolationists who say that this is bad for our country?

THE PRESIDENT: Well, if you take the economic issues-- first of all, the volume of imports into our country is thefunction of the strength of our economy combined with the weakness ofthe other Asian economies which would normally be markets for China'sproducts. And our people have chosen to buy those products and ithas not weakened our economy. After all, we had the lowestunemployment rate in 28 years. So that is not, for me, the source ofthe problem. And we knew that the trade deficit would worsen thisyear because of the weakness in Asia.

But I am concerned about the fact, even though ourexports overall -- notwithstanding the April figures -- our exportswere up 7 percent in '97 over '98, and they're running about 17percent -- excuse me, '97 over '96; they're running about 17 percenthigher in '98 over '97. I do think that the United States shouldhave greater market access. And I think if we had greater marketaccess then our exports would be increasing at least proportionatelyto our imports.

However, my preference would be for China to take thosesteps that would enable it to come into the WTO, not to give Americaany special deals or special preference, but to simply adopt arigorous plan for opening new markets. I think Americans would dojust fine in a fair and free and open market, competing with allother people who would like to sell to China. And that's what I hopewe can achieve. And I hope we'll make some progress on that.

But in the meanwhile, I have to continue to press formore access for American products and I do have a strategy on it.But we will be more vulnerable to those criticisms in this year forthe simple reason that our economy is especially strong and theproblems in Asia are especially acute. And the intersection of thosethings mean we're taking on a lot more imports than we ordinarilywould.

Q How have the problems, the economic crisis in EastAsia, the nuclear crisis in South Asia and ongoing congressionalhearings affected the agenda for the summit? Has it changed sincewhat you would have conceived of at your meeting last year?

THE PRESIDENT: Well, I think the first two matters havemade the importance of the summit, the importance of the trip evengreater. Because I think they illustrate in graphic terms thatrelate to the security and the welfare of the American people why aconstructive partnership with China is important if we can achieveit.

If you just look at the economic issues. You asked thequestion about Chinese devaluation. The Chinese have tried to beconstructive in working with us on the whole Asian economic crisis.If you look at the Indian subcontinent, just imagine how much moretension there would have been after the India and Pakistan tests ifChina hadn't signed the Comprehensive Test Ban Treaty, and thenresponded with a test of its own since India asserted that it wasreally doing this because of China and not because of Pakistan.

And now, you know, the Chinese headed the five-partytalks we had with the Permanent Five, and they adhered to everystatement we made. And I think that's important. And it's really-- you can't imagine any scenario in which we can unravel thedifficulties between India and Pakistan without China playing a majorrole. So I think that's very important.

Now, as to the congressional hearings, I think you haveto -- or investigations -- the only one that I think has any bearingon the trip -- it won't have any bearing on the trip, but it has abearing on our relationships with China -- is all the inquiries intothe question of whether any elements of the Chinese governmentattempted to influence the last election by channeling money intoeither my campaign or the campaign of various members of Congress.

As I have always said, that is a serious issue. I haveraised it with the Chinese, from the President on down. They havevigorously denied it. And I have asked them to, please to cooperatein every way with the investigation that we have to conduct into this-- that is, "we" the Executive Branch, and "we" the United Statesthrough xx the Congress. And we will continue to express that viewon this trip. But that will not -- that doesn't in any way underminethe importance of the trip or the need for this kind of partnershipagainst the background of the economic and security issues youmentioned.

Q Mr. President, would you like to see the end ofcommunism in China, and is that a goal of American policy?

THE PRESIDENT: Well, of course I would like to seeChina adopt a more open, freer political system in which basicpolitical and civil rights would be recognized. The Chinese haveexpressed their intention to sign the covenant. I think that's veryimportant. And I believe that the Chinese people will, over time,understand and will come to embrace the notion that they can onlyachieve their full greatness in the world of the 21st century if theyallow the widest possible latitude for personal imagination andpersonal freedom, and that there is a way to do that and stillpreserve the coherence and stability of their society.

And so I think there will be a process of evolution hereas China becomes a more involved and constructive partner with therest of the world, has a bigger say in regional affairs, and alsocomes to grips with the basic elements of what it takes to succeed inthe modern world. I believe that. And I believe that we can furtherthat by pushing in that direction and by actually having a dialoguein which the Chinese leaders really have to imagine the future andwhat it's going to be like and understand what life is like. Youknow, they're going to have -- what do they have, 400,000 people onthe Internet now, they're going to 20 million before you know it. SoI would like to see a China that is more open and more free, and Ibelieve -- and also that is more accommodating to difference.

I think this -- if you look at the question of Tibet, Isee this as a great opportunity for China, not some great problemthat threatens instability. I think the symbolic importance of theDalai Lama saying that Tibet just seeks to be genuinely autonomousregion, but not separate from China, and then having a President ofChina agree to meet with the Dalai Lama -- I think the benefits toChina would be sweeping, enormous and worldwide. And I don't thinkit would lead to greater instability.

And that relates to, you know, you've got -- China has asubstantial Muslim population. China has a not insubstantial andgrowing Christian population. I think, you know, this -- thereligious leaders who went to China at my request, after PresidentJiang and I worked out the opportunity for them to go, came back andmade their report to me and their recommendations yesterday. And wehad an announcement about that here.

I think all this is going to be a big part of China'sfuture. And I think that -- I think they will -- let me just saythis. Any society in change has to find a way to reconcile therealities it faces, its highest hopes for the future, with itsbiggest nightmare. And every country with any kind of history at allhas a nightmare. When we worked out with the Russians -- I'll giveyou something in a different context -- when we worked out with theRussians how we were going to relate Russia to NATO, and what theterms of NATO expansion would be, I kept telling people over and overagain, you've got to understand what their nightmare is, we werenever invaded by Hitler and all that. And you could say there'snobody alive in Russia today that remembers Napoleon and not all thatmany that remember Hitler -- but that's not true. Those things, theyseep into the psyche of a people. And you have to understand that.

For the Chinese -- the word instability to us may mean abad day on the stock market, you know, demonstrations out here on themall or the ellipse, because we're a very long way from our Civil Warand we think that such a thing is unthinkable. But to them,instability in the context of their history is something that wasjust around the corner, only yesterday. And it becomes a significantproblem.

So what we have to do is to figure out a way to pressour convictions about not only what we think is right -- morallyright -- for the people now living in China, but what we believe withall of our hearts is right for the future of China and the greatnessof China in terms of openness and freedom. And we have to find a wayto do it so that they can accommodate it to their psyche, which isvery much seared with past instabilities.

Q Your administration, since you've been in office,has aggressively pushed U.S. exports, U.S. companies and products inthe global marketplace. Some have argued that there's a danger andan emphasis on commercialism that could cloud national security orhuman rights interests. What's your view on the matter and how doyou deal with that, both in China and in a broader sense?

THE PRESIDENT: Well, I think they are two differentissues. I think on the human rights issue, I think it onlyundermines human rights if you basically just do it with a wink and anod and it's obvious that you don't care about human rights or otherissues of liberty or human decency. This is not just with China, butgenerally.

I think on balance the evidence is that greater economicprosperity and greater economic openness leads to more open societiesand to greater freedom and to a higher quality of life across theboard. So I think that -- I don't see them as fundamentally inconflict. I just think that as long as you recognize that there is-- as long as we in the United States and the government recognizethat we have an obligation to pursue a coherent and full policy, thateverything we do to open a country economically and to bring in newideas, new information, and new people, and to bring people fromthose countries out of there own environs, that that's a good thing,and it advances the cause of human rights and liberty over the longrun -- and sometimes over the very short run.

Now, on the national security issues, very often thesequestions require a lot of careful judgment by people who know allthe facts; and even there it's not always clear what should be donebecause technology is becoming more universally available in so manyareas. I think we have very clear rules and guidelines onnonproliferation and we've made a lot of progress with the Chinese onnonproliferation.

On the question of the satellites -- if you just want totake the satellites. The issue there, we have a system now where inevery decision all the relevant agencies, including the nationalsecurity agencies, are all involved; if the satellites are purelycommercial, the initiative comes out the State Department, theinitial approval -- but everybody else gets a say in almost a defacto veto. If there can be some interconnection between thesatellite and rocket that goes up, then it initiates out of State,but everybody else gets a say. And I think the system has workedquite well for the United States and has advanced our interestswithout undermining our security. I've not see any evidence of anycase where there's been a national security interest that's beencompromised.

Q What about Sikorsky helicopters? The new ones canbe sold, but the parts and the services cannot. Do you see thatsanction -- it's a leftover, I guess, '89 sanction -- do you see thatbeing lifted anytime soon?

THE PRESIDENT: Well, first of all, as you know, in theTiananmen sanctions there are five categories of sanctions. The onlyone we've actually lifted outright is the one on nuclear cooperationin exchange for the comprehensive agreement we made with the Chineseon nuclear cooperation. And I think that's been quite a good thing.

On the satellite issues, that's a case-by-case thing,initiated in 1988 and then implemented by Presidents Bush and by me.On the others, most of them have to be reasoned on a case-by casebasis. And we'll have to look at it and we'll do the right kind ofnational security review and make the best judgment we can on it.

Q What's the reason behind not lifting the sanctionson the Sikorsky's?

THE PRESIDENT: Well, I can't -- I don't want to talkabout it now. I mean, I'll be glad to get some sort of answer toyou, but I think what -- all I can say is that we have to -- we dealwith these things on a case-by-case basis and we do the best we canwith them.

Q Mr. President, I wanted ask about Japan. Whyaren't you visiting Japan on this trip, and can you respond to thecriticism that, based on that, that in some way American policy istilting towards China and is giving a lower priority to its allies inAsia?

THE PRESIDENT: Well, I think -- first of all, I thinkthat would be a huge mistake to say that. I have been to Japan onmore than one occasion since I've been President. I intend to go toJapan again before I leave office. I have had the Japanese PrimeMinisters here. And Prime Minister Hashimoto is coming here verysoon after I get back from China. We talk to each other all the timeon the telephone and we had a conversation just the other day.

It's interesting, I think sometimes we can read too muchinto this. I'm going to China because I think -- we moved the tripup, you remember, at the recommendation of Ambassador Sasser, afterthe national security team look at it and said they thought he wasright because there's so much going on in Asia and because PresidentJiang had a good constructive trip here. And we wanted to try tobuild on our relationship with China.

We have made clear to the Japanese that it will in noway undermine the importance of our relationship with Japan, which,as you know, has got a long security, economic and politicalcomponents to it. And I think it would be really a stretch to try tointerpret the fact that I'm going to China and not to Japan at thisparticular time as having any significance other than the fact thatI've been President nearly -- well, five and half years, now -- and Ithink it's time to go to China. And I think it's important to devotea significant amount of time to it and for it to be a trip thatstands on its own, just as President Jiang's trip here stood on itsown. But it is in no way a derogation of the Japanese relationship.And we've -- we certainly, as you know, spent a lot of time workingon U.S.-Japanese issues and Japanese economic issues in the last fewweeks and we're going to spend a lot more.

Q How important do you think it is for the U.S. tohelp China develop its own financial markets, whether it be bondmarkets or housing or Fannie Mae? And what are you going to doduring this trip to help them do that?

THE PRESIDENT: The answer to the first question is Ithin it's quite important. I think that developing these kinds ofmarkets and giving international capital access to them I think isquite important and will continue the process bringing China into theglobal economy in a way that I think is good. The Chinese may be alittle reluctant now because they think, you know, they see what'shappened in some other countries.

But as long as they've got good, stable financialpolicies and significant cash reserves and follow a prudent course, Ithink they'd be very much advantaged by having more sophisticated andvarious markets. I haven't decided exactly what, if anything else, Ican do on that. I'm going to Shanghai and while there I expect tohave a lot of discussions about the financial markets, how they'restructured and where we're going from here. But I don't haveanything specific to say about that.

Q Often there are CEO delegations that accompanytrips of this kind, and it doesn't appear that there will be thistime. Is there a particular reason for that?

THE PRESIDENT: Well, we are going to have a U.S.-Chinabusiness meeting in Shanghai, and a lot of American CEOs are going tobe there. And I have -- some who have mentioned to me their interestin this trip, just in passing, I've encouraged, if they've got aninterest in China, to participate in that.

But, frankly, since this is the first trip an AmericanPresident has made in quite a long while, and since there are issuesother than economic issues that also have to be front and center, Ithought it was better this time just to take our delegation. Thereis another practical problem -- it would probably be impolitic for meto admit it, but there is a practical problem here, which is thatthere are now so many American businesses involved in China you'dhave a hard time figuring out who to take and who to leave if we didit. (Laughter.)

So we decided since we had this big event planned inShanghai, we would just tell everyone to please come and try to dothe trip with a smaller delegation.

Q Mr. President, is it your goal to at some pointgrant China permanent most favored nation status?

THE PRESIDENT: I think it would be a good thing if wedidn't have to have this debate every year, yes. I don't think -- Ithink that even a lot of the people that feel for whatever reasonthey have to vote against it recognize that we're better off havingnormal trading relations with China and that we don't need to havethis debate every year. And if some future, terrible problem arosebetween the two of us which would call into question whether weshould continue that, then there certainly would be -- Congress wouldhave the option to debate and to legislate in that area.

But I don't think this debate every year serves aparticularly useful purpose. It might actually have for a few yearsafter Tiananmen Square, when there was uncertainty about what ourpolicy was going to be and where there was no systematic way ofdealing with human rights and other concerns. But I think now thatthere is and there will continue to be a systematic way of dealingwith that, and I hope that there are other ways for Congress to beinvolved in China and to make their views known. I think it would bebetter if we didn't have to have this debate every year.

Q Will you propose legislation or legislative actionto --

THE PRESIDENT: I would want to have consultations withCongress. We discussed this last year. I discussed this with anumber of leaders in Congress last year, and the consensus was thatit wasn't the right time to propose it because the Congress wasn'tready to deal with it. But let's see how the trip goes and when Iget back, see how people are feeling about it.

Q Another issue that's languishing on Capitol Hill isthe IMF. And the Senate passed it months ago and overwhelmingly, butthe House has been holding it up. Some of the social conservativeswant to add abortion language. Dick Armey wants strict conditionsbefore there would be approval. Newt Gingrich has even suggestedthat unless the administration is more cooperative in his mind onsome of their hearings, that he would hold it up.

How important do you think it is to do this, do itquickly? And how has the economic trouble of Asia made it moreimportant, if you believe it is?

THE PRESIDENT: I think the economic trouble in Asia hasmade it more important in two ways -- one symbolic and one practical.Symbolically it's more important because the United States needs tobe seen as doing everything possible to be a responsible player inthe international economy, and because we have a huge stake in whathappens in Asia. A big percentage of our exports go to Asia; asignificant percentage of our own economic growth has been fueled bythat export market.

There is a practical reason that's important, which isso many countries got in trouble at the same time, the IMF is goingto need the money pretty soon. And we can't expect to lead the worldwhen all these huge interests are at stake and then say, but I'msorry, there are 15 or 20 members of the Republican majority in theHouse of Representatives who have said that if this administrationwon't change its family planning policy, that they're prepared to seeus lose our vote in the United Nations and have no influence over theInternational Monetary Fund and not do our part there.

I think this is part of a dangerous move toward kind ofboth unilateralism and isolationism that you can also see in some ofthe budget proposals for foreign assistance. Some members of theHouse appear to want to sanction everybody in the world who doesn'tagree with us on anything, and not invest in anybody in the world whodoes agree with us and can be our partner in the future and can builda better 21st century for their children.

I just completely disagree with this whole approach, andI'm hoping we can find a way out of it. The Speaker's is in a littlebit of a political bind because of the way his caucus works, and Ifeel badly about it. But he knows good and well we ought to pay ourway to the IMF and the U.N.

Q I just wanted to ask you a question actually abouttobacco. At a press conference about a month ago, I asked you -- andthis was before tobacco had actually blown up -- I asked you if youthought you could convene a tobacco summit of some sort to bring thecompanies back into the fold at the time the companies were sayingthey couldn't accept the McCain bill.

Have you discussed with anybody bringing up some sort oftobacco summit to try and get everybody back at the table and try andwork out a compromise? And if so, when would something like thathappen?

THE PRESIDENT: Let me tell you what we're doing now, iswe're exploring every conceivable alternative for how we could comeup with a bill that can actually pass the Congress that would do the

job of reducing teen smoking. The only thing I have ruled out, whichI did earlier today in my press conference, was just taking someslimmed-down bill that would make a mockery of the process so thatCongress could say it did something.

I believe that the central reason the tobacco companiespulled out was not so much the money but was the uncertainty as towhether there would be some liability cap. And there was an unusualcoalition of liberals and conservatives, for an unusual set ofreasons, who voted against that; which is why, after consultationwith Senator Lott, I came out and clearly said that I would beprepared to accept one and I thought they ought to vote for it. AndI still believe that.

And the reason is clear. Whether your philosophicallyopposed to a liability cap or not as part of the settlement, underprevailing Supreme Court decisions I think it's clear that if we wantthe tobacco companies to limit their advertising and marketing, inorder to do that they're going to have to understand to some extentwhat their financial exposure is in the future.

So for me, I have no problem with that, and I think ifyou talked to anybody who really wants a bill, they will tell youthat in the end, if we're going to get a bill, it will have to havesome kind of liability cap on it. So it ought not to be too generousto tobacco companies. It ought to be something they still feel, ifthey continue to do the wrong thing.

But if you look at -- there are three elements. All thestudies show there are three elements which has led to a very highrate of teen smoking, even though it's illegal in every state to sellcigarettes to teenagers. One is the price. If the price werehigher, kids wouldn't be as likely to buy them. Two is theadvertising. And three is the access.

So we've got to try to deal with all three of thosethings. Then we need the bill to deal with the public health issues.And we need something for the tobacco farmers. And everything else,as far as I'm concerned, can be subject to negotiations.

So I'm looking at -- we've discussed three or four orfive different ways that we can get this thing back on track. Butthe Senate knows what the parameters are. They could -- we couldsend them up a bill tomorrow that would pass the Senate if theydecided they were going to do it.

Q Do you have a bill? I mean, a White House bill.

THE PRESIDENT: No, we don't, because we thought it wasbetter -- in consultation with the Republicans, we thought it wasbetter to let them have a committee bill. So they voted this billout 19 to 1, and some of the people who voted for the bill votedagainst it on the floor yesterday -- the day before yesterday.

Q So you can't see a scenario giving them politicalcover of having a White House bill?

THE PRESIDENT: Oh, I don't mind giving them politicalcover. Don't misunderstand me. I don't mind -- to me, this is aboutthe kids. If there is an agreement and there are members -- thereare Democrats who are worried about being attacked because they gavea liability cap or Republicans who are worried about being attackedbecause they voted for a bill that would increase the price ofcigarettes a buck a pack or however much it is in the bill, or theywant to have some differences in the particulars as it's implemented,I don't mind doing that.

I think that this administration, I think because of thestand that I have taken and the stand the Vice President has taken, Ithink that our credibility on this is pretty strong. People know wereally believe in this and we really believe it ought to be done.And I think everyone understands that any complicated piece oflegislation has to represent a series of compromises.

So I'm more than happy to do all that, but I just -- I'mnot prepared to adopt a bill that I don't think will do the job andthat no reputable public health authority believes will do the job.That's my only bottom line.

I don't -- I'm not interested in gaining any politicalbenefit from this except insofar as it's necessary to induce peopleto ultimately pass the right kind of bill. That's my only objectivehere. I think this is a public health opportunity of a generationfor the United States, and to squander it because there was $40million in unanswered advertising by the tobacco companies, to whichthere are very good answers, is a great -- it would be a great pity.And I think in the end it's a misreading of the political opinionsand character of the American people for the Republican majority tothink that they've gotten some big victory here. I just don't agreewith that, and I hope we can work it out.

Q One quick last China question. Did China's helpfor Pakistan's nuclear program -- was that a contributing factor inthese tests, as the Indians claim?

THE PRESIDENT: Well, of course that has its roots inthe war that China fought with India over 35 years ago. And so Chinaquite rationally, from its point of view, developed a securityrelationship with Pakistan.

But the important thing is that the Chinese have agreednow not to give assistance to non-safeguarded nuclear facilities,which would include the ones in Pakistan. They're in theComprehensive Test Ban regime. And equally important, sincedeliverability of missiles is a big issue, deliverability of nuclearweapons is a big issue, they've agreed to abide by the guidelines ofthe Missile Technology Control Regime and to work with us inimproving both of our abilities to deal with those issues.

So China -- India can blame China or say that this is aChinese issue, but the truth is, we need to find a way out of thiswhich leaves the Indians more secure, not less; leaves the Pakistanismore secure, not less; and puts the India-China relationship back onthe path it was on before this last change of government and thetesting occurred.

We got to start from where we are, but I think theChinese commitment on that going forward was the important thing, andwe have it, and I think they will honor it.

Q Thank you.

THE PRESIDENT: Thank you very much.

Q Thank you very much.

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