DEERE & COMPANY

most important for supporting smaller U. S. exporters. China will require vast amounts of imported technology as she pursues her development goals during the coming years. By the 1990's it is estimated that China will have a literate work force of 550 million

people. This work force in itself will require major investments to be fully utilized. Although capital is being formed at a fast rate in China, it appears that credits for the importation of technology will be an important factor. In this context, the Eximbank support would be an important step in allowing the U. S. exporters to play a role in obtaining their fair share of China's future imports.

The U.S. historically has not been an aggressive exporter. U.S. exports as a percentage of GNP rank low compared to other industrial powers such as Germany and Japan. It would appear that China's policy of food self-sufficiency will eventually reduce the U.S.'s commodity exports to that country to emergency sale proportions. Would it not appear wise to organize to participate in the other trade opportunities that will develop?

We believe it is important that our government set the tone for its interest in exports as a job creating mechanism, and for its desire to improve relations with the PRC by eliminating current restrictions to Eximbank credit extensions to that country.

H. W. Becherer
Vice President

Deere & Company

We understand that your subcommittee plans to hold hearings on
January 26, 1978 on Representative AuCoin's bill, H.R. 5714, to
remove obstacles in the Export-Import Bank Act to the extension
of credits to the People's Republic of China (PRC).

Caterpillar Tractor Co. supports H. R. 5714. The record 1977
U.S. trade deficit and continuing high unemployment are powerful
arguments for removing obstacles to exports from this country.
The restrictions on Eximbank loans and guarantees to the PRC and
other communist countries are a self-imposed handicap on our own
ability to export.

We cannot, of course, ignore political and national security considerations relating to trade. We expect and support reasonable controls of exports to assure that the U.S. does not jeopardize its own security by providing weapons or other items of significant military value to adversary nations. The Export-Import Bank, however, is not the appropriate mechanism for monitoring or enforcing such restrictions. We welcome, therefore, Congressman AuCoin's initiative in seeking to remove restrictions on ExportImport Bank credits to the People's Republic of China.

It is not certain that the PRC would be willing to utilize such
credits at this time. However, the gesture of making credits
available would be an important contribution toward more normal
trade and political relations with that country.

Morever, we are aware from our own contacts with PRC officials of
that country's interest in obtaining American-made equipment.
And we believe that the PRC's attitude toward the use of credits
is evolving. Against the background of that country's ambitious

CATERPILLAR TRACTOR CO.

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development goals, the PRC might well decide within the next few years to use at least short-term credits. We should position ourselves now so that we will be able to extend such credits.

As international economic competition grows stronger, we must assign higher priority to looking after the long-term economic interests of the United States. H. R. 5714 is a step in the

right direction.

Sincerely,

D. R. Lammers

Statement of

Omer G. Voss

Vice Chairman
International Harvester Company

Before the

Subcommittee on International Trade,
Investment, and Monetary Policy

Committee on Banking, Currency, and Housing
U.S. House of Representatives

January 26, 1978

HR 8196

International Harvester Company welcomes the opportunity to testify on behalf of passage of HR 8196, which would amend the Export-Import Bank Act with regard to exports to the People's Republic of China.

For many years, International Harvester has taken the position that improvement of trade relations with countries with which the United States does not have normal relations can help to break down barriers of mistrust and silence that prevent communication and indeed threaten world peace. We believe that the establishment of regular and close trade relations paves the way for smoother relations in other fields.

One way in which closer trade relations might be fostered with the People's Republic of China would be to allow U.S. exporters to China to use the programs and facilities of the U.S. ExportImport Bank. Aside from the obvious financial benefits to U.S. exporters and the benefits to U.S. workers employed in producing such exports, such a move would demonstrate to China the sincerity of our desire to proceed with the establishment of normal relations.

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As an international company producing a broad range of agricultural machinery, construction equipment, turbine generating equipment and trucks, International Harvester has many products that would find ready acceptance in the Chinese market. example, in 1977 we sold $2.5 million of heavy-duty trucks to China for use in their oil fields.

For