Senator Biden, thank you for that characteristically understatedintroduction. Senator Roth, Governor Carper, Congressman Castle,friends and guests, I am delighted to be here in Wilmington withyou today. Although I was born in Prague and came of age inDenver, I have spent most of my adult life in New York andWashington -- or in transit between the two. So I am very gladto get off the train, at last, and see the city without a blur.

Delaware is a small state, but it has a very large presence inWashington.

I doubt there is a Senator in our era with a greater record ofaccomplishment than Joe Biden. I am delighted that he has decidedto advance the interests of Delaware through his service as theleading minority member of the Senate Committee on ForeignRelations.

By his leadership on the Chemical Weapons Convention, his advocacyof a tough stance in the war against drugs, and his support for aforeign economic policy that works for America, Joe Biden isshowing every day that strong policies abroad make a realdifference for our citizens back home.

Senator Bill Roth is Chairman of the Senate Finance Committee.In other words, like Senator Biden, he has clout. In fact, heis also serving, with Senator Biden, as Chair of the Senate's NATO Observer Group, consulting with the Administration on thehistoric enlargement of that historic alliance. Senator Rothhas earned universal respect for his energy, fairness and achievements during his years of public service.

Representative Mike Castle has not been in Washington as longas his colleagues -- which you may or may not consider a goodthing -- but he has already established a reputation forindependence and courage. I thank all of you for taking the timeto welcome me here today.

As Secretary of State, I am often asked my view of the world nowthat the Cold War is receding into memory and a new century isabout to dawn.

There are obviously many elements to this and, because I am aformer professor, I have the habit of discussing each in soundbites that are fifty minutes long.

But in deference to the lulling effects of this wonderful lunch,and to all our schedules, I will give you a highly abridgedversion.

Largely as the result of strong U.S. leadership fromAdministrations of both parties, we have in our era anunprecedented opportunity to integrate the world around basicprinciples of democracy, open markets, law and a common commitmentto peace.

Not every country is yet able to participate fully in thisintegration. Some are in transition from centralized planning andtotalitarian rule to democracy. Some have only begun to dip theirtoes into economic and political reform. Some are still too weakto participate meaningfully in the international system. And afew have governments that actively oppose the premises upon whichthat system is based.

It is in America's interests to strengthen the system, to ensurethat it is based on high standards and sound principles of law,and to make it more inclusive. We do this by helping transitionalstates to play a greater role, by giving a boost to the weakstates most willing to help themselves, and by making it clear tothe outlaw states that they cannot prosper at the expense of therest; they must either reform or suffer in isolation.

That is why we are working with our allies to build a NATOstrengthened by new members and trained for new missions, and whywe are pleased the alliance has made an historic breakthrough byenlisting Russia as a co-builder of peace.

It is why we have worked with friends in Asia to freeze NorthKorea's nuclear program.

It is why we stand with the peacemakers against the bombthrowersin the Middle East, Northern Ireland, Bosnia and other troubledregions of the world.

It is why we have insisted on tough UN sanctions against theoutlaw regimes of Libya and Iraq.

And it is why we are engaged in a strategic dialogue with Chinaaimed at encouraging that country to become a fully responsibleand active participant within the international system.

Because it is a timely subject, and very important to Americaninterests across the board, let me elaborate a bit on this lastgoal.

Next month, the annual Congressional debate concerning China'smost-favored-nation, or MFN, trading status will begin.

I can say today that President Clinton has decided to renew China'sMFN status for the coming year. I understand that the White Housewill be making the announcement shortly.

Some in Congress will not agree with this approach, arguinginstead that a confrontational approach is more likely to alterChina's policies in areas where we have differences, such ashuman rights and military exports. The Administration's view isthat our long term interests are best served by a strategicdialogue with Chinese leaders on a full range of issues. Let meexplain why.

First, it is important to remember that MFN is a powerful symbolof America's global commitment to open markets. Despite its name,MFN is not a privileged status accorded only to close friends;it is the ordinary tariff treatment we extend to most nations.

More generally, we have to think carefully about what our longterm approach to China should be. There is no questioning thesignificance of China's emergence as a major, modern economicand military power. And there should be no doubt that China willplay a major role in the future of Asia, where the United Stateshas a panoply of vital interests.

The evolution of our relations with China will depend primarily onhow China defines its own national interests during the remainingyears of this century and into the next. Through our strategicdialogue, we are encouraging the Chinese to accept what webelieve is true -- that China will be able to find greatersecurity, prosperity and well-being inside a rule-basedinternational system than outside.

Currently, China is constructively engaged with the internationalcommunity in some areas; in some, it is not. Given theundemocratic nature of China's government, we can expect thatfurther movement in the direction of inclusion will be gradual.But we also believe continued U.S. engagement is the best way toencourage that movement.

The opponents of maintaining normal trading relations with Chinahave legitimate concerns -- which the Administration shares --but the tool they have chosen is less scalpel than wrecking ball.

They proceed from the fragile hope that denying MFN would have asalutary effect on China's human rights or arms export practices.

The Administration, however, proceeds from the realistic convictionthat revoking MFN would de-rail prospects for U.S.-Chinacooperation both on these and other important issues such aspreserving peace on the Korean Peninsula, encouraging dialoguewith Taiwan, controlling nuclear proliferation, safeguarding theglobal environment, cracking down on international terror,fighting the narcotics trade and further opening China's marketsto meet World Trade Organization standards.

In recent weeks, some have advocated using China MFN as leverageto protect democratic rights in Hong Kong following its reversionto Chinese authority on July 1. However, as Senator Roth pointedout in last Friday's Wall Street Journal, this idea is stronglyopposed by Hong Kong's democratic leaders, because of the damageit would do to Hong Kong's free market economy.

A further objection to ending normal trading relations is that itwould do more to isolate the United States than China. We couldexpect virtually no support from our friends and allies in Europeand Asia, all of whom support our policy of seeking China'sintegration into regional and global institutions.

Critics say that denying MFN is essential to uphold U.S.principles. The Administration believes our strategic dialoguecan both protect American interests and uphold our principlesprovided we are honest and frank about our differences on humanrights and other issues -- which we have been and will continueto be.

Whether or not we revoke MFN, China will be a rising force inAsian and world affairs.

History teaches us the value of encouraging emerging powers tobecome part of international arrangements for settling disputes,facilitating shared economic growth and establishing standards ofinternational behavior.

Here at home, we should not let the MFN debate obscure the factthat those on both sides share common goals. Whether our ownparticular interests in China are focused on diplomatic, security,commercial or humanitarian concerns, our overriding objective isto encourage in China full respect for the rule of law.

If you are a business person, you will care whether China's legalstructure respects individual rights, and whether the politicaland security environment is stable. If you are a militaryplanner, you will want to see China moving ahead with economicand political reform because you know that an open societycontributes to peace. If you are a human rights activist, youwill welcome the long-term liberalizing effects created byexpanded commerce, creation of a strong private sector, and abroad dialogue between China and the world's democracies.

And if you are Secretary of State, you will be determined to moveahead on all fronts, encouraging the full integration of Chinainto the international system.

A half century ago, a generation of American leaders led byPresident Truman and Secretary of State Marshall offered a planfor re-building a Europe decimated by war. Their goals then weresimilar to our goals today. They understood that nations workingtogether as trading partners and partners in peace would be lesslikely to fall into the abyss of war.

They believed that gaining the commitment of nations to highstandards of law and human rights would make the world lessbrutal and less unjust.

And they believed in human progress -- for they had just defeatedthe greatest enemies of progress ever to walk the earth.

Their task, then, was concentrated on the former battlegrounds ofthe second world war.

History enables us now to cast the net more broadly. Today, thereis no region -- and no nation -- that need remain outside theinternational system.

Broadening and strengthening that system cannot be done bygovernments alone. It is a joint opportunity, in which educators,community leaders and the private sector -- that's you -- mustplay a strong partnership role.

As one whose job it is to protect American interests, I hope andbelieve that, together, we will seize that opportunity. And byso doing, arrive at the end of this century well prepared for the next. Thank you very much.