Number 42, August 1995



# Managing U.S. Relations with China



## Towards a New Strategic Bargain



by Ron Montaperto

Note

Conclusions

Issues in Bilateral 
Relations: Views in Washington and Beijing



## Defining the Problem

United States relations with the People's Republic of China are fragile. 
Problems in one area, most dramatically Taiwan, affect our ability to manage 
other issues, such as proliferation. Negativism is greater than ever before. 
Despite continuing efforts to set the record straight, Beijing believes the 
United States regards China as its future enemy. In Beijing's view, the new goal 
of the United States is to contain China.

This is not a ploy. Although the leadership is clearly attempting to extract 
concessions, their statements fully reflect Chinese perceptions at all levels. 
In early 1992, the idea that the United States viewed China as a future, hostile 
peer competitor resided mainly within the Chinese People's Liberation Army 
(PLA). Now, the PLA appears to have carried the day. Where the United States 
sees Comprehensive Engagement, the Chinese see Containment.



## Origins of the Problem

Basic disagreements have been a factor in bilateral relations since the early 
1970s. It is only in the last few years that they have been so troublesome.

This is because the end of the Cold War eroded the previous strategic basis 
for conducting bilateral relations. Prior to 1990-1991, Cold War imperatives 
limited the negative impact of disagreements. Both sides had strong incentives 
for not allowing the Taiwan issue, controversy about the sale of Silkworm 
missiles to Iran, or a rising trade deficit to obscure the strategic purposes of 
the relationship. Although relations were never close, they were effective.

All that is left of that old strategic bargain is a recognition that stable 
ties are important because they bear on vital economic interests and that 
present relations will affect the future. This recognition is sufficient to 
prevent collapse. It is not, however, powerful enough to provide a stable 
equilibrium. In the absence of a regulating mechanism, other factors are 
exerting a disproportionate, negative influence. A new strategic bargain is 
necessary.

China and the United States are focused on domestic problems. In China, an 
uncertain leadership is coping with the transition to the post-Deng Xiaoping era 
and managing the political/social consequences of economic growth. In foreign 
and national security policy, regime concerns translate into an imperative to 
"avoid difficulties and maintain stability." The United States shares this 
desire.

Despite common interests, however, the two nations reflect marked differences 
in their respective values and experience. Although basic interests overlap, 
specific priorities at times do not. Also, in their approaches to international 
relations, China and the United States emphasize different concerns and have 
somewhat different perspectives.

For example, the United States is a global power. China remains essentially a 
regional power. China's approach to international relations is driven by a 
trenchant nationalism and a narrowly defined concept of state sovereignty that 
seems more appropriate to the nineteenth century than to the beginning of the 
twenty-first. For the Chinese, the immediate pre-1949 past is a period of 
national humiliation. Beijing's priority is still to build a "rich country and 
strong army" to guarantee that China will never again face similar treatment.

Accordingly, Beijing invests safeguarding sovereignty with a unique 
intensity. As the rhetoric over intellectual property rights shows, it is quick 
to interpret disagreement as an affront. There is a consistent tendency to 
escalate often minor disagreements to the level of high principle.

Beijing's approach to international relations is state-centered, inclined 
against alliances, overtly suspicious of multilateral security regimes, and 
skeptical about all but ad hoc coalitions. In contrast to the United States with 
its long experience of alliances, coalitions, multilateral regimes, and 
willingness to embrace interdependence, for Beijing, international politics 
remains very much a zero-sum game of "Beggar thy Neighbor."







## The Strategic Importance of U.S. Relations With China

When viewed from a strategic perspective, it is clear that the benefits of 
effective bilateral relations to both countries transcend the limits imposed by 
any one issue. A stable and prosperous Asia is key to the continuing prosperity 
of the United States. The tenor of U.S. relations with China directly impacts on 
regional stability and, therefore, on regional prosperity.

United States/China relations affect the ties among all regional powers. 
Adversarial or estranged relations cause division as the powers adjust to the 
pressures produced by the two giants. An assessment of U.S. relations with China 
and, increasingly, an assessment of U.S.-Chinese-Japanese trilateral relations 
are central to the policy calculus in every regional capital.

But U.S./China relations are important in an even more fundamental sense. A 
new global system is emerging. Asian nations are actively redefining the ways in 
which they order their relations with each other and with the trans-Pacific 
world.

Maintaining the place of the United States in this changing regional order is 
a vital strategic necessity. If the United States is to manage its interests 
well, and if regional expectations for U.S. leadership are to be met, effective 
relations with the People's Republic of China are imperative. The future will be 
shaped very much by the ways in which Beijing and Washington comport themselves 
today.





## Towards a New Strategic Bargain

Constructing the new strategic bargain to discipline relations requires the 
United States and China to reaffirm that maintaining the long-term stability of 
the Asia Pacific region is a shared vital national interest. Striking this new 
bargain raises three major challenges.

First, Comprehensive Engagement must be infused with a sense of purpose based 
upon clearly defined United States interests. A sense of priority is required. 
It is necessary to identify the most important issues and determine how focusing 
on any one issue will affect the ability to achieve progress on the others. 
Also, expectations must be consistently articulated. Finally, there must be a 
consistent view of China.

Consistency is difficult. For some, China is a fragile Third World country, 
an emerging market, or a potential strategic partner. For others, China is an 
abuser of human rights, a trade problem, a proliferator, or a future military 
threat.

This absence of consensus is not due entirely to problems in the eye of the 
beholder. On the contrary, it is the direct result of Chinese policies. 
Beijing's actions on human rights, the World Trade Organization, proliferation, 
the South China Sea, and Taiwan often reflect a disturbing disregard for their 
larger consequences. It is not difficult for observers to marshal evidence to 
support their respective views.

Second, it is necessary to establish benchmarks for assessing Beijing's 
policies. These must be flexible and appropriate to a changing environment. It 
must be clear that vital interests will not be compromised. The object is to 
enlarge the size of the regional table. China's taking its place at that table 
cannot be allowed to mean that the place of another is forfeited.

This suggests a third challenge. Owing to the nationalist impulse, Beijing is 
determined to become a superpower. Even with a large measure of good will on 
China's part, integrating this potential superpower into the life of the region 
will be a daunting task.





Integrating a new power implies a parallel redefining of regional roles and 
relations. Such a restructuring is already in progress. It is essential to 
approach relations with China, and with Japan and our other allies and friends, 
with a new measure of flexibility. Accommodating to the nationalism of others 
requires hard choices. But it does not necessarily require that vital interests 
be compromised. The United States must face the complex and risky task of 
determining what compromises it is willing to consider in order to build a more 
stable future.





## Managing the New Engagement

This is not a time for bold new initiatives. Because Beijing is so focused on 
the succession, the leadership will wish to avoid the appearance of compromising 
on core issues involving sovereignty, such as Taiwan or the South China Sea. Any 
effort to alter the basic status quo is likely to provoke an extremely 
inflexible response. A breathing space is necessary.

Threats aside, Chinese leaders will probably not allow relations to collapse 
or become hostile. There is an opportunity to work out a modus vivendi, in 
effect to create a firewall, for the future.

Under this concept, the United States would authoritatively reaffirm once 
again, both to Beijing and especially to Taipei, its commitment to the 
long-standing one-China policy. Encouraging sentiment in favor of an independent 
Taiwan serves neither the long-term interests of the United States nor the 
interests of the 21 million residents of Taiwan.

A declaration of independence would provoke military conflict. Other powers 
would choose sides and, in some cases, U.S. regional relations would be severely 
strained. Washington and Beijing would be estranged for many years. The people 
of Taiwan would suffer great loss. Moreover, most Taiwanese do not see 
independence as a desirable option. They prefer their version of the "one 
country, two systems" formulation because it emphasizes political and economic 
instruments and because, unlike the independence path, it allows for evolution.

However, Washington must make it equally clear to Beijing that U.S. interests 
require expanded unofficial ties with Taipei. In the future, economic 
imperatives alone will increase the need for high-level officials to enjoy 
routine mutual access. Such ties have had a demonstrably positive impact in the 
past. An evenhanded approach, coupled with Beijing's perception of the 
importance of stable bilateral and regional ties, is likely to be accepted, 
however ungraciously.

Second, engagement requires continued interaction with the PLA. The PLA is 
the most coherent of all of China's political institutions. Owing to the 
leadership succession, its already high political influence will increase. The 
PLA is a repository of nationalism and a determined advocate of the "Containment 
Theory." Finally, it exerts a major influence over Beijing's policies on Taiwan, 
the South China Sea, proliferation, and human rights.

However, hard-line propensities are tempered by the realization that conflict 
does not serve Beijing's long-term interests. Moreover, the PLA is ill-prepared 
for action against Taiwan. Although a declaration of independence would provoke 
a military response, the PLA is not now capable of mounting a successful 
invasion. A naval blockade is more feasible, but the difficulties of 
coordinating sustained air, surface, and submarine operations make success an 
open question. Because its qualitative advantage in aircraft has eroded somewhat 
in recent years, Taiwan may not be able to defeat a determined attack. Taipei 
will, however, redress this deficiency when it takes delivery of F-16 and Mirage 
2000 aircraft in 1996.

Although the PLA could inflict great damage, it is not clear that a decisive 
victory is possible, or that Beijing could force Taiwan to accept a political 
settlement on its terms. This uncertainty, the inevitable damage to China's 
regional political and economic position resulting from military action, 
Taiwan's qualitative advantage, and Beijing's uncertainties about possible U.S. 
responses will continue to deter a Chinese attack. For the next few years, 
Beijing will continue the military policies, long in place, of conducting 
increasingly complex military exercises to discourage sentiment for 
independence. Military attack will be a last resort.

PLA leaders are aware that present deficiencies will not be overcome in the 
near term. The military modernization program has achieved some improvement in 
selected areas. Command and control capabilities are being enhanced, rapid 
response units exist, aerial refueling capabilities are being developed, and air 
defense capabilities are clearly improving. Beijing has purchased four 
Kilo-Class submarines and around fifty Su-27 aircraft from Russia. The PLA also 
is continuing its plan to build an aircraft carrier. Although these are 
important, much work remains before the PLA will be able to fully exploit this 
equipment. Also, despite increasing budgets, continuing financial shortfalls and 
the difficulty of developing doctrine to guide the use of modern weapons 
constrain progress.

In sum, the PLA has a highly trained, but very small, core that is 
approaching modernity. It has produced a self-sustaining cadre of highly 
professional officers. It has also identified key areas for future improvement. 
But it remains at least ten-to-fifteen years away from achieving broad modern 
capabilities. The desire to correct present doctrinal, operational, and 
equipment deficiencies is a powerful point of leverage for the United States.

Integrating China should be on the agenda of a highly focused regional 
dialogue. Because U.S. perspectives mirror those of the region, Washington is 
well positioned to lead an effort to develop common positions and approaches to 
Beijing. If the perspective is sufficiently broad, it will be possible to disarm 
Beijing's concerns about containment.





``