SHAPING CHINA'S FUTURE IN WORLD AFFAIRS:

THE U.S. ROLE

Robert G. Sutter

April 25, 1996
ii

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iii

FOREWORD

In April 1996, the Army War College's Strategic Studies

Institute held its Annual Strategy Conference. This year's theme

was "China into the Twenty-first Century: Strategic Partner and .

. . or Peer Competitor." As world events turned out, it was a

prescient choice.

Robert G. Sutter, a Senior Specialist in International

Policy with the Congressional Research Service of the Library of

Congress, presented the following paper as part the conference's

concluding panel, "China and the United States: The New Great

Game." Dr. Sutter sets the scene for his discussion of the U.S.

role in China's future by providing a comprehensive analysis of

the key factors that shape China's domestic and international

policies. He outlines a mixed picture--a regime today that is

pragmatic in its international political and economic relations

but highly protective on territorial and sovereignty issues. He

also notes that it is a regime in transition and articulates the

various interpretations of where that transition might be

headed.

But if understanding China is vital to effective U.S.

policy, so too are achieving consensus on U.S. objectives and

framing coherent courses of action. On this count, Dr. Sutter

finds several competing outlooks at work, both within and outside

the U.S. Government. His review of these suggests that Chinese

leaders will have as much difficulty predicting the future course

of American policy as the other way around.

Dr. Sutter concludes his paper with several useful

guidelines for those charged with formulating instrumental policy

with respect to China. These insights complete a thorough survey

of the major issues, interactions, and choices which will shape

the U.S.-China strategic relationship. For that reason, I commend

to you, Shaping China's Future in World Affairs: The U.S. Role.

RICHARD H. WITHERSPOON

Colonel, U.S. Army

Director, Strategic Studies Institute
iv

BIOGRAPHICAL SKETCH OF THE AUTHOR

ROBERT G. SUTTER is a Senior Specialist in International Policy

with the Congressional Research Service (CRS) of the Library of

Congress. His area of specialization is Asia and the Pacific.

Before joining the CRS in 1984, Dr. Sutter served at the Central

Intelligence Agency as a Chinese foreign policy analyst. He

earned his Ph.D. in history and East Asian languages at Harvard

University and is the author of eight books and numerous articles

dealing with China, Japan, Korea and Indochina.
1

SHAPING CHINA'S FUTURE IN WORLD AFFAIRS:

THE U.S. ROLE

INTRODUCTION

Backed by impressive economic growth and steadily increasing

military power, China's international influence has grown

substantially in recent years. Beijing's growing assertiveness in

a variety of areas from trade policy to the Taiwan Strait has

challenged important interests of the United States and others

with a concern for international stability. Chinese power poses a

set of questions markedly different than a few years ago when

China's leaders appeared as an isolated and troubled regime

following the suppression of pro-democracy demonstrators at

Tiananmen Square in 1989.

In many important respects, Chinese leaders since the late

1970s have followed generally pragmatic policies that have

integrated China's economy more closely with the rest of the

world. The result has been a foreign policy seeking greater

economic advantage in order to improve the material standard of

living of the Chinese people and to increase support for

continued Chinese communist rule. Seeking economic advantage has

prompted Chinese leaders to be more flexible than in the past on

differences with neighbors and to curb actions disruptive to the

prevailing status quo in Asian and world affairs.

Although optimists judge that China's growing economic and 

military power will be moderated by an ever widening web of

international interdependence, skeptics suspect that greater

power will allow Beijing to be more assertive in backing

nationalistic, territorial or other demands. Of course, actual

Chinese policy could turn out to be moderate on some issues

(e.g., trade disputes) and more assertive on others (e.g.,

territorial disputes). Political and economic developments inside

China will partly determine whether Beijing follows an

accommodating or assertive foreign policy. Determinants outside

China include the important role U.S. policy plays in influencing

Chinese behavior.

Largely because of China's closer economic interaction with

the rest of the world, especially with the free market states of

Asia and the West, China's future is more dependent than before

on external factors. Inasmuch as other international actors in

Asia and the West generally refrain from confronting China on

difficult issues without the backing of the United States, it

seems clear that the United States will be a key determinant in

whether or not the international system constrains and presses

China in the future. Heavy international pressure led by the

United States against China could prompt the PRC to recalculate

the costs and benefits of its recent pragmatic and interactive
2

approach to foreign affairs in favor of a more autarkic and

assertive posture designed to reduce dependency and protect

Chinese interests under U.S.-led pressure. On the other hand, the

United States also has an opportunity to play a supportive role

in China's development and interaction with the international

system. This U.S. approach would involve a path of careful

engagement, continuing vigilance against potentially disruptive

and deviant Chinese behavior, and encouragement of PRC growth and

influence with a goal of seeing China's power channeled along

routes acceptable and helpful to broader goals of international

development and peace.

BACKGROUND: EVOLUTION OF CHINA'S ROLE IN WORLD AFFAIRS1

Under the leadership of Mao Zedong, China executed some wide

swings in foreign policy behavior. During the 1950s, Mao charted

a pro-Soviet, anti-U.S. foreign approach; in the 1960s, China

shifted to a posture antagonistic to both superpowers; and in the

1970s, Mao sanctioned a realigning of China toward a

rapprochement with the United States in opposition to perceived

Soviet expansion. Throughout this period, Chinese leaders under

Mao mixed hard and soft tactics in foreign affairs in ways that

showed a strong willingness to threaten or use force in order to

seek advantage or to respond to perceived encroachment or

pressure from outside. China cultivated the image of an aggrieved

"have not" power determined to struggle to change the world--at

least over a period of time. Beijing supported revolutionary

political movements and gave arms and training to radical

insurgencies directed against established governments.

Outside analysts were able to discern core goals in Chinese

 foreign policy notably involving support for the security of the

Chinese state and its Communist Party leadership; development of

China's wealth and power; and China's great desire to stand

strong and independent in world affairs. Nevertheless, the

frequent shifts in priorities and tactics sometimes caught

Chinese leaders unaware or unresponsive, leading to leadership

confusion and conflict. Domestic politics would on occasion spill

over into Chinese foreign policy, leading to sometimes serious

leadership foreign policy debates. Perhaps the most graphic

example of the latter occurred in the mid-late 1960s, during the

most violent phase of the Cultural Revolution. This period saw a

collapse of Chinese foreign policy, amid a broader collapse of

Chinese government and party institutions, reflecting the lifeand-death struggle for power then underway among the senior

leaders in China.

Toward Greater Pragmatism in Chinese Foreign Policy, 1969-1989.

China's relationship with the superpowers and especially the
3

Soviet Union remained at the heart of Chinese foreign policy

through much of this period. In particular, Soviet power

repeatedly impeded both China's efforts to expand its influence

in Asian and world affairs, and its ability to secure China's

broader foreign policy goals of security, independence and

development.2

1969-76. During this period, China was only beginning to

emerge from the violent domestic conflict and international

isolation caused by the Cultural Revolution. The Soviet military

buildup and the Sino-Soviet border clashes prompted a major

reassessment in Chinese foreign policy that focused on countering

the Soviet threat to Chinese security. As the United States was

pulling back militarily from Asia under terms of the Nixon

doctrine, Beijing saw an opportunity to work with this former

adversary against Soviet pressure in Asia. It also used the

opening to the United States to support China's broader effort to

gain greater international recognition.

1976-80. The period began with the death of Mao, the purge

of the Maoist "gang of four," and the rehabilitation of more

pragmatic leaders led by Deng Xiaoping. Deng and his reformminded colleagues began a major economic and political reform

effort designed to end the ideological struggles of the past and

to improve the material well-being of the Chinese people.3 In

foreign affairs, they broadened the basis of China's interest in

contacts with the West and the rest of the developed world from

continued common anti-Soviet strategic concerns to include

greater economic, technical, and other exchanges.

In the 1980s, Chinese leaders were generally pleased by the

strong U.S.-led international response to the Soviet invasion of

Afghanistan in December 1979. The election of Ronald Reagan and

the buildup of U.S. military strength in the early 1980s were

seen by Beijing as complementing similarly strong efforts against

Soviet expansion by U.S. allies in Europe and Asia. As a result,

China came to view Soviet expansion as held in check for the

first time in over a decade--a trend that Beijing judged was

likely to continue to pose difficulties for a USSR leadership

already preoccupied with problems including leadership succession

and deepening economic malaise.

Meanwhile, Chinese leaders began to reassess their close

alignment with the United States in light of candidate Reagan's

strong statements of support for Taiwan. In response, Beijing

opted in 1981-82 for a more "independent" posture in foreign

affairs that struck a favorable political chord in China and

among Third World countries deemed important to China.

In the mid-1980s, with the rise to power of Mikhail

Gorbachev and his reform-minded colleagues in the Soviet Union,
4

China and the Soviet Union moderated past differences and

appeared determined to improve political, economic and other

relations. Leaders of both sides focused on problems of internal

economic development and related political reform, and both were

interested in fostering a stable, peaceful international

environment conducive to such reform. Sino-Soviet ideological,

territorial, and leadership differences of the past were less

important. The two sides remained divided largely over competing

security interests in Asia. Gorbachev began to meet Chinese

interests in this area by starting to pull back Soviet forces

from Afghanistan, Mongolia, and other places around China's

periphery. Concurrently, Chinese military planners began to

revise China's strategic plans. They downgraded the danger of

Soviet attack and allowed for a major demobilization of Chinese

ground forces.

The Soviet initiatives also dulled Chinese interest in

cooperating closely with the United States and its allies and

associates in Asia to check possible Soviet expansion or for

other reasons. China's growing need for close economic and

technical ties with these countries compensated to some degree

for the decline in Chinese interest in closer security ties with

them. Chinese leaders also wished to improve relations with the

Soviets in order to keep pace with the rapid improvement of

Gorbachev's relations with the United States and Western Europe.

Otherwise, Chinese leaders ran the risk of not being considered

when world powers decided international issues important to

China.

Foreign Policy After Tiananmen.4

The sharp international reaction to China's harsh crackdown

on dissent after Tiananmen caught Chinese leaders by surprise.

They reportedly had expected developed countries to move

relatively swiftly back to China after a few months, but they had

not counted on the rapid collapse of communism in Eastern Europe

and the subsequent march toward self-determination and

democratization throughout the Soviet empire, leading to the end

of the USSR by 1991. Taken together, these unexpected events

diverted the developed countries from returning to China with

advantageous investment, assistance, and economic exchange;

reduced China's strategic importance as a counterweight to the

USSR; and posed the most serious challenge to the legitimacy of

the Chinese communist regime since the Cultural Revolution.

In response, Beijing used foreign affairs to demonstrate the

legitimacy and prestige of its communist leaders. High-level

visits, trade and security agreements and other foreign policy

means were used to enhance Beijing's image before skeptical

audiences at home and abroad. As time went on, Chinese leaders
5

managed to reestablish political stability. To do this, Chinese

leaders gave higher priority to the resource needs of the

military and public security forces. Meanwhile, economic growth

began to accelerate sharply, especially in southern and coastal

regions.

Recognizing the inability of communist ideology to support

their continued monopoly of power, leaders in Beijing played up

more traditional themes of Chinese nationalism to support their

rule. Thus, U.S. and other criticisms of the communist system in

China were portrayed not as attacks against unjust arbitrary rule

but as assaults on the national integrity of China. They were

equated with earlier "imperialist" pressures on China in the 19th

and 20th centuries.5

Meanwhile, Deng Xiaoping's initiative in early 1992 forced

other PRC leaders out of their hesitant approach to economic

modernization after Tiananmen. Deng's call for faster growth and

less impeded economic interchange with the outside world

coincided with the start of an economic boom still underway on

the mainland. Double digit annual growth rates caused inflation,

dislocation and numerous social problems, but they clearly caught

the attention of the outside world. Many of China's well-to-do

neighbors like Hong Kong and Taiwan had already positioned

themselves well in the post-Tiananmen period to take advantage of

the rapid growth. They were followed rapidly by Western European

and Japanese visitors and traders. U.S. business interest in the

China market grew markedly from 1992 to 1994 and was credited

with playing an important role in forcing the shift in Clinton

administration policy linking U.S. most favored nation (MFN)

treatment and China's human rights conditions.6

On specific issues in foreign affairs, Chinese leaders

generally adhered to the logic underlying the pragmatic trend in

Chinese foreign policy seen in the post-Mao period:

• Post-Mao Chinese communist leaders need to foster a better

economic life for the people of China in order to legitimate and

justify their continued monopoly of political power. These

leaders cannot rely as Mao did on his enormous personal prestige

as a successful revolutionary, or on the appeal of communist

ideology: they have little of Mao's prestige, and the appeal of

communist ideology is largely a thing of the past.

• China depends critically on foreign trade, and related

foreign investment and assistance, for its economic development.

• China depends particularly heavily on its neighbors for

aid, investment, and trade benefits, and on the United States to

absorb its exports.
6

 • Therefore, to buttress their survival politically, postMao leaders emphasize their concern with maintaining a "peaceful"

international environment which assures continued trade,

investment, and assistance flows so important to Chinese economic

well-being.

Thus, Chinese leaders put aside past ideas of autarky and

self-reliance and allowed the Chinese economy to become

increasingly integrated into the world economy. They sought to

avoid dependence on any one power by encouraging broad

competition. Beijing made efforts to meet the requirements of the

United States and others regarding market access, intellectual

property rights and other economic issues, and strove to become a

member of the General Agreement of Tarriffs and Trade (GATT) and

a founding member of the World Trade Organization (WTO). Chinese

leaders duly accepted commitments and responsibilities stemming

from their participation with such international economic

organizations as the World Bank, the Asian Development Bank and

the Asian Pacific Economic Cooperation (APEC) forum.

Chinese leaders remained sensitive on issues of national

sovereignty and were less accommodating on international security

issues. They did adjust to world pressure when resistance

appeared detrimental to broader Chinese concerns. Examples

included Chinese cooperation with the international peace

settlement in Cambodia in 1991; Beijing's willingness to join the

Non-Proliferation Treaty and to halt nuclear tests by the end of

1996 under an international agreement banning nuclear tests;

China's willingness to abide by terms of the Missile Technology

Control Regime (MTCR) and the Chinese leaders' reportedly helpful

efforts to assist the United States in reaching an agreement with

North Korea in October 1994 over the latter's nuclear weapons

program. Beijing also endeavored to meet international

expectations on other transnational issues like policing drug

traffic, curbing international terrorism, and working to avoid

further degradation of the world's environment.

It is easy to exaggerate the degree of Chinese accommodation

to international concerns. Beijing's continued hard line against

outside criticism of Chinese political authoritarianism and poor

human rights record graphically illustrates the limits of Chinese

accommodation. Continued Chinese transfer of sensitive military

technology or dual use equipment to Pakistan, Iran and other

potential flash points is widely criticized in the United States

and elsewhere. And the Chinese political and military leaders are

not reluctant to use rhetorical threats or demonstrations of

military force in order to intimidate and deter those in

sensitive areas like Taiwan, the South China Sea, and Hong Kong,

who are seen by Beijing as challenging its traditional

territorial or nationalistic claims.7
7

In short, Beijing has been widely seen as accommodating

pragmatically to many international norms not because such

accommodation is seen as inherently in China's interest. Rather,

Beijing is said to view each issue on a case-by-case basis,

calculating the costs and benefits of adherence to international

norms in each case. Thus, for example, Beijing saw by 1991 that

maintaining its past support for the Khmer Rouge in Cambodia

would be counterproductive regarding China's broader interests in

achieving a favorable peace settlement in Cambodia and

solidifying closer relations with the Association of Southeast

Asian Nations (ASEAN) countries, Japan and the West--all of whom

saw continued Chinese aid as a serious obstacle to peace. By the

same token, the U.S.-led international moratorium on nuclear

testing had reached a point in 1994 that Beijing had to announce

its decision to stop nuclear testing by the end of 1996, and join

a comprehensive nuclear test ban, or risk major friction in its

relations with the United States, Japan, Western Europe and

Russia.

Underlying the case-by-case approach is a rising sense of

nationalism among Chinese leaders. Viewing the world as a highly

competitive state-centered system, Chinese leaders remain deeply

suspicious of multilateralisim and interdependence. Rather, they

tend to see the world in more traditional balance-of-power terms,

and therefore argue that the current world trend is more

multipolar (i.e., a number of competing nation-states) than

multilateral (a system where nation-states sacrifice their

independence and freedom of maneuver for the sake of an

interdependent international order).8

At bottom, Chinese suspicions of many multilateral efforts

center on the role of the United States and the other developed

countries. These nations are "setting the agenda" of most such

multilateral regimes. They are accused of doing so to serve their

own particular national interests and to give short shrift to the

interests and concerns of newly emerging powers like China. As a

result, many leaders in China see U.S. and other efforts to

encourage or press China to conform to multilateral standards on

international security, human rights, and economic policies and

practices as motivated at bottom by the foreign powers' fear of

China's rising power, their unwillingness to fairly share power

with China, and their desire to "hold down" China--to keep it

weak for as long as possible.

ASSESSMENT AND PROSPECTS

The above analysis of the international behavior of the PRC

in recent years suggests several key themes.

-- Chinese leaders now see the security environment around

China's periphery as less likely to be disrupted by a major
8

international power than at any time in the past. Of course, the

reduced big power military threat does not preclude danger posed

by possible conflicts between China and its neighbors over

territorial disputes or other issues that China itself might

provoke. Nor does it automatically translate into growing Chinese

influence in Asia or sanguine Chinese leadership attitudes

regarding the evolving balance in Asia. Regional economic and

military powers (e.g., Japan, Indonesia, India) are among leaders

asserting their influence as East-West and Sino-Soviet tensions

have ended.

-- Regional security trends are generally compatible with 

China's primary concern with internal economic modernization and

political stability. So long as the regional power balance

remains stable and broadly favorable to Chinese interests, it

will not intrude on Beijing's recent effort to give pragmatic

development of advantageous economic contacts top priority in its

foreign affairs. At least some leaders in Beijing appear prepared

to embark on a more assertive Chinese stance in the region

presumably after China has achieved solid progress in its

economic modernization program.

-- Ideological and leadership disputes have less importance

for Chinese foreign policy than in the past. Although Chinese

leaders could be divided between more conservative officials and

those who are more reformist, the differences within the

leadership over foreign affairs have appeared markedly less than

they were during the Maoist period.

-- Reflecting the more narrow range of foreign policy

choices present among Chinese leaders, Beijing's foreign policy

has become more economically dependent on other countries,

especially the Western aligned, developed countries, than in the

past. Particularly as a result of the new openness to foreign

economic contacts and the putting aside of Maoist policies of

economic self-reliance, Beijing has come to see its well-being as

more closely tied to continued good relations with important

developed countries, notably Japan and the United States. They

provide the assistance, technology, investment and markets China

has needed to modernize effectively.

-- China's overall pragmatic adjustments in world affairs do

not depend on just one or two leaders in China. Although Deng

Xiaoping picked up senior foreign policymaking duties from Mao

Zedong and Zhou Enlai, the policies followed have represented, in

broad terms, an outline agreed upon among senior Chinese leaders

who are advised and influenced by a wide range of experts and

interest groups in China. Many of these groups have a strong

interest in dealing pragmatically with world affairs. This has

included particularly strong economic, technological and other

interconnections between Chinese enterprises and interest groups
9

and counterparts outside China. As a result, they are loathe to

pursue autarkic, confrontational or provocative policies that

could jeopardize their particular concerns, as well as China's

economic progress in an increasingly interactive world. A

substantial segment of the Chinese leadership does remain

suspicious of U.S. pressure and very sensitive regarding issues

of national sovereignty.

The outlook for Chinese foreign policy over the next 5-10

years remains uncertain. Optimists in the West tend to

extrapolate from the pragmatic trends seen in Chinese foreign

policy behavior since the death of Mao and the rise of pragmatic

nation-building policies of Deng Xiaoping. They argue that the

logic of post-Mao foreign policy will continue to drive Chinese

leaders in directions of greater cooperation, accommodation and

interdependence with the outside world, and especially China's

neighbors and the advanced developed countries led by the United

States. According to this view, as China becomes economically

more advanced, it will undergo social and eventually political

transformation, that will result in a more pluralistic political

decisionmaking process in Beijing that will act to check

assertive or aggressive Chinese foreign actions or tendencies.

Moreover, as Beijing becomes more econom- ically interdependent

on those around China and the advanced developing countries, it

will presumably be less inclined to take aggressive or disruptive

actions against them.

Proponents of this view see ample evidence at present to

support their opinion. They cite, for example, the fact that PRC

leaders continue to give top priority to economic development

rather than military expansion or political assertiveness; that

PRC leaders have been increasingly flexibile in accommodating

international economic norms in order to benefit from the

international economic system; and that PRC leaders have also

shown more flexibility in dealing with sensitive security and

political issues through multilateral organizations like the

Asean Regional Forum and through bilateral talks and exchanges

with other countries.9

Pessimists in the United States and elsewhere in the West

are more inclined to focus on the strong nationalistic ambitions

and intentions of the Chinese leaders. They are often struck by

the strong nationalistic views of at least a segment of PRC

leaders in the past 2 years who voice deep suspicion of U.S.

pressures directed against China. These Chinese leaders see these

U.S. pressures and other U.S. policies, such as support for

Taiwan, as fundamental challenges to China that must be

confronted and resisted.

In the past, Chinese nationalistic ambitions ran up against,

and were held in check by U.S.-backed military containment or
10

Soviet-backed military containment. Later, Beijing's need for

advantageous foreign economic interchange to support economic

development at home, and thereby legitimate continued communist

rule in China, caused it to curb assertive, nationalistic

behavior abroad. But the pessimists believe that Beijing has now

or will soon reach a point of economic development where it will

no longer need to cater so much to outside concerns. For example,

the government in Beijing may have reinforced its political

legitimacy by its record of material progress in recent years.

And China's economy has become such a magnet for foreign

attention that the Sino-foreign tables could be reversed--that

is, foreign countries now will feel an increasing need to

accommodate China or risk being closed out of the booming China

market, rather than China feeling a need to accommodate foreign

interests.10 China is now widely acknowledged as a world-class

economic power and possibly a nascent superpower. None of this is

unrecognized by China's leadership.

Whether China will follow the path of the optimists or

pessimists, or some other future course, will depend heavily on

two sets of factors:

 • Internal--political stability and the course of economic

and political performance;

• External--the interaction of Chinese relations with key

states around its periphery and Chinese adjustment to

international trends in the so-called "new world order."

Internal Variables.

Developments inside China that could cause a shift from

pragmatism to a more assertive and disruptive emphasis on

nationalism in Chinese foreign policy are:

• A major economic failure or change in political

leadership. These could prompt Beijing leaders to put aside their

current approach to nation-building and adopt a more assertive

foreign policy; this could be accompanied by harsher reactions to

internal dissent and to Western influence in China;

• The achievement of such a high level of economic success

and social-political stability that Chinese leaders would feel

confident that China was strong enough to pursue its interests in

the region and elsewhere with less regard for the reaction or

concerns of other countries.

Some have argued that it might be good for Asian and world

stability if China continued to make progress toward economic

modernization, but failed to achieve full success.11 Under these
11

circumstances, Beijing leaders would likely continue to see their

interests as best served by pursuing a moderate, conventional

nation-building program. They would likely remain preoccupied

with the difficulties of internal modernization and would not

achieve the level of success that would allow for a more forceful

policy in Asian and world affairs for some time to come.

An examination of variables governing China's development

and reform efforts suggests that Beijing appears to face such

future prospects. Beijing leaders are unlikely to achieve fully

their current development objectives for some time because of

significant economic constraints, the complications from efforts

to implement proposed reforms, and leadership and political

instability. Major short-term economic constraints include an

inadequate transportation system, insufficient supplies of

electric power, an expanding government spending deficit, moneylosing state enterprises, and a shortage of trained personnel.

Long-term impediments include growing population pressure, the

difficulty of obtaining enough capital to develop available

energy resources and general industry, and the slowdown of

agricultural growth after the rapid advances in the recent past.12

Reflecting these and other important constraints, the

Chinese leadership at present continues to delay some changes in

prices and economic restructuring because it fears they would

have serious consequences for Chinese internal stability. Such

changes can trigger inflation and cause hoarding. Closing

inefficient factories forces workers to change jobs and perhaps

remain unemployed for a time. Decentralized economic

decisionmaking means that local managers can use their increased

power for personal benefit as well as for the common good. The

result of these kinds of impediments has been a zig-zag pattern

of forward movement and slowdown in economic reforms.

The problems of political stability focus on leadership

succession--as principal leader Deng Xiaoping's health slowly

fades--and the difficulty Beijing has in trying to control

students, workers, and others demanding greater accountability,

less corruption, or other steps that would curb central

authority. The repeated political difficulties over the results

of the economic reforms and political measures continue to

demonstrate the volatility of politics in China.

Of course, the widely publicized difficulties of the reform

efforts sometimes obscure their major accomplishments and the

political support that lies behind them. Reflecting the rapid

economic growth in China over the past 17 years, the constituency

favoring economic reform includes representatives of coastal

provinces, enterprise managers, prospering farmers, many

intellectuals, and technically competent party officials. The

major alternatives to current policies (e.g., Maoist self-
12

reliance, Soviet-style central planning) have been tried in the

past and have been found wanting. Some of the followers of purged

party leader Zhao Ziyang provided an alternative favoring greater

political as well as economic reform, but thus far no leader has

emerged with a program with viable support or constituency able

to lead China in a direction markedly different than the current

Communist Party-led development effort. Thus, on balance, it

appears likely that Beijing will remain focused on economic

reform while stressing the need for political stability, even in

the event of strong leadership and political disputes and

economic complications in the next few years. Nevertheless,

analysts are sometimes concerned about what they see as Chinese

assertiveness in the post-Cold War order in Asia.

External Relations.

The foreign powers around China's periphery and those who

have an important role to play regarding Chinese interests in

international organizations, trade and global issues could

influence the course of China's future in several ways. Some may

adopt policies on issues sensitive to Beijing that would prompt

Chinese leaders to subordinate pragmatic interests for the sake

of protecting Chinese territorial or other national claims. Most

notable in this regard are outside challenges to China's claims

to disputed territories. In the case of Taiwan, for example, if

the leaders in Taipei were to formally declare independence from

the mainland, Beijing might be hard put not to follow through on

its repeated pledge to use force to stop such a development. And

in the case of disputed claims to islets in the South China Sea,

Chinese naval forces could be expected to respond promptly to any

effort by Vietnam or others to expand their territorial holdings

by force.

On global economic issues, there is uncertainty as to how

far the Chinese government will go in compromising with or 

retaliating against the United States and others unless China is

allowed expeditiously to enter the WTO.13 What is clear, however,

is that a major shift toward protectionism among the developed

countries would clearly undermine the basis of China's export-led

growth. It could lead to a major shift in China's foreign policy,

away from continued cooperation with the developed countries. By

the same token, if foreign powers were to appear to "gang up"

against China and impose sanctions because of PRC arms exports,

human rights or other policies, this, too, might prompt a serious

Chinese reevaluation of the costs and benefits of cooperation

with the international status quo.

In contrast to those who argue against heavy or provocative

external pressure on China are those who argue against the

dangers of appeasement or weakness in the face of China's growing
13

strength. Even those who want foreign countries to "engage"

closely with China often add that this must be done from a firm

position. As a recent Trilateral Commission Study concluded,

a cooperative approach may not elicit a constructive

Chinese response . . . the strength and prosperity of

the Trilateral Countries--not their weakness--generate

Chinese respect. Such classic considerations as balance

of power, realism and a keen sense of Trilateral

interests must also govern Western and Japanese

thinking about China.14

Before reviewing specific areas of Chinese-foreign

interaction, it is useful to review some generalizations

regarding the post-Cold War world system that affect Chinese

actions and those nation-states and others who interact with

China. These generalizations include the following:

• The international political system is characterized by

multipolarity among several power centers rather than the U.S.-

Soviet bipolar order that prevailed during the Cold War.

• Trends toward democracy, free-markets and interdependence

are growing. Tightly controlled economic and political state

systems unwilling to interact openly with the outside world are

anachronistic and in decline.

• Most leading states (e.g., United States, Japan, European

Union countries, China, Russia) are preoccupied with domestic

economic development and domestic politics. There are few

strongly internationally focused leaders on the current world

scene.

• Economic issues have new importance now that security

concerns have been reduced with the demise of the Cold War.

• Other transnational issues have grown in importance

including concerns regarding enviromental conditions, human

rights, proliferation of weapons of mass destruction, health,

drugs and terrorism.

• Technology and communications have spread widely knowledge

about issues in international affairs and have made it more

difficult for elites to control foreign policy decisionmaking. In

general, more inclusive, pluralistic approachs are required in

order to establish lasting foreign policies that will be

supported over time by the better informed and more involved

peoples of individual countries.15

The Former Soviet Union. The military threat posed to China

by the Soviet Union was downgraded substantially by PRC leaders
14

in the 1980s and is now not of major immediate importance.

Indeed, at no time in the past has the PRC been so free from

great power military pressure and threat. Russia, the newly

emerging central Asian countries, and the new Mongolia do not

pose a substantial national security threat to China over the

near term. Beijing can relax its military guard against them.

Instability in these areas could pose a danger to China's

desire to maintain firm control of minority populated areas along

the inland frontier of China. The collapse of communism in the

USSR has also put pressure on PRC leaders to justify their

continued efforts to legitimate the Chinese Communist Party as

one of the few remaining ruling communist parties in the world.

Meanwhile Russia does provide some opportunity for the PRC to

acquire weapons and advanced technology to advance the wealth and

power of China.

Japan, Korea.16 China's relations with Japan and Korea likely

will continue to reflect the delicate balance of often

conflicting economic and security concerns. Japan seems likely to

follow policies over the next few years conducive to China's

continued preoccupation with economic development. Thus, the

Japanese appear likely to continue to rely on the United States

for security support and to use their economic might and slowly

growing military power to foster greater economic development and

peace in Asia. Japan remains China's major source of foreign

assistance and advanced technical equipment.

As part of its more relaxed stance regarding Soviet policy

in Asia, Beijing muted or reversed past vocal support for greater

Japanese defense efforts, the U.S.-Japan security treaty and the

U.S. military presence in Japan. It also muffled public support

for Japanese claims to the so-called Northern Territories,

islands north of Hokkaido that have been occupied by Moscow since

World War II.

Indeed, as the perceived danger of Soviet military expansion

subsided, some official Chinese pronouncements and popular

demonstrations registered sharply critical views of Japan's

growing role in Asian affairs. Some warned bluntly about the

danger of revived Japanese militarism; criticized U.S.

encouragement of greater Japanese military spending; and sharply

attacked alleged Japanese efforts to "infiltrate, control and

exploit" the Chinese and other Asian economies. Other, more

sophisticated Chinese views also registered concerns over alleged

expanding Japanese efforts to use economic-backed power to gain

political and economic influence in parts of Asia considered

sensitive by China. In particular, some Chinese officials

expressed concern that Japan would use improved trade and aid

relations with Vietnam, Laos, and Cambodia to build strong

influence there as the war in Cambodia is settled. At bottom,
15

however, Chinese leaders have been loathe to allow such concerns

to interfere substantially with China's interest in encouraging

greater trade, investment and assistance from Japan.17

 In Korea, Beijing has worked since the mid-1980s to reduce

tensions associated with the dangerously volatile military

confrontation between North Korea and U.S.-backed South Korea. It

has seen the tense arms race on the peninsula working against

Chinese interests. Thus, in the 1980s, the USSR used its ability

to provide advanced fighter aircraft and other equipment China

could not provide in order to gain greater influence in

Pyongyang. Military confrontation also increased the risk of a

conflict which could pit China (an ally of North Korea) against

its main economic partners in the United States and Japan

(supporters of South Korea). The North-South split in turn slowed

Chinese efforts to open greater economic exchanges with

economically dynamic South Korea. China has made considerable

progress in trade relations with South Korea. But Beijing

hesitated to move faster in exchange with South Korea for fear of

alienating North Korea. The Chinese were especially sensitive

since North Korea's leadership situation has been unstable while

the country appears to be trying to develop weapons of mass

destruction, notably an atomic bomb.

Over the longer term, some Chinese observers worry about the

implications of Korean reunification. Some see a reunified Korea

as a hedge against emerging Japanese power, but others worry

about scenarios in which Japan would come to dominate the

peninsula in opposition to China's influence there. They also

worry about the economic and security challenges a reunified,

possibly nuclear armed Korea would pose in its own right.

Taiwan, Hong Kong.18 Beijing's main political concern

regarding Taiwan has been to check the possible emergence of

"separatist" political tendencies on the island that would

challenge the long-standing position of "one China" held by the

Communists on the mainland and the Nationalists on Taiwan. At

present, movement toward de jure political independence of Taiwan

is held in check by Nationalist leaders in Taipei, who continue

to adhere to the "one China" principle for practical and

ideological reasons, and by the growth in trade and people-topeople contacts between the island and the mainland since 1987,

when Taipei dropped formal opposition to Taiwan residents

visiting the mainland for family reunions and other humanitarian

reasons.

Beijing's concerns about separatist trends on Taiwan are not

unfounded. Taiwan's rapidly growing economy has pushed per capita

income to over 20 times that of the mainland. The recent

relaxation of authoritarian political and other controls in

Taiwan stands in contrast to Beijing's crackdown on political and
16

intellectual dissent. The opposition party in Taiwan advocates

the right of the people of Taiwan to determine their political

future--including political independence. (The party's stance

enjoys some support from U.S. officials in Congress, although the

U.S. Administration repeatedly affirms its support for "one

China.")

The Nationalist leaders in Taiwan have modified their past

rigid adherence to their claim to be leaders of the legitimate

government of all of China. Under the rubric of "flexible

diplomacy," they now publicly pursue possible diplomatic

arrangements that would continue to recognize the principle of

"one China," but would also recognize that there are two

competing governments in China. This "one China--two governments"

or "one China--two areas" stance has been condemned by Beijing

officials as an effort to garner international recognition of

Taiwan's separate identity from the mainland.

Beijing's concerns over Taiwan are linked to its management

of the return of Hong Kong to Chinese sovereignty in 1997.

Beijing has held up the "one country--two systems" model it

created in the 1984 Sino-British agreement calling for Hong

Kong's reversion as a model for Taiwan's reunification with the

mainland. The credibility of Beijing's promise to allow autonomy

in Hong Kong after 1997 plummeted as a result of its handling of

student-led demonstrators in China in mid-1989. It was unclear

what the longer term effects of the crisis would be on the

stability and prosperity of Hong Kong although the economy in

Hong Kong improved along with that of the Chinese mainland in the

1990s. If Beijing grossly mismanages the Hong Kong situation,

resistance in Taiwan to any sort of union with the mainland could

grow. Beijing also has an important economic stake in Hong Kong,

which is China's main trading partner and its main source of

foreign exchange and investment. Although there is more

uncertainty than ever as to what Hong Kong residents will do as

1997 approaches, one view among those who plan to stay in the

territory after reversion appears to be a wish to avoid

confrontation with Beijing. These individuals appear determined

to make the best of the situation by encouraging Beijing to see

China's interests served best by leaving Hong Kong with as much

autonomy as possible.

Indochina, Southeast Asia.19 As the Vietnamese withdrew

forces from Cambodia in the late 1980s, China focused strong

efforts to insure that a peace agreement in Cambodia would

guarantee complete Vietnamese military withdrawal and the

establishment of a new government in Phnom Penh that was not

dominated by the Vietnamese. The collapse of the USSR increased

Vietnamese incentives to accommodate China over Cambodia and

other disputes, and China was ready to reciprocate in the

interests of securing its southern boundary and playing a
17

prominent role in the Cambodian settlement. Beijing was prepared

to pressure its client, the Khmer Rouge, as they threatened to

disrupt the Cambodian settlement process which China saw as

serving its interests in securing influence in Indochina and

elsewhere in Southeast Asia.

There remains a risk that some other power or coalition of

countries will emerge to challenge and resist Chinese interests

in Southeast Asia. Japan is one possibility. At present, Beijing

seems to anticipate a number of regional and other powers active

in the region in ways that do not fundamentally challenge Chinese

interests. One area of possible exception involves the

conflicting territorial claims of China and Southeast Asian

nations to islands in the South China Sea. There, assertive

Chinese military actions have appeared to belie Chinese

diplomats' expressions designed to reassure Southeast Asian

nations of Chinese intentions. China has also worked with U.S.

oil companies to assert its claims to resources under the sea. An

intensified territorial dispute might cause the ASEAN states to

seek greater outside support against China, setting the stage for

a confrontation in the region.20

South, Southwest Asia.21 Elsewhere in Asia, China is likely

to be an important foreign policy player, but it remains hampered

by distance and geographic barriers from exerting as strong an

influence as it does in Northeast and Southeast Asia. In South

Asia, India's ambition and defense buildup support its ability to

face China along the disputed border. But the two sides have

downplayed tensions and relations have improved especially since

Prime Minister Gandhi visited Beijing in December 1988--the first

high-level state visit since the Sino-Indian border war 30 years

earlier.

India depended heavily on the Soviet Union for advanced

military equipment. Now it needs to find other suppliers. India

also seeks to reach out to China, Japan, the United States and

the West as it readjusts its foreign and domestic policies to

take account of recent world trends. While China is prepared to

reciprocate Indian gestures of good will, it continues to supply

Pakistan, India's main strategic rival on the subcontinent, with

an array of aircraft, tanks, and other military equipment.

Beijing has used arms sales and transfers of sensitive

technology to gain economic profits and garner influence

throughout the Persian Gulf region. China has sold several

billion dollars worth of arms to Iran, Iraq and Saudi Arabia. Its

influence suffered a setback after the 1990-91 Persian Gulf War,

but Beijing has worked hard to reestablish strong ties with Iran

and others in the region during the ensuing period. Recent SinoIranian exchanges reportedly include the sale of Chinese nuclear

reactors to Iran. Nevertheless, few world conflicts lent
18

themselves as readily to Chinese weapons sales, and Chinese

transfers declined sharply by 1990-91.22

Features of the New World Order: Implications for China's Policy.

Whether or not there is continued pragmatism in Chinese

foreign policy will also depend on transnational issues and

trends and how they could possibly affect China. In general,

those features often reinforce trends supporting continued

Chinese pragmatism in world affairs, or they have results that

are less than probable to produce consequences that would see a

substantial shift in Chinese policy.

The international, western-led norms of the new world order

include:

Greater emphasis on international organizations, especially

the United Nations. This trend seems to work to the advantage of

China's current policies. It assures that China, by virtue of its

seat on the Security Council, will continue to play a major role

in world decisions. Other powers that might be inclined to

pressure China will need to take account of China's U.N. role in

assessing their policies.

International trade practices. The developed countries and

the financial institutions they lead are requiring countries like

China to adhere more closely to free market and less politically

controlled economic development approaches. This puts pressure on

China's desire to follow certain neo-mercantilist strategies in

order to build foreign exchange reserves to purchase needed

commodities, including high technology, abroad. While Chinese

leaders might be expected to resist outside pressures for more

reform and transparency in the Chinese economy, they also want to

maintain access to foreign markets in order to gain foreign

exchange and purchase high technology.

Arms transfers and proliferation. Recently enhanced

international efforts to curb the sale of weapons systems and

technology associated with weapons of mass destruction pose a

direct concern to segments of the PLA and others in the Chinese

leadership. They rely on these sales for their personal benefit

and to gain the foreign exchange needed to purchase needed

technology and supplies abroad. The sales also build better

political relations as well as other ties where China's military

can possibly gain access to information, technology and other

material which developed countries try to restrict in transfers

to China.

One can argue that China's leaders are prepared to adjust to

this feature of the new world order, even though on balance it
19

probably has a more negative than positive impact on immediate

Chinese interests. Longer term Chinese interests may be seen as

better served by preserving an image of Chinese cooperativeness

with the international regimes to control proliferation of

sensitive weapons systems and technologies. A case can be made

that the actual lost sales for China from such control regimes

may be small, while the intangible but substantial costs of China

appearing to obstruct global arms control would appear large. Of

course, China will almost certainly try to have its cake and eat

it too (e.g., appear cooperative but also engage in sales where

possible). In any event, the sharp decline in Chinese arms sales

in recent years--due largely to market forces--suggests that this

issue may be less important in determining Chinese policy in the

future.

Drugs, terrorism, environment. Beijing has appeared

generally cooperative in working with recently enhanced

international efforts to curb the flow of drugs, to pressure

those who harbor terrorists, and to deal with worldwide

environmental issues. Significantly, such cooperation involves

infringement on traditional Chinese concepts of national

sovereignty but Beijing has gone along with international

efforts in these areas with little complaint and often with

considerable enthusiasm. Evidently, Chinese leaders bridle at

some outside "intrusions" into China's or other countries'

sovereign affairs (e.g., over the human rights issue, see below),

while they wink at others.

Human rights. China seems to take particular offense with

heightened world efforts to press China to bring its human rights

practices into closer alignment with the broad participatory,

accountability and democratic standards followed by other

governments. It sees such pressure as an affront to China's

national sovereignty and as designed, at bottom, to undermine the

legitimacy and power of the Chinese communist regime. Beijing is

particularly concerned when human rights issues are used in

conjunction with calls for greater freedom for selfdetermination in places like Tibet and Taiwan. Such outside

advocacy is then seen to amount to little more than disguised

efforts to overthrow China's government and split the nation

apart.

Chinese leaders are especially concerned about this aspect

of the new world order. Nonetheless, a pragmatic Chinese approach

is still warranted if one judges that the ability of outside

powers to threaten China is limited. Limits are imposed by

distance, the absence of major resources devoted to this effort,

and major differences in the West and among Asian-Pacific

countries regarding how prominent a role human rights should play

in interaction with a country like China.
20

ROLE OF THE UNITED STATES AND U.S. POLICY CHOICES

Although the United States does not border on China, Beijing

recognizes that the United States still exerts predominant

strategic influence in East Asia and the Western Pacific; is a

leading economic power in the region, surpassed locally only by

Japan; and is one of only two world powers capable of exerting

sufficient power around China's periphery to pose a tangible

danger to Chinese security and development. As the world's only

superpower, the United States also exerts strong influence in

international financial and political institutions (e.g., the

World Bank and the U.N.) that are very important to Beijing, and

its role in particular areas sensitive to Beijing, notably policy

regarding Taiwan and international human rights, is second to

none.23

The pattern of international interchange with China's

growing strength in recent years appears to underline the

importance of the U.S. role. Few of China's neighbors are willing

to challenge or express strongly different views than the PRC on

major issues. They privately support a significant U.S. military

presence in the region, partly because it serves as an implicit

counterweight to China's military power. They and more distant

developed countries also privately support firm U.S. efforts to

open China's markets, end unfair commercial practices, and

protect the integrity of the world trading system. And they

appreciate U.S. efforts to press China to end nuclear testing and

 proliferation of equipment and technology for weapons of mass

destruction.24 Notably, however, this support is usually not

expressed openly.

Beijing, too, sees the United States as the key link in the

international balance of power affecting Chinese interests. This

judgement goes far toward explaining why Chinese leaders so

avidly seek a visit to China by President Clinton. It would

signal to all at home and abroad that the United States has

muffled its opposition to and endorses cooperation with the

Beijing government. Of course, as noted above, some Chinese

leaders remain deeply suspicious of U.S. motives. They believe

the U.S. Government is conspiring to weaken and undermine the

Chinese leadership and "hold back" China from a more prominent

position in world affairs.25

There is general agreement in the United States that

Washington should use its influence in order to have Beijing

conform to international norms and over time to foster changes in

China's political, economic, and security systems compatible with

American interests. At the same time, there is little agreement

in Washington on how the United States should achieve these

objectives.
21

Caught up in the drama of the recent changes inside China,

Western specialists and other observers have understandably

focused on internal variables and factors as the most important

determinants of China's future. Indeed, most foreign powers, led

by Japan, Russia, India, the ASEAN states and others around

China's periphery have appeared willing in recent years to

accommodate and work with China, and to avoid actions and

pressures that could prompt a sharp adjustment or shift in

Chinese policy or a change in China's future policy orientation.

Not so the United States. U.S. policy now intrudes on such a

wide range of issues sensitive to Beijing and to the future of

China's policy as to represent perhaps the most critical current

variable in determining China's future direction.

• The United States clearly has it within its power through

trade sanctions or protectionist trade measures to seriously

complicate PRC economic development plans.

• The United States has the option at this time to instigate

or exacerbate regional security tensions over China's rising

power in ways that could seriously complicate China's desire for

an accommodating security environment in the region.

• The United States also plays a key role in such sensitive

territorial questions for the PRC leadership as Taiwan, Tibet,

Hong Kong and the South China Sea. Any PRC leadership that does

not handle these issues appropriately is widely seen as

vulnerable to challenges from others in the communist hierarchy.

Beijing's leaders' view of the challenges posed by such

territorial problems also is seen as going far toward determining

PRC willingness or reluctance to associate closely with outside

powers and develop an interdependent approach to world affairs.

• Sharp tensions in U.S.-China relations would presumably

force key countries in the region like Japan, South Korea,

Russia and Australia, and key international actors like the

international financial institutions that provide several billion

dollars of aid to the PRC annually, to feel the need to choose

between Washington and Beijing on important issues--choices with

unpredictable and potentially serious implications for China's

ability to sustain a cooperative foreign environment.

By the same token, the United States also appears to have a

potentially large influence on encouraging China to engage with

the world in a positive and constructive way. With its superior

military strength and intelligence capabilities, the United

States could take the lead in reassuring Asian states over

China's growing military power and at the same time reassuring

China of the regional response to China's rise. As the world's

largest economy, the United States can play a very important role
22

in determining the most constructive ways to engage the Chinese

economy in the WTO and other multilateral economic organizations.

U.S. policy on issues like Taiwan, Tibet, Hong Kong, the South

China Sea and other territorial questions sensitive to Beijing

could be done in ways that encourage constructive PRC responses

to accepted international norms. Similar arguments can be made

regarding U.S. policy toward trade, proliferation, human rights,

environment and other questions now at the center of U.S.

interaction with China.

In a word, a case can be made for the argument that, for the

time being, the United States has it within its power to move the

direction of PRC policy in one way or the other. Whether U.S.

policymakers realize their influence and what they propose to do

with it remains to be seen.

An effective U.S. policy toward China, whether tough or

accommodating, does not seem likely in the near future. There

remains too much uncertainty and unpredictability in the conduct

of U.S. foreign policy in the post-Cold War environment to allow

for such an organized American approach. There are many reasons

for this knotted situation in U.S. foreign policy.

Numerous issues and variables affecting U.S. policy make it

difficult to chart the general direction of U.S. policy. The task

is made all the more difficult because the previous framework for

U.S. policy, based on the primacy of security issues and

opposition to Soviet expansion, is now obsolete. Imperatives of

economic competitiveness, democracy, human rights, and other

values have achieved greater prominence in U.S. policymaking. The

ability of the executive branch of government to use the argument

of U.S. strategic competition with the Soviet Union as a means to

keep foreign policymaking power in its hands is also at an end.

American policymaking will likely reflect more sharply the

pluralistic nature of U.S. society and the various pressure

groups and other representative institutions there for some time

to come.

History has shown that this fluidity and competition among

priorities is more often than not the norm in American foreign

policy. Presidents Wilson and Roosevelt both set forth

comprehensive concepts of a well-integrated U.S. foreign policy,

but neither framework lasted long. The requirements of the Cold

War were much more effective in establishing rigor and order in

U.S. foreign policy priorities, but that era is now over. In

retrospect, it appears as the aberration rather than the norm in

the course of U.S. foreign policy.

In general terms, there appear to be three distinct

tendencies or schools of thought concerned with U.S. foreign

policy after the Cold War. Although contemporary U.S. foreign
23

policy advocates cover a wide range of opinion and issues, one

can discern these three approaches. By understanding what these

schools stand for and observing the actions of U.S. policy in

specific areas regarding China, one can get a better sense as to

how difficult it will continue to predict the future direction of

U.S. policy toward China.

On one side are Americans who are concerned with what they

see as a relative decline in U.S. power that gets in the way of

U.S. efforts to protect important interests abroad. They call for

the United States to work harder to preserve important interests

abroad, but with fewer U.S. resources and less U.S. influence

available to do the job. These leaders' review of recent

developments causes them to expect further changes in world

affairs, sometimes in unexpected ways. They see relatively

limited or declining U.S. power and influence to deal with those

changes.

They stress in particular several "realities" governing the

current U.S. approach to Asia and the Pacific and world affairs

in general:

• U.S. attention to China, Asia and the Pacific and

elsewhere abroad has been diverted by the need to focus on

pressing U.S. domestic problems.

• U.S. Government decisionmaking will remain difficult

because of the possibility that the executive branch will remain

in control of one U.S. political party, and the Congress in

control of another party.

• The U.S. Government and the U.S. private sector have only

limited financial resources to devote to domestic and foreign

policy concerns.

• The priorities in U.S. policy toward China will remain

unclear. Security, economic, and cultural-political issues will

vary in receiving top priority in U.S. policy.

• There remains no obvious international framework to deal

with foreign issues. U.S. policy must use a mix of international,

regional, and bilateral efforts to achieve policy goals.

Under these circumstances, these advocates see a strong need

for the United States to work prudently and closely with

traditional U.S. allies and associates. Their cautious approach

argues, for example, that it seems foolish and inconsistent with

U.S. goals not to preserve the long-standing U.S. stake in good

relations with Japan and with friends and allies along the

periphery of Asia and in Oceania. Their security policies and

political-cultural orientations are generally seen as in accord
24

with U.S. interests. Although opinion surveys sometime claim that

the American public and some U.S. leaders see Japan as an

economic competitive "threat" to U.S. well-being, these observers

stress a different line of argument. They highlight the fact that

few polls of U.S. public opinion or U.S. leaders support the view

that it is now in America's interest to focus U.S. energies on

the need to confront the Japanese economic threat, in a way that

confrontation with the Soviet Union came to dominate U.S. policy

during the Cold War.

In the view of these advocates, caution is in order in

anticipating future U.S. relations with other major regional

actors--the former Soviet Union, China, and India. All three are

preoccupied with internal political-development crises. Few

appear to be seeking to foment tensions or major instability in

the region. All seek better ties and closer economic relations

with the West and with the advancing economies of the region.

U.S. policy would appear well advised, they say, to work closely

with these governments wherever there is possible common ground

on security, economic, or political issues.

In considering U.S. assets available to influence trends in

the region, these advocates call on U.S. leaders to go slowly in

reducing U.S. military presence in the region. The economic

savings of such a cutback would be small; the political costs

could be high inasmuch as most countries in Asia have been

encouraging the United States to remain actively involved in the

region to offset the growing power of Japan or the potential

ambitions of China or others.

A second major school of thought on U.S. foreign policy

emerged in the 1990s. These proponents have argued for major

cutbacks in U.S. international involvement and a renewed focus on

solving U.S. domestic problems concerning crime, drugs, lagging

economic competitiveness, educational standards, homelessness,

poverty, decaying cities and transportation infrastructure, and

other issues. Variations of this view are seen in the writings of

William Hyland, Patrick Buchanan, and other well-known

commentators, and in the political rhetoric of Ross Perot.

Often called an "American First" or "Neoisolationist"

school, these advocates argue for sweeping cuts in U.S. military,

diplomatic, and foreign assistance spending abroad. They are

skeptical of the utility of the international financial

institutions, the United Nations, and the international efforts

to promote free trade through the GATT, WTO and other means. They

argue that the United States has become overextended in world

affairs; has been taken advantage of in the current world

security-economic system; and must begin to retreat from

international commitments in order to gather together the

resources needed to deal with American domestic problems. As to
25

specific recommendations, these proponents tend to favor a

complete U.S. pullback from foreign bases; drastic cuts in

foreign assistance and foreign technical/information programs;

and termination of various international economic talks that

help to perpetuate a world trading system, which they see as

basically contrary to American economic interests. Many in this

school favor stronger government intervention in the domestic

U.S. economy and related areas of promoting technology,

education, and social welfare. Some favor trade measures that are

seen as protectionist by U.S. trading partners.

Meanwhile, on the other side of the debate lies a third,

somewhat less well articulated school of thought. This school

generally judges that U.S. policy needs to more strongly and

actively promote U.S. views of the world political, military, and

economic order; to press those countries that do not conform to

the U.S. view of an appropriate world order; and to lead strongly

in world affairs, attempting to avoid compromises and

accommodations with others that would reduce the impact and

strength of U.S. leadership.

This school of thought has always been present in American

politics. But it appears far stronger today than at any other

time since at least the 1960s for several reasons:

• Impact of Reagan policies. After a prolonged period of

introspection and doubt following the Vietnam War, the oil

shocks, and the Iran hostage crisis, U.S. opinion became much

more optimistic about the United States and its future after two

terms of Ronald Reagan.

• Victory in the Cold War. This represented a great

accomplishment for the U.S.-backed system of collective security

and for U.S. political and economic values.

• Persian Gulf War. U.S. military doctrine, equipment, and

performance were strong; U.S. ability to lead in a world crisis

also appeared strong.

• Economic developments. Although the United States is seen

facing still serious difficulties, advocates point to analysts

who are now more optimistic about U.S. ability to prosper in the

increasing competitive world economic environment.

• Values-Culture. The United States is seen as better

positioned than any other country to exert leadership in all

major areas of cultural influences; i.e., ideas and values,

political concepts, life-style, and popular culture.

Further giving impetus to this school of thought is the

perception of a power vacuum in the world, in which the United
26

States is more free to exert its influence. Thus, proponents of

this viewpoint are not deterred by the seeming decline in

economic resources available to U.S. policymakers. In particular,

the former Soviet Union, China, and India are likely to remain

internally preoccupied for some time. Meanwhile, Japan and

Germany are acknowledged to be economically powerful; but

politically they have shown themselves to be uncertain as to how

to use their new power and culturally they appear to be not

nearly as influential as the United States.

 In recent years, advocates of this third tendency have been

most vocal in pressing their concern for strong U.S. policy in

support of U.S. political values of democracy and human rights.

In this regard they have sometimes argued for a more active U.S.

foreign policy, leading some recipient countries to view U.S.

policy as illegitimate interference in a country's internal

affairs. They have also reinforced the strength and determination

of the U.S. case in opposition to economic or trading policies

seen in the United States as grossly inequitable or predatory;

and they have reinforced strongly the U.S. policy against the

proliferation of weapons of mass destruction. Other areas where

they have exerted more influence involve international sanctions

against countries that harbor terrorists or promote the drug

trade. They have also pushed the U.S. Government to be more

assertive in promoting humanitarian relief and in recognizing

politically the legitimacy of people's right to selfdetermination.

In sum, it is not hard to see the evidence of clashes among

these three, often competing tendencies in U.S. policy toward

China. Most obvious in recent years have been those of the third

group who have strongly pursued human rights, proliferation,

trade practices and other issues with China. They have pressed

Beijing hard to meet U.S. sanctioned international norms,

threatening sometimes very serious economic or other sanctions if

China did not conform. By contrast, the more cautious and

accommodating first group sees the strong advocates of U.S.

values and concerns as being unrealistic about U.S. power and

unwilling to make needed compromises with the Chinese government

and others in order to protect U.S. interests in relations with

China.

The three approaches that emerge from this complicated mix

to influence current U.S. policy toward China are noted below. At

present there is little indication as to which approach will

ultimately succeed.26

On one side is an approach favored by some in the Clinton

administration, the Congress and elsewhere who argue in favor of

a moderate, less confrontational and "engaged" posture toward

China. Some in this camp are concerned with perceived fundamental
27

weaknesses in China and urge a moderate U.S. policy approach out

of fear that to do otherwise could promote divisions in and a

possible breakup of China with potentially disastrous

consequences for U.S. interests in Asian stability and

prosperity. Others are more impressed with China's growing

economic and national strength and the opportunities this

provides for the United States. They promote close U.S.

engagement with China as the most appropriate way to guide the

newly emerging power into channels of international activity

compatible with American interests.

Sometimes underlying this moderate approach is a belief that

trends in China are moving inexorably in the "right" direction.

That is, China is becoming increasingly interdependent

economically with its neighbors and the developed countries of

the West, and is seen as increasingly unlikely to take

disruptive action that would upset these advantageous

international economic relationships. In addition, greater wealth

in China is seen pushing Chinese society in directions that seem

certain to develop a materially better-off, more educated and

cosmopolitan populace that will over time press its government

for greater representation, political pluralism and, eventually,

democracy. Therefore, U.S. policy should seek to work ever more

closely with China in order to encourage these positive long-term

trends.

A second, tougher approach is that of some U.S. advocates

inside and out of the U.S. Government who have doubts about the

interdependence argument. These U.S. policymakers and opinion

leaders stress that Beijing officials still view the world as a

state-centered competitive environment where interdependence

counts for little and compromises sovereign strength. China's

leaders are seen as determined to use whatever means at their

disposal to increase China's wealth and power. At present,

Beijing is seen biding its time and conforming to many

international norms as it builds economic strength. Once it

succeeds with economic modernization, the argument goes, Beijing

will be disinclined to curb its narrow nationalistic or other

ambitions out of a need for international interdependence or

other concerns for world community. When strong enough, China,

like other large powers in the past, will possess great

capabilities and will attract few friends or allies.

Under these circumstances, this approach encourages U.S.

leaders to be more firm than moderate in dealing with China.

Rather than trying to persuade Beijing of the advantages of

international cooperation, the United States is advised to keep

military forces as a counterweight to rising Chinese power in

Asia; to remain firm in dealing with economic, arms proliferation

and other disputes with China; and to work closely with

traditional U.S. allies and friends along China's periphery in
28

order to deal with any suspected assertiveness or disruption from

Beijing.

A third approach is favored by some U.S. officials and

others who believe that the political system in China needs to be

changed first before the United States has any real hope of

reaching a constructive relationship with China. Beijing's

communist leaders are seen as inherently incapable of long-term

positive ties with the United States. U.S. policy should focus on

mechanisms to change China from within while maintaining a

vigilant posture to deal with disruptive Chinese foreign policy

actions in Asian and world affairs. The development of an

authoritarian superpower more economically competent than the

USSR is not to be aided.

OUTLOOK FOR U.S. POLICY

Given the continued wide range of opinion in the United

States over the appropriate U.S. policy toward China, it appears

likely that U.S. policy will continue its recent pattern of

trying to accommodate elements of all three approaches. On some

issues, like linking MFN treatment and human rights, the U.S.

Government has seen U.S. interests best served by an approach

that meets PRC concerns. On others, like intellectual property

rights protection and proliferation of missile technology, the

U.S. Government seems prepared to threaten sanctions or to

withhold benefits from Beijing until it conforms to norms

acceptable to the United States. Meanwhile, although many U.S.

officials would see as counterproductive any declaration by the

U.S. Government that a policy goal was to change China's system

of government, there is a widespread assumption that greater U.S.

"engagement" will encourage such desirable changes.

Whether the U.S. Government policy synthesis of these three

tendencies is done smoothly or is accompanied by the often

strident policy debates accompanying U.S. China policy decisions

in recent years depends partly on U.S. leadership. In this vein,

several rules of thumb are suggested that U.S. leaders could

consider when determining whether the United States should try to

accommodate, confront or change China on a particular policy

issue:

• How important is the issue at hand for U.S. interests? (In

general the more important U.S. interests at stake, the less

accommodating and more forceful U.S. leaders should be.)

• How does the issue at hand fit in with broader U.S.

strategic interests in relation with China? (Presumably, some

U.S. officials would be inclined to soft pedal relatively minor

disputes with China when they are pressing for broader gains

elsewhere).
29

• How much leverage does the United States have over the PRC

on this issue? (In general, the greater the degree of U.S.

leverage, the easier it is for U.S. leaders to press for their

demands.)

• What are the attitudes of U.S. allies and associates? (If

they do not support a firm U.S. stance, U.S. efforts to pressure

China may be outflanked, Quixotic and counterproductive.)

• How sensitive is the issue at hand to the PRC? (Experience

has indicated that Beijing has shown less sensitivity and greater

flexibility on international economic issues, and has shown more

sensitivity and less flexibility on issues involving domestic

political control and territorial claims. Many analysts believe

that PRC leadership flexibility on sensitive issues will be

restricted for a time as a result of the decline of Deng

Xiaoping's health and the ongoing leadership succession

struggle).

Other matters of importance in considering specific China

policy issues include:

• How does the U.S. stance affect broader U.S. interests in

Asian stability and international affairs?

• What is the U.S. "bottom line"? Chinese officials will

press for the advantage until they find it.

• Can this matter be effectively pursued in an overall

friendly and respectful atmosphere? This reduces suspicions in

Beijing regarding the alleged overall hostile intent of U.S

policymakers toward China-- suspicions which greatly limit PRC

flexibility.

• Can this issue be pursued with the aid of U.S. allies,

associates and other international leaders to create an

atmosphere that would prompt Beijing to change in directions

favored by the United States? (The United States used this

approach in part to get Beijing to go along with international

sanctions and military action against Libya and Iraq; with

planned sanctions against North Korea; and with provisions of the

1991 Cambodian peace accord that were opposed by Beijing's former

client, the Khmer Rouge.)

ENDNOTES

1. Among the many useful reviews of Chinese foreign policy

and behavior in this period see A. Doak Barnett, China and the

Major Powers in East Asia, Brookings, 1977; Harry Harding, (ed.),

China's Foreign Relations in the 1980s, Yale, 1984; June Teufel
30

Dreyer, (ed.), Chinese Defense and Foreign Policy, Paragon House,

1989; Harry Harding, A Fragile Relationship: The United States

and China Since 1972, Brookings, 1992; Samuel Kim (ed.), China

and the World, Westview, 1993; Robert Sutter, Chinese Foreign

Policy--Developments After Mao, Praeger, 1986; Yufan Hao and

Guocang Huan (eds.), The Chinese View of the World, Pantheon,

1989; Allen Whiting (ed.), "China's Foreign Relations," The

Annals, January 1992, and John W. Garver, Foreign Relations of

the People's Republic of China, Prentice Hall, 1993.

2. This analysis draws heavily from Robert Sutter, Chinese

Foreign Policy in Asia and the Sino-Soviet Summit: Background,

Prospects and Implications for U.S. Policy, CRS Report 89-298F,

May 15, 1989, pp. 7-11.

3. The political reforms fell notably short of political

pluralism or democracy as there remained strong measures to

prevent dissent from emerging as a serious challenge to the

regime.

4. Among useful analysis of this period see Lloyd Vasey,

"China's Growing Military Power and Implications for East Asia,

Pacific Forum CSIS, August 1993; Ming Zhang, "China and Its Major

Power Relations," The Journal of Contemporary China, Fall 1994;

Thomas McNaugher, "A Strong China: Is the U.S. Ready?," Brookings

Review, Fall 1994; Ralph Cossa, "China and Northeast Asia: What

Lies Ahead,? Pacific Forum CSIS, February 1994; Lin Chong-pin,

"China Military Modernization: Perceptions, Progress and

Prospects," Security Studies, Summer 1994; Robert McNamara, et.

al, Sino-American Military Relations: Mutual Responsibilities in

the Post-Cold War Era, National Committee on U.S.-China

Relations, November 1994.

5. Discussed among others at an international forum on U.S.-

Chinese relations, Woodrow Wilson Center for Scholars,

Washington, DC, November 7, 1994.

6. See among others U.S.-China Relations, CRS Issue Brief

94002 (updated regularly).

7. For background, see CRS Issue Brief 92056 and CRS Report

95-46S.

 8. See among others Trends of Future Sino-U.S. Relations

and Policy Proposals, Institute for International Studies of

Beijing Academy of Social Sciences, et. al., September 1994, and

Sino-U.S. Relations: Status and Outlook-- Views From Beijing, CRS

memorandum, August 15, 1994.

9. Discussed, among others, in Ming Zhang, "China and the

Major Power Relations," The Journal of Contemporary China, Fall
31

1994.

10. Discussed, among others, in Lin Chong-Pin, "Chinese

Military Modernization: Perceptions, Progress and Prospects,"

Security Studies, Summer 1994.

11. Reviewed in China in Transition, CRS Report 93-1061S,

December 20, 1993, 23 p. Of course, among other arguments are

those that stress that an economically successful China would be

very closely integrated with and depend on the world economy, and

would not be disruptive in world politics.

12. See, among others, CRS Issue Brief 93114.

13. Discussed, among others, in CRS Issue Brief 94002.

14. Yoichi Funabashi, et. al., Emerging China in a World of

Interdependence, Trilateral Commission, May 1994.

15. This section benefited from the insights of Thomas

Robinson.

16. See, for background among others, the article by Allen

Whiting in the Annals, 1992 and the article by Samuel Kim in

Current History, September 1992.

17. Some U.S. experts judge that there is a generational

debate in China on Japan with younger Chinese specialists

accepting Japan's playing a bigger role in world affairs.

18. See, among others, the article by Paris Chang, in

Annals, January 1992. See also CRS Report 92-658S, TaiwanMainland Relations--Implications for the United States, by Robert

Sutter, August 6, 1992, 26 p.

19. For background, see article by Robert Ross in Annals,

January 1992. See also CRS Report 92-118F, Indochina and

Southeast Asia Under Change, by Robert Sutter and Jeffrey Young,

January 31, 1992, 19p.

20. See CRS Report 92-614S, East Asia: Disputed Islands and

Offshore Claims--Issues for U.S. Policy, by Robert Sutter, July

28, 1992, 15 p.

21. Reviewed in articles by John Garver and Yitzhak Shichor,

The Annals, January 1992.

22. See among others, Chinese Missile and Nuclear

Proliferation: Issues for Congress, by Shirley Kan, CRS Issue

Brief 92056 (updated regularly).
32

23. See, among others, Trends of Future Sino-U.S. Relations

and Policy Proposals, cited in note 8.

24. See sources cited in notes 5 and 15.

 25. See, among others, Sino-U.S. Relations: Status and

Outlook--Views From Beijing, CRS memorandum, August 15, 1994.

26. See sources noted in notes 5 and 15.
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