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Formulating U.S. Strategies toward the “China Challenge”

How should the United States cope with the “China challenge”? While there are no easy answers to this question, the first and most important step is for Washington to formulate a long-term and consistent overall strategy toward China, beginning by constructing a U.S.-Chinese agenda for relations that is dominated by positive bilateral issues. Such a task is imperative, considering current U.S. perceptions of and policy toward the People’s Republic.

      After the establishment of the PRC in 1949, the United States and China entered a confrontational relationship that lasted for almost two decades, during which they fought in Korea and reached the brink of direct military conflict over Taiwan and Vietnam. In the late 1960s and early 1970s, Beijing and Washington’s shared perception of the strategic threat from the Soviet Union reshaped the foundation of Sino-American relations. Following President Richard Nixon’s visit to China and the issuance of the Shanghai Communiqué in 1972, Beijing and Washington embarked on a strategic partnership. With the Soviet threat as an overriding concern, Washington and Beijing put aside the negative issues in their relationship, such as the Taiwan problem and China’s excessive human rights abuses during the Cultural Revolution. All the while, the American public maintained a highly positive image of China until the late 1980s.

      The Tiananmen tragedy of 1989, together with the collapse of the Soviet empire, completely transformed the foundation of Sino-American relations. While the American public and Congress now perceive Beijing in overwhelmingly negative ways—largely as the result of the widespread media coverage of the Tiananmen bloodshed—Washington has had little space to develop a new and positive long-term strategy toward China. Indeed, since 1989, Washington’s China policy agenda has been dominated by a series of negative issues, such as Beijing’s human rights violations, the Taiwan problem, trade deficits and most-favored-nation (MFN) status for China’s trade, intellectual property rights disputes, China’s allegedly irresponsible arms sales records, and, more recently, illegal campaign donations, among them. The frequent media coverage of these issues, in turn, further enhances the negative public image of the country and forces Washington to perceive and deal with China on a case-by-case basis, making U.S. policy toward the People’s Republic in the post–Cold War era extremely shortsighted and highly inconsistent. The need to cope with the “China challenge” makes it apparent that the United States should develop a long-range and consistent strategy toward China.

      In searching for such a strategy, the advocates of the “China threat” notion argue the need to “contain” or “constrain” China. Emphasizing that China remains under the rule of an irresponsible one-party dictatorship, is unwilling to abide by international norms and regulations, continues its military build-up, and has a history of using force to realize its foreign policy goals, these advocates urge Washington to play a leadership role in preventing China from developing into a larger threat to international peace and stability. Although their specific policy prescriptions vary, they share two basic features: First, they assume that China’s internal and external behavior is driven by an evil ambition to dominate Asia and the world; and, second, they lead to the conclusion that by putting pressure on the People’s Republic, the United States can change China’s basic course of development.

      The adoption of a U.S. strategy toward China that emphasizes containment or constrainment would be both mistaken and dangerous. It is mistaken because it shows no understanding of the basic fact that China’s course of development has been, and will continue to be, shaped by primarily internal concerns and that, therefore, the United States will have limited leverage in changing that course by exerting external pressure. It is dangerous because, without an appreciation of the tremendous positive changes that have occurred in China in the past two decades and the frustration in furthering the reform-and-opening process, it automatically defines China’s ongoing economic and political development as a vital threat to the United States. Such a strategy will only serve to strengthen China’s victim mentality and enhance its people’s reciprocal suspicion of America’s evil intentions. China certainly is not an enemy of the United States today and will not automatically become one in the foreseeable future, but the “China threat” notion and the corresponding policy prescriptions of containment could change it into one.

      With a basic understanding of China’s importance in international affairs and the fundamental flaws of the containment approach, the Clinton administration has recently decided to adopt a “constructive engagement” strategy in dealing with China. The main assumption of this approach is that by actively engaging China and maintaining a dialogue with Beijing’s leaders, China will eventually integrate itself economically and politically into the international community.

      The constructive-engagement approach is undoubtedly correct. Most important, it demonstrates a desire to understand China, to trust the Chinese people, and to live in peace with China in the next century. The question is, however, how to make it work. The key here lies in two crucial adjectives that should be used to define U.S. strategy toward China: long-range and consistent.

      Constructive engagement will not succeed unless it is supported by a long-range vision. This is due, first and foremost, to the nature of the approach itself: It is based on the assumption that the process of engagement will promote mutual understanding, enhance perceptions of mutual interests, and, consequently, create an irreversible condition of mutual dependence. The truth of this approach can be tested only by time. As discussed previously, considering that it will also take time for the Chinese to develop successful responses to the “China challenge,” it is even more important to the United States to adopt a long-range vision in dealing with China.

      How far into the future should this long-range vision look? Based on the anticipated results of two crucial developments in the People’s Republic, such a vision should span at least fifteen to twenty years. First, in formulating plans for China’s economic, social, and political reforms, the country’s political leaders, as well as the majority of its scholars, consider the next fifteen to twenty years crucial, targeting 2010–15 as a period for achieving a series of major goals in improving China’s economy, polity, environment, and quality of life.²¹ Second, in terms of China’s democratization prospects—a key aim of the constructive-engagement approach—within fifteen to twenty years the last generation of Chinese leaders who grew up in the revolutionary era will have withdrawn completely from the central stage of Chinese politics. It will be much less difficult for a new generation of Chinese leaders, who have gained their education and political experience in a more open environment, to commit themselves to transforming China into a true democracy.

      Regarding the “consistent” aspect of constructive engagement, the central question is how to establish a mutual understanding and trust that is essential for China and the United States to establish an enduring partnership. In this context, such a framework will require consistent efforts by both sides to create, step by step, a U.S.-China agenda dominated by positive themes.

      Establishing such an agenda is both necessary and possible. There are substantial differences between the U.S. and China, and all kinds of negative issues will enter their agenda of bilateral relations from time to time. But the two countries have many more common concerns and shared interests that will serve as the basis for creating and maintaining a positive U.S.-China relations agenda. In a global sense, China’s gradual integration into the world economic system makes it share with the United States a concern over the stable development of the world economy and, correspondingly, a lasting world peace. Similarly, in a long-range view, China has common interests with the United States on such global issues as environmental protection, population growth control, and a stable food supply. As far as regional issues are concerned, neither China nor the United States is willing to see tension on the Korean peninsula develop into open military confrontation, or Muslim fundamentalist movements to prevail in central and western Asia, or militarism to dominate Japanese politics. More important, both the Chinese and the American people are pragmatic and at the same time idealistic, and they both have a strong sense of mission and consciousness of historical responsibility. These shared traditions will prove to be invaluable as a basis for Sino-American cooperation.

      Yet creating a positive agenda for U.S.-China relations as a central part of constructive engagement requires an understanding of how to deal with several important issues that are now complicating U.S.-China relations.

The Taiwan Issue

Taiwan has been the single most important issue causing tension in U.S.-China relations in the past five decades. In 1954 and 1958, the Taiwan issue twice brought the United States and China to the verge of direct military confrontation. After the normalization of U.S.-China diplomatic relations in 1979, Taiwan repeatedly became the subject of diplomatic disputes between Washington and Beijing. In March 1996, on the eve of Taiwan’s presidential election, Beijing conducted armed missile “tests” aimed at areas off two of Taiwan’s main seaports. In response, Washington dispatched two aircraft carrier battle groups to the area, again causing severe tensions in Sino-American relations. The Taiwan issue, before its final settlement, will continue to present major challenges to policymakers in both Washington and Beijing.

      The Taiwan issue is basically a Chinese one, and it should and can be resolved peacefully. Beijing’s leaders have repeatedly claimed that they will resort to force if Taiwan declares independence or if they find evidence of foreign forces’ involvement in detaching Taiwan from China; nevertheless, there are reasons to argue that Beijing may not use force to resolve the Taiwan issue.

      Despite the episodes of intense confrontation across the Taiwan Strait, it is not war, but relative peace, that has historically dominated PRC-Taiwan relations over the past four decades. Even during the 1958 Taiwan Strait crisis, when Mao Zedong ordered large-scale shelling of Jinmen, Mao’s main purpose was to use the shelling to create the internal tension necessary to promote the “Great Leap Forward,” as well as to make it clear to the international community that Taiwan was part of Chinese territory. Mao had no intention of invading Jinmen; rather, to maintain a “special linkage” between the mainland and Taiwan (Jenmen Island is only two miles from the mainland, while Taiwan is close to one-hundred miles away), Mao let the Nationalists control it.²² The history of Beijing’s Taiwan policy reveals that the People’s Republic was not wary of using force if necessary, but Beijing’s leaders preferred to refrain if possible.

      The regime in Beijing today has many reasons not to use military means to resolve the Taiwan issue. If a war were to erupt between mainland China and Taiwan, it would have grave consequences in addition to its disastrous effects on the Asia-Pacific region and worldwide peace and stability: China’s coastal areas (the country’s most economically developed) are exposed to a retaliatory attack from Taiwan and allied forces; international financial and trade ties, which are crucial to mainland China’s continued development, would be severely damaged; and the Communist regime would risk its own existence, especially if the People’s Liberation Army failed to win a clear-cut victory. Even if Beijing were able to crush Taiwan’s military resistance, winning the “hearts and minds” of the people on the island would remain a tremendous challenge. Taiwan could thus become “China’s Northern Ireland.” In sum, Beijing’s leaders would probably find that the reunification of mainland China and Taiwan, no matter how desirable in their view, could not be properly achieved by military means.

      Thus the focus of U.S. policy should be on preventing a worst-case scenario from happening. Washington should vigorously promote direct communications between Beijing’s and Taiwan’s authorities and political parties, as well as between the people across the strait. While doing so, Washington should continue to advise Beijing that China’s development and prosperity depend upon the country’s connections with the outside world, which would be fundamentally jeopardized if it were to fight a war over Taiwan. In the meantime, it is even more important for Washington not to encourage, let alone support, Taiwan’s push for independence. Specifically, Washington should not support Taiwan’s bid for UN membership and should discourage Taipei’s self-styled “pragmatic diplomacy” efforts. While providing Taiwan with a conditional security guarantee, Washington should not give Taipei’s officials the illusion that the United States will defend Taiwan in any circumstance. To be sure, there is an extremely subtle and delicate balance that Washington must maintain in handling relations with mainland China and Taiwan.

Human Rights

Profound differences exist between the United States and the PRC on the human rights issue. While Washington emphasizes the rights of individual citizens, such free expression (including political dissidence), Beijing argues that the most important human rights concern survival and security, and that individual rights should not prevail at the expense of collective interests. Moreover, Beijing considers China’s human rights to be within its purview alone, claiming that the criticism of China’s human rights violations by the United States and other Western countries shows an ongoing tendency of Western interference in China’s internal affairs.

      The differences between American and Chinese approaches toward the human rights issue are substantive. However, it is also important to note that such differences are not always insurmountable and, in actuality, have diminished somewhat over the past two decades.

      To be fair, China’s overall human rights situation has improved dramatically since the adoption of the reform-and-opening policies in the late 1970s. In a society that was once characterized by the tightest state control over all aspects of individual activities, Chinese now enjoy, among other things, more freedom in such rights as travel, career selection, and expression (so long as their opinions do not oppose the government directly)—rights they did not have two decades ago. More important, although the current government does not embrace the international human rights regime completely, it does acknowledge that China’s human rights status has flaws (by saying that it is “not perfect”) and needs to be improved; this means that, at least in theory, there exists the possibility, even under Communist rule, that China may accept more conditions of the international human rights regime.

      China’s human rights practices have fluctuated in recent years. The most outrageous is the sentencing of Wei Jingsheng and Wang Dan, two prominent political dissidents, to lengthy imprisonment on highly dubious charges in 1995. While the two have been released (both around the times of the recent U.S.-China state visits), China still has a long way to go before it becomes a civil society. Therefore, Washington should continue to make the human rights issue an integral part of an ongoing U.S.-China dialogue. In dealing with specific cases, Washington should make it clear to Beijing that its human rights violations will substantially reduce public support in the United States for a constructive and cooperative relationship with China. However, Washington should understand that regardless of its efforts, the United States is not in a position to transform China’s human rights situation overnight. Thus it should not assign its human rights diplomacy toward China with the task of creating a fundamental change in China’s human rights policy and status. If Washington’s overall constructive-engagement strategy toward China succeeds in the long-run, it can be anticipated that Beijing’s attitude toward human rights will also change substantially on its own.

Hong Kong

A British colony for more than 150 years, Hong Kong became part of the PRC on July 1, 1997. While Western attention on Hong Kong’s postcolonial fate has focused on the period immediately following the Chinese takeover, as well as on whether or not Beijing will allow Hong Kong to retain its freedom of expression, Beijing faces a more profound challenge in the absence of a well-coordinated strategy to handle the Hong Kong problem.

      Indeed, Beijing’s basic aims in Hong Kong are contradictory. On the one hand, Beijing’s leaders certainly understand that Hong Kong’s continued prosperity will be crucial for the PRC to sustain its long-range plans of nationwide economic development, and that Hong Kong will serve as a the single most important example in carrying out Beijing’s “one country, two system” policy toward Taiwan. On the other hand, however, Beijing’s leaders also understand that Hong Kong has such a distinctive political culture from that of the mainland and are worried that Hong Kong’s tradition of free political expression will not only make their rule over Hong Kong difficult but also have an adverse impact on the mainland’s political development. Hence, from Beijing’s perspective, the development of Hong Kong’s political situation should not elude the PRC’s control.

      Beijing will try to balance the two aims, with the hope that it will achieve both. At some point, though, it will have to choose between the two aims. Despite its desire to control autonomous economic and political institutions in the former colony, if Beijing fails to maintain prosperity in Hong Kong, profound negative consequences will extend far beyond the region. It will endanger China’s overall reform-and-opening process, create a new source of crisis between the mainland and Taiwan, and, consequently, worsen the prospects for improved Chinese-American relations.

      Therefore, Washington should do everything possible to encourage Beijing to emphasize the maintenance and promotion of prosperity as the top priority of its Hong Kong policy. Washington should also make the Hong Kong issue a central part of its strategic dialogue with China, emphasizing to Beijing’s leaders that their proper handling of the Hong Kong issue will help create and enhance an important positive theme in U.S.-China relations. In the meantime, Washington should not do anything that may reduce Hong Kong’s capacity to remain a key international commercial and financial center. For example, Washington should always remember that revoking China’s MFN status will directly jeopardize Hong Kong’s trading power. Although the United States does not have direct control over Hong Kong’s fate, there are many constructive and positive ways it can influence Hong Kong’s development.

Bilateral Trade and MFN

It is in the realm of bilateral trade that Washington may possess the most effective bargaining power to influence Beijing’s behavior. But this power is not the result of the much publicized and politicized U.S. trade deficit with China. In actuality, the increasing deficit reflects to a large extent the fact that many Taiwanese, Hong Kong, South Korean, and Japanese companies, attracted by China’s low labor costs, have moved their businesses to China, bringing their trade surpluses with them. Washington’s bargaining power over U.S.-China trade lies in the fact that, from a Chinese perspective, trade with the U.S. occupies a central position in China’s entire economic network with the outside world. By contrast, from an American perspective, trade with China is by no means unimportant, but its position in America’s overall trade relations is much less crucial.

      The question for the United States is how to use this bargaining power. After 1989, Washington began to link China’s MFN trade status to the issue of Beijing’s alleged human rights violations. Yet it gradually became clear that Washington’s threat of economic sanctions had failed to change Beijing’s overall human rights record and had only served to undermine the foundation of economic cooperation between the two countries. As a result, in 1994 the Clinton administration decided to de-link the MFN issue with China’s human rights progress. Beginning in 1997, triggered by the suspicion that China had illegally funded U.S. political parties during the 1996 presidential campaign, congressional pressure to use MFN as a means to regulate China’s human rights policy and external behavior has gained new momentum.

      MFN is not the right issue for Washington to collide with China. Contrary to its name, most-favored-nation status is not an American favor to China; by using MFN as a means to pressure Beijing, Washington has only adversely affected both Chinese and American business interests. Furthermore, this strategy is a mistake in a moral sense. Its adoption can be so easily misunderstood, not just by the Chinese government but by the Chinese people as well, as an indication of continued American arrogance. Using China’s MFN status as a bargaining chip, Washington has failed—and will continue to fail—to force Beijing to change any of its important established policies.

      Rather, it is China’s accession to the World Trade Organization (WTO, the successor organization to the General Agreement on Tariffs and Trade) that may give the United States, together with other industrial countries, more of a positive impact on Beijing’s overall economic policy. Over the past four or five years, Beijing has made real efforts to conform to WTO membership criteria; its entry into the organization thus should be used to further promote its opening to the outside world as well as its embrace of free-trade rules and regulations. In addition, Washington should also seriously consider inviting China to attend meetings of the leading industrial democracies in the Group of Eight, which will enhance Beijing’s sense of being a responsible member of the international community.

      In the meantime, it is also important for Washington to understand that China’s economic development has already created, and will continue to create, decentralization of its political institutions and economic system. The Chinese government will continue to lose its ability to control local authorities over trade issues. Thus Washington should demonstrate a comprehension of, and sensitivity toward, frictions in U.S.-China trade over which Beijing has no real control and avoid blaming the Chinese government accordingly.

      There are many ways America’s bargaining power on bilateral trade relations can create positive developments in U.S.-China relations. For example, the United States is in a strong position to consult with the Chinese government about financial and insurance policies, legal reform, customs services, and other important aspects of China’s efforts to transform its trade system and, more important, the old philosophy underlying it. If properly exercised, America’s bargaining power on trade relations with China can promote significantly China’s integration into the international community.

      Given the extent of Asia’s current financial crisis, China will find it necessary to rely more heavily on sources of trade and investment outside the region to sustain its export-led growth, and WTO membership would certainly boost China’s prospects for broadening its trade network. With its considerable influence in the new trade organization, the United States surely will be tempted to push Beijing into making concessions on other contentious issues that are on their bilateral agenda. Missile proliferation is one such issue.

Arms Control

Beijing and Washington have disagreements on arms control and nonproliferation issues. China has transferred weapons and nuclear technology to foreign countries, some of which (such as Iran) Washington believes to be responsible for sponsoring international terrorism. However, the United States has sold F-16 fighters to Taiwan, an act Beijing believes to have created a serious threat to China’s national security interests. And yet U.S.-China differences on arms control are much less significant than problems in other realms, since the former usually do not involve policy principles. Indeed, unlike its attitude toward human rights, Beijing seldom challenges the nonproliferation principles Washington adheres to (although it often cites U.S. arms sales and its proliferation record to cast doubt on the sincerity of Washington’s belief in these principles).

      In the past several years, Beijing has made substantial efforts to accommodate Washington’s arms control agenda. For example, China announced in 1992 that it would abide by the Missile Technology Control Regime restrictions on missile exports. In 1995, it suspended its nuclear energy cooperation agreement with Iran and stopped providing Tehran with Silkworm missiles. It has also placed its nuclear energy cooperation program with Algeria under the inspection of the International Atomic Energy Agency. These cases indicate that Beijing is willing to act responsibly on the arms control issue.

      It is true that in some cases, such as the continual transfer of nuclear technology to Pakistan and, more recently, the sale of tactical missiles to Iran, China has not acted in accordance with U.S. expectations. However, this is a reflection of the normal difference in the two countries’ specific national security concerns. Just as it is difficult for the U.S. to cut off its supply of arms to Taiwan, it is difficult for China to stop its arms shipments to Pakistan.

      Washington should continue to persuade Beijing to restrict its arms exports that have the potential of damaging regional and global stability, and should continue to emphasize that it is in the fundamental interests of the U.S., China and other countries in the Asia-Pacific region, and the world to prevent arms proliferation. But Washington should make its aims reasonable and realistic. More important, Washington should acknowledge that Beijing’s attitude toward the arms control issue has been responsible and cooperative in general, while at the same time making every effort to inform the American public of such. In carrying out Washington’s constructive-engagement strategy, there is every reason to make the arms control issue a positive part of the U.S.-China relations agenda.

TOC | Summary | Foreword | Two | Three | Four | Five | Notes | About the Author

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