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June 6, 1996

    96-518 F

    CRS Report for Congress

    Received through the CRS Web

    China's Rising Power: Alternative U.S. National
    Security Strategies — Findings of a Seminar

    June 6, 1996

    Robert G. Sutter
    Senior Specialist in International Politics
    With the Assistance of Peter Mitchener
    Foreign Affairs and National Defense Division

    Congressional Research Service
    The Library of Congress

    ABSTRACT

    This report summarizes the findings of a May 1996 CRS seminar that examined challenges
    posed for U.S. policy by the rising wealth and power of China, and alternative U.S. strategies
    to deal with China's rising power. A Clinton administration representative and four nongovernment
    experts discussed these subjects; together with other seminar participants, they
    reached general consensus on recommendations favoring a balanced U.S. policy of positive
    and negative incentives geared toward prolonged interaction with rising Chinese power in
    the context of careful U.S. leadership attention to nurturing the relative power and influence
    of the United States in Asian and world affairs. This report will not be updated.

    China's Rising Power: Alternative U.S. National Security
    Strategies — Findings of a Seminar

    Summary

    Although recent development of China's wealth and power poses opportunities as
    well as challenges for U.S. policy, participants at a CRS seminar on dealing with
    China's rise focused on the challenges. China was seen as a very large, strategically
    located country undergoing rapid economic growth and social change, and ruled by
    authoritarian political leaders. Since the Maoist era, China has made great strides in
    conforming to many international norms, but a combination of rising Chinese power
    and nationalistic assertiveness has posed serious problems for: U.S. security interests
    in Asia; U.S. efforts to curb trafficking in technology for weapons of mass destruction
    and conventional weapons; U.S. support for a smooth running market based
    international economic systems; and U.S. backing of other international norms
    regarding human rights, environmental protection and other issues.

    Seminar participants judged that historical experience suggests that the United
    States will be unable to reach any "grand bargain" or lasting solution to the China
    challenges. Rather, U.S. leaders will need to devote continuous high-level policy
    attention, issue by issue, case by case, in order both to deter Chinese assertiveness and
    to encourage Chinese accommodation to prevailing international practice. In so doing,
    the U.S. would be ill served to rely solely on policies designed to moderate Chinese
    assertiveness through accommodation and greater integration in world affairs.
    Although many are hopeful about the positive changes that could come from China's
    economic modernization and social change, positive changes could be long in coming.
    As a result, seminar participants urged U.S. policymakers to establish U.S. national
    goals vis-a-vis China, and clearly defined negative and positive incentives that would
    prompt PRC behavior more compatible with U.S. interests. At the same time, a U.S.
    policy of containment against China was seen as both premature and unworkable.

    An effective U.S. strategy toward China needed to be seen in the context of a
    broader U.S. strategy in Asia -- one seen to include a strong U.S. military, economic
    and political presence, and requiring some degree of cooperation from important U.S.
    allies and friends in the region. Recommendations for U.S. policy focused on
    establishing a clear set of priorities that take account of U.S. interests along with
    Chinese concerns and those of U.S. allies, associates and other interested third parties,
    especially in Asia. To formulate these policy priorities, and to help to insure that they
    are met, requires careful and consistent high-level U.S. policy attention, including
    regular U.S.-PRC summit meetings. The fact that such meetings give considerable
    prestige to PRC leaders seen as illegitimate by many Americans posed perhaps an
    immediate dilemma for sustained U.S. efforts to deal with the rise of China.

    Contents

    Introduction ......................................................1

    The Challenge of China .............................................2

    Findings and Recommendations ......................................9

    Lessons of History ............................................10

    Limits of Engagement and Containment ...........................10

    Seeing China in Asia ..........................................11

    High-Level Dialogue Versus Prestige for PRC Leaders ...............12

    Specific Recommendations .........................................14

    Set Priority Among U.S. Policy Interests ..........................14

    Build A Consensus Behind U.S. Policy at Home and in Asia...........15

    Clarity and Consistency ........................................16

    China's Rising Power: Alternative U.S. National
    Security Strategies — Findings of a Seminar

    Introduction

    China's provocative use of force in the Taiwan Strait to intimidate voters in
    Taiwan's first presidential election on March 23, 1996, headed the list of Beijing's
    deviations from U.S.-backed international norms in early 1996. Other contentious
    issues included the estimated $2 billion in annual losses U.S. firms suffer as a result
    of China's continued and growing violations of U.S. intellectual property rights,
    despite past Chinese government agreement to halt such violations; China's reported
    continued close cooperation in Pakistan's widely noted effort to build a nuclear
    weapons capability; reports of China's sale of advanced surface-to-surface missiles
    and related technology to such troubled areas as Iran and Pakistan; and Beijing's
    hard-line stance toward any signs of political dissent or advocacy of greater human
    rights in China.1

    1 For background, see, Kerry Dumbaugh, China-U.S. Relations, CRS Issue Brief
    94002.

    Against the backdrop of a deluge of media and congressional criticism of
    China's actions and the Clinton Administration's avowed policy of comprehensive
    engagement with the People's Republic of China (PRC), the Administration
    toughened the U.S. posture toward China. Specific steps included deploying two

    U.S. carrier battle groups to the Taiwan area during the PRC military exercises in the
    region in March 1996; postponement of the planned visit of China's defense minister
    to the United States; temporary suspension on approval of U.S Export-Import Bank
    financing for new U.S. projects in China, pending a thorough review of U.S. options
    to deal with reported Chinese exports of nuclear weapons technology; and other
    measures. The Administration endeavored to underline its dissatisfaction with recent
    Chinese behavior while trying to find common ground to sustain a longer term
    engagement with China, through a series of recent or anticipated discussions with
    senior PRC leaders. Notably, President Clinton reportedly sent a letter to China's
    leaders with newly appointed U.S. Ambassador James Sasser, requesting such a
    dialogue. The Chinese responded in part by sending in March 1996, the PRC State
    Council's senior foreign policy official to the United States for extensive discussion
    with executive branch and congressional leaders.2

    2 Interviews with PRC Embassy and U.S. Government officials, March 1996.

    Congressional opinion was not assuaged by the Administration's actions, and
    Congress sought additional measures to reinforce the U.S. posture against China's
    infractions of international norms. The House and Senate passed separate nonbinding
    resolutions expressing support for Taiwan in the face of PRC intimidation.

    CRS-2

    Many Members, strongly concerned with Chinese infractions on nuclear and missile
    proliferation and on important trade issues like intellectual property rights, were
    adamant in hearings, public statements, and private communications with the
    Administration that more needed to be done in order to end Beijing's egregious
    violations of accepted world norms. For example, the House Committee on National
    Security along with the Senate Foreign Relations Committee held extensive hearings
    on China's military and national security challenges to U.S. interests. The House and
    the Senate also passed the 1996-1997 State Department authorization bill (HR 1561)
    that contained over one dozen provisions targeted directly or indirectly on
    strengthening U.S. opposition to PRC government practices, on issues ranging from
    Taiwan to Tibet, and from human rights to World Trade Organization (WTO)
    membership.

    President Clinton vetoed HR 1561 and the veto was sustained by the House on
    April 30, 1996. After reaching an understanding with Chinese officials on reported
    Chinese exports of nuclear weapons related technology to Pakistan, the President in
    May 1996 lifted the suspension of U.S. Export Import Bank financing, but he also
    began formal procedures threatening over $2 billion in trade sanctions unless China
    took further measures to curb intellectual property rights violations -- a deadline of
    June 17 was set. On May 20, 1996, the President announced that he would grant on
    June 3 the annual waiver that allows Chinese imports Most-Favored-Nation (MFN)
    tariff treatment by the United States, setting the stage for the annual congressional
    debate on the pros and cons of the move and on the broader direction of U.S.
    relations with China. Senate Majority Leader and Republican presidential candidate
    Bob Dole added to the debate with a speech on May 9 that was sharply critical of the
    Clinton Administration's "vacillation" on China Policy, though also supportive of
    continued MFN for Beijing.

    In this context, the Congressional Research Service, at the request of the House
    National Security Committee and with the support of the National Committee on
    U.S.-China Relations, conducted a seminar on May 13, 1996. The topic was
    "Dealing With China: Alternative U.S. National Security Strategies." A Clinton
    Administration representative and four non-government experts offered diverse
    perspectives as to the challenges posed for the United States by China's rising power
    and influence in world affairs, and made recommendations for U.S. policy. The
    speakers and others who addressed the seminar gave their personal views under
    ground rules that their remarks would not be for personal attribution. The views
    expressed were those of the individual participants, not the sponsors. The speakers
    at the seminar were Kurt Campbell, Dept. of Defense; Douglas Paal, Asia Pacific
    Policy Center; Jonathan Pollack, RAND Corp; Ezra Vogel, Harvard University;
    Arthur Waldron, Naval War College.

    The Challenge of China

    In the period immediately following the June 1989 Tiananmen incident and
    subsequent collapse of communist regimes in Europe and elsewhere, many
    journalists, analysts and other observers outside China judged that the communist

    CRS-3

    regime in China was destined for collapse.3 Observers also sometimes warned of
    major retrogression in Chinese economic reforms, speculating that Beijing would
    feel compelled in the face of domestic and foreign pressure to revert to autarchic
    development policies of the Maoist past. These would reduce Chinese
    interdependence with other countries and substantially reduce China's incentive to
    avoid disruptive behavior in interaction with its neighbors and other world powers.

    3 See China and Congress in 1992, Kerry Dumbaugh, CRS Report 93-894F, October
    12, 1993.

    On balance, China's record in recent years has undercut the predictions of
    collapse or retrogression. The regime in Beijing has presided over a period of
    unprecedented growth in the Chinese economy. This growth has not only benefitted
    many in China, but has come at a time of lackluster growth in most other parts of the
    world. The result has been a period of unprecedented international investment in and
    interaction with the Chinese economy. When combined with Beijing's selectively
    accommodating posture in world affairs in recent years, the result has been to erode
    foreign sanctions and to enhance the international legitimacy of the Chinese leaders.

    Nevertheless, analysis of key determinants of China's future shows a wide range
    of possible outcomes for China over the next few years. In particular, a good deal
    of the success of Beijing's efforts in recent years is attributed to the leadership of
    senior leader Deng Xiaoping. Deng's anticipated early demise means that a vacuum
    at the center of political power in China could lead to political struggles with
    possibly adverse outcomes for the country. The leadership transition is likely to
    complicate an already difficult set of problems of governance caused by dynamic
    economic growth, rapid social change, a realignment of central and local power
    arrangements and other factors. Also seen as complicating China's future is the rise
    of the Chinese military's influence on sensitive policy issues, including foreign
    policy; and the increasingly nationalistic tendency among Chinese leaders and people
    alike which seems to reduce Chinese flexibility in dealing with the United States and
    much of the outside world.

    A positive scenario for China's future posits an effective administration and
    some political reform along with powerful economic modernization. Alternative
    outcomes are of two kinds. One sees a series of developments, including political
    changes, leading to degeneration of government effectiveness and authority with a
    range of negative effects on China's economic and social development. Another sees
    China developing formidable economic power while retaining strong authoritarian
    political control. This raises the possibility of an emerging Chinese economic and
    military superpower, less interested in accommodation with the outside world and
    unfettered by the political checks and balances that accompany less authoritarian
    political structures. It is the latter scenario that has received considerable attention
    in hearings and is the cause of particular concern on Capitol Hill.

    Recent developments in China pose economic, cultural and other opportunities
    and the prospect of cooperation on global and regional issues, as well as challenges
    for the United States. The seminar participants, like much recent U.S. government,
    media and popular opinion, focused on the challenges to U.S. policy. China is seen
    as a very large strategically located country undergoing rapid economic growth and

    CRS-4

    social change and ruled by an authoritarian political leadership. Strongly supported
    by "conservative" political, military and other constituencies in China, Chinese
    leaders are seen as determined to maintain their political power while pursuing a
    strongly nationalistic ideology emphasizing China's desire for greater international
    respect and recognition of China's territorial claims and aspirations for leadership in
    Asia and world affairs. Chinese leaders strive to make China a great power with
    broad international influence. Chinese capabilities to achieve great power remain
    limited in certain areas because of such factors as continued widespread poverty,
    population pressure and limited capability for military power projection. China's
    uncertain leadership transition is also seen as a source of potential weakness, as are
    the difficulties the authoritarian political leaders in Beijing are seen to face in trying
    to manage China's rapid, uneven economic and social changes. On balance, the
    participants at the seminar saw problems for U.S. policy focused heavily on China
    itself and nearby parts of Asia, although China is also seen to pose difficulties in
    other areas of U.S. policy concern.

    The difficulties posed by China's search for wealth and power prompted one
    participant at the seminar to recall the many positive features for U.S. interests in
    China's approach to world affairs since the death of Mao Zedong 20 years ago.
    Chinese international policy changed markedly during the Maoist period (19491976).
    It moved from reliance on the USSR and strident opposition to the United
    States to a posture of strong opposition to both the U.S. and the USSR. Finally, their
    approach relied strategically on reconciliation with the United States to deal with the
    danger posed by the Soviet threat. These shifts were often accompanied by hostile
    and militant actions fundamentally threatening peace and stability in Asia and the
    broader international order.

    After Mao died, Chinese leaders emphasized domestic policies of development
    that required markedly increased economic contacts abroad. These policies
    comported with Beijing's desire to sustain good relations with the West and avoid
    disruptions around the periphery of China that would complicate the Chinese drive
    toward modernization.4

    4 See among others, China in World Affairs, by Robert Sutter, CRS Report 95-265S,
    January 31, 1995, 19 p.

    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 legitimize and justify their continued
    monopoly of political power. These leaders cannot rely, as Mao did, on
    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 fading.

    * China depends critically on foreign trade, and related foreign investment and
    assistance, for its economic development.

    CRS-5

    * China depends particularly heavily on its neighbors for aid, investment, and
    trade benefits, and on the United States to absorb its exports.

    * Therefore, to buttress their political survival, post-Mao 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.

    Chinese leaders put aside past ideas of autarchy 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 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
    consider halting nuclear tests by the end of 1996 under an international agreement
    banning nuclear tests; China's reported 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 selectively
    sought 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.

    As was noted in the seminar, 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 confronting its traditional territorial or nationalistic claims. These and
    other assertive Chinese actions may reflect a changing Chinese international
    calculus. Increasingly, Chinese leaders are seen as more confident in their
    international position of greater wealth and military power. The power vacuum in
    Asia caused by the collapse of the USSR combines with strong Chinese nationalistic
    ambitions to fuel a perceived PRC tendency to assert its interests in the face of
    opposition from the United States and others.

    CRS-6

    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.5

    5 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 consider halting nuclear testing by the end of 1996, and join
    a comprehensive nuclear test ban, or risk major friction in its relations with the U.S., 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 multilateralism 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 multi-polar (i.e. a number of
    competing nation states) than multilateral (a system where nation states sacrifice
    some of their independence and freedom of maneuver for the expected benefits of
    an interdependent international order governed by law).

    Chinese suspicions of many multilateral efforts focus on the central 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 by the established powers' fear of China's rise, their unwillingness to
    share power fairly with China, and their desire to "hold down" China -- to keep it
    weak and fragmented for as long as possible. In short, Chinese leaders are often
    predisposed to oppose the international status quo supported by the United States.

    This mix of accommodation and assertiveness has combined with China's
    obviously growing power and importance to lead to a number of specific conflicts
    with United States foreign policy and security interests.6

    6 See among others, China's Rising Military Power and Influence, by Robert Sutter,
    CRS Report 96-66F, January 16, 1996. See also Council on Foreign Relations publications
    Redressing the Balance: American Engagement in Asia, 1996; and Weaving the Net:
    Conditional Engagement With China, 1996.

    a. China's military power. There appears to be a general agreement among
    specialists that China, at present, does not pose a major direct military threat to the
    United States. Its military, economic and other capabilities are seen as too limited
    to pose such a danger in the near future (5-10 years). U.S. and foreign analysts see
    potential for China to challenge and threaten the United States over the longer term

    CRS-7

    (20-plus years). Of the nations of the world, in their view, China is among the very
    few that have the mix of economic, political, human resource, and military factors
    that could produce the emergence of a superpower capable of directly challenging
    the United States in the first half of the 21st Century. China's rapid economic growth
    in recent years has been accompanied by a steady increase in military spending,
    reflecting in part the influence of the Chinese military on budget and policy issues.
    The overall impact of China's military buildup on justified U.S. policy concerns
    remains a subject of debate among U.S. specialists.

    In the interim, the main danger to U.S. positions coming from China bears on
    U.S. interests in preserving and strengthening the peace and stability of the Asian-
    Pacific region. There is considerable debate among specialists as to whether or not
    China is likely to embark on an expansionist or more assertive course disruptive to
    stability in the area.

    b. China as a proliferator of weapons of mass destruction, manufacturing
    technology for such weapons, and related delivery systems. Chinese military
    strategy against both the United States and the Soviet Union focused during much
    of the Maoist period (1949-1976) on developing reliable, hard-to-locate weapon
    systems of mass destruction -- i.e., nuclear missiles and bombs. These weapons gave
    Chinese leaders the option of a second strike against a stronger adversary and thus
    were seen to deter a feared preemptive nuclear attack, especially from the USSR.
    For many years, China shared such technology with a select group of countries,
    notably Pakistan, whose defense had a direct bearing on China's own national
    security. At the same time, China has a long record of selling materials, technology,
    and related expertise in these sensitive areas for profit.

    In the past, U.S. and other western-aligned international observers tended to
    play down the consequences of these Chinese actions. They appeared more
    interested in sustaining a broadly cooperative relationship with Beijing in the Cold
    War competition with the Soviet Union. U.S. views changed markedly in the post-
    Cold War environment. This occurred especially after the 1991-1992 U.S.-led allied
    confrontation with Iraq, which was developing mass destruction weapons in order
    to dominate regional adversaries and world oil supplies. Fearful of having to
    confront authoritarian, expansionist leaders armed with nuclear or other mass
    destruction weapons and related delivery systems, U.S. officials now saw China's
    proliferation practices as a major threat to U.S. interests. American officials have
    had some success in recent years in leading international efforts to press China to
    adhere to international control regimes regarding nuclear weapons and related
    missile delivery systems. In this effort, they have used leverage provided by China's
    dependence on trade and other relations with the U.S. and other developed countries
    concerned with proliferation.

    c. China's economic rise. The strength, size, and vibrancy of the Chinese
    economy has attracted positive international attention but also has caused
    considerable uneasiness among China's major trading partners. Although China's
    economy was large, though qualitatively weak, and grew rapidly in the Maoist
    period, the regime's "self reliant" development strategy meant that Chinese
    interaction with the world economy was limited and the consequences of
    developments in China for other nations were generally limited.

    CRS-8

    The post-Mao economic reforms have changed that situation. The Chinese
    economy is larger than ever and is growing at a rate surpassing that of the Maoist
    period and mirroring the rapid rise that some other Asian countries experienced
    during periods of economic "take off" in the latter 20th century. At the same time,
    the Chinese "open door" policies have put aside Maoist autarchy in favor of
    integrating the Chinese economy with the growing economies of Asia and the world.
    In the past 10 years, Chinese foreign trade and foreign investment in China have
    grown at rates far surpassing China's overall economic growth rate. The Chinese
    economy today statistically depends more on foreign trade than do the economies of
    other large countries like Russia, India and Brazil, and that dependency even
    surpasses that of Japan. China is now among the top 15 world traders and rising fast.
    Much of this trade stems from investment from inside China and from abroad in
    manufacturing industries designed to produce goods for export. To a considerable
    degree, China has become a manufacturing platform for exports to many countries
    of the world, with investment from Hong Kong and Taiwan being the major impetus
    behind this development.7

    7 See Central Intelligence Agency, China's Economy in 1994 and 1995, December,
    1995.

    Analysts in Asia and the West sometimes see China's economic power and
    potential as a current or prospective threat to Asian stability or the stability of
    international commerce in certain commodities. On the one hand, Chinese leaders
    may choose to use this rapid economic growth to support military modernization and
    a more assertive policy toward China's neighbors. On the other hand, Chinese
    enterprises may choose to direct their sometimes state-supported manufacturing
    capabilities to world markets sensitive to the rest of Asia and the West.

    In this view, the size, scope, and capabilities of the Chinese economy, when
    combined with the fact that the economic system in China remains subject to state
    control and direction in several important respects, means that China is seen as
    having a great ability to "surge." This involves targeting production in certain areas,
    dominating markets, and causing major disruption and dislocation for trading
    partners and competitors. Of course, the larger and more resilient world economies
    (e.g., the United States, Japan) doubtless are better able to adjust to Chinese growth,
    but others (e.g., Taiwan) may find themselves more vulnerable to a directed or
    predatory Chinese economic initiative.

    Another challenge relates to the ability of Chinese authorities to divert foreign
    supplied technology from civilian to military use. Reports of such alleged diversions
    have led to investigations in Congress over the past year.

    d. China's challenge to other post-Cold War values. Beijing's determined
    effort to sustain its authoritarian political regime is seen to defy U.S.- backed efforts,
    accentuated in the post-Cold War period, supporting greater pluralism, human rights
    and democracy. China's economic development could also come at the expense of
    its environment, which given the size of China, is sure to have a major impact on
    international efforts to curb suspected global warning, among other environmental
    concerns. As noted above, it is unclear whether the rise of China's wealth and power

    CRS-9

    will prompt Beijing leaders to be more or less accommodating to these widely shared
    values backed by the United States.

    e. The problem of a weakened China. Although the potential problems and
    dangers noted above stem from the growth of China's wealth and power, analysts at
    the seminar and elsewhere have been careful to point to the dangers to Asian and
    international stability that could result from a markedly weakened China. The
    concern focuses on a possible breakdown in government authority in China, such as
    was seen in a number of Communist countries in recent years. The size and scope
    of problems in China suggest that such a breakdown could be accompanied by large
    scale economic dislocation, armed conflict, and massive outflows of migrants. For
    the crowded and often strongly homogeneous countries along China's eastern rim,
    and for the sparsely populated and poorly controlled countries to China's north and
    west, such outflows of migrants would pose a national security threat of the first
    order.

    Findings and Recommendations

    The presentations and discussions at the seminar offered a somber picture for
    the United States as it faces the wide range of existing and potential challenges posed
    by China's rising power in the years ahead. There was general agreement that the
    United States needed to clarify U.S. goals vis-a-vis China and find practical ways
    both to engage China more fully in the current world system while deterring Chinese
    behavior adverse to U.S. interests. Policies of accommodation of China on the one
    hand, or strict constraints of China on the other were deemed to be inappropriate or
    unworkable. The panelists were in general agreement that the U.S. strategy toward
    China should be seen in the context of a broader U.S. strategy in Asia -- one
    requiring a strong U.S. military, economic, and political presence, and also requiring
    significant cooperation from important U.S. allies and friends in the region.

    Recommendations for U.S. policy focused on establishing a clearer set of U.S.
    priorities that take account of U.S. interests along with Chinese concerns and those
    of interested third parties, especially in Asia. To formulate these policy priorities,
    and to help to insure that they are implemented, requires careful and consistent high-
    level U.S. policy attention, including regular U.S.-PRC summit meetings. It was
    acknowledged that such meetings, and the prestige they give to PRC leaders seen as
    illegitimate by many Americans, posed a difficult problem for U.S. policy as it
    endeavors to deal effectively with the rise of China.

    CRS-10

    Lessons of History

    China shows strong signs of emerging as the most important new world power
    in the early 21st century. In modern history, most instances of such rising powers
    have been accompanied by severe strains on the prevailing international system,
    often resulting in conflict. The size and importance of China, and its large influence
    on the strategically and economically important rimlands of the Pacific Basin
    prompted seminar participants repeatedly to emphasize the need for consistent and
    close U.S. policy attention to China for years to come. Given the wide differences
    in U.S. and Chinese leaders' values and world views, along with the relatively
    immature security, political and economic frameworks for the post-Cold War
    situation in Asia, specialists warned the U.S. not to expect any "grand bargain"
    regarding the future of the region and of China's role in it to be reached in the
    foreseeable future. More likely, in their view was a future characterized by the need
    for persistent U.S. efforts dealing case-by-case with issues as they arise and striving
    both to encourage China to engage more fully with and conform to the norms of the
    international system, and to deter China from taking action detrimental to accepted
    world norms.

    Limits of Engagement and Containment

    Some seminar participants were hopeful that greater U.S. and other international
    engagement with China along with continued rapid economic and social change in
    China would lead to changes prompting Chinese leaders to conform more fully to
    international norms. Growing economic interdependence presumably would reduce
    China's incentive to challenge the interests of its important economic partners, while
    internal pressures stemming from modernization would presumably reduce the
    ability of the authoritarian regime to exert power in ways contrary to the interests of
    the Chinese people.

    Nevertheless, it was duly acknowledged that the positive fruits of such a
    development process are not certain and could be long in coming. This is seen as
    especially relevant given the evident determination of China's current leaders to
    sustain political authoritarianism, and the slow and mixed record of such "peaceful
    evolution" in other parts of Asia. As a result, U.S. policymakers were urged by some
    participants to establish some clearly defined positive and negative incentives that
    would both prompt Chinese leaders to conform more to international norms backed
    by the United States and deter them from taking actions disruptive of such norms.
    Specific recommendations are discussed below.

    On the other hand, a policy of U.S. containment of China was deemed
    unneeded and currently unworkable. For one thing, because of its economic
    strength, China is in a far different position than the USSR or Maoist China, when
    they were targets of U.S. containment strategies during the Cold War. In one sense,
    it was argued, it is already "too late" for the U.S. to consider containing China as the
    PRC in the past two decades has so broadened its economic and related political
    connections abroad as to make a policy of trying to isolate China unworkable. At the
    same time, it was argued, the challenges currently posed by China cannot be
    compared to the fundamental antagonism to the U.S. of the USSR or of Maoist China

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    during much of the Cold War. As noted above, some participants thought that
    China's record in world affairs shows increasing willingness to conform to U.S.backed
    norms. While some Chinese doubtless harbor antagonistic intentions toward
    the United States, their freedom of action is constrained for now by realities of power
    and by the practical considerations of Beijing's search for greater wealth and power.
    At the same time, rising wealth and power, prevailing nationalistic sentiment,
    leadership uncertainty giving greater influence to military and other conservative
    leaders, and other trends could prompt more assertive and disruptive Chinese foreign
    policy behavior.

    At this time, it remains unclear whether Beijing will in the future follow a path
    of confrontation or greater accommodation with world norms; seminar participants
    judged that the United States should wait to see which path is chosen, and try
    positively to influence the choice before the U.S itself chooses a path of containment
    and confrontation. A U.S. effort to pursue a containment policy under current
    circumstances would likely get little support from allies and associates in Asia, who
    are wary of China and uncertain about Beijing's future policy directions, but who see
    little justification for such a hard U.S. response and, in any event, have to live in
    close proximity to the PRC.

    Seeing China in Asia

    Seminar participants were in agreement that an effective U.S. policy toward
    China needs to be placed in the context of a broader U.S. policy toward East Asia.
    Whatever strategy the United States adopts to deal with China needs to be
    compatible with broader U.S. efforts to protect and foster American interests in the
    post-Cold War situation in East Asia. From the point of view of U.S. national
    security policy, the latter effort involves several major components in addition to
    dealing with China:

    * U.S. efforts to revitalize security alliances with regional allies. The
    Administration has already capped a recent effort to strengthen alliance
    relations with Japan during President Clinton's visit to Tokyo in April 1996.

    * U.S. efforts to build support, at home and abroad, for the U.S. forward
    deployed forces in East Asia. Despite U.S. Government spending cutbacks,
    the Pentagon has been able to sustain support for around 100,000 U.S.
    forward deployed forces. U.S domestic backing for this effort is enhanced by
    the willingness of allies and associates to publicly support the U.S. presence
    and to bear some of the financial and other burdens associated with it.
    Although Japan and to a much smaller degree Korea bear financial costs
    associated with the U.S. presence, many Asian governments are reluctant to
    stand up and be counted in support of the U.S. military presence, even though
    they privately support it in strong terms. Such public ambivalence makes it
    difficult for U.S. defense leaders to make a strong case that the American
    military presence is an asset rather than a liability in U.S. efforts to benefit
    U.S. interests in East Asia.

    * U.S. efforts to strengthen still weak multilateral efforts to promote a more
    secure environment in Asia. Some seminar participants stated that existing

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    multilateral security efforts in the region like the ASEAN Regional Forum
    (ARF) were weak, but they expressed a desire to use at least some multilateral
    efforts to sustain U.S. security interests in the region.

    As the United States seeks both to deter and engage China, seminar participants
    emphasized the need for the United States to build coalitions centered among Asian
    allies and associates. Such coalitions were seen as difficult to form and use, but
    important in making sure that China's leaders did not outflank or isolate U.S. efforts
    to press China for change. A key difficulty was the perceived preference of these
    Asian allies and associates for an ambivalent position on China and on forthright

    U.S. efforts to deal with China. Thus, seminar participants judged on the one hand
    that it was desirable for the United States to set out in clear terms its security and
    other concerns vis-a-vis China and to press U.S. Asian allies and associates to back
    the U.S. position; yet, on the other hand seminar participants judged that U.S. allies
    and associates under most likely circumstances would be very reluctant to take such
    forthright positions regarding China for fear of antagonizing the PRC or important
    domestic political constituencies.

    High-Level Dialogue Versus Prestige for PRC Leaders

    Seminar participants appeared to agree on the need for high-level and
    continuous dialogue between U.S. and PRC leaders. They readily acknowledged that
    summit meetings with Chinese leaders would be used by the PRC to legitimize
    Beijing's current authoritarian rulers both at home and abroad. This poses a big
    problem for the large segment of U.S. opinion that sees China as a rising power bent
    on rolling back U.S influence in Asia and those that remain strongly offended by
    Beijing's crackdown at the time of the Tiananmen incident and its subsequent
    violations of human rights and other norms.

    Specialists at the seminar offered arguments to persuade U.S. skeptics of the
    utility of high-level dialogue, despite the problem of legitimizing Beijing's
    authoritarian rulers. They stressed the need for senior U.S. leaders to lay out U.S.
    interests to their Chinese counterparts in order for the latter to understand clearly
    areas of great sensitivity to the United States. The alternative is miscalculation that
    can lead to military confrontation. For example, several seminar participants judged
    that Beijing had misunderstood U.S. resolve in pursuing its military intimidation
    efforts against Taiwan in 1995-1996. They also emphasized the U.S. needs to take
    account of Chinese leaders' interests. Without a clear sense of Chinese priorities, it
    was argued, U.S. leaders will have difficulty in coming up with options for China
    that have a realistic chance of being successful.

    High-level U.S. dialogue with China was said to assist international efforts to
    get China to conform to norms favored by the U.S. It was claimed that China's shift
    from confrontation to more conformity in the last 20 years was facilitated by U.S.
    leaders' efforts in discussion with senior Chinese leaders. The U.S. leaders were said
    to make clear to Beijing the negative consequences of confrontational or
    obstructionist actions in sensitive areas, and the positive consequences of more
    cooperative behavior. As such, American leaders were seen to have helped to
    channel Chinese behavior in more constructive ways.

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    High-level dialogue with China was especially needed during a time of
    leadership transition in the PRC. Without it, Chinese leaders are seen as prone to
    adopting politically safe nationalistic stances that greatly reduce Chinese flexibility
    and increase PRC paranoia in dealing with the United States. With high-level U.S.
    assurances, PRC leaders could justify taking a few more risks in moving away from
    narrow nationalistic positions to more cooperative internationalist stances broadly
    beneficial for both China and the world community.

    To deal with the issue of adding to Beijing's international prestige, U.S. officials
    were urged to "pick and choose" from among Chinese leaders. Thus, some at the
    seminar said there is no need for U.S. leaders to have a summit meeting with Premier
    Li Peng, who is widely identified with the Tiananmen crackdown. But the U.S.
    could move ahead with President Jiang Zemin, who handled the 1989 demonstrations
    in his area of responsibility, Shanghai, in a largely bloodless way. The idea here
    suggested by some is in part to empower the more pragmatic Chinese leaders.

    Some seminar participants went on to stress that past practice and practical
    interests seem to argue in favor of dialogue even with leaders thought to be key to
    distasteful or dangerous PRC policies. For one thing, U.S. practice in dealing with
    the USSR during the Cold War showed the utility of dialogue with Soviet leaders
    even when U.S. policy saw the USSR as an evil empire. Meanwhile, a seminar
    participant supportive of Clinton Administration policy pointedly emphasized the
    benefits of active dialogue with China's People's Liberation Army (PLA) -- viewed
    by many as a key force in Chinese domestic authoritarianism and international
    assertiveness. The perceived benefits were:

    * Make known U.S. military priorities and concerns to key PRC leaders at a
    time of leadership transition and policy formulation in China.

    * Exposing the nationalistic PLA leaders to the possible negative consequences,
    including possible U.S. military actions, if they forcefully pursue their
    nationalistic goals.

    * Exposing the PLA leaders to a broad discussion of U.S. perceptions of
    interests and priorities, encouraging them to pursue paths of constructive
    activity and avoid disruption and confrontation.

    * Exposing U.S. leaders to clear understanding of PLA plans, intentions and
    capabilities.

    * Establishing "rules of the road" so that U.S. and PRC forces in proximity in
    East Asia do not accidentally come into conflict.8

    8 While not addressed explicitly at the seminar skepticism of such U.S.-PRC military
    exchanges has been voiced repeatedly on Capitol Hill, notably during hearings held by the
    House Committee on National Security and the Senate Committee on Foreign Relations.

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    Specific Recommendations

    Set Priority Among U.S. Policy Interests

    Panelists were in agreement that U.S. policymakers should establish more clear
    priorities in order to set clearer guidelines for dealing with China in the years ahead.
    Specifically, seminar participants urged a higher priority be given to U.S. security
    and economic interests regarding peace and development in Asian and world affairs,
    and suggested that U.S. concerns over issues of values, like human rights, be given
    less priority. Part of the reasoning had to do with a sense that regional peace and
    development were not only in U.S. interests but were of fundamental importance to
    human rights conditions in China and neighboring areas. And part of the reasoning
    had to do with the general judgment that Chinese priorities made it unrealistic for

    U.S. policymakers to hinge relations with China on human rights.

    Seminar participants agreed that U.S. policymakers where possible should
    reduce linkage between major issue areas as they set their priorities for dealing with
    China. They generally endorsed the recent U.S. Administration's practice of dealing
    with economic and trade disputes with positive and negative incentives focused in
    the area of economic relations. The Clinton Administration's May 1996 decision to
    threaten over $2 billion in trade sanctions if China did not do more to protect U.S.
    and international intellectual property rights was a case in point. They urged similar
    approaches in dealing with security issues and human rights questions, though it
    appeared that U.S. leverage on the human rights issue, per se, was relatively weak.
    (In part this is why some in Congress wish to link human rights and U.S. trade policy
    toward China).

    Chinese leaders were thought to be relatively open to meaningful negotiations
    with suitable give-and-take on trade and economic issues with the United States.
    Beijing had shown less flexibility on security issues involving such questions as
    nuclear technology and missile exports. Some seminar participants judged that
    progress could be made here as well provided in part that U.S. negotiators were
    aware of Chinese motives for reported nuclear and missile sales to Pakistan and the
    Middle East.9 Those motives included China's search for economic profit and better
    overall relations with key strategic and oil producing countries (China is now a net
    importer of oil). Seminar participants also linked Chinese arms transfers to this
    sensitive area to a PRC desire to show the United States that if U.S. policy continues
    to upgrade arms sales to Taiwan then Beijing is prepared to respond with an
    upgrading of military related sales to areas sensitive for the United States.

    9 In particular, some noted that a U.S. explanation of its difficult experience with
    proliferation in sensitive world areas might have a positive impact on China's appreciation
    of how such proliferation could affect its interests.

    Given Beijing's strident nationalistic emphasis in recent months, specialists
    judged that the U.S. could expect little flexibility on Chinese issues of "sovereignty"
    (e.g. Taiwan) or internal political control (e.g. human rights). On the former, the

    CRS-15

    face-off of U.S. and PRC forces in the Taiwan area at the time of the March 1996
    Taiwan presidential election had the benefit of giving Beijing a clearer notion of the
    limits of U.S. tolerance to mainland Chinese pressure tactics. Seminar participants
    warned that Beijing remains determined to restore its sovereignty over Taiwan over
    the long term and that one of the lessons learned by the PLA from the face-off with
    the U.S. forces was that China needed to do more to prepare militarily for possible
    contingencies over Taiwan. It was assumed that this line of thinking would add to
    incentives prompting faster Chinese military modernization. Nevertheless,
    participants also judged that the U.S. show of force had provided a useful deterrent
    to further PRC aggressive actions, at least for the time being. Over the longer term,
    at least one seminar participant judged that the U.S.-PRC framework setup in the
    1970s and 1980s for dealing with the so-called Taiwan issue no longer conformed
    to reality and would have to be adjusted through what were expected to be very
    difficult discussions with the PRC.

    Several suggestions on how to advance U.S. human rights interests despite PRC
    inflexibility included:

    * Use an improved atmosphere coming from U.S. leaders' willingness to meet
    with Chinese leaders to petition strongly and privately for the release of
    prominent Chinese dissidents.

    * Use improved U.S. interchange with China to actively promote U.S. interests
    and values through business contacts, exchange and education programs,
    study missions, etc. Some seminar participants urged greater U.S. funding for
    these efforts.

    Build A Consensus Behind U.S. Policy at Home and in Asia

    As noted above, seminar participants judged that this consensus had to focus on
    broader U.S. policy toward Asia as well as policy toward China. U.S. officials were
    urged to explain fully to American opinion leaders and citizens the utility of a
    continued strong and active U.S. military, economic and political involvement in
    Asia, as the foundation of an effective policy toward China. A strong exposition on
    the many current and future challenges posed by China was thought to be helpful in
    obtaining greater American support for an effective and balanced Asian presence in
    East Asia.

    Clear and realistic priorities and consistent direction were deemed important in
    building of Asian support for U.S. leadership. As noted earlier, most U.S. friends
    and allies are reluctant to follow the United States in confrontation with China, even
    when the PRC strongly violates world norms. Part of the reason has to do with a
    regional perception that U.S. policy could change, with the United States
    withdrawing from Asia, leaving its allies and associates exposed before the rising
    power of China. Seminar experts acknowledged the difficulty for U.S. policy in
    crafting a China policy sufficiently balanced to win support among Asian allies and
    friends while having enough force behind the policy to warrant a serious and
    constructive PRC response. Some participants noted that this argues for more active
    U.S. diplomacy and military cooperation with allies and friends.

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    Clarity and Consistency

    Once U.S. leaders establish clear and workable policy priorities and build
    consensus at home and abroad behind them, it is incumbent on U.S. leaders to remain
    consistent in pursuing these objectives. One participant judged that the Clinton
    Administration had been less than optimally effective in dealing with China because
    it had changed policy in key areas regarding MFN and Taiwan. In particular, the
    Administration's ability to establish lasting understandings with Chinese leaders and
    to build consensus in the U.S. depends on clarity, credibility and consistency. The
    alternative is seen as vacillation and drift whereby the U.S. may be forced to resort
    to extraordinary means, including the use of force, in order to clarify its intentions
    in the face of growing pressure from China.

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