CHINA: WAKING UP TO THE NEXT SUPERPOWER

By KARSTEN PRAGER

CHINESE TROOPS LAUNCHING missiles that splash down perilously close to Taiwan and put its armed forces on high alert. A U.S carrier task force cruising the area, another sailing toward it. Washington assessing whether--and how--it might have to help Taiwan should the island be attacked by China. These are the most serious signals to date about the state of relations between the world's sole remaining superpower and its sole up-and-coming superpower. One misstep and one misperception after another in recent years have bumped the U.S. and China closer to crisis. The latest rupture has been triggered by China's harsh warning to Taiwan, underlined by war games offshore, that it must remain committed to eventual reunification and squelch whatever dreams of independence it might be harboring. True, what is happening off Taiwan is pantomime rather than confrontation: eager to avoid a clash, both sides are merely using their military to lend muscle to political messages. But to date neither Washington nor Beijing has given much indication that it knows the other well enough to ensure that pantomime belligerence does not someday give way to the real thing.

Over the next decade--or two or three--China will be at the top rung of American foreign-policy challenges. As a rising nation, like others before it, China is demanding respect in proportion to its strength. That would be reason enough for increased concern in the U.S.--and Asian countries--but Washington has a wider range of interests at stake where China is concerned.

Foremost is trade. The U.S. and China, a huge and largely untapped market of 1.2 billion people, now do $50 billion worth of business with each other. Beyond that, the enormous amount of U.S. commerce with Asia as a whole gives Washington even more reason to discourage China from intimidating its neighbors, to say nothing of starting a war. China poses a particular security worry because it has atomic weapons and has sent nuclear technology to other countries. Finally, the U.S. has both a moral and a realpolitik interest in seeing China improve its human-rights record. Encouraging the establishment of democracy and the rule of law not only satisfies America's sense of mission in the world but, if successful, would make China more stable.

China is not Haiti or Bosnia, places where America's involvement may be desirable but is ultimately optional. China is not optional. A half-century after World War II, the U.S. remains the dominant power in the Pacific, and to the degree that it tries to maintain influence there, it will inevitably knock up against China's rising importance. The peace and prosperity of the world in the next century depend in many ways on what Beijing does. How should the U.S. handle it? There are essentially two prescriptions: a policy called comprehensive engagement, and one that goes under the old cold-war name, containment.

The goal of comprehensive engagement, the approach pursued by all U.S. Presidents since Richard Nixon, is to bring China into the world community through broadly based dialogue and diplomacy; an example is the Pentagon's policy of expanding contacts with the Chinese military through naval visits and official exchanges. Admiral R.J. Zlatoper, the commander in chief of the U.S. Pacific fleet, has made a priority of better military-to-military relations. "I see myself as a missionary, not just a war fighter," he says. "I sense on the Chinese side an equal interest in being engaged with us."

The advocates of containment are led by an odd-bedfellow alliance of human-rights activists and old cold warriors. "Both [Senator Edward] Kennedy and [Senator Jesse] Helms are in a pro-Taiwan mode," says a senior U.S. official, "the former because of China's appalling human-rights record, the latter because Taiwan is the last anticommunist country in the world." Angered by what they interpret as Beijing's uncompromising, uncooperative behavior, the containment forces are convinced China is a bully that needs to be disciplined, not indulged. They urge that the U.S. get tough and stop acquiescing. Says former Secretary of Defense Caspar Weinberger: "Their whole foreign policy has turned suddenly much more aggressive, and that bodes no good for the nature of any people."

Across the board, the critics contend that comprehensive engagement has amounted to giving in to China whenever the two countries have come into conflict. To some degree, the record over the past few years bears that out. China's responses to Washington's efforts have been "a mixed bag," says a State Department official. The U.S. has been quietly appreciative of Beijing's cutoff of military assistance to the Khmer Rouge in Cambodia in 1990, of its cooperation in the apparently successful effort to freeze North Korea's nuclear-weapons program and of its restraint in using its U.N. Security Council veto against U.S. initiatives. But Washington remains utterly frustrated by insensitivity--if not outright resistance--to other American concerns where China is giving little ground or no ground at all.

In 1993 President Clinton "delinked" Beijing's human-rights record from the annual decision on whether to grant China most-favored-nation trading status. The rationale was that repeated attempts to deny this status had not only made China more recalcitrant but also threatened to hurt U.S. business in China. By reinforcing trade ties, the Administration argued, the U.S. would be in a better position to influence China on human rights. But China's record has not improved. The State Department's latest annual report, made public two weeks ago, talks of "widespread and well-documented abuses," particularly in Tibet.

Beijing has continued to test atomic weapons, transferred nuclear-arms technology to Pakistan and sold missiles to Iran. Clinton is still deciding whether to impose certain economic sanctions on China to punish it for the Pakistan deal, as the law requires, or to waive such penalties as he has in similar circumstances. On the trade front, there is also disappointing news: estimates of the U.S. trade deficit with China range from $20 billion to $35 billion, depending on how Hong Kong transshipments are counted; moreover, Beijing has failed to vigorously enforce agreements with the U.S. that outlaw piracy of videos, CDs and software.

Meanwhile, despite assurances that it seeks a negotiated solution, China has rattled its neighbors by claiming sovereignty over the Spratly Islands in the South China Sea, where six countries have competing territorial claims. It has also repeatedly interfered in the affairs of Hong Kong, the British colony that will return to Chinese sovereignty next year, supposedly with a "high degree of autonomy."

Beijing is also building up its military. In 1979 Deng Xiaoping told the generals and admirals of the People's Liberation Army that they would have to wait 10 years before they could collect their share of the wealth created by modernization. With the military's needs relegated to the lowest rung in his grand reform scheme, the defense budget was effectively frozen, and manpower was pared down from 4 million to 3 million. "Now the bill has come due," says a Washington analyst, "and the post-Deng leadership is paying."

Washington knows China is playing catch-up and is not overly worried about the military expansion: by most estimates it will be at least two decades before Beijing has the capacity--specifically a blue-water navy--to project power at a distance. That could change, of course. Last year an unofficial study, not endorsed by the U.S. Defense Department, concluded that "Chinese military officials believe the present gap in their capabilities is temporary and the long-term goal is to be a global military peer of the U.S." The Clinton Administration is assessing whether to sell China technology to build turbine engines that some experts think could be used to power cruise missiles. Such weapons, according to U.S. Navy officials, played a decisive role in a classified war game, simulated in 1994, in which Chinese forces "defeated" the U.S. Seventh Fleet in 2010. Later this year, the National Defense University in Washington will publish a study that estimates that China could surpass the U.S. as a superpower in 35 years.

By tolerating the ways in which China acts against U.S. interests, the Clinton Administration would seem to be engaged in a very generous form of comprehensive engagement. That is not how the Chinese see it. As far as they are concerned, Clinton's policy is containment by another name. Not only have Washington's harangues on human rights rankled, but there have been other sources of friction. Because of pressure from the U.S., Beijing believes, it lost its bid to host the 2000 Olympics, which went instead to Sydney, Australia. Washington has blocked China's membership in the World Trade Organization, which Beijing wants as a venue for reconciling trade disputes and obtaining more favorable tariff treatment. The U.S. has also explored a closer military relationship with India, against which China fought a war in 1962, and last year established full diplomatic relations with Vietnam, a traditional enemy that repulsed a Chinese invasion in 1979.

James Lilley, a former U.S. ambassador to China, explains, "China sees America snuggling up to India and kicking Pakistan in the shins, recognizing Vietnam, selling F-16s to Taiwan, walking hand in hand with Japan into the 21st century, wanting a united Korea under Seoul allied with the U.S." What does it look like from the Chinese perspective? Lilley answers his own question: "A ring around China."

All this must be viewed in the context of Beijing's current state of fragility, with Deng Xiaoping on his deathbed and his designated successor, Jiang Zemin, not firmly in control. Despite the government's success in raising the standard of living, its problem list is long: money-losing state enterprises, more than 100 million basically unemployed migrant workers, rampant corruption, growing gaps between rich and poor as well as between the booming coastal provinces and the neglected hinterland--all tinder for potential social unrest. Perhaps most important, an ideologically bankrupt Communist Party is relying on repression and nationalism to keep itself in power and the country united.

Small wonder that U.S.-China exchanges, as Lilley puts it, are a "dialogue of the deaf." Weakened initially by the end of cold-war pressure to cooperate against the former Soviet Union, the relationship is in its worst shape since the Tiananmen massacre in 1989.

What should the U.S. do? For all the setbacks, over the long run, comprehensive engagement, in a more muscular form than that practiced in recent years, has the best chance of creating a balanced, fruitful relationship. The U.S. should be hard-nosed on nuclear proliferation and intellectual-property rights, and may find it advantageous to enlist friends' and allies' support in that endeavor instead of going it alone. In the more sensitive area of human rights, a breakthrough will probably have to await the arrival of a new generation of leaders in Beijing, but the U.S. should acknowledge whatever little progress China has made. Says Burt Levin, a veteran China analyst and former U.S. diplomat: "Chinese citizens have greater freedom today than they have had in 50 years. To be oblivious to that is foolish." Comprehensive engagement, sums up Secretary of Defense William Perry, "does not mean that the U.S. will acquiesce to [Chinese] actions with which we disagree. But we will not try to isolate China over these issues. You cannot isolate a country with more than a billion people."

Last year Joseph Nye, who has since retired as Assistant Secretary of Defense, warned, "If you treat China as an enemy, China will become an enemy." A containment policy such as the one the U.S. used to hem in Moscow, says Perry, "could actually undermine our security, because a China that feels encircled is quite unlikely to cooperate on vital U.S. security interests. Containment could create those security problems. It could push China to accelerate its defense modernization, which would contribute to a regional arms race, increasing the likelihood of military conflict in hot spots like Taiwan, the Spratly Islands, the Korean peninsula."

Containment could also spark a trade war, in which the U.S. and China might close their markets to each other, with ripples spreading to other countries in the Pacific. Equally important, a hard-line policy toward Beijing would put stress on U.S. alliances in the region. "Not a single friend and ally would join us in such a strategy," suggests a ranking Administration official. "We'd be all alone, and that would cause severe strains with Japan, South Korea, Australia and in Southeast Asia." Singapore Senior Minister Lee Kuan Yew, an astute analyst of the region, takes the point a step further: "The last thing Asia wants is containment. First, it will not succeed. Second, you will have absolutely no influence on how China and its attitudes develop: it will be hostile and xenophobic to the West, and that's no good for us." Says Levin: "Dealing with China as an enemy strengthens the know-nothings in Beijing and means that the pragmatists are no longer willing to carry America's water."

For engagement to work, however, the U.S. must maintain its military presence in Asia. The U.S. Pacific Command comprises 200 ships, 2,000 aircraft and 300,000 soldiers, sailors, airmen and Marines, of whom 100,000 are "forward deployed" in South Korea, Japan and at sea. As long as there is a danger of war on the Korean peninsula, a drawdown of U.S. forces is unlikely; in the meantime, they help stabilize the entire region. The presence of 47,000 U.S. troops in Japan, for example, reassures not only Tokyo, which is carefully monitoring its great neighbor's rise to power, but even China, which along with other Asian countries is worried about Japan's rearming. "We are concerned about what kind of China will emerge," says Singapore's Lee. "The problem is of such gigantic size that it is not solvable in the Asian context alone. It is balanced only if the Americans are here, along with Japan. America alone is credible for 10, maybe 15 years, but not beyond."

Right now, the key test case for America's China policy is Taiwan. On March 23, it will hold a presidential vote--the first time in the 4,000 years of Chinese history that a leader will be chosen in a free election. The winner is likely to be Lee Teng-hui, the current President, who has infuriated Beijing by seeking greater international recognition for Taiwan. Beijing insists that the island is part of China and eventually it will be reintegrated. Lee, at least officially, accepts the objective of reunification, although Beijing and his political opponents at home have been questioning his sincerity.

The U.S. too is pledged to a one-China policy, but Beijing has come to suspect that Washington is backing away from it. When the U.S. granted Lee Teng-hui a visa last year for a private visit to his alma mater, Cornell University, Beijing was irate. Hard-liners and moderates in the leadership may disagree on any number of questions, but they are of one mind when it comes to sovereignty over Taiwan; there is no room for compromise. "No leader in Beijing," says Ralph Cossa, executive director of Pacific Forum CSIS, a Honolulu think tank, "could survive if he lost Taiwan." Beijing's current missile diplomacy backs up earlier warnings by President Jiang that Taiwan must stick to the one-China policy and that a declaration of independence means war.

While the U.S. acknowledges that the island is part of China, it is also pledged to view an attack on it with "grave concern"--a purposely ambiguous statement that not only angers America's containment advocates but also frustrates Beijing. When Chinese officials felt out Nye in late 1995 about a U.S. reaction if China were to threaten Taiwan, he told them, "Nobody knows." In a later interview with TIME, he elaborated, saying, "There's less ambiguity here than meets the eye. But we don't want either side to rock the boat. We don't want Taiwan to declare independence, which would be the case if we gave it a blank check, and we don't want the Chinese to use aggressive tactics, which would be the case if we gave them a blank check. I told the Chinese that Americans are unpredictable: even if we said we wouldn't defend Taiwan, the U.S. Congress and the American public might change their minds. The moral of the story is, be very cautious. As you saw in 1950--when we said we weren't going to do anything in Korea--we were at war within the year."

The generals in Beijing, says Andrew Nien-Dzu Yang, a Taiwan specialist on the Chinese military, "don't want a confrontation with the U.S.," but some of Beijing's rhetoric about the U.S. commitment to Taiwan has had a harsh tone. Whether with pure bluster or a touch of psy-war, a member of the general staff late last year told Chas. W. Freeman, a former U.S. diplomat in Beijing and Assistant Secretary of Defense, that "America will not sacrifice Los Angeles to protect Taiwan." At this point China lacks the military capability to bring off a successful invasion of a well-defended Taiwan. Even if the Chinese had the amphibious equipment needed to move large numbers of troops across the 100-mile Taiwan Strait, U.S. military experts estimate that Beijing would have to deploy half a million men for a victorious assault and that casualties would be in the range of 50%. True, China could seriously damage Taiwan's economy with a naval blockade or sporadic missile strikes, but it would also suffer by losing foreign support, particularly the substantial Taiwanese investment on the mainland--$29 billion, by most estimates.

For now, war almost certainly is not on Beijing's mind. According to one Chinese official, "While we have contingency plans on Taiwan, we do not intend to invade Taiwan." As matters stand, the likely scenario is that Taiwan will have its election this Saturday; Lee will win and perhaps declare his commitment to reunification more explicitly, thereby allowing China to back off. Even Beijing agrees that reunification will not take place until some time in the future, when the societies on the two shores of the strait are more closely synchronized. The immediate crisis will pass, and the two sides will not have irreparably antagonized each other. But how will they fare at resolving the next conflict when it comes along, as it surely will? Comprehensive engagement may still be the right path, but it would yield better results if both sides also engaged in more mutual comprehension.

--With reporting by Lewis M. Simons and Mark Thompson/Washington

With reporting by LEWIS M. SIMONS AND MARK THOMPSON/WASHINGTON