The emergence of China as a great power and its large influence on the affairs of the Asia Pacific region are due to its size, location, and potential. If the economy continues to grow and the leadership deals successfully with pressing political and economic issues, China's scope of influence will extend throughout the globe. Dealing with China as a rising power is the most compelling of all of the many complex challenges facing the United States and its regional allies. Their stance and their actions and those of the other regional powers will be crucial elements of China's foreign and national security policy calculus.
China's leaders place priority on economic growth. However, they might deliberately risk or even sacrifice economic development if:
Beijing's primary objective is to see China take what it considers its rightful place as a major regional and global power: to set the regional political agenda and determine rather than react to major political and economic currents. To be a global superpower requires a world-class economy.
Economic development is also extremely important in the short term for social stability and the tenure of the leadership. Since 1992, the Chinese Communist Party (CCP) has staked its continued rule on the proposition that rising living standards will offset growing popular dissatisfaction with many of the negative phenomena, such as corruption, that have emerged as a corollary of rapid economic development. According to the official logic, the Chinese people will accept and embrace Beijing's ideology, Socialism with Chinese Characteristics, if they see that the system can guarantee a constantly improving livelihood and simultaneously enhance China's international position.
Whether China's drive toward development will propel it into the ranks of the most successful global economies remains an open question. The era of undisciplined economic growth may be coming to an end. Beijing has begun to control real growth in gross domestic product, which amounted to 9.8 percent in the first three quarters of 1995, the lowest rate in years. Similarly but tentatively, inflation decreased to about 13 percent in 1995 from about 25 percent in 1994. These figures suggest that the government has developed a fairly wide range of new, more effective economic control mechanisms, the lack of which had produced difficulties in the past.
Chinese economists continue to be concerned about the slow progress in developing a legal and judicial infrastructure to match and support the still-embryonic financial and physical infrastructures necessary to unify economic activity on a national scale. Without such infrastructures, growth could slow and eventually undermine further the already weak loyalty of China's population.
Another issue that will assume greater importance is energy shortfalls. Although China possesses abundant resources of coal, it lacks the capability to mine it, transport it to the places that need it, and locate and tap requisite new reserves of petroleum. In 1993 China became a net importer of energy. The only short-term recourse is to find reliable new sources of foreign supply. This means that in the future, Beijing will begin to compete with the United States, Japan, and other industrial nations to purchase oil on the world market, a development that risks producing price rises and all that implies for the relevant domestic economies, balance of trade problems, and global trade discipline. The need to cultivate reliable sources of energy supply also helps to explain Beijing's growing interest in establishing closer ties with Iran and Iraq, as well as China's continuing focus on the potentially petroleum-rich South China Sea.
The Chinese economy will probably continue its present upward trajectory into 2000, although growth rates will not match the levels of the 1990s. The leadership will continue its effort to develop and perfect crucial economic control mechanisms but is likely to make only a minimal effort to solve the problems related to the lack of legal and judicial infrastructures. In the longer term, Beijing can expect to encounter a series of economic peaks and troughs, and the leadership will have to adjust some of its foreign policy and military modernization priorities to account for fluctuations in the availability of crucial financial resources.
Among the challenges for China into the twenty-first century will be to:
Although the central issue will be succession politics, the outcome will depend upon how well the various candidates deal with the latter three concerns. Until all four issues are resolved, the Chinese government will continue to find it difficult to compromise or to adopt bold policies in the foreign policy arena.
Succession. Since Deng Xiaoping selected him as the core of the third generation in 1989, China's president and party secretary, Jiang Zemin, has done much to consolidate his position. He now occupies every important formal leadership position in the party, state, and military systems. More important, as his relations with the People's Liberation Army (PLA) illustrate, he is using his position to make the personnel and policy decisions that enable him to develop his own base of political power. The Fifteenth National Congress of the Chinese Communist Party scheduled for the fall of 1997 will probably witness the emplacement of a cadre of civilian and military officials who, formally at least, will owe their positions to Jiang. In this sense, it can be argued that the succession is complete, or nearly so.
However, despite his gains and the top echelon's commitment to avoiding a potentially destabilizing open battle for primacy, Jiang's long-term prospects are far from settled. Opponents regard him as unable to lead or to manage the many problems now facing China. After Deng's final passage from the scene, competition will intensify, and different contenders will maneuver for advantage for two to three years. During this period, the government will remain commensurately weak and therefore unable to undertake bold initiatives in either the domestic or the foreign policy spheres. Caution will prevail in both areas.
Regional Pressures. The victor in the succession struggle will be the individual who makes progress on the other issues confronting the CCP leadership. For example, Shanghai and Guangzhou continue to enjoy record-setting levels of economic growth and desire a commensurate degree of political autonomy. In contrast, other areas in the interior continue to press Beijing for special consideration in the allocation of development funds, and all areas want to retain a larger share of revenues for local application. Similarly, Tibet and the non-Han areas of western China seek more latitude for cultural expression, if not outright political autonomy. The result is more pressure on Beijing to strike a new bargain between the center and China's various regions. Yet concerns about releasing potentially uncontrollable divisive pressures make Beijing afraid to create such a bargain rapidly.
Privatization. Privatizing the debt-ridden state-owned sector of the economy is risky. Although they comprise a bare 15 percent of the total, all state-owned enterprises are centered in raw materials, transportation, and basic industries. The reform of China's financial system and restructuring and privatization of its state-owned enterprises are inextricably linked. Without the latter, the commercialization of China's financial sector, critical to the efficient deployment of the nation's investment resources and sustained growth, will be postponed indefinitely. Stated more simply, the economy cannot afford the burden of maintaining these inefficient industries and enterprises.
Reforming the state sector is more than an economic problem, however. A significant proportion of the CCP cadres, upon whom the government relies for support, work in the state economic sector. For this group to lose their positions would threaten the continued tenure of the CCP. More important, the loss of the safety net of the housing, education, medical care, and retirement income provided by the state-owned enterprises would further reduce the already low public confidence in the government and intensify the criticism of the CCP leadership that began in earnest in 1992, when the new economic policies were instituted. For the next few years or so, the leadership will probably continue to pay the economic costs involved and move only at a snail's pace in this critical policy area.
Legitimacy. The CCP leadership must restore its legitimacy in the minds of the Chinese people. It has been undermined by:
Each domestic issue is bound up with the larger question of political succession and affects the course of China's external relations. This pattern will persist at least until 1999. Until then, or until the issue of succession is resolved, China's leaders will not be inclined to compromise on what they regard as the core issues of foreign and national security policy.
Chinese foreign policy since 1980 shows no evidence of even the slightest commitment to revolutionary Marxism or an effort to spread Socialism. Instead of offering an alternative, China's leaders have opted for nationalism. As a result, the fragile legitimacy of the CCP leadership depends on the ability of Jiang and his colleagues to link China's domestic and particularly its foreign policies with the larger strategic objective of building the rich country and strong army that will deconstruct the perceived abuses of the past and form a basis for constructing a new image of China as a global power.
Into the twenty-first century Beijing will continue to:
The cultivation of nationalism will make it difficult for Beijing to compromise on many important foreign policy issues. For example, abundant evidence supports the view that the Chinese people widely supported Beijing's March 1996 exercises and missile tests in the Taiwan Strait, despite the palpable negative impact on Beijing's status within the region and on its relations with the United States. Overall, Jiang and the CCP gained much domestic political credit by what was billed as resolute action in defense of China's sovereignty and national integrity. This imperative applies in other areas as well. For example, owing to succession politics and domestic political challenges that threaten the Jiang leadership's legitimacy, the CCP cannot afford to appear to compromise on core issues that involve sovereignty or national prerogative, such as relations with Taiwan and Hong Kong or the status of China's territorial claims in the South China Sea. However, this will not be so in other, non-core areas. For example, although domestic political considerations will encourage the government to respond to requests for changes in its policies on human rights or nuclear proliferation with highly nationalistic statements about intrusions into China's internal affairs, the obvious benefits to China's development plans will undoubtedly encourage the leadership to find some ground for compromise.
Overall, the last years of the 1990s will see the continuation of Beijing's present pragmatic foreign and national security policies. Because of the importance of short- and long-term economic development, China's most important foreign policy priorities will be to maintain regional peace and stability and develop the broad network of economic ties that support them. The Jiang leadership will concentrate on diplomatic and economic means to maintain the present stable regional environment.
The Chinese also reason that, if they are forced to deal with a larger number of relatively more independent power centers, the United States will be less able to determine the flow of global and regional events. The development of multipolarity is therefore in China's strategic interest. Signs of this trend in Chinese strategic thinking are:
Disputed areas (in red) total an area slightly larger than New Mexico. Although Beijing and New Delhi are probably a long way from formally resolving their competing territorial claims, the threat of renewed conflict along the border is the lowest in decades. Both sides have decided to develop expanded political and economic relations and, in support of this effort, both armies have established an effective regime of confidence building and conflict-avoidance measures in the disputed areas.
China fears that Tokyo will translate its economic power into political and military power that will block or challenge China's great power ambitions and threaten its security. Bilateral relations worsened in 1996 as a result of Beijing's refusal (in Japanese eyes) to respond to Tokyo's concerns about China's nuclear testing program, continuing difficulties over disputed ownership of the Senkaku Islands, and PLA exercises and missile tests in the Taiwan Strait. Another factor was Chinese fear that the new generation of Japanese political leaders is less sensitive about the legacy of Japan's imperial past than its elders and will seek a more active international role for Tokyo at China's expense.
China's goal will be to prevent Japan from rearming or adopting an explicitly anti-Chinese stance and, if that fails, to dilute the effectiveness of the effort or neutralize it. However, because China has little leverage over Japan and because, in Beijing's view, the U.S.-Japan alliance helps restrain Japan, in the late 1990s Beijing will continue to play on regional fears about the possible recrudescence of Japanese militarism in an effort to limit Tokyo's ability to expand its activities and influence within the region. It will continue to play the so-called "history card."
Of direct concern to the United States will be Beijing's effort to interpret the redefinition of the U.S.-Japan security alliance as an attempt to establish joint hegemony throughout the Asia Pacific region. China will oppose virtually every aspect of U.S. security relations with Japan, from the redefinition of the Defense Cooperation Guidelines, to FSX production, to discussions about Theater Missile Defense (TMD), on the grounds that they are all intended to cement the leading position of the regional superpowers at the expense of the remainder of the region. It will also insist that the U.S. alliance with Japan is designed solely to contain China and that, by upgrading and expanding the scope of the alliance, the U.S. and Japan are drawing lines among the regional powers in ways that threaten regional stability.
China's strategic nuclear forces provide a credible deterrent. The People's Liberation Army (PLA) possesses the world's third-largest nuclear weapons arsenal, including more than 80 intermediate-range ballistic missiles and more than 20 intercontinental ballistic missiles (ICBMs). The Air Force has 180 nuclear-capable bombers, and the Navy deploys one nuclear submarine armed with 12 ballistic missiles. By the end of the century, China might be deploying accurate, mobile, solid-fuel ICBMs. Beijing is also expected to field ICBMs with multiple independently targeted warheads by 2010.
Despite these achievements, China's strategic nuclear arsenal does not begin to match those of the United States and Russia and will not do so through the first decade of the next century, even if the rumors about Russian transfers of SA18-associated technologies to China prove true. Although Beijing is clearly committed to modernizing and perfecting its strategic nuclear forces, China's long-term thinking about the use of nuclear weapons and constraints on scarce resources will limit Beijing to a second-strike, countervalue nuclear doctrine.
The PLA can inflict great damage in limited campaigns against any of its immediate neighbors but is years away from being able to project sustained military force at any distance from China's borders. China lacks the capability either to produce or to purchase new systems in the quantities necessary, and the PLA in 1996 was probably two decades away from challenging or holding its own against a modern military force.
Since the early 1980s, Beijing's military modernization program has produced a self-sustaining cadre of highly professional officers. The effort to procure and field modern weapons is proceeding relatively slowly. The PLA is also slowly developing the doctrinal concepts required for high-technology warfare and has identified a number of key mission areas and weapons systems for future development:
As a result, most of China's 24 Group Armies now have designated rapid-deployment units comprising some 18 to 20 divisions. There is also a force of some 5,000 Marines. These formations are equipped with the PLA's most modern ground weapons and are at the leading edge of training reform. While such crack units would be effective in operations in the South China Sea, their small size, their dispersal throughout China, and a lack of lift limit their effectiveness for large-scale operations such as an invasion of Taiwan.
To address the problems of strategic lift, the Air Force acquired ten Ilyushin heavy-transport aircraft from Russia and in 1995 began to integrate long-range transport operations into the training cycle. However, the small number of suitable aircraft will make it difficult to conduct training on a scale large enough to make a difference. The Air Force has also acquired one squadron of Su27 fighter aircraft and in 1995 signed an agreement with Russia for an additional squadron and production rights. Although the Su27 provides a clear qualitative gain, limitations on pilot skills and the lack of aerial refueling capability will deny the PLA their full benefit.
The PLA Navy is replacing or improving its old surface combatants and its submarines and has acquired two of the four Kilo Class submarines contracted for with Russia. However, these improvements will not address the Navy's fundamental problem: its inability to mount sustained, coordinated operations and to protect itself while doing so.
Critical indicators for the future include:
Taiwan-China relations will alternate between periods of stability and potential crisis. The tension in cross-strait relations appeared to have moderated in late 1996 as each side waited for the other to make a move. Although Taiwan president Lee Teng-hui asserted in his May 20, 1996, inaugural address that independence for Taiwan is "impossible and unnecessary" and mentioned his willingness to travel to China, both statements were carefully hedged and grounded on Taipei's past positions, diluting their value in Beijing's eyes. Nor did Lee provide any other indication of future conciliatory moves by his government, which is in place until 2001. In a restrained public reaction to the speech, authoritative Chinese media reported the statements of "the leader of the Taiwan authorities," noted that they contained nothing new, and reaffirmed the necessity for an end to Taipei's "splittist" behavior. Neither side is likely to undertake any major initiative until well into 1997.
Taiwan's quest for identity and international status will continue to vex Beijing-Taipei and Beijing-U.S. relations. Continuing political evolution and economic necessity will increase the pressure on Taipei to participate more visibly in international organizations, and China will not compromise on the issue of eventual reunification. Succession politics will make even a compromise that stops short of independence difficult to achieve. Because nationalism is involved, evolution in China toward a more open political system will not cause pressure from the mainland to abate. At most, a more open Chinese regime will only help reduce Taiwan resistance. A final resolution is decades away.
During a period of stress, China may use military instruments against Taiwan. Although China and Taiwan will wish to avoid conflict, China's ultimate concern is that, if allowed to progress beyond certain, unspecified limits, Taiwan's sense of separateness will evolve into an unsurmountable obstacle to reunification. Beijing's March 1996 exercises and missile tests in the Taiwan Strait aimed to limit Taiwan's behavior, not to attack Taiwan or any of the islands under its control.
At a minimum, the PLA would repeat the military posturing of March 1996. Other scenarios to consider are.
Full-Scale Invasion. The PLA cannot yet transport a credible invasion force to Taiwan. Invasion is unlikely for the following reasons:
Naval Blockade. Although the PLA Navy cannot coordinate the air, surface, and submarine dimensions of a naval blockade, the reaction to the PLA's March 1996 exercises and missile tests suggests that even a partly effective blockade can unsettle Taiwan's economic life.
Air Operations. Possibly in concert with a naval blockade, amphibious operations, missile strikes against Taiwan-held islands, or missile strikes against Taiwan itself, air operations provide a third option. Taipei's qualitative advantage would help offset the PLA's numerical superiority, but air operations would cause great damage, eventually enable China to achieve air superiority, and could force Taipei into a political settlement on China's terms unless Taiwan were to receive external assistance.
China's military posturing during 1995 and 1996 demonstrates that any use of the PLA will provoke both internal and regional demands for a U.S. response. The U.S. deployment of two aircraft carrier battle groups to the Taiwan Strait area in March 1996 set a precedent that will be impossible to ignore in the future. Moreover, the Taiwan Relations Act requires that "the United States make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability."
Chances are better than even that the United States will have to determine whether to become involved in a Taiwan-China conflict. Washington will also be required to choose an appropriate mix of military and political means. Although a force-on-force confrontation is not likely, the United States will at least be called on to provide a wide range of logistical and combat support to the armed forces of Taiwan. If it were to do so, relations with China would suffer accordingly.
China has conflicting territorial claims in the Spratly Archipelago with Brunei, Malaysia, the Philippines, and Vietnam. In addition, Chinese governments have historically defined the entire subregion as an area of special interest for Chinese security.
Conflict in the South China Sea will occur only if one or more of the Southeast Asian disputants attempts to alter the status quo. As with Taiwan, Beijing will probably not opt for military instruments to settle its ownership claims by 2001. In military terms, although it can deter any similarly unlikely effort by Brunei, Malaysia, the Philippines, or Vietnam to challenge Chinese claims, the PLA cannot yet seize and hold territories in the South China Sea. At some point during operations in the Spratlys, its forces would become vulnerable to significant air and sea counterattack by regional forces. Nonetheless, Beijing will probably continue to test the will of the other claimants, particularly Vietnam, by continuing to refuse to discuss the issue of sovereignty and at times reinforcing its claims by improving existing facilities and, in a replication of actions on Mischief Reef, by constructing new ones.
A conflict in the South China Sea would directly affect all members of the Association of Southeast Asian Nations (ASEAN) and threaten Japan's and the Republic of Korea's vital sea lines of communication. The United States has declared that it takes no position on the issue of ownership but has also reaffirmed its commitment to maintaining freedom of navigation in the South China Sea. If conflict were to occur, the United States would become involved in limited operations designed to keep the sea lanes open.
ASEAN and the ASEAN Regional Forum (ARF) on security issues accept the need to maintain a U.S. military presence within the subregion. Beijing is concerned, accordingly, that anti-China sentiment not lead to the consolidation of ASEAN unity and will wish to thwart any U.S. attempt to enhance its position there at China's expense.
Beijing's effort to accomplish its goals will be qualified by two important factors:
In these circumstances, the Chinese will:
Beijing will try to improve its position on the Korean peninsula to reduce U.S. influence when the crisis there ends. As long as a credible North Korean military threat exists, the U.S. troop presence on the Korean peninsula serves Chinese interests:
China shares the view that the balance of power on the peninsula will shift permanently towards Seoul and, as a result, the likelihood of conflict on the Korean peninsula will soon begin to diminish. Suspicious as it is of perceived U.S. containment intentions, China is likely to see decreasing benefit in a continued U.S. military presence on the peninsula after the threat from the North finally recedes. The long-term goals will be to reduce U.S. influence and eventually replace U.S. influence with its own.
Since 1993, Beijing has systematically developed a broad network of economic ties with South Korea, the most visible example in the political sphere being Jiang Zemin's visit to Seoul in November 1995. Although contacts thus far emphasize trade and economic ties, credible evidence supports the assertion that both sides are actively building a substantial dialogue on security-related issues as well. Ties between Beijing and Seoul will continue to develop in the late 1990s and almost certainly will include contacts between the two military establishments. The most important elements of Beijing's effort will be attempts to:
For China's leaders, to conduct relations with the United States is to confront a paradox. Development imperatives dictate broad and close interaction, while perceived longer-term strategic imperatives produce suspicion and incipient competition. Beijing's present policies clearly indicate that its leaders are guided in the main by the imperatives of development. Despite frictions over trade, intellectual property, proliferation, human rights, and even Taiwan, Beijing shows no evidence of any willingness to allow its ties with Washington to collapse or evolve towards military conflict. Nor, with the exception of U.S. support for Taiwan independence, is it likely to find a reason to do so at any time during the next decade or so.
On the other hand, continuing suspicion will mean that the present cyclical pattern of bilateral ties will continue. Issues such as accession to the World Trade Organization (WTO), the sale of nuclear materials to Pakistan, and intellectual property rights and safeguards, if they are resolved, will be replaced by other problems of a similarly vexing nature. Also, convinced as it is of Washington's intention to maintain leverages over China, in the form of the redefined alliance with Japan, a continuing presence on the Korean peninsula, and strong ties with ASEAN--that is, convinced as it is that Washington will practice "Soft Containment " or "Engagement with Elements of Containment,"--Beijing will, in the next few years, become increasingly willing to manifest its concerns about the longer term. In the absence of any strategic accord with Washington, it can and it will begin to try to better position itself within the region as a hedge against an uncertain future. Indeed, its actions with respect to Japan, the two Koreas, and Southeast Asia indicate that it has already begun to do so.
The next few years will see a new element in Beijing's relations with the United States. While Beijing will continue to seek the benefit of economic and other ties, the Chinese will also try to thwart U.S. efforts to consolidate what Beijing perceives to be its modified containment strategy. Because China is at present strategically and materially disadvantaged relative to the United States, direct competition, much less military confrontation will be carefully avoided. Rather, the Chinese will mount a low-intensity effort to compete strategically with the United States, an effort that is carefully controlled to avoid escalation to crisis. As noted, this effort will focus on the Asia Pacific region, but it will also at times extend to Western Europe and the Middle East as well.
Within the decade, China could become a power that is a peer to the U.S. in the East Asian theater. Moreover, as its comprehensive national strength continues to develop over the decade, Beijing might play the role of theater peer with more assurance than is presently the case. A more capable and confident China may prove to be more obdurate in its pursuit of issues that touch upon sovereignty and national reunification, such as Taiwan or the South China Sea. In these circumstances, a miscalculation by Beijing of either Taipei's or Washington's intentions could produce a conflict into which the United States might be drawn. Prudence would dictate that such an eventuality be considered by U.S. force planners.
Unhindered access to the markets of a stable and prosperous Asia is essential to the continuing prosperity of the United States. The tenor of U.S. relations with China affects regional stability and, therefore, economic prosperity. Adversarial, estranged, hostile, or even highly competitive relations create or intensify fault lines within the Asia Pacific as the other regional powers struggle to adjust to the pressures produced by Washington and Beijing.
If the U.S. is to maintain its position within the Asia Pacific region, then there is also an interest in ensuring that China's growing comprehensive national strength is not directed against the United States in the future. It is in the American interest to dissuade China from engaging in military/strategic competition with the United States or from directly challenging the U.S. regional position.
Whereas the U.S. has at times placed high priority on the state of human rights inside China, a broad consensus seems to have developed in U.S. government circles that human rights can best be advanced in the context of promoting economic development and general good relations.
The United States and China will probably not enter into conflict by 2006 or even 2016. But, without a long-term focus, the United States will not dissuade China from directing its growing comprehensive national strength into strategic competition, and Washington will not be able to maintain its position within the Asia Pacific region.
A successful approach will establish a strategic framework that will guide and discipline bilateral ties. Such a framework would strike a balance between flexibility and the need to safeguard vital national interests. If the United States views and treats China as a hostile or potentially hostile power, Beijing is likely to act in that way in the future. On the other hand, an effective approach will include realistic expectations for Chinese behavior and appropriate benchmarks for judging Beijing's policies, based on an ordered sense of national interests and strategic priorities.
U.S. policy towards China combines aspects of three approaches to dissuasion--approaches which are not always mutually compatible:
Elements of the first approach clearly predominate in the present U.S. policy mix. This has the potential to produce significant short-term improvement. But the recent history of U.S./China relations suggests that the utility of this approach for dissuasion over the longer term remains open to question. It may be possible to deal with present irritants, and this might build some confidence for the future. But the potential for continuing alternations between positive and negative poles will remain. The second approach supports the first, and, with its emphasis on building a strategic framework based on shared or complementary interests, it appears to offer some potential for stabilizing bilateral ties. The third approach will not dissuade China at all. Rather, it will merely postpone Beijing's issuing of the challenge.
It is worth noting that all three approaches assume a continuing U.S. military presence within the region as well as strong security relations with its alliance partners and friends. The first two acknowledge Beijing's sensitivities on this point, but they do not suggest that U.S. forward deployments are in any sense negotiable. Rather, they affirm the centrality of such deployments to American vital interests and would develop interactions between the two military establishments as a means of dealing with Chinese concerns. A robust military force and an active dialogue on security issues and concerns are viewed as key elements in any strategy of dissuasion.
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