CENTRAL ISSUES

       Attempting to provide a brief, yet sound, analysis of U.S.-China relations is always a challenge. More than any other major diplomatic relationship, this one seems to flirt with extremes. Witness the virtual roller-coaster ride of just the last three years: from near military confrontation over Taiwan in 1996, to two presidential summits and "constructive strategic partnership" in 1997-98, to 1999's collection of scandals, allegations, and miscalculations. But while the overall atmosphere seems to flash back and forth between hot and cold, a fairly consistent agenda has emerged that fits neatly into three categories of issues.

       Security. The bulk of the U.S. security agenda in dealing with China attempts to achieve two goals: mitigate instability caused by China's military modernization and secure China's cooperation in maintaining peace and stability on the Korean peninsula, the Taiwan Strait, the South China Sea, and South Asia. To this end, the Clinton Administration has pursued a policy of "comprehensive engagement" with "constructive strategic partnership" as its ultimate aim. Congressional critics of the administration's policy have focused their concern on the need to deploy missile defense systems in Asia in response to China's missile modernization, and the need to control the export of sensitive technologies to China to avoid accelerating China's military modernization process. Critics also urge the administration to take care that Taiwan is not denied access to modern and effective hardware and technology to care for its self-defense needs.

       Commerce. America's commercial agenda with China is as challenging as it is strait-forward. The U.S. seeks to bring China's commercial practices more in line with international rules and norms, and to foster an environment within China that is conducive to the expansion of internationally competitive private enterprise. Through negotiation, the U.S. hopes to lower barriers to trade and investment. Through cooperation, the U.S. hopes to work together to build a strong legal infrastructure that protects private property rights, commercial contracts, and the integrity of essential financial institutions. The Clinton Administration has tried to meet these goals by maintaining a normal trade relationship (extending MFN) and pursuing a tough negotiating agenda through the U.S. Trade Representative. Critics charge that the administration's efforts have fallen short of expectations - China's trade barriers remain too high while the U.S. trade deficit with China continues to soar.

       Politics. The U.S. political agenda in China is to foster the stable development of a society more tolerant of dissent, and more responsive to the governed. This agenda has been the source of great controversy. China vigorously objects to U.S. reports that catalogue systematic human rights abuses in China and efforts to condemn China's human rights practices at the UN Human Rights Commission. The Clinton Administration has attempted to advance this agenda by establishing a formal dialogue on human rights, endorsing legislative and judicial exchange programs, and by encouraging the expansion of grassroots democracy. Critics charge that the administration has failed to give sufficient priority to human rights concerns and has favored dialogue over action in response to China's continued abuses.

CRITIQUE

       Security. Since the end of the cold war, the U.S. security relationship with China has changed significantly. Once a strategic partner in containing Soviet expansionism, China's military is viewed much more critically and warily by U.S. strategists today. With no common foe, China's military modernization raises concerns about China's intentions and capabilities. Beijing's insistence on threatening to use force against Taiwan, and Washington's willingness to sell arms to Taiwan, is just one example of the lack of shared vision between the two sides on significant security issues. Disagreements over other issues like missile defense, espionage, and technology transfer dominate current news coverage and demonstrate the lack of trust and common purpose on security matters.

       Commerce. Investment and trade are elements of overall U.S.-China relations that have changed least over the last 20 years. The U.S. has consistently viewed China's gradual market reforms as an opportunity to expand American exports and to promote mutually beneficial interaction between our two peoples. Since 1980 the U.S. has annually extended normal trade relations (formerly most-favored nation) trade status to China, and began in 1986 to negotiate China's accession to the General Agreement on Tariffs and Trade (now the World Trade Organization). But where the end of the cold war changed U.S. security views towards China, it was the Tiananmen Square crackdown ten years ago on June 4th that brought uncertainty to commercial relations. China's entry to the World Trade Organization continues to falter and China's trade status, while annually renewed by the President, must endure highly charged Congressional challenges to alter China's status. To move ahead, both sides need to focus on a common agenda of building a free market infrastructure within China - emphasizing the rule of law, market-based banking, and the free flow of information (transparency).

       Politics. Perhaps the most underdeveloped aspect of U.S.-China relations, the political relationship has never been easy. Summitry (Nixon-Mao, Carter-Deng, Clinton-Jiang) puts a happy face on a tenuous relationship. Both sides fundamentally disagree on ideology and political organization (communism/socialism vs. democracy). Americans care deeply about the fate of democracy and dissent in China, Taiwan, and Hong Kong. By contrast, China puts a premium on economic development and national unity. While a common diplomatic agenda is a worthy enterprise, both sides should readily recognize the limits to such a partnership posed by competing principles of political organization. Until political values become more similar (i.e. China becomes more democratic), this relationship will not be strong and visions of partnership will remain overly optimistic.

       Beijing and Washington share responsibility for the lack of progress in this relationship. Beijing is responsible for continuing to crush organized dissent, intruding into religious affairs, and developing a provocative military posture and tone towards Taiwan, the South China Sea, and other U.S. interests. Washington -- primarily the Clinton Administration -- is responsible for failing to safeguard American national security secrets, overselling the potential benefits of its "constructive engagement" policy, and failing to build consensus in Congress and the general public in support of its goals.

       The Clinton Administration's policy is plagued with the following flaws:

• The Administration overstates the pace of change and potential for freedom and democracy in China. The U.S. should see China for what it is, not just what the U.S. would like it to be. U.S. policy should begin with an end in mind, but must emphasize current challenges and gradual, modest progress. Overreaching rhetoric from the Administration, like that of President Clinton while in China last June, has left its policy vulnerable to the truth.

• The President continues to entertain a false debate, leaving his critics unanswered and his allies unsatisfied. The President continually asserts that the only alternative to his policy of "constructive engagement" leading toward a "constructive strategic partnership" is a policy of isolation and confrontation. The real debate is over how to deal with China, not whether to deal with China.

• Constructive engagement with China, destructive estrangement with Congress. President Clinton has done more over the last four years to improve relations with the Communist Party of China than he has with his co-equal branch of government in the U.S. Even members of the President's own party feel that their interests are ignored or overlooked in the President's dealings with China. The President cannot blame the Congress for hindering his China agenda if he fails to engage their interests at least as earnestly as he does Beijing's.

• Engagement with China translates into neglect for others. The Administration's rationale for "engaging" China sets a peculiar standard. Since China is a populous potential market, dangerous, and a potentially destabilizing force, it requires "engagement." But India is populous and potentially dangerous, in addition to being the world's largest democracy, and what does it get? Sanctions. China launches missiles toward Taiwan and gets engagement. North Korea builds secret nuclear facilities and gets foreign aid. What does this approach mean for the interests of U.S. friends and allies? Neglect.

       Since May 7, when NATO forces mistakenly targeted and destroyed the Chinese Embassy in Belgrade, experts in and out of government have tried to assess what damage this tragic accident will cause in an already troubled relationship with China. When righteous indignation in China spilled over into government endorsed protests, destroying embassy property and holding our ambassador hostage in the embassy for nearly a week, it seemed that the bombing itself was responsible for sending U.S.-China relations into yet another tailspin. Unfortunately, however, this recent episode is merely a symptom of a dysfunctional relationship littered with mistakes and miscalculations.

       Prior to the bombing, U.S. relations with China were already riddled with difficulty. American national security was compromised by unwise, if not unlawful, transfers of technology to China via commercial transactions and espionage. China had amassed a significant missile arsenal in the region directly opposite Taiwan, and a campaign to destroy the fledgling China Democracy Party was well underway. Most recently, the two sides failed to reach an agreement on China's entry into the World Trade Organization during Premier Zhu Rongji's visit to Washington last month, after 13 years of negotiations.

       Deep currents of distrust have percolated beneath the surface for years, as leaders in Washington and Beijing struggle to put the best face on a troubled relationship. There is widespread belief within China that the United States, fearful of China's rise and jealous of its own power, is engaged in a conspiracy to hinder China's development, split the nation apart, and sink its society into chaos. Many in the United States see China's government as based on dangerously flawed principles and bent on staying in power by any means necessary - whether using force against its own people or provoking external conflict to fabricate domestic unity. Unfortunately, whether true or false, both of these beliefs founded on distrust are strengthened by the NATO bombing and China's reaction to the same.

       In the aftermath of NATO's tragic error and the failed summit with China's Premier, the Administration may be tempted to make concessions to China in order to revive hope for their constructive strategic partnership. The United States should not respond to an isolated accident by compromising a policy based on a pattern of behavior. It is clear that China would like to use this tragic bombing to get the U.S. to back away from its scrutiny and criticism of China's ignominious pattern of human rights, military, and commercial behavior. Indeed, Beijing cut off human rights and military exchanges with the U.S. in protest, and has resisted further trade concessions since President Clinton turned away Premier Zhu's offer last month.

TO PROTECT AND PROMOTE FREEDOM

       The U.S. should resist the temptation to offer concessions to Beijing, and instead focus its efforts on ways to protect and expand freedom in China and throughout Asia. The U.S. must remain vigilant in deterring China, and any other power, from using the threat or exercise of military force to achieve political objectives. The U.S. must also continue to assert its right, and that of its allies, to defend itself against missile attack. Beijing will likely push the Administration to pledge not to assist Taiwan in developing its own missile defense. Taiwan's freedom and security must not be compromised in the rush to apologize to Beijing.

       Secondary to these security interests is an emerging economic and political agenda waiting to be implemented. Widespread suffering resulting from the Asian financial crisis has created a new openness throughout the region to consider international cooperation in reforming fundamental domestic institutions. The financial crisis proved that certain domestic institutions are critical to survival in an open and competitive world. Laws must govern the behavior of all, leaders and followers alike, and must be enforced to guarantee contracts and the protection of personal property. Competitive markets for control must function within an economy in order to break the bonds of corruption between bankers, businessmen, and bureaucrats. Transparency and free flow of information are necessary to send markets proper signals and to guard against abrupt and unexpected economic disruptions.

       Reforms in these areas will make China more prosperous and stable, but will also increase freedom and openness. An effective legal system protects civil as well as commercial rights. Competitive markets for corporate control have obvious implications for political control. And freedom of information is not only vital to properly functioning markets, it is the oxygen of democracy. The Administration should continue to press for progress in these areas as part of China's membership in the World Trade Organization. This is an agenda worthy of the world's sole remaining superpower.

       While Americans should express regret, and the Chinese outrage, over the tragedy in Belgrade, it is important that the U.S. not allow short-term responsibility to undermine long-term responsibility. In the wake of this tragedy, the Clinton Administration has an opportunity to recognize its policy errors and adjust course for future success. Ultimately, short-term contrition is less important than building a China policy fosters developments within China that allow freedom, opportunity, and civil society flourish.

Note: The Heritage Foundation is a private, non-profit public policy research organization in Washington, DC. The views expressed in this paper are those of the author and do not necessarily reflect the views of The Heritage Foundation.