U.S.-China Relations in the Twenty-First Century: Final Report of the American Assembly

American Assembly at Columbia University

November 1996

At the close of their discussions, the participants in the Eighty-ninth American Assembly, on "China/U.S. Relations in theTwenty-First Century: Fostering Cooperation, Preventing Conflict,"at Arden House, Harriman, New York, November 14-17, 1996, reviewed as a group the following statement. This statement represents general agreement; however, no one was asked to sign it. Furthermore, it should be understood that not everyone agreed with all of it.

Sharing a Common Future: Building Cooperation, Reducing Differences

China's emergence as a great power in the next century will redefine the world's economic, political, and environmental dynamics. An active U.S. policy is needed to meet that challenge. Imagine by way of illustration two possible dramatic alternatives for the year 2010.

Scenario One : U.S. exports to China are booming, as is Chinese trade with the United States; large groups of Chinese and Americans from all circles of life are in close contact; China and the United States are cooperating closely ininternational organizations aimed at controlling proliferation and protecting human rights; U.S. firms have supplied large quantities of capital and technology to China's efforts to clean up its air and water; Shanghai has joined Hong Kong as a major international center of commerce and culture; and direct trade and cultural relations across the Taiwan Strait have brought new levels of security and prosperity to both Taiwan and the China mainland. The relaxed atmosphere has led to the steady liberalization of the Chinese political system, especially at the local level.

Scenario Two : U.S. troops in Asia have been significantly augmented to respond to growing Chinese military threats. As Chinese and U.S. warships confront one another in the Pacific, the Japanese public is clamoring to expand its military and debating whether to go nuclear; huge Chinese purchases for its strategic petroleum reserve have destabilized world oil markets, a tthe same time as large Chinese weapons sales to Iran have raised fearsabout an Iranian threat to the security of oil supplies in the Persian Gulf; Hong Kong has become an economic backwater from which largenumbers of skilled people and large quantities of capital have fled. Political repression within China has intensified.

While these scenarios are only illustrative, the stark differences between them make clear how high are the stakes and how grave the risks for both China and theUnited States. These include the possibility of a new cold war in Asia that would put at risk China's economic modernization efforts and undermine the attempt to balance the U.S.budget, the loss of critical cooperation on a variety of global and regional issues, and a strain on the East Asian security involvement to the detriment of all countries in the region.

Yet, while the stakes are high, Sino-American relations have not been treated with commensurate seriousness. High level contacts have been in frequent. Official exchanges have often dwelt principally on reciprocal litanies of complaint. Mutual distrust has been the result. The United States adopted an approach of engagement, yet Beijing worries that the U.S. intent is to weaken China internally and to isolate it internationally. China seeks the benefits of international cooperation and trade, yet it appears in different to some international norms. United States' positive influence on China is limited, but a lack of proper attention could propel us toward the dire Scenario Two. Disagreements and Misperceptions

The United States and China have real differences. The United States as an established power has helped shape the world order. China, as a rising power, has less commitment to and less experience with existing rules.

The United States is a pluralistic nation, federalist in structure, shaped by immigrants who came here seeking freedom. China, ethnically more homogeneous, has a long tradition of centralism, and because of painful experiences in its contacts with the West, is preoccupied with internal stability and sovereignty.

But there are also serious misperceptions. Few Americans have an accurate understanding of the complexity of the internal situation in China or of the extraordinary pace and consequences of its rapid change. The images of the June 1989 killings around Tiananmen Square remain more vivid for most Americans than the transformation that economic reforms are helping to bring about in the lives of most Chinese, including the hundreds of millions of people who have been lifted out of poverty. Few Americans are aware, moreover, that this economic growth has contributed to a rise in decentralization, grassroots political reform, and expression of diverse opinion; nor do they realize that despite continued repression of political dissidents, independent union organizers, and restriction of religious freedom, ordinary Chinese enjoy much greater freedom of movement, job choice, life style, and access to information.

Few Chinese, on the other hand, have an adequate understanding of the enormous good will that Americans feel toward their country or appreciate the degree to which the United States would welcome China as a strong and prosperous partner in building a stable international order. Neither country adequately understands the relevant political dynamics of the other. Facing Historic Transitions: Post-Cold War and Post-Deng Xiaoping

Both the United States and China find themselves at points of historic transition that complicate the effort to develop fruitful relations with one another:

With the end of the cold war, the U.S. government has been heavily preoccupied with long-neglected domestic issues and has not yet developed a coherent policy for coping with the challenges of the post-cold war world. Many Americans no longer see any need for the United States to continue to play a leadershiprole in the world, nor to work with governments of whose policies it disapproves.

As China approaches the post-Deng Xiaoping era, its government is in the throes of a political succession. New leaders--technocrats who lack the strong broad political base of their powerful predecessors--are emerging. Reforms of banking, state enterprises, government finance,and the welfare system are still in experimental stages. Nationalism and xenophobia are on the rise. China desires U.S. support and cooperation in its modernization efforts, yet a history of humiliation at Western hands, combined with growing strength makes China extremely sensitive to any hint of condescension or reluctance to accord it the status it considers its due.

In this situation, the United States needs to be clear about our long-term national interests and how their fulfillment can be advanced or impeded by China's policies.

• The United States seeks a generally free global trade regime. Yet, no effort to regulate global trade and investment can succeed if China, the world's fastest growing economy, is not a part of it. No sustainable improvement of human rights is likely unless China's economy is increasingly prosperous and open to the outside world. China wants access to the U.S. market, investment funds, and technology. The United States wants access to China's market, the greater predictability that the rule of law and increased transparency would afford, and Beijing's help in refining and enforcing equitable, multilateral rules for the global economy. In this realm converging interests abound, yet disputes have proliferated.
• Preventing the proliferation of weapons of mass destruction is a major security interest in the post-cold wa rworld and a focus of U.S. policy. No attempt to regulate their transfer--not least the transfer of those from the former Soviet Union--can succeed without China's active involvement. Beijing's ratification of the Non-Proliferation Treaty and its recent commitment to the Comprehensive Test Ban are encouraging signs; periodic reports of nuclear technology and other transfers to Iran and Pakistan are disquieting and threaten to trigger sanctions underexisting U.S. law.
• The United States cannot expect to maintain a stable equilibrium and avoid an arms race in Asia unless potential conflicts in Korea, the Taiwan Strait, and disputed territories in the SouthChina Sea are resolved peacefully--a task in which Beijing's cooperation is indispensable. More broadly, preserving peace in the Asia Pacific region requires cooperation among all powers on emerging issues. Thus a positive relationship between China and the other powers of the region, including the United States, is indispensable.

The U.S. role in the Asian balance depends heavily upon the preservation of our alliances with Japan, South Korea, and others. The United States is currently adapting the contours of our defense cooperation with Japan and Korea to post-coldwar security and political circumstances. Consultations with Beijing will be required to assure that such adjustments are properly recognized as maintaining important elements of regional stability rather than harbingers of a renewed effort to contain or encircle China.

• The United States has an abiding interest in human rights and political pluralism.These are values on which our nation was founded, and they remain a source of unity and strength. We cannot abandon the affirmation of these values as an integral element of our foreign policy. Chinese officials often express resentment at what they regard as our interference in their domestic affairs. Yet there is widespread recognition that economic growth may often generate pressures for political pluralism. The Chinese government has welcomed efforts by foreign nongovernmental organizations (NGOs) to strengthen the legal system, establish the social infrastructure necessary for the rule of law, and to establish more transparent rules to govern trade and investment. Greater tolerance for pluralism and the development of a more responsive government would further narrow the chasm that separates the United States from China in this domain. p
• Regional and global attempts to address environmental problems would be ineffective without China's active cooperation. China's rapid economic growth is fueling adramatic rise in its energy demands. China is second only to the United States as the world's largest emitter of greenhouse gases.Furthermore, China cannot successfully combat international drug trafficking and organized crime activities in its territory, nor illegal immigration without effective collaboration between the United States and China.
• Building cooperation on many other transnational issues will also require Beijing's assistance, since it plays a significant role in a host of international organizations and possesses a veto in the UN Security Council.

A renewed dialogue between Beijing and Washington should be directed primarily at exploring ways of enhancing cooperation and reducing differences in all these spheres. Developing a More Cooperative Overall Relationship

We have a new window of opportunity. The American election is over. Visits of Secretary of State Warren Christopher and National Security Advisor Anthony Lake to China in 1996 and the visit of Chinese Defense Minister Chi Haotian to Washington in December have prepared the way for possible reciprocal state visits--the first since Tiananmen--in 1997. Tensions in the Taiwan Strait have eased, and the leaders of both countries have expressed their desire to cooperate and to fashion a new framework for their relations, in order to expand cooperation and limit differences.

In dealing with China, our highest priority should be to establish a new overall relationship of greater mutual confidence, grounded on a new post-cold war rationale of working together on global, regional, and bilateral issues in a pragmatic way that advances our mutual interests. By viewing individual problems within a broader context, it should become easier to find successful solutions and to reduce the remaining differences. If the United States can focus first on building cooperation in areas where our interests converge, we may be able to reduce suspicions and increase mutual confidence so that it will become easier to make progress in solving more difficult problems.

The growth of trade between the two countries and increased investments by U.S. companies in China provide some of the foundations for building the new relationship. Care must be taken to remove uncertainties and impediments to their growth.

Building this overall relationship will require exchanges of high level officials to engage in comprehensive and constructive private discussions about their respective views of the world. The Unites States should affirm its interest in a prosperous and stable China and emphasize that it prefers to work with a China that is becoming strong rather than to pursue futile illusions that it can somehow keep China weak. The United States should set a proper tone for this relationship by treating China and its leaders with the status appropriate to a major power. The United States should support China's participation at meetings of the G-7 in the same status as Russia, and should encourage Chinese membership and active participation in international organizations.

At the same time, the United States should make it clear that for China to become a true international leader--commensurate with its past history and future importance--it is essential for China to respect and support international norms of behavior. The United States should make it clear that it expects reciprocity as it attempts to accommodate China's needs; the extent to which the United States can accommodate China's needs will depend on the extent to which China takes its concerns into account. Taiwan

For more than four decades, issues relating to Taiwan have been the most difficult and potentially explosive issues in U.S.-China relations. They remain the principal issues that, in the worst case, could cause open conflict.

Stability in the region depends on gradual, mutual accommodation between the People's Republic of China (PRC) and Taiwan. The United States should continue to stress to the PRC that Asian stability and Sino-American relations are founded on a peaceful approach to the resolution of this issue. The United States should:

• make clear to Taiwan that the United States will oppose unilateral efforts to seek independence, and
• give high priority to restoring increasingly productive cross-strait relations.

To this end, the United States should adhere to the Shanghai Communique, the normalization communique on arms sales to Taiwan. At the same time, the United States must retain a comprehensive, unofficial relationship with Taiwan as provided by the Taiwan Relations Act. This framework enables Taiwan to sustain democracy, prosperity, and security in an atmosphere free of coercion. Regional Security Issues

Even as the Asia-Pacific region enjoys unprecedented prosperity made possible by the sustained peace that has prevailed throughout most of the region over the past two decades, the durability of this peace is being called into question. Historical precedents certainly give cause for concern about the ability of the international system to accommodate peacefully a new major power such as China. The absence of effective regional security institutions, such as those that exist in Europe, compounds the difficult task of peacefully assimilating a much more powerful China into the region. Certain Chinese actions, including missile exercises in the Taiwan Strait, and the building of a military installation on Mischief Reef in the South China Sea, have further contributed to a growing regional concern that China increasingly may be prepared to use force to achieve its policy objectives.

While working to develop Asian regional institutions to deal with these problems, the United States should take the following steps:

• engage in a sustained strategic dialogue with China and U.S. allies to reduce Chinese suspicions and promote the mutually beneficial preservation of regional peace and stability in Asia;
• increase military contacts at all levels to expand mutual understanding of intentions and capabilities, thus promoting mutual trust and stability;
• maintain U.S. force capability and bilateral alliances in the region at current levels to sustain the credibility of our commitments while taking into account any dramatic changes in the regional situation that could justify cuts (e.g., the peaceful reunification of the Korean Peninsula);
• make clear that it supports the peaceful resolution of territorial disputes in the South and East China Seas, and views as unhelpful any unilateral actions that alter the status quo and threaten the principle of freedom of navigation in international waters.

North Korea

The United States and China share a number of important interests with respect to North Korea: the desire to avoid a conflict, opposition to a nuclearized Korean peninsula, and an interest in deterring North Korea from military adventures. Even with respect to the continued deployment of U.S. troops in Korea following reunification, there is not an inherent clash of interest as long as the United States does not seek to deploy troops north of the Thirty-Eighth Parallel.

The United States should make a concerted effort, in coordination with its Korean and Japanese allies, to improve the quality of its dialogue with China about North Korea, and to try to allay mutual concerns about U.S. and Chinese intentions in the post-reunification period. To date, China's actions concerning Korea, although consistent with U.S. interests, have not received due recognition. A more explicitly coordinated approach would help alter perceptions in some quarters that U.S.-Chinese interests are necessarily divergent. Nonproliferation

Building on the considerable progress that has already been achieved in dealing with proliferation over the past fifteen years in this field, the United States should:

• continue to work with China to secure its accession to new nonproliferation regimes and improve its compliance with existing ones;
• assure China that as it is asked to abide by international rules, it is entitled to have a seat at the table at which the rules are being drafted;
• seek to turn areas of current confrontation with china into arenas for cooperation. For example, the United States and china have a common interest in preventing either a nuclear arms race or the actual use of nuclear weapons in South Asia. The administration should initiate a broader, more strategic dialogue with china that seeks to base our respective policies on our common interests in this region. In addition, in view of the damage to the relationship that would occur if sanctions were triggered by Chinese transfers of weapons of mass destruction covered by U.S. law (such as the alleged transfer of M-11 missile components to Pakistan in 1992),the administration should work with Beijing to better meet its nonproliferation commitments.

Economic & Commercial

China's stunning economic growth has deep implications for the United States. Exports to China have grown rapidly, but U.S. companies have encountered a variety of market access obstacles. Imports from China have risen even more rapidly, benefiting American consumers, but also creating adjustment problems for U.S. producers and workers.

• The United States should seek to normalize fully its commercial relations with china and to facilitate Beijing's entry into international economic regimes. To that end,
• The United States should actively lead in multilateral efforts to bring China into the World Trade Organization (WTO) on terms compatible with the existing WTO regime. This will require flexibility in negotiating transition arrangements. We should expect Beijing's commitment among other things to the principles of national treatment, transparency, and nondiscrimination; increased market access for foreign products and services; a standstill with respect to performance requirements and agreement to their eventual elimination; substantial and continuing tariff reductions and the steady elimination of non-tariff barriers; and a gradual phaseout of subsidies to national industries.
• At the same time, the U.S. president should seek legislation to extend to China permanent most-favored-nation trading status. The current annual review damages Sino-U.S. relations and creates uncertainties for U.S. businesses in China.
• The United States should seek support from China's other large trading partners in its efforts to improve market transparency and to negotiate away impediments blocking access to China's market.
• China should understand that lax enforcement of agreements it reaches with the United States undermines a stable bilateral economic relationship. Both the United States and China should refrain from linking trade with unrelated issues.
• The United States should promptly lift post-Tiananmen economic sanctions on China that have become counterproductive or place an unnecessary burden on U.S. business. These include restrictions on trade and development assistance to China, Overseas Private Investment Cooperation (OPIC)coverage on U.S. businesses operating in China, and the ability of china to participate in the U.S.-Asian Environmental Partnership. The administration should work with China to remove the obstacles to bringing into force the 1985 Agreement on Peaceful Nuclear Cooperation.
• The United States should look for ways to provide stability to world markets while helping China meet soaring demands for energy and food. China's environment, in tandem with its rapidly growing energy and food consumption, ought to be areas of intensive cooperation with the United States. China's energy consumption is growing at close to 8 percent per year while domestic sources of coal continue to supply the bulk of China's energy demand; increasing numbers of cars and trucks are causing a growth in demand for oil of close to 15 percent per year. This soaring demand for oil, which cannot be satisfied by domestic sources, may be drawing china closer to oil-producing countries in the Persian Gulf and Central Asia. Its grain purchases are large enough to affect world prices. Close cooperation can assure stability in world supplies with minimal disruption to the environment. This will also enhance commercial opportunities for U.S. firms in these areas.

Human Rights

The United States has a strong abiding interest in the way all countries, including China, treat their people. China's pursuit of policies that promote meeting human needs and respect for humanitarian values, political freedoms, and the rule of law will enhance stability, reduce corruption, and create the conditions for stronger economic growth, with positive consequences for American economic stakes in the country. At great cost to china's stature abroad, the Chinese government has imprisoned individuals for the nonviolent expression of political and religious beliefs and for attempting to establish independent trade unions. While not the only important issue in the relationship, encouraging improvements in China's human rights environment will remain a priority of U.S. policy toward China. More progress is likely to be made on resolving differences over human rights when the overall relationship between the two countries is sound.

• New ways must be found to engage the Chinese government in a constructive, goal-oriented dialogue on human rights and the rule of law that builds on China's own interests in achieving progress in these areas. The threat of imposing sanctions is not a useful tool in advancing respect for human rights in China, and in fact is often counterproductive. Without necessarily resorting to sanctions, especially serious violations of universally accepted human rights require a strong response.
• Discussions on human rights should be made an integral part of the strategic dialogue between the two countries. Maximum engagement implies maximum frankness, but this does not imply public diatribes and U.S. preaching. In discussions on human rights, the United States should make clear that its goal is not to undermine the Chinese government. It should be willing to listen to China's criticisms of U.S. human rights failings and should acknowledge the progress that has been made in the expansion of economic and, to a lesser extent, political freedom and the meeting of human needs.
• In taking human rights seriously, we should consider what is good for the majority of the Chinese people and the underlying forces that tend toward improvement: economic growth, growth of non-governmental institutions, and expansion of democratic institutions.
• Egregious violations of rights in individual cases should be used as illustrations of larger systemic problems.
• China should be encouraged to sign and ratify the international human rights covenants and other human rights instruments, and to facilitate monitoring by international humanitarian organizations such as the International Committee of the Red Cross.
• A bilateral human rights forum between nonofficial organizations of the two countries should be established.
• Greater attention should be paid to using multilateral forums. Human rights concerns can be pursued within the established human rights framework of the United Nations, though this does not necessarily mean sponsorship of or lobbying for a resolution critical of China in the UN Human Rights Commission. China's participation in G-7 meetings would provide additional opportunities to address human rights concerns.

Hong Kong: Both the United States and China have important economic and humanitarian interests in Hong Kong's continued prosperity and stability. Hong Kong has been a bastion of civil and commercial freedoms in Asia, including freedoms of the press, speech, and assembly. The United States should take an informed interest in the territory's transition to Chinese rule. A successful transition In Hong Kong will heighten prospects for a peaceful resolution of Beijing's differences with Taiwan.

There is growing concern within the United States that, while china's leadership has committed its prestige to a smooth transfer of sovereignty, political aspects might be mismanaged. Given the extent of media attention, missteps will be magnified, and these could harm U.S.-China relations. The United States should emphasize the importance to China of taking steps--both before and after July 1,1997--to increase confidence in its commitment to honoring the terms of the Joint Declaration and the Basic Law. Such steps might include proceeding cautiously with passage and implementation of the law against subversion, permitting continued human rights reporting on Hong Kong within the United Nations framework, and reaching agreements with the United States on its consular presence and ship visits. At the same time the United States should emphasize to Taipei that it will closely monitor Taiwan's actions with regard to Hong Kong.Tibet: The United States should make clear that it does not challenge Chinese sovereignty over the area and that its concerns over the situation in Tibet are concerns of a human rights and humanitarian nature. It must refrain from any actions that suggest or raise expectations of Tibetan independence. The United States should encourage China to engage in a dialogue with exiled Tibetan leaders aimed at greater autonomy and the preservation of Tibet's unique culture and religion, and should stress the importance of greater access to Tibet by foreign diplomats and journalists.

Revitalizing the US-China Relationship

Some Americans believe that China's policies across the board run counter to U.S. interests and that efforts to moderate Chinese behavior by cooperation will be unproductive. The Assembly reject this view, but recognizes that its existence complicates a smooth implementation of the policy we advocate.

To revitalize the U.S.-China relationship, the U.S. president must take the lead. The president and his cabinet must articulate publicly as soon as possible a carefully reasoned, broad-ranging policy. That would not only give Americans a clearer understanding of the objectives, benefits, and costs of the China relationship, but would also strengthen the political support for along-term policy and provide a basis for clearer and more consistent communication and engagement with China. This will require the president to:

• engage actively with Congress to build bipartisan support;
• maintain a schedule of regular meetings with the Chinese leadership that is not derailed by transitory friction; President Jiang Zemin should be invited to the United States for a summit meeting in the first half of 1997.
• direct a range of high level exchanges, including the military;
• encourage direct Congressional engagement with the Chinese, including visits to China.
• At the same time, it is imperative that a compelling case for a revitalized approach to china be articulated to the media.

A healthy U.S.-China relationship will not only depend on government-to-government relationships, but also on the contributions of a range of private organizations, both businesses and nongovernmental organizations. These are important because they can:

• support the development of needed institutions in China, for example the law, the court system, legal aid, alternative dispute resolution organizations, local elections, independent bodies and judiciary, Chinese NGOs, and a freer and livelier press;
• lend expertise where it can be helpful as China seeks to improve its capacity to govern effectively;
• provide additional channels of informal dialogue on important issues;
• support experimental projects that enable China to deal more effectively with specific problems, such as the environment; and
• help inform the U.S. public and promote educational and cultural exchanges.

Four decades ago, when the United States and China had no trade, no diplomatic relations, and faced the ominous possibility of military confrontation, the United States decided to devote major resources to the training of students and professional specialists capable of understanding and interpreting the behavior of the PRC. Today, with the two nations engaged in massive trade and political relations, the public commitment to the training of young Americans has, ironically, been increasingly neglected. As the United States and China confront the opportunities and challenges of a new, twenty-first century encounter between great and powerful world actors, it is crucial that the United States rededicate the public and private resources needed to provide the nation with a stable and adequate supply of trained and politically independent professional talent.

Mutual suspicions between the United States and China are too deep to be erased by a few visits or a series of newly announced programs. Domestic political considerations in the United States may make new initiatives to improve relations difficult. On some issues, Chinese leaders' reluctance to pay the costs of participation in international organizations may prevail over their desire to participate. Yet with such high stakes, the United States and China must take risks and exercise patience to set the relationship on a sound basis for the next century. The risks of trying and failing are negligible compared to the risks of not trying at all.