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United States-China Relations in the Twenty-First Century

Roy Grow, Burton Levin, Al Porte, and Robert White

The American Assembly at Columbia University

June 1998

Participants

The American Assembly

"China will choose its own destiny, but we can influence that choice by making the right choice ourselves - working with China where we can, dealing directly with our differences where we must.

Seeking to isolate China will not free one more political dissident, will not open one more church to those who wish to worship, will do nothing to encourage China to live by the laws it has written. Instead, it will limit our ability to advance human rights and religious and political freedom."
President Bill Clinton, Washington, D.C. June 11, 1998

Preface

Since its founding in 1950 through the combined efforts of President Dwight Eisenhower and Ambassador Averell Harriman, the American Assembly has had an important influence on America's domestic and foreign policies. Its cloistered gatherings of informed public officials and private individuals have produced a series of reports which have helped both the public and policy makers to better understand and deal with the complexities of the contemporary scene.

One need not elaborate on the significance to America of its relationship with China. China can no longer be viewed primarily in terms of its large population and its potential. Over the past 20 years, China has recorded progress unprecedented in the history of humankind in developing its economy and elevating the living standards of hundreds of millions of its people. China is well on the path to becoming a major power and its policies, domestic and foreign, will have a profound impact on the well-being of our nation and the international community.

The past half-century of U.S.-China relations has not been happy. For the most part the relationship has been marked by hot and cold war and mutual suspicion and distrust. This has been an odd state of affairs, given the historic admiration existing between the two peoples. Ironically it is this admiration and the resulting emotionalism that have helped create such a troubled legacy between the two nations.

The crucial importance and the continued troubled state of the U.S.-China relationship led the American Assembly to begin in November 1996 a series of assemblies dedicated to examining ways of improving and developing the relationship. The Midwest Assembly is part of this process. As Americans, we share the nation's concern and interest in how our relations with China develop and progress. As Midwesterners, with pride in our accomplishments in agriculture, manufacturing, and technology, we have a special interest in how we relate to and interact with a nation whose needs for our products are growing and whose students have enrolled in our colleges and universities for generations.

We are particularly pleased to offer our findings on the eve of President Clinton's visit to China. We welcome this visit as a promising harbinger of the strategic partnership that we would like to see between the United States and China. We hope that the visit will prompt more effective and sustained efforts by the administration to educate the American public about China issues and the importance of our relationship with that country.

This regional American Assembly, U.S.- China Relations in the 21st Century: A Midwest View, convened in Minneapolis from May 14 to May 17, 1998. As the assembly met, Asia was in the throes of financial crisis and nuclear testing in the Indian subcontinent had accelerated the arms race. These signs of instability should be incentives for closer cooperation between the two countries in the search for stability.

The 67 attendees were drawn from Minnesota business, academia, government and nongovernmental organizations, law, labor, and the media. Other regional assemblies in this series previously were held at the Air Force Academy and in Seattle, Shanghai, and Atlanta. Future assemblies are planned for San Francisco, Hong Kong, and Taiwan.

Addresses at the Minneapolis plenary sessions were presented by Michael Armacost, president of the Brookings Institution, and Walter Mondale, a partner with the Dorsey & Whitney law firm in Minneapolis. Both speakers are former United States ambassadors to Japan.

Financial support for the Midwest assembly came from the American Assembly, New York, and from Minnesota sponsors Cargill, Inc.; H. B. Fuller Co.; Honeywell Inc.; Hormel Foods Corporation; Land O'Lakes, Inc.; Medtronic, Inc.; 3M Company; Northwest Airlines Corp.; Norwest Bank Corporation; Pillsbury Company, a division of Grand Metropolitan PLC; Sit Investment Associates, Inc.; University of St. Thomas; US Bank Inc.; Vaispar Corporation, and the Whitney and Elizabeth MacMillan Foundation.

Whitney MacMillan, former CEO and former chairman of Cargill Inc., and Walter Mondale served as program co-chairmen. Professor Burton Levin of Carleton College was the meeting director.

Moderators of the three discussion groups were Professors P. Richard Bohr, Ted Farmer and Roy Grow. Rapporteurs were international attorneys Nelson Dong, Frank Jesse and Mark McNeil. Daniel A. Sharp, president of the American Assembly, provided advice throughout the assembly. Robert White assisted with editing. Doug Hennes of the University of St. Thomas and Al Porte of Porte and Associates provided valuable assistance.

The American Assembly takes no position on subjects in this report. Views expressed by participants are their own, not of the institutions they represent.

China In 2010

The United States would benefit from a China that is economically strong and stable and growing at a sustainable rate; from a China that is unified, internationally responsible, confident, and peaceful, with the rule of law applying both to its own citizens and to its dealings with the international community.

We believe that economic growth provides the best environment for the development of a China that best serves the interests of the Chinese, the United States and the international community. China's modern history has been one of relative poverty and relative isolation. With its economic growth and increased involvement in the international community comes the opportunity to take on the responsibilities as well as the benefits of its increasing stature. A desirable China in 2010 would be a country that acts on the basis of international principles as well as national interests. It would be confident in its actions and its position, not reacting to actions of others so much as constructively working to shape events.

Further, a desirable China of 2010 would be characterized by the rule of law featuring an independent judiciary empowered to interpret law and uphold due process. Such a legal regime would afford greater protection of the civil and human rights of the Chinese people, strengthen barriers against actions shaped by the preferences of officials or the exigencies of the moment and weaken the importance of personal connections. A China ruled by law would also attract increased foreign investment, play a larger role in world capital markets and nourish economic development. We would also like to see a China with a more broadly based system of government in which larger numbers of citizens participate in public decision-making.

What Kind of Relationship Do We Want With China in the 21st Century?

The United States and China should establish a relationship of strategic partnership. Such a relationship would transcend the previous and now outdated preoccupation with Russia. It would encompass systematic consultations not only on security matters, but also on the economic and environmental issues now looming ever larger on the global agenda.

In our democracy, many interests and advocacy groups seek to address important issues that may complicate the conduct of foreign policy. Without ignoring the importance of these special issues, the people of the United States--assisted by the 'bully pulpit" efforts of their leaders-- should strive for a clearer understanding of our overall national interests.

We applaud the administration's moves toward a policy of engagement, and we believe that such engagement will help move China in the direction outlined above.

What Challenges are Posed by China?

China--at least for now--appears focused on economic development and seeks a stable world to carry out that task. China's economic accomplishments to date have been impressive. This record of success holds out the prospect of the dream of a huge China market at last being transformed into reality. But for some it also holds out the fear of a new power emerging on the scene with the same disastrous consequences of Japan's and Germany's emergence in the early 20th century. We believe this view overlooks fundamental differences in the world system between then and now. Then the road to power and prestige was through imperialism and military expansion; now the road is through economic prosperity and technological achievement. We believe China is fully cognizant of the changed nature of the international scene and will seek to advance its interests accordingly.

China has 2,300,000 members in the People's Liberation Army, the world's largest standing armed force. However, this force lags far behind the United States and Japan in military technologies and is concerned with protection of its own territorial integrity. China will require many years of military modernization before it can project military power to any significant degree.

It is almost axiomatic that as China grows economically stronger, it will seek to improve its currently limited military capabilities. While tills will require careful monitoring and a continued U.S. military presence in the region, it would be wrong to view any balanced improvement in China's military capabilities as inherently threatening. Greater contact between the military leaders of both nations and greater transparency in China's conduct of military affairs would help reduce chances of misunderstanding. Recognizing the growing importance of China to regional stability, we strongly encourage regular high level political and military contacts among the most important nations in the region- Japan, China, and the United States.

China--at least for no

Free trade with China is a two-edged proposition. On the one hand, it offers Americans lower priced goods because of China's relatively lower costs of production. On the other hand, such lower-priced imports may well cause dislocations among lower skilled American workers and jeopardize some marginal domestic industries.

We believe, on balance, the correct policy choice for the United States is in favor of freer trade. The phenomenon of economic dislocation of U.S. workers and industries by foreign competition is not unique to China, but China's sheer size makes its impact upon this sensitive domestic issue proportionately larger. The solution for this challenge from all such foreign imports has at least three policy components:

Obstacles And Issues

A series of potential obstacles and issues need to be considered in the evolving relationship between China and the United States.

Taiwan

Taiwan remains the most serious outstanding issue between the United States and China. While extensive investment and trade relations have brought Taiwan and China closer together, political developments on Taiwan have produced a counter-current.

Taiwan's democratic evolution and the consequent growth of the political power of native Taiwanese have strengthened sentiment for an independent Taiwan state. Peace in the Taiwan area has rested for the past two decades on fealty by all three of the major actors--the United States, Taiwan, and the People's Republic of China--to the principle of one China, with Taiwan as a part of that one China. In China, Taiwan's seeming drift toward independence is perceived as a threat, and it was this perception that led to Chinese missile firings in the Taiwan Straits two years ago.

It is in the interest of the United States to see a peaceful resolution of the Taiwan issue by the Chinese people on both sides of the Taiwan Strait. For the time being, a measure of calm has been restored to the situation. Significant segments of the Taiwanese community, particularly the business sector, are increasingly aware that Taiwan's economy is tied to China's. They now harbor a greater appreciation of the dangers of Taiwan testing the waters of independence.

For the United States, it is imperative that we preserve the framework of our policy toward Taiwan constructed so painfully and thoughtfully in our dealings with both Taiwan and China. This framework provides for American acknowledgment of Taiwan's status as part of China in return for a tacit Chinese willingness to abide by the status quo without resort to force. To preserve this framework, the United States should make clear to Taiwan that while we stand ready to defend it against unprovoked military attack, we will not provide It with a blank check to engage in provocative behavior on the independence issue. We should remind Taiwan that under the status quo It has prospered politically and economically and has enjoyed de facto independence, albeit without diplomatic stature. At the same time, the United States should make clear its opposition to the threat or use of military force to resolve issues. Americans strive for solutions. But no solution to the Taiwan issue is in sight. We should avoid the temptation to act as broker and should play for time in the hope that the often evidenced subtle wisdom of the Chinese people will over the long term provide a peaceful and satisfactory solution.

Human Rights

Freedom of speech and association, and the protection of the cultural, linguistic and religious rights of ethnic minorities are not only the core values of the United States, but have also been affirmed and reaffirmed by the international community as universal to all peoples. The U.S. government and its citizens are concerned about continuing violations of the fundamental human rights of all peoples.

We welcome recent steps by China to accept international standards of human rights by becoming a patty to the International Covenant on Economic, Social, and Cultural Rights and pledging to become a party to the International Covenant on Civic and Political Rights. We acknowledge that conflicting perspectives about human rights reflect the different histories and conditions of our two countries. We therefore encourage frank and honest discussion about our differences as characterized by the exchange between President Clinton and President Jiang at the 1997 U.S. - China summit.

With an understanding of the positive steps that have been taken by China, its expressed desire to develop the rule of law, its impressive achievements in improving the living conditions of its population, and the need for mutual respect. In our bilateral relations, we recommend that the U.S. continue its current policy of engaging China on human rights issues.

In reviewing the human rights situation in China, it would be wise to keep in mind the experience of South Korea and Taiwan. Both share China's Confucian cultural heritage, both were poor, and both, until recently, paid scant regard to human rights. Rapid economic development over the past two decades and the concomitant growth of more open societies and better educated peoples provided a potent mix that brought increasing personal freedom and, eventually, democracy to both.

We believe the same process is under way in China. The Chinese people now enjoy far greater personal freedom and a much higher standard of living than they have for the past 50 years. Economic development has brought about a more open society and softened authoritarian rule in China. While much remains to be done, much has improved. It would be a serious mistake for American policy makers to ignore the relationship between economic development and improved human rights conditions in China.

Weapons Proliferation and Arms Control

The U.S. should be consistent and should treat China no less - and no more - harshly than it treats any other signatories to the various multilateral arms control agreements. If the U.S. has clear evidence of Chinese violations, then U.S. policy should hold China accountable in accordance with China's obligations and international law. The U.S. should seek to involve the other parties to these international agreements in engaging China on suspected violations. Unilateral approaches run a greater risk of exacerbating Chinese resentment over perceived American hectoring. In any event, multilateral approaches carry greater weight.

On a more positive note, the U.S., China, and all other major powers should work together to identify threats to world peace and to enhance their common security by preventing proliferation of weapons of mass destruction.

The United States has worked successfully with China in recent months in dealing with North Korea's threatened acquisition of nuclear capability. We should build on success and seek opportunities for further dialogue as China considers the implications of nuclear testing by India and Pakistan. The U.S. and China have clear, common interests in reducing these regional tensions.

Environment China's rapid economic growth presents numerous challenges to the environment, both domestic and global. China's scientists and growing numbers of its government officials and its general public are aware of the costs and dangers of environmental degradation. The U.S. should seek to respond to China's environmental problems in two ways:

Economic and Business Issues

The growth of the Chinese economy has been one of Asia's most important developments. This growth has helped Chinese society develop in important ways, has led to a rapid rise in the standard of living, and is moving China toward the forefront of technological and industrial development.

Given these dramatic developments, Sino-American economic relationships are in a dynamic phase, and this assembly believes two sets of events will affect our relationship: (1) The world's adjustment to China's rapid economic growth; and (2) the continued unfolding of the current economic crisis sweeping East and Southeast Asia.

These events carry a potential for friction between our two nations, and we believe it is in the interest of both to keep a long-term perspective in mind.

The Asian economic crisis could influence China's economic development and trade policies in important ways. We are especially concerned about the impact on Sino-American economic relations of the following developments:

  1. The devaluation of non-Chinese currencies across the region.
  2. The reduction of capital availability and, therefore, of the flow of foreign direct investment to China.
  3. The large over-capacity in production across the region, including China.

These developments create the possibility of massive shifts in levels and directions of capital flows and commodity trade, and increases in unemployment and social unrest. Such changes would require careful and to respond to China's encooperative management of the Sino-American economic relationship by Chinese and American policy makers.

Following are a series of recommendations adopted by this assembly:

Principles

In approaching the issues discussed in this report, it is helpful to consider some general principles that will increase U.S. effectiveness in dealing with China.

  1. The American public needs to recognize the mutuality of the relationship between the United States and China beyond economic and political issues. While we have much to offer China, there is much that we can learn from China's rich traditions and expertise--in academic fields, in medicine, and in the arts.
  2. We emphasize the need for continuous education - of citizens and of governments. Each country should acquaint its citizens with the culture, history and language of the other country. Doing so requires increased public and private funding for education and educational exchange at all levels
  3. The U.S. has significant leverage in its dealings with China. The Chinese desire a friendly relationship with the United States. They see such a relationship as contributing importantly to the security and economic development of their nation. For the Chinese leadership, a close, mutually respectful relationship with the United States enhances both their own and their nation's standing and prestige.
    The U.S., however, has in the recent past dissipated this leverage by a diplomatic style which features public threats and admonition and gives far greater emphasis to the problems than the benefits of the relationship. The Chinese see themselves as emerging from more than a century of domestic troubles and foreign humiliation. They are proud of their recent accomplishments, which are real and should be acknowledged, and they are sensitive to perceived insults. A hectoring American stance toward China provokes an emotional nationalistic Chinese response which weakens the influence that America could otherwise exert in a less charged atmosphere. We applaud the new approach by the U.S. government which appears to be moving in the direction of these principles.
  4. Sino-American relations have been severely damaged in the last eight years by partisan conflict. In order to create an effective China policy, our political leaders must fashion a bipartisan approach based on American national interests rather than grandstanding or seeking partisan political advantage.
  5. The U.S. also needs to recognize that there is a domestic Chinese political aspect to the bilateral relationship. While China's leadership is not as constrained as is America's by domestic politics, it is mistaken and dangerous to assume that a small group of Chinese leaders have a free hand in determining foreign policy. China is not a monolithic nation. The political, economic and social changes of the past twenty years have stimulated patriotic pride, a growing public awareness and interest in foreign affairs, and competing interest groups and factions.

The U.S. cannot expect the Chinese leadership to accept propositions without reference to the sensibilities of the Chinese people. Nor can the U.S. ignore the implications of its behavior on the competition in China between forces favoring modernization and those resistant to it. In sum, American leaders cannot achieve their desired ends by demonizing or humiliating the Chinese leadership or nation. Quiet diplomacy bolstered by sensitive and informed non-governmental contacts and exchanges is far preferable and far more productive in dealing with China than hostile public attacks.

Participants

The American Assembly at Columbia University