Foreign Affairs

Foreign Affairs

May/June 2004


Don't Break the Engagement
By Elizabeth Economy


Elizabeth Economy is C.V. Starr Senior Fellow and Director of Asia Studies at the Council on Foreign Relations and the author of The River Runs Black: The Environmental Challenge to China's Future.


Staying The Course On China

After almost three years of calm, the American debate over China policy is set to heat up again. Like Bill Clinton, George W. Bush came into office pushing for a tougher approach to Beijing. And like his predecessor, Bush soon changed his tune. But if the Clinton administration's shift reflected a deep-rooted embrace of the logic of engagement, the Bush administration's shift has appeared more tactical, reflecting a realist appreciation for alliances of convenience during times of crisis. Now that the initial and most urgent phases of the war on terrorism have passed, China policy is likely to find its way back onto the agenda of hard-liners who consider the country a strategic competitor. They are likely to be joined by those who think that tough talk about trade deficits and China's human rights violations makes for good campaign politics. With the bilateral trade deficit now at $120 billion, Beijing's reported backsliding on human rights, and its heavy-handed diplomacy with Hong Kong and Taiwan, 2004 could be a banner year for the critics of engagement. Yet a return to China-bashing and to a strategy of containment would be a mistake. The past 30 years have demonstrated that engagement works — if not exactly in the way its advocates predicted.

Supporters of engagement long argued that it would help tame China through a traditional pattern of modernization: economic growth and increased connection with the outside world would spur the development of a Chinese middle class that would in turn press for capitalism, democracy, and peace. But in fact, although China has gotten richer, economic reforms have not led directly to political ones. Economic liberalization is indeed breeding a middle class with a new set of demands, including protection of private assets, access to unfiltered information, and a greater political voice. So far, however, the middle class has not organized in any meaningful way to push for wholesale political change. Instead, that change is occurring primarily in response to the negative effects of China's market transition.

For the past several decades, as China's leaders have banked on the country's striking economic success to legitimize their leadership, they have ignored the political and institutional changes necessary to ensure that markets function smoothly and transparently and that the social challenges arising from economic reform are addressed effectively. The result has been a dramatic rise in corruption and the decline of the country's social welfare system, which together have bred widespread popular discontent and undermined the legitimacy of the ruling Chinese Communist Party (CCP).

China's leaders recognize that they must assuage this discontent in order to survive. They have responded by adopting a strategy of political reform that harks back to Deng Xiaoping's approach to economic reform a generation ago: decentralization, experimentation, and opening up to the outside world. President Hu Jintao and Premier Wen Jiabao are trying to enhance the efficiency of the system by establishing new political processes and institutions, inviting domestic and foreign experts into the process, and permitting local experiments . . .