China looks at the world: the world looks at China

Author(s): David M. Lampton

Source: Great Decisions , 2010, (2010), pp. 43-54

Published by: Foreign Policy Association

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Chinese military jets of the PLA ( People 's Liberation Army) fly over Tiananmen Square during a grand military parade for the celebration of the 60th anniversary of the founding of the People's Republic of China, in Beijing , China , Oct. 1, 2009. (Imaginechina via AP Images)

China looks at the world: the world looks at China

by David M. Lampton

Never periphery of the before global of has international population a country moved with developments some from 20% the of the global population moved from the

periphery of international developments to the center of them with such rapidity. In 1976,

the year of Mao Zedong's demise, the Chinese Communist elite defined national security in terms of economic self-sufficiency, support for Third World revolution and a closed ideological system in which intellectual contamination from the West and the Soviet Union was a principal danger. Today, China is in many (but not all) ways a status quo power. It is a self-acknowl- edged beneficiary of, and cheerleader for, inter- dependence. And, it is a country that eschews revolution (at home or abroad) with the same alacrity that it embraced it 40 years ago.

In 1976, the era was officially defined as an "era of war and revolution"- today it is the "era of peace and development." China has been transformed from an aggrieved victim nation

lamenting a world system in which the "imperi- alists" had repeatedly stripped away sovereignty, into a generally self-confident great power in a system largely built by others. In short, Beijing's national security circumstances and behavior have changed, with implications for China's neighbors, the U.S . and the global system. Many, perhaps most, of these changes have been posi- tive; some less so.

A lot has changed in China and with regard to its role in the world since 1976.

At that time, the sign in the lobby of the Beijing Hotel may have proclaimed "China has friends all over the world," but no serious person in China, or anywhere else, then be- lieved that. China's leaders still had a tenuous

relationship with Washington and a war with Moscow was possible. Today, China has dip- lomatic relations with 175 countries and "stra-

tegic partnerships" with 17.

www.greatdecisions.org 43

4 What are

China's

security concerns and

goals , and how do its

perceptions affect its

neighbors , the U.S. and the

world?

DAVID M. LAMPTON

/ s H y man Pro fe s s o r, director of China Stud- ies, and dean of faculty at the School of Advanced International Studies of Johns Hopkins Univer- sity. Former president of the National Commit- tee on United States-Chi- na Relations, his most re- cent book is: The Three Faces of Chinese Power:

Might, Money, and Minds ( University of California Press , 2008). The author thanks Tabi t ha Mai lory for her research assis- tance and comments on

an earlier draft.

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Then, the country was largely cut off from the world, with a one-room

airport terminal more than adequate to serve the capital of a nation that com- prised 25% of the world's population. In recent years, air travel has been growing at close to 10% a year. In the mid- 1 970s , China had a prim- itive and small nuclear deterrent force;

today it is acquiring a new generation of land-mobile ballistic missiles and

missile-launching submarines. Seven years after the U.S. had put

men on the moon, China did not have

any realistic prospect for manned space flight; by late 2008, it had knocked an aging satellite out of orbit and had put six astronauts into space and safely re- trieved them.

In that year, virtually none of Chi- nese gross domestic product (GDP) was involved in foreign trade; by 2008, about 70% of China's GDP was con-

nected to exports and imports. In 1976, China held virtually no

U.S. government and/or private debt; today, it holds over U.S. $1 trillion in such instruments, making Washington and Beijing mutual financial hostages.

And for that year, China's C02

emissions were about one quarter of those of the U.S., but by 2006-2007, it had become the world's largest C02 emitter, threatening not only its own environment, but also arousing interna- tional demands that China contribute to

global environmental security. Nothing so defines the difficulty of

dealing with China today as the jux- taposition of its strengths and weak- nesses. While the outside world may be fixated on China's growing muscles, its leaders generally are still more preoc- cupied with their nation's disabilities and vulnerabilities. The international

community sees Beijing's mounting strengths and expects more rapid po- litical liberalization and greater relative effort in addressing issues of the global

commons. Yet, the first thing on Chi- nese leaders' minds when they arise in the morning generally is the staggering

domestic agenda they confront. From their perspective, they need to husband their scarce resources to deal with a

domestic agenda often on the ragged edge of control, believing that they currently enjoy a window of opportu- nity for growth that soon may close, not

least because of its aging population.

As one interviewee in Shanghai recent- ly put it to this author: "Strategically, our number one priority is Chinese Communist party (CCP) survival, eco- nomic growth…." Consequently, with respect to issues such as global warm- ing, civil liberties and dealings with reprehensible states, one finds China's resistance to change explained by ref- erence to its internal needs for stability

and economic growth. In short, China has many reasons to cooperate with the world, and in many important respects it desires to do so, but the titanic forces

of domestic social and political turmoil that are accompanying its moderniza- tion do not always make this easy or possible.

In order to respond to a changing China, it is important to understand the framework through which its leaders look at the world. Some key questions to consider include: Can a China with growing comprehensive national power feel secure at the same time that the rest of the world does?

Can a China that places primacy on economic growth cooperate to effec- tively address global environmental challenges? •

China's national security strategy

China's serves national internal security development. strategy It serves internal development. It does so by increasing the flow of re- sources into China and minimizing the external threats and drains that might divert leadership attention and scarce resources from its domestic growth and

social change agenda. More specifical- ly, Beijing's national security strategy consists of four broad, interrelated and

evolving elements. Since the late 1970s, Deng Xiao-

ping and his successors have felt they could see about 20 years into the fu- ture. When they have looked ahead, they have thus far felt confident that a weakened Soviet Union/Russia and

a preoccupied U.S. have made a big-

power war involving China unlikely. Therefore, the first element of Beijing's security strategy is the assessment that

China has at least a two-decade-long window of opportunity during which it can keep military spending at a rela- tively low fraction of GDP and focus human and material resources on the

modernization of the economy and so- ciety. Although military spending and defense modernization have advanced

impressively in recent years, China's rapid economic growth- nearly 10% annually for more than three decades- has enabled civilian leaders to maintain

defense spending at a relatively low level of GDP while keeping the military

at least modestly satisfied with increas-

ing resources. Beijing learned from the 1991 implosion of the Soviet Union that an economy that overinvests in its military apparatus and underinvests in human needs erodes regime legitimacy to the point where even an enormous military cannot save the regime from the wrath of its own people.

Second, foreign and national secu- rity policy are to provide the cocoon for a tumultuous internal economic and

social transformation process, whose defining features are urbanization, mar- ketization and globalization. Each of these changes is wrenching, such as the relocation of 300^-00 million peasants into urban areas over the last 30 years (with a like number still to go). Simi-

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China vs. U.S. Defense Expenditures, 1989 – 2008

CHINA

LUCIDITY INFORMATION DESIGN

NOTE: There are several estimates of China's military expenditures, with the U.S. Department of Defense estimate more than double that of the IISS estimate displayed here.

larly, remaking the Chinese economy from a state-owned-and-managed op- eration into a predominantly nonstate- owned structure involves creating winners and losers on an enormous

scale- once again, a perilous politi- cal undertaking. Therefore, the job of foreign and national security policy, beyond providing physical security on the conventional and nuclear lev-

els, is to make sure that the domestic modernization process has the interna- tional technological, financial and hu- man inputs necessary for success. This means ensuring that Chinese industry has access to foreign markets for its exports and assuring the uninterrupted flow of strategic materials and financial resources into China.

A third element of the strategy is to reassure neighbors and more-distant powers that as China's military grows in reach and punch, the People's Re- public of China (PRC) will not threaten either the prevailing global order or the

core interests of other powers. Were Beijing's rise to be perceived as a threat to either its neighbors or the current dominant power, the U.S., this would elicit international counterreactions

that would retard China's domestic

modernization. Central to this reassur-

ance effort has been China's participa- tion in international multilateral orga- nizations; its generally careful use of

military power outside its borders over the last 30 years; growing involvement in military-to-military exchanges and United Nations peacekeeping efforts; gradually expanding transparency; and Beijing's welcoming of foreign direct investment that not only has fostered growth in China, but also given for- eigners a positive stake in China's suc- cess.

The final element of this strategy has been to keep U. S .-China relations on a relatively even keel. A militarily hostile U.S. would force a dangerous diversion of human and financial re-

sources away from domestic modern- ization. A hostile U.S. would not pro- vide the trade surplus, technological and human inputs that have contributed

so much to China's progress. And, a hostile U.S. might make the prospect of an eventual resolution of the Taiwan

issue more difficult. So, from Beijing's perspective, productive Sino- American relations are central to everything it wants to achieve, at least for now and the foreseeable future.

This four-pronged strategy, of course, leaves unanswered how Chi-

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A Chinese bicyclist peddles past a massive television screen rebroadcasting the 60th anni- versary military parade in Beijing on Oct. 26, 2009. Although military spending and defense modernization have advanced impressively in recent years, China 's rapid economic growth has enabled civilian leaders to maintain defense spending at a still relatively low level of GDP. (UPI/Stephen Shaver /Landov)

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na will use its heightened power two decades hence. On the one hand, it is

entirely possible (and, indeed, central to America's strategy with respect to China) that 20 years from now the PRC will have so invested itself in global interdependence that it will become an increasingly stabilizing force, or as then U.S. Deputy Secretary of State Robert Zoellick put it in September 2005, a responsible "stakeholder" in the inter- national system. On the other hand, a more sobering possibility exists, name- ly, that Beijing's greater power gives it greater capacity to meet its own narrow interests without due regard for others, and that those greater capabilities will give rise to new, more expansive objec- tives. The policy implication of the first

scenario is that America's enlightened self-interest lies in facilitating Chinese growth and involvement international- ly, in the belief that multiplying strands

of interdependence will incline China in the direction of cooperative and con- structive behavior. No one can be sure

that this happy scenario will material- ize. But, if outside powers now exces- sively focus on the uncertain and pos- sibly deleterious uses of Chinese power decades hence, and consequently seek to slow and constrain that growth and involvement today, this certainly will

decrease Beijing's propensity to coop- erate now and in the future. One can

be more certain about the downside of

trying to constrain Chinese growth than one can be about the pacifying conse- quences of interdependence.

China's interests and fears

Given China's national security strat- egy, its historical experience of hav- ing been a great nation cast upon hard times in the 19th and 20th centuries and

the success of Beijing's domestic de- velopment policies and diplomacy over the past three decades, there is a wide- spread leadership and popular consen- sus on the mainland about the PRC's

current core interests and what consti-

tute the principal threats to them. The regime's core interest is survival. Many things are seen as potential threats to that, most prominently internal insta- bility. In 2008 there were 90,000 mass incidents in China: tumult stemming from income and social inequality, en- vironmental concerns, corruption and justice-related issues. While most of these disturbances remain localized and

limited to a domestic audience, China's

leaders are ever vigilant for possible connections between the activities of

foreigners and domestic discontent.

Throughout their history, the Chi- nese have believed that internal solidar-

ity is the greatest resource for survival and that outsiders wishing to weaken or dominate China first seek to increase

internal division. There are, of course, the more traditional conventional mili-

tary and economic threats that worry Beijing (discussed below), but PRC leaders are highly concerned that the actions and policies of foreign groups, foreign governments or international organizations may make the job of internal governance more difficult. At the same time, they recognize how beneficial China's engagement with the world has been overall. The stock and

trade of a PRC foreign minister or am- bassador is to effectively protest actual and imagined foreign "interference in the internal affairs of China."

Threats from China's frontier

The PRC's national capital is near the eastern seaboard on the North China

Plain, very far from China's western periphery. This periphery is vast in its geographic extent, rich in natural re- sources and populated by "minority" peoples with identities and cultures quite distinct from the numerically dominant Han population, who con- stitute more than 90% of the country's total population. Put bluntly, these mi- nority peoples (the Uyghurs, Tibetans and others) that Beijing trusts least occupy a large percentage (nearly one third) of China's real estate- and stra- tegic ground at that. Moreover, these peoples have a history of association with their ethnic and religious brethren who straddle the PRC's far-flung bor- ders and with their diasporas around the

world. To various extents they would like as much autonomy from Beijing as they can get.

These realities, combined with the economic opportunities pulling Han migrants into these areas, not to men- tion Beijing's "Go West" development effort, all have combined to produce various central policies over the years, some more accommodating than others. However, the long-term trend has been to let the migration of Han people into

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these regions in order to weaken the hold of native peoples over their tra- ditional areas and dilute their cultures,

breeding resentment on both sides, which intermittently leads to violence. These processes were at work in March 2008 in areas of China with significant Tibetan populations and most recently in July 2009 among the Uyghurs (a Turkic minority group of considerable size) in Xinjiang. In both cases, there was violence directed against the Han by aggrieved indigenous persons, re- prisal by Hans, and violent repression by the central government and its local administrations.

If this were the end of the story, one

could say this is a tragic, albeit famil- iar, saga of continental expansion by a dominant group, muscularly displac- ing native peoples and their cultures. In the Han Chinese narrative, howev- er, there often have been connections (sometimes imagined and sometimes real) between the discontent of mi- nority peoples and external agitation, aimed at weakening Beijing's gover- nance capacity and fragmenting the nation. In the 1950s, 1960s and into the 1970s, the U.S., as former Cen-

tral Intelligence Agency (CIA) officer John Kenneth Knaus recounts, was in-

timately connected to efforts to foster unrest in Tibet in order to destabilize

the Communist regime in Beijing. In the early 1960s, the Soviet Union used economic distress in China to

encourage disaffected local people in Xinjiang to cross the border into the U.S.S.R.'s then subordinate Central

Asian republics. When his Holiness the Dalai Lama sought the support of the U.S. government and people for his movement, this bred distrust in Beijing. In the same way, the World Uyghur Congress, which held its 3rd general assembly in Washington , D .C . , in 2009, and the 2005 establishment of the International Uyghur Human Rights and Democracy Foundation in Washington, D.C., both reinforce the presumed connection between dis- content in China's West and policy in Washington. Concisely, the first job of Chinese national security policy is to secure the nation's borders, con-

solidate control over its vast periphery and the people who live there and to keep "meddling" foreigners out. To the foreigners, problems in these ar- eas are seen through the lens of self- determination and human rights- to the Chinese government, these issues are viewed more through the lenses of "terrorism" and/or "separatism," both national security challenges.

Turning to China's offshore periph- ery, specifically Taiwan, the island al- most certainly would have fallen to Mao Zedong's forces had U.S. Presi- dent Harry S. Truman (1945-53) not sent the 7th Fleet into the Taiwan Strait

as part of his broader decision to in- tervene in the war on the Korean Pen-

insula in June 1950. Thereafter, in the

mid-1950s, Washington signed a de- fense treaty with Taiwan (the Republic of China, or ROC) and had other secu- rity relationships with the island, some of which were terminated at the end

of 1979 as part of the Sino- American normalization agreement a year ear- lier. In the PRC narrative, reunifica-

tion has been prevented by Washing-

ton's policies and actions, though in more recent years cross-Taiwan Strait economic and cultural integration has somewhat eased Beijing's anxiet- ies. Nonetheless, the Taiwan Strait is the one place in the world where one could currently imagine a direct con- flict between nuclear powers.

These issues of China's unstable

periphery and the action of foreigners, real and imagined, become directly linked to regime security because a key element of the CCP's legitimacy, beyond economic growth, rests on its ability to reunify the country follow- ing its dismemberment in the 19th and 20th centuries (Xinjiang, Hainan Island, Tibet, Hong Kong and Macau already have been "brought back to the fold of the Motherland"). For Beijing and the PRC citizenry, Taiwan remains the principal item of unfinished territorial business, beyond offshore claims in the East and South China seas, which are

not trivial. Moreover, linking China's Han majority and the Beijing elite to- gether is the shared belief that, in the case of Xinjiang and Tibet, the Chinese

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state has brought to these "backward" regions the blessings of development and yet the more central government subsidies these areas have received, the

more hostile they have become. There- fore, resentment at what is perceived as ingratitude reinforces the nationalism of unification. As a result, Beijing's central leaders are under popular do-

mestic pressure from the Han majority to get tougher and tighten their grip on

China's western periphery at precisely the time when much of the rest of the

world is calling for accommodation. Beyond the combined threats to territorial unification and regime le- gitimacy that China's vast periphery presents, China's elite also perceives

an array of more "traditional" security threats in the military and economic realms, the latter reaching beyond the narrow confines of economics to

the vulnerabilities that are intrinsic

to interdependence. Some of these threats have long existed and others are newer, reflecting China's growing involvement in the world system. •

Military- related concerns Two related large threats categories are of of particular military- related threats are of particular concern to Beijing: frictions with oth- er big powers and failed states along China's periphery, along with techno- logical developments with respect to weapons systems.

China's regional environment

China lives in a tough neighborhood, not only bordered by 14 land neigh- bors, but several additional big mari- time states as well. Throughout most of recorded history, China's imperial, then Republican, and now PRC leaders have focused on managing relations with the peoples and states that surround China. Many different elements have made such management difficult: the expan- sionist desires of some (Japan from 1894 to 1945); territorial and resource-

related disputes with others (the Soviet Union/Russia, India, Vietnam, Korea, the Philippines and Japan); minority groups straddling common borders to China's south, west and north; conflicts

in neighboring countries that drew Bei- jing in (Vietnam, Laos, Cambodia and Korea); the historically derived fear of China's small bordering states and so- cieties that they will be culturally and economically dominated by their big neighbor (Myanmar/Burma, Vietnam, the Russian Far East and the Koreas); and China's constant anxiety that its neighbors will allow themselves to be used strategically as a counterweight to China itself (e.g., India, Japan, Vietnam, Mongolia, Central Asian states and the Koreas- not to mention Taiwan). Two

countries are highly indicative of the depth, breadth and interconnectedness of Beijing's regional national security concerns: India and Japan.

China and India have frictions (not least their respective relations with Pakistan). China and India's long- standing border dispute involving two principal tracts of territory, one about the same size as Switzerland and the

other three times that size, has been quiescent for some time; nonetheless, it has incendiary potential. New Delhi and Beijing held a 13th round of nego- tiations in August 2009. Moreover, the Administration of President George W. Bush (2001-2009) was widely viewed in China to be seeking an improved re- lationship with New Delhi as leverage against an ever-stronger Beijing. In the Chinese view, Bush's 2008 final agree- ment (the U.S .-India Nuclear Coopera- tion Approval and Non-Proliferation Enhancement Act) to move ahead with

Indo-U.S. civilian nuclear cooperation even though India detonated nuclear weapons in 1998, remains outside the 1968 Nuclear Non-Proliferation Trea-

ty,* and has a substantial unconstrained

military nuclear- weapons sector, dem- onstrated that the U.S. was seeking In- dian strategic support by trading away Washington's usually sacred nonpro- liferation concerns. As one Chinese

security specialist put it to the author in mid-2009: "The U.S. uses nonpro- liferation as tactics, not as strategy- look at India relations! They are trying to check China- smart tactics, but bad

strategy…. The U.S. does not system- atically care about nonproliferation."

With respect to Japan, the legacy of mistrust stemming from World War II Japanese aggression is not far from the surface in the minds of most Chinese;

nor is the anxiety that Japanese citizens

feel at the prospect of a regionally dom- inant China well hidden either. In recent

years, one of Beijing's underlying fears is that the U.S. -stretched strategical- ly in the Middle East and Central Asia, and with severe financial constraints-

will seek to deputize Tokyo to play an ever-larger regional, and eventually global, security role. In 2007, 55% of Chinese polled saw Japan as "a country striving to strengthen its military capa-

bilities." This fear is stoked by efforts to strengthen the U.S .-Japan security relationship in light of dangers on the Korean Peninsula, dating back to the Clinton Administration; Washington and Tokyo's cooperation on the place- ment of antiballistic missile systems in Japan and aboard Japanese naval vessels and the joint development of such systems; periodic and recent ef- forts in Japan to modify its "peace con- stitution"; the increasing willingness of Tokyo to send military and peace- keeping forces at ever-greater distance from Japanese shores (as the Chinese themselves are doing); and periodic ruminations in Japan about whether or not Tokyo needs to contemplate ob- taining nuclear weapons. For their part, the Japanese do not feel comfortable with a growing Chinese navy sitting astride the sea lanes of communica-

tion* through which 80% of Japan's petroleum imports flow. This mutual strategic mistrust is further exacerbated

*For definition, see glossary on p. 103

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by Sino-Japanese offshore territorial disputes in areas thought to be rich in hydrocarbon resources. These disputes also have significant nationalistic im- plications for both sides. Therefore as China surveys its re- gional environment, it sees a complex

and sometimes dangerous setting, one in which there are currently four nucle- ar states (Russia, North Korea, Pakistan

and India), two of which are highly un- stable and all of which present compli- cated issues for Beijing. Further, it sees another four nearby societies that could

go nuclear in reasonable time frames were there a decision made to do so

(Japan, South Korea, Taiwan and Iran). In addition, China has four failed

or near-failing states along its borders (Afghanistan, Myanmar, Pakistan and North Korea). Afghanistan and My an-

'Action -reaction cycle' and the quest for deterrence GREAT POWERS CAN BECOME TRAPPED in an action-

reaction cycle in which "Country A" acquires a new mili- tary capability (often as a result of technological advance), thereby motivating "Country B" to develop an offsetting, if not leapfrogging or asymmetric, capability, in turn set- ting off an endless spiraling cycle of challenge and response. This was a well-understood phenomenon during the cold war (1945-91) in the context of U.S.-Soviet relations. The consequences of prolonged cycles of action and reaction are to boost each side to ever-higher levels of destructive capa- bility, impose ever-greater financial costs on each society (and others who must respond), and provide progressively less security to everyone as both sides move up the escala- tory ladder. Some of these tendencies are taking shape in the U.S .-China relationship, a situation that concerns both sides. This can be seen in two related areas- the security and cred- ibility of China's nuclear deterrent and the related issue of ballistic missile defense (BMD).

China has a relatively small nuclear force, the exact number

of warheads being a state secret. Currently, the Chinese nuclear

arsenal is thought to be in the 25CMOO warhead range. It is also

thought to be growing. In contrast, the U.S. had approximately

2,200 deployed warheads in 2009; this number will drop to as few as 1,500-1,675 if the July 2009 U.S .-Russia joint under- standing for a follow-on treaty to the Strategic Arms Reduction

Treaty is agreed to and fully implemented over time. Regard- less, China has a relatively modest fraction of the warheads that the U.S. currently possesses. Further, only a small (though

growing) percentage of the PRC's total warheads are capable of reaching the U.S. aboard approximately 45 intercontinental

ballistic missiles. However, Beijing's nuclear and conventional missiles could strike U.S . forces in much of Asia. Until recently,

most of China's strategic warheads were in fixed sites on land,

unable to be launched rapidly because they were liquid-fueled. This meant that the Chinese deterrent force was relatively vul- nerable to a hypothetical first strike, with either nuclear or con-

ventional "smart" weapons. Chinese fears of this admittedly re-

mote possibility were not lessened by the Bush Administration's

post-9/11 talk of preemptive warfare and its 2002 nuclear pos-

ture review that explicitly included the Taiwan Strait as a place

where it was conceivable the U.S. could employ its nuclear capability. The U.S . has never adopted a policy of "no first use,"

which China has repeatedly urged on Washington. The combi- nation of U.S. doctrine and Chinese vulnerabilities has led Bei-

jing to be unsure about the credibility of its nuclear deterrent.

Compounding Beijing's anxieties about its deterrent, the U.S., particularly under the Bush Administration, placed a high priority on developing and deploying BMD. This in- cluded not only fielding systems under U.S. control, but also providing some BMD capabilities to U.S. allies and friends in Europe (upsetting Moscow) and Japan, Taiwan and South Korea. All this greatly disconcerts Beijing. As one former Chi-

nese arms control negotiator in Geneva, Switzerland, put it to the author in July 2009, "BMD is a big deal and had a big effect on China's deterrent- a problem." These moves in Asia are worrisome to Beijing for reasons beyond the suspicion that China (not North Korea) is the real object of these defensive systems. In particular, given China's relatively low numbers of strategic warheads, a rather small U.S ./allied missile defense system could hypothetically destroy whatever few warheads might remain after a hypothetical U.S. disarming first strike (either conventional or nuclear), leaving China vulnerable to Washington's large number of remaining warheads. A Chi- nese general explained Beijing's concerns to this author in mid-2009:

"We believe that strategic nukes are very important to Chi- nese power and the numbers are top secret. . . .Chinese nukes are

small in number, [and] as far as capabilities, not on a par with

the U.S. and Russia, so China is very worried about its capabili- ties. …The U.S. and China have different concerns. The U.S.

is concerned with China's new capabilities and numbers, but China is concerned with its own capabilities."

The deterrence playbook developed during the cold war by Washington and Moscow enumerates the kinds of responses that can be made by a nation fearing for the credibility of its

nuclear retaliatory force. China is doing all of these things- it is traveling down a well-worn trail. It is making its land-based

force harder to find by making it mobile; putting an increasing

percentage of its retaliatory force out to sea on submarines where it is harder to find; developing the capability to put more

than one warhead on missiles, thereby multiplying the targets with which any defensive system would have to deal, and in- creasing the number of warheads in a cost-effective manner; and the PRC military is acquiring systems and capabilities to interfere with the sensors and computers that are integral to

U.S. defenses. It is these developments and dynamics that, in part, account for the successful 2007 Chinese antisatellite test;

increasing Chinese cyberwarfare activity directed at the U.S. and others; China's more assertive naval pushback against U.S. surveillance activities in international waters (but in China's exclusive economic zone) near the PRC; and for China's 2009 unveiling of its new generation of ballistic missile submarines,

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Chinese farmer Gao Xianzhang looks at two baby-shaped pears growing in moulds in a pear tree at his farm in Lianghexia village , north China's Hebei province , Aug. 29, 2009. Gao has created 10,000 of these minimarvels this season, which he plans to export to Eu- rope. (Imaginechina via AP Images)

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mar pump illegal drugs across their borders into China, as do Vietnam, Laos and Pakistan. Pakistan, a nuclear state with an unstable polity, is highly volatile, while a portion of its terri- tory is a haven for jihadists. North Korea- a Marxist dynasty that regu- larly makes outlandish threats, trans- fers dangerous technology to states of concern (e.g., Syria and Iran) and supplies China with unwelcome refu- gees in profusion- poses its own set

of challenges. With respect to North Korea, every destabilizing initiative by Pyongyang brings new demands upon Beijing "to do something" about its wayward neighbor and presumed client. Moreover these states, and oth-

ers nearby, also figure in human traf- ficking and refugee-related concerns. For instance, from Myanmar in late August 2009, there were approxi- mately 30,000 Burmese citizens and irregular soldiers that crossed the bor-

der into the PRC to escape civil strife in northern Myanmar.

In short, China is truly in a tough re-

gion. Beijing seeks to be able to protect and advance its growing interests, in part by developing ever-more capable military forces. This does not inevita- bly foretell Chinese military expansion, but it does mean that steadily growing Chinese military strength is part of the future of Asia, as well as that of the

broader international system. •

Vulnerabilities of interdependence When perceived Mao surveyed a predatory the world, interna- he perceived a predatory interna- tional system in which "self-reliance" best served China's security- China would be most secure when it depended on no outside power(s), international institutions or external economic rela-

tionships. This vision kept China poor (in Mao's 27 years of post-1949 rule, China's share of global GDP remained almost unchanged at less than 5%).

Deng had a different vision, one built on comparative advantage, Chi-

na's integration into world systems, and cooperation with advanced nations and international institutions such as

the U.S. and the World Bank* to help transform China. Such involvement

would foster growth, which would increase the welfare of the Chinese

people, which would enhance regime support, which would expand China's global stature, which, in turn, would further foster growth – a virtuous cycle .

All this, of course, came at the price of ever-greater Chinese integration with,

and dependence upon, global systems and processes. A dramatic example of this is China's increasing reliance on the international grain-trading system, a food dependency that Mao would never have contemplated or tolerated. The same applies to oil.

This mounting interdependence has meant that the costs of unstable global systems have become ever greater for China itself. The security problem for China is how to realize the gains from interdependence while minimizing its dangers and costs. This category of threat has many dimensions, but four significant issues help illustrate the thinking of Beijing's policymakers: protectionism; financial interdepen- dence; strategic materials; and global warming. PROTECTIONISM China is not an

export-led economy to the extent one associates the term with the "little

dragon economies" of Taiwan, Hong Kong, South Korea and Singapore, in part because the PRC provides less val- ue added to its exports than the others. Nonetheless, nominally nearly 70% of China's GDP is composed of foreign trade. Even if this considerably over- states the PRC's real dependence on ex- ports, the 23% decline in PRC exports from July 2008 to July 2009 is more than worrisome to Beijing- it is poten- tially destabilizing, given that (in 2005) 80 million people were working "in the

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Secretary of State Hillary Rodham Clinton speaks during a visit to the gas-fired Taiyanggong Thermal Power Plant in Beijing, Feb. 21 , 2009. Clinton and Chinese officials agreed to focus their governments ' efforts on stabilizing the battered global economy and combating climate change. (AP Photo/Greg Baker)

field of foreign trade," according to the PRC minister of commerce. Moreover,

customs revenues and taxes on export- oriented and foreign-invested firms ac-

count for a significant fraction of gov- ernment income at all levels, with the

minister of commerce noting in 2005 that "the import and export tax revenue accounts for about 18% of the nation's

total." Consequently, a high priority for China's central government is to make sure that the world, especially markets for China's exports, stays open for business. Concurrently, Beijing needs to increase domestic consumption as a driver of economic growth. FINANCIAL INTERDEPENDEN-

CES It almost has become a cliche

that Communist China is

"capitalist" America's bank- er, holding in excess of $1 trillion U.S. dollar-denom-

inated debt, making China the largest foreign holder of U.S. securities in the world

as of August 2009. Chinese corporations and other PRC investors are not doing this as charity for the U.S., but rather because despite all the current weak spots in the U.S. financial system, the U.S. remains the safest place to put money in the volume China possesses. The U.S. market has enough liquidity and scale to handle what the

PRC has to invest.

This investment, howev-

er, subjects China to substan-

tial foreign exchange risk, meaning that if the value of the U.S. dollar declines

precipitously, the PRC loses substantially. Given the huge pump-priming stimulus plan in me u.a., ana tne rising

U.S. budget deficit both in absolute volume and as a per- centage of GDP, the Chinese are alarmed that Washington may pay back its debts with cheapened dollars eroded by the inflation they fear could come soon. Notably, Hillary Clinton, in Beijing in February 2009 on her first trip abroad as secretary of

state, urged China to keep investing in America. During the first meeting of the high-level Strategic and Economic Dialogue in Washington in July 2009, a principal objective of China's repre- sentatives was to urge fiscal respon- sibility and a strong dollar policy on Washington. As China's Vice Premier Wang Qishan reportedly put it, "The U.S., as the world's major reserve cur- rency issuing country, should properly handle and balance the impact of U.S. dollar issuance on the U.S. domestic

economy and the global economy." To which, the U.S. responded, "The U.S. … is committed to reducing the federal budget deficit relative to GDP to a sus- tainable level by 2013."

The Chinese are hopeful, but by no means confident, about U.S. assur-

ances. In the first half of 2009, Beijing officials several times urged the world financial system to gradually reduce its

dependence on the U.S. dollar as the dominant currency of reserve and set- tlement. Implied was Beijing's desire to see a gradually expanding global role for its currency, the renminbi. The U.S. and China are two economic scorpions in a bottle: Americans need the PRC to

keep investing in the U.S. and China needs reassurance about the soundness

of its investment and its continued abil-

ity to export to America at this moment.

China's people are leery about the deci- sion of their leaders to place so many eggs in the U.S. basket. STRATEGIC MATERIALS The PRC

is now 50% dependent on imported oil for its petroleum needs, and about 80- 85% of this comes through sea lanes

of communication in the

Indian Ocean and South

China Sea. Consequent- ly, given the linkage be- tween economic growth and system legitimacy in China, and hence the link

with social and political stability, China's leaders are concerned with how

they can reduce their po- tential supply vulnerabili-

ties with respect to stra- tegic materials. They are doing so in several ways: diversifying domestic en- ergy sources, including a rapid expansion of civil nuclear power; conserv- ing energy; seeking to di- versify foreign suppliers and transportation modal-

ities (e.g., building pipe- lines); creating a strategic petroleum reserve; and providing more security for those supplies coming by sea- which means in- creasing blue-water naval capabilities.

Because China has

per capita resource en- dowments that are below

the world per capita average in almost every category (except coal), and giv- en that China has become a colossal

manufacturing hub, its requirement for resources, whether iron ore, uranium,

SI I

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Smoke billows from a chemical plant on the outskirts ofChangzhi, Shanxi province , March 23, 2009. China's leaders recognize climate change as an enormous problem and one that will affect China adversely. (Reuters/Str /Landov)

KM

soybeans, rare metals or timber, has become enormous, with PRC demand now being a market maker in many commodity areas. In some cases, such as uranium, the linkage to national security is quite clear. For instance, with its 1 1 currently operating nuclear plants, China is able to meet about 70% of its uranium needs domestically – but, if expansion of its nuclear plant numbers by 2020 reaches planned lev- els, China will be able to satisfy only about 10% of its needs, meaning that it must rely on others. If there is a civil nuclear power renaissance as the rest of the world tries to move away from carbon-based energy, the international competition for uranium could become even more intense. This accounts for

China signing long-term uranium sup- ply agreements with Kazakhstan and Australia. China's Foreign Ministry and its increasingly active transnational corporations are working full-time to assure PRC access to needed resources

across the board. As China becomes

more dependent on key suppliers for strategic resources, and as its citizens are increasingly far-flung, it will also be drawn into providing some measure of security for its vulnerable workers and sources of supply. In the short run, this will be manifest in increased PRC

capacity to evacuate personnel from perilous circumstances. CLIMATE CHANGE Domestic sta-

bility, and the economic growth upon which it is seen to depend, is Beijing's overarching priority. Nonetheless, China's leaders do recognize that not only is climate change a problem of enormous proportions, they also know that China will be very adversely af- fected by it. They further concede that

China has an international obligation to meaningfully address this issue.

Key to their past and continuing response to climate change is reduc- ing the amount of energy consumed in producing each unit of GDP. So, for instance, at the end of the 1988-2000

period, because of its energy efficiency efforts, China annually was using about one half the energy it otherwise would have consumed (at the 1977 level of energy intensity) in the absence of such efforts and thereby was emitting far smaller volumes of greenhouse gas than otherwise would have been the case. Still, key to Chinese lead- ers' thinking is that they need to con- tinue high-speed economic growth for decades in order to generate the em- ployment and rising living standards that will preserve political and social stability. They are, therefore, unlikely

to commit to absolute C02 reduction targets any time soon. Instead, they foresee a future in which they can emit

more C02for a significant period, albeit far less C02 than would be the case in the absence of their energy-efficiency

and C02 intensity reduction efforts. For the U.S. and other developed

economies, the Chinese position raises a host of issues. For example, because China wants economic assistance and

technological cooperation in its carbon reducing and energy-efficiency efforts, the questions arise as to who pays, how much and how are developers of Western environmental technology to be compensated? The Chinese posi- tion raises the further issue of whether

Western legislative bodies will agree to have China (and India) producing ever-greater absolute volumes of C02 while Western countries are commit-

ting themselves to mandatory, and quite possibly painful, caps requiring absolute reductions in greenhouse-gas emissions? China and the U.S. found

many important ways to cooperate on energy and climate change issues in the run-up to the Copenhagen climate change conference in December 2009, including research and technology de- velopment. However, a comprehensive global approach that will sufficiently deflect the world from the dangerous trajectory it is on appears difficult to realize soon.

The climate change scenario shows how complex China's national secu- rity calculations have become in the 21st century. Global ecological change is occurring and it will be very dam- aging to the economic and ecological foundations of Chinese society. This problem can only be addressed through international cooperation. However, the presumed costs to economic growth in China are feared to be too politically and socially destabilizing, given the Chinese elite's belief that its first secu-

rity task is to keep people employed. China's minister of human resources

and social security said in August 2009 that China needed to generate 24 mil- lion jobs in 2009, but was likely to create "only" 12 million. It is easy for short-term fears of national security

I 52

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¡

1 n 1 2

ā S i i a

Shipping containers are piled up at a container terminal in the port of Dalian, China , Sept. 11, 2009. China and America need to rebalance their economic relationship so that China buys more from the world and the U.S. sells more to China. { AP Photo/Elizabeth Dalziel)

CHINA

(political and social instability) to over- whelm the long-term needs for action that genuinely will secure China and indeed, the globe's, safety.

Policy issues for the U.S. China is growing in comprehensive na- tional power (the capacities to threaten,

economically induce and persuade). This raises the issue for the U.S. of

how to constructively make appropri- ate "room" for China in international

institutions and in the global power system, conceding that the last eight U.S. Presidents have generally acted with vision in this respect. One of the central issues of this era is whether it

is possible for China to achieve what it considers its legitimate national se- curity and other needs at the same time

its neighbors and other countries also feel secure.

Questions that U.S. policymakers should consider carefully are:

Is it possible for China to meet its need for a stable, minimal strategic de- terrent and simultaneously for Ameri- cans and others to fulfill their security needs? Can an action-reaction cycle that could leave everyone worse off in security terms be avoided? How can the chance for destructive competitions in space, on the high seas and in cyber- space be minimized?

Also, arms control, as distinct from

counterproliferation, was almost en- tirely off the U.S. agenda for the Bush Administration. Should the U.S ., China

and other nuclear powers move with vigor to pick relatively low-hanging arms control fruit such as: ratifying

the Comprehensive Test Ban Treaty of 1996? Reaching a Fissile Material Cutoff Treaty originally suggested by President Bill Clinton? And beginning to look at issues germane to having a BMD adequate for American security but not threatening to the deterrent of others?

Granted that China and the U.S.

are increasingly becoming partners in many respects, they are also increas- ingly becoming competitors, not only militarily, but economically and intel- lectually as well. As a consequence of the cooperative/competitive ambiguity in the bilateral relationship, in what ar- eas could both nations mutually ben- efit from cooperation? The U.S. and China are already cooperating in the

zone of civilian nuclear power to a de- gree unappreciated by most Americans. Should Washington resume allowing U.S. satellites to be put aloft by Chi- nese launch vehicles? Should the U.S.

and China cooperate in space, as some civilian space agency officials in both countries desire? Can the two countries

cooperate more broadly on ambitious joint energy development, clean coal technologies and energy conserva- tion enterprises? Additionally, both countries should seek opportunities to cooperate on other positive-sum trans- national issues, not least health and hu-

manitarian problems. And finally, how can China and

America rebalance their economic rela-

tionship so that China buys more from the world (and the U.S . sells more to the

PRC), and how can America get itself onto sustainable fiscal and trade deficit

paths so that confidence in its economy is restored and the burdens placed on future generations of Americans will not be so great? It is a goal easy to de- scribe but difficult to reach. Doing so will be key to both the world economy and U.S .-China relations in the years and decades ahead. •

OPINION BALLOTS AFTER PAGE 16

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gNU ESTIONS 1. Describe China's security status in Asia, the kinds of chal- lenges Beijing's leaders perceive they face and the policies they are adopting in light of those challenges.

2. To what extent is China a strong state? A weak state? How do the answers to these questions shape what the U.S. can reasonably expect in terms of Beijing's cooperation on global issues?

3. How should the uncertainty over China's future use of its growing power affect U.S. contemporary interactions with, and policies toward, China?

4. How much cooperation, or what kinds of cooperation, can the U.S . expect from China with respect to addressing global warming? Or put alternatively, what expectations can China realistically have for the U.S. in this regard?

5. The U.S. and China are in the relatively early stages of an action-reaction cycle. This cycle exists in space policies,

in the creation of growing cyberwarfare capabilities in both countries, and in the very structure and doctrine of nuclear forces. At what point should the U.S. simply recognize that the PRC has (and will increasingly have) a credible deter- rent, and seek to achieve a stable deterrence relationship at the lowest possible levels? Is it feasible to negotiate such a relationship? Is it desirable?

6. At what point, if any, would the U.S. and China both be better off cooperating in space rather than militarily compet- ing there? Why might either side be hesitant to cooperate in this domain?

NOTES:

UJE A D I N G S

Bergsten, C. Fred, Freeman, Charles, Lardy, Nicholas R., and Mitchell, Derek, China's Rise: Challenges and Opportunities. Washington, D.C., Peterson Institute for International Econom- ics and the Center for Strategic and International Studies, 2008. 269 pp. $13.95 (paper). A data-rich look at varied dimensions of China's rise, including military modernization, economic growth, the origins of domestic instabilities and the key contours of its foreign policies.

Economy, Elizabeth C., The River Runs Black: The Environmen- tal Challenge to China's Future. Ithaca, NY, Cornell University Press, 2004. 337 pp. $13.10 (paper). A well- written analysis of the principal environmental challenges facing China and the domestic forces that make it difficult for Beijing to effectively address them. The author also examines the rise of a nascent environmental move-

ment in China and assesses its implications for political change.

Knaus, John Kenneth, Orphans of the Cold War: America and the Tibetan Struggle for Survival. New York, Public Affairs, 1999. 398 pp. $18.44 (paper). A CIA officer's thoroughly researched and documented study of U.S. involvement in the Tibetan struggle during the height of the cold war. Particularly informative on U.S. interactions with his Holiness the Dalai Lama over time.

Lampton, David M., The Three Faces of Chinese Power: Might, Money, and Minds. Berkeley, University of California Press, 2008. 361 pp. $21.95 (paper). An in-depth look at how Chinese have

thought about power over time, how they think about it today, how

China's coercive, economic and ideational power have changed in recent decades, and what this means for the rest of the world.

Scobell, Andrew, China's Use of Military Force: Beyond the Great Wall and the Long March. Cambridge, UK, Cambridge University Press, 2003. 299 pp. $27.99 (paper). The author argues that there are two strands in China's strategic military tradition- one pacific and the other more martial. These two traditions merge into a contemporary military culture that the author calls the "Cult of Defense." The author looks at several cases in which Beijing employed military force and draws broad conclusions from these examples.

Shambaugh, David, ed., Power Shift: China and Asia's New Dy- namics. Berkeley, University of California Press, 2005. 383 pp. $18.90 (paper). This volume brings together a broad range of ana- lysts of Chinese foreign policy who examine varied dimensions of China's growing power and how the PRC's rise is shaping econom- ic, security and cultural relations throughout the Asian region.

Tucker, Nancy Bernkopf, Strait Talk: United States-Taiwan Rela- tions and the Crisis with China. Cambridge, MA, Harvard Uni- versity Press, 2009. 390 pp. $28.00 (hardcover). A fine analysis of how the U.S. became entangled and reentangled in the Taiwan issue. It also discusses the moral dimensions of this foreign policy issue, the bureaucratic and mass politics that have shaped American policy over time, and provides a cogent explanation of why this small island remains a potential challenge for U.S. security policy.

TO LEARN MORE ABOUT THIS TOPIC AND TO ACCESS

WEB LINKS TO RESOURCES GO TO www.greatdecisions.org r

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