Sweet and Sour

Recipe for a New China Policy

Zalmay M. Khalilzad holds the corporate chair in international security at RAND and directs the Strategy and Doctrine Program for RAND's Project AIR FORCE. He served in the Bush administration as assistant deputy undersecretary of defense for policy planning.

China's rise as a great power is beyond dispute. Its economic growth and potential, its current and future military capacity, the size of its territory and population, and its geopolitical location all make it likely that China will be a key player on the international scene in the 21st century. By 2020 China is likely to emerge as a formidable regional power capable of threatening U.S. allies in East Asia and posing an increased nuclear threat to the U.S. homeland. What is less certain is the role Beijing will choose to play in the world and how U.S.-China relations will evolve.

The last two administrations have both described their strategy toward China as one of engagement. However, there is a fundamental lack of consensus on what strategy can best achieve our purposes. Routinely every four years, and additionally whenever there is a crisis, our debate on China policy begins anew.

The central question in the current debate is whether the United States should abandon or modify its strategy of engagement. The Clinton administration believes that engagement has moderated Chinese behavior on international security issues, increased opportunities for trade and investment, and improved the situation in China itself. Congressional leaders, in contrast, have argued that Chinese efforts to acquire sensitive U.S. military technology, the absence of satisfactory progress on Beijing's human rights record, the continued Chinese sale of missiles and nuclear-weapons-related technology to other states, and the increased number of Chinese missiles deployed across the Taiwan Strait demonstrate that the engagement strategy has failed.

Some on Capitol Hill believe that China is destined to become a major threat to the United States. Thus, they say, the goal of U.S. strategy in Asia should be to constrain the growth of Chinese power, both economic and military, and to oppose Chinese policies within its own region. In effect, these observers imply that we must move from engagement to containment.

But neither engagement nor containment is adequate for dealing with China, a growing power whose future remains highly uncertain. Engagement rests on the hope that economic, political, and military connections will either transform China into a cooperative democracy or, at minimum, produce convergence on some key interests. This is a supposition. In the meantime, it is a fact that U.S. engagement is helping China develop economically and militarily. Thus, should China become hostile, our current mode of engagement will merely have made China into a potentially more threatening adversary. But shifting to containment is equally troublesome. Such a strategy presupposes that China will ultimately become hostile, giving short shrift to the possibility that Sino-U.S. relations could evolve in a more cooperative direction. Containment could become a self-fulfilling prophecy, setting the stage for a confrontation where none existed.

Neither engagement nor containment balances the two key U.S. objectives, which should be to encourage China to become more democratic and cooperative while at the same time protecting U.S. interests in case China becomes more hostile. The next administration should transcend both containment and engagement and should embrace neither. Instead, it should adopt a new, blended strategy, which could be called "congagement."

Beyond Reach U.S. Air Force bases in Kunsan, South Korea, and Okinawa, Japan, are situated too far northeast for today's U.S. fighter aircraft to repel hypothetical Chinese military incursions in the South China Sea. The solid rings indicate the maximum unrefueled range of U.S. fighter aircraft now at the bases in South Korea and Japan. To close this geographical gap, a "congagement" strategy might lead the United States to take preparatory steps toward forming new alliances with other nations in the region or establishing new military bases in Southeast Asia, such as at Cam Ranh Bay in Vietnam. In addition, by 2015 the Chinese could field hundreds of long-range cruise and ballistic missiles capable of hitting U.S. bases in the region and nearby U.S. allies, particularly Taiwan. One way to deter such missile strikes would be for the U.S. military to develop and deploy longer-range aircraft systems, such as medium-range bombers with standoff missiles; longer-legged fighters, bombers, tankers, reconnaissance aircraft, and other support platforms; and, over the very long term, space-based systems.

The Limits of Engagement

The engagement policy of the Bush and Clinton administrations has had three elements. Economically, engagement has meant opening Chinese markets to U.S. products, granting China "most-favored-nation" (MFN) trade status, reducing the number of goods and technologies covered by export controls, and allowing Chinese companies to operate relatively freely in the United States. Politically, Washington has tried to bring China into the various multilateral arms control regimes dealing with weapons of mass destruction, proliferation, and arms trade; to bring China into other international regimes dealing with such issues as human rights; and to include China in solving regional problems, from Korean tensions to nuclear proliferation in South Asia. Militarily, the United States has sought enhanced military-to-military relations to increase mutual confidence, agree on "rules of the game," promote cooperation, and avoid misunderstandings.

Enmeshing China in the international system can socialize Chinese leaders into international norms of behavior and increase their stake in the current system. China's cessation of the sale of long-range antiship cruise missiles to Iran is a good example. Initially this may have been a mere concession to the United States, but over time, as Chinese dependence on Persian Gulf oil grows, China may well become convinced that a global nonproliferation norm is actually in its best interest. Similarly, as China develops economically, it may see a global free-trade regime as useful and beneficial to itself and embrace the World Trade Organization (WTO) wholeheartedly, instead of attempting to join the WTO while still protecting its state-owned enterprises from foreign competition. Increased Chinese interaction with the outside world can also promote democracy in China, and a democratic China will be less likely to come into conflict with the United States and other democracies.

AP/WIDE WORLD PHOTOS/GREG BAKER

Three Chinese women wait for customers at the California Wine Institute booth at the China Wine '99 exhibition in Beijing on Nov. 17, 1999. The four-day trade show of wine, spirits, beer, and related technologies coincided with the signing of a deal between the United States and China on China's entry into the World Trade Organization. Tariffs on foreign wines sold in China are expected to drop sharply if and when China joins the organization.

However, so far the results of our engagement policy have been less than advertised. On the one hand, it is true that China acceded to the Non-Proliferation Treaty (NPT) in 1992 and has played a helpful role in dealing with the North Korean nuclear problem. It supported the extension of the NPT, ratified the Chemical Weapons Convention, accepted limitations imposed by the Missile Technology Control Regime, and agreed to stop assisting Iran's nuclear program.

On the other hand, China has aided Pakistan with its nuclear weapons program and provided it with M-11 missiles. Despite publicly taking a position close to that of the United States on South Asian nuclear programs after the Indian nuclear explosions, privately China encouraged Islamabad to explode a nuclear device. Although China ratified the Chemical Weapons Convention and claims that it does not produce or possess chemical weapons, it in fact has an advanced chemical weapons program. Similarly, China is a party to the Biological Weapons Convention but pursues an offensive biological weapons program. And China continues to provide shorter-range missiles and other military assistance to Iran.

The problem with the engagement strategy is that it offers no guidance as to what should be done when Chinese actions conflict with U.S. interests or when China behaves badly. When China sells nuclear-related materials to Pakistan, no parallel responses are available. Engagement merely counsels that economic or diplomatic sanctions not be applied in retaliation. A trade ban imposed on the companies involved in selling sensitive materials would be consistent with engagement. But such sanctions would be hard to impose and enforce, and easy to circumvent, given the ability of the guilty parties in China to use front companies or other types of evasion.

More fundamentally, engagement rests on a bold assumption: that continued contact will eventually rectify Chinese behavior. The key weakness of the strategy is that it fails to outline what must be done to protect American interests should China become both more powerful and more hostile. In the meantime, the strategy helps China develop economically and technologically, thus creating the base for future military strength.

The Folly of Containment

The goal of a containment policy would be to prevent an increase in China's power relative to that of the United States. The policy would attempt to slow the growth of China's power, both economic and military, and limit the expansion of Chinese influence beyond its borders. The United States would limit foreign trade and investment in China and prevent the transfer of any technology that might aid China's military. It would end China's MFN trade status and oppose the unification of Taiwan's capital and technology with mainland China's manpower. The United States would commit itself to defend Taiwan.

The United States would reorient its existing regional alliances toward the emerging Chinese threat. It would also need to forge new, anti-China alliances and build up the militaries of Vietnam, Indonesia, India, and other potential Chinese rivals. Besides maintaining its military bases in Korea and Japan, the United States would establish one or more new bases further south to be in a better position to respond to Chinese use of force against Taiwan, disputed areas in the South China Sea, or members of the Association of Southeast Asian Nations (ASEAN).

At present, containment is an inappropriate strategy for dealing with China. China is not seeking to dominate East Asia and is not in a position to do so. A Chinese threat to dominate the region is, to say the least, far from manifest. Adopting containment as a U.S. strategy would be costly, because U.S. trade and investment with China would suffer while others would gain at our expense. Such a policy would also impede the operation of the United Nations Security Council, where China has veto power as a permanent member.

Containment is also unrealistic. First, it would be hard to obtain a domestic consensus to subordinate other policy goals (including trade), and it would be difficult to mobilize national energies on the basis of predictions that are not only extremely pessimistic but uncertain as well. Second, to be effective containment would require the wholehearted cooperation of regional allies and most of the other advanced industrial countries of the world; again, such cooperation would be difficult to obtain. Our allies in Western Europe may not believe that even a more aggressive China would pose a threat to them. The countries in the region by and large are not convinced that such a hard policy toward China is necessary.

In general, containment fatalistically projects an outcome that is far from inevitable. It unnecessarily resigns itself to unfavorable developments while overlooking the possibility that Sino-U.S. relations could evolve in a much more acceptable fashion. And whatever leverage over Chinese policies the United States might attain by means of engagement would be lost.

The Merits of "Congagement"

AP/WIDE WORLD PHOTOS

A Beijing vendor sells a newspaper on Aug. 12, 1999, with the headline, "High Tensions in the Taiwan Strait." The story includes an illustration of a mock dogfight between Chinese Su-27 and Taiwanese Mirage 2000 jet fighters and says China is sure to use force if Taiwan declares formal independence.

Under congagement, we would enhance military, economic, and political relations with China. Recent contacts between the U.S. military and the People's Liberation Army (PLA) have become controversial. However, under congagement, military-to-military relations would be expanded. These contacts can provide the Chinese military with the opportunity to get to know the U.S. military--our capabilities and intentions--which may help curb any tenden- cies toward military adventurism. Such contacts could also increase U.S. knowledge of the PLA. Moreover, military-to-military contacts can lead to personal relations that are useful on a day-to-day basis and prove vital in time of crisis. In economic affairs, the MFN status would continue, and we would encourage Chinese membership in the World Trade Organization. However, we would criticize Chinese human rights practices more vigorously, without suggesting that sanctions be applied to change these practices. In military and economic relations, we would insist on reciprocity. When China behaves badly or threatens our interests, we must be prepared to respond.

As a hedge against potential conflict with China over issues such as Taiwan, the United States should move on three fronts. First, we should avoid doing anything that directly abets the growth of Chinese military power--especially the Chinese military's acquisition and development of systems that would prove difficult for the United States to deal with.

Second, we should encourage U.S. friends and allies not to contribute directly to the growth of Chinese military capabilities. Existing U.S. and allied export controls that now restrict access to Western technology need to be strengthened by an agreement among the allies, including Israel, to further restrict a set of technologies relevant to the most dangerous systems, such as advanced ballistic and cruise missiles, advanced air-to-air missiles, advanced surface-to-air missiles, the latest fighter jets, counterspace capabilities, and increased capabilities for system integration.

Third, the United States should strengthen its own capabilities and those of its friends in East Asia to deter Chinese aggression and resist a potentially hostile China. China's military leaders are considering the possibility of a conflict with the United States over Taiwan. They recognize the overall superiority of the U.S. military but believe there are weaknesses that could be exploited. According to the Chinese, U.S. weaknesses include vulnerability of U.S. bases to missile attacks, heavy U.S. reliance on space, America's need to rapidly reinforce the region in times of conflict, susceptibility of U.S. cities to being held hostage, and America's sensitivity to casualties.

According to the emerging Chinese military doctrine, the local balance of power in the region will be decisive--because, in this new era, wars are short and intense. In a possible Taiwan conflict, China would seek to create a fait accompli, forcing the United States to risk major escalation and high levels of violence to reinstate the status quo ante. China might gamble that these risks would constrain the U.S. response. Such an approach by China would be extremely risky and could lead to a major war.

Dealing with such a potential challenge from China requires many steps:

• burden-sharing and enhanced ties with states in East and Southeast Asia. New formal alliance relationships--central to a containment strategy--are neither necessary nor practical at this time, but it would be prudent to take preparatory steps toward the formation of a new alliance or the establishment of new military bases should they become necessary. would signal to China that any attempt on their part to seek regional hegemony would be costly.

• enhancing military-to-military relations between Japan and South Korea

• encouraging more political-military cooperation among the ASEAN states and resolving their overlapping claims to the Spratly Islands and the South China Sea

• fostering a Japanese-Russian rapprochement, including a settlement of the dispute over the Kuril Islands claimed by both countries

• enhancing military-to-military cooperation between the United States and the ASEAN states.

These steps are important in themselves for deterrence and regional stability, but they can also assist in shifting to a much tougher policy toward China should that become necessary.

Additional measures should be taken to correct the Chinese belief that China can confront the world with a fait accompli in Taiwan. The United States should expand joint exercises with states in the region, preposition stocks there, ensure access to key facilities in countries such as the Philippines, and increase Taiwan's ability to defend itself. The large distances of the East Asian region suggest that future U.S. forces must emphasize longer-range systems and standoff weapons. The United States must also increase its capabilities to protect friendly countries and U.S. forces in the region against possible missile attacks.

As long as there is a potential for China to become a hostile power, it is not in the interest of the United States for Taiwan to unite with China. Assuming that Taiwan completes its democratic transition successfully, its people will not want to join an authoritarian China, either. While containment may require the United States to encourage Taiwan to declare independence, under congagement we would not do so. The growing economic interdependence between China and Taiwan should discourage Taiwan from unilaterally declaring independence, a move that could produce a crisis that would scare large sectors of the Taiwanese business community. If China were to become a friendly, democratic power, U.S. policy could become more favorable to reunification. The same is likely to be the case among most Taiwanese.

A congagement strategy is noncommittal on some of the key judgments about China's future--for example, whether a China enmeshed in the international system will modify its behavior, lean democratic, or challenge U.S. global leadership. Instead, this strategy sharpens the fundamental choice faced by China's leadership: either to cooperate with the current international system or to challenge the U.S. world role and pursue regional hegemony. By indicating that we are prepared to protect our interests, this strategy points out to China the costs of turning hostile.

The United States likes to decide up front whether a country is a friend or foe. However, China cannot and should not yet be categorized as partner or as adversary. Therefore, congagement is the right policy at this time. It embodies a flexible approach during this period of great Chinese transition. If China chooses to cooperate with the current international system and becomes increasingly democratic, this policy could evolve into mutual accommodation and partnership. If China becomes a hostile power bent on regional domination, this policy can turn into containment.

Related Reading

Chinese Policy Toward Russia and the Central Asian Republics, Mark Burles, RAND/ MR-1045-AF, 1999, 84 pp., ISBN 0-8330-2731-X, $15.00.

Congage China, Zalmay M. Khalilzad, RAND/ IP-187, 1999, 8 pp., no charge.

Interpreting China's Grand Strategy: Past, Present, and Future, Michael D. Swaine, Ashley J. Tellis, RAND/ MR-1121-AF, forthcoming.

Taiwan's National Security, Defense Policy, and Weapons Procurement Process, Michael D. Swaine, RAND/ MR-1128-OSD, 1999, 78 pp., ISBN 0-8330-2798-0, $12.00.

The United States and a Rising China: Strategic and Military Implications, Zalmay M. Khalilzad, Abram N. Shulsky, Daniel L. Byman, Roger Cliff, David T. Orletsky, David Shlapak, Ashley J. Tellis, RAND/ MR-1082-AF, 1999, 111 pp., ISBN 0-8330-2751-4, $15.00.