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The United States and China: A New Framework

The relationship between the United States and China is fast becoming the world's most critical. More regular consultations are required. President Clinton should also lift punitive economic sanctions, accelerate China's entry into the World Trade Organization, and stress U.S. plans to remain a major Asia-Pacific actor. Beyond the October summit, the presidents of the United States and China need to regain control of their respective domestic debates so that the two countries are less likely to become adversaries.


Shaping and managing the U.S. relationship with Chinais one of the principal foreign policy challenges facing the United States for the foreseeable future. It is at least as important as efforts to build an open world trading order and clearly more important than any attempt to expand NATO's membership. Indeed, if the U.S.-Soviet relationship was critical to the history of the second half of the twentieth century, it is quite possible the relationship between the United States and China will, more than any other foreign tie, define international affairs in the first half of the next century. It is difficult to exaggerate what is at stake for the United States. U.S. interests include deterring any use of military force by China against Taiwan or other countries in the region, discouraging Chinese export of technology associated with weapons of mass destruction or rogue state military capabilities, eliciting diplomatic cooperation vis-à-vis North Korea and within the UN Security Council, fostering political and economic reform on the mainland, expanding the opportunity to trade with and invest in what could one day be the world's largest market, preserving Hong Kong's market system and its special status, and encouraging a responsible environmental policy on the part of the country that is home to one out of every six people on the planet.

More generally, the United States has a clear interest in seeing the emergence of a China that is prepared to act with restraint, both beyond its borders and toward its own citizens. The emergence of such a China should not be assumed. It is possible the United States might one day find itself in the position of having to contain an expansionist, hostile China. If this happens, U.S. foreign policy will have to adjust accordingly. But containing China would surely be costly and dangerous, and vastly inferior to a situation in which the country was more responsible and its relationship with the United States more cooperative. This should be our goal.

The upcoming October summit between President Jiang of China and President Clinton provides a historic opportunity for the two countries to realize some progress toward creating a framework for managing the many issues that divide them. The number and complexity of these issues should not be underestimated. The leaders are not likely to find solutions to most of them in the course of brief discussions. What they can and should do, however, is create a basis for moving relations forward.

This said, the term summit is misleading and even counterproductive. For many, it will conjure up images of U.S.-Soviet summits, reinforcing a view that the United States and China are adversaries engaged in a new cold war. Similarly, summitry often implies an emphasis on the negotiation of arms control and other accords.

But the United States and China are not and need not become adversaries. Nor should the measure of success of the Jiang-Clinton meeting be the number of pacts signed. On many matters the countries remain far apart, and there has simply not been adequate dialogue to bridge the differences. Also, many of the most important issues do not lend themselves to negotiation and resolution in some formal text. Frank discussion and honest consultation are required.

The most important outcome of President Jiang's visit thus might be a mutual commitment to hold regular meetings between not only presidents but mid- and high-level officials. After Tiananmen Square, such meetings became rare. This is not in the American interest. Meetings with Chinese officials are as much in the U.S. interest as China's and should not be seen as some benefit to be withdrawn as a sanction. Where there is disagreement with some aspect of Beijing's behavior, U.S. officials should use meetings to press their case.

At one level, the meeting in Washington will automatically go part way toward establishing a more normal pattern of relations between the two countries. Although U.S. presidents have met bilaterally with Chinese leaders at the United Nations and at meetings of the Asia Pacific Economic Cooperation forum, President Jiang's visit in late October will be the first official visit by the Chinese head of state to the White House in more than a decade and the single most important visit by a Chinese leader since Deng Xiaoping's historic trip in 1979. And Mr. Clinton's proposed return visit to China next spring would be the first visit there by an American president in nine years. By contrast, since 1989 both President Jiang and Premier Li Peng have had numerous state visits to all other major industrial countries and the heads of these states each have made one or more official visits to China.

But it will take more than an exchange of visits to transform the relationship into a partnership, a phrase used by both Secretary of State Madeleine Albright and Chinese Foreign Minister Qian Qichen to describe their goals. There is a long agenda of issues on which the two countries appear to have different interests and priorities.

Normalizing Economic Relations

A principal objective of the October meeting should be the normalization of economic relations between the two countries. The first step should be the lifting of punitive economic sanctions that the United States has imposed on China. These were imposed in a coordinated fashion by the industrialized countries in the immediate aftermath of the Tiananmen Square repression. But although Japan and the European countries lifted their sanctions long ago, the United States continues to suspend Overseas Private Investment Corporation (OPIC) insurance, reinsurance, financing, and guarantees in China. It also prohibits the Trade and Development Agency from financing feasibility studies there. And U.S. policy blocks American firms from supplying nuclear power generation equipment to China.

Sanctions penalize U.S. firms in their competition with European and Japanese firms in China while imposing few costs on the Chinese. The availability of OPIC insurance would encourage more U.S. firms to invest in China, leading to more sales of machinery and equipment. In the pre-1989 era the Trade and Development Agency funded more feasibility studies in China than in any other country. These frequently led to Chinese purchases of U.S. capital goods. While U.S. firms have been precluded from bidding on nuclear power generation projects, the Chinese have ordered more than US $10 billion in nuclear power generation equipment from Canadian, French, Russian, and other suppliers. In short, because China has access to alternative sources of supply, economic sanctions provide the United States with little leverage, impose substantial costs on U.S. firms, and reduce U.S. exports and job creation. Subject to the caveats discussed later, the summit should provide the occasion for the United States to begin lifting the sanctions, including those on the sale of nuclear power generation equipment.

The summit should also provide the occasion for moving forward the negotiations leading to China's membership in the World Trade Organization. In the past year, these negotiations have made little progress. China has made important market-opening commitments, including major reductions in tariffs and a timed phaseout of licensing requirements and quotas that restrict imports of many critical products. Much less progress has been made in dealing with subsidies of state-owned enterprises and national treatment for providers of financial and other services in China. This should not be surprising, given the weakness of many of China's state-owned firms in its most protected sectors and the resulting fragile condition of its major banks, which have been forced to keep the financial spigots open to sustain these inefficient enterprises.

Although Beijing remains some distance from meeting the standards of the World Trade Organization, several U.S. interests would be served by China's early entry. First, membership in the WTO would lock in the many market-opening measures that the Chinese have already taken. Also, China's negotiators have pledged to a stand-still posture; that is, not to pull back from liberalizing measures already put forward in their WTO accession negotiations. But this is not a binding agreement. China can raise its tariffs and increase nontariff barriers with impunity if its economic growth markedly declines. Once the country is in the WTO, however, any increased trade protection would have to be agreed to by the organization, would be subject to careful international monitoring, and would have to be phased out as soon as possible. Second, China's entry would lock it into a schedule of future reforms and opening-up measures that is both transparent and certain. This would provide important information to U.S. firms that would like to penetrate China's more closed sectors but now have no idea when they should launch their marketing. Finally, China's membership in the WTO would serve U.S. interests by providing a mechanism for dealing with inevitable trade frictions on a multilateral basis, thereby providing some relief to a clearly overloaded bilateral relationship.

This suggests that the United States should recalibrate its demand that China rapidly eliminate existing quotas and licensing requirements. Instead, Washington should allow Beijing time to come into full compliance with WTO standards. The result would be to accord China a status somewhere between a developed and a developing country. Its market-opening steps, including further reductions effective October 1 in more than 6,000 tariffs, could be recognized as a down payment toward coming into full compliance with international trade standards. A schedule in the protocol governing China's membership would specify the balance of reforms and market-opening measures to be taken.

The Political Agenda

Human rights violations will inevitably figure prominently in the U.S.-China relationship. The American and international media are sure to focus on these matters, as will Congress. As a result, President Clinton will both want and, for domestic political reasons, need to raise concerns over treatment of political dissidents and those who are repressed for religious reasons when he meets with President Jiang.

But it would be wrong to place human rights at the center of the Sino-American relationship given the importance of other interests. It would likely prove more productive to raise U.S. concerns in multilateral forums such as the Commission on Human Rights in Geneva. In addition, over the long run the human rights situation in China is likely to improve dramatically only if there is systemic market and political reform. This argues for focusing less on individual cases and more on fundamentals. It also argues for some perspective. As evidenced by increasingly widespread rural elections and the introduction of various reforms of legal and criminal codes, China today is a less closed, less repressive country than it was a decade ago. Increased cultural, legislative, and diplomatic exchanges along with greater economic interaction are likely to do more good than continuing or, as some are advocating, expanding economic and political sanctions.

A second political issue involves Hong Kong. The meeting in Washington comes less than four months after China regained sovereignty over the former British colony. Thus far, at least, the Chinese have acted in a manner consistent with their obligations under the Sino-British Joint Declaration. President Clinton ought to note the continued American interest in Hong Kong's unique status and remind President Jiang that Chinese behavior there will be watched closely and have a large impact on how China is perceived by many Americans.

The Security Agenda

President Jiang's visit comes just after the publication of the new U.S.-Japan Defense Guidelines that expand what the United States can expect from Japan in the way of assistance and active participation in future crises. Beijing sees this expansion as something of an unfriendly act aimed at China. This is not the case; the new guidelines do not mention China or any specific contingency involving China. It need not fear the guidelines or U.S. security ties with any Asia-Pacific country as long as it acts in a manner not prejudicial to U.S. interests. Similarly, the president can explain U.S. plans for theater missile defense, making it clear that TMD is designed principally to protect U.S. forces in the region.

What might prove to be the most significant security-related matter facing the United States and China in the medium and long term is China's attitude toward a continuing American military presence in East Asia and the Pacific. In the past, Chinese officials appeared to recognize the contribution made to the area's peace and stability by the U.S. military presence. There are, however, indications that China's posture is changing. President Clinton should make clear that the United States would strongly resist Chinese pressure on local states that they weaken their ties to us. Mr. Clinton should emphasize that the United States is and will remain a Pacific power and presence, something that includes but is not limited to U.S. forces in Japan and in Korea, even after unification.

For now, though, the most contentious security issue is likely to be Chinese exports of technology that promote the proliferation of weapons of mass destruction and missile systems. China has made some significant progress in this area in recent years, including its accession to the Nuclear Nonproliferation Treaty, the Chemical Weapons Convention, and the Comprehensive Test Ban Treaty; its statement that it would respect the Missile Technology Control Regime, despite not being a formal member; and its commitment to the United States (made in May 1996 and subsequently codified in Chinese law) that it would not provide assistance to unsafeguarded nuclear facilities. At the same time, there are lingering questions about China's export policies, in particular its support for various programs in Pakistan and Iran, and its willingness to comply with the terms of the various supplier groups designed to stem proliferation.

In this context, it would be appropriate for President Clinton to recognize that China's new law governing the export of nuclear and nuclear-related dual-use technology goes a long way toward allowing him to make the certification required under the 1985 bilateral Peaceful Nuclear Cooperation Agreement. If the administration is confident of China's ability and willingness to enforce this law, commercial sales of U.S. nuclear power generation equipment should go ahead, especially given that the case for proceeding is strong on both commercial and environmental grounds.

Iran-China relations merit separate treatment. Months ago, China indicated it had suspended the sale of nuclear reactors to Iran. This was and remains a welcome development. But it is important that China extend this ban to include all technologies that could contribute to Iranian missile and unconventional weapons programs. This objective should be presented not as a quid pro quo for peaceful nuclear cooperation with the United States but as something that touches on vital U.S. security interests and that will inevitably have a major impact on how China is viewed here.

The situation on the Korean Peninsula is one in which China and the United States have a strong incentive to cooperate. A major conflict there would prove costly and dangerous to both. The visit here offers an opportunity to discuss approaches to the ongoing Four-Party Talks, urge China to continue to encourage more reasonable and less aggressive North Korean behavior, and remind it of U.S. interests in and commitments to the region. Up to now U.S.-Chinese discussions on North Korea often have been disappointing. But the visit will provide a good test as to whether China is willing to assume a more constructive role in the region, particularly in promoting the full implementation of the U.S.-North Korean framework agreement under which Pyongyang agreed to eliminate its nuclear weapons program.

The visit is also an occasion to reiterate the long-standing and strong U.S. desire that differences between China and Taiwan be resolved peacefully. President Jiang needs to understand that China's use of force against Taiwan is unacceptable under any circumstances. At the same time, President Clinton can make clear his firm opposition to unilateral acts by either party—including a declaration of independence by Taiwan—that threaten the peace.

Last, military-to-military exchanges should be expanded as long as they become more reciprocal and benefit the United States as much as they do China. Such exchanges can build confidence and break down personal barriers, but only if they are implemented in a manner that both sides find useful. Otherwise, the exchanges could well increase mistrust and cause more harm than good.

Beyond Closed Doors

Public interest in the Clinton-Jiang meeting is sure to be intense. Although scorecards and other attempts to measure success are inevitable, the priority should be less on resolving specific disagreements than on establishing a framework within which a broad range of issues can be addressed.

One action that should certainly be ruled out is the negotiation of a fourth communiqué that would attempt to revisit the nearly theological questions of U.S. policy toward China and Taiwan. Those matters are adequately handled by the existing communiqués and the Taiwan Relations Act, and any attempt to add to or otherwise modify these accords would be a distraction that would raise more problems than it could ever solve.

Public diplomacy might prove as important as anything discussed in private. The U.S.-China relationship is coming under intense pressure in this country as various people and groups seek to promote their particular agendas. The public events surrounding the visit will afford President Clinton a rare and valuable opportunity to educate the American people and Congress as to the range and significance of U.S. interests at stake in this relationship and to argue for a balanced policy that works to bring about a more responsible China. In particular, the president can explain why many of the proposals that would sanction China for those aspects of its behavior that we find troubling are short-sighted and likely to work against long-term U.S. interests.

The need for making a greater effort to shape public and elite thinking applies equally to Jiang Zemin and his associates. Many people in China are coming to view the United States in unfriendly terms, seeing U.S. policy as designed largely to frustrate China's "rightful" emergence as a major power. This is not the case, and it would be extremely useful if China's leaders accepted some responsibility for shaping the way the United States is portrayed and perceived in their country.

Last, it is important that the effort to build a deeper and more productive U.S. relationship with China not be episodic and tied to presidential get-togethers. The need for regular meetings among officials at lower levels has already been noted. In addition, the task of generating congressional, public, and allied (particularly Japanese) support for a concerted policy toward China deserves regular U.S. attention. Investing in building a cooperative relationship makes sense by any standard, particularly when one considers the costs of what it would take to implement a strategy to deal with a hostile China.

SERIES: Brookings Policy Brief Series | # 25