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The United States and China: Containment or Engagement?
Frank Frost
Foreign Affairs, Defence and Trade Group
Major Issues
Introduction
The United States and China after the Cold War
Bilateral and multi-lateral issues
Developments since March 1996
Australia's interests
Conclusion
Endnotes
The relationship between the United States and China is one of the most
important in the post Cold War international environment, but the two
countries have not maintained harmony or confidence in their relationship
in the 1990s. Discord has risen since the Tiananmen massacre in 1989 and
has increased markedly since mid 1995, particularly over the longstanding
issue of Taiwan. In March 1996, the military exercises conducted by China
during Taiwan's presidential election campaign, and the dispatch by the
US of two carrier groups to stand by near Taiwan, caused unease and some
alarm in East Asia.
Australia has a vital stake in the progress of US-China relations. The
sensitivities evident in Australia's own relations with China in 1996
(over issues including Taiwan, the impending visit of the Dalai Lama and
the AUSMIN meetings in July) have illustrated the potential for tensions
in US-China relations to affect Australia's policy interests. This paper
provides a concise evaluation of these issues.
The paper suggests that two major factors have fuelled the difficulties
experienced between the US and China: firstly, the conjunction of dynamic
economic growth and political uncertainty in China itself and, secondly,
the impact of the end of the Cold War.
China's economic growth has brought benefits to most Chinese but has
also been accompanied by stresses on China's administrative and political
system. With the decline of Communism as a credible ideology, China's
regime has placed increasing emphasis on nationalism as a basis for its
legitimacy. The decline of Cold War tensions since the mid 1980s has helped
China to broaden greatly its foreign relations, especially with its neighbours
in East Asia. At the same time, however, China's process of political
transition, as the era of the 92 year old Deng Xiaoping draws to an end,
has caused concern that leaders competing for political succession may
be drawn towards assertive stances in foreign policy, particularly on
issues of territorial sovereignty.
Domestic developments in China and the end of the Cold War have both
changed the climate for US-China relations. In the 1990s, the US and China
have been able to cooperate in a number of areas (such as in the negotiations
to end the Cambodia conflict in 1991) but overall, the level of trust
in the relationship has declined. The assertive attempt by the Clinton
Administration in 1993 to link continuation of China's access to normal
trading status (under 'Most Favoured Nation' provisions) was rejected
by China. Chinese leaders have harboured suspicions that the US is intent
on undermining China's Communist Party regime and may be unwilling to
accept China's rise to major power status. Indeed, the levels of suspicion
involved, especially on the part of China's leaders, have given rise to
some concerns in both countries that a 'new Cold War' might emerge, in
which the US might be drawn to 'contain' China's rising influence and
power.
The climate of lack of confidence and trust clearly complicates the
handling of bilateral and multilateral issues and the US and China must
contend with five policy areas which are especially important in their
relationship. Taiwan remains the most sensitive issue between China
and the US and China's concerns were heightened by the non-official visit
to the US by Taiwan's President Lee Teng-hui in June 1995. US-China economic
relations have been accompanied by discord over market access, protection
for intellectual property rights and China's desire to enter the World
Trade Organisation. The US has had concerns about arms control issues,
including China's approach to nuclear non-proliferation and over its alleged
provision of arms and weapons-making materials to other countries. China's
forthcoming resumption of sovereignty in Hong Kong in July 1997
may also see tensions arise with the US over China's policies towards
civil and political rights of Hong Kong residents. Human rights issues
are a further ongoing source of disagreement. None of these areas can
be easily resolved and each is likely to be the focus for further dispute.
Faced with a serious deterioration in relations by late 1995, the US
since early 1996 has moved to review its policies towards China. National
Security Advisor Anthony Lake's visit in early July 1996 was received
favourably by China and may have paved the way for further leadership
meetings after the US presidential elections. However the potential for
controversy and tension in the relationship continues.
Ongoing stress in US-China relations has significant implications for
Australia's foreign policy interests. Since 1995 the climate for Australia-China
relations has been affected by the wider tensions in US-China relations,
with China showing increasing sensitivity over Australia's non-officinal
links with Taiwan. In August 1996, China reacted critically to Australia's
reaffirmation of its allied relations with the US in the AUSMIN talks.
Continuing US-China tensions could clearly impact on Australia's bilateral
and multilateral policy goals, if for example they were to inhibit the
capacity of APEC to pursue its efforts towards regional trade facilitation
and liberalisation.
The paper concludes that the future of US-China relations cannot be
predicted with confidence. Both sides have recently taken steps to improve
management of their relations, but no immediate breakthroughs appear likely.
In the medium term, the future of the relationship will depend both on
development of an enhanced US-China dialogue and on the process of economic
and social change and political succession in China. Improved dialogue
could clearly help increase communication and confidence in the relationship.
However, until the outcome of the process of transition in China is clarified,
Chinese foreign policy and its key bilateral relationship with the US,
are likely to continue to be a factor for uncertainty in the Asia-Pacific
region.
The United States and China have what is widely regarded as one of the
world's most important bilateral relationships. China's rapidly growing
trade with the US has played a major role in the process of export-oriented
growth which is expected to make China the world's second largest economy
within a decade. Cooperation between the two countries is vital to the
prospects for preserving and enhancing security and economic cooperation
in the Asia-Pacific region.
However, US-China relations have recently experienced discord and strain.
China opposed bitterly the visit to the US of Taiwan's President Lee Teng-hui
in June 1995. China's military exercises in the Taiwan Straits in early
1996 at the time of Taiwan's presidential elections produced a sharp response
from the US, which sent two carrier groups to stand by, in one of its
largest military deployments in the East Asian region since the Vietnam
war. The tensions between the US and China have impeded communication
and dialogue between the two countries and have caused concern among the
states of East Asia. The recent tensions are also of concern to Australia,
which has substantial bilateral relationships with both countries and
which considers constructive US-China relations to be essential to the
prospects for regional cooperation, especially in APEC.
Two major factors lie behind the difficulties between the US and China.
Firstly, while rapid economic growth in China has produced many benefits
both domestically and in the East Asian region, that growth has been accompanied
by uncertainty in Chinese politics and in foreign policy. The ruling Communist
Party has yet to resolve the process of leadership transition as the era
of Deng Xiaoping draws to an end. In this climate of political transition
and competition, China's neighbours and international associates have
been concerned that its sensitivity on issues of territorial sovereignty
and its accompanying tendency towards assertive stances in foreign relations
will be exacerbated.
Secondly, the end of the global Cold War since the late 1980s has affected
profoundly the context of East Asian international relations, and of US-China
relations in particular. For two decades from 1972, the US and China cooperated
in many areas in the face of a common opponent, the Soviet Union. The
demise of the Soviet Union, however, has seen the emergence of a new environment
as the US has sought to pursue a wide range of economic and strategic
interests with a Chinese government which has cooperated with the US in
many areas, but which has also been suspicious of US motives and in disagreement
with some of its policies.
The US in the 1990s has sought to pursue relations with China under
the banner of 'engagement'. However, the strain between the US and China
in the mid 1990s has led to some concerns in both countries that a 'new
Cold War' might be in prospect in East Asia, with the US in long term
conflict with the last remaining Communist major power. Some Chinese commentaries,
at both the official and popular level, have expressed the suspicion that
the US may be unwilling to accommodate China as a major power and that
it seeks to thwart China's influence through a policy of' 'containment'.
In the wake of the stress generated during 1995 and early 1996, both countries
have moved to attempt to stabilise their relations and improve dialogue.
But significant areas of disagreement and conflicts of interests stand
in the way of lasting detente and cooperation in US-China relations.
This paper provides a concise overview of the background to the US-China
relationship, discusses the five major ongoing areas of contention (Taiwan,
economic relations, arms control, Hong Kong, and human rights), reviews
the immediate outlook in August 1996 as the US approaches the next presidential
elections, and discusses the implications of recent developments for Australia.
China in the 1990s: Economic Growth, Political Uncertainty
China has for many centuries had the potential to be a major power but
its international significance has been limited by its relative isolation
and then (from the early nineteenth century) by the intervention of a
series of foreign powers. With the end of civil war in 1949, China gained
an improved capacity to assert its own foreign policy interests and its
international profile rose, especially after the People's Republic of
China (PRC) replaced Taiwan (the Republic of China) in the United Nations
in 1971. Since the late 1970s, economic reform and growth in China has
raised its profile further and increased its influence, both in East Asia
and internationally.
China's pattern of growth since 1978 has been one of the most remarkable
developments since the end of World War Two. By 1993, the World Bank estimated
that China had the world's third largest economy but had the fastest growing
economy of all. China may become the second largest economy in the world
within the next decade. Growth has averaged 9.5 per cent annually since
the late 1970s and was estimated in 1995 to have been 10.2 per cent, and
Tables 1 and 2 illustrate the trend. Economic growth has been driven in
part by extensive flows of foreign investment: China has been the world's
largest recipient of foreign investment, with $US220 billion having been
committed between 1979 and 1993. The result of China's economic expansion
has been that between 1985 and 1993 alone, its economy doubled in size:
by contrast, Australia's economy took 24 years to do the same thing (1969-1993).
Since market and export-oriented economic reforms were initiated in 1978,
China's GDP per capita has grown by 6.7 times, although it still remains
modest in international terms ($US506 by official estimates for 1995).(1)
Furthermore, China's economic growth has played a major part in bolstering
and advancing growth and dynamism in the whole East Asian region, with
which it now has extensive trade and investment links (see Table 3).
China's continuing rapid growth has led many observers to conclude that
it is heading for the status of a superpower in the next century. However,
China continues to face some challenges in maintaining its recent pace
of economic modernisation and expansion and of coping with the changes
which this growth is bringing. China's limited capacities in education,
for example, pose substantial obstacles to development. China has only
about 2.5 million students enrolled in tertiary education (out of a population
of 1.2 billion) and only about 7 million tertiary graduates overall. These
limited numbers constrain China's capacities in economic and public sector
management.
China also faces significant problems of inequalities in development
as many coastal areas have expanded much faster than much of the countryside.
This inequality has stimulated a pattern of mass migration of up to 150
million people from rural areas to the cities in search of work and opportunities.
While many people have found work, there has also been a rise in crime
and other social problems.(2) The urban economy is also threatened by
the large array of inefficient state owned enterprises. These absorb subsidies
which amount to about one third of budgetary expenditure, but they cannot
be allowed to be bankrupted for fear of throwing about 100 million workers
out of a job. In the absence of an effective legal structure and with
high rates of growth straining administrative capacities, corruption has
become a problem so severe that state and party leader Jiang Zemin has
warned that if unchecked it could bring the regime down.(3)
Rapid economic growth in China has also been occurring at a time of
uncertainty for the ruling Chinese Communist Party (CCP) regime, which
has had to contend with the declining international and domestic credibility
of Communism as an ideology and with the impending leadership transition
after Deng Xiaoping (who is 92 years old) departs from the political scene.
The collapse of the Soviet Union and of the Communist regimes in Eastern
Europe between 1989 and 1991 startled the leaders of the CCP. With China
left as the only Communist-ruled major power, China's rulers have been
suspicious that Western countries and particularly the United States are
keen to see Communism overturned in China as well. The Party's authority
has been under strain within China, partly because of the suppression
of dissent in Tiananmen Square in June 1989 (in which at least one hundred
demonstrators died) and because the process of economic reform has made
the party less relevant in the day to day lives of China's people.(4)
The decline in the authority of Communism has been accompanied by a
heightened emphasis by the ruling party on nationalism. This has been
reflected in both official comments and in popular discussion and has
included emphasis on the abuses suffered by China in the past at the hands
of intervening foreign powers and on the need for China to protect its
territorial sovereignty. Nationalist feelings have been fuelled by incidences
in which Chinese feel that their country has not received the respect
and recognition it deserves: the rejection in 1993 of China's bid to hold
the Olympics in the year 2000 has been the most significant recent catalyst
for these reactions. In a recent article, Nayan Chanda and Karl Huus have
argued that:
The Chinese regime left ideologically bereft by the global collapse of
communism, has taken refuge in nationalism to shore up its power. Its
main goal may be to hold the country together during its rapid, turbulent
transformation. Yet the implications are worrying. Dissidents see nationalism
wielded as a new tool of repression, and foreign businessmen sense an
anti-foreign backlash in investment policy. On issues ranging from Tibet
to Taiwan and Hong Kong, meanwhile, rising nationalism can only translate
into an even tougher Chinese line.(5)
The process of internal change in China, together with the end of the
Cold War, have had a profound impact on China's foreign policy. With its
economy increasingly open to foreign investment and trade, the Chinese
government has been keen to stabilise and broaden the country's international
relationships. The decline of Cold War tensions has facilitated this process
greatly. Since the mid to late 1980s China has improved relations with
all of its neighbours and with many other countries internationally. China
has widened economic relations with Japan (although many suspicions about
Japan remain in China after the trauma of Japan's military aggression
in the 1930s) and redeveloped cooperation with the Russian Federation.
Relations with South Korea were established in 1992. China was able to
establish diplomatic ties with Indonesia and Singapore in 1990 and the
Paris Agreements on Cambodia in 1991 removed that conflict as a source
of serious regional tension in Southeast Asia and facilitated normalisation
with Vietnam. At the same time, China's economic interactions with East
and Southeast Asia since the late 1970s have increased dramatically (see
Table 3). All of these developments have been beneficial for both China
and the Asia-Pacific region.
However the combination of rapid growth and continuing political uncertainty
has also proved unsettling for the countries of East Asia. China's growth
has enabled it to pursue a military modernisation program which has involved
a cutback of 500 000 in the 3 million strong armed forces. China has also
pursued equipment upgrading (partly through cooperation with Russia) and
the development of some weapons with a potential offensive capacity (such
as medium and long range missiles) although it has been argued that the
effectiveness of these programs so far has been limited.(6) China also
has territorial disputes with a number of its neighbours. China and Japan
for example, have an ongoing dispute over the Senkaku islands. China is
also in dispute with neighbouring states over the islands and atolls of
the South China Sea. China has claimed large areas of seas surrounding
the Spratly islands: its claims are contested in whole or in part with
Taiwan, Vietnam, the Philippines, Malaysia and Brunei. China's continued
assertions of its 'incontestable sovereignty' over the area, a claim which
it reasserted in May 1996 after it ratified the United Nations Convention
on the Law of the Sea, has been viewed with concern, especially by the
members of ASEAN.(7) A further focus for uncertainty in China's foreign
policy is that its direction may be affected by the character of the process
of political succession which emerges after Deng Xiaoping passes from
the scene. The British specialist Michael Yahuda (London School of Economics
and Political Science) has argued that a great deal depends on the dynamics
of the succession process:
The less disruptive that may be, the more likely it is that a self-confident
leadership will emerge that would be able to pursue China's sovereignty
claims with moderation and with due regard to the wider issues that they
encompass. The more difficult the succession the more likely that a weak
leadership would respond erratically and assertively to perceived challenges,
especially if it were dependent upon the armed forces who are imbued with
more virulent nationalist sentiments.(8)
The United States and China: Cooperation and Conflict
In the post Cold War era, relations with China have emerged as one of
the most complex and problematic areas of foreign policy for the United
States. The US is an important economic partner for China and the two
countries have been able to pursue some common interests in regional and
international security but their relationship has also been marked by
conflict and suspicion.
The United States' relations with the People's Republic of China have
moved through three major phases since 1949. For over two decades after
the inauguration of the People's Republic in October 1949, the US and
China viewed each other with mutual antipathy. The US had sympathised
with and supported the ousted Kuomintang regime, refused to recognise
the PRC, and continued to maintain diplomatic relations with the KMT regime
when it withdrew to Taiwan. US and Chinese forces fought each other in
the Korean war and US concern about China's influence in Southeast Asia
was a primary motivation for its involvement in the war in Vietnam.
The concerns which the US and China both held about the policies and
influence of the Soviet Union sponsored a second phase in relations from
1972, when President Nixon made his historic visit. Chairman Mao Zedong
told US Secretary of State Kissinger at the time that the two countries
could overcome their profound ideological differences by working together
'against a common bastard' - the Soviet Union.(9) Relations were normalised
in 1978 and the US and China continued to cooperate through the 1980s,
particularly in opposing Soviet influence in Asia which they saw as being
advanced by Vietnam's presence (with Soviet assistance) in Cambodia after
1979.
However the changes in Soviet policies under President Gorbachev after
1985 and then the demise of the Soviet Union itself, created a new strategic
environment for both the US and China. For the US, the decline and fall
of the Soviet Union and its allies in Eastern Europe was a watershed development
which greatly improved the overall security position of the US and left
it as the sole superpower. The end of the Cold War, however, also posed
new challenges for the US. The US government has had a wide range of foreign
policy interests it has wished to pursue - for example, in promoting international
security and arms control, economic relations and human rights. But US
policymakers in the post Cold War environment have not had the Soviet
challenge to act as a pressure to help them assign priorities to the wide
range of US interests. As Michael Yahuda has observed:
Without the priorities imposed by opposition to Soviet communism and its
alleged expansion there was no longer an agreed basis for harnessing domestic
affairs to serve long term foreign policy goals... Amid these new uncertainties
domestic forces acting primarily through Congress began to impinge more
on foreign policy, both in the parochial sense of strengthening the pressure
for protectionism and in the idealistic sense of calling for greater priority
to be given to promoting human rights and democracy in the world.(10)
These developments have been clearly evident in US relations with China.
With the end of the Soviet Union as a common enemy, the geopolitical logic
for the US-China strategic alliance was removed and underlying tensions
and conflicts of interests, which had been dormant during much of the
1970s and 1980s, began to emerge. A second major catalyst for change was
the massacre of dissidents in Tiananmen Square in June 1989 which brought
strong criticism from the US along with many other countries and raised
the profile in the US of human rights issues in China.
The Bush Administration censured China after Tiananmen but also sought
to maintain a policy of communication and engagement. However in the new
post Cold War environment Bill Clinton, during the 1992 presidential campaign,
felt free to challenge the Bush Administration on its China policies.
During the campaign, Clinton was critical of the Bush Administration for
an allegedly 'soft' position on issues including human rights and labour
rights. Clinton remarked during the campaign that it 'no longer made any
sense to play the China card' and show 'forbearance' towards Beijing because
America's Soviet opponents had 'thrown in their hand'. Clinton accused
Bush of 'coddling ageing rulers with undisguised contempt for democracy,
for human rights' and promised that in office he would withdraw all trading
privileges from China as long as human rights abuses continued.(11)
In office from 1993, the Clinton Administration attempted to implement
its commitments by linking trade relations with China, particularly its
access to 'Most Favoured Nation' status(12), to improvements in human
rights performance. The Chinese government predictably reacted negatively
and refused to make concessions. The administration was forced to abandon
its policy in May 1994. In 1995 a second area of substantial policy disagreement
emerged over Taiwan. The decision of the Clinton Administration to allow
Taiwan's President Lee Teng-hui to make a private but highly publicised
visit in June 1995 brought a strongly critical reaction from China, which
conducted a series of missile tests near Taiwan and cancelled a number
of agreements and exchanges with the US.
By the end of 1995, in the words of the American specialist Jonathan
Pollack (RAND Corporation) '...there was neither warmth nor trust in the
bilateral relationship'.(13) The Lee visit acted as a catalyst to underscore
a series of concerns among Chinese leaders and senior officials about
the US. While there is no uniform view among China's senior leaders about
the US, David Shambaugh (editor of the China Quarterly,
writing in late 1995) has argued that there have been widespread suspicions
among China's leadership about US intentions in the post Cold War environment.
To many Chinese leaders, he suggested:
...the United States is pursuing a hostile policy comprised of four inter-related
components. First, it is believed that the United States is trying to
contain China strategically. Second, it is believed that the United States
seeks to frustrate China's emergence as a world economic power. Third,
it is thought that the United States wants to permanently divide Taiwan
from China, and is fuelling pro-independence sentiments on the island.
Fourth, Beijing sees evidence of a concerted policy to destabilise and
undermine the regime and communist Party rule in China, with the intent
of bringing about the collapse of the People's Republic itself. Having
disposed of the Soviet Union and other former Communist party-states,
Beijing believes that America's cold warriors now have their sights on
consigning Communist China to the proverbial dustbin of history.(14)
In the context of the existence of reservations and suspicions about
US policies in China, the relationship has probably been inhibited since
1993 by the relatively limited contact between senior Chinese and US leaders.
While Secretary of State Christopher has held a number of meetings with
his counterpart Qian Qichen, President Clinton and President Jiang Zemin
have had just three occasions to meet; during the 1993 and 1994 APEC summits
and in New York in October 1995. The need for more regular dialogue at
senior levels appears to have been recognised by the US, and the relevance
of this issue is clear in the light of the range of complex policy areas
in which the two countries have disagreements.
The US-China relationship is characterised by both cooperation and friction.
China is already very deeply involved in the international economy and
has received large amounts of foreign investment. In the Asia- Pacific
region, China along with the US is a member of both APEC, the primary
vehicle for regional trade and investment liberalisation, and the ASEAN
Regional Forum, the most important consultative body on regional security
issues. Chinese officials are also constantly involved in consultative
groups in the 'second track' of discussions on economic and political
cooperation issues. Nonetheless, the US and China have to contend with
five areas of major existing and potential conflict of interests: Taiwan,
economic relations, arms control, Hong Kong, and human rights.
Taiwan
The status and future of Taiwan and of its relations with the PRC have
been by far the most significant recent source of China-US tensions and
are likely to continue to pose a difficult set of problems for all three
governments.
The existence of an alternative government on Taiwan claiming to represent
China was a legacy of the Chinese civil war up to 1949. The defeated Kuomintang
forces withdrew to the island in October 1949 and their administration,
the Republic of China, retained international recognition by many countries
including the US. The People's Republic, however, always maintained its
right to sovereignly over Taiwan. When the US extended recognition to
the People's Republic in 1978, it ended diplomatic recognition of the
Republic of China, withdrew its remaining military forces and terminated
the security treaty which had been in force since 1954. However an understanding
was reached that while Beijing would not renounce the use of force against
Taiwan, the US would support Taiwan's position by continuing to sell it
arms. This was followed in April 1979 by the Taiwan Relations Act, adopted
by Congress against the wishes of President Carter, by which the US executive
government was obliged to regard any use of force against Taiwan as a
threat to the security of the Western Pacific and as of 'great concern'
to the US. The Act also committed the US to supplying 'arms of a defensive
character' to Taiwan.(15) Discord between the US and China over Taiwan
was muted after the two countries pursued their anti-Soviet strategic
alliance after 1972 while the Cold War was in progress, but has increased
markedly in the 1990s.
For China's leaders the status of Taiwan is a matter of national sovereignty
which cannot be compromised. If Taiwan were to remain separate from the
mainland in the long-term, then China's power and influence could well
be seen by its leaders to be inhibited. China's leaders have accepted
as a temporary aberration the rule of the authorities on Taiwan on the
basis that reunification will ultimately be achieved. They have seen the
substantial development of trade and investment between Taiwan and the
mainland as contributing to this long-term goal.
However these assumptions have been brought into question by the process
of change in Taiwan itself. Taiwan has become a highly successful economy
and a major source of investment in East and Southeast Asia. Taiwan's
economic status and credibility have given it an increased international
profile and it has been able to participate in international groups including
the Asian Development Bank and APEC. Since the mid 1980s, Taiwan has also
moved to adopt a democratic political system, a process which reached
a new stage in March 1996 with the holding of the first fully competitive
national presidential elections. The government on Taiwan considers itself
to represent the whole of China and as such has not sought to claim representation
just of the territory of Taiwan. However the Taiwan government has sought
to gain increased international acceptance of its existence so that Taiwan's
economic and political interests can be safeguarded. It has been these
trends which have made the PRC especially sensitive about the recent presidential
elections.
These developments have had important implications for US-China relations.
Taiwan's move towards a democratic system of government has given it an
additional source of credibility and popularity in the US and especially
in the US Congress. The democratic political trends in Taiwan have clearly
contrasted with those in China since the Tiananmen massacre. Taiwan has
also had a highly effective lobbying capacity in the US Congress.
The potential for discord between the US and China over Taiwan have
been clearly evident in 1995 and 1996. In early 1995 pressures emerged
to allow President Lee Teng-hui to visit the US to accept an honorary
degree from his alma mater, Cornell University. The Clinton
Administration initially indicated to the Chinese government that a visit
would not be approved but after almost unanimous support was given in
Congress to resolutions supporting President Lee's request, the Administration
was forced to change its position and accept the visit. China was highly
critical of the decision and took a number of retaliatory steps including
conducting a series of missile tests near Taiwan in July and August, reversing
agreements with the US on protection of intellectual copyright and cancelling
a series of exchanges and dialogues.(16)
The lead up to the Taiwanese elections on 23 March 1996 saw additional
tension between China and the US over Taiwan. Chinese military exercises
in March in the Straits of Taiwan forced the re-routing of major shipping
and air lanes and brought regional security issues into sharp relief.
The exercises included firing of live ammunition and of M-9 missiles close
to Taiwan's major ports, Kaohsiung and Keelung. The tactics did not succeed
in intimidating the candidates in the elections, which President Lee won
convincingly with 54 per cent of the vote. Since the main runner up candidate
opposed reunification with the mainland, about 75 pe rcent of the electorate
in effect supported maintenance of Taiwan's autonomous status. The dispatch
by the US of two aircraft carrier groups to stand by, underscored the
US geopolitical interests in Taiwan's stability and in the success of
its elections.(17)
In his inaugural address on 20 May, President Lee indicated his wish
for continued close contacts with the PRC and announced his willingness
to visit if this would assist in this. While the situation in the Taiwan
straits had stabilised by June, the potential for discord continues. Although
the US does not support a declaration of independence by Taiwan it will
not accept pressure or what is perceived as bullying by the PRC in support
of its goal of reunification. The US would also oppose forcible reunification.
It is this US commitment to what the PRC sees as a party to an internal
dispute which provides the basis for further disagreement and conflict.
Economic Relations
The growth of economic relations between the US and China has been one
of the most striking developments in the Asia-Pacific region in the past
decade. The US market has been very important to China at a time when
its industrial development has proceeded rapidly (see Table 3). The US
too has been able to develop important export markets especially in certain
sectors, including commercial aircraft (symbolised by the decision of
Boeing to hold its 1996 annual general meeting in Beijing). However the
rapid integration of China into the international economy has been accompanied
by friction with the US over issues including the balance of trade, market
access for US products, Chinese policies on protection of intellectual
property rights, and China's access to membership of the World Trade Organisation.
The development of trade has been heavily in favour of China although
the extent of the imbalance is in dispute. US Department of Commerce figures
calculate China's exports to the US in 1995 at $US45.8 billion and imports
at $US11.8 billion. However the US counts goods transhipped through Hong
Kong while China does not; China argues that its exports to the US in
1995 amounted to $US24.7 billion.(18)
Whatever the precise figures, while both the US government and business
have welcomed the increased trade between the two countries, the US has
also been highly concerned by the issue of market access for its goods
and protection of intellectual property rights. In a speech in Hong Kong
in November 1995, US Deputy Trade Representative, Charlene Barshefsky,
said that market access remained a key stumbling block to improved US-China
relations:
China continues to maintain one of the most protectionist trade regimes
in the world. While the US accepts 40 per cent of China's exports, China
accounts for less than 2 per cent of US exports. China blocks access to
its markets for many US goods, especially capital goods, limits investment
opportunity and discriminates against foreign business. In areas of increasing
comparative advantage, especially services, China keeps its markets closed
while Chinese companies scramble to monopolise it.(19)
One key focus for dispute has been US concern over lack of protection
for the intellectual copyright held by US corporations. Tensions over
alleged 'pirating' of US-owned computer software and recordings have been
longstanding. The US and China concluded an agreement on protection for
intellectual property in February 1995 but after the dispute over President
Lee's visit in June, China reversed some of the actions it had taken through
the agreement; for example, a number of pirate compact disc factories
which had been closed were allowed to reopen. Continuing concerns by the
relevant US industries over the issue resulted in a US threat in early
1996 to impose sanctions on a range of Chinese goods About 90 per cent
of the tens of millions of compact discs which China produces annually
are estimated to be pirated. After intense negotiations an agreement was
reached on 17 June 1996 by which the US withdrew the threatened sanctions
in return for Chinese commitments to close a number of pirate factories,
impose other controls, and increase access for foreign producers of sound
recordings. While the agreement was seen as a valuable step forward by
US negotiators it is unlikely to have resolved the vexed issues involved
particularly because in the very rapidly growing coastal regions of China,
the central government cannot easily control the operations of individual
enterprises who enjoy the support and involvement of local authorities.(20)
Issues of market access are also crucial in the attitude of the US to
China's desire to join the World Trade Organisation. To join the WTO a
signatory must agree to uphold the basic requirements of membership: transparency
of the trade regime, and uniform, non-discriminatory applications of trade
rules and treatment for goods and, to a more limited extent, services
providers. Many countries have encountered difficulties in these areas
in trade with China. The substantial differences in rates of development
in different regions of China also raises the question of whether China
should be allowed to join the WTO as a developing country, as China's
government demands, or as a country considered to be already developed.
The US has pressed China for a series of further changes in its trading
regimes and practices before it will accept China's membership in the
WTO.(21) Chinese leaders see this resistance as another manifestation
of an unwillingness by the US to accord China the recognition in economic
terms which they regard as already fully merited. Negotiation of China's
entry into the WTO is likely to be a long-drawn out process, with many
issues to be clarified, but its entry would enable both China and the
US to handle their frictions in trade relations in a wider, multi-lateral
context(22)
A further source of contention in economic relations has been that China
does not enjoy access to Most Favoured Nation (MFN) trading status on
a permanent basis, as do the great majority of the US's economic partners.
Although trade tensions continue, there appears to be a growing consensus
that China's MFN status should not be placed under continuing threat of
revocation. President Clinton announced his support for extension on 20
May 1996 for MFN for China for the year 1996/97. While there was criticism
from a number of members of Congress in the lead up to the vote in the
House of Representatives, the key decision by the House on 27 June was
taken by a margin of 286 to 141. Members supporting extension of MFN argued
that while they might deplore many Chinese practices in areas including
political repression of dissidents, pirating of US software and recordings
and alleged transfers of arms and weapons-making materials to countries
such as Pakistan (see below), they did not consider that denial of MFN
would be effective in advancing US interests. The extension of MFN for
a further year was also accompanied by renewed calls for China to be granted
MFN status on a permanent basis like all the US's other major trading
partners, a step which would do a great deal to improve the climate and
character of economic relations.(23)
Arms Control and Proliferation
In the post Cold War environment, proliferation of arms and of weapons
making capacities remain substantial problems and the US and China have
clashed over these issues. Two key issues have recently been contentious:
China's testing of nuclear devices and its approach towards the negotiations
for a Comprehensive Test Ban Treaty (CTBT), and China's alleged exports
of nuclear-weapons related technology and equipment.
The US has supported strongly the development of a CTBT while China,
along with India, has been one of the major countries expressing reservations.
China's principal area of concern has been in relation to the issue of
on-site inspections of alleged breaches of the Treaty. China argued that
international seismic, atmospheric and hydro-acoustic monitoring were
adequate to ensure that nuclear capable states do not carry out explosions.
China also argued for a two thirds majority for approval of on-site inspections
while a number of other major powers (including the US) wanted to have
a simple majority for approval. The climate for negotiations on nuclear
non-proliferation efforts was improved by China's announcement at the
end of July 1996 that it would cease nuclear testing, a step taken after
it conducted what it said would be its last test (on 29 July). Further
progress was announced in early August, when a compromise between the
US and China on the issue of approval for on-site inspections cleared
the way for China to endorse adoption of the Treaty, although the fate
of the Treaty itself still remains in doubt, principally because of the
continuing reservations held by India.(24)
China's exports of weapons and nuclear-related equipment (for example
to Pakistan) has been another area of contention. In early 1996 the US
criticised what it saw as the sale by China of ring magnets to Pakistan
which could be used in the enriching of uranium and the US threatened
both sanctions and suspension of prospective loans from the Export-Import
Bank. After four months of negotiations, an agreement was reached by which
China promised to monitor exports of such technologies and to refrain
from future sales to Pakistan.
A further controversy was publicised in June 1996 with reports of sales
by China of M-11 missiles to Pakistan. The Washington Post reported
deployment of the missiles by Pakistan and also suggested that Pakistan
may now have developed nuclear warheads for the missiles. Under the Missile
Technology Control Regime (MTCR) concluded in 1987, 28 nations agreed
not to export missiles capable of carrying a payload of more than 500
kilograms more than 300 kilometres. China has not been a signatory to
the MTCR but it has agreed to act in accordance with its provisions. After
the reports appeared, US government officials were reported to be concerned
that the provision of M-11 missiles would constitute a violation of the
MTCR and by law the US government would be required to impose sanctions
on a violator, whether that country is a formal signatory or not. At the
time of writing, this issue was still under investigation.(25)
Hong Kong
China's resumption of control over Hong Kong has not so far been a significant
issue of contention in US-China relations but it could easily become one.
Under agreements concluded with Britain in 1984 (the Joint Declaration)
China will resume full sovereignty over Hong Kong on 1 July 1997 when
the British lease on the New Territories expires. Under the terms of the
Joint Declaration, China has agreed that Hong Kong will be constituted
as a Special Administrative Region for a period of 50 years: it will retain
its status as a free port and the Region's social and economic system
will remain unchanged; freedom of speech, of association, of travel and
of religion will be guaranteed by law.
China's legal right to assume full control of Hong Kong is unquestioned
internationally. However the manner in which Chinese authorities assert
that control could produce discord. China has consistently indicated its
opposition to the political reforms promoted by Hong Kong Governor, Chris
Patten, in 1992 which introduced elections for the Legislative Council.
China has already announced its intention to dissolve the current Legislative
Council and replace it with a provisional legislature on 1 July 1997.
China has not been willing to accept any dissent among members of the
Preparatory Committee, which is the body which China has established to
be responsible for matters relating to the resumption of sovereignty.
The Democratic Party, which has a significant presence on the Legislative
Council, has not been given representation in the provisional legislature.
China will also have difficulties in dealing with groups in Hong Kong
which have protested against the restrictions on dissent in China and
especially the suppression of protest at Tiananmen Square in 1989. The
Chinese government is concerned that such groups should not be able to
spread their ideas within China itself. If members of these groups, or
prominent Hong Kong democrats, such as Martin Lee, are seen to suffer
discrimination after the resumption of sovereignty then this seems certain
to become an issue in relations with the US. By the provisions of the
Hong Kong Relations Act, the US government is required to monitor China's
adherence to the Joint Declaration with the UK after the resumption of
Chinese sovereignty in 1997. Hong Kong may thus join the series of issues
over which the US and China have substantial disagreements.
Human rights
Human rights have been, and are likely to continue to be, a substantial
focus for discord in the relationship. The end of the Cold War and the
collapse of most of the former Communist regimes have left China among
the few remaining avowedly Communist systems. While Communist ideology
has been de-emphasised in the process of economic reform, the continuation
of the dominant political role of the Chinese Communist Party remains
a paramount goal of China's leaders. The Chinese government has continued
to reject western attempts to promote universal human rights standards
in relations to China and has indicated a determination to maintain firm
control over dissent. China has argued that 'the issue of human rights
can only be studied in the context of the economic development, history
and cultural traditions of a particular country. The right to development
represents a most basic human right'.(26)
China has not been willing to soften its stance on political dissent.
The prison sentence given to China's most prominent dissident, Wei Jingsheng,
in December 1995 was a clear illustration of the Chinese government's
determination to control dissent. Human rights issues are a source of
ongoing suspicion of China's government in many sectors of US opinion.
The espousal by the US government of adherence to human rights standards,
and its explicit endorsement of democracy as a political philosophy whose
promotion is a key declared principle of US foreign policy, are a source
of irritation and concern to China's leaders.
China's military exercises in the Taiwan Straits, and the extent of
the US response, produced widespread unease in East Asia. The Taiwan Straits
exercises influenced the discussions held between the US and Japan in
April 1996 in which the security relationship between the two countries
was reaffirmed and was declared to be relevant to the wider security interests
of both countries in the Asia-Pacific region. The US-Japan talks were,
in turn, greeted with disquiet by China which retains longstanding suspicions
about Japan and opposes strongly any move by Japan to assume a wider role
in regional security.(27) Overall, the developments in early 1996 illustrated
the potential for the Taiwan issue to affect the security climate in the
whole East Asian region and to exacerbate difficulties in US-China relations.
Since March 1996 both the US and China have moved to try to stabilise
their relations. Progress was made during the visit to China by the US
National Security Adviser, Anthony Lake, in early July. However the relationship
remains a difficult one both in the US, where it may be an issue for debate
during the Presidential election campaign, and in China.
The US Policy Review and the Lake Visit
The disruption to relations with China caused by President Lee's visit
in June 1995 and the Taiwan Straits confrontation in March 1996 prompted
a policy review by the Clinton Administration. As the former head of the
National Security Council, Stanley Roth, commented in mid 1996: 'by the
end of last year, the White House had recognised that it was going to
have to manage China policy very carefully to prevent it from falling
off the cliff'.(28) As a result the Clinton Administration took steps
to reaffirm more precisely the goals of its China policies.
In a major statement on US policy towards China on 18 May 1996, Secretary
of State Warren Christopher noted the widespread uncertainty which recent
developments in China had aroused. Christopher stressed the great challenges
China faces in maintaining growth and stability. Rapid economic change
has been accompanied by internal pressures for China including inequalities
in growth and development and the advent of mass population movements
from countryside to urban areas by people in search of jobs and opportunities.
China's leaders, he noted, have also had to face the collapse of Communism
as an international force and an impending leadership transition as the
Deng Xiaoping era draws to a close. In this situation, Secretary Christopher
argued, China's leaders:
are turning to nationalism to rally their country and legitimate their
hold on power. This, in turn, has prompted fears that an increasingly
nationalistic China might exert its growing power and influence in ways
that challenge the security and prosperity of its Pacific neighbours.
Christopher rejected the view that China should be seen as a fundamental
threat to US interests. He also rejected the view which he argued is held
by some Chinese that 'despite our public assurances the United States
really seeks to contain and weaken China'. China, he argued, should not
be isolated or demonised. Christopher then set out three tenets for US
policy:
[W]e believe that China's development as a secure, open, and successful
nation is profoundly in the interests of the United States. Second, we
support China's full integration and its active participation in the international
community. Third, while we seek dialogue and engagement to manage our
differences with China, we will not hesitate to take the action necessary
to protect our interests.
In developing areas of common interest, Secretary Christopher suggested
that the time had come for more regular dialogue with China. He proposed
that periodic cabinet level consultations be held in each other's capitals
to facilitate a candid exchange of views and that regular summits should
also be held between the countries' leaders.
As a step towards the improved dialogue and communication which Christopher's
statement had recommended, National Security Adviser Anthony Lake visited
China between 9 and 11 July. Lake said that his visit was designed to
facilitate an exchange of 'state visits over the next couple of years'.
The visit did not lead to any discernible major developments in any of
the areas of major contention in the relationship but both sides were
able to comment positively. Defence Minister Chi Haotian said that 'The
engagement policy is being very productive... with the level of engagement
being raised'. For his part, Lake expressed his satisfaction with the
'very candid and direct exchanges on issues' in his talks and he indicated
that the US was keen to place consideration of contentious issues in the
context of a long-term process of dialogue. Lake's comments on human rights
indicated the distance the Clinton Administration has come since its attempt
in 1993 to link explicitly human rights and trade. He said that the US
was not softening its approach to human rights issues but, 'We have to
understand that this is a long term issue. In my judgement, its very unlikely
that one meeting, or an effort to devise a trade-off between one issue
and human rights, is going to produce a giant step forward'.(29)
Continuing Controversy
While the Lake visit has clearly been a positive contribution to US-China
relations, developments since March 1996 have also illustrated continuing
uncertainties and tensions.
In the US, the Clinton Administration's policies towards China have
been criticised by Republican presidential candidate Bob Dole and may
well figure during the campaign itself. Dole devoted a considerable part
of a major address on foreign policy on 9 May to China and US-China relations.
Dole called China's emergence 'the most important international challenge
the US faces as we enter the 21st century' and he supported the maintenance
of Most Favoured Nation status by China, a position he has held consistently
since 1980. However, Dole argued that the Clinton Administration 'lacked
a strategic policy towards China. The bottom line is that American credibility
in Asia is low and still declining and American interests are challenged
throughout the region'.
Dole also announced some policies which would not be welcome to China.
He argued that a system of anti-ballistic missiles should be developed
by the US in the East Asia region in cooperation with Japan, South Korea
and Taiwan. The system, which he called the Pacific Democracy Defence
Program, had the appearance of being aimed primarily at potential threats
from Chinese missiles. The proposal opened up a further area of disagreement
with the Clinton Administration. Dole has argued that America and its
allies 'are under direct threat of missile attack today.' The Clinton
Administration, by contrast, has supported the development of such systems
but at a slower pace and without the emphasis on a concerted system for
East Asia.(30)
The concept of an 'Asian star wars' system has produced divided reactions.
While some observers supported the proposal, it has also aroused concerns
that it will add to suspicions in China that key figures in the US do
see China as a longterm challenge that needs to be 'contained'. The precise
rationale for the system also remains unclear. Although China does have
a program to develop long range missiles, it has only deployed four such
missiles so far and their capabilities (including accuracy) are regarded
as being limited.(31)
On China's part, signs of continuing reservations about US policies
have been clearly evident. In July attention was raised by a book widely
circulated and publicised in China called The China that can say no.
The book, written by five young writers, has chapters with titles including
'Don't Be Worried about saying "be prepared for war"', 'Trade
Minister Wu Yi, the Chinese Iron Lady Who Says No To America', and 'The
Shameful Anti-China Plot Won't Succeed'. One of the co-authors, Zhang
Xiaobao, said that, 'In the past we've said yes too often. The West is
engaged in a plot to contain our progress. Because China has a totally
different ideology, we have been cast in the role of the new evil empire'.
Another co-author, Song Qiang, commented that, 'Its not that we don't
need the US any more, its just that we don't want the Americans to isolate
us and make us dependent on them.'(32) The experience of China's athletes
at the Atlanta Olympics also came in for highly critical comment in China
with allegations that US spectators were unduly partisan and that the
food provided did not suit Chinese tastes.(33)
In early August, additional controversy also arose over the issue of
Taiwan. The US had allowed a transit visit by Taiwan's Vice President
Lien Chan, who was due to stopover in the US on 12 August on his way to
the Dominican Republic. China's Foreign Ministry said that it had made
its opposition to the stopover visit known to the US and called on the
US 'to honour the solemn commitment it has made on the question of Taiwan
so as to prevent new damages occurring in Sino-US relations'.(34)
Australia's alliance with the US, its extensive relationship with China
and the high priority given by successive Australian governments to the
development of security and economic cooperation in the Asia-Pacific region
make the health of the US-China relationship of major foreign policy interest.
Developments since 1995 have illustrated that tensions in the US-China
relationship are of substantial potential significance for Australia.
Professor Colin Mackerras (Griffith University) has observed that:
For Australia, China's enormous population and area, its economic growth,
which has now been going on at a generally consistent and impressive level
since the late 1970s, its growing military power and the controversial
nature of much of what it does; as well as the fact that so large a nation
is in the same region, give China a necessarily high priority in Australia's
foreign relations.(35)
Australia's approach towards the PRC developed in the context of the
Cold War and Australia's alliance with the US, concluded in 1951. However
Australia's status as an ally of the US has not prevented it from pursuing
independent policies towards China reflecting Australia's national interests.
Along with the US, Australia did not recognise the People's Republic in
1949 but, unlike the US, did trade with China through the 1950s and 1960s.
Australia recognised the PRC in December 1972, six years before the US.
Since the late 1970s and the process of economic reform and rapid growth,
Australia's economic relationship with the PRC has expanded greatly, although
Australia's overall share in China's rapidly growing trade has declined
since the early 1980s (see Table 3). In 1995 China was Australia's sixth
largest trade partner and Australian trade with China reached $A6.98 billion,
an increase of 12.8 per cent from 1994. In the first four months of 1996
Australia became China's tenth largest trading partner with Australian
exports having increased by 27 per cent over the equivalent period in
1995.(36)
After 1972 successive Australian governments enjoyed close diplomatic
and political relations with China but Australia, like the US, was very
concerned at the suppression of dissidents in Tiananmen Square in June
1989 and for a time suspended some contacts. Australia continued to pursue
human rights issues in its relations with China but after 1993 the Australian
government expressed its opposition to the Clinton Administration's attempt
to link human rights issues with access to Most Favoured Nation status.
Australia's position on this issue is considered to have had some influence
in the Clinton Administration's decision in May 1994 to change this policy.(37)
Australia welcomed the improvement in US-China relations which followed
the change in policy on MFN but Australian relations with China have been
affected by the rise in tensions between the US and China since 1995 over
Taiwan. Australia has followed a 'one China' policy since it recognised
the PRC in 1972 but has also developed an extensive economic relationship
with Taiwan: in 1995 Taiwan was Australia's ninth most important trade
partner, with exports and imports valued at $A3.3 billion and $A2.6 billion
respectively. The effect of the tension over the Lee visit to the US was
to raise China's sensitivities over the general issue of interactions
with Taiwan by many countries and so the issue of Australia's non-official
associations with Taiwan became more contentious. As a result, in October
1995 the Chinese Embassy in Australia protested about what it saw as a
series of visits to Australia by Taiwanese leaders, including the Governor
of Taipei, who was in Australia at the time. A confidential Department
of Foreign Affairs and Trade report, publicised in January 1996, was reported
to state that 'China had threatened to downgrade ties with Australia last
year because Beijing believed Australia was becoming too close to Taiwan'.(38)
The newly-elected Coalition Government thus has come into office in a
climate of heightened sensitivities in relations with China.
The Howard Government since March 1996 has reaffirmed the importance
of a secure and prosperous Asia Pacific region for Australia and of the
role of bilateral relationships and regional cooperation between Australia,
the US and the countries in the region.(39) The Foreign Minister, Mr Downer,
has emphasised the significance of China's role in the region and the
importance of engagement with it. Speaking on 20 February, Mr Downer said
that, 'In our region, China is emerging as a major power both economically
and strategically. The challenge for the region is to ensure that we fully
engage China in regional affairs and in playing its proper part in contributing
to regional development and security'.(40)
In comments since 2 March, Mr Downer has supported both the maintenance
of a secure regional environment and endorsed the role the US as central
to its achievement. During the tension between China and Taiwan in March,
Mr Downer urged both sides to avoid misunderstanding or miscalculation.
He said that 'we have called for restraint on the part of the Chinese.
We will be making similar points to Taiwan'. In relation to the US role
at the time, the Minister said 'I think what we have seen in the last
few days is a very clear demonstration by the United States that it is
interested in maintaining its involvement in the security of the region
and we obviously welcome that.'(41) The government also called on China
to support attempts to secure a Comprehensive Test Ban Treaty and criticised
the nuclear tests conducted by China in early June and late July.(42)
The new Australian Government has continued to emphasise the value of
Australia's growing economic relationship with China. However its decision
to cancel the 'soft loans' provided under the Development Import Financing
Facility (DIFF) scheme has proved an irritant. China has been the second
largest beneficiary under the scheme and has received about 30 per cent
of funds allocated since 1984/85; in 1996 there were reported to be 19
DIFF-supported projects in China to a total value of $140 million. In
May, China's Ambassador to Australia, Hua Junduo, criticised the decision
to cancel the scheme and said that 'We hope that the Australian government
will follow internationally accepted practices and continue to support
the projects in the pipeline and implement these projects on time'.(43)
In a speech in Hong Kong on 4 July 1996, Mr Downer reaffirmed that 'Strategically,
China, and our longterm relationship with it, is of vital importance in
Australian foreign policy'.(44) However, recent developments have underscored
the current political sensitivity of this relationship in the wider context
of US-China relations. One reflection of this has been that issues which
have been able to be handled with limited levels of contention or difficulty
in the recent past, are now causing more difficulty. With China now highly
sensitive about Taiwan in the wake of developments since mid 1995, the
issue of non-official visits to Taiwan by Australian political figures
is proving to be more potentially contentious. China has expressed concern
about the planned visit in early September to Taiwan of Minister for Primary
Industry, John Anderson, although ministers in the former Labor government
made similar such non-official visits. The impending visit to Australia
by the Dalai Lama is also a focus for disagreement: the Dalai Lama last
visited Australia in 1992 and he met privately with then Prime Minister
Keating but China has expressed its displeasure at the prospect of a meeting
with Prime Minister Howard.(45)
Alliance relations between Australia and the US have also attracted
some critical comment from the Chinese media. The annual 'Ausmin' talks
between Australia and the US saw a strong reaffirmation of the alliance
relationship and an enhanced program of military exercises was announced.
The communique from the talks noted the 'fluid' and 'unpredictable' security
environment and also endorsed pursuit of comprehensive and open engagement
with China. The communique stated:
Both sides noted the profound impact of the U.S.-China relationship on
the future security and prosperity of the Asia Pacific region. Both sides
underlined the importance of pursuing a policy of comprehensive engagement
with China and of supporting China's development as a secure, open and
successful nation and as a strong and constructive member of the international
community. Both sides agreed that a 'one China' policy best served the
region's interest in stability and prosperity.(46)
However, an article in the official People's Daily reacted critically
to recent trends in US and Australian policies. The editorial accused
the US of using its military ties with Japan and Australia in a bid to
'entrap' China. Referring to a recent comment by Defense Secretary William
Perry that Japan and Australia were the northern and southern 'anchors'
of the US security engagement in Asia, the article said, 'From this we
can see that the United States is really thinking about using these two
"anchors" as the claws of a crab'.(47)
Foreign Minister Downer immediately rejected the interpretation carried
by the article. He said on 7 August that he had recently raised with Foreign
Minister Qian Qichen, the fact that Australia was pursuing a new security
declaration with the US (when the two ministers were attending the annual
ASEAN meetings in July):
He didn't object at all to that when I mentioned that to him before the
AUSMIN talks took place. But I did go out of my way to make sure that
I briefed the Chinese in advance. I have said to Qian Qichen privately,
and I have often said publicly, that the Australian government does not
support a policy of containment of China. We support a policy of engagement
with China... We think it is fundamentally important to the future security
of the region that China is fully engaged in the architecture of the region..(48)
At the time of writing (mid August), the Australian government was preparing
to hold further talks with China during the visits by Foreign Minister
Downer from 22 August and the Minister for Trade, Mr Fischer, from 27
August. Mr Downer was reported to have reaffirmed Australia's high priority
on relations with China which ha said are 'broad based, positive and mutually
of benefit'.(49) On 15 August, the Minister for Immigration, Mr Ruddock,
after discussions in Beijing with the director general of the foreign
affairs committee of the State Council, Liu Huaqiu, said that Mr Liu had
nominated four issues which China wished to discuss with Australia: the
forthcoming visit of the Dalai Lama, Mr Anderson's impending visit to
Taiwan, the cancellation of loans under the DIFF scheme, and Australia's
recent alliance discussions with the US.(50) The outcome of these forthcoming
discussions in Beijing will provide further indications of how Australia's
interests may be affected by the recent trends in China's wider foreign
relations, especially with the US.
As this paper has suggested, many of the problems being experienced
in relations between China and the United States stem from the fact that
China is an emerging major power in the early phases of the post Cold
War era. China is undergoing a remarkable period of economic growth which
is simultaneously improving living conditions for most Chinese while placing
the country's economic and political institutions under stress. The ruling
Communist Party's legitimacy has been bolstered by the record of growth
since 1978 but its capacity to control China has been made more difficult
by the declining salience of Communism as an ideology and by the development
of a more complex and decentralised society. While continuing economic
growth is drawing China into a wide range of closer associations with
its major trading partners, this is occurring at a time when the leadership
is especially sensitive about issues of territorial sovereignty. China's
foreign policy is thus reflecting a country undergoing rapid change, while
its leadership is strained by the demands of maintaining an effective
administration, amid contests for influence in the struggle for political
succession.
In this context, it is not surprising that the US-China relationship
has experienced difficulties. As Winston Lord (Assistant Secretary of
State for East Asia and Pacific Affairs) has recently observed:
We are dealing with a complex, difficult and prickly partner whose power
is growing, whose leadership is in transition and whose government is
turning increasingly to a nationalism that is conditioned by thousands
of years of experience as the Middle Kingdom, followed by more than a
century of humiliation by foreigners.(51)
The US has also had its own problems in policy making. In the post Cold
War environment, the US has a wide range of economic, political and security
interests to pursue with China. However, without the discipline formerly
imposed by the strategic contest with the Soviet Union, it has proven
difficult to establish clear and consistent priorities for those interests
and US policies have appeared both to China and to Western observers to
be ill-coordinated and sometimes contradictory. The appearance of inconsistency
has helped fuel suspicions among Chinese officials that while the US professes
to seek 'engagement' with China, it actually seeks rather to contain the
rise of a potential rival superpower.
Given these factors, pursuit of the US-China relationship is likely
to continue to involve both strain and some conflict. As this paper has
argued, the US and China have substantial areas of disagreement in human
rights, arms control, economic relations and especially over Taiwan. Hong
Kong may join these issues as a focus for dispute in the near future.
Some disputation and conflict may be hard to avoid over these issues.
However, the US could improve the prospects for handling its relations
with China by adding additional substance and depth to its own declared
policy of engagement. The policy could be enhanced by more regular dialogues
of the kind suggested by Secretary Christopher in May. The basis for engagement
could also be bolstered by moving to extend permanent MFN status to China.
These steps would help remove the image of China being a 'special case'
in US foreign policy and help alleviate concerns in China that the US
harbours a desire to 'contain' or limit China's rise in national strength
and international significance.
The future of US-China relations cannot be predicted with confidence.
Both sides have recently taken steps to improve management of their relations,
especially through the Lake visit in July, but no immediate breakthroughs
appear likely. The US, in particular, seems unlikely to move to renew
its dialogue with China at head of state level until after the Presidential
elections. In the medium term, the future of the relationship will depend
both on development of an enhanced process of dialogue and on the process
of economic and social change and political succession in China. Improved
dialogue could clearly help increase communication and confidence in the
relationship. However, until the outcome of that process of transition
in China is clarified, Chinese foreign policy and its key bilateral relationship
with the US, are likely to continue to be a factor for uncertainty in
the Asia-Pacific region.
- Chalmers Johnson, Nationalism and the market: China as a Superpower,
Japan Policy Research Institute, Working Paper No 22, July 1996, p 2.
Alternative methods of measuring China's GDP, using estimates of 'real
purchasing power' or 'purchasing power parity' suggest that its per
capita GDP should be higher than official estimates: the Asia Pacific
Economic Group, for example, calculates China's per capita GDP in 1995
at $US1678 (see Table 1).
- 'China's politics of crime', The Economist, 10 August 1996.
- Michael Yahuda, The International Politics of the Asia Pacific
, London, Routledge, 1996, p 218-219.
- 'China's Communists: Great leap backwards', International Herald
Tribune, 3 July 1996.
- Nayan Chanda and Karl Huus, 'The New Nationalism', Far Eastern
Economic Review, 9 November 1995.
- Strategic Survey 1995/96, International Institute of Strategic
and International Studies, 1996, p 175. A survey of China's military
capabilities and the implications of its program of military modernisation
is provided by Gary Brown, China as a Military Power: Peril or Paper
Tiger?, Research Paper No 1, Parliamentary Research Service, 15
August 1996.
- 'China's push for sea control angers ASEAN', The Australian,
23 July 1996.
- Yahuda, op cit, p 219.
- Michael Dobbs, 'US focuses on better ties to China: Policy flip-flops
roil mercurial relationship', The Washington Post, 9 July 1996.
- Yahuda, op cit, p 142.
- Michael Dobbs, 'US focuses on better ties to China: Policy flip-flops
roil mercurial relationship', The Washington Post, 9 July 1996.
- 'Most Favoured Nation' status essentially confers normal trading rights
to countries trading with the US. Under the Jackson-Vanik ammendment
to the Trade Act of 1974, MFN status can be extended to non-market economies
only if the President grants a waiver certifying that the country does
not impede emigration. This measure was adopted to encourage the Soviet
Unon to permit the emigration of Soviet Jews. China first gained MFN
status under the Jackson-Vanik ammendment in 1980 and its annual renewal
was regarded as routine until the Tainanmen massacre in 1989: see Marcus
Noland, US-China Economic Relations, Working Papers Series on
Asia Pacific Economic Cooperation, Washington, Institute for International
Economics, June 1996, p 11.
- Jonathan D. Pollack, 'The United States in Asia in 1995: The case
of the missing President', Asian Survey, XXXVI, 1, January 1996,
p 6.
- David Shambaugh, 'The United States and China: a new Cold War?', Current
History, September 1995, p 244.
- Yahuda, op cit, p 138.
- Shambaugh, loc cit .
- Economist Intelligence Unit, Country Report: China, Mongolia, 2nd
quarter 1996, p 14.
- 'Damned Lies and statistics', Far Eastern Economic Review,
30 May 1996.
- David Lague, 'In Search of Harmony and a Stable Asia', Sydney Morning
Herald, 18 November 1995.
- 'US withdraws its threat of sanctions against China; trade war averted;
officials cite Beijing crackdown on pirated goods', Washington Post,
18 June 1996.
- Noland, op cit, p 25-27.
- See Lu Weiguo, Reform of China's Foreign Trade Policies, Research
Paper No 19, Parliamentary Research Service, 30 November 1996.
- 'House supports China MFN renewal; to hold further hearings on China',
BNA International Trade Daily, 1 July 1996.
- David Anderson, Touch and go for a comprehensive test ban: the
28 June deadline, Current Issues Brief, No 19 1995-96, Parliamentary
Research Service, 25 June 1996; 'Safeguard vow on nuclear arms', Sydney
Morning Herald, 2 August 1996; 'Chairman of talks proposes four
word "refnement" to CTBT text', USIS Washington File,
9 August 1996..
- 'Going Ballistic', Far Eastern Economic Review, 27 June 1996.
- Xinhua newsagency, 18 July and 25 December 1993, quoted in Sheldon
Simon, 'East Asian Security: the Playing Field has Changed', Asian
Survey, XXXIV, 12, December 1994, p 1052.
- 'Cracks in the armour', Far Eastern Economic Review, 2 May
1996.
- Michael Dobbs, 'US focuses on better ties to China: Policy flip-flops
roil mercurial relationship', The Washington Post, 9 July 1996.
- The Washington Post, 11 July 1996.
- 'On the offensive', Far Eastern Economic Review, 23 May 1996.
- See Brown, China as a Military Power, p 22.
- 'Chinese warned of showdown with US', Sydney Morning Herald,
13 July 1996.
- Steven Mufson, 'China puts forward consistent, caustic anti-US themes:
Diversity of complaints hints at resevoir of grievances', The Washington
Post, 13 August 1996.
- 'China says Taiwan VP's trip may hurt US ties', Reuters, 7
August 1996.
- Colin Mackerras, 'China' in Russsell Trood and Deborah McNamara, eds,
The Asia-Australia Survey 1996-97, Melbourne, MacMillan, 1996
(forthcomng), p 57.
- 'Australia rises to 10th on China's trade list', The Age, 24
June 1996.
- Mackerras, loc cit, p 57.
- ibid, p 59.
- 'Security through Cooperation', Address by the Minister for Foreign
Affairs, Mr Alexander Downer, to the Conference on "The New Security
Agenda in the Asia Pacific Region", co-sponsored by International
Institute for Strategic and International Studies and the Strategic
and Defence Studies Centre of the Australian National University, Canberra,
2 May 1996.
- 'Engage emerging giant, China, Downer argues', Canberra Times,
21 February 1996.
- 'Downer warns China over war games', The Australian, 13 March
1996.
- 'Australia calls on China to end nuclear test program', The Australian,
9 June 1996.
- Ravi Tomar, A DIFFerence of Opinion: Cancellation of the Development
Import Finance Facility, Current Isues Brief No 20, 1995/96, Parliamentary
Research Service, 25 June 1996, p 8, 13.
- 'Australia, North East Asia and China: Opportunities in a changn world',
Address by the Hon Alexander Downer MP, Minister for Foreign Affairs
of Australia, at a joint Asia House/Austcham luncheon, Hong Kong, 4
July 1996.
- 'China demands PM snub Dalai Lama', Sydney Morning Herald,
13 August 1996.
- Australia-United States Ministerial Consultations: Joint Communique,
p 2.
- 'Australia and Japan are the claws US will use to entrap us, says
China', Australian Financial Review, 8 August 1996.
- ibid.
- 'Downer courts Chinese', The Australian, 16 August 1996.
- 'Beijing concerned by the mood in Canberra', Canberra Times,
15 August 1996.
- 'US-Sino spats could turn into something nasty', Australian Financial
Review, 21 June 1996.
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