China's Policy Toward the US in the Post-Cold War

From Confrontation to Accommodation: China’s Policy toward the U.S. in the Post-Cold War Era

by Yeh-chung Lu

B.A. June 1995, National Cheng-chi University, Taiwan, ROC M.A. June 1998, National Cheng-chi University, Taiwan, ROC

A Dissertation submitted to

The Faculty of Columbian College of Arts and Sciences of The George Washington University in partial satisfactionof the requirements for the degree of Doctor of Philosophy

August 31, 2009

Dissertation directed by

Susan K. Sell Professor of Political Science and International Affairs

The Columbian College of Arts and Sciences of The George Washington University certifies that Yeh-chung Lu has passed the Final Examination for the degree of Doctor of Philosophy as of June 29, 2009. This is the final and approved form of the dissertation.

From Confrontation to Accommodation: China’s Policy toward the U.S. in the Post-Cold War Era

Yeh-chung Lu

Dissertation Research Committee:

Susan K. Sell, Professor of Political Science and International Affairs, Dissertation Director

Bruce J. Dickson, Professor of Political Science and International Affairs, Committee Member

Harry Harding, University Professor of International Affairs and Political Science, Committee Member

iii Dedication

To my parents, Cheng-du Lu and Hsiang-ling Yu

iv Acknowledgements

The completion of this dissertation would still be a mission impossible without the unwavering support and help from so many people. My dissertation advisors from

George Washington University, Bruce Dickson, Susan Sell, and Harry Harding, deserved all the credits by providing their insights to my research. Bruce Dickson guided me throughout the whole process of research and writing and asked me to deliberate about the linkage between theory and evidence. Susan Sell’s knowledge of IR theories always kept me on the track while exploring these divergent issues. Harry Harding, with his analytical mind, broadened the perspectives on my research. Martha Finnemore, Iva

Beatty, and Forrest Maltzman provided necessary and timely administrative guidance and assistance to facilitate my study in George Washington University.

I have always been grateful to my teachers from National Cheng-chi University in

Taiwan. I benefited a lot from a chief advocate for Taiwan’s IR discipline, Bih-jaw Lin. I am deeply appreciative of the help from Chung-chian Teng and Kwei-bo Huang, who constantly advised me on scholarship and life along the way. I wish to express special thanks to Kun-shuan Chiu, who made my field research in China possible and fruitful.

Alex Chiang encouraged me to continue my study in the United States from the begining, leading me to understand what culture shock was and how to deal with it. Scott Kastner from the University of Maryland shared his experiences with me, through which I saw how a successful scholar paved his way in academia.

I also benefited a lot from my classmates in GWU. John Tai, Kazuhiro Obayashi,

Yangmo Ku, Liang Sun, Gonzalo Paz, Jeff Becker, and Logan Wright all provided their support and help to me at different points in time. Jung-ming Chang, a longtime friend

from college years, deserved my special thanks, for his encouraging me to move toward this goal. Patty Chen and Sam Chin, Angela Yao, and Tony Tu and Dana Lin, provided sincere friendship and support when necessary.

Finally, I owe a considerable debt to my parents and my sister, who have been providing their unconditional support in both financial and emotional terms. Without their understanding, my study and research would be simply impossible. I want to express my special thanks to Dai-Rong; it is for sure I couldn’t go this far without her encouragement and support in the past seven years.

Abstract of Dissertation

From Confrontation to Accommodation: China’s Policy toward the U.S. in the Post-Cold War Era

China’s foreign policy in general and U.S. policy in particular underwent a significant change in contrast to its stance in the early 1990s. In the immediate aftermath of the Cold War, China adopted a confrontational stance toward the U.S., while issues over human rights, trade, arms control, and Taiwan were the salient points of contention.

However, since the mid-1990s, China has gradually become accommodative with the U.S. interests. China’s accommodation is evident in its relationship with the U.S. on the issues such as trade and episodic crises. In addition, China has gradually abandoned confrontational “opposing hegemonism” rhetoric while referring to its U.S. policy.

How should we describe these new developments and China’s policy towards the

United States in the post-Cold War era? What accounts for this shift from a confrontational policy to an accommodative one while facing the American “hegemon”?

This research aims to explain these questions by surveying specific cases in U.S.-China relations from 1991 to 2006.

My research aims to provide an eclectic analysis of defensive realism with trade expectations theory to explain China’s changing behavior toward the U.S., with a central argument that this shift is based upon the cost-benefit analyses of the Chinese leadership.

It is a cost-benefit analysis in which advantages from cooperation with the U.S. beneficial to China’s needs and disadvantages of confrontation harmful that shapes China’s behavior, making China adapt to live with a hegemon.

Employing materials such as Chinese official statements, memoirs, in-depth

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interviews with officials and scholars active in the government decision-making process,

Chinese internal circulated and journal articles, and newspapers, this research explores several interconnected factors accountable for China’s shift to accommodation. China’s perceptions of distributions of capabilities in the international system, perceptions of threat and reciprocated interactions between China and the U.S. in their dyadic relationship, China’s expectation of benefits from trading with the U.S., and the top leaders’ concern of political survival while accommodating the U.S., altogether have contributed to China’s gradual accommodation to the U.S. in the post-Cold War era.

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Table of Contents

Dedication...... iv

Acknowledgements...... v

Abstract of Dissertation ...... vii

Table of Contents ...... ix

List of Figures...... xi

List of Tables...... xii

Acronyms...... xiii

Chapter 1 Introduction ...... 1

New Developments in Chinese Foreign Policy ...... 1

Theoretical Puzzle and the Insufficiency of Offensive Realism...... 5

Explanations for China’s International Behavior...... 7

Significance and Limitations ...... 17

Organization of My Research ...... 19

Chapter 2 Chinese World Views in the Post-Cold War Era ...... 21

Perception and the Study of Chinese Foreign Policy...... 28

Deng Xiaoping’s Judgment since the 1980s ...... 35

Evolution with World Events: Chinese Perceptions of U.S. and World Power

Distribution ...... 39

Conclusion ...... 75

Chapter 3 Political and Diplomatic Issues: How to Live with a “Threat”?...... 77

Bilateral Reciprocity and the Perception of Threat...... 80

“Desired” vs. “Unwanted”: Political Quarrels over Human Rights ...... 86

Moving toward “Constructive Strategic Partnership” ...... 95

Pursuing Stability with the Bush Administration...... 102

Conclusion ...... 112

Chapter 4 Economic Interdependence: Part of the Solution or Part of the Problem?...115

Trade Expectation Theory and China’s U.S. Policy ...... 119

Trade Dependence, China’s Economic Development, and Globalization...... 126

U.S.-China Trade Relations: Ballast and Hot Button Issues...... 135

Chinese Perceptions of the Trading Relationship ...... 143

WTO Membership: How Expectation Affects China’s Decision ...... 149

Managing Bilateral Trade Issues...... 157

Conclusion ...... 161

Chapter 5 Domestic Political Context: Is anyone still a Hardliner? ...... 163

Political Survival as an Explanation ...... 168

Crisis as a Catalyst for Policy Shift ...... 172

Conclusion ...... 206

Chapter 6 Conclusion...... 209

Findings...... 209

Hypotheses Revisited...... 218

Future Research Agenda ...... 221

Bibliography ...... 229

List of Figures

Figure 2.1 China’s GDP and Military Expenditure, 1991-2006…………………….…..25

Figure 2.2 Reports on U.S. with keywords in Renmin Ribao , 1989-2007……..………44

Figure 2.3 China and the U.S. Military Expenditure, 1991-2006………………………69

Figure 4.1 China’s Foreign Trade and GDP, 1991-2006……………………………….129

Figure 4.2 China’s Exports Ratio to GDP, 1991-2006…………………………………130

Figure 4.3 China’s Trade Surplus with the U.S., 1991-2005…………………………137

Figure 4.4 Ratio of Exports to U.S. in China’s Total Exports, 1991-2005……………138

Figure 4.5 U.S. Share in China’s Total Realized FDI/FOI, 1991-2006………………139

List of Tables

Table 2.1 Comparison of CNP Scores of Major Countries…………………………….67

Table 4.1 U.S.-China Merchandise Trade Statistics, 1991-2005………………………135

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Acronyms

APEC Asia-Pacific Economic Cooperation ARF ASEAN Regional Forum ASEAN Association of Southeast Asian Nations CASS Chinese Academy of Social Sciences CCP Chinese Communist Party CICIR Chinese Institute for Contemporary International Relations CMC Central Military Commission CTBT Comprehensive Test Ban Treaty FALSG Foreign Affairs Leading Small Group G-7 Group of Seven GATT General Agreement on Tariffs and Trade GDP gross domestic product GNP gross national product IPR intellectual property rights IR international relations MOFA Ministry of Foreign Affairs MOFTEC Ministry of Foreign Trade and Economic Cooperation MTCR Missile Technology Control Regime NATO North Atlantic Treaty Organization NGOs nongovernmental organizations NPC National People’s Congress NPT Non-Proliferation Treaty PBSC Politburo Standing Committee PLA People’s Liberation Army PLAAF People’s Liberation Army Air Force PLAN PLA Navy PNTR permanent normal trade relations PRC People’s Republic of China RMB renminbi SOEs state-owned enterprises TALSG Taiwan Affairs Leading Small Group TMD theater missile defense TRA Taiwan Relations Act

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UN United Nations U.S. United States USSR Union of Soviet Socialist Republics USTR United States Trade Representative WTO World Trade Organization

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Chapter 1 Introduction

New Developments in Chinese Foreign Policy

In April 2006, China’s President Hu Jintao made it known that China would uphold a new concept of security featuring mutual trust, mutual benefit, equality, and coordination in the practice of future Sino-American relations during his visit to

Washington, D.C. This gesture demonstrated China’s increasingly non-confrontational policy toward the United States. In the early 1990s, however, China pursued a confrontational policy toward the U.S. under the banner of “anti-hegemonism.” Evidence from this period suggests that China had rejected international control over weapons proliferation, evident in its sales of M-9 and M-11 missiles to states of U.S. concern, and it threatened to retaliate if U.S. revoked China’s MFN status over human rights issues.

The zenith of this period of confrontation was the 1996 Taiwan crisis, in which both sides acknowledged the potential of a direct military conflict. In addition, China’s restart of military cooperation with the Soviets after 1990, 1 the debut of the Shanghai Five in 1996,

and China’s forging a “strategic co-operative partnership” with Russia in the same year

have all been commonly seen as a reaction to U.S. predominance. 2

China’s anti-hegemonism policy lasted for almost five years after the collapse of the

Soviet Union as certain observers—particularly offensive realists such as John

1 Liu Huaqing, Liu Huaqing Huiyilu (Beijing: Jiefangjun Chubanshe, 2004), pp. 590-599. 2 Aaron Friedberg, “11 September and the Future of Sino-American Relations,” Survival , vol. 44, no. 1 (Spring 2002), pp. 40-41; Denny Roy, “China’s Reaction to American Predominance,” Survival , vol. 45, no. 3 (Autumn 2003), p. 64.

Mearsheimer, Aaron Friedberg, and Denny Roy—had predicted. However, in the face of continued U.S. predominance, China made a policy shift that became more amenable to

U.S. interests in the mid-1990s. In terms of bilateral relations, China agreed to resume exchanges of high-level officials with the U.S., which led to the summit meetings in 1997 and 1998 between the top leaders. China also made concessions to the U.S. in their 1999 negotiation over World Trade Organization (WTO) membership. In the 2001 EP-3

Incident, the Chinese leadership adopted a pragmatic rather than a nationalistic approach to cope with the Bush administration. During U.S. Secretary of State Colin Powell’s visit to Beijing in summer 2001, China expressed its welcome of the U.S. presence as a stabilizing factor in the Asia-Pacific region. Since the U.S. has initiated its national missile defense (NMD) plan in 1998, many Chinese analysts and government officials such as Sha Zukang have continued to claim that China will not pursue an arm races with the U.S. since 2001. 3 When listening devices were discovered on a Boeing 767 airplane

to be designated as top leader Jiang Zemin’s Air Force One in 2002, the Chinese

government kept the story out of the media to avoid open political friction with the U.S.

In the meantime, China’s overall foreign policy underwent a significant change in

contrast to its policy stance in the early 1990s. 4 As Evan Medeiros and Taylor Fravel

stated, since the mid-1990s, China has displayed a “new diplomacy” in world affairs that

they deemed more cooperative than confrontational. 5 First, China sought to settle or at

least freeze territorial disputes with neighboring states. In July 2001, China and Russia

agreed to “maintain the status quo” on pending boundary issues. In November 2002,

3 Xinhua News Agency, March 14, 2001. 4 Guoli Liu, ed., Chinese Foreign Policy in Transition (NY: Aldine de Gruyter, 2004). 5 They contend that China has “expanded the number and depth of its bilateral relationships, joined various trade and security accords, deepened its participation in key multilateral institutions, and helped address global security issues.” Evan Medeiros and M. Taylor Fravel, “China’s New Diplomacy,” Foreign Affairs , vol. 82, no. 6 (November/December 2003), p. 23.

China and the Association of Southeast Asian Nations (ASEAN) countries decided to undertake consultation and seek peaceful means to resolve territorial and jurisdictional disputes that China would formerly only address on a bilateral basis. 6 China also became

more actively engaged in regional and international organizations while downplaying the

significance of its bilateral “strategic partnerships” with other countries. By one count,

the number of China’s memberships in inter-governmental organizations increased from

30 in 1977 to 50-plus in 2000. 7 In the late 1990s China also became more involved in

regional arrangements such as the ASEAN Regional Forum (ARF), which China had

originally been hesitant to participate in due to possible American and Japanese

dominance. Compared to its attitude in the early 1990s, China currently plays a greater

role in the Six-Party Talks addressing the current nuclear crisis on the Korean Peninsula.

China has participated in several international nonproliferation regimes since the 1990s.8

While China was aware that its “strategic cooperative partnership” with Russia could raise suspicions in the U.S., the two parties explicitly issued reassurances in 1996 that their cooperation was “not directed at any third country.”

This dissertation, then, begins with an understanding of these new developments in

China’s policy towards the United States in the post-Cold War era as a shift from a confrontational policy to an accommodative one. For the purpose of this research,

“confrontation” is defined as resistance to the other’s claims in their bilateral relations, while making their own claims on certain issues. Furthermore, “war” would be the

6 Bates Gill, Rising Star: China’s New Security Diplomacy (Washington, DC: The Brookings Institution, 2007), pp. 35-37. 7 David Lampton, Same Bed, Different Dreams: Managing U.S.-China Relations, 1989-2000 (Berkeley: University of California Press, 2001), pp.162-163; Alastair Iain Johnston, “Is China a Status Quo Power?” International Security , vol. 27, no. 4 (Spring 2003), pp. 12-13. 8 These include the Missile Technology Control Regime (MTRC), the Treaty on Nonproliferation of Nuclear Weapons (NPT), and Chemical Weapons Convention (CWC), and the Comprehensive Test Ban Treaty (CTBT).

ultimate form of resistance and “balancing” the most likely policy choice in the forms of alliance and/or military buildups. “Accommodation” is defined as acceptance, with both

sides agreeing to recognize some of the other’s claims while not sacrificing their own

essential interests in order to avoid the violent behavior generated by potential discord. It

assumes that their bilateral relations are not zero-sum, yet total harmony of interests may

not prevail because their divergent but essential interests remain. 9

What accounts for this shift from a confrontational policy to an accommodative one?

My research aims to provide an eclectic analysis of defensive realism with trade

expectations theory to explain China’s changing behavior toward the U.S., with a central

argument that this shift is based upon the cost-benefit analyses of the Chinese leadership.

Chinese foreign policy has become more interest-based and pragmatic since the inception

of economic reform rather than ideology-based as in the past. 10 China’s tendency to

adopt confrontational strategy or not has depended on its own definition of interests, as

indicated in the Chinese leadership’s emphasis that any struggles with other countries

should be pursued with “just grounds, to our advantage, and with restraint.” Therefore, it

is a cost-benefit analysis, in which advantages from cooperation beneficial to China’s

domestic needs are considered along with the disadvantages of any confrontation harmful

to domestic development, that shapes China’s behavior, making China adapt to live with

a hegemon, if not a threat. The Chinese leadership has changed its perceptions of threat

and of the distribution of capabilities in the international system that had confined its

policy choices since the end of the Cold War. The perception of the source of threat had

9 Some suggest that accommodation is a “mutual toleration” and “tacit acceptance” of each other’s interests. Jeffrey Lefebvre, “The United States and Egypt: Confrontation and Accommodation in Northeast Africa, 1956-1960,” Middle Eastern Studies , vol. 29, no. 2 (April 1993), pp. 321-338. 10 Winberg Chai, “The Ideological Paradigm Shifts of China’s World Views: From Marxism-Leninism-Maoism to the Pragmatism-Multilateralism of the Deng-Jiang-Hu Era,” Asian Affairs: an American Review , vol. 30, no. 3 (Fall 2003), pp. 163-175.

changed from the Soviets in the 1980s to the U.S. after Tiananmen, and this perception had the effect of the interactions in their dyadic relationship. Political survival becomes the paramount task, with continuous economic achievement constituting the necessary means to this end. These factors contributed to the shift in China’s foreign policy since the end of Cold War.

Theoretical Puzzle and the Insufficiency of Offensive Realism

What, then, made China gradually shift its confrontational policy to an accommodative one toward the U.S. “hegemony” in the unipolar world? China’s

“anti-hegemon” rationale seems reasonable to neo-realists such as Kenneth Waltz who see the international system as anarchic, characterized by the lack of any overarching authority that could ensure the security of individual states, and compelling relatively weaker states to balance against the stronger one for their own survival. 11 Waltz’s view

on the definitive balance-of-power theory is echoed by offensive realists like John

Mearsheimer. According to offensive realism, balance-of-power theory has been the

guiding principle to China’s foreign policy goal of preventing the superpowers’

worldwide expansion and dominance throughout the Cold War years and has continued to

direct Chinese international behavior. Given that the U.S. has been the “lonely

superpower” since the demise of the Soviet Union, China should have had to adopt

balancing policies toward the U.S. Nonetheless, offensive realists also contend that only

weak and small states in absolute terms adopt bandwagoning and accommodative

policies toward the strongest state in the long run. A state with sufficient capability should,

11 Kenneth Waltz, Theory of International Politics (MA: Addison-Wesley, 1979).

in contrast, keep on pursuing its power until it achieves hegemon status.12 Thus

Mearsheimer laments that it is only a matter of time that China will attain its status as a dominant regional hegemon and push U.S. influence out of Asia: “This is the tragedy of great power politics.” 13 In the early 1990s, in line with the offensive realist prediction,

China did perceive the U.S. as a malign hegemony and most international institutions as

mechanisms that favored the interests of the West. As a result, China adopted

confrontational policies and sought to ally with other countries to counter U.S. influence.

However, the evolution of China’s foreign behavior reveals the insufficiency of

offensive realism. Contrary to offensive realists’ prediction about balancing, followed by

a push for hegemony, since the mid-1990s an economically growing China has been

“searching for stability with America.” 14

Offensive realism, with its proposition that great powers would continually balance against each other to strive for hegemonic status, predicts that China would continue to balance against U.S. dominance as it did in the early to mid-1990s, while attributing

China’s failure to do so now to the lack of reliable allies and military capabilities, or rendering China’s gesture merely a tactical move. 15 But, would offensive realists employ

the same argument to explain accommodative policies toward the U.S. by other

countries—Canada, for example? Offensive realism cannot satisfactorily explain the

12 John Mearsheimer, The Tragedy of Great Power Politics (NY: W.W. Norton & Company, 2001), pp. 40-41, and 162-164. 13 John Mearsheimer, “The Rise of China Will not be Peaceful at All,” The Australian , November 18, 2005, p. 14. 14 Wang Jisi, “China’s Search for Stability with America,” Foreign Affairs , vol. 84, no. 5 (September/October 2005), pp. 39-48. A careful reading on the reports to the Party Congress of the Chinese Communist Party in recent years indicates that China has gradually changed its foreign policy priorities from the “neighboring states,” followed by “developing states,” and then “developed countries” (1992 and 1997), to “developed countries,” followed by “neighboring states” and then “developing states” (2002 and 2007). 15 Aaron Friedberg, “11 September and the Future of Sino-American Relations” Survival , vol. 44, no. 1 (Spring 2002), pp. 33-50; Denny Roy, “China’s Reaction to American Predominance,” Survival , vol. 45, no. 3 (Autumn 2003), pp. 57-78.

phenomenon evident in China’s accommodation to the U.S. with its “a matter of time” proposition.

Explanations for China’s International Behavior

My research starts with defensive realism to explain China’s changing U.S. policy in

the post-Cold War era. When Kenneth Waltz’s balance-of-power theory directed our

attention to the international structure to contend that international anarchy is a sufficient

causal factor in explaining state behavior, one of his auxiliary assumptions that states are

security-maximizers caring about their own survival also provided the theoretical

foundation for defensive realism to develop.

With the assumption that the state is a rational (and primary) actor in the

international system, defensive realists such as Stephen Walt share the core assumption

with structural realism that the distribution of power in the anarchical international

system is crucial to state behavior. In addition, following Robert Jervis’ research on

perception and misperception, defensive realism maintains that decision-makers’

perceptions and the capability of state constitute intervening variables to explain state

behavior in terms of balancing or bandwagoning. 16 Compared to offensive realists who

assume that, due to the scarcity of security in the international system, states are driven to

16 Robert Jervis, Perception and Misperception in International Politics (Princeton: Princeton University Press, 1976); Robert Jervis, “Realism in the Study of World Politics,” International Organization , vol. 52, no. 4 (October 1998), pp. 971-991; Stephen M. Walt, “The Enduring Relevance of the Realist Tradition,” in Ira Katznelson and Helen V. Milner, eds., Political Science: State of the Discipline (NY: W.W. Norton & Company, Inc., 2002), pp. 197-230; Jeffrey W. Taliaferro, “Security Seeking under Anarchy: Defensive Realism Revisited.” International Security , vol. 25, no. 3 (Winter 2000/01), pp. 132-136; Gideon Rose, “Neoclassical Realism and Theories of Foreign Policy,” World Politics , vol. 51, no. 1 (October 1998), pp. 157-165; Randall Schweller, “Bandwagoning for Profit: Bringing the Revisionist State Back in,” International Security , vol. 19, no. 1 (Summer 1994), pp. 72-107. Schweller also contributes to the discussion regarding the distinction between “status quo” and “revisionist” states, see Schweller, Deadly Imbalances: Tripolarity and Hitler’s Strategy of World Conquest (NY: Columbia University Press, 1998).

maximize their own power and to pursue hegemonic status if possible, 17 my research is closer to defensive realism in that they both treat states as differentiated units with somewhat different intentions (i.e. with status quo, revisionist, or revolutionary goals), and they both hold that peace is attainable if states are satisfied with their own status and there is no strongest power or perceived threats. Yet within the defensive realist camp, while Waltz attributes states’ balancing behavior solely to systemic explanations, Walt contends that interactions which shape states’ threat perceptions are crucial to state foreign policies. In other words, Walt seeks to combine systemic factors and bilateral interactions to form foreign policy analysis. 18

Based on Waltz’s defensive version of neo-realism, this study accepts as a starting

point the importance of international systemic constraints or incentives. Nonetheless,

building on the particular contribution of this analysis that power matters, my research on

China’s policy shift from confrontation to accommodation with the U.S. focuses mainly

on the Chinese leadership’s perceptions of the international system as equally crucial

“intervening variables” in the determination of Chinese foreign policy.

To probe how China perceives its external environment, my research accepts the

defensive realist view that concerns over the security dilemma—that the increase in one’s

security would decrease the security of others—causes states to worry about one

another’s future intentions and relative power. Therefore, states may pursue purely

security-seeking strategies to avoid unnecessary conflicts that are oftentimes caused by

leaders’ mistaken belief that aggression is the only way to make their state secure.

17 Mearsheimer, The Tragedy of Great Power Politics (NY: W.W. Norton & Company, 2001), p. 35. 18 Walt makes the statement that realism, though with various strands, is still a powerful tool to explain foreign policy. Stephen M. Walt, “The Enduring Relevance of the Realist Tradition,” in Ira Katznelson and Helen V. Milner, eds., Political Science: State of the Discipline (NY: W.W. Norton & Company, Inc., 2002), pp. 197-230.

Moderate strategies, as defensive realists like Stephen Walt suggest, are the best route to security, and balance-of-threat is a more reasonable strategy for state survival.19 As for current Sino-American relations, this camp of scholars, including Avery Goldstein and

Robert Ross, tends to emphasize the stability between the two nuclear powers and the different goals they have. In other words, China does not necessarily perceive the U.S. as a security threat now and that nuclear deterrence somewhat contributes to U.S. and

Chinese mutual accommodation in the Asia-Pacific region. 20

My research suggests that the balance-of-threat theory helped China to identify the source of threat—the U.S. after the Tiananmen incident—but the international distribution of capabilities among states constrained China’s policy choices vis-à-vis the

U.S. My analysis further suggests that from the international systemic point of view,

China’s U.S. policy is the outcome of the interplay between the structure of international power and China’s perceptions of this structure of power.

My research takes its analysis of the international system as a point of departure for both analytical and practical reasons. During the Cold War years, comparativists prioritized domestic foundations in explaining Chinese foreign policy and concluded with a theory of China’s uniqueness. 21 Michel Ng-Quinn, however, related a level-of-analysis

19 Jeffrey Taliaferro, “Security Seeking under Anarchy: Defensive Realism Revisited,” International Security , vol. 25, no. 3 (Winter 2000/01), pp. 128-161; Robert Jervis, “Cooperation Under the Security Dilemma,” World Politics 30: 2 (Jan. 1978), pp. 167-214; Stephen Walt, “Testing Theories of Alliance Formation: the Case of Southwest Asia,” International Organization , vol. 42, no. 2 (Spring 1988), pp. 275-316; Stephen Walt, The Origin of Alliances (Ithaca: Cornell University Press, 1987); Charles Glaser, “Realists as Optimists: Cooperation as Self-Help,” Security Studies , vol. 5, no. 3 (Spring 1996), pp. 122-166; Stephen Van Evera, “Offense, Defense, and the Causes of War,” International Security , vol. 22, no. 4 (Spring 1998), pp. 5-43; Thomas Christensen, “China, the U.S.-Japan Alliance, and the Security Dilemma in East Asia,” International Security 23: 4 (Spring 1999), pp. 49-80; William Wohlforth, “The Stability of a Unipolar World,” International Security , vol. 24, no. 1 (Summer 1999), pp. 5-41. 20 Avery Goldstein, “Great Expectations: Interpreting China’s Arrival,” International Security 22:3 (Winter 1997/98), pp. 36-73; Robert Ross, “The Geography of the Peace: East Asia in the Twenty-First Century,” International Security , vol. 23, no. 4 (Spring 1999), pp. 81-118. 21 For instance, Lucian Pye, The Spirit of Chinese Politics: A Psychocultural Study of the Authority Crisis

question to the study of Chinese foreign policy, suggesting that researchers should draw their attention to the impact of the international structure to develop a more coherent theory of Chinese foreign policy. 22 In practical terms, most Chinese leaders and academics are now inclined to employ this systemic explanation of international structure to begin their analyses. A prestigious Chinese IR scholar, Wang Jisi, suggests that since the early 1980s, the conceptual framework of Chinese leaders is closer to the traditional

“realist” view in Western IR theory, in which China discerns the distribution of power in the world and then adopts a “balance of power” policy toward the two superpowers accordingly. 23 My interviews with Chinese scholars also confirmed this view; most

started with the common assertion that “[i]t is the systemic factors that determine Chinese

policy toward the U.S.” 24

Therefore, my research starts with the evolution of China’s worldviews—perceptions of capability distribution as well as threat—in the post-Cold

War era. Deng Xiaoping’s statement of “peace and development” that paved the way for his reform and opening policies in 1978 was an example of how a relatively stable international environment and a strategic common ground with the United States could contribute to China’s domestic policy initiatives. China began to perceive the U.S. as a

in Political Development (Cambridge: M.I.T. Press, 1968). 22 Michael Ng-Quinn, “The Analytic Study of Chinese Foreign Policy,” International Studies Quarterly , vol. 27, no. 2 (June 1983), pp. 203-224. Other scholars also echoed this view. As William Tow contends, “Since the PRC’s inception, its foreign policy has been most influenced by the balance-of-power, state-centric approach to international politics and security. The Chinese have waged a protracted struggle against what they have [long] regarded to be efforts by both the U.S. and the Soviet Union to force China into geopolitical submission.” William Tow, “China and the International Strategic System,” in Thomas Robinson and David Shambaugh, eds., Chinese Foreign Policy: Theory and Practice (Oxford, UK: Clarendon, 1994), p. 120. 23 Jisi Wang, “International Relations Theory and the Study of Chinese Foreign Policy: A Chinese Perspective,” in Thomas Robinson and David Shambaugh, eds., Chinese Foreign Policy: Theory and Practice , pp. 481-505. 24 For instance, interview #4, Beijing, June 17, 2008; interview #5, Beijing, June 20, 2008; interview #9, Beijing, July 2, 2008; interview #16, Washington, DC, August 18, 2008.

political threat after Tiananmen, and the end of the Cold War left China to re-locate itself within the international system under the slogan of “building a new international political and economic order” in opposition to the American claim of “a new world order.” At the time, Deng passed the judgment “one dead, the other severely injured” to describe the former Soviet Union and the United States. The Chinese official messaging was imbued with the phrase “multipolarization” through out the early 1990s. To cope with the U.S. threat, China officially foresaw the decline of the U.S. power and the rise of Western

Europe, which would lead to a multipolar world in the near future. 25

However, the burgeoning U.S. economy changed China’s expectations in the mid-1990s, and China, faced with the protracted nature of the “multipolarizaiton” process, began to employ the phrase “one superpower, many great powers” to describe the distribution of capabilities in the international system. 26 While some analysts started to propose that “the superpower is more super, and the many great powers are less great,” 27

the 1999 U.S.-led Kosovo War accelerated the Chinese leadership’s changing perceptions

of the movement toward a unipolar, not a multipolar, world. 28 Many strategists started to admit the generational gap in military capabilities and to question if asymmetric war could really prevail over the U.S. at the end of the day. As a result, China’s

25 Qian Qichen, “1991 Guoji Qingshi yu Zhanwang” [The International Situation and Its Prospects in 1991], Guoji Zhanwang , no. 1(1992), pp. 3-4; Wang Jisi, “Meiguo: Weiyi Chaoji Daguo Diwei zai Xueruo” [U.S.: The Only Superpower is in Decline], Liaowang , no. 52 (1994), pp. 15-16. 26 Qian Qichen, “Guanyu Dangqian Guoji Qingshi he Woguo Duiwai Guanxi” [On Current International Situation and Foreign Relations of China], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 3 (1995), pp. 1-5; Ministry of Foreign Affairs of PRC, Zhongguo Waijiao 1996 [China’s Diplomacy 1996] (Beijing: Shijie Zhishi Chubanshe, 1996), pp. 3-4. 27 Jisi Wang, “Building a Constructive Relationship,” in Morton Abramowitz, Funabashi Yoichi, and Jisi Wang, China-Japan-U.S.: Managing the Trilateral Relationship (Tokyo: Japan Center for International Exchange, 1998), pp. 22. 28 Yang Mian, “Danji xiang Duoji Tiaozhan” [Unipolarity Challenges Multipolarity], Neibu Canyue (June 30, 1999), pp. 27-32; Wang Yiwei and Tang Xiaosong, “Cong Baquan Wendinglun dao Danji Wendinglun” [From Hegemonic Stability Theory to Unipolar Stability Theory], Shijie Jingji yu Zhengzhi no. 9 (2000), pp. 14-19.

accommodation began with its acknowledgement of the U.S. as a rising superpower. For analytical purposes, my research regards this accommodating process as starting with both sides’ agreement to renegotiate their relations after the 1996 Taiwan Strait crisis, leading to China’s adaptation to the unipolar world since 1999, and proceeding on to

China’s current efforts to sustain its relatively stable relationship with the United States since 2001.

To explain China’s accommodating behavior, two recent studies solely focus on the effect of international system at the expense of other economic or domestic dynamics.

Peter Van Ness employs the Gramscian view of “hegemony,” arguing that in the region of

East Asia, American hard and soft power is overwhelming and China perceives the regional order as neither anarchical nor multipolar but as a hegemonic system under

America’s rule that results in China’s acceptance rather than balancing of U.S. unipolar power in Asia. 29 However, this argument overstates the impact of the international system on state behavior and omits China’s official views on the concept of

“multipolarization.” Rosemary Foot attributes China’s accommodation with the U.S. in the 1990s to the international distribution of power and to economic interests. 30 Her

analysis, however, only focuses on systemic explanations and ignores the dyadic

interactions between the Chinese leadership and the Clinton administration that helped

maintain China’s accommodative posture. In other words, Foot neglects the fact that

reciprocal bilateral interactions between U.S. and China could help to reduce China’s fear

of the American threat in the unipolar world and lead to cooperation.

29 Peter Van Ness, “Hegemony, not Anarchy: Why China and Japan are not Balancing U.S. Unipolar Power,” International Relations of the Asia-Pacific , vol. 2, no. 1 (February 2002), pp. 131-150. 30 Rosemary Foot, “Chinese Strategies in a U.S.-hegemonic Global Order: Accommodating and Hedging,” International Affairs , vol. 82, no. 1 (2006), pp. 77-94.

Therefore, it is worth exploring Walt’s theory of threat perceptions to discern the

origin of the Chinese leadership’s sense of insecurity more thoroughly. After examining

the systemic power distribution, I proceed to explore bilateral interactions between China

and the U.S. and to demonstrate how punitive tit-for-tat interactions could exacerbate

their relations, while cooperative reciprocity reduced China’s fear of the U.S. threat and

led to the shift from confrontation to accommodation towards the United States in the

post-Cold War era.

Robert Axelrod identified the possibility for self-interested actors to evolve in a

cooperative direction in a situation lacking binding authority. Cooperation could

spontaneously emerge, or one player might follow the lead of another player. Given the

large enough shadow of a future in which the two players would be dealing with each

other repeatedly, a norm of reciprocity would develop, which the two participants would

follow in a cooperative direction. 31 Robert Keohane further employed this concept to explain state cooperation under international anarchy, arguing that reciprocity, mostly used to refer to beneficial interactions, could help not only to foster but also to maintain cooperation. 32 In addition, Axelrod and Keohane suggest that the high value of future payoffs from repeated interaction and the credible threat retaliation for potential defection are both crucial to facilitating cooperation between two states under international anarchy.

Common interests between two states certainly help them to adopt cooperative strategies, but even in cases where each state has its own preferences and goals, the costs of retaliation by the other tomorrow, they suggest, could convince a state to refrain from

31 Robert Axelrod, The Evolution of Cooperation (NY: Basic Books, 1984), pp. 13; 174-178. 32 Robert Keohane defines reciprocity as “exchanges of roughly equivalent values in which the actions of each party are contingent on the prior actions of the others in such a way that good is returned for good, and bad for bad.” Robert Keohane, “Reciprocity in International Relations,” International Organization , vol. 40, no. 1 (Winter 1986), p. 8.

defection today. 33

In the post-Cold War era, the lack of cooperative reciprocity between the U.S. and

China over political issues including human rights and Taiwan led to the 1996 military confrontation over the Taiwan Strait. Based upon cost-benefit calculations, however,

China and the U.S. decided to negotiate a way out of this relatively confrontational situation. Summit meetings in 1997 and 1998 contributed to China’s gradual policy shift towards accommodation, which led China to perceive a less threatening U.S. In the late

1990s, Jiang Zemin began using “zhong zhong zhi zhong (the first and foremost)” to describe Sino-U.S. relations against China’s overall foreign relations. Chinese officials and analysts have, since the early 2000s, begun to show that China is more willing to adopt initiatory gestures in the dyadic relationship with the U.S. to maintain stability.

The perceptions of threat and the distribution of state capabilities in the international system help us understand the constraints on China, or the disadvantages of confrontation.

It is important, then, to direct our attention to the advantages China can enjoy from cooperation with the U.S.

Therefore, my research employs Dale Copeland’s trade expectation theory 34 to explain how economic benefits led to China’s shift from confrontation to accommodation after the Cold War. According to trade expectation theory, if trade expectations are positive, the dependent state, which relies more on continuing trade relations, expects to gain positive benefits from future trade relations and thus will be more inclined towards peace than war. If the state is pessimistic about future trade, then these negative

33 Robert Axelrod and Robert Keohane, “Achieving Cooperation under Anarchy: Strategies and Institutions,” World Politics , vol. 38, no. 1 (October 1985), pp. 226-254. 34 Dale Copeland, “Economic Interdependence and War: A Theory of Trade Expectations,” International Security, vol. 20, no. 4 (Spring 1996), pp. 5-41; Dale Copeland, “Economic Interdependence and the Future of U.S.-Chinese Relations,” in G. John Ikenberry and Michael Mastanduno, eds., International Relations Theory and the Asia-Pacific (NY: Columbia University Press, 2003), pp. 323-352.

expectations will push the state toward aggression.35 Following this logic, a policy shift towards accommodation is more likely when China is expecting increasing returns in trading with the U.S.

By China’s count, trade value between the two nations has increased from US$2.45 billion in 1979, to US$10 billion in 1988, to US$54.9 billion in 1998, and to US$333.7 billion in 2008. 36 In general, Chinese official statements exhibited pessimistic views in the early 1990s prior to Clinton’s de-linkage of trade and human rights issues, and

Chinese top leaders sometimes criticized the U.S. of “politicizing” or “securitizing” pure trade issues. Since the second half of the 1990s, the Chinese government has become more optimistic that U.S.-China trade would lead to increased prosperity.

China’s WTO membership negotiation with the U.S. is a case in point. Nicholas

Lardy and others suggest that accession to WTO had been a long-term goal of China, indicating that the Chinese leadership expected to forward China’s economic interests by further integrating with the world market. 37 Nevertheless, as Margret Pearson points out,

China’s WTO accession was also a political decision to deepen cooperation with the

Clinton administration. 38 It is therefore important to further explore how Chinese

35 Dale Copeland, “Economic Interdependence and the Future of U.S.-Chinese Relations,” in G. John Ikenberry and Michael Mastanduno, eds., International Relations Theory and the Asia-Pacific (NY: Columbia University Press, 2003), pp. 323-352. 36 Figures are from China’s General Administration of Customs. Cited from Zhou Shijian, “Zai Mocazhong Xunsu Fazhan” [The Rapid Development amid Frictions], Shijie Zhishi , no. 6 (2002), pp. 28-32; and Wang Yong, Zhongmei Jingmao Guanxi [The Political Economy of China-US Trade Relations] (Beijing: Zhongguo Shichang Chubanshe, 2007), p. 126. The figure of 2008 comes from China Custom Statistics Information, http://www.hgtj.cn/CustomsStat/OperateForm/StatNewsViewAllow.aspx?guid=728a6939-79e7-4521-8584- 27b4e49d5730 (accessed 4/28/2009). 37 Nicholas R. Lardy, Integrating China into the Global Economy (Washington DC: Brookings Institution Press, 2002); Harry Harding, “China, the WTO, and the United States,” Testimony before the U.S. Trade Deficit Review Commission, Washington, D.C., February 24, 2000; Margret M. Pearson, “China’s Integration into the International Trade and Investment Regimes,” in Elizabeth Economy and Michel Oksenberg, eds., China Joins the World: Progress and Prospects (New York: Council on Foreign Relations Press, 1999), pp. 161-205. 38 Margret M. Pearson, “The Case of China’s Accession to GATT/WTO,” in David M. Lampton, ed., The

expectations affect its U.S. policy in detail.

Last but not least, the Chinese leadership’s concern about political survival also has an impact on China’s international behavior. 39 Neo-classical realist Randall Schweller argues that because of domestic factors states assess and adapt to structural-systemic changes differently. 40 State behavior can be based upon domestic factors such as whether the leaders can make prudent judgments and if they are capable of implementing their policy for the purpose to remain in power.41 In line with this reasoning, my research contends that China is no exception in that political survival is the top priority of its political elites, and foreign policy, as former Chinese Foreign Minster Qian Qichen once stated, is “the extension of China’s domestic policies.” 42

According to China’s domestic context, when reformist leaders such as Deng

Xiaoping and Jiang Zemin held the view that the U.S. plays an indispensible, if not contributing, role in China’s economic development, they needed to cope with the conservatives and military who prioritized planned economy and relations with the

Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 337-370. 39 However, as Glen Snyder and Paul Diesing suggest, an accommodative strategy should be moderate and “refusal to concede on essentials,” otherwise it could endanger political survival of the leadership. Glen Snyder and Paul Diesing, Conflict among Nations: Bargaining, Decision Making, and System Structure in International Crises (Princeton, NJ: Princeton University Press, 1977), pp. 38-39. 40 Randall Schweller, Unanswered Threats: Political Constraints on the Balance of Power (Princeton: Princeton University Press, 2006), p. 10; and Schweller, “The Progressiveness of Neoclassical Realism,” in Colin Elman and Miriam Elman, eds., Progress in International Relations Theories (Cambridge, MA: MIT Press, 2003), pp. 311-347. 41 Schweller employs state-level variables, including elite consensus, regime vulnerability, and elite and social cohesion, to explain states’ balancing or underbalancing, and concludes that it is the lack of elite consensus and social cohesion that leads to state’s underbalancing behavior. He concludes that when crisis occurs, political elites have to deal with the internal-external nexus in terms of stability. Under this circumstance, incoherent and fragmented states are unwilling and unable to balance against threats because elites view the domestic risks to be too high, and they are unable to mobilize the required resources from a divided society. In other words, balancing is simply too costly to implement. See Randall Schweller, Unanswered Threats: Political Constraints on the Balance of Power . Another line of reasoning—domestic mobilization to strengthen leaders’ political base – is seen at Thomas Christensen, Useful Adversaries: Grand Strategy, Domestic Mobilization, and Sino-American Conflict, 1947-1958 (Princeton: Princeton University Press, 1996). 42 “Qian Qichen on the World Situation,” Beijing Review , vol. 33, no. 3 (January 15-21, 1990), p. 16.

Soviets within the leadership. The time of crisis then played an important role in potential policy continuity or change, because the top leaders were required to cope with major external and internal sets of dynamics at the same time. As Carol Lee Hamrin once suggested, the ability to defend the national interest is the core issue of regime legitimacy to the Chinese leadership. 43 Hamrin’s view on the role of crisis is echoed by analysts as

Tao Wenzhao in China. 44

Therefore, my research demonstrates how reform-minded top leaders dealt with

their conservative counterparts within the leadership in the cases of crisis between China

and the U.S. in the post-Cold War era—the 1995-96 Taiwan Strait Crisis, the 1999

Chinese embassy bombing incident, and the 2001 EP-3 incident. At a glance, the

distribution of capabilities in the international structure shaped the leadership’s

perceptions of the external threat and decreased any radical calls for a full-blown

confrontation with the U.S.

Significance and Limitations

With the acknowledgement of offensive realism’s insufficiency, we need to develop a more comprehensive view to understand Chinese foreign policy after the Cold War.

How should we describe China’s policy towards the United States in the post-Cold War era? What accounts for China’s shift from a confrontational policy to an accommodative

43 Carol Lee Hamrin, “Elite Politics and the Development of China’s Foreign Relations,” in Thomas W. Robinson and David Shambaugh, eds., Chinese Foreign Policy: Theory and Practice (NY: Oxford University Press, 1994), p. 107. 44 Tao Wenzao, “1995-1996 Taihai Fengyun ji qi Yingxiang” [Taiwan Strait Incidents of 1995-1996], Harbin Gongye Daxue Xuebao (March 2004), pp. 1-10; Liu Jianhua, “Lun Yiwai Shijien dui Zhongmei Guanxi de Yingxiang” [The Impact of Incidents in Sino-U.S. Relaitons], Shijie Jingji yu Zhengzhi , no. 7 (2006), pp. 59-64; and my interview #5, Beijing, June 20, 2008.

one while facing the U.S. “hegemony”? This research provides a neo-classical realist analysis of Chinese policy toward the U.S. from 1991 to 2006.

This research argues that China’s international behavior is the product of the international distribution of capabilities, the Chinese leadership’s perceptions of this distribution of capabilities and the sources of threat derived from it, bilateral interactions with the U.S., and leaders’ concerns over their domestic political power. These factors are interconnected rather than conflicting.

After reviewing the period since the end of Cold War, this research contends that

China has been a rational actor and its behavior is based upon the calculus of costs and benefits, which makes it more a status quo power than a revisionist state during this period of time. As long as China’s vital interests are secure and the costs outweigh the benefits of the conflict with the U.S. in the leadership’s calculation, the future of

U.S.-China relations are manageable. The conclusion of this research may serve to engage the current debate of whether China’s rise would inevitably result in a military conflict with the U.S.

This research was conducted through focus-group interviews in China and in the U.S.

with analysts, scholars, and former and current government officials. I also employed

open source materials such as official statements, the collected works of former Chinese

leaders such as Deng Xiaoping and Jiang Zemin, newspaper databases ( Renmin Ribao

and others), and Chinese journals. In addition, many former Chinese officials have

recently published their memoirs, including Liu Huaqing, Qian Qichen, and Li Peng, and

several writers have personal access to key persons also published the biographies of Zhu

Rongji and Hu Jintao. These memoirs and biographies served as a good point of

reference.

There are, however, some limitations to this research. China’s still relatively opaque,

elite-driven decision-making process prevented my further exploration of a strong causal

linkage between these interrelated variables and policy outcomes. The lack of access to

the key decision makers remains a difficult challenge, as recognized by many other

analysts of Chinese foreign policy. This research, as other analyses, relied on scholarly

debates instead to probe decision-makers’ thinking, with the assumption that these

debates to a degree reflect the real policy process in China. Following other researchers,

this research also employed internal circulation materials to complement this deficiency.

In addition, some scholarly works in American academia and policy circles, with those

authors’ own connections with Chinese officials, also contributed to this research.

Organization of My Research

Chapter 1 unfolds the main argument of this research. Chapter 2 aims to provide the international systemic explanation on China’s shift from confrontation to accommodation, arguing that the distribution of state capabilities in the international system and how

China perceived this distribution have an impact on China’s international behavior.

Chapter 3 addresses China’s perception of the external threat and political relations between China and the U.S. in the post-Cold War era. Using tit-for-tat interactions, this chapter explains why and how China perceived the U.S. as more threatening or less so over time, and how the perceptual change affects China’s U.S. policy. Chapter 4 employs trade expectation theory to explain how economic interdependence and the concept of economic globalization led the Chinese leadership to a more accommodative policy.

Chapter 5 discloses how China’s domestic politics, with the special focus on the means

that reform-minded leaders adopted to ward off dissenting views from the conservatives that preferred a more hawkish U.S. policy. Chapter 6 concludes this research, with a brief evaluation of these variables.

Chapter 2 Chinese World Views in the Post-Cold War Era

State behavior has long been a critical issue in International Relations (IR) scholarship. 45 With the focus on the distribution of capabilities among states, neo-realism as one of the strands in IR scholarship attributes state behavior to the international structure. 46 Kenneth Waltz provides a defensive version of neo-realism, arguing that to preserve their own security, states need to follow the principle of balance of power and weak states should coalesce to counterbalance powerful states. State capabilities, according to Waltz, are mostly defined by military strength. 47 With the same focus on the international structure, offensive realism emphasizes states’ long-term strategy for power maximization and the relentless balancing as a result of this strategy. Offensive realist

John Mearsheimer predicts that a state will pursue ultimate power until it reaches hegemonic status. 48

In line with this neo-realist reasoning, China’s “opposing hegemonism” policy

45 Some IR scholars predict China’s future march to an inevitable conflict with the U.S., for reasons as ideological/political system differences (democracy peace theorists as John Owen), the endless struggle for power compelled by the international system (offensive realists as John Mearsheimer), and China’s nature as a revisionist state (Robert Gilpin, Samuel Huntington, and Arthur Waldron). Others suggest there exist contributing factors for a peaceful China, such as China’s greater involvement with international institutions (liberal institutionalists as Robert Keohane) and social learning and adaptation (Alastair Iain Johnston), geography, threat perception, security dilemma, and power disparity (defensive realists as Kenneth Waltz, Stephen Walt, William Wohlforth, Bates Gill), the nature of China as a status quo power (neo-classical realists Randall Schweller, Robert Ross, and Avery Goldstein), and economic interdependence (liberals as Richard Rosecrance, others as Dale Copeland). I will discuss and highlight their respective works below when necessary. 46 Kenneth Waltz, Theory of International Politics (MA: Addison-Wesley, 1979). 47 Kenneth Waltz, Theory of International Politics (MA: Addison-Wesley, 1979), pp. 161-163. Waltz also mentions economic and political power as other determinants of capabilities, but his emphasis is nonetheless on military strength. 48 John Mearsheimer, The Tragedy of Great Power Politics (NY: W.W. Norton, 2001).

toward the Soviet Union or the U.S., or both, in various times seems reasonable because a state should always strive to balance against other stronger actors. According to neo-realism, the international system is anarchic, characterized by the lack of any overarching authority that can ensure the security of individual states. Thus less powerful countries must coalesce to balance against the strongest one for their own survival. 49 For

offensive realists such as Aaron Friedberg and Denny Roy, balance-of-power theory had

been the guiding analytical model for China’s foreign policy efforts to preventing

superpowers’ worldwide expansion and dominance throughout the Cold War. 50 And, after the collapse of the Soviet Union, John Mearsheimer predicted that China should have adhered to this balancing policy toward the U.S. until China gained regional hegemon status. 51 In the early 1990s, China did perceive that most international institutions were mechanisms favorable to the power and interests of the West; therefore, China sought to ally with others to counter U.S. influence. The debut of the Shanghai Five in 1996 and

China’s new a “strategic cooperative partnership” with Russia in the same year constituted a strategic response to the North Atlantic Treaty Organization’s (NATO) expansion and continued U.S. dominance. 52

But, contrary to the offensive realist prediction that China would continue to seek

endless balance against the United States, China began to make a policy shift to

accommodate the U.S. claims on certain highly contested issues as the 1990s wore on.

49 Kenneth Waltz, Theory of International Politics (MA: Addison-Wesley, 1979). 50 Aaron Friedberg, “11 September and the Future of Sino-American Relations,” Survival , vol. 44, no. 1 (Spring 2002), pp. 33-50; Denny Roy, “China’s Reaction to American Predominance,” Survival , vol. 45, no. 3 (Autumn 2003), pp. 57-78. 51 John Mearsheimer, “The Rise of China Will not be Peaceful at All,” The Australian , November 18, 2005, p. 14. 52 Aaron Friedberg, “11 September and the Future of Sino-American Relations,” Survival, vol. 44, no. 1 (Spring 2002), pp. 40-41; Denny Roy, “China’s Reaction to American Predominance,” Survival , vol. 45, no. 3 (Autumn 2003), p. 64.

For instance, on the political front, China adopted a rigid and exclusive view on human rights in the early 1990s, accusing any calls from the West as an effort at subverting

China. But in the late 1990s, though still wary of so-called humanitarian intervention,

China started to discuss this issue with other countries in international fora. 53 On the economic front, China has become more compliant on the intellectual property rights

(IPR) issues and passed related regulations. At the very least China demonstrated its growing willingness to deal with trade frictions through negotiations rather than wars of rhetoric or threat of retaliation as it did in the early 1990s. When the Bush administration proposed the Container Security Initiative (CSI) in 2002, which aimed to prevent the smuggling of terrorist weapons by pre-screening ocean-going cargo containers and the stationing of U.S. custom officers in foreign ports if necessary , China almost immediately endorsed the initiative and allowed the examination of containers destined for the U.S. from Shenzhen and Shanghai. 54 In October 2002, the Chinese government agreed to accept the first office of the Federal Bureau of Investigation (FBI) operating in China to facilitate counter-terrorism campaigns. Domestically, the Chinese government revised a history textbook, describing the U.S. in an “admirable objective” manner. 55 These

developments indicated a shift that China has become more willing to accommodate the

U.S. rather than bluntly oppose American interests based upon rigid concepts of

sovereignty as it had in the past.

China’s shift to accommodating the U.S. interests is analytically interesting,

53 Zhang Qingmin, “Zhongguo de Guojia Texing, Guojia Jiaose he Waijiao Zhengce Sikao” [China’s National Characteristics, National Roles, and Foreign Policy Thinking], Taipingyang Xuebao , no. 2 (2004). Collected in Wang Jisi and Niu Jun, eds., Zhongguo Xuezhe Kan Shijie: Zhongguo Waijiao [World Politics – Views from China: China’s Foreign Affairs] (Beijing: Xinshijie Chubanshe, 2007), pp. 170-183. 54 China endorsed the Container Security Initiative in July 2003. 55 Wang Jisi, “From Paper Tiger to Real Leviathan: China’s Images of the United States since 1949,” in Carola McGiffert, ed., Chinese Images of the United States (Washington, D.C.: The CSIS Press, 2005), p. 16.

because the realists, with few exceptions, in IR scholarship often begin their analysis on the international structural level to conclude the conflicting nature of U.S.-China relations.

It is also important from a practical standpoint, as experts in China still hold to this systemic view as the point of departure to analyze Chinese foreign policy. This is evidenced by open source materials and in my own interviews, in which Chinese scholars began their discussion with an analysis of international system.

How, then, would realists explain China’s policy shift towards accommodation since the mid-1990s? Mearsheimer’s model cannot explain China’s changing behavior since it takes the state as a power-maximizer motivated by relative gains in “zero-sum” terms.

And, it is thus least likely for China to cooperate with the opponent, because cooperation could result in the increase of the opponent’s strength. To Mearsheimer, China’s accommodation could be deemed a tactic for accumulating long-run gains that one day a strong China would exert over the U.S. However, with the “zero-sum” mindset,

Mearsheimer cannot satisfactorily explain China’s cooperative behavior such as joining international arms control regimes or the suspension of arms sales to states that concern the U.S., because even when lying low, China should grasp every opportunity to diminish

U.S. interests.

More importantly, Mearsheimer’s “underdog policy”, which holds that only absolute weak and small states bandwagon, cannot explain why China still accommodates U.S. interests since China’s national capabilities continued to grow in the 1990s and proved to be far from insignificant in real material terms. According to the Chinese government,

China’ GDP and military expenditures—two of the main indicators for national material power in IR studies—have kept on increasing while China has become yet more inclined toward accommodation since mid-1990s (Figures 2.1). If this “underdog policy”

reasoning is correct, then China should have been weakening in absolute terms and thus forced to bandwagon with the U.S. after the Cold War. While in the first half of the 1990s

China had adopted relatively a confrontational policy; however, China’s accommodating behavior occurred as China continued to develop economically and militarily. After the

1996 Taiwan Strait crisis, both China and the U.S. started to renegotiate their relationship in a process that led to two bilateral summit meetings. And in the aftermath of the 1999

Chinese embassy bombing accident, China continued to perceive the U.S. as a threat, but it still tried to accommodate the U.S. 56 How, then, would realists explain the puzzle of

why a stronger China continues to become more inclined towards accommodation?

Figure 2.1 China’s GDP and Military Expenditure, 1991-2006

$100,000

$10,000

$1,000 MilEx GDP

billion yuan billion $100

$10

$1 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Source: National Bureau of Statistics of China, China Statistical Yearbook 2007 (Beijing: China Statistics Press, 2007), http://www.stats.gov.cn/tjsj/ndsj/2007 (accessed 11/23/2008).

While Mearsheimer pushes the structural explanation to the extreme to conclude that

56 Many of my interviewees in China note that the U.S. has been a threat to China in political and security terms. Interviews #2, Beijing, June 16, 2008; #4, Beijing, June 17, 2008; #7, Beijing, June 30, 2008; #10, Beijing, July 4, 2008; #12, Beijing, July 9, 2008; #13, Hong Kong, July 14, 2008; #18, Beijing, October 12, 2008; #19, Beijing, October 14, 2008; and #20, Beijing, October 14, 2008.

states would pursue absolute power and relentlessly balance each other, Waltz argues that security is the ultimate goal of states, and thus states would pursue maintaining the balance of power in the international system. In other words, Mearsheimer treats states as

“power-maximizer,” which pursues ultimate dominance in world affairs, while Waltz sees states as “security-maximizer” that reacts to systemic imperatives. 57

This chapter will explore the international systemic explanation of Chinese foreign policy toward the U.S., namely, the Waltzian balance-of-power theory. As this chapter will demonstrate, the distribution of capabilities in the international system and China’s perceptions of this distribution constrained its policy toward the U.S. in the post-Cold

War era. As they did, for example, in the mid-1980s when China took a year to adjust its policy to accommodate the U.S. after reassessing America’s resolve regarding the issue of arms sales to Taiwan and China’s own relative material capabilities. 58 My research on

China’s shift towards accommodation accepts the basic assumption of neo-realism about

the international system, in which “anarchy”—characterized by the lack of an

overarching authority—does constrain the behavior of the primary actors, states. I also

accept the realist assumption that treats China as a rational actor (though with limited

rationality)—which has been proven by Allen Whiting’s research on China’s deterrence

and security politics in general and per its involvement in the Korean War. 59

As Waltz contends that the distribution of capabilities among states in the

international system constrains states’ policy choices, this chapter further argues that how

57 As Stephen Walt points out, states as “security-maximizer” reacts to external threats, not simply the distribution of capabilities among nations. I will detail Walt’s argument in the next chapter. 58 Robert S. Ross, “China Learns to Compromise: Change in U.S.-China Relations, 1982-1984,” The China Quarterly , no. 128 (December 1991), pp, 742-773. 59 Allen S. Whiting, China Crosses the Yalu: The Decision to Enter the Korean War (Stanford: Stanford University Press, 1960); The Chinese Calculus of Deterrence: India and Indochina (Ann Arbor: University of Michigan Press, 1975); China Eyes Japan (Berkeley: University of California Press, 1989); and “China’s Use of Force, 1950-1996, and Taiwan,” International Security , vol. 26, no. 2 (Fall 2001), pp. 103-131.

states perceive these systemic imperatives is the key to understanding state behaviors. It is the perceived distribution of capabilities that constrains the choices and strategies the state has to respond prudently to external pressure: the state’s perception of power disparity helps it to decide whether and how to counterbalance a stronger state in order to maintain the balance of power in the international system.

Based upon Waltz’s balance-of-power reasoning, I develop the first hypothesis of my research as follows:

Hypothesis 1: The distribution of capabilities within the international system

constrains state behavior. As a rational actor, if China perceives its

power disadvantages vis-à-vis the U.S. in a disproportionate and

irreversible way, then China is more likely to accommodate.

Given the gap between the U.S. and China in terms of material capabilities, I expect that: if China perceives its capability gap vis-à-vis the U.S. to be narrowing, then China will be more likely to adopt confrontational policies toward the U.S. If, on the other hand,

China perceives the capability gap to be widening, then China’s policy will more likely be constrained and thus more accommodative as a more confrontational policy of balancing would be very costly. The state capability is mostly defined by military strength. 60

While the distribution of capabilities constrains policy choices, the perception of this distribution significantly shapes whether a state would adopt balancing against its opponent. My analysis of why China has adopted balancing and accommodating policy towards the United States between 1991 through 2006 begins with Chinese perceptions of

60 Kenneth Waltz, Theory of International Politics (MA: Addison-Wesley, 1979), pp. 161-163. Waltz also mentions economic and political power as other determinants of capabilities, but his emphasis is nonetheless on military strength.

the international structure after the Cold War, and moves to examine how these perceptions gradually evolve and come to terms with the world events.

This chapter thus strives to answer the question: How does China perceive its military disadvantage vis-à-vis the U.S. and the varying extent to which China can balance the U.S. threat by military modernization (internal balancing) and/or allying with others (external balancing)? This question can be explored by looking into China’s worldview and perceptions of the U.S. prowess as revealed by China’s official discourse.

I also employ in-depth interviews, scholarly debates in both open-source and internally circulated materials, memoirs, and the CCP’s mouthpiece, Renmin Ribao (People’s Daily) to see how leaders’ perceptions changed overtime. It should be noted that most scholars in China begin their analyses with Deng Xiaoping’s thinking on Chinese foreign policy, so Deng’s judgment on the international situation serves as a point of departure. Here, I point out why and how these perceptions matter in foreign policy analysis.

Perception and the Study of Chinese Foreign Policy

Decision-makers’ perceptions of the international environment provide the “first cut” in the analysis of foreign policy. 61 As Harold and Margaret Sprout once suggested,

researchers of foreign policy analysis need to look into the international context—as

perceived and interpreted by the decision makers. 62 Robert Jervis points out the

61 Robert Keohane, “Theory of World Politics: Structural Realism and Beyond,” in Robert Keohane, ed., Neorealism and Its Critics (New York: Columbia University Press, 1986), pp. 158–203. 62 Harold Sprout and Margaret Sprout, The Ecological Perspective on Human Affairs with Special Reference to International Politics (Princeton: Princeton University Press, 1965), p. 225. Cited from Valerie M. Hudson with Christopher S. Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow,” Mershon International Studies Review , no. 39 (1995), p. 213.

importance of understanding elites’ perceptions while analyzing policy outcomes. 63 To

Jervis, perceptions and misperceptions constitute the foundations upon which foreign policy is made, because “[it] is often impossible to explain crucial decisions and policies without reference to the decision-makers’ beliefs about the world and their images of others.” 64 Misperceptions can also lead to incongruities between the perceived and

objective environment, resulting in less satisfactory outcomes in foreign policy. 65

The neoclassical realist analysis of foreign policy emphasizes the role of leaders’

perceptions as a transmission belt in explaining the effects of international system on

state behavior. 66 For instance, William Wohlforth claims that systemic realism fails to

explain the end of the Cold War and why the Soviet Union chose to accommodate the

U.S. By taking perception of power into account, Wohlforth concludes that the Soviets’

“increased awareness of decline and of high costs of existing policies was associated with

change from hallowed precepts,” 67 and this perception finally led the Soviets to realize that it was becoming a “declining challenger” rather than a “rising challenger” that could successfully maximize its own power at the U.S. expense.

In the study of Chinese foreign policy, many scholars have, using case studies, generated the proposition that top leaders’ and elites’ perceptions of the external environment affect Chinese foreign policy. Gilbert Rozman and Allen Whiting in their

63 Robert Jervis, Perception and Misperception in International Politics (Princeton: Princeton University Press, 1976). 64 Robert Jervis, Perception and Misperception in International Politics (Princeton: Princeton University Press, 1976), p. 28. 65 Robert Jervis, “Hypotheses on misperception,” World Politics , vol. 20, no. 3 (April 1968), pp. 454-479; Valerie M. Hudson with Christopher S. Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow,” Mershon International Studies Review , vol. 39, no. 2 (October 1995), pp. 213-214. 66 Gideon Rose, “Neoclassical Realism and Theories of Foreign Policy,” World Politics , vol. 51, no. 1 (October 1998), pp. 144-172. 67 William Wohlforth, “Realism and the End of the Cold War,” in Michael Brown, Sean Lynn-Jones, and Steven Miller, eds., The Perils of Anarchy: Contemporary Realism and International Security (Cambridge, MA: MIT Press, 1995), p. 23.

respective works find a general trend of perception among decision-makers, analysts, specialists, and even public opinion that seems in line with China’s policies toward the

Soviet Union and Japan. 68 Some other scholars further explore how Chinese analysts and scholars help to shape the perceptions of the Chinese leadership. They maintain that by submitting internal reports through government branches and consultation with policy makers in formal or informal discussions Chinese analysts and scholars have more chance to express their perspectives to policy makers than in the past decades.69

During my own interviews, a Chinese analyst maintained that during the 1999 embassy bombing crisis, his report—which deemed the U.S. was accidentally, not intentionally, bombing the Chinese embassy—contributed to the Chinese leadership’s decision to temper the harsh nationalistic public opinion in the society. 70 Another strategist also noted that his study on maritime safety was adopted and formally became part of a government policy. 71 As Lu Ning notes in his in-depth analysis of the dynamics of Chinese foreign policy making, the access and connections between a scholar or analyst and the top leadership is crucial to discern how much weight that scholar’s voice carries in the process of decision making. 72

However, the perceptual analysis of Chinese foreign policy suffers certain

limitations and we should not take access to the leadership as a guarantee that a scholar’s

68 Gilbert Rozman, The Chinese Debate about Soviet Socialism, 1978-1985 (Princeton: Princeton University Press, 1987); Allen S. Whiting, China Eyes Japan (Berkeley: University of California Press, 1989). 69 Quansheng Zhao, “Impact of Intellectuals and Think Tanks on Chinese Foreign Policy,” in Yufan Hao and Lin Su, eds., China’s Foreign Policy Making: Societal Force and Chinese American Policy , pp. 123-138; Bonnie Glaser and Phillip Saunders, “Chinese Foreign Policy Research Institutes: Evolving Roles and Increasing Influence,” pp. 607-608; He Li, “The Role of Think Tanks in Chinese Foreign Policy,” Problems of Post-Communism , vol. 49, no. 2 (March/April 2002), pp. 33-43. 70 Interview #7, Beijing, June 30, 2008. 71 Interview #5, Biejing, June 20, 2008. 72 Lu Ning, The Dynamics of Foreign-Policy Decisionmaking in China (Boulder, CO: Westview Press, 1997), pp. 136-143.

view will necessarily be adopted and transformed into policy. In most cases, scholars have been unable to tease out clearly whether perceptions cause policy change, or whether academic debates only serve to justify the policy after the fact. It is an uneasy task to discern the causal relationship between perception and foreign policy in a democratic country where the process is more likely to be revealed through check-and-balance mechanisms and through interviews with policy makers. This task is even more difficult in China where the process of foreign policy making is still opaque and exclusively controlled by a small group of elites. Besides, as several scholars have noted, the political environment in China has constrained scholars’ willingness to risk expressing dissenting views on sensitive issues or policies, making their views in open-source publications more likely to represent the reproduction, elaboration, or justification of official perspectives. 73

My own interviews confirmed the limitations of assuming causality between

scholarly views and leaders’ perceptions and policy outcomes; interview subjects by and

large confirmed that it is the political leaders who finalize decisions. They also validated

the above mentioned channels for disseminating policy ideas upward to the government

and the leadership, and further directed my attention to burgeoning on-the-job training

programs for mid-level government officials provided by the CCP Central Party Schools

or other universities, where scholars and practitioners exchange their views to improve

governance. 74

73 Interview #14, Hong Kong, July 15, 2008; Rex Li, “Unipolar Aspirations in a Multipolar Reality: China’s Perceptions of U.S. Ambitions and Capabilities in the Post-Cold War World,” Pacifica Review , vol. 11, no. 2 (June 1999), pp. 115-149; Ming-Chen Shai with Diane Stone, “The Chinese Tradition of Policy Research Institutes,” in Diane Stone and Andrew Denham, eds., Thank Tank Traditions: Policy Research and the Politics of Ideas (Manchester, UK: Manchester University Press, 2004), pp. 141-162. 74 Interviews #2, Beijing, June 16, 2008; #5, Beijing, June 20, 2008; #7, Beijing, June 30, 2008; #8, Beijing, July 1, 2008; and #10, Beijing, July 4, 2008.

My Chinese interviewees, however, differed on the extent to which they believed their opinions affect top leaders’ final decisions. Contrary to those who contended their opinions were often incorporated into government policies, a Chinese scholar regularly invited to participate in formal discussions at the Ministry of Foreign Affairs (MFA) suggested that the foreign policy-making process in China is very complicated and the outcome is hardly a one-person contribution. According to this scholar, the policy output is “a result of different forces in that the top leader has to consider opinions from various ministries, party branches, and even the military.”75 Different government branches

usually invite different scholars from think tanks or universities to express opinions based

on their own needs, but “it is hard to identify one specific opinion that prevails over

others and finally becomes official policy.” 76 Another interviewee, who frequently

lectures the Party cadres and government officials about foreign affairs, also arrived at the

same conclusion—that the process of foreign policy-making is complicated and it

remains difficult to tease out the intricacies of elite decision-making. 77

While Chinese scholars provide a mixed picture of their influence on policy-making,

CCP party cadres and government officials seem even more cautious and conservative

when ascribing a role to scholars in the final policy output. A senior government official

noted that scholars only play a minimal role only as zhinang or canmou (brain trust or advising staff) in government decision-making, and their influence varies according to different policy fields. 78 For instance, government branches are more engaged with

academia in the fields as economic, legal, and social issues, but in foreign policy

75 Interview #8, Beijing, July 1, 2008. 76 Interview #8, Beijing, July 1, 2008. 77 Interview # 21, Beijing, October 16, 2008. 78 Interview #22, Beijing, November 18, 2008.

discourse specialist input is usually limited to the provision of more general macro perspectives than concrete policies. In most cases, scholars are often invited to provide a briefing at the information collection stage; however, as one gets closer to the actual decision-making levels, more senior government officials are involved but not scholars. 79

As to the “group study” advocated by the top leader Hu Jintao that calls for greater

involvement of academia to improve the quality of policy output, a senior party cadre of

the CCP noted that “It is still the top leadership that decides what the topic is and which

scholars to invite for discussion.” Topics are often selected based on existing policy

interests. In each session of group study of the members of the Politburo Standing

Committee (PBSC), scholars provide briefings and introduce information and ideas on

the assigned topic, and are expected to address questions from the members of PBSC. But,

at the end of each session, it is always Hu that draws the conclusions with the focus of

policy relevance. 80 After all, it is always the officials and top leaders who make the final

decision.

Acknowledging that scholars have limited rather than direct impact on policy,

however, I suggest that scholarly debates, in most cases confirming rather contradicting

official lines, has contributed to our understanding of Chinese foreign policy. Since the

mid-1990s, China’s top leader Jiang Zemin had encouraged scholarly debates on foreign

policy issues. For instance, in the mid-1990s, several books related to foreign policy were

published under the editorship of Liu Ji, then-Vice President of the Chinese Academy of

Social Sciences (CASS) and advisor to Jiang, 81 and the government is more willing to

79 Interview #22, Beijing, November 18, 2008. 80 Interview #17, Beijing, October 8, 2008. 81 Joseph Fewsmith, China since Tiananmen: The Politics of Transition (NY: Cambridge University Press, 2001), pp. 196-201; H. Lyman Miller and Liu Xiaohong, “The Foreign Policy Outlook of China’s ‘Third Generation’ Elite,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the

assign “research tasks” to scholars and analysts for policy consultations. 82 Yong Deng, a

Chinese analyst based in the U.S., further suggests that the government censorship of publications on IR in China, the difficulty for scholars to publicly express dissenting views, together with consultations that scholars provide to government officials, in fact resulted in an “intertwined” relationship between the scholarly debates and official thinking. 83 My research thus takes scholarly discussions, with the focus on the work by those who are in government-affiliated think tanks, as a point of reference for analysis.

In addition to discussion in open sources, my research also includes internal circulated materials to further discern the leadership’s perceptions. Many Chinese scholars, who have access to government officials in China while based in the U.S. where a more critical thinking is required for policy analysis, suggest that analysts and scholars of Chinese foreign policy should complement open source materials with internal circulation materials if accessible. 84 Oftentimes there exists a range of views in these debates in China, in open sources as well as in internal materials; however, this is, at least, a reflection that these views have respective sympathizers within the government or top

Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), p. 146; Merle Goldman, “Politically-Engaged Intellectuals in the 1990s,” The China Quarterly , no. 159 (September 1999), pp. 700-711. 82 Margaret Sleeboom-Faulkner, “Regulating Intellectual Life in China: The Case of the Chinese Academy of Social Sciences,” The China Quarterly , no. 189 (March 2007), pp. 83-99. In this essay, the author also discussed the recruitment policy and political requirements within the CASS after the Tiananmen. 83 Yong Deng, “The Chinese Conception of National Interests in International Relations,” The China Quarterly , no. 154 (June 1998), p. 309. David Shambaugh also emphasizes the significance of the exploration of scholarly debates, noting that theses prominent Chinese scholars’ works “land on the desks of ministers, state councilors, and party and state leaders in Zhongnanhai. They also orally brief leaders on occasion, accompany them on trips to the United States, and attend meetings with American dignitaries.” David Shambaugh, Beautiful Imperialist: China Perceives America, 1972-1990 (Princeton: Princeton University Press, 1991), p. 286. 84 Suisheng Zhao, “Beijing’s Perception of the International System and Foreign Policy Adjustment in the Post-Cold War World,” Journal of Northeast Asian Studies , vol. 11, no. 3 (Fall 1992), pp. 70-83; Jianwei Wang and Zhimin Lin, “Chinese Perceptions in the Post-Cold War Era: Three Images of the United States,” Asian Survey, vol. 32, no. 10 (October 1992), pp. 902-917.

leadership. 85

Deng Xiaoping’s Judgment since the 1980s

China’s scholars and analysts often start their work with a focus on the international situation. But what does “international situation” mean to them? How does this concept affect the worldview of the Chinese leadership and China’s foreign policy? In China, the term “international situation/pattern ( guoji xingshi or guoji geju )” refers to the distribution of capabilities and interactions among primary actors over a certain period of time. 86 As Liang Shoude, a senior professor at Peking University, suggests, the international situation is “a structure, form, and status that composed of the interlocking relationships among primary actors—states or groups of states—on the international stage over a certain period of time. This pattern is based upon the comparison of interests and strengths among these actors.” 87 For Chinese scholars, the sovereign state is still the most important actor in world politics, though they also include groups of states such as international organizations and regional arrangements in their analysis. Compared to

Waltz’s concentration on how units are “arranged or positioned” in the international

85 Ming-Chen Shai points out that from time to time, the leaders employed scholarly views to serve their own political ends in power struggles, as Zhao Ziyang pushed for governmental reform but was circumscribed by the conservatives within the CCP top leadership. Ming-Chen Shai with Diane Stone, “The Chinese Tradition of Policy Research Institutes,” in Diane Stone and Andrew Denham, eds., Thank Tank Traditions: Policy Research and the Politics of Ideas (Manchester, UK: Manchester University Press, 2004), pp. 141-162. 86 A professor in Peking University, Liang Shoude, provides the mostly shared definition of international pattern in China’s academia. See Liang Shoude, “1996 Nian Guoji Geju de Yanbian ji qi Tedian” [The Evolution and Basic Traits of the International Pattern in 1996], Sixiang Lilun Jiaoyu Daokan , no. 3 (1997), pp. 12-13; Liang Shoude and Hong Yinxian, Guoji Zhengzhixue Gailun [An Introduction to International Politics] (Beijing: Zhongyang Bianyi Chubanshe, 1994). 87 Tang Xizhong, Liu Shaohua, and Chen Benhong, Zhonguo yu Zhoubain Guojia Guanxi: 1949-2002 [China and Its Neighboring States: 1949-2002] (Beijing: Zhongguo Shehuikexue Chubanshe, 2003), p. 28.

system at the expense of how they interact, 88 Chinese academia also pays attention to how units relate and interact with one another. In other words, when Waltz only focuses on the distribution of material power in his analysis of the international system and relegates interactions among states to the study of state-level foreign policy rather than international politics, Chinese analysts tend to incorporate the interactions between states as part of the international structure in world politics. Given that Liang Shoude has been one of the editors and contributors to China’s IR textbooks, other Chinese analysts noted that Liang’s definition of the international structure is influential and endorsed by the

Chinese government. 89 If this holds true, we can expect that the Chinese leadership is

more open to the possibility that state interactions could influence the restraints put forth

by the international distribution of capabilities.

The architect of China’s economic reform and opening up, Deng Xiaoping, had

perceived that the international situation facing China would be favorable to “peace” and

“development” in the late 1970s and early 1980s, and thus put “modernization” instead of

his predecessor Mao Zedong’s “preparation for war,” as the policy priority for China in

the following decades. In 1985, Deng formally commented that “peace and development

as the two outstanding issues of our times,” 90 and this judgment has had a significant

88 Kenneth Waltz, Theory of International Politics (MA: Addison-Wesley, 1979), p. 80; and Waltz, “International Politics Is Not Foreign Policy,” Security Studies , vol. 6, no. 1 (Autumn 1996), pp. 54-57. 89 Interviews #5, Beijing, June 20, 2008; #23, Washington, DC, January 15, 2009. 90 Deng Xiaoping Wenxuan Vol. III [Selected Works of Deng Xiaoping Vol. III] (Beijing: Renmin Chubanshe, 1993), pp. 104-106. Deng expressed this judgement in a meeting with the delegation from the Japanese Chamber of Commerce and Industry. The main theme of the talk is to call for developed nations such as Japan and European countries to prioritize economic relations and trade with the Third World countries, including China, and jointly to deter the possibilities of war brought by the two superpowers. And, more important, the talk concluded with China’s hope that Japanese entrepreneurs to deepen economic and technological cooperation with China. It should be noted that, after the economic reform initiative in December 1978, Deng in January 1980 already proposed to change Mao Zedong’s worldview of “war and revolution.” With the more relaxed U.S.-Soviet relations then, Deng, on various occasions, pointed out the possibility to avoid another world war in the near future, and the importance of the role of economic development in future international

impact on Chinese international behavior through the present, both practically and theoretically. In terms of policy, Deng’s pragmatic judgment resulted in China’s adoption of the “independent and peaceful foreign policy” in the mid-1980s, under which China tried to distance itself from the U.S. after the short honeymoon period during the Carter

Administration but continued to court U.S. investment, while trying to restore the

Sino-Soviet relationship following their formal split in the late 1960s. 91

In academia, Deng’s thoughts that prioritized economic development over Mao’s

“war and revolution” also shed light on efforts to explain and predict Chinese international behavior. As a professor in China Foreign Affairs University in Beijing states, since 1978, Deng’s judgment had set the ground for China’s economic modernization and contributed to China’s gradual change in ideas from “struggle” to

“cooperation” in international affairs, and had brought about China’s comprehensive participation in international institutions since 1994. 92 The majority of my interviewees confirmed that China has been and will continue to be upholding “peace and development” as its ultimate foreign policy goal. 93

We can also find other of Deng’s policy statements that legitimize China’s balancing

relations. Deng’s preference for economic development, therefore, played an indispensible role to his judgment of peace and development as two outstanding themes since the 1980s. Zheng Qirong, ed., Gaigekaifang Yilai de Zhongguo Waijiao (1978-2008) [China’s Diplomacy since Reform and Opening up (1978-2008)], (Beijing: Shijie Zhishi Chubanshe, 2008), pp. 6-11. 91 Hu Zhengqing, “80 Niandai Guoji Qingshi Zhanwang” [The Outlook for the International Situation in the 1980s], Renmin Ribao , December 31, 1979, p. 6; Liu Huaqiu, “Zhongguo Shizong Buyu di Fengxing Dulizizhu de Heping Waijiaozhengce” [China will Always Adhere to an Independent Foreign Policy of Peace], Qiushi , no. 23 (1997), pp. 1148-1155. With regard to China’s policy shift from allying with the U.S. to seeking an independent foreign policy in the early 1980s, see Carol Hamrin, “China Reassesses the Superpowers,” Pacific Affairs , vol. 56, no. 2 (Summer 1983), pp. 209-231. 92 Zhu Liqun and Zhao Guangcheng, “Zhongguo Guojiguannian de Bianhua yu Gonggu: Dongli yu Qushi” [The Change and Consolidation of China’s International Ideas: The Dynamics and Trend], Waijiao Pinglun, no. 101 (February 2008), pp. 18-26. 93 Time after time, when I asked my informants about China’s changing international behavior, they attributed it to Deng’s guidelines without hesitation. Interviews #5, Beijing, June 20, 2008; #10, Beijing, July 4, 2008; #11, Beijing, July 9, 2008; #12, Beijing, July 9, 2008; #18, Beijing, October 12, 2008.

behavior. Deng declared three national tasks for China in 1982 as: modernization, unification, and opposing hegemonism. 94 “Opposing hegemonism” became the guidance

for Deng’s successors and led to the adoption of balancing policy. The 1989 Tiananmen

incident and subsequent sanctions from the West increased the Chinese leadership’s sense

of insecurity. Deng asked the Chinese leadership to always give the first priority to

“national sovereignty and security” and to prevent Western peaceful evolution of China,

while focusing on domestic economic development and to keep low profile in

international affairs. 95 As a reaction to the Summit Meeting at Malta in late 1989

between Bush and Gorbachev that indicated to China a reconciliation between the two

superpowers, Deng stated that “one way or another, China will be counted as a pole,” in a

meeting with leading members of the CCP Central Committee in March 1990, and went

on: “Our foreign policies remain the same: first, opposing hegemonism and power politics and safeguarding world peace; and second, working to establish a new international political order and a new international economic order… In this world there are plenty of complicated contradictions, and some deep-seated ones have just come to light. There are contradictions that we can use, conditions that are favorable to us, opportunities that we can take advantage of -- the problem is to seize them at the right moment.” 96

When facing the changing international environment, Deng contended that the

bipolar world will come to an end soon and presumed that China could play a greater role

in shaping the new international order. 97 I argue, however, that it was Deng’s

94 Deng Xiaoping Wenxuan Vol. III [Selected Works of Deng Xiaoping Vol. III] (Beijing: Renmin Chubanshe, 1993), p. 3. 95 Deng Xiaoping Wenxuan Vol. III [Selected Works of Deng Xiaoping Vol. III] (Beijing: Renmin Chubanshe, 1993), pp. 347-349. 96 Deng Xiaoping Wenxuan Vol. III [Selected Works of Deng Xiaoping Vol. III] (Beijing: Renmin Chubanshe, 1993), p. 353. 97 The Chinese leadership perceives “pole” as a state or a group of states that is “strong in the comprehensive national power (CNP) and influential in international affairs.” Please refer to Zhong Min, “ ‘Ji’ shi Sheme Yisi?” [What Does “Polarity” Mean?], Renmin Ribao , May 19, 1991, p. 8.

overemphasis on the contradictions of interests among the Western countries and his sense of insecurity after Tiananmen that clouded his judgment on the post-Cold War era and delayed China’s recognition of the major powers’ distribution of capabilities. This perception of U.S. threats and a misperception of the distribution of capabilities led to

China’s relatively confrontational policy towards the United States in the early 1990s. 98 I explore why this is the case and how the Chinese academia and leadership gradually change their perceptions of distribution of capabilities along with the evolution of world events. Chinese perceptions of the American threat will be discussed in Chapter 3. When

Deng promoted multipolarization, as with his “peace and development” statement, the evolving international situation required China to gradually reassess its surroundings and to change its behavior accordingly.

Evolution with World Events: Chinese Perceptions of U.S. and World Power Distribution

Deng’s statement of “peace and development” as the salient issues has led to China’s adoption of a relatively more peaceful foreign policy than Mao’s revolutionary foreign policy. 99 In the late 1970s and 1980s, China held an ambivalent view towards the role of the U.S. in its own process of economic development. On the one hand, the U.S. was perceived as a participant that China should invite to contribute to its economic

98 Also, as Chapter 2 will demonstrate, China’s harsh line in the 1990s was also a response to U.S. sanctions against China following the Tiananmen crackdown. 99 Recent research on China’s international image building and foreign policy has suggested that China has been promoting its image as “peace-loving,” “cooperator,” and “developer” since the 1980s, as opposed to the “revolutionary bastion” it strove to be under the Maoist period. Hongying Wang, “National Image Building and Chinese Foreign Policy,” in Yong Deng and Feiling Wang, eds., China Rising: Power and Motivation in Chinese Foreign Policy (Lanham, MD: Rowman & Littlefield Publisher, 2005), pp. 73-102.

development. On the other hand, the Chinese leadership was also suspicious of U.S. intentions over issues as human rights and arms sales to Taiwan. 100 Also, as I will detail

in Chapter 4 the economic relationship between China and the U.S., in which China’s

expectation from the continuing trade relationship with the U.S. contributed to its shift to

accommodation. It is very important to recognize that Deng’s goal of modernization also

helped stabilize this bilateral relationship because of China’s need for U.S. technology

and capital.

However, Deng’s mantra about the upcoming multipolar world and the

contradictions of interest among Western countries had clouded the Chinese leaders’

judgment and cultivated China’s relatively confrontational policy towards the U.S. in the

early 1990s. As I will demonstrate, Deng’s somewhat contradictory conceptions require

reinterpretation to conform to reality. An expert on grand strategy at Renmin University

of China, Shi Yinhong, once pointed out that Deng Xiaoping’s legacy about China’s

national task and strategy is very rich. This richness makes it complicated, and this

complication inevitably results in certain “internal tension (inconsistency),” and so it

requires successors to reinterpret his thought from time to time to accommodate reality, 101 or their preferred policies.

With open-source materials, Michael Pillsbury has documented and examined

Chinese debates on the future international security environment among scholars and analysts throughout the 1990s. 102 According to Pillsbury, there still are some Marxist and

100 Harry Harding, “China’s American Dilemma,” Annals of the American Academy of Political and Social Science , no. 519 (January 1992), pp. 12-25; Gong Li, “The Official Perspective: What Chinese Government Officials Thank of America,” in Carola McGiffert, ed., Chinese Images of the United States (Washington D.C.: The CSIS Press, 2005), p. 28. 101 Shi Yinhong, “Zhongguo dui Mei Waijiao he Zhanlue 15 Nian” [China’s Diplomacy and Strategy toward the U.S. for 15 Years], Guoji Guancha, no. 2 (2004), p. 3. 102 Michael Pillsbury, China Debates the Future Security Environment (Washington DC: National Defense

ideological taboos that forbid Chinese scholars and analysts from publicly discussing certain scenarios that could disconcert the superiority of communism vis-à-vis capitalism, and the forecast that the U.S. would grow stronger than other major powers is one of them. 103 Pillsbury’s work suffers selection bias in which he chose the most hawkish views or the views at two extremes; however, it provides a point of reference for our understanding of Chinese thinking. As world events evolved, Chinese scholars and analysts began to openly recognize that a “multipolar world” was a near future potentiality, not an immediate reality.

In the early 1990s, the unprecedented end of bipolarity as a result of the demise of the Soviet Union “left China’s leaders without a definition of their place in the world.” 104

In addition, as will be detailed in Chapter 3, in the shadow of the Tiananmen incident that caused such insecurity within the Chinese leadership, the U.S. was perceived as a political threat that could endanger the CCP’s rule. This anxiety further diminished

Chinese admiration of America in the pre-1989 period. 105 Therefore, the Chinese leadership not only perceived multipolarization of world politics as a trend based on their assessment of U.S. decline, but also advocated this concept as a goal. 106 Deng Xiaoping

University Press, 2000). 103 Michael Pillsbury, China Debates the Future Security Environment (Washington DC: National Defense University Press, 2000), p. xxvii. 104 Michel Oksenberg, “The China Problem,” Foreign Affairs , vol. 70, no. 3 (Summer 1991), p. 9. 105 Suisheng Zhao, “Beijing’s Perception of the International System and Foreign Policy Adjustment in the Post-Cold War World,” Journal of Northeast Asian Studies , vol. 11, no. 3 (Fall 1992), pp. 70-83; Zi Zhongyun, “The Clash of Ideas: Ideology and Sino-U.S. Relations,” in Suisheng Zhao, ed., Chinese Foreign Policy: Pragmatism and Strategic Behavior (Armonk, N.Y.: M.E. Sharpe, Inc., 2004), pp. 224-242; Yong Deng, “Hegemon on the Offensive: Chinese Perspectives on U.S. Global Strategy,” Political Science Quarterly , vol. 116, no. 3 (2001), pp. 343-365. 106 China’s promotion of the “new international political and economic order” in the early 1990s was in line of this reasoning, in which Deng stressed the importance to “oppose (American) hegemonism” and to promote the “Five Principle of Peaceful Co-existence” characterized by equality and, more important, non-interference of domestic affairs. See Qian Qichen, “Dangqian Guoji Qingshi” [The Current International Situation], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 16 (1994), pp. 1-15. While a relatively small number of scholars in China admit that China upholds multipolarity as a goal, many in the West or other countries point out that China does try to facilitate the realization of a multipolar

once commented “[i]n the [so-called] multi-polar world, China too will be a pole.” 107

This was an indication of his desire for multipolarity, and, having prevented a

U.S.-centered unipolar world from occurring, China would be able to counter U.S. interference in its domestic affairs. As Suisheng Zhao notes, “because the multipolar system is its goal, Beijing ‘perceives’ it.” 108

In line with the prevailing multipolarity reasoning, the Chinese top leaders deemed the power distribution favorable to other countries such as Germany and Japan, and preferred to foresee the eventual U.S. decline. Deng Xiaoping on the abovementioned occasion further stated that “we should continue to observe the international situation” to seize the right moment to drive a wedge between the U.S. and its Western allies. 109

In the 1990s, the U.S. was first depicted as “dangerous but in decline,” but this image of the U.S. has changed with world events, especially in the mid- to late-1990s, as will be explicated later. Generally, China is still worried about the U.S. ability to delay

China’s development and further integration with the world economy, but the perception of the U.S. as a threatening actor possessing the intentions and capabilities to topple the

CCP regime and pursue world domination has decreased over time. 110 In other words, world. It is worth noting that China’s Assistant Minister of Foreign Affairs Wang Yi once noted that China should employ the opportunities provided by economic globalization to facilitate the process of multipolarization of world politics. Wang Yi, “Quanqiuhua Beijingxia de Duojihua Jincheng” [The Process of Multipolarization in the Context of Globalization], Guoji Wenti Yanjiu , no. 6 (2000), pp. 1-6. Also see Niu Jun, “Houlengzhan Shiqi Zhongguoren dui Meiguo de Kanfa yu Sikao” [Chinese Perspectives on U.S. in the Post-Cold War Era], Guoji Jingji Pinglun (July-August, 2001), pp. 5-8; Suisheng Zhao, “Beijing’s Perception of the International System and Foreign Policy Adjustment in the Post-Cold War World,” Journal of Northeast Asian Studies , vol. 11, no. 3 (Fall 1992), pp. 70-83; Kao Lang, “Houlengzhan Shiqi Zhonggong Waijiao Zhengce de Bian yu Bubian” [Change and Continuity in CCP’s Foreign Policy in the Post-Cold War Era], Zhengzhi Kexue Luncong (Taipei) (September 2004), pp. 19-48. 107 Deng Xiaoping Wenxuan Vol. III [Selected Works of Deng Xiaoping Vol. III] (Beijing: Renmin Chubanshe, 1993), p. 353. 108 Suisheng Zhao, “Beijing’s Perception of the International System and Foreign Policy Adjustment in the Post-Cold War World,” Journal of Northeast Asian Studies , vol. 11, no. 3 (Fall 1992), pp. 70-83. 109 Deng Xiaoping Wenxuan Vol. III [Selected Works of Deng Xiaoping Vol. III] (Beijing: Renmin Chubanshe, 1993), p. 354. 110 Interviews #2, June 16, 2008; #4, Beijing, June 17, 2008; #7, Beijing, June 30, 2008; #10, Beijing, July

China has, since the mid-1990s, perceived the U.S. as strong and dangerous, but has tried to justify U.S. foreign policies on their own merit rather than seeing the U.S. as predatory in nature. 111 This is also an outcome of contemporary interactions between the U.S. and

China that will be detailed in Chapter 3.

Many Chinese official reports and analyses also reflect how the perceptions of the leadership have changed overtime. China gradually downplayed “anti-hegemonism” from the early 1990s to 2006 (save for some episodic crises), and acknowledged the protracted nature of the process of “multipolarization” with increasing mentions of “one superpower, many great powers ( yichao duoqiang ).” China has also promoted “globalization” since the mid-1990s, and with it more open discussions on and acknowledgement of

“unipolarity.” It should be noted that to date the Chinese government is still reluctant to officially employ the term “unipolarity” to describe the international system, 112 while in academic discussions “unipolarity” is more often seen. This chapter deals with China’s perceptions of threat and of power disparity, and I will detail the role of economic interdependence and globalization in Chapter 4.

The reports from China’s official mouthpiece correspond to this trend. American

China expert Susan Shirk demonstrates that certain terms that appear in the official mouthpiece, Renmin Ribao , are related to the thinking of the Chinese leadership. She

further suggests China has been toning down the polemical terms such as “hegemonism”

and “multipolarization” while becoming more willing to employ the term “win-win” as

4, 2008; #11, July 9, 2008; #12, Beijing, July 9, 2008; #13, Hong Kong, July 14, 2008; #18, Beijing, October 12, 2008; #19, Beijing, October 14, 2008; #20, Beijing, October 14, 2008. 111 There certainly are different schools of thought in China that hold different views on the nature of U.S. hegemony, and some of them still see U.S. as a threat to China even today. 112 Jia Qingguo, “Learning to Live with the Hegemon: Evolution of China’s Policy toward the U.S. since the End of the Cold War,” Journal of Contemporary China , vol. 14, no. 44 (August 2005), p. 404, fn. 29.

an indication of China’s overall inclination towards cooperation in the 1990s. 113

Following Shirk’s logic, I examined the Renmin Ribao database but limited searches to reports regarding the U.S. ( Meiguo ) to demonstrate how China depicts its relations with the U.S. with certain key terms from 1989 to 2007. The keywords include two polemical anti-American terms—“hegemonism” ( baquan zhuyi ) and “multipolarization” ( duojihua ); and two more cooperative terms—“globalization” ( quanqiuhua , as more inclined to “non zero-sum”) and “win-win” ( shuangying , positive-sum interactions).

Figure 2.2 Reports on U.S. with keywords in Renmin Ribao , 1989-2007

300

250

200 Hegemonism Multipolarization 150 Globalization

100 Win-Win Numbers of Report 50

0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year

Source: People’s Daily Database 1946-2007, http://data.people.com.cn.

As Figure 2.2 shows, the polemical anti-American terms have the peaks around

1996, 1999, and 2001, when episodic incidents deeply affected China’s perception of the

U.S. Cooperative terms have been more frequent seen since 1998. It is noteworthy that

China first applied the term “win-win” on U.S.-China relations in late 1999, when Jiang

113 Susan Shirk, China: Fragile Superpower (NY: Oxford University Press, 2007), pp. 98-99.

Zemin appraised the efforts from both sides to reach the agreement on WTO issues. 114

Based upon Waltz’s balance-of-power reasoning, this chapter argues that the distribution of capabilities and Chinese perceptions of this distribution in the itnernaitonal system constrained China’s policy toward the U.S. in the post-Cold War era. This chapter focuses on the evolution of Chinese perceptions of U.S. capabilities, and how these perceptions affected China’s policy toward the U.S. as follows. The Chinese perceptions of U.S. intentions will be discussed in Chapter 3.

Post-1991:

Perception of Power Distribution

China’s scholarly discussions on international structure in the early 1990s, as with

Western academia, were preoccupied with but not limited to the question “to what extent” and “for how long” this uniplolarity of U.S. would last. As the realists in Western IR scholarship aptly pointed out, the end of the Cold War changed the international system and had a crucial impact on state behavior. 115 They hold the view that the U.S. enjoys its superpower status vis-à-vis other countries in terms of political, economic, military, and even ideological strength. As Charles Krauthammer once claimed, it is the “unipolar moment”. 116 In addition, some suggest that given the U.S. military projection capabilities

and geographical position vis-à-vis other countries, its primacy would live well, 117 while

114 Renmin Ribao , November 16, 1999, p. 1. 115 Kenneth Waltz, “The Emerging Structure of International Politics,” International Security , vol. 18, no. 2 (Fall 1993), pp. 44-79, and “Structural Realism after the Cold War,” International Security , vol. 25, no. 1 (Summer 2000), pp. 5-41. 116 Charles Krauthammer, “The Unipolar Moment,” Foreign Affairs , vol. 70, no. 1 (Winter 1990/1991), pp. 23-33. 117 William Wohlforth, “The Stability of a Unipolar World,” International Security , vol. 24, no. 1 (Summer 1999), pp. 5-41; Stephen Brooks and William Wohlforth, “American Primacy in Perspective,” Foreign Affairs , vol. 81, no. 4 (Jul/Aug2002), p20-33; Wohlforth, “Unipolar Stability,” Harvard International Review , vol. 29, no. 1 (Spring 2007), p44-48.

others show their concerns that other great powers would emulate U.S. innovations and later to overpower the later and create a “power transition”. 118

China’s view on the post-Cold War international structure begins with Deng’s judgment of “one dead, the other severely injured” in describing the former Soviet Union and the United States. 119 And, due to China’s sense of insecurity that followed the U.S.

“the end of history” argument, China not only saw U.S. as a political threat that could endanger the CCP’s rule, but preferred to foresee the “severely injured” U.S. decline with the hope that contradictions among the West countries would accelerate the pace of U.S. decline. To the Chinese leadership, U.S. domestic issues such as unemployment and economic stagnation after the Cold War justified their assessment. These U.S. contradictions with foreign partners and its domestic problems would inevitably bring about opportunities and uncertainties to China. 120

A view from a scholar close to Jiang Zemin revealed how the Chinese leadership perceived the future international situation directly following the Cold War. In a 1995 article on the CCP mouthpiece journal Qiushi (Seeking Truth), Chen Qimao of the

Shanghai Institute for International Studies (SIIS) argued, since the Cold War came to an end peacefully without needing an international conference like the Yalta Agreement that concluded WWII, the contradictions between the West and Russia, and within the

Western camp would continue for a period of time until they agreed on the division of their new spheres of influence. Chen concluded that China should seize the opportunity to

118 E.g. Christopher Layne, “The Unipolar Illusion: Why New Great Powers Will Rise,” International Security , vol. 17, no. 4 (Spring 1993), pp. 5-51; Ronald L. Tammen ... [et al.], Power Transitions: Strategies For the 21st Century (NY: Chatham House Publishers, 2000). 119 Qian Qichen, “1991 Guoji Qingshi yu Zhanwang” [The International Situation and Its Prospects in 1991], Guoji Zhanwang , no. 1 (1992), pp. 3-4. 120 Qian Qichen, “Guanyu Guoji Xingshi yu Wuoguo Duiwai Guanxi” [The International Situation and Our Foreign Relations], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 8 (1993), pp. 1-15.

exploit these contradictions to strengthen itself. 121

In addition, Deng contended on different occasions that “opposing hegemonism” and a multipolar world are as beneficial to world peace as to China. Chinese scholar

Wang Huning, from Fudan University and later assigned to the CCP Central Committee

Policy Research Office, elaborated on why China should continue to uphold “opposing hegemonism” (towards the U.S.) as a guiding policy even after the Cold War. Wang pointed out that in Deng’s reasoning, a peaceful international environment is a prerequisite of China’s foremost national task—economic development; and that the U.S. and the Soviet Union equipped with massive nuclear weapons and confrontational ideologies were the two possible spoilers of world peace. All other developing countries should therefore unite under the banner of “anti-hegemonism” to prevent the two superpowers from further delimiting their sphere of influence. Only when all other countries work together to succeed a multipolar world will the two be kept at bay and world peace preserved. 122 In other words, Deng perceived that massive nuclear weapons

justified U.S. and Soviet hegemonic status. And, Deng ordained the two superpowers still

to be expansionist even after the Cold War. 123 In addition to its nuclear weaponry, I contend, it was U.S. sanctions against China following Tiananmen that made the U.S. so threatening to China and thus encouraged the elite to read U.S. policy as expansionist in

121 Pillsbury points out that Chen has developed a personal relationship with Jiang since Jiang was the mayor in Shanghai. See Michael Pillsbury, China Debates the Future Security Environment (Washington DC: National Defense University Press, 2000), p. 29. Chen Qimao, “Lengzhanhou Daguo Zhengzhi Jiaozhu de Xindongxiang” [The New Trend of the Political Rivalry among the Major Powers after the Cold-War], Qiushi , no. 6 (1995), pp. 39-44. 122 Wang Huning, “Deng Xiaoping dui Guoji Zhnaglue de Sikao” [Deng Xiaoping’s Deliberation on International Strategy], Dangzheng Luntan , no. 1 (1995), pp. 4-7. Wang has been assigned from Fudan University to the Policy Research Office of the CCP Central Committee in 1995. 123 A group of Chinese scholars held the view that based upon traditional realpolitik that power and interest were still the two key concepts of world politics, the U.S. global strategy was inherently expansionist because of its advantage in national capabilities. Jianwei Wang and Zhimin Lin, “Chinese Perceptions in the Post-Cold War Era: Three Images of the United States,” Asian Survey , vol. 32, no. 10 (October 1992), p. 908.

nature. Therefore, as other analysts have pointed out, the Chinese leadership not only perceived multipolarization as a trend based on their assessment of U.S. decline, but also made efforts to advocating this concept as a goal. 124

Here I contend that in the early to mid 1990s, it was a “discussion” rather then

“debate” among scholars and analysts, because most of them shared the aforementioned assumptions that “the U.S. is ill-intended but in decline” and that “a multipolar world is beneficial to world peace and to China.” China’s correspondent strategies for a perceived multipolar world were basically in accordance with the realist thinking on balancing. 125

The discussion covered three major issues:

1. The only superpower was in decline

Many Chinese scholars and analysts in government-affiliated think tanks held the

view that the winner of the Cold War—the U.S.—was actually in decline. In 1994,

Chinese American watcher Wang Jisi of the Institute of American Studies at CASS

elaborated this view:

(1) In the post-Cold War period, the importance of economic factors is growing and

military power less significant; this trend curbs the U.S. intention to achieve

diplomatic goals with military primacy.

(2) U.S. national cohesion and political confidence had decreased, and the American

124 Suisheng Zhao, “Beijing's Perception of the International System and Foreign Policy Adjustment in the Post-Cold War World,” Journal of Northeast Asian Studies , vol. 11, no. 3 (Fall 1992), pp. 70-83. 125 However, in scholarly discussions, there was a view that described the post-Cold War world as “one superpower, many great powers” right after the 1991 Gulf War. In an article on Guoji Zhanwang (World Outlook) published by SIIS, a Chinese analyst employed this term to illustrate the future international pattern, in which the U.S. would remain stronger than others, yet would need to share leadership with and to solicit cooperation to maintain the world order. However, the author concluded, “the U.S. will act as an ‘initiator’ rather than a ‘leader’ on international political issues……and given the increasing influence of other powers, this is the age of ‘multipolarity’.” Wang Ling, “Meiguo ‘Shijie Xinzhixu’ he Weilai ‘Guoji Xinzhixu’ Chutan” [A Preliminary Analysis on U.S. “New World Order” and the Future “New International Order”], Guoji Zhanwang , no. 15 (1991), pp. 3-5.

public distrusted their political leaders and was tired of party politics. Other societal

problems had worsened and become difficult to solve.

(3) The U.S. domestic politics prevented the Clinton administration from forging a global

strategy. These schisms include the diminishing authority of the president in foreign

policy-making, growing political schisms between Congress and the White House,

interagency coordination problems within the administration, and altogether being

complicated by interest group politics.

Wang concluded, “No matter who is in charge, the U.S. will be a weak government in domestic and in international front.” 126

2. Japan and Western European countries would rise to economically challenge the U.S.

In the early 1990s, especially prior to 1993, major powers competed with one another per their own national grand strategies, and this provided a chance for China to promote multipolarization. For instance, the U.S. under President Bush’s “new world order” initiative was under contestation worldwide. In Europe, President François

Mitterrand of France proposed the formation of a “European Confederation” to further

126 Wang Jisi, “Meiguo: Weiyi Chaoji Daguo de Diwei zai Xiajiang” [U.S.: The Only Superpower is in Decline], Liaowang , no. 52 (1994), pp. 15-16; Wang Jisi and Zhu Wenli, “Lengzhenhou de Meiguo” [The U.S. after the Cold War], Taipingyang Xuebao , no. 1 (1994), pp. 33-47; Wang Houkang and Jin Yingzhong, eds., Guoji Geju [International Structure] (Shanghai: Shanghai Shehui Kexueyuan Chubanshe, 1992), pp. 125-126; Huang Suan, “Shijie Jingji Geju de Xinbianhua” [The Changes in the World Economic Structure], in Du Gong and Ni Liyu, eds., Zhuanhuanzhong de Shijie Geju [The World Structure in Transition] (Beijing: Shijie Zhishi Chubanshe, 1992), pp. 164-170; Chu Yukun, “Shilun Zhanhou Meiguo Dijiuci Jingji Shuaitui” [A Tentative Analysis of the U.S. Ninth Economic Recession after World War Two], Shijie Jingji yu Zhengzhi (November 1991), p. 10; Ji Wei, “Meiguo Jingji Mianlin de Xinwenti” [The New Problems Facing the U.S. economy], Shijie Jingji yu Zhengzhi (October 1993), pp. 6–8; Huang Hong, “Meiguo Quanqiu Zhanlue Tiaozheng zhong de Neizai Maodun ji Zhiyue Yinsu” [The Intrinsic Contradictions and Constraining Factors in the Adjustment of the U.S. Global Strategy], Xiandai Guoji Guanxi (March 1993), p. 32; Sun Haishun, “Lun Mei, Ri, Xi’ou Guoji Ziben Diwei de Xinbianhua” [On the New Changes in Status of the International Capital of the U.S., Japan, and Western Europe], Meiguo Yanjiu , vol. 6, no. 1 (1992), pp. 91-92; Wang Zhenhua, “Daxiyang Liangan Guanxi de Bianhua yu Ouzhou Anquan Jizhi de Tiaozheng” [Changes in the Trans-Atlantic Relationships and the Adjustment in the European Security Mechanism], Ouzhou , vol. 14, no. 1 (1996), pp. 60-61.

facilitate regional integration and to attain “the center of the world” status. In addition,

Japan planned to lead a tri-polar world with the U.S. and Europe. 127 In China’s eyes,

these major countries would, one way or another, begin balancing against U.S. in the near

future.

3. Multipolarization would soon be realized

As early as in the late 1980s, some Chinese analysts had argued that it was already a

multipolar world. 128 To them, the Soviet Union under Gorbachev’s “new thinking” had revealed its decline in military terms, and the economic growth of Europe, Japan, and

China had boosted these states’ international status.

In the early 1990s, most Chinese analysts reached the consensus that multipolarization would be realized soon, with great help from the Third World countries.

Many developing countries had become more independent and autonomous, which left less opportunity for the developed countries to control and exploit them but opened the possibility of lesser states allying themselves with China. The American and Western victory in the Gulf War did send a contrary message to Chinese analysts, but the majority still perceived the U.S. as possessing a declining role in world affairs.

127 Xi Runchang, “Lun Lengzhanhou Shijiezhengzhi de Duojihua yu Daguojien de Zhanlue Jingzheng” [On Multipolarization in World Politics and Strategic Competition among Big Powers after the Cold War], Jiaoxue yu Yanjiu , no. 4 (1998), pp. 20-24. Also see Chen Qimao, “Lengzhanhou Daguo Zhengzhi Jiaozhu de Xindongxiang” [The New Trend of the Political Rivalry among the Major Powers after the Cold-War], Qiushi , no. 6 (1995), pp. 40-41; Sa Benwang, “Guanyu Shijie Geju Duojihua de Jidian Sikao” [Some Thoughts on Multipolarization of the World Pattern], Heping yu Fazhan , no. 2 (1996), pp. 1-4. 128 Du Xiaoqiang, “Guoji Zhanglue Geju Duojihua Xintan” [Exploration on Multipolarization in the International Strategic Pattern], Shijie Jingji yu Zhengzhi , no. 4 (1987), pp. 1-7, 63; Du Xiaoqiang, “Shi Liangji haishi Duoji?” [Is It Bipolarity or Multipolarity?], Shijie Zhishi , no. 14 (1987), pp. 14-15.

Official Tone and Balancing Behavior

Official Chinese documents in the early 1990s generally reflected this view of the perceived decline in U.S. power and predicted a changing distribution of power that would lead to a new round of power struggles among major powers. 129 In the political

report delivered by the CCP General Secretary Jiang Zemin to the Fourteenth National

Congress of the Chinese Communist Party (hereafter, Party Congress) in 1992, the Party

did take the struggle among major powers into account while being very alert to U.S.

“hegemonism,” and expressed a willingness to engage with neighboring and developing

countries in order to realize “multipolarization.”130

In terms of how to cope with this new international situation, China’s reaction seemed to confirm the realist argument to adopt an internal and external balancing strategy. A former analyst in a government-affiliated think tank and now professor in

Tsinghua University stated that “we have drawn our attention to how to win a high-tech local war, and have given our military budget a double-digit increase ever since.” 131

Externally, the visits of Chinese high-level officials indicated China had looked forward to forging relationships with developing countries as a countermeasure to U.S. hegemony while expecting the contradictions between the Western states to help usher in a multipolar world in no time. For instance, after 1990, the PLA resumed military cooperation with the Soviets. 132 China concluded its first “strategic partnership” with

129 Qian Qichen, “1991 Guoji Qingshi yu Zhanwang” [The International Situation and Its Prospects in 1991], Guoji Zhanwang , no. 1 (1992), pp. 3-4; Wang Jisi, “Meiguo: Weiyi Chaoji Daguo Diwei zai Xueruo” [U.S.: The Only Superpower is in Decline], Liaowang , no. 52 (1994), pp. 15-16. 130 Jiang Zemin, “Speed up the Pace of Reform, Opening, and Modernization, and Win Greater Victories in the Cause of Socialism with Chinese Characteristics,” Report to the 14th National Congress of CCP in Beijing, October 12, 1992. 131 Interview #7, Beijing, June 30, 2008. 132 Liu Huaqing, Liu Huaqing Huiyilu [Memoir of Liu Huaqing] (Beijing: Jiefangjun Chubanshe, 2004), pp. 590-599.

Brazil in 1993. In 1994, Jiang Zemin visited Russia and declared the establishment of a

“constructive partnership”, in addition to the agreement on border issues. 133 Many

Chinese scholars agreed that this cooperation was motivated by the border issues, but they also noted that it helped to foster a counterbalancing strategy against U.S. as a byproduct. 134 My hypothesis—that China will be more likely to adopt confrontational policies toward the U.S. if China subjectively perceives a narrowing gap of capabilities—explains China’s confrontation with the U.S. in the early 1990s. In other words, as Waltz suggests, states may misperceive the international environment to make unwise foreign policy. 135

1995-1996 onward:

Perception of Power Distribution

In the mid-1990s, Chinese scholars and analysts gradually reached a consensus position using “one superpower, many great powers” to describe the international structure as opposed to the previous model that rested on a U.S. with declining international standing. 136 China thus became less optimistic about the pace of moving

133 Zhong Zhicheng, Weile Shijie geng Meihao: Jiang Zemin Chufang Jishi [For a Better World: A Record of Jiang Zemin’s Overseas Visits] (Beijing: Xinhua Shudian, 2006), pp. 50, and 55-56. 134 Interviews # 1, Beijing, June 12, 2008; #17, Beijing, June 30, 2008; #10, Beijing July 4, 2008. When the U.S. intended to enhance security relations with Japan in 1996, China and Russia forged a “strategic constructive partnership” in the same month, at least as a senior professor in the School of International Studies at Peking University points out, “This was a joint effort to assuage the systemic pressure characterized by the U.S. military strength.” Interview # 4, Beijing, June 17, 2008. Analyst Tang Tianri of the Xinhua News Agency commented, “This ‘intimate relationship’ between China and Russia will constitute a tremendous counter-balance to Western influence.” See Tang Tianri, “Fuza Duobian de Daguo Guanxi” [Complicated and Volatile Relations among Big Powers], Banyuetan , no. 6 (1996), p. 17. 135 To Waltz, states that cannot objectively perceive the distribution of capabilities in the international system would be punished in return, such as Germany, Japan, and Italy in the WWII. Kenneth N. Waltz, “Evaluating Theories,” The American Political Science Review , vol. 91, no. 4 (December 1997), pp. 913-917. 136 Jin Canrong, “The U.S. Global Strategy in the Post-Cold War Era and Its Implications for China-United States Relations: A Chinese Perspective,” Journal of Contemporary China , vol. 10, no. 27 (2001), pp. 309-315.

toward a multipolar world. They commenced to differ openly on whether the world had already become multipolar, and to what extent this “one superpower, many great powers” system would persist.

1. American status in the mid-1990s

Most Chinese America-watchers revised their evaluations about the destined decline of the U.S. that had captivated discourse in the early 1990s. In the mid-1990s, however, they had a different observation: 137

(1) After the economic stagnation that followed the Gulf War in March 1991, the U.S.

economy had continued to grow and its annual economic growth rate had surpassed

that of Germany and Japan since 1995, with its leading advantage in technological

innovation over other countries.

(2) The U.S. still enjoyed great advantages in military strength, as defined by expenditure

and the advancement of technology.

(3) Societal issues still, however, challenged the U.S. in terms of national cohesion.

(4) International institutions generally hewed to the interests of the U.S., but it became

more difficult for the U.S. to dominate these institutions.

2. Had multipolarity arrived?

Did this “re-discovery” of U.S. strength change China’s desire for multipolarization?

Not much. In addition to Pillsbury’s analysis that strategists with military backgrounds

137 Wang Jisi, Gaochu Busheng Han [The Lonely Power at the Top of the World] (Beijing: Shijie Zhishi Chubanshe, 1999), pp. 374-406; Jin Canrong, “The U.S. Global Strategy in the Post-Cold War Era and Its Implications for China-United States Relations: A Chinese Perspective,” Journal of Contemporary China , vol. 10, no. 27 (2001), pp. 309-315.

had tried to safeguard the so-called orthodox view from time to time, 138 Chinese academics accepted this “one superpower and many great powers” description. However, some of them tended to see it as a period of transition and a big step forward to

“multipolarity,” while others saw it a temporary “setback.” Xi Runchang of CASS suggested that a relatively stable international structure had come into being in 1997, in which the interactions among “five major powers” had settled. Though the material capabilities were distributed unequally between the only superpower and other major powers, there was no clear enemy in their complicated interactions. Xi thus concluded that the pattern of “one superpower, many great powers” is itself an “embryo” of multipolarity, or at least had already set the ground for a multipolar world. 139

Given the interactions among major powers in 1996, many analysts noticed that the idea of “unipolarity” had come to challenge that of “multipolarity.” An analyst of the

China Institute of International Studies (CIIS, subordinated to MFA), Sa Benwang, contended that U.S. was trying to enhance its unipolar status internationally, causing some “setbacks” in the process of multipolarization. However, “‘multipolarization’ is irreversible” and a multipolar world “will come into existence in the early 21 st century

(around 2010 to 2020).” 140 Other analysts also shared the view that multipolarity was irreversible and that the contradictions among major countries on certain key

138 This orthodox view, according to Pillsbury, was represented by PLA General Huang Zhengji. Huang’s arguments include: U.S. decline is inevitable and continuing, and its influence is already limited; multipolarity is inevitable; and the Third World countries will rise up against the U.S. See Michael Pillsbury, China Debates the Future Security Environment (Washington DC: National Defense University Press, 2000), pp. 57-58. 139 Xi Runchang, “Lun Lengzhanhou Shijiezhengzhi de Duojihua yu Daguojien de Zhanlue Jingzheng” [On Multipolarization in World Politics and Strategic Competition among Big Powers after the Cold War], Jiaoxue yu Yanjiu , no. 4 (1998), pp. 20-24. 140 Sa Benwang, “Guanyu Shijie Geju Duojihua de Jidian Sikao” [Some Thoughts on Multipolarization of the World Pattern], Heping yu Fazhan , no. 2 (1996), pp. 1-4; and “Daguo Guanxi yu Shijie Geju” [Big Power Relations and the World Pattern], Liaowang , no. 52 (1996), pp. 42-43.

international issues were far greater than in prior years. 141

3. Will the current “one superpower, many great powers” system persist?

Some academics and analysts came to question the inevitability of multipolarization, and to see “one superpower, many great powers” as a sustainable, not transitional, international pattern. Yang Dazhou, a senior analyst in CASS, publicly challenged the orthodox view of the coming multipolar world as early as 1997. 142 To Yang, a pluralistic

“one superpower and four powers” system already existed, but the Third World countries would not come to challenge the U.S. any time soon.143 Other analysts such as Yan

Xuetong of CICIR and Zhou Jianming of the Shanghai Academy of Social Sciences

(SASS) also echoed Yang’s view. 144

Balancing and Renegotiating with the U.S.

China officially employed the term “one superpower, many great powers” while reviewing the international situation of 1995, and ceased to depict U.S. as in decline. 145

141 Shi Lujia, “’Danji Shijie’ yu ‘Duoji Shijie’ de Jilie Jiaoliang” [Keen Competition between “Unipolar World” and “Multipolar World”], Shishi Baogao , no. 9 (1998), pp. 32-35; Yang Chengxu, “Jushi Huanhe, Jingzheng Jiaju” [Situation Relaxed, Competition Aggravated], Banyuetan , no. 1 (1996), pp. 8-11; Tang Tianri, “Fuza Duobian de Daguo Guanxi” [Complicated and Volatile Relations among Big Powers], Banyuetan , no. 6 (1996), pp. 14-17; Qian Wenrong, “1997 Guoji Xingshi Zhanwang” [Prospects for the 1997 International Situation], Banyuetan , no. 1 (1997), pp. 9-12. 142 Michael Pillsbury, China Debates the Future Security Environment (Washington DC: National Defense University Press, 2000), p. 13. 143 Yang Dazhou, “Dui Lengzhanhou Shijie Geju zhi Wojian” [My Opinion on the Post-Cold War World Pattern], Heping yu Fazhan , no. 2 (1997), pp. 41-45. 144 Yan Xuetong points out that the re-distribution of capabilities among major powers had emerged in 1994 and come to a closure in 1996, characterized by “one superpower and many great powers;” and “this pattern will persist for a long time.” In line with Yan, analyst Zhou Jianming of the Shanghai Academy of Social Sciences (SASS) argues that this pattern would last 15 to 20 years, and that the U.S., Japan, and Western Europe did have common interests and would continue to coalesce. Yan Xuetong, “Guojia Liyi de Panduan” [Judgment on National Interest], Zhanlue yu Guanli , no. 3 (1996), pp. 35-44; Zhou Jianming, “Zhengque Renshi ‘Yichao Duoqiang’ de Guoji Geju” [Correctly Recognize “One Superpower, Many Great Powers” in the International Pattern], Shehui Kexue , no. 2 (1998), pp. 34-37. 145 Ministry of Foreign Affairs of PRC, Zhongguo Waijiao 1996 [China’s Diplomacy 1996] (Beijing: Shijie

During the peak of the 1996 Taiwan Strait crisis, then Deputy Minister of Foreign Affairs

Zhang Deguang stated: “The contour of world structure as ‘one superpower and many great powers’ has become more obvious.” 146 In Jiang Zemin’s political report to the

Fifteenth Party Congress in 1997, “multipolarization” was mentioned for three times, increased from only once in the political report in 1992. 147 This seemed to suggest that the Chinese leadership has turned to relate “multipolarity” with “one superpower and many great powers.”

With the use of “one superpower and many great powers” to describe the international situation, and in the face of a potential military confrontation with the U.S.,

China had gradually come to terms with the U.S. power. The U.S. and China agreed to hold summit meetings to increase mutual trust and to better manage bilateral relations.

China also tried to downplay domestic anti-American sentiments before Jiang’s 1997 visit to the U.S. 148

However, mistrust between China and the U.S. persisted. China continued to pursue internal and external balancing strategies and to further advance its own military

Zhishi Chubanshe, 1996), pp. 3-4. 146 Zhang Deguang, “Guanyu Guojixingshi de Baogao” [A Report on the International Situation], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 5 (1996), pp. 2-8. 147 Jiang Zemin, “Speed up the Pace of Reform, Opening, and Modernization, and Win Greater Victories in the Cause of Socialism with Chinese Characteristics,” Report to the 14th National Congress of CCP in Beijing, October 12, 1992; and Jiang Zemin, “Hold High the Great Banner of Deng Xiaoping Theory for an All-round Advancement of the Cause of Building Socialism With Chinese Characteristics Into the 21st Century,” Report to the 15th National Congress of the CCP in Beijing, September 12, 1997. It is also noteworthy that the term “globalization” had its debut in the CCP political report, as an assurance to the outside world that China would abide by the opening up policy even after Deng’s death. But the term “globalization” itself was mentioned only once and was limited to the economic sphere. 148 Chinese domestic nationalistic sentiments were reflected in several popular books then, such as: Song Qiang, Zhang Zangzang, and Qiao Bian, Zhongguo Keyi Shuo Bu [China Can Say No] (Beijing: Zhongguo gongshang chubanshe, 1996); Liu Kang and Liu Xiguang, Yaomohua Zhongguo de Beihou [Behind the Demonization of China] (Beijing: Zhongguo shehui kexue chubanshe, 1996). The Chinese government exerted censorship on publications and toned down criticism against the U.S. See Robert Lawrence Kuhn, The Man Who Changed China: The Life and Legacy of Jiang Zemin (New York: Crown Publishers, 2004), Ch. 19. It should be noted that the book might be words of fulsome praise, but it entails some details for understanding Chinese opaque politics.

capabilities after 1996. As a Chinese strategist points out, Chinese military capabilities have grown steadily, and “the U.S. has paid close attention to this trend since

1996…especially to China’s development of countermeasure to the aircraft carrier battle group.” 149

On the other hand, however, the Chinese leadership also understood the potential negative consequences of an all-out confrontation and how a domestic military buildup concerned neighboring countries or how an alliance with Russia worried the U.S.

Then-Premier Li Peng once stated: “Of course [we] believe neither China nor Russia will fall out with the West, this [arrangement] is to increase our bargaining chips [vis-à-vis the

West].” 150 Some Chinese analysts contended that China should pursue a pragmatic policy to further participate and contribute to international affairs, as Jiang Zemin reassured that

China would continue to abide by Deng’s “28-Character Strategy” 151 after Deng’s death

in 1997. 152 These developments showed that China had become more concerned about

U.S. military capabilities and had started to reassess its previous subjective judgment that

“the U.S. is in decline.”

149 Interview #7, Beijing, June 30, 2008. 150 Li Peng wrote on December 29, 1996, and words in [ ] are added. Li Peng, Heping, Fazhan, Hezuo: Li Peng Waishi Riji Vol. II [Peace, Development, Cooperation: Li Peng’s Dairy on Foreign Affairs Vol. II] (Beijing: Xinhua Chubanshe, 2008), p. 511. 151 According to Zheng Qirong, Deputy Dean of China Foreign Affairs University, Deng proposed this strategy in different occasions in late 1989 and early 1990s following the Tiananmen incident. Foreign Minister Qian Qichen summed up Deng’s comments and labeled it as a“28-Character Strategy” in 1995: “Observe calmly; secure our position; cope with affairs calmly; hide our capabilities and bide our time; be good at maintaining a low profile; never claim leadership; and make some contribution.” Zheng Qirong, ed., Gaigekaifang Yilai de Zhongguo Waijiao (1978-2008) [China’s Diplomacy since Reform and Opening up (1978-2008)], (Beijing: Shijie Zhishi Chubanshe, 2008), pp. 16-24. 152 Zhou Jianming, “Zhengque Renshi ‘Yichao Duoqiang’ de Guoji Geju” [Correctly Recognize “One Superpower, Many Great Powers” in the International Pattern], Shehui Kexue , no. 2 (1998), pp. 34-37.

1999 Post-Kosovo War:

Perception of Power Distribution

A series of world events that began in 1999 again shaped Chinese perception of the international situation. China officially accepted that the pattern of “one superpower and many great powers” would likely persist for a longer period of time, and thus would postpone the realization of a multipolar world. The U.S.-led war on Kosovo and the

Chinese Embassy Bombing incident triggered an open yet intense debate in Chinese academic community. This is worth noting because, as Pillsbury suggests, public debate over foreign policy was rarely seen in China in the early to mid-1990s. 153 In the aftermath of the Kosovo War, however, more and more academics and analysts joined the discussion on many issues, including the orthodox view that multipolarity is inherently beneficial to world peace and to China.

By the year 2001, whether or not the U.S. was in decline was no longer a point of

contention because the Chinese majority has perceived U.S. material strength as

unparalleled, 154 and NATO still a reliable partner to the U.S. In this relatively short

period of time from 1999 to 2001, as Shi Yinhong suggests, China had improved its

strategic thinking from a solely reactive stance in the past to adapt to the changing world,

and has produced a more consistent policy towards the U.S. ever since. 155

1. Anti-hegemonist alliance available?

153 According to Pillsbury, the only exception was the dialogue between Yang Dazhou of CASS and PLA General Huang Zhengji that revealed their two extreme views representing different professional interests within the government. 154 Chinese scholars Wang Yiwei and Tang Xiaosong introduced the discussion in the Western academia on how U.S. unipolarity helps maintain world peace to Chinese academic community. Wang Yiwei and Tang Xiaosong, “Cong Baquan Weidinglun dao Danji Weidinglun” [From Hegemonic Stability Theory to Unipolar Stability Theory], Shijie Jingji yu Zhengzhi , no. 9 (2000), pp. 14-19. 155 Shi Yinhong, “Zhongguo dui Mei Waijiao he Zhanlue 15 Nian” [China’s Diplomacy and Strategy toward the U.S. for 15 Years], Guoji Guancha , no. 2 (2004), pp. 1-6.

Interactions between the U.S. and other major powers have changed China’s perception, particularly the U.S.-led Kosovo War. 156 In June 1999, an article in the

internally circulated Neibu Canyue (Internal Reference, a weekly published by Renmin

Ribao ) presented a view to challenge the orthodox view that an anti-hegemonist alliance

was in the making. Analyst Yang Mian wrote that “in the past, we have put too much

emphasis on the U.S. inevitable decline and too little to U.S. resilience and capability of

adjustment.” As for the relationship between Western Europe and the U.S., “they have a

lot of common interests…No matter how much difference within NATO, it is only on

tactics, not strategy, because they still share the same political system and ideology.” And,

the role of Russia and developing countries had already become less significant because

“they choose to seek close ties with the U.S. for economic benefits.” 157 In the same vein, analyst Xiao Feng of the International Department of the CCP Central Committee concluded that we should see “multipolarity” as a “trend that would develop in the future” rather than a “realistic pattern that already exists.” 158 Strategist Yuan Peng of

CICIR further stated: “Multipolarization is something next to a dream in the far future.” 159

While the majority of Chinese academic community admitted this collective action

156 These interactions include, but are not limited to: the Kosovo War not only showed the contradictions between the U.S. and the Western Europe are not fundamental and Europe also realizes its limits in that a common security policy is not achievable in the near future. Japan and South Korea both have decided to continue their security alliances with the U.S., while only asking U.S. troops for self-discipline in their territories. Even Russia is expecting U.S. economic assistance while asking the U.S. to amend the ABM Treaty. Many Third World countries, formerly important and ideal partners in China’s opposing hegemonism, are less reliable. 157 Yang Mian, “Danji xiang Duoji Tiaozhan” [Unipolarity Challenges Multipolarity], Neibu Canyue , no. 25 (1999), pp. 27-32. 158 Xiao Feng, “Dui Guoji Xingshizhong Jige Redian Wenti de Kanfa” [Views on Some Hot-spot Issues in International Situation], Xiandai Guoji Guanxi , no. 12 (1999), pp. 3 [1-5]. 159 Yuan Peng, “Youxin Wuli de Fankang” [Having the Will but No Strength to Resist], Zhongguo Xinwen Zhoukan , August 12, 2000, p. A36.

problem in forging an anti-hegemonist alliance, 160 strategist Shi Luze from China’s

National Defense University restated the orthodox view. Shi refuted all three arguments in Yang Mian’s article: First, the Kosovo War was merely a setback to the trend of multipolarization and China and Russia would remain the “main force” in opposition to

U.S. hegemonism. Second, developing countries would constitute the “important force” in this anti-hegemonist alliance because of their burgeoning economies and possession of natural resources. Third, the European Union and Japan would be the “potential force” because Germany and France have been and will be taking the lead to oppose the U.S.

Last, the U.S. economy was strong, but not strong enough to support its plan of world domination and that a U.S. decline was inevitable—it’s just a matter of time. 161 This

debate between Yang and Shi indicates that from time to time analysts and researchers

with military backgrounds prefer the orthodox view that U.S. will eventually decline. 162

2. U.S. military primacy and Chinese disadvantage

Since the 1991 Gulf War, China has devoted itself to upgrading its military

capabilities in terms of science and technology, with the goal of winning local wars under

hi-tech conditions. As PLA strategist Peng Guangqian pointed out, when the U.S. and its

160 Shi Yinhong, “Zhiheng de Kunnan” [The Difficulty to Balancing], Taipingyan Xuebao , no. 4 (1998), pp. 48-58; Shi Yinhong, “Guoji Quanshi Geju Biandong Yinqi de Lilun Wenti” [Some Theoretical Questions caused by the Change of Internaitonal Structure], Xiandai Guoji Guanxi , no. 3 (2002), pp. 9-11. 161 Shi Luze, “Shijie Geju Duojihua Qushi de Xintedian” [New Features of Multipolaization in the World Structure], Neibu Canyue , no. 23 (2000), pp. 27-32. Shi made his arguments without mentioning Yang’s name. 162 As mentioned above, the orthodox view is certainly not exclusive to analysts in the military. Researchers in other civilian institutes may also share this orthodox view. For instance, Chen Demin of Peking University holds that “multipolarization is still inevitable in the contemporary world.” Chen Demin, “Duojihua Rengshi Dangjin Shijie de Fazhan Qushi” [Multipolarization is still the Trend of Development in the Contemporary World], Xiandai Guoji Guanxi , no. 11 (1999), pp. 4-9. And, some others have asked the leadership to rethink whether “peace and development” are still the main trend of the times. Yan Xiaodong, “Wo Zhunan Shiguan Beixihou de Guoji Xingshi ju Yingduizhice” [International Situation and the Correct Response after the Embassy Bombing in Yugoslavia], Neibu Canyue , no. 21 (1999), pp. 23-25.

allies demonstrated high-tech weaponry to win the Kosovo War, China continued to uphold the national defense goal to win local wars with high-tech weaponry and equipment. 163 Since China is also equipped with nuclear weapons, Peng suggested, China has the capability to deter the invasion from other countries. In the aftermath of the

Kosovo War, many argued that the gap of military hardware between China and the U.S. was too huge for the Chinese to catch-up, which rendered an arms race with the U.S. unrealistic. 164 It should be noted that due to the lack of transparency, it is still difficult for researchers to determine China’s current development of weaponry for asymmetric warfare. 165

3. Multipolarity and Anti-hegemonism inheritably good for China?

The most significant change in the discussions of this period is that some scholars came to challenge the assumption that multipolarity and the strategy of “opposing hegemonism” were in China’s interest. As Pillsbury thoroughly explored, in the debate between the orthodox and reformist views over multipolarity in the early to mid-1990s, analysts all followed Deng’s view that multipolarity was a necessity to safeguard world peace and thus was helpful to Chinese development.

163 Yang Minqing and Jia Yong, “Shiji Zhijiao de Woguo Anquanxingshi – Junshi Zhuanjia Fangtanlu” [Security Situation of Our Country in the Turn of Century – Interviews with Military Experts], Banyuetan Neibuban , no. 6 (1999), pp. 15-19. 164 Zhu Yuwu, “Ren yu Wuqi Bianzhengguan” [A Dialectical Analysis on Human Resources and Weapons], Jiefangjun Bao , Novemeber 21, 2000, p. 6; Sha Ziping, “Lun Zixun Zhanchang de Youlie Zhuanhuan” [On Fungibility between Advantages and Disadvantages in Information Warfare], Jiefangjun Bao , January 29, 2002, p. 6. 165 Analysts and scholars in the West disagree with Peng’s perspectives, arguing that China not only continues to develop weapons for asymmetric warfare, but also is willing to employ coercive diplomacy to influence neighboring states. On the development for asymmetric warfare, see Michael Pillsbury, China Debates the Future Security Environment (Washington DC: National Defense University Press, 2000), and Pillsbury, “China’s Perceptions of the USA: The View from Open Sources,” http://www.uscc.gov/researchpapers/2000_2003/pdfs/chinperc.pdf. (accessed 2009/3/10). On China’s coercive diplomacy with limited military capabilities, see Thomas Christensen, “Posing Problems without Catching Up,” International Security , vol. 25, no. 4 (Spring 2001), pp. 5-40.

However, as early as in 1998, several Chinese scholars started to ponder the fundamental question of whether multipolarity is inherently favorable to China and balancing was the only strategy able to preserve world peace. For instance, strategist Shi

Yinhong’s historical analysis on state behavior points out that in addition to balancing, a state can choose “hiding from the threat,” “free-riding (bandwagoning to benefit),” or

“transcending (tying the threat with international arrangements)”. Shi suggests, the other three strategies are more often seen than balancing throughout history. 166

Other leading scholars, from a practical point of view, also suggest that China should not habitually oppose every initiative from U.S. solely in order to pursue a seemingly beneficial multipolar world. Here, I provide a summary of the work from senior researcher Wang Yizhou of the Institute of World Economic and Politics at CASS, and from professor Ye Zicheng of Peking University as an example to demonstrate the idea that China needs further deliberation on “multipolarization.” 167

(1) Given the current complex environment, China should uphold Deng Xiaoping’s

thinking on foreign affairs, to which modernization is the core of national interest,

and a peaceful international environment is the key to achieve this goal.

“Anti-hegemonism” is only a means to the end of economic development, and so is

participation in international arrangements.

166 Shi actually quotes from Paul Schroeder’s research. Shi Yinhong, “Zhiheng de Kunnan” [The Difficulty to Balancing], Taipingyan Xuebao , no. 4 (1998), pp. 48-58; Shi Yinhong, “Guoji Quanshi Geju Biandong Yinqi de Lilun Wenti” [Some Theoretical Questions caused by the Change of Internaitonal Structure], Xiandai Guoji Guanxi , no. 3 (2002), pp. 9-11. Paul Schroeder, “Historical Reality vs. Neo-realist Theory,” International Security , vol. 19, no. 1 (Summer 1994), pp. 108-148. 167 Wang Yizhou, “Sikao ‘Duojihua’” [Reflections on “Multipolarization”], Guoji Jingji Pinglun (September-October 1998), pp. 26-27; Ye Zicheng, “Zhongguo Shixing Daguo Waijiao Zhanglue Shizaibixing” [China’s Great Power Diplomacy is Imperative], Shijie Jingji yu Zhengzhi , no. 1 (2000), collected in Wang Jisi and Jin Canrong, eds., Zhongguo Xuezhe Kan Shijie: Daguo Zhanlue [World Politics – Views from China: Strategies of the Great Powers] (Beijing: Xinshijie Chubanshe, 2007), pp. 124-136; Ye Zicheng, “Zhongguo Fanba Sixiang de Maoduan ji qi Chaoyue” [Beyond the Paradox of China’s Anti-Hegemonist Thought], Taipingyang Xuebao , no. 4 (1999), pp. 66-73.

(2) For the past decade, “anti-hegemonism” and multipolarization was almost equal to

anti-Americanism. From now on, China should be explicit that the conception of

multipolarization is not designed to challenge U.S. status in the international arena,

and that China is not a revisionist trying to overthrow the current world order.

(3) The U.S. is leading, not dominating, the world order. So China should not oppose the

U.S. irrationally without pragmatic thinking. Using the free-rider effect, we can

participate in and benefit from international arrangements.

(4) Multipolarization is in essence meant to prevent U.S. domination or infringement on

the rights of other states. But given U.S. military and economic primacy, U.S.

involvement has become a precondition to the realization of multipolarity.

Adaptation and Adjustment

In 1999, China perceived that there was a rivalry between unipolarity and multipolarity. 168 But in 2000, as the U.S. granted China normal trading status and Russia

pursued a more peaceful relationship with the U.S., China regarded the improved

relations between the U.S., Russia, and China as an indication that the latter two had

regained their influence in world affairs; therefore, China officially concluded that

“multipolarization [was] regaining momentum.” 169

In 2000, however, China’s White Paper on National Defense issued by the State

Council Information Office did reflect that China again perceived the U.S. as a security threat. Compared to the 1998 White Paper on National Defense in which the U.S. was

168 Ministry of Foreign Affairs of PRC, Zhongguo Waijiao 2000 [China’s Diplomacy 2000] (Beijing: Shijie Zhishi Chubanshe, 2000), p. 14. 169 Ministry of Foreign Affairs of PRC, Zhongguo Waijiao 2001 [China’s Diplomacy 2001] (Beijing: Shijie Zhishi Chubanshe, 2001), pp. 1-3.

positively mentioned for all of ten instances, the 2000 edition depicts U.S. negatively for eleven out of a total of thirteen instances. 170 This change in rhetoric occurred against the backdrop of certain changes in domestic politics in Taiwan and in the U.S. In Taiwan, a pro-independence president took the office in March, and in the U.S., George W. Bush, who described China as a “strategic competitor”, won the presidential election in

November. This White Paper publicly shows Chinese perception of U.S. as a possible spoiler of peace and development.

The power distribution revealed by the Kosovo War restrained China’s policy choice—China found it difficult in practice to balance against the U.S. Internally, China began its preparation for high-technology warfare and asymmetric strategy, in the hope that one day China could defeat the U.S. militarily. As several scholars suggest, however, these military buildups gave further credence to the “China Threat Theory” and alienated

China’s possible allies such as ASEAN counties. Worse still, the military buildup even strengthened U.S. military ties with Japan and Taiwan to a degree. 171 In addition, as

evidenced by the Kosovo War, the perceived frictions between the U.S. and its Western

allies were more overstatement than reality. As a result, the trend toward a multipolar

world “has been prolonged and will be in a ‘zigzagging’ fashion”. 172

Following Waltz’s assertion that balancing is very costly, the Chinese leadership in this period of time realized that it would be difficult to develop coalitions with other

170 John Pomfret, “U.S. Now a ‘Threat’ in China’s Eyes: Security and Taiwan issues Lead to Talk of Showdown,” Washington Post , November 15, 2000, p. A01. 171 Douglas Porch, “The Taiwan Strait Crisis of 1996: Strategic Implications for the United States Navy,” Naval War College Review, vol. 52, no. 3 (Summer 1999), pp. 15-48; Tao Wenzhao, “1995-1996 Nian Taihai Fengyun jiqi Yingxiang” [1995-1996 Taiwan Strait Crisis and Its Implications], Harbin Gongyedaxue Xuebao , vol. 6, no. 2 (March 2004), pp. 1-10. 172 Liu Huaqiu, “Fengyun Bianhuan shuo Huanhe” [Détente in a Changeable Situation], Guoji Zhengzhi , no. 3 (2001), pp. 3-6; Tang Tianri, “Duojihua Qushi zai Quzhezhong Fazhan” [Moving toward Multipolarity in a Tortuous Way], Guoji Zhengzhi , no. 3 (2001), pp. 11-12.

major powers to counterbalance the U.S. as previously predicted, and even more so to catch-up to the U.S. in military terms in the near future. As a result, the Chinese leadership felt constrained by the international system and adjusted their policy to adapt to the reality of a unipolar world.

2001 to 2006:

Perception of Power Distribution

According to my own interviews, in retrospect, many Chinese analysts not only cede the U.S. its continued unipolar status but contend that after the Cold War the international system has continued “moving towards unipolarity” until the present. 173 A professor of

Peking University suggests that if anything has ever changed in the international structure in the post-Cold War era, it is “[t]hat the U.S. is becoming even stronger.” 174

Also, in analysis from open sources, Chinese scholars are not only discussing the meaning of unipolarity in Western journals but also the continuously growing power of the U.S. in Chinese materials. 175 Under these circumstances, many Chinese scholars and

173 Interviews #1, Beijing, June 12, 2008; #4, Beijing, June 17, 2008. 174 Interview #4, Beijing, June 17, 2008. 175 This development is in a stark contrast with that in the 1990s, wherein Pillsbury described as a Marxist taboo because the discussion on U.S. power could reveal inferiority of Communism, and was thus not to be discussed publicly. These discussions include: Jia Qingguo, “Learning to Live with the Hegemon: Evolution of China’s Policy toward the U.S. since the End of the Cold War,” Journal of Contemporary China , vol. 14, no. 44 (August 2005), pp. 395-407; Zhu Feng, “China’s Rise Will Be Peaceful: How Unipolarity Matters,” in Robert Ross and Zhu Feng, eds., China’s Ascent: Power, Security, and the Future of International Politics (NY: Cornell University Press, 2008), pp. 34-54. Chinese articles on this issue include: Jia Qingguo, “Jiyu yu Tiaozhan: Danji Shijie yu Zhongguo de Heping Fazhan” [Opportunity and Challenge: A Unipolar World and China’s Peaceful Development], Guoji Zhengzhi Yanjiu , no. 4 (2007), pp. 51-64; Zhang Qingmin, “Zhongguo de Guojia Texing, Guojia Jiaose he Waijiao Zhengce Sikao” [China’s National Characteristics, National Roles, and Foreign Policy Thinking], Taipingyang Xuebao , no. 2 (2004). Collected in Wang Jisi and Niu Jun, eds., Zhongguo Xuezhe Kan Shijie: Zhongguo Waijiao [World Politics – Views from China: China’s Foreign Affairs] (Beijing: Xinshijie Chubanshe, 2007), pp. 170-183; Chen Yue, “Ruhe Renshi Lengzhanhou Guojigeju de Duojihua” [How to Understand Multipolarization after the Cold War], Jiaoxue yu Yanjiu , no. 4 (2001), pp. 53-56; Dai Xiaodong, “Danji Shijie de Bianshu – Dui Danji Wendinglun de Yizhong Pipan” [A Critique on Unipolar Stability Theory], Guoji Guancha , no. 1 (2003), pp. 37-43; Li Mingming, “Yetan ‘Danji Wendinglun’ – Jian yu Dai Xiaodong Xiansheng Shangque” [Also on

analysts have had second thoughts and have tried to further deliberate among the

“internal tensions” that surrounded in China’s international theorizing. For instance, after the EP-3 incident in 2001, some experts from the military proposed that China needed to strike a balance in certain juxtaposing conceptions: the relationships between

“anti-hegemonism” and “economic development,” between “never claim leadership” and

“make some contribution,” and between “cooperation” and “struggle.” 176 Strategist Shi

Yinhong also suggested the redefinition of the U.S. role as that of hegemon in world affairs, but also asks: “Does the U.S. deserve China’s whatever-it-costs opposition?” 177 I now investigate if the realist internal and external balancing strategy is still prevalent in

China’s thinking.

Chinese analysts began to adopt a more pragmatic and moderate view of China’s capabilities in the early 2000s, which differed from their speculation in the 1990s. As to the issue of “comprehensive national power” (CNP) 178 , in the 1990s Chinese analysts tended to emphasize how economic reform had contributed to the increase of GDP, an important indicator of CNP, and how this increase has taken China to a better international standing vis-à-vis other major countries. For instance, two researchers of

“Unipolar Stability Theory” – To Discuss with Mr. Dai Xiaodong], Guoji Guancha , no. 3 (2003), pp. 59-64. 176 Zhou Bolin, “Zhongmei Guanxi Zaici Zoudao Shiziluko” [Sino-U.S. relations once again in the Crossroads], Naibu Canyue , no. 20 (2001), pp. 27-32. 177 Shi Yinhong, “Zhongguo dui Mei Waijiao he Zhanlue 15 Nian” [China’s Diplomacy and Strategy toward the U.S. for 15 Years], Guoji Guancha , no. 2 (2004), p. 3. 178 The concept of “comprehensive national power” (CNP) is a unique Chinese concept of measurement of national power. CNP refers to “the combined overall conditions and strengths of a country in numerous areas.” Analysts in the Western academia or policy circles tend to analyze national capabilities in terms of GDP, military equipments, or technology, among other things, the Chinese analysts tend to include political will and social cohesion into their analysis in addition to those material capabilities. As Deng Xiaoping once stated, “In measuring a country’s national power, one must look at it comprehensively and from all sides.” On the evolution and development of the conception of CNP, see Michael Pillsbury, China Debates the Future Security Environment (Washington DC: National Defense University Press, 2000), pp. 203-205; Huang Shuofeng, Daguo Jiaoliang: Shijie Zhuyaoguojia Zongheguoli Guojibijiao [Rivalries between Major Powers: A Comparison of World Power’s Overall National Strength] (Beijing: Shijie Zhishi chubanshe, 2006).

CASS suggested that based upon their calculation, China’s CNP has continued to grow and surpassed that of G-7 members United Kingdom and Italy in 1993. 179 Huang

Shuofeng of the Academy of Military Science (AMS), a leading researcher on CNP in

China, also suggested in 1994 that although U.S. will retain its advantage in terms of CNP,

China would surpass France and Britain in the year 2000. 180

In the early 2000s, however, as Chinese CNP continued to grow, most researchers tended to emphasize the gap between China and the U.S. and focus on how to improve

China’s status. 181 Here, I employ Huang Shuofeng’s cross-time research as an example to demonstrate China’s changing perception of its national power.

Table 2.1 Comparison of CNP Scores of Major Countries (As % of US Score) Country (rank in 2005) 2005 2000 1996 1989 USA 100 100 100 100 Japan 62.18 65.72 66.39 62.02 Germany 58.48 68.30 64.36 51.92 Russia* 58.25 -- 45.88 -- France 44.42 47.12 40.19 46.58 China 42.05 53.49 35.73 37.48 UK 40.15 34.40 38.28 36.08 Source: Several works from Huang Shuofeng. 182 Percentage of the U.S. score is generated by the author for comparison purposes. * Huang’s 1992 research only covered analysis on USSR, wherein the figure of Russia was not included.

179 Chen Xiuying and Tu Qin, “Zonghe Guoli Pingjia Zhibiao de Lianghua yu Hecheng Fanfa – Jian lun Zhongguo Zonghe Guoli zai Guoji Bijiaozhong de Diwei” [Measurement and Synthesis Method in the Study of Comprehensive National Power – Also on China’s CNP Status in International Comparison], Shijie Jingji , no. 5 (1996), pp. 14-18. 180 Huang Shuofeng, “Sheme shi Zonghe Guoli” [What is Comprehensive National Power?], Dangjian , no. 2 (1994), pp. 76-77. 181 Zhai Ligong et al., “Zhongguo yu Xifang Qiguo Zongheguoli Zuixin Bijiao” [Latest Comparison on Comprehensive National Ppwer between China and G-7], Tungji Yanjiu , no. 5 (2000), pp. 3-8; Yan Yan, “Zhongmei Liangguo Zongheguoli Dinglianghua Bijiao” [A Quantitative Comparison on Comprehensive National Power between China and U.S.], Zhongnan Caijing Daxue Xuebao, no. 6 (2001), pp. 38-43. 182 Data of 2000 are from Huang Shuofeng, Zonghe Guoli Lun [On Comprehensive National Power] (Beijing: Zhongguo Shehui Kexue Chubanshe, 1992), pp. 220-221. Data of 1989 are from Huang Shuofeng, Guojia Shengshuai Lun [On the Rise and Fall of Naitons] (Changsha: Hunan Chubanshe, 1996), p. 337. Data of 1996 and 2005 are from Huang Shuofeng, Daguo Jiaoliang: Shijie Zhuyaoguojia Zongheguoli Guojibijiao [Rivalries between Major Powers: A Comparison of World Power’s Overall National Strength] (Beijing: Shijie Zhishi chubanshe, 2006), pp. 107-109.

Table 2.1 shows that China’s comparative CNP status is not as good as suggested in the early 1990s, and the 2005 status somehow refutes Huang’s own 1994 prediction that

China would be better off than France. In any event, many scholars see Chinese CNP has long been inferior to that of the U.S. (most of time only 35-45 %). They argue that China should acknowledge that American advanced science and technology, education, and informational technology, along with “hard” military and economic power, combine to constitute its outstanding international status.

In retrospect, many Chinese scholars and strategists now perceive the military power disparity between China and U.S. since the end of Cold War. A professor in Tsinghua

University points out that China has had a double-digit increase in annual military budget since 1991, but it is very difficult to catch up U.S. militarily because China’s military modernization started from a very low point, “with the gap of 20 years.” 183 When China emphasized in the early 1990s that a U.S. domestic economic downturn brought about the reduction of military expenditure and decline in its international status, the revived U.S. economy continued to boost its military primacy since the mid- to late-1990s. The

Chinese leadership gradually came to make objective assessments of military disparities with the U.S. as Figure 2.3 shows in terms of annual spending, even though China’s spending continued to grow.

183 Interview #7, Beijing, June 30, 2008.

Figure 2.3 China and the U.S. Military Expenditure, 1991-2006

600,000

500,000

400,000 China 300,000 US 200,000 US $ million

100,000

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year

Source: Amount in constant (2005) US$. Information from Stockholm Peace Research Institute (SIPRI) Military Expenditure Database, http://milexdata.sipri.org/result.php4 (accessed 6/10/2009).

Chinese military capabilities thus remain at a relatively low grade. In 2003, Chinese experts Hu Angang and his colleague conducted a comparative study on the military capabilities of China, the U.S., Japan, and India. They concluded that while China’s military expenditures have been growing since 1980, its military capabilities were still only one-third of that of the U.S. in 1998. 184 In general, the majority of Chinese scholars

and experts seem to share agreement that “multipolarization” is just an ideal, and that

“one superpower, many great powers” or even “unipolarity” is the reality, especially in

military terms. 185

China has recognized the difficulty of internally balancing against the U.S. through

184 Hu Angang and Liu Taoxiong, “Zhong, Mei, Ri, Yin, Guofang Shili Bijiao” [A Comparative Study on Military Capabilities of China, U.S., Japan, and India], Zhanlue yu Guanli , no. 6 (2003), pp. 40-45. They employ the concept of “military capital” (defined by the value of total defense hardware assets minus the depreciation from the previous years) and “human capital” (defined by educational levels of all in uniform) to argue that China’s military capabilities has been and continues to fall far behind that of the U.S. 185 Interviews #1, Beijing, June 12, 2008; #4, Beijing, June 17, 2008; #7, Beijing, June 30, 2008; #8, Beijing, July 1, 2008; #9, Beijing, July 2, 2008; #13, Hong Kong, July 14, 2008; #16, Washington DC, August 18, 2008; #19, Beijing, October 14, 2008.

economic development and military buildup because of the huge advantage U.S. enjoys.

Furthermore, they have accepted that the gap is widening rather than narrowing. 186 How, then, about the strategy of external balancing—allying with other countries? Most scholars and analysts still share the view that contradictions among the West are somewhat overstated, and some experts as Wang Jisi re-emphasize the fact that the

“Sino-U.S. relationship is still the most contradictory dyadic relationship among major countries” because of the different political, social, and ideological systems between the two. 187

Whether Russia is a reliable partner in opposing American hegemonism is still in question, and China is even more concerned than before about Russia’s possible buck-passing strategy that would leave China alone to challenge the U.S. After the EP-3 incident, Jiang Zemin’s visit to Russia in July 2001 raised the suspicion that China and

Russia would work together again to balance against the U.S. However, analyst Li

Daguang from China’s National Defense University contends that it is in the interests of both China and Russia to cooperate, not conflict with the U.S. nowadays. And, China should be aware that Russia would likely still play the “China Card” and distance itself from China to please the U.S. 188

In addition to economic incentives that U.S. can provide, many Chinese scholars

also find it morally difficult to co-opt developing countries to balance the U.S. with the

term “multipolarization” or “anti-hegemonism”. 189 Wang Yizhou of CASS suggests that,

186 Interviews #1, Beijing, June 12, 2008; #4, Beijing, June 17, 2008; and #7, Beijing, June 30. 187 Wang Jisi, “Lengjing, Lengjing, Zailengjing – Dui Dangqian Meiguo yu Zhongguo Guamxi de Jidian Guancha” [Be Calm, Be Calm, and Be Calm – Certain Points of View on Current U.S.-China Relations], Guoji Jingji Pinglun (September-October 2004), pp. 5-8. 188 Li Daguang, “Zhong-Mei-E Sanguo Xingde Dasanjiao Guanxi” [The New Triangular Relationship of China-U.S.-Russia], Neibu Canyue , no. 37 (2001), pp. 16-23. 189 A senior professor at Renmin University of China and a regular consultant to the Ministry of Foreign

when China refers to “multipolarization,” the majority of developing countries are apparently not included as a “pole”; and this makes China look no better than other powers in the eyes of Third World. 190 To these countries, China’s call for

“multipolarization” is akin to an extension of the concept of “sphere of influence” from the 19 th century. Ye Zicheng of Peking University further suggests that a multipolar world will even be harmful to China if it means including India and boosting Japan’s political influence. And, to better serve China’s interest in economic development, he takes a step forward to promote the “Concert of Big Powers” and emphasizes that it is imperative for

China to cooperate with the U.S. and others for its own good. 191

More important, as during the Cold War years, China still believes that given fundamental differences between U.S. and China, a strategic common goal—either a common interest or enemy—is a necessity for stable and peaceful U.S.-China relations.

China perceives that the U.S. global anti-terrorism campaign after the September 11 th incidents provided a new strategic basis for such stable U.S.-China relations. 192 Other influential Chinese analysts, including Yang Jiemian of the Shanghai Institute for

Affairs states that when China wants to promote “anti-hegemonism” to developing countries, most of them replied: “You yourself are a hegemon in our eyes! After working together opposing U.S., then what? Even if you (China) come to take the leading role in world affairs, to us, it is only the big hooligan leaves and then comes a junior one!” Therefore, he notes that now China has tried to avoid using these terms unless in meetings with Russia or France, “to make them happy.” Interview #8, Beijing, July 1, 2008. 190 Wang Yizhou, Quanqiu Zhengzhi he Zhongguo Waijiao [Global Politics and China’s Foreign Policy] (Beijing: Shijie Zhishi Chubanshe, 2003,) pp. 206-207. 191 Ye Zicheng, “Dui Zhongguo Duojihua Zhanlue de Lishi yu Lilun Fansi” [Reflection on the History and Theory of China’s Multipolarization Strategy], Guoji Zhengzhi Yanjiu , no. 1 (2004), pp. 9-23; Ye Zicheng, Zhongguo Dazhanlue [The Grand Strategy of China] (Beijing: Zhongguo Shehuikexue Chubanshe, 2003). According to Ye, given that the term “multipolarization” is not appealing even to the developing countries China has courted and that the U.S. is important to China’s economic development, China should stop employing this polemical “multipolarization” when dealing with the U.S. and other major countries. 192 A Chinese expert of CICIR states that “For China, the main task in coping with the U.S. since the end of Cold War until the present is to regain the momentum of strategic cooperation, just as we worked together to counter the Soviets in the Cold War years. And the U.S. global anti-terrorism campaign is no doubt the new foundation!” Interview #5, Beijing, June 20, 2008.

International Studies (SIIS) also share this view. 193 And this strategic re-orientation, most

Chinese analysts believe, is conducive to stabilizing U.S.-China relations even when an

“episodic incident” occurs from time to time.

Official Tone and Accommodative Behavior

While the U.S. continues to be a threat along security and political dimensions, the official tone of Chinese policy since 2001 has incorporated the emerging issue of non-traditional security threats and the readjustment of security strategy. The international situation in China’s eyes is more relaxed when major countries are seeking greater compromise and cooperation. 194 The Chinese top leaders continue to minimize confrontational terms such as “anti-hegemonism” and “multipolarization” in their political reports, 195 indicating that China already perceived and accepted the reality that the U.S. is crucial to China’s economic interest and will not be in decline in thirty to fifty

193 Yang Jiemian, “Xinsanjiao zhong de Zhongmei Guanxi” [Sino-U.S. Relations in the New Triangle], Neibu Canyue , no. 32 (2002), pp. 19-24. SIIS was formerly subordinated to the Ministry of Foreign Affairs but now is affiliated with the Shanghai City government. To these theorists, President Bush’s visit to China for the APEC Summit in 2001 was a milestone in their bilateral relations, wherein both sides agreed to develop “constructive and cooperative relations.” “U.S., China Stand against Terrorism,” Remarks by President Bush and President Jiang Zemin, Shanghai, People's Republic of China, October 19, 2001. 194 Ministry of Foreign Affairs, Zhongguo Waijiao 2001 [China’s Diplomacy 2001] (Beijing: Shijie Zhishi Chubanshe, 2001), p. 2. 195 Mentions of certain key terms in the CCP leadership’s political reports also revealed some change in policy priority. In the 2002 political report by Jiang Zemin to the Sixteenth Party Congress, “multipolarization” appeared three times as President Bush came to power in 2001, to reflect on the perceived U.S. hegemonism and how China thought of its own role in the future. But, “multipolarization” was mentioned for only once in the 2007 political report delivered by Jiang’s successor Hu Jintao. Mentions of the term “hegemonism” also dropped from three in 2002 to two times in 2007. Mentions of the term “globalization,” on the other hand, increased from four in 2002 to five times in 2007. The Chinese leadership also has elevated “developed countries” as the first priority of diplomacy in 2002 and 2007, whereas in the 1990s policy priority was given to “neighboring” and then “developing countries.” Please refer to Jiang Zemin, “Build a Well-off Society in an All-Round Way and Create a New Situation in Building Socialism with Chinese Characteristics,” Report to the 16 th National Congress of CCP in Beijing, November 8, 2002; Hu Jintao, “Hold High the Great Banner of Socialism with Chinese Characteristics and Strive for New Victories in Building a Moderately Prosperous Society in all Respects,” Report to the 17 th National Congress of CCP in Beijing, October 15, 2007.

years. 196

China has taken the view that the future U.S.-China relations are relatively relaxed due to the emerging new point of cooperation—the ongoing anti-terrorism campaign—and therefore, is trying to sustain the momentum with the U.S. to ease the security dilemma exacerbated in the late 1990s over the U.S. military primacy demonstrated in the Kosovo War. The Chinese leadership has welcomed that the Bush administration’s changing rhetoric about China, from “strategic competitor” to willing to seeking a “cooperative and constructive relationship.”

Recently some IR scholars in the West such as Robert Pape, T.V. Paul, and Robert

Art, have proposed that China and other second-ranked states have been engaging in

“soft-balancing” against the U.S. in the post-September 11 th era, with non-military tools

(i.e. international institutions, economic measures, and diplomatic arrangements) to delay or complicate U.S. use of force. 197 However, I argue that it is problematic to describe

China’s policy as “soft-balancing.” There is a conceptual problem within “soft-balancing” in that it is very difficult to falsify whether a state’s specific policy is not balancing against the U.S. 198 In addition, as this soft-balancing strategy is arguably to China’s advantage, China is not purporting to overthrow the existing U.S.-led international order,

196 Interview #8, Beijing, July 1, 2008. 197 Robert Art redefines “balancing” as “behavior designed to create a better range of outcomes for a state vis-à-vis another state or coalition of states by adding to the power assets at its disposal, [in an attempt] to offset or diminish the advantages enjoyed by that other state or coalition.” See Art, “Correspondence: Striking the Balance,” International Security , vol. 30, no. 3 (Winter 2005/06), pp. 183-184. For China’s balancing U.S. power, “softly” and non-military ways, see Robert Pape, “Soft Balancing against the United States,” International Security , vol. 30, no. 1 (Summer 2005), pp. 7-45, and T.V. Paul, “Soft Balancing in the Age of U.S. Primacy,” International Security , vol. 30, no. 1 (Summer 2005), pp. 46-71. 198 As Kier Lieber and Gerard Alexander point out, the term “soft-balancing” produces more ambiguity than clarity, because even in the 2003 Iraq War, most countries did not see the U.S. as a tangible threat when they did not support U.S. unilateralism. These differences between the U.S. and others are diplomatic frictions. See Kier Lieber and Gerard Alexander, “Correspondence: Striking the Balance,” International Security , vol. 30, no. 3 (Winter 2005/06), pp. 191-196. Therefore, I suggest, when one uses the term “balancing” to describe a given state’s behavior, one needs to clarify the target in the first place.

which makes China’s so-called internal balancing policy defensive in essence.

Second, in the case of the Iraq war since 2003, China and other countries oppose

U.S. policy “procedure,” not necessarily its “substance.” 199 As many other countries did,

China sought to deal with Iraq but in a different manner than the U.S., and was not

necessarily opposed to the goal of eliminating purported weapons of mass destruction

(WMD). We need to find whether China wants to replace substantial U.S. policy goals or

it is just diplomatic frictions that China asks for procedural justification. For instance, as

some Chinese experts contend, China has not been “soft-balancing” against the U.S. in

the UN Security Council (UNSC) on many issues, including the resolution on the Kosovo

War in 1998 and 1999, and again on Iraq issues. China employed “abstention,” instead of

veto power, to express its opinion on certain resolutions like the one to safeguard the

principle of “territorial integrity” in the former Yugoslavia. 200

It should be noted that, in my research, accommodation is defined as “acceptance of

U.S. claims while retaining to safeguard China’s fundamental interests—such as

sovereignty and territorial integrity” and it is not an underdog policy for survival. Instead,

China still keeps a relatively rigid stance on its core interests while facing U.S.

interference in human rights and Taiwan. On human rights issues, while being more

willing to talk with the West, China maintains that its counterparts should accept the fact

that it is a diverse world and should respect the diversity of other countries. As for Taiwan,

199 As Stephen Brooks and William Wohlforth suggest, in the Iraq War, France and Germany asked for a multilateral solution within UN, and many had suggested that the Iraqi regime was rational and could be coped with international arrangements. In the same vein, they further suggest that we need to look into possible alternative explanations, such as domestic political dynamics in the upcoming elections in Germany and France that inevitably hardened the policy choices of the incumbent leaders Shroeder and Chirac. See Stephen Brooks and William Wohlforth, “International Relations Theory and the Case against Unilateralism,” Perspectives on Politics , vol. 3, no. 3 (September 2005), pp. 509-524. 200 Dai Ying and Xing Yue, “Zhongguo wei zai Liengheguo dui Meiguo Ruanzhiheng” [China Has not “Soft-Balance” U.S. in the United Nations], Guoji Zhengzhi Kexue , no. 3 (2007), pp. 19-51.

this has always been seen as an issue about sovereignty and territorial integrity and difficult for the Chinese leadership to compromise in this area.

Conclusion

This chapter aims to provide a neo-realist explanation of China’s accommodation to the U.S. since the end of the Cold War. Neo-realists Waltz and Mearsheimer both begin their analyses of international politics at the international systemic level, in which the international anarchy is deemed as the causal factor of state behavior. Waltz, however, sees states as more security-maximizers than the power-maximizers suggested by

Mearsheimer’s offensive realist view.

As a strand of neo-realism, Waltz’s defensive realist explanation is correct in that balancing is very costly, and in the case of China’s policy toward the U.S. after the Cold

War, balancing has been gradually replaced by accommodation as China recognized the widening power disparity between the two countries and re-calculated the costs and benefits of balancing.

Since the mid-1990s, when China and the U.S. acknowledged the importance of avoiding war over the Taiwan issue, both sides elected to renegotiate their relations. The summit meetings in 1997 and 1998 initiated a gradual shift on China’s part towards perceiving a less threatening U.S. After the 1999 Kosovo War, the Chinese leadership also saw clearly U.S. military primacy and realized that it would be more difficult to externally balance the U.S. than previously predicted, and even more so to catch-up the

U.S. in military terms in the near future. As a result, the Chinese leadership adjusted their policy in adaptation to the unipolar world.

However, Waltz’s argument that the systemic imperatives are the causal force of state behavior is somewhat problematic. To Waltz, China’s confrontational policy toward the U.S. in the immediate aftermath of the Cold War can only be attributed to Chinese leaders’ misperceptions of the objective distribution of capabilities in the international system. However, this systemic explanation is not satisfactory because it cannot explain the origin of China’s misperceptions over the distribution of capabilities, whether they can be amended, or why they change.

To amend Waltz’s balancing theory that treats the international system as the causal force of state behavior, Stephen Walt proposes the balance-of-threat theory to contend that the perception of external threats is the driving force of foreign policy. Thus, China’s confrontational behavior toward the U.S. in the first half of the 1990s can be explained by feelings of insecurity within the Chinese leadership stemming from the Tiananmen incident and by the leadership’s uncertainty over the distribution of power in the new international system. As a result, the Chinese saw the international system moving toward multipolarity and tried to drive a wedge between a U.S. they believed to in decline and its

Western allies. Hence, Chapter 3 will demonstrate the significance of Walt’s balance-of-threat theory in explaining China’s foreign behavior. I will analyze how the interactions between China and the U.S. gradually changed China’s threat perception of the U.S., which resonates with China’s view that interactions among states constitute an integral part of the international structure.

Chapter 3 Political and Diplomatic Issues: How to Live with a “Threat”?

Chapter 2 provided a neo-realist structural explanation of China’s shift from confrontation to accommodation with the U.S. since the end of the Cold War, arguing that the distribution of power in the international system and China’s perceptions of this distribution help shape China’s behavior. While Waltz’s international systemic explanation suggested that China’s accommodative policy toward the U.S. was the product of the asymmetric distribution of capabilities between the two nations, however, he cannot satisfactorily explain why China could not objectively perceive this distribution and conduct accommodative policy immediately following the Cold War in the first half of the 1990s. To amend Waltz’s theory of balancing, which treats the international structure as the only causal factor for state behavior, Stephen Walt proposes that states’ balancing behavior is the result of perceptions of external threat—which can evolve as interactions between states evolve. 201

Walt’s view on the role of interactions between states resonates with the Chinese conception of international politics. China’s understanding of the international structure is similar, but not identical, to the Waltzian model predominant in Western academic and policy circles. In approaching the international structure, Chinese analysts pay more attention to the interactions among the primary actors, emphasizing that the divergent interests or contradictions in their dyadic relationships constitute the driving force of state

201 Stephen Walt, The Origin of Alliances (Ithaca: Cornell University Press, 1987).

behavior. 202 To Chinese analysts, bilateral relations are embodied in policy interactions, in which they deem China’s policy toward the U.S. as a reaction to U.S. initiative. 203 This

specifically Chinese understanding of the international structure helps account for the

emphasis on bilateral interactions in Chinese foreign relations.

This chapter will employ Walt’s balance-of-threat theory, which holds that a state’s foreign policy corresponds, and evolves accordingly, to its perception of threat. As Walt suggests, states are security-maximizers, and security, not domination, is the state’s ultimate goal. China had always been cautious of U.S. and had regarded the U.S. as a political threat to the rule of CCP since the 1989 Tiananmen. In his research, Walt has documented how bilateral interactions between two antagonist nations shaped those nations’ policies. 204 It is also important to explore how the interactions between China

and the U.S. help shape China’s perceptions of the U.S. and, as a result, its behavior.

Both Waltz and Walt are defensive realists, but they differ on the approaches they

employ to explain state behavior—Waltz focuses only on the international structural level,

while Walt includes other factors, especially the bilateral interactions between two

nations that increase or decrease the sense of threat, into his analysis of state strategies. 205

It is thus important to employ Walt’s balance-of-threat theory into my research. As

202 Interview #23, Washington, DC, January 15, 2009. 203 Wang Jisi and Wang Yong, “A Chinese Account: The Interaction of Policies,” in Ramon Meyers, Michel Oksenberg, and David Shambaugh, eds., Making China Policy: Lessons from the Bush and Clinton Administrations (Lanham, MD: Rowman & Littlefield Publisher, Inc., 2001), pp. 269-295; Yang Jiemian, et. al., Da Mohe: Zhongmei Xianghu Zhenglue he Zhengce [Grand Matching-up: China-U.S. Mutual Strategies and Policies] (Tianjin: Tianjin Renmin Chubanshe, 2007); Steven I. Levine, “Sino-American Relations: Practicing Damage Control,” in Samuel S. Kim, ed., China and the World: Chinese Foreign Policy Faces the New Millennium, 4 th Edition (Boulder, Colorado: Westview Press, 1998), pp. 91-113. 204 Stephen Walt, “Testing Theories of Alliance Formation: the Case of Southwest Asia,” International Organization, vol. 42, no. 2 (Spring 1988), pp. 275-316. 205 Jeffrey W. Taliaferro, “Security Seeking under Anarchy: Defensive Realism Revisited.” International Security , vol. 25, no. 3 (Winter 2000/01), pp. 132-136; Stephen M. Walt, “The Enduring Relevance of the Realist Tradition,” in Ira Katznelson and Helen V. Milner, eds., Political Science: State of the Discipline (NY: W.W. Norton & Company, Inc., 2002), pp. 197-230.

Alastair Iain Johnston notes, if balance-of-power theory was enough to explain state behavior, then China should have continued to ally itself with the Soviet Union from

World War II through the early 1970s, because the U.S. was the dominant power from

1945 to 1972. Furthermore, China should have leaned toward the Soviets when the capabilities of the Soviet Union declined under Gorbachev’s reforms. 206 Johnston thus argues that China’s rapprochement with the U.S. in the early 1970s was attributed to

China’s perception that the Soviets were more threatening than the U.S. 207

This chapter explores bilateral political interactions between China and the U.S., and

aims to demonstrate why China perceived the U.S. as gradually less threatening as the

post-Cold War era progressed. This chapter then makes the argument that China’s

perception of the American threat had an impact on its policy towards the U.S. and that

“cooperative reciprocity” 208 between the two nations has significantly reduced China’s fears of the American threat since the mid-1990s. To probe the relationship between

China and the U.S., I employ the concept of reciprocity, proposed by Robert Axelrod and others, to examine how interactions changed China’s threat perception of the U.S. In the aftermath of Tiananmen China asserted that U.S.-initiated economic sanctions were responsible for the deterioration of their relations. Furthermore, according to the Chinese leadership, the post-Cold War world held more opportunities than constraints on China, in

206 Alastair Iain Johnston, “International Structures and Chinese Foreign Policy,” in Samuel S. Kim, ed., China and the World: Chinese Foreign Policy Faces the New Millennium, 4 th Edition (Boulder, Colorado: Westview Press, 1998), p. 67. 207 This analysis to a degree supports the argument that China had been acting as a security-maximizer, which reacts to threats, not a power-maximizer, which pursues ultimate dominance in world affairs. Johnston’s other work continues to express this point of view, seeing China as a status quo state rather than a revisionist power. Alastair Iain Johnston, “Is China a Status Quo Power?” International Security , vol. 27, no. 4 (Spring 2003), pp. 5-56. 208 “Cooperative reciprocity” is defined when a country employs cooperative initiatives and reciprocal behavior in return. Joshua S. Goldstein and John R. Freeman, Three-Way Street: Strategic Reciprocity in World Politics (Chicago: The University of Chicago Press, 1990), pp. 6-8. I use “punitive reciprocity” to describe the interactions negatively affect their dyadic relations.

light of opposition to hegemony, hoped-for multipolarization, and the “new international political and economic order”. In the second half of the 1990s, however, the summit meetings between the leaders of both sides characterized cooperative reciprocal interactions and contributed to China’s accommodative behavior vis-à-vis U.S.

Bilateral Reciprocity and the Perception of Threat

Chinese analysts oftentimes emphasize interactions with the United States as the key to understand China’s U.S. policy, suggesting that an impact-reaction model exists with the U.S. taking the initiative and leaving China to react. 209

This chapter analyzes China’s shift towards accommodation using the concept of

reciprocity in terms of bilateral interaction, but further argues that reciprocity itself is not

necessarily a causal factor of state behavior. Cooperative reciprocity can ease the

perceptions of threat between two hostile nations, leading them to cooperate in the future;

and punitive reciprocity increases perceptions of threat between two nations, which

would result in confrontation.

Robert Axelrod identified the possibility for self-interested actors to evolve

cooperative methods of interaction in a situation lacking a binding authority. Cooperation

could spontaneously emerge, or develop after one player made cooperative overtures that

the other player could follow. Given shared recognition of a future in which the two

209 Interview #11, Beijing, July 9, 2008; #23, Washington, DC, January 15, 2009. A similar line of saying is “the nature of Sino-U.S. relations totally depends on the nature of the U.S. policy to China;” in Chu Shulong, “Mei dui Hua Zhanlue ji ZhongMei Guanxi Zouxiang” [U.S. Strategy to China and the Trend of Sino-U.S. Relations], Heping yu Fazhan , no. 2 (2001), p. 41. Also see Wang Jisi and Wang Yong, “A Chinese Account: The Interaction of Policies,” in Ramon Meyers, Michel Oksenberg, and David Shambaugh, eds., Making China Policy: Lessons from the Bush and Clinton Administrations (Lanham, MD: Rowman & Littlefield Publisher, Inc., 2001), p. 269.

players would be dealing with each other repeatedly, a norm of reciprocity would develop, with the two participants both moving in a cooperative direction. 210 Robert Keohane also employed this concept to explain state cooperation under international anarchy, arguing that reciprocity—mostly used to refer to beneficial interactions—could help not only to foster but also to maintain cooperation. 211 Finally, Axelrod and Keohane suggest that the high value of future payoffs from repeated interactions and the credible threat of retaliation from defection are both crucial to facilitating cooperation between two states under international anarchy. Common interests between two states certainly help them to adopt cooperative strategies, but even in cases where each state has its own preferences and goals, the potential costs of retaliation by the other tomorrow could convince a state to refrain from defection today. 212

Axelrod and Keohane’s arguments of reciprocity are theoretically sound, and cognition of future costs and benefits in a sufficiently lengthy the shadow of the future seems to enhance the feasibility of cooperation. However, empirical analyses provide a mixed picture on whether states follow what their opponents did in the previous encounter. First, scholars challenge Axelrod’s assumption of the rationality of decision makers, arguing that it is even more difficult to assume states will reciprocate when they have divergent definitions of their own national interests and of how to pursue these interests. The lack of timely and accurate information also impedes the ability of

210 Robert Axelrod, The Evolution of Cooperation (NY: Basic Books, 1984), pp. 13, 174-178. 211 . Robert Keohane defines reciprocity as “exchanges of roughly equivalent values in which the actions of each party are contingent on the prior actions of the others in [such] a way that good is returned for good, and bad for bad.” Robert Keohane, “Reciprocity in International Relations,” International Organization , vol. 40, no. 1 (Winter 1986), p. 8. 212 Robert Axelrod and Robert Keohane, “Achieving Cooperation under Anarchy: Strategies and Institutions,” World Politics , vol. 38, no.1 (October 1985), pp. 226-254.

decision-makers to reciprocate properly. 213

Second, as Robert Jervis suggests, states “tend to overestimate the hostility of

others” and it is common that each side believes it is cooperating while the other is

defecting or, at best, exploiting the relationship.214 Mistrust between two states undermines the possibility of generating long-term cooperation.

Third, case studies present mixed results on whether reciprocity constitutes a characteristic of any given dyadic relationship between states. Some scholars argue that during the Cold War, reciprocity existed only in the minority of dyadic relationships between members of the Western Bloc and the Soviet Union, and between two Western states. 215 Other analysts found a high degree of reciprocity for cooperative behaviors, but low conflict, between Canada and the USSR.216

While the above discussion on the impact of reciprocity is still contested, it is important to employ Walt’s “perception of threat” to explain state behavior under scrutiny.

As the rest of this chapter will show, cooperative reciprocity reduced China’s fears of the

American threat, which led to China’s accommodative behavior toward the U.S. since the mid-1990s.

My research accepts Axelrod’s definition of tit-for-tat as a policy involving cooperating on the first move and then reciprocating to the other player in their future

213 Francis A. Beer, “Games and Metaphors,” Journal of Conflict Resolution , vol. 30, no. 1 (1986), pp. 171-191; R. Harrison Wagner, “The Theory of Games and the Problem of International Cooperation,” American Political Science Review , vol. 77 (1983), pp. 330-346; Joanne Gowa, “Anarchy, Egoism and Third Images: The Evolution of Cooperation and International Relations,” International Organization , vol. 40, no. 1 (December 1986), pp. 167-186. 214 Robert Jervis, “Realism, Game Theory, and Cooperation,” World Politics , vol. 40, no. 3 (April 1988), pp. 337-338. 215 William R. Thompson and David R. Rapkin, “Conflict, Inertia, and Reciprocity: Coping with the Western Bloc,” in Charles W. Kegley, Jr., and Patrick J. McGowan, eds., Foreign Policy USA/USSR (Beverly Hill: Sage, 1982), pp. 241-265. 216 Gregory A. Raymond, “Canada between the Superpowers: Reciprocity and Conformity in Foreign Policy,” American Review of Canadian Studies , vol. 17 (1987), pp. 224-235.

iterated interactions. As Axelrod suggests, reciprocity does play an important role in explaining states’ policy shifts from confrontation to accommodation (or vice versa), indicating that the art of diplomacy can trump structural constraints. And, following

Walt’s perception of threat argument, reciprocity decreases the feelings of insecurity of states and could generate cooperation between them. Since the Chinese analysts have the tendency to argue that China remained reactive to U.S. policy after the Cold War, my hypothesis for this chapter is as follows:

Hypothesis 2: China’s fears of the American threat influence its policy toward the

U.S., and reciprocity can change China’s threat perception. When

cooperative ventures between the U.S. and China continue, China’s fear

of the American threat is more likely to diminish; as a result, its

accommodative policy toward the U.S. is more likely to persist in their

future interactions.

If the U.S. provides something China desires, and China reciprocates by providing a

U.S. desire, then the two nations should evolve in a cooperative direction. If, however,

the U.S. initiates something unwelcome by China, then China would be expected to

retaliate and adopt a confrontational policy in response.

To examine this hypothesis, I mainly look into interactions between China and the

U.S. between 1991 and 2006, identifying specific issues in the U.S.-China political

discourse, such as quarrels over human rights and the summit meetings, in which

“cooperative reciprocity”—defined as when a country employs cooperative initiatives

and reciprocal behavior in return—helped to reduce China’s threatening perception of

U.S.

It should be noted that, given the variety of issues between the U.S. and China, in

this chapter I limit my scope to the issue of human rights, a major “unwelcome” concern

of the CCP since Tiananmen, and the summit meetings that seemed contributing to

enhance China’s international status and thus “desired” to China.

The human rights issue is crucial to the Chinese leadership and thus complicates the

exploration of the political relations between China and the U.S. The issue is of

importance to the Chinese leadership because it is related to the legitimacy of the CCP. If

the Chinese top leaders cannot adeptly cope with this issue, they will face pressure not

only from competitors within the political elite, but also from broader Chinese society.

Other scholars and analysts examine issues such as China’s reduction of arms sales

to countries of U.S. concern to demonstrate its accommodating behavior, and China’s

participation in the Missile Technology Control Regime (MTCR) has been a point of

interest under scrutiny. However, Chinese officials have described these policies as a

response to the changing external security environment. Liu Huaqiu once stated that

China’s compliance to international arms control regimes was to ensure a peaceful

international environment, which was deemed a necessity to China’s domestic economic

development. 217 Analysts in America also seem to share the agreement that the changing external security environment, not bilateral reciprocity between U.S. and China, was the main driving force behind China’s participation in international arms control regimes. For instance, Bates Gill lays out China’s changing approaches to international security regimes since the 1990s, concluding that the shift from isolation to participation is

217 Liu Huaqiu, “Zhongguo Hejunkong Zhengce Pingxi” [Analysis of China’s Nuclear Arms Control Policy], Xiandai Junshi (November 1995), pp. 15-18.

basically a reaction to the external security environment after the Cold War. 218 In other words, China’s participation in the MTCR was more a response to the changing international environment, rather than merely a reaction to a specific U.S. policy. 219

Moreover, from the Chinese perspective, cooperative reciprocity did not exist between the U.S. and China over non-proliferation and arms control issues. The U.S. has resorted to doling out punishments rather than providing rewards in attempting to shape

China’s non-proliferation policy. Jing-dong Yuan and Bates Gill document how

Congressional edicts required the U.S. government to impose sanctions against China since the early 1990s. 220 To the Chinese leadership, U.S. accusations of China’s weapons sales to Pakistan and Iran and the subsequent U.S. sanctions only resulted in negative impacts on U.S.-China relations. The Chinese leadership, while agreeing to abide by the

MTCR guidelines, was expecting the U.S. government to reciprocate and to terminate its arms sales to Taiwan. 221

The U.S. has not taken Chinese expectations about reciprocal arms sales linkages into account while imposing sanctions against China. As of mid-2009, China is still

218 Bates Gill, Rising Star: China’s New Security Diplomacy (Washington, DC: Brookings Institution Press, 2007). 219 Evan S. Medeiros, “China, WMD Proliferation, and the ‘China Threat’ Debate,” Issues & Studies , vol. 36, no. 1 (January/February 2000), pp. 19-48; Wu Yun, “China’s Policies toward Arms Control and Disarmament: From Passive Responding to Active Leading,” The Pacific Review , vol. 9, no. 4 (1996), 577-606; Jing-dong Yuan, “China’s Pragmatic Approach to Nonproliferation Policies in the Post-Cold War Era,” in Suisheng Zhao, ed., Chinese Foreign Policy: Pragmatism and Strategic Behavior (Armonk, N.Y.: M.E. Sharpe, Inc., 2004), pp. 151-176. 220 Jing-dong Yuan, “China’s Pragmatic Approach to Nonproliferation Policies in the Post-Cold War Era,” in Suisheng Zhao, ed., Chinese Foreign Policy: Pragmatism and Strategic Behavior (Armonk, N.Y.: M.E. Sharpe, Inc., 2004), pp. 166-167; Bates Gill, Rising Star: China’s New Security Diplomacy (Washington, DC: Brookings Institution Press, 2007), appendix, pp. 208-215. 221 Liu Huaqiu linked these two issues by first stating that “ballistic missiles per se are not weapons of mass destruction, but rather a carrier vehicle. [Likewise], fighter aircraft are also a carrier vehicle that can carry nuclear, biological, and chemical weapons.” Then, Liu accused the U.S. that “Limiting missile exports without limiting fighter plane exports is [clearly] a double standard.” Liu Huaqiu, “Zhongguo Hejunkong Zhengce Pingxi” [Analysis of China’s Nuclear Arms Control Policy], Xiandai Junshi (November 1995), pp. 17-18.

seeking accession to the MTCR. Therefore, the case of China’s participation in the international security regimes is not a suitable example of how reciprocity can gradually ease China’s perceptions of the American threat.

In bilateral relations, as Jervis stated, reciprocity can also generate a dilemma: participants often fear giving away too much and receiving too little in return. Many

Chinese scholars argue that, due to the strength of the U.S., China has been patient, enduring whatever the U.S. meted out during the 1990s. 222 It is also worth noting that both the Bush and the Clinton administrations were actually concerned that any initiative would be taken as a sign of weakness by China and in turn would backfire and the U.S. was therefore hesitant to engage in any cooperative initiatives. I begin with the early

1990s.

“Desired” vs. “Unwanted”: Political Quarrels over Human Rights

In the aftermath of Tiananmen, the improvement of human rights in China became an issue that the U.S. “desired” but had long been an “unwanted” topic with the Chinese leadership. Without a strategic common goal—countering the Soviets was no longer a major concern—human rights issues came to the forefront in U.S.-China relations in the mid-1990s. 223 Both sides differ as to the meaning of “human rights,” the reasons for promoting human rights, and indeed the way to cope with these divergent views. At a

222 Interviews #8, Beijing, July 1, 2008; #10, Beijing, July 4, 2008. 223 Harry Harding, “Breaking the Impasse over Human Rights,” in Ezra Vogel (ed.), Living with China: U.S.-China Relations in the Twenty-first Century (NY: W.W. Norton & Company, 1997), p. 169. For a discussion on the ascendance of human rights from a secondary to a more prominent issue in Sino-U.S. relations after the mid-1980s, see Harry Harding, A Fragile Relationship: The United States and China since 1972 (Washington DC: The Brookings Institution, 1992), pp. 198-206.

glance, in the early 1990s, the American concept of human rights concerning China referred to the rights of individuals, with freedom of expression and political participation, among other things, constituting its major parts. On the Chinese side, however, the collective rights of subsistence and development seemed to be more important than the rights of individuals. The Americans’ history of promoting human rights abroad was deemed by the Chinese to be, at best, an imposition of ideology and, at worst, a plot to overthrow the CCP’s rule. While the U.S. government employed public condemnation and other punitive means to force China to change, the Chinese leadership preferred to cope with the issue more quietly, through bilateral dialogue, and refused to let external pressure interfere with their policies. Throughout the early 1990s, the human rights issue, as brought up by the U.S., generated China’s hostile response in return. In the meantime, as Qian Qichen noted, the Chinese leadership desired a diplomatic breakthrough and an end to economic sanctions. 224

Linkage of Human Rights and MFN

China had long been suspicious of the Western standards for so-called human rights.

In a 1989 meeting with former U.S. president Richard Nixon that addressed China’s internationally isolation, Deng Xiaoping expressed his high hope for a better bilateral relationship with the U.S. Even so, he argued that the “rights of the state ( guoquan )” are more important than “human rights ( renquan )”:

“I am not saying that governments of Western countries are trying to overthrow the socialist system in China. But at least some Westerners are trying to. This can only

224 Qian Qichen, Waijiao Shiji [Ten Stories of a Diplomat] (Beijing: Shijie Zhishi Chubanshe, 2003), pp. 165-201.

arouse the resentment of the Chinese people and make them work harder for the prosperity of their country. People who value human rights should not forget the rights of the state. When they talk about human dignity, they should not forget national dignity. In particular, if the developing countries of the Third World, like China, have no national self-respect and do not cherish their independence, they will not enjoy that independence for long.”225

Chinese leaders had, on various occasions, emphasized Chinese “uniqueness” regarding the issue of human rights, arguing that human rights should be judged in light of cultural and historical differences and various degrees of economic development.

Beijing had long been suspicious of Western attempts to promote human rights and treated these attempts as a pretext for “westernizing and splitting” China. In order to secure most-favored-nation (MFN) trading status, however, Beijing hosted an unprecedented visit from Assistant Secretary of State for Human Rights and

Humanitarian Affairs Richard Schifter in December 1990 and agreed to more formal human rights dialogues with the U.S.

President Clinton pushed forward the U.S. desire to link human rights and trade

issues. Executive Order 128590 of May 1993, which linked China’s “overall, significant

progress” in human rights to the country’s MFN status, soured U.S.-China relations. 226

At this juncture, the Chinese leadership reportedly proposed that China should cease trying to avoid confrontation and instead should fight firmly for its interests against the

U.S. In the summer of 1993, Jiang communicated to Chinese envoys and diplomats that

China should deter any foreign attempt to interfere in China’s domestic affairs and that

225 Deng Xiaoping Wenxuan Vol. III [Selected Works of Deng Xiaoping Vol. III] (Beijing: Renmin Chubanshe, 1993), p. 331. 226 According to Lampton, these five areas include: prisoner accountings and more humane treatment, religious expression, preventing the loss of Tibet’s cultural heritage, permitting international broadcasts to reach Chinese citizens, and implementing the 1992 agreement regarding prison labor. See David M. Lampton, Same Bed, Different Dreams: Managing U.S.-China Relations, 1989-2000 , p. 136.

this fight should take place “on just grounds, to our advantage, and with restraint ( youli, youli, youjie ).” 227

On the American side, in mid-1993, practitioners including Winston Lord feared an endless downward spiral in U.S.-China relations as a consequence of purely punitive policies vis-à-vis China. 228 Others, however, cautioned against giving away too much and gaining too little in return. 229 From President Clinton’s perspective (and that of his predecessor), some reciprocated gestures from China were necessary for the U.S. justify his China policy domestically. 230 When National Security Advisor Anthony Lake expressed U.S. intents to improve relations with China, China received Assistant

Secretary of State John Shattuck in October of 1993 and claimed Beijing was ready to resume human rights talks with Washington on the basis of “complete equality, mutual respect and seeking common ground.” 231

In the eyes of China, a sense of insecurity had prevented the leadership for making concessions to the U.S., especially in the early- to mid-1990s when there was a transition

227 Jiang Zemin Wenxuan, Vol. I [The Selected Works of Jiang Zemin , Vol. I] (Beijing: Renmin chubanshe, 2006), p. 313. And, on another occasion, Jiang proposed a “four noes” policy: (1) China does not want confrontation with the U.S.; (2) China will not provoke confrontation with the U.S.; (3) China will not avoid confrontation with the U.S. if the latter wants it; and (4) China does not fear confrontation with the U.S. Nayan Chanda and Lincoln Kaye, “China: Circling Hawks,” Far Eastern Economic Review 156:40 (October 7, 1993), pp. 12-13. Jiang Zemin Wenxuan, Vol. I [The Selected Works of Jiang Zemin , Vol. I] (Beijing: Renmin chubanshe, 2006), p. 313. 228 David M. Lampton, Same Bed, Different Dreams: Managing U.S.-China Relations, 1989-2000 (Berkeley: University of California Press, 2001), pp. 135-136. 229 According to James Mann, the outcome of the debate in September 1993 was Clinton’s decision to restore the meetings and exchanges between American and Chinese high-level officials, while his own meetings with Jiang were still limited as to where to meet and with how much ceremony in his first term. James Mann, About Face: A History of America’s Curious Relationship with China, from Nixon to Clinton (NY: Vintage Books, 2000), pp. 290-291. The Chinese also noticed this re-consideration within the Clinton administration in this period: see Song Liansheng and Gong Xiaohua, eds., Zhongmei Shounao Waijiao Shilu [A Record of Diplomatic Affairs between the Two Heads of China and the United States] (Beijing: Jingji Ribao Chubanshe, 1998), p. 391. 230 Harry Harding, A Fragile Relationship: The United States and China since 1972 (Washington DC: The Brookings Institution, 1992), pp. 247-283; Nayan Chanda, “Misguided Complacency: China’s Disdain for U.S. Overtures Could Spark Backlash,” Far Eastern Economic Review , November 18, 1993, p. 22. 231 Kathy Wilhelm, “U.S. Human Rights Envoy Says Dialogue With China Will Continue,” The Associated Press , October 12, 1993.

of political power within the Chinese Communist Party from aging “paramount leader”

Deng Xiaoping to the “core” of the succeeding leadership led by Jiang Zemin. Any significant concession to the U.S. under these circumstances might be seen as too soft, and thus ran the risk of incurring U.S. further demands and, ultimately, endangered the rule of the Party.

As a result, China refused to respond further with what U.S. desired as “significant progress in human rights” to facilitate their cooperation. China reiterated its concerns over Clinton’s policy and sought to counter-balance U.S. politicization of trade issues through the divide-and-rule strategy. In late 1993, in their respective visits to the U.S.,

China’s Vice Foreign Minister Liu Huaqiu and Foreign Minister Qian Qichen on different occasions expressed their refusal to cooperate with U.S. efforts regarding either arms control or trade issues.

In early 1994, the State Department’s report concluded that China had not made significant progress on human rights, indicating that the extension of China’s MFN status was not guaranteed. The loss of this status would raise the average customs duty on

China’s export goods to the U.S. from 8 to 40 percent. 232 In a trip to Washington, Liu

Huaqiu aggressively pointed out that Germany, France, and Canada were interested in commercial contracts with China and that it was inevitable that the policy of linking trade and human rights would eventually give way to commercial interests. 233

In March 1994, State Secretary Warren Christopher’s trip to China that aimed to

communicate, if not achieve, both what the U.S. desired and what China wanted, was

neither pleasant nor successful. Chinese Premier Li Peng stated that if the U.S. decided to

232 “China Dismisses U.S. Human Rights Report,” Agence France-Presse , January 13, 1994. 233 James Mann, About Face: A History of America’s Curious Relationship with China, from Nixon to Clinton , pp. 296-297.

revoke China’s MFN status, “it will do more harm to U.S. than to China, because China can develop on our own, but the U.S. will lose a huge market of China.” 234 While

expressing high hopes for better relations in the future, Jiang Zemin assertively

communicated that the issue of human rights in China was “in essence the issue of laws

and politics,” and that “the government is obliged to… maintaining political stability.” 235

Now the ball was in Clinton’s court. In hopes that the Chinese would follow his lead

and reciprocate the changed tone of his behavior, President Clinton decide to employ

quiet diplomacy, sending Special Envoy Michael Armacost to China in early May.

Armacost continued to explore issues that China could agree to that would help Clinton

ease domestic criticism if he decided to sever the ties between trade and human rights. 236

China, though strongly opposing U.S. political interference, intended to continue to benefit economically from the U.S. if at all possible. Therefore, as the former deputy dean of the Chinese Foreign Affairs College Qu Xing points out, the Chinese government agreed to make reciprocating gestures, such as releasing prominent dissident Wang

Juntao, clearing two more emigration cases, and receiving experts to facilitate Voice of

America’s (VOA) broadcasting in China. 237

On May 26, 1994, with the acknowledgment that China had made some progress in

important human rights areas, President Clinton formally delinked China’s MFN trading

234 “Li Peng Huijian Meiguo Guowuqing [Li Peng meets U.S. Secretary of State],” Renmin Ribao , March 13, 1994, p. 1. 235 “Jiang Zemin Zhuxi Huijian Meiguo Guowuqing shi shuo, Zhongmei Guanxi Yingdang Haoqilai [When Meets with U.S. Secretary of State, President Jiang Says Sino-American Relations should Improve],” Renmin Ribao , March 14, 1994, p. 1. 236 Robert Suettinger details Michael Armacost’s mission to China : see Robert Suettinger, Beyond Tiananmen: The Politics of U.S.-China Relations, 1989-2000 (Washington, DC: The Brookings Institution, 2003), pp. 194-195. 237 Qu Xing is now serving as Chinese deputy ambassador to France. Qu Xing, Zhongguo Waijiao 50 Nian [50 Years of China’s Diplomacy] (Nanjing: Jiangsu Renmin Chubanshe, 2000), pp. 552-553. Song Liansheng and Gong Xiaohua, eds., Zhongmei Shounao Waijiao Shilu [A Record of Diplomatic Affairs between the Two Heads of China and the United States], pp. 392-393.

status and its human rights record. In place of the old policy, the U.S. planned to pursue a broader and more engaging approach, based on the belief that more trade and U.S. contacts could improve human rights practice in China. President Clinton explained that this policy change had been effected because revoking China’s MFN status “would not change their human rights policies—if anything, they would become more repressive.” 238

Across the Pacific, however, China perceived this delinkage more as what China

“deserved” than what it “desired,” given that trade was mutually beneficial and that

President Clinton should not have made the linkage in the first place. As a scholar who used to serve in the Clinton administration recalled, “China called Clinton’s bluff and won! . . . Because Clinton actually asked China to re-evaluate the Tiananmen incident, but China refused, and Clinton backed off.” 239 Jiang Zemin, without reference to

“gratitude” or “welcome,” only expressed that Clinton’s de-linkage decision “is

beneficial to the enhancement and expansion of U.S.-China trade relations, and is in

accordance to the fundamental interests of both sides.” 240

UN Commission on Human Rights

Since 1990, China has faced pressure from Western countries on the UN

Commission on Human Rights in Geneva. 241 The U.S. has repeatedly tried to pass a resolution censuring China for its poor human rights record. Since the mid-1990s, China has employed two different tactics in response to U.S. pressure. On the one hand, China assured the world of its willingness to discuss human rights occasionally with other

238 Steven Erlanger and David Sanger, “On World Stage, Many Lessons for Clinton,” New York Times , July 29, 1996, p. A14. 239 Interview #25, Washington, DC, March 13, 2009. 240 Renmin Ribao , June 11, 1994, p. 1. 241 With the exceptions of 1991 (Gulf War), 1998 (Clinton’s visit to China), 2002, and 2003.

Western countries such as Australia in a bilateral way as a countermeasure to U.S. pressure. 242

On the other hand, China became more articulate in allying with other developing countries, defending its human rights record in addition to issuing abrupt denials of the charges as “unwarranted” or “groundless.” 243 When the U.S. and other Western countries

first proposed the resolution, in 1990, China employed a “no action motion,” with support

from other developing countries such as Pakistan, as a procedural countermeasure to

prevent the U.S.-led resolution from coming to a vote. This motion was welcomed by

developing countries because it allowed them to avoid directly challenging the Western

resolution. Since 1996, as the politically skilled Chinese Ambassador to the UN

Commission on Human Rights Wu Jianmin pointed out, the Chinese response to Western

criticism had become more organized and assured. Given that many developing member

states were concerned about being targeted by the West for their own human rights

records, China succeeded in organizing a “Like-Minded Group” in the UN Commission

on Human Rights to propose that every member should employ “dialogue” ( duihua ), not

“confrontation” ( duikang ), in coping with the human rights issue in the developing world

and that “human rights cannot be ‘politicized’.” 244 China successfully foiled the U.S.-led

resolution 11 times from 1990 to 2004. 245

To review U.S.-China relations in the early 1990s, different policy priorities made

242 “China: Human Rights Dialogue OK, But No Confrontation,” Dow Jones International News , March 11, 1996. 243 Lowell Dittmer, “Chinese Human Rights and American Foreign Policy: A Realist Approach,” The Review of Politics 63:3 (Summer 2001), pp. 421-459 [p. 449]. 244 Wu Jianmin, Waijiao Anli [Case Studies in Diplomacy] (Beijing: Zhongguo Renmin Daxue Chubanshe, 2007), pp. 221-244. 245 The U.S. proposed for such condemnation except in 1991, 1998, 2002, and 2003. In 1995, the U.S. sponsored resolution defeated China’s procedural maneuvering and was brought to the vote at the Commission. But, at last, the resolution of censuring China was again defeated by one ballot in the substantive vote.

cooperative reciprocity between the two nations very difficult, if not impossible. While the U.S. regarded the de-linkage policy as a major concession to China, China saw it as a deserved and just policy correction. In addition, China was sensitive to U.S. pressure, and generally reciprocated in a negative way, as shown in the UN Commission on Human

Rights.

A professor at the Peking University expressed that, “China had to grin and bear it under the U.S. pressure. The interaction between the U.S. and China in the 1990s was an impact-response paradigm, in which most of time it was the U.S. took the initial action and China responded accordingly.” 246 This statement indicates that, in Clinton’s first

presidential term, the lack of a consistent policy on both sides was largely responsible for

the volatile relationship between the two countries. While Clinton, like the rest of the

American public, was first caught up by moral issues over human rights, China was

hoping for the best, in this case that the U.S. would change its hostile China policy in the

near future.

As a result, in the first half of the 1990s, the Chinese leadership was concerned

about a U.S. intention to overturn communism with “the end of history” argument that

democracy would prevail over other authoritarian or non-democratic regimes at the end

of the day, and furthermore that the demise of the Soviet Union would generate U.S.

unchecked hegemonism. 247 The U.S. was perceived as an imminent ideological and

political threat to Chinese top leaders. 248 Against this backdrop, while Deng Xiaoping

246 Interview #11, Beijing, July 9, 2008. 247 Interview #4, Beijing, June 17, 2008. 248 Interviews #2, June 16, 2008; #4, Beijing, June 17, 2008; #7, Beijing, June 30, 2008; #10, Beijing, July 4, 2008; #18, Beijing, October 12, 2008; #19, Beijing, October 14, 2008; #20, Beijing, October 14, 2008. Jin Canrong, “Zhongguoren de Meiguoguan” [The Chinese Perspectives of the U.S.], Guoji Jingji Pinglun

asked the leadership to be patient, observing and grasping the opportunities in the international environment, the CCP’s General Secretary Jiang Zemin further proposed the necessity to “stressing politics” in 1995 in order to deter the Western plot of splitting

China. 249 The Clinton administration’s pressure on the Chinese leadership over human

rights issues inevitably increased China’s fears of the American threat, leading to China’s

balancing behavior toward the U.S. in this period of time.

Moving toward “Constructive Strategic Partnership”

China’s other desire was to restore a strategic relationship with the U.S. like the one they had enjoyed during the Cold War years in containing the Soviets. With the lack of a strategic common ground between China and the U.S. after the Cold War, as Steven

Levine suggests, it was China that encouraged the U.S. to consider its bilateral relations

“from a strategic, long-range perspective, looking toward the creation of a healthy, good, and stable relationship for the twenty-first century.” 250

Presidents Clinton and Jiang met on several international occasions beginning in

1993, mostly at APEC summit meetings and occasionally when Jiang visited the U.S. for

the UN General Assembly, though most of time their differences over human rights

(September-October 1997), pp. 17-20; Niu Jun, “Yilu: Pingxi Zhongguoren dui Zhongmeiguanxi de Zhanlue Sikao” [Distrust: A Review on the Chinese Strategic Thinking of Sino-U.S. Relations], Taipingyang Xuebao , no. 4 (1998), pp. 13-16; Niu Jun, “Houlengzhan Shiqi Zhongguoren dui Meiguo de Kanfa yu Sikao” [The Chinese Persepctives and Thinking of the U.S. in the Post-Cold War Era], Guoji Jingji Pinglun (July-August 2001), pp. 5-8; Wang Haitao and Liu Qian, “Lun Gaigekaifang hou Zhongguoren de Meiguoguan” [On the Chinese Perspectives of the U.S. after the Reform and Opening Up], Guoji Guanxi Xueyuan Xuebao , no. 6 (2003), pp. 47-53. 249 Jiang Zemin Wenxuan Vol. I [Selected Works of Jiang Zemin Vol. I] (Beijing: Renmin Chubanshe, 2006), pp. 458, 485. 250 Steven I. Levine, “Sino-American Relations: Practicing Damage Control,” in Samuel S. Kim, ed., China and the World: Chinese Foreign Policy Faces the New Millennium, 4 th Edition (Boulder, Colorado: Westview Press, 1998), p. 97.

impeded the nurturing of cordiality between the two leaders.

However, the quarrels between China and the U.S. over human rights soon gave way in light of the military confrontation over the Taiwan Strait in 1996, in which two U.S. aircraft carrier battle groups were deployed to deter China’s coercion of Taiwan. Both sides then started to demonstrate cooperative reciprocity to arrest the downward spiral in their bilateral relations. 251 On May 17, 1996, U.S. Secretary of State Warren Christopher explicitly stated that the U.S. would employ “engagement policy” 252 —a policy shift that asked for U.S. domestic consensus to build a broader framework to integrate China into international norms and rules, and to further shared interests and address differences through consultation and cooperation, not confrontation.

China welcomed this policy adjustment and became more willing to reciprocate.

Foreign Minister Qian Qichen later praised Secretary Christopher’s statement. 253 A

senior professor at the Renmin University of China and regular consultant to the Chinese

Ministry of Foreign Affairs expressed that the U.S. rearrangement of policy priorities

“officially transformed U.S.-China relations from the Cold War to the post-Cold War

era.” 254

The Chinese tended to see summit meetings between top leaders as a positive sign,

251 Harry Harding, “The Clinton-Jiang Summits: An American Perspective,” in Peter Koehn and Joseph Y.S. Cheng, eds., The Outlook for U.S.-China Relations Following the 1997-1998 Summits (Hong Kong: The Chinese University Press, 1999), p. 30. Also see David Shambaugh, “The 1997 Sino-American Summit,” Asian Update , October 1997, http://www.asiasociety.org/publications/update_sino-us.html (accessed January 9, 2008); Robert Suettinger, Beyond Tiananmen: The Politics of U.S.-China Relations, 1989-2000 , pp. 311-313. 252 Warren Christopher, “American Interests and the U.S.-China Relationship,” Address by Secretary of State to the Asia Society, the Council on Foreign Relations and the National Committee on U.S.-China Relations, New York, May 17, 1996. 253 Qian also expressed some reservations regarding Christopher’s speech, especially Christopher’s view of human rights issues as interference to Chinese interests. Liu Liandi (ed.), Zhongmei Guanxi de Guiji, 1993-2000 Dashi Zonglan [The Track Record of Sino-American Relations, 1993-2000] (Beijing: Shishi Chubanshe, 2001), p. 111. 254 Interview #8, Beijing, July 1, 2008.

though more symbolic than substantial. They deemed the summits to be proof of two countries’ closer relationship and a chance to increase mutual understanding and forward bilateral relations. This view persisted even when, from time to time, the U.S. would foreground politically sensitive issues and press for a response. 255 Additionally, the summits were a showcase for Chinese achievements, both historical and material—China finally had the chance to enjoy an equal footing with the only world superpower and to demonstrate its successful economic development. 256

In pre-summit meetings in 1997, the U.S. identified nine issue “baskets” to guide discussion with Chinese counterparts. These baskets included such issues as nonproliferation, military-to-military relations, security dialogue, economic and commercial interests, energy and the environment, human rights, rule-of-law, law enforcement cooperation, and science and technology. 257 The two sides concluded 24 agreements regarding these topics after painstaking negotiations, but, as Jiang Zemin recalled, they differed somewhat sharply over such issues as Taiwan, human rights, and weapons proliferation. 258 For instance, in the press conference after the meeting,

President Clinton claimed the Chinese government was “on the wrong side of history” in terms of human rights, while Jiang continued to defend political stability as paramount to the Chinese people.

However, other concrete issues had brought both sides closer, which in turn helped

255 Yang Jiemian, “Summit Diplomacy and Strategic Partnership: Aspirations, Expectations, and Realization,” in Peter Koehn and Joseph Y.S. Cheng, eds., The Outlook for U.S.-China Relations Following the 1997-1998 Summits (Hong Kong: The Chinese University Press, 1999), pp. 49-64. 256 Interview #5, Beijing, June 20, 2008; Yang Jiemian, et. al., Da Mohe: Zhongmei Xianghu Zhenglue he Zhengce [Grand Matching-up: China-U.S. Mutual Strategies and Policies] (Tianjin: Tianjin Renmin Chubanshe, 2007), pp. 300-302. 257 Robert Suettinger, Beyond Tiananmen: The Politics of U.S.-China Relations, 1989-2000 , pp. 312-313. 258 Zhong Zhicheng, Weile Shijie geng Meihao: Jiang Zemin Chufang Jishi [For a Better World: A Record of Jiang Zemin’s Overseas Visits], pp. 270-271.

the two leaders to agree to work toward a “constructive strategic partnership” in their

Joint Statement. Unfortunately, the term “constructive strategic partnership” aroused more vagueness than clarity. While the U.S. preferred to focus on the concrete issue baskets and declared the goal of “building toward” a partnership with China, the Chinese emphasized the nature of this partnership and downplayed the significance of making changes that are “oriented toward the 21st century.” 259

The views of two prominent officials illustrate the differences in the two nations’ approaches. Chinese Foreign Minister Qian Qichen explained that this partnership could be a new way of managing international affairs. Qian claimed this partnership with the

U.S. was just like those with Russia and France, and “is by no means an alliance” in order to avoid alienating Russia, France, and other countries. In addition, Qian stated that in the post-Cold War era “all major countries have been trying to engage cooperative, rather than confrontational, relationships. And in this sense, the establishment of a strategic partnership might well be considered as a new way of handling relations between major countries in the world.” 260

On the American side, according to Chinese scholar Yang Jiemian, U.S. officials had a different pattern of expression, starting with the trope of exclusion, declaring that this strategic partnership would not parallel or follow the model of the strategic triangle

between the U.S., China, and the Soviets in the 1980s, nor would it take into account any

third parties. 261 In this view, the partnership was “long-term and comprehensive,” with

259 “Jiang Back in Beijing after U.S. State Visit,” Xinhua , November 4, 1997, FBIS-CHI-97-308. 260 “Qian Qichen on ‘Constructive’ Strategic Partnerships,” Xinhua , November 3, 1997, FBIS-CHI-97-307. 261 The response here is from Yang Jiemian’s interview with then U.S. Deputy Assi stant Secretary of State for Intelligence and Research Thomas Fingar. See Yang Jiemian, “Summit Diplomacy and Strategic Partnership: Aspirations, Expectations, and Realization,” in Peter Koehn and Joseph Y.S. Cheng, eds., The Outlook for U.S.-China Relations Following the 1997-1998 Summits , pp. 54-55.

the goal that “ties at all levels will become more extensive and profound…and no single issue will undermine the entire relationship.” 262 In sum, China’s explanation emphasized

interpersonal trust between top leaders of major powers, but the U.S. seemed to prefer

building mutual trust starting with lower cabinet-levels and then working up to the top

leaders at the state level.

These different interpretations of the partnership resulted in some pitfalls in China.

A Peking University professor with a specialty in Chinese foreign policy pointed out that

“[i]t is very important to notice the difference. When the term was firstly applied to

U.S.-China relations, many Chinese were ignorant of the term ‘to build toward’ a

‘constructive strategic partnership’. Instead, in their wishful thinking, the U.S. and China were already ‘partners’.” “The consequence of this misperception that a partnership has already come into being,” he went on, “was to overestimate the shared interests between

China and the U.S. and thus to unrealistically conclude that China was crucial and indispensible to the U.S.” 263 With the benefit of hindsight, I contend that this

misperception contributed to the re-emergence of Chinese nationalism. When episodic

crises occurred between the U.S. and China, such as the 1999 Chinese embassy bombing

incident, the Chinese people could not calmly accept the U.S. explanation that the event

had been an “accident,” because no one bombs his “partner,” but does bomb his

“enemy.”

After the 1997 summit meeting, President Clinton planned to continue discussion on

the issues of human rights and proliferation, among other issues, with Jiang Zemin on a

return visit to China. The negotiation of the date of Clinton’s visit again revealed the

262 For Yang’s interview with Fingar, see Yang Jiemian, “Summit Diplomacy and Strategic Partnership: Aspirations, Expectations, and Realization,” p. 55. 263 Interview #1, Beijing, June 12, 2008.

different interpretations as well as emphases of both sides. Both China and the U.S. shared an understanding of the importance and political benefits of maintaining the momentum of cooperation established in the first Clinton-Jiang summit. Nevertheless, the

U.S. was concerned about domestic electoral politics, while China focused on the implications that could symbolically promote its status in the international structure. 264

Both sides continued to respect and reciprocate what the other wanted.

In spite of the role of U.S. domestic politics in determining its date, China

interpreted this visit as a symbolic achievement. For one, Clinton would be the first U.S.

president to visit China in the nine years since Tiananmen, indicating a full diplomatic

“re-normalization” between the two nations. Furthermore, China saw Clinton’s

rescheduling of the visit from November to June as a response to China’s improving

relations with Europe, including the regularization of the China-EU Summit in early 1998,

and an indication that China had become a more significant U.S. foreign policy

priority. 265

At this second summit meeting, following the success of the previous year, the

leaders discussed and agreed to deepen cooperation on more concrete issues. 266 The two nations also expressed their concern about nuclear testing in India and Pakistan. On the

Taiwan issue, Clinton publicly reciprocated with the “three noes” policy to China—the

U.S. does not support Taiwanese independence, does not support “two Chinas” or “one

264 Harry Harding, “The Clinton-Jiang Summits: An American Perspective,” in Peter Koehn and Joseph Y.S. Cheng, eds., The Outlook for U.S.-China Relations Following the 1997-1998 Summits , pp. 32-33. 265 Song Liansheng and Gong Xiaohua, eds., Zhongmei Shounao Waijiao Shilu [A Record of Diplomatic Affairs between the Two Heads of China and the United States], p. 507; Ministry of Foreign Affairs of PRC, Zhongguo Waijiao 1999 [China’s Diplomacy 1999] (Beijing: Shijie Zhishi Chubanshe, 1999), pp. 346-350. 266 These issues include: establishment of hot-line communication; de-targeting each other with nuclear weapons; arms control; high-level as well as military personnel exchanges; China’s WTO accession; field of law; and people-to-people exchanges. White House Press Office, “Fact Sheet on Achievements of U.S.-China Summit,” U.S. Newswire , July 1, 1998.

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China, one Taiwan,” and does not support Taiwanese membership in any organization for which statehood is a requirement—as a political compensation for Taiwan leader Lee

Teng-hui’s visit to the U.S. in June 1995.

As a Chinese scholar at the Chinese Academy of Social Sciences (CASS) concludes,

“When the U.S. began to re-examine China’s situation and their relations in the mid-1990s, China responded accordingly. The general trend of Sino-U.S. relations throughout the 1990s was a process of re-orientation and re-adjustment, where the strategy of tit-for-tat seemed to exist between both sides—the U.S. took the lead, and

China learned how to respond and to manage it.” 267

Based upon these endeavors of cooperative reciprocity, China’s perceptions of U.S. intentions changed significantly. As a result of the 1996 Taiwan Strait crisis, the Chinese leadership perceived the U.S. not only a political threat that could endanger the CCP’s rule, but also a grave security threat that could tangibly hinder China’s recovery of

Taiwan. 268 However, the bilateral summit meetings between Clinton and Jiang, especially the U.S. policy shift and “three noes,” eased China’s fears of the American threat. The

Chinese leadership had been long wanting for a stable international environment to enable domestic development, and the politically less threatening U.S. was again perceived as a contributing factor for China’s economic growth. 269

267 Interview #21, Beijing, October 16, 2008. 268 Interview # 4, Beijing, June 17, 2008; Niu Jun, “Houlengzhan Shiqi Zhongguoren dui Meiguo de Kanfa yu Sikao” [Chinese Perspectives on U.S. in the Post-Cold War Era], Guoji Jingji Pinglun (July/August, 2001), pp. 7-8; Shi Yinhong, “Meiguo Duihuazhengce de Jibenbeijing” [The Background of U.S. China Policy], Zhanlue yu Guanli , no. 6 (1996), pp. 33-36. 269 China has long expected the U.S. involvement in its economic development since the late 1970s, and did benefit from U.S. participation throughout the 1980s until the Tiananmen incident and the end of Cold War. Since the mid-to-late 1990s, China restored the positive perceptions of U.S. in the process of economic development and globalization. Yuan Ming, “Zhongguo Xiandaihua Jingchengzhong de Meiguo Yinsu” [The American Factor in the Process of China’s Modernization], Waijiao Pinglun , no. 82 (June

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Pursuing Stability with the Bush Administration

During the 2000 presidential campaign, candidate George W. Bush defined China as a “strategic competitor,” stating that while the U.S. can find areas of agreement with

China, the U.S. must stand firmly to deal with China over disagreements. 270 Discord

between the two nations remained when Bush assumed presidency, with his support for a

pro-separatist Taiwan, his emphasis on religious freedom, and continued focus on a

national missile defense system were all most worrying to China.

China noticed the changing rhetoric and employed a more proactive approach in

hopes of maintaining a stable relationship with the U.S. When Bush came into power, his

administration soon decided to introduce a resolution to condemn China’s human rights

practices in the UN Commission on Human Rights, and also needed to decide the content

of arms sales to Taiwan that April and whether or not to continue China’s trading status

for another year. Under the circumstances, the Chinese leadership proactively furthered a

more stable relationship with the United States.

Qian’s Visit to the U.S. as Initiatory Gesture

Chinese Vice Premier Qian Qichen’s U.S. visit in early 2001 indicated China’s

continuing efforts to pursue a stable relationship with the United States. As Chapter 2

demonstrated, China had begun to admit U.S. unipolar superpower status, exemplified

2005), pp. 78-83; Wang Jisi, “Meinu yu Yeshou” [Beauty and Beast], Meiguo Daguan (August 2001), http://ias.cass.cn/show/show_project_ls.asp?id=150 (accessed 2009/3/1). 270 Thomas Lippman, “Bush Makes Clinton’s China Policy an Issue,” Washington Post , August 20, 1999, p. A9.

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militarily in the 1999 Kosovo War. This was a result of China’s changed understanding of the international system in which U.S. enjoyed military dominance, and recognized the difficulty facing other nations that might wish to form an anti-American alliance. 271

Given the power disparity between the U.S. and China in the international system, China,

with more confidence generated from positive interactions with the Clinton

administration in the form of a “constructive strategic partnership,” desired to take the

initiative to foster positive interactions with the Bush administration.

In March 2001, China’s top negotiator on arms control, Sha Zukang, expressed

China’s willingness to discuss the proposed national missile defense system (NMD) with

the U.S. in order to “narrow the differences” between two sides, toning down China’s

strong criticisms of the U.S. desire to seek absolute security at the expense of other

countries. 272 More important, then-Vice Premier Qian Qichen’s visit to the U.S. in the same month indicated China’s efforts to make friendly gestures toward the Bush

Administration in hopes that the latter would reciprocate on the issues of arms sales to

Taiwan and human rights. 273

Qian’s visit successfully established a solid footing with the Bush administration. 274

During the Bush-Qian meeting, President Bush urged the Chinese to respect human rights and religious freedom and reassured Qian Qichen that, with regards to the NMD system,

“nothing we (U.S.) do is a threat to you (China).” Qian expressed China’s opposition to

271 Liang Shoude and Hong Yinxian, Guoji Zhengzhixue Gailun [An Introduction to International Politics] (Beijing: Zhongyang Bianyi Chubanshe, 1994). 272 Craig Smith, “China Willing to Talk about Missile Defenses,” New York Times, March 15, 2001, p. A10. 273 Interview #8, Beijing, July 1, 2008; Jia Qingguo, “Learning to Live with the Hegemon: Evolution of China’s Policy toward the U.S. since the End of the Cold War,” Journal of Contemporary China 14:44 (August 2005), pp. 401-402; Robert J. Saiget, “Chinese Envoy Hoping to Calm Rocky Relations with Bush Government,” Agence France-Presse , March 16, 2001; Editorial, “China Comes Calling,” New York Times , March 21, 2001, p. A22; Renmin Ribao , March 23, 2001, p. 3. 274 Interviews #8, Beijing, July 1, 2008; #25, Washington, DC, March 13, 2009.

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the possible U.S. sale of destroyers equipped with the Aegis radar system that required deeper military coordination with Taiwan. 275 On another occasion, Qian restated that the

U.S. and China “have no reason to become rivals or enemies. We have plenty of reasons

to become friends and partners.” 276

A professor at Peking University specializing in the history of U.S.-China relations points out, “This approach by Qian Qichen indicated a change to which using the

‘impact-response paradigm’ to analyze Chinese foreign policy might no longer be the case. China now has become more confident to be proactive than merely responsive.”277

My own interview with a Chinese scholar at CASS also resonates this view, stating that,

“[c]ompared to the 1990s, China is more willing to take initiation in various dimensions of Sino-U.S. relations.” 278 Chinese strategist Shi Yinhong also praised Qian’s visit as one

of China’s attempts to “shape” policy rather than only to passively “respond” to the

situation surrounding China. 279 Wang Jisi and Wang Yong suggested that, “China’s own behavior will become an increasingly strong determinant in shaping the future of

China-U.S. relations.” 280 Many American specialists on China reportedly also suggested

that China was sending positive signals to smooth the rocky start with the Bush

administration in early 2001. 281

275 Marc Lacey And David E. Sanger, “First Meeting: China Testing Firmer Way of Bush Team,” New York Times , March 23, 2001, p. A5. 276 Xinhua Meiri Dianxun , March 22, 2001, p. 6. 277 Interview #11, Beijing, July 9, 2008. 278 Interview #21, Beijing, October 16, 2008. 279 Shi Yinhong, “Lun Qian Qichen Fuzongli Fangmei de Biyao, Chengjiu, he Qishi [On Vice-Premier Qian Qichen’s Visist to the U.S.: Background, Achievements, and Inspiration],” Guoji Luntan 3:3 (June 2001), pp. 1-5. 280 Wang Jisi and Wang Yong, “A Chinese Account: The Interaction of Policies,” in Ramon Meyers, Michel Oksenberg, and David Shambaugh, eds., Making China Policy: Lessons from the Bush and Clinton Administrations (Lanham, MD: Rowman & Littlefield Publisher, Inc., 2001), pp. 269-295. 281 Interview #25, Washington, DC, March 13, 2009. Bates Gill with specialty of security and arms control issues noticed Chinese friendly gestures, stating that “if the (Qian’s) visit turns sour or the Bush team is seen moving away from a charm offensive, we’ll see less smiling faces and China’s effort will be drawn

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9/11 and “Constructive and Cooperative Relations”

The friendly ambiance of March 2001 was complicated only few weeks after Qian’s visit when the U.S. EP-3 surveillance aircraft had mid-air collision with a Chinese fighter jet nearby China and with the U.S. trying to initiate another round of shaming politics at the UN Commission of Human Rights.

In the second half of year 2001, however, the U.S. and China gradually restored

their cordial relations following these crises, when the U.S. took initiative and began to

redefine its relationship with China. In July 2001, during U.S. Secretary of State Colin

Powell’s visit to China as part of the efforts to mend bilateral relations after the EP-3

incident, he toned down Bush’s campaign rhetoric of “strategic competitor” and stated

that “we view China as a friend, not as an adversary.” 282

The September 11 th incidents provided another point of cooperation for the two nations. In the aftermath of September 11 th , President Bush’s visit to Shanghai for the

APEC summit meeting in October 2001 was a milestone in their bilateral relations, when

the U.S. communicated its willingness to develop “constructive and cooperative

relations” with China—a positive response to China’s support for the American

anti-terrorism campaign. 283 More important, during the meeting with Bush, Jiang Zemin

proposed that both sides should establish a mechanism of “strategic dialogues” to enable

the two nations to engage in direct communication and exchange views through back.” David Lampton also expressed his concern that China may not cooperate with the U.S. in the control of weapons proliferation, if “we’re too robust” expressing differences with China. See Murray Hiebert and Susan Lawrence, “U.S.-China Relations: Dangerous Brinkmanship,” Far Eastern Economic Review , March 15, 2001, pp. 16-21. 282 Steven Mufson and Philip Pan, “U.S., China Set for More Talks: Powell Raises Rights, Arms Issues,” Washington Post , July 29, 2001, p. A01. 283 “US, China Stand against Terrorism,” Remarks by President Bush and President Jiang Zemin, Shanghai, People's Republic of China, October 19, 2001.

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high-level representatives on issues of common concern. 284 Though Jiang’s proposal did not receive Bush’s prompt response, it again indicated China’s shift to a more proactive attitude towards U.S.-China relations and helped pave the way for institutionalization of future communication between the two nations such as the senior dialogues and strategic economic dialogues since 2005.

This positive momentum continued when President Bush made a working visit to

Beijing in February 2002, followed by Jiang Zemin’s return visit to President Bush’s

Crawford, TX, ranch in October 2002. The two leaders agreed to push forward the development of the Sino-US constructive cooperative relationship, especially on anti-terrorism and other regional issues such as de-nuclearization of the Korean

Peninsula.

The Bush administration, unlike the Clinton administration in the early 1990s, did not raise unwelcome issues during a political power transition in China. Instead, the Bush administration wanted to continue the constructive and cooperative relationship with

China under Hu Jintao, who succeeded Jiang as Party Secretary in November 2002 and as

President of the State in March 2003. For instance, in April 2003, the U.S. expressed that it would not pursue the resolution critical of China at the UN Commission on Human

Rights, based upon “what we believe will best advance the cause of human rights in

China with the new government in Beijing.” 285

In 2002 and 2003 the U.S. and China worked together in pursuit of their common interests on other regional issues. When the situation in the Korean Peninsula worsened when North Korea went public with its highly enriched uranium (HEU) program that

284 Wu Yingchun, “Jiang Zemin Zhuxi yu Bush Zhongtong Juxing Huitan [President Jiang Zemin Meets President Bush],” Renmin Ribao , October 20, 2001, p. 1. 285 “U.S. Won’t Reproach China on Human Rights,” Associated Press , April 11, 2003.

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could generate nuclear weapons in 2002, China became more active in the process to denuclearize the Peninsula. China held the first round of Six-Party Talks in August 2003 in hopes of finding a peaceful resolution among the U.S., North Korea, South Korea,

Japan, Russia, and China. On the issue of anti-terrorism, China communicated its intent to abstain once the U.S.-led resolution went to vote in the UN Security Council. While the Taiwan independence issue was heated leading into the island’s presidential election,

Chinese Premier Wen Jiabao received President Bush’s reassurance, in a meeting between the two leaders in the Oval Office in December 2003, that the U.S. opposed Taiwan’s referendum since it could provocatively destabilize regional peace.

China paid close attention to American China policy in Bush’s second term, with high hopes that their constructive and cooperative relationship would continue as it had in the previous four years. 2005 marked a continuation of cooperative reciprocity in the eyes of China, despite some frictions over trade including a Chinese oil company’s planned purchase of an American firm that encountered great opposition from U.S. Congress.

Positive signs included several cabinet-level exchanges between the two nations, including Secretary of Defense Rumsfeld’s visit to Beijing in October, even though he remained critical of China’s lack of transparency on military budget and buildups and urged for greater political freedom for the Chinese people. 286 During the trip, however,

Rumsfeld was the first American Defense Secretary to visit the headquarters of the PLA

Second Artillery Corps that supervises China’s arsenal of conventional and nuclear missiles.

286 Philip Pan, “In China, Rumsfeld Urges Greater Global Role, Freedom, Military Candor,” Washington Post , October 19, 2005, p. A19; Thom Shanker, “Rumsfeld Tells China Its Military Buildup Worries Neighbors,” New York Times , October 21, 2005, p. A14.

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“Responsible Stakeholder”?

When we look into the role of reciprocity in shaping state behavior, we should note that one player’s gesture might not generate immediate response from the other. This was seen in the case of the U.S. putting forward the term “responsible stakeholder” to redefine bilateral relations in the early months of the Bush administration. While seemingly more desirable than the previous “strategic competitor,” this new term did not elicit an immediate reciprocal response from China.

As a proactive gesture on China’s part, a close aide to China’s top leadership, Zheng

Bijian, coined the conception of “peaceful rise” in 2002, suggesting that, China hoped to rise not through territorial expansion or challenges to other powers, but through its own hard work and to further integrate with a peaceful international environment. 287 In

response, U.S. Deputy Secretary of State Robert Zoellick commented in September 2005

that China should take concrete steps to cooperate with the U.S. on common interests and

to become a “responsible stakeholder” in world affairs. The suggested issues that China

should address included its military buildup, energy security, counterfeiting and

intellectual property rights protection, political reform, and other regional issues. 288

Initially, the term “stakeholder” confused Chinese analysts as well as practitioners,

and received no formal response from the top leadership. For instance, there were no

official comments on the specific term or mentions of Zoellick in the CCP mouthpiece

287 This conception of China’s “peaceful rise” was a reaction to the “China threat” theory, and was formulated by Zheng Bijiang, an aide to China’s top leader Hu Jintao in 2002. It should be noted that this concept was later replaced by “peaceful development” in official tones, see: Bonnie S. Glaser and Evan S. Medeiros, “The Changing Ecology of Foreign Policy-Making in China: The Ascension and Demise of the Theory of ‘Peaceful Rise’,” China Quarterly (2007), pp. 291-310. 288 Robert B. Zoellick, “Whither China: From Membership to Responsibility?” Remarks to National Committee on U.S.-China Relations, New York, NY, September 21, 2005; Glenn Kessler, “U.S. Says China Must Address Its Intentions; How Its Power Will Be Used Is of Concern,” Washington Post , September 22, 2005, p. A16.

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Renmin Ribao for almost a month, until an article reporting the G-20 meetings held in

Beijing in mid-October, and yet, the author merely employed the positive side of

Zoellick’s statement to conclude that the U.S. would need cooperation from China to

“sustain an open international economic system.” 289 Zheng Bijiang’s tentative reaction, too, was to grasp the positive side while downplaying the remaining differences with

Zoellick, maintaining that, “the U.S. seems to be willing to further sustain and perfect the current international order with a peacefully rising China.” 290 It was reported, however,

that without further deliberation, the Chinese leadership could not decide how to

reciprocate or respond. 291

It was on or shortly after Bush’s visit in November 2005 that China’s several leading

U.S. experts began to publish articulate reactions to Zoellick’s statement. An article in

Renmin Ribao , written by Yuan Peng at the Institute of American Studies of CICIR as a

compliment to Bush’s visit, contended that there was a debate unfolding in the U.S., with

the focal point turning from the “China question” to the “rising China question,” to which

Zoellick expressed the hope that China would be “working with us to shape the future

international system” and to “share risks and responsibilities.” Yuan concluded that it was

a test for the U.S. to see whether the country could truly accept China’s peaceful

development, and was now important for China to ensure a long-term stable relationship

with the U.S. to serve its own strategic interests.292

289 Zhang Yong, “Zhongguo Hong, Xin Liangdian [Chinese Red Lanterns Become A New Focal Point],” Renmin Ribao , October 18, 2005, p. 3. 290 Shu Taiguan, “Bush Zongtong de Disanci Zhongguoguan [President Bush’s Third View on China],” Liaowan Dongfan Zhoukan , November 22, 2005, http://big5.china.com.cn/chinese/zhuanti/bsfwzg/1038020.htm (accessed December 12, 2008). 291 Lanxin Xiang, “Why Washington Can’t Speak Chinese?” Washington Post, April 16, 2006, p. B03; Glenn Kessler, “Bush-Hu Meeting to Highlight Role That China Plays; Iran, North Korea at Top of the Agenda,” Washington Post , April 20, 2006, p. A20. 292 Yuan Peng, “Zhongmei Guanxi Zhenglue Zhongyaoxing Yuri Juzeng [Strategic Importance of China-US Relations Keeps Rising],” Renmin Ribao , November 22, 2005, p. 3.

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Yuan’s article represented an optimistic view, but others illustrated China’s hesitation in accepting the term “responsible stakeholder.” Chinese leading voice Wang

Jisi communicated his view on the term “stakeholder,” judging that, “to China, the key of this expression is “whether the U.S. can treat China as an equal footing stakeholder.” 293

Wang also pointed out that though the U.S. had adopted a more pragmatic policy toward

China, pragmatism does not render ideological issues obsolete, and the U.S. had never been ambiguous in hoping that China would move in the direction of political change. 294

In the same vein, Da Wei and Sun Ru, also from the Institute of American Studies of

CICIR, expressed a cautious view that it will still benefit the U.S. and China if the two nations agreed to strengthen positive interactions on common interests. But, China would need to strike a balance between the costs and benefits that result from such cooperation, because sometimes it would backfire if a nation conceded too much on issues like currency control or energy security. It is of great importance for China and the U.S. to diminish possible misunderstanding in advance in order to achieve long-term stability. 295

The Chinese leadership formally responded to the conception of “responsible stakeholder” in April 2006, when Hu Jintao visited the U.S. When receiving Hu in the

White House, President Bush said, “[as] stakeholders in the international system, our two nations share many strategic interests.” 296 Hu, with the wish for equality, replied that the

two nations “are not only stakeholders, but … should also be constructive partners.” 297

293 Liu Wanyuan, “Meiguo Chongxin Dingwei Zhongguo: Liyi Xiangguanzhe [U.S. Redefines China: Stakeholder],” Zhongguo Xinwen Zhoukan , November 28, 2005, pp. 40-41. 294 Liu Wanyuan, “Meiguo Chongxin Dingwei Zhongguo: Liyi Xiangguanzhe [U.S. Redefines China: Stakeholder],” Zhongguo Xinwen Zhoukan , November 28, 2005, pp. 40-41. 295 Da Wei and Sun Ru, “Bush Zhengfu Duihua Zhenglue Tiaozheng Quxiang [A Changing Trend of Strategic Adjustment of China Policy under the Bush Administration],” Xiandai Guoji Guanxi 11 (2005), pp. 9-13. 296 Glenn Kessler, “U.S., China Stand Together but Are Not Equal,” Washington Post , April 21, 2006, p. A18. 297 Glenn Kessler, “U.S., China Stand Together but Are Not Equal,” Washington Post , April 21, 2006, p.

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Hu’s statement indicated the Chinese leadership was still preoccupied with “equality.” In other words, China preferred to describe its relationship with the U.S. as “constructive partners” rather than “stakeholder,” or at least to juxtapose the two terms. 298

The Chinese perception of the American threat has undergone certain changes in this

period of time. When George W. Bush came into office in 2001, many analysts in China

were concerned about U.S. hegemonism evident in its refusal to join the Kyoto Protocol

and its claim of unilateral withdrawal from the Anti-Ballistic Missile (ABM) Treaty.

However, when American scholars as William Wohlforth proposed in the late 1990s that

a unipolar world led by the U.S. would be conducive to peace and stability due to the

high cost of balancing and of U.S. good intents in maintaining a status quo order, Chinese

analysts and scholars became less antagonistic to this sort of argument than in previous

periods. In addition, the September 11 th incidents and the following U.S. global campaign against terrorism provided the opportunity to stabilize and improve Sino-U.S. relations after the EP-3 collision in April 2001. Arguably, China began to see the U.S. as less threatening when the Bush administration abandoned the term “strategic competitor” in describing China. Nevertheless, the 2003 Iraqi War revived the threat image of the U.S.

As some analysts noted, U.S. dismissal of opposition from traditional allies like Germany and France indicated that the U.S. was still pursuing power maximization, not acting like a benign hegemon defensively responding to threat. 299 But when the Bush administration

A18. 298 Yi Fei, “Zhongmei Yingshi ‘Jiansheshi Hezuozhe’ Lingren Huiwei [Pleasant to See U.S. and China as Constructive Partners],” Xinhuawang , April 22, 2006, http://news.xinhuanet.com/comments/2006-04/22/content_4457525.htm (accessed December 12, 2008). 299 Feng Changhong, “How to View U.S. Strategic Thinking,” in Carola McGiffert, ed., Chinese Images of the United States (Washington, D.C.: The CSIS Press, 2005), p.37; Wang Jisi, “From Paper Tiger to Real Leviathan: China’s Images of the United States since 1949,” in Carola McGiffert, ed., Chinese Images of the United States (Washington, D.C.: The CSIS Press, 2005), p. 17.

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in 2003 redefined U.S.-China relations as the best ever since 1972 and proposed that

China be a “responsible stakeholder” in 2005, the Chinese leadership continued to pursue a stable relationship with the U.S. 300

Conclusion

Walt’s emphasis on a threat perception theory in which reciprocity plays a significant role in the dyadic relationship between China and the U.S. is complementary to the international systemic explanation of state behavior. In the early 1990s the issue of human rights occupied the heart of U.S.-China relations and, for the most part, constituted an “impasse”. Negative and punitive reciprocity emerged when the U.S. expressed its concerns and named improvements in human rights as a precondition to further relations with China in response to the U.S. domestic pressures, and China, out of fear of political subversion, perceived U.S. policy as a brutal interference in its internal affairs. Per defensive realist theory, when Waltz with his international systemic analysis cannot satisfactorily explain the balancing behavior of the asymmetrically weak China vis-à-vis the U.S., Walt’s theory of threat perceptions that include bilateral interactions does improve our understanding of China’s behavior.

However, the employment of reciprocity in explaining the change of threat perceptions and as a result state behavior has its own limits. First, it is difficult for a state to learn about its opponent’s “desired” outcomes in advance. As President Clinton regarded MFN status as China’s “desired” outcome and hoped for China’s cooperative reciprocation for his delinkage of human rights and trade policy, China deemed its MFN

300 Wang Jisi, “From Paper Tiger to Real Leviathan: China’s Images of the United States since 1949,” in Carola McGiffert, ed., Chinese Images of the United States (Washington, D.C.: The CSIS Press, 2005), pp. 14-15; Interview #8, Beijing, July 1, 2008.

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status as beneficial to both sides and thus a “deserved” status that did not merit positive and cooperative reciprocation. As a result, China was reluctant to reciprocate, though the

U.S. market, capital, and technology, etc., were important to China’s economic development.

Second, whether or not China would reciprocate to Clinton’s delinkage policy was subject to the development of China’s domestic politics. During the early 1990s, when the political power transition from Deng Xiaoping to Jiang Zemin made it very difficult to reciprocate because any conciliatory measure Jiang took might be perceived as too soft by other contenders within the Chinese leadership and endanger Jiang’s political power.

The role of domestic political concerns is also evident when China took several months to respond to Zoellick’s “responsible stakeholder” statement, due in part to China’s concern about the possible alienation with long-time allies in the developing world.

Third, reciprocity may not occur when one player can find other alternatives to simply dealing directly with the opponent. This is evident when China found that other

European countries were willing to engage China commercially, and thus the U.S. threat of revoking MFN status if there was no improvement in human rights issues seemed less credible. Therefore, China felt reluctant to reciprocate following Clinton’s renewal of its

MFN status.

Last but not least, it is worth noting that China has become more and more willing to

adopt initiatory gestures in the relations with the U.S. By stating that “the nature of

Sino-U.S. relations is decided by the nature of the U.S. policy to China,” 301 the Chinese leadership and analysts used to stress the reactive nature of China’s policy toward the U.S.

301 Chu Shulong, “Mei dui Hua Zhanlue ji ZhongMei Guanxi Zouxiang” [U.S. Strategy to China and the Trend of Sino-U.S. Relations], Heping yu Fazhan , no. 2 (2001), p. 41.

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and routinely blame the U.S. whenever facing a low ebb in their dyadic relationship. The increase of Chinese initiatory gestures should gradually reduce China’s ability to blame the U.S. for the deterioration of bilateral relations in the future.

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Chapter 4 Economic Interdependence: Part of the Solution or Part of the Problem?

Chapter 2 explored China’s perceptions of the international system and Chapter 3 demonstrated how bilateral interactions regarding political issues shaped overall

U.S.-China relations in the post-Cold War era. In general, the differing capabilities of

China and the U.S. gradually led China to realize the costs of militarily provoking the

U.S., and politically positive interactions contributed to China’s relatively accommodative policy.

As a senior professor at the Renmin University of China notes, economic incentives also helped outweigh the costs of confrontation and thus played a contributing role in

China’s adaptation to an accommodating approach in the post-Cold War era. 302 This chapter will explore how China’s expectations of economic returns shaped its conception of national interest and its behavior.

China’s pursuit of economic benefits from the U.S. can be traced back to the early

1970s, when both sides acknowledged the importance of strategically countering Soviet expansion. The 1972 Shanghai Communiqué between China and the United States noted that bilateral trade was “another area from which mutual benefit can be derived”, and economic relations were “in the interest of the peoples of the two countries.”303 Both

sides have formally pursued trade relations since 1979, with the normalization of

diplomatic relations, and China started to enjoy the most-favored-nation (MFN) trading

302 Interview #8, Beijing, July 1, 2008. 303 Joint Communiqué between the People’s Republic of China and the United States of America, February 27, 1972.

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status in regard to the United States.

However, due to the two nations’ different political systems and ideologies, China was cautious of the political and cultural influences that might come along with U.S. investment and technology. When President George H.W. Bush visited China in February

1989, the reform-minded Zhao Ziyang and conservative Li Peng alike hoped that the U.S. would provide investment and trade benefits without promotion of any Western political values. 304

Since the 1980s, the Chinese leadership has noted the growing influence of economic interdependence and later globalization in world politics. In the 1990s, they have accepted that economic globalization is an irreversible trend and China needs to adapt to it. With the national long-run strategy in the pursuit of wealth and power, the

Chinese leaders decided to further integrate with the world economy, and the U.S. played an important role in the process.

In general, official Chinese statements in the early 1990s, prior to Clinton’s de-linkage of trade and human rights issues, communicated pessimistic views of the two countries’ trade relations. Top Chinese leaders sometimes criticized the U.S. for

“politicizing” or “securitizing” pure trade issues and threatened retaliation if the U.S. government resorted to punitive measures, such as high tariffs against China’s exports. In the second half of the 1990s, the Chinese government had become relatively optimistic about the prospective improvement of Sino-U.S. economic and trade relations. Chinese officials have oftentimes expressed their positive views of Sino-U.S. economic and trade relations, and yet it is clear that they were aware from the start of the possible setbacks of

304 George Bush and Brent Scowcroft, A World Transformed (NY: Alfred A. Knopf, Inc., 1998), pp. 92-93; 96-97.

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this apparently mutually beneficial situation. Even more important, while Chinese officials have noted the increasing returns from complementarities and the division of labor between China and the U.S. in terms of trade relations, they have also begun not only to pursue an equal footing with their American counterparts, but also to stress the importance of a stabilized political relationship with the U.S. to ensure trade benefits to both sides. 305

By China’s count, the trade value between the two nations has increased from

US$2.45 billion in 1979, to US$10 billion in 1988, to US$54.9 billion in 1998, to

US$333.7 billion in 2008 .306 Official Chinese views on U.S.-China trade relations and

the shift of China’s policy seem to conform to trade expectation theory—that expectation

of future trade would change the leadership’s cost-benefit calculations and thus

behavior. 307 The increasing return from trading with each other also helped stabilize overall Sino-U.S. relations and proved that a more accommodative political environment is beneficial to Sino-U.S. economic and trade relations. Many Chinese scholars share the view that economic interdependence has become a driving force and thus a solution to overall U.S.-China relations since the mid-1990s, and yet many of them deem political and strategic understanding between the two nations as the most salient factor in the

305 Li Changjiu, “Zhongmei Jingmao yu Zhengzhi Guanxi de Fazhan Xincheng Xianming Duizhao” [A Strong Comparison between Sino-U.S. Economic and Political Relations], Xiandai Guoji Guanxi , no. 6 (2001), pp. 17-20. 306 Figures are from China’s General Administration of Customs. Cited from Zhou Shijian, “Zai Mocazhong Xunsu Fazhan” [The Rapid Development amid Frictions], Shijie Zhishi , no. 6 (2002), pp. 28-32; and Wang Yong, Zhongmei Jingmao Guanxi [The Political Economy of China-US Trade Relations] (Beijing: Zhongguo Shichang Chubanshe, 2007), p. 126. The figure of 2008 comes from China Custom Statistics Information, http://www.hgtj.cn/CustomsStat/OperateForm/StatNewsViewAllow.aspx?guid=728a6939-79e7-4521-8584- 27b4e49d5730 (accessed 4/28/2009). 307 Dale Copeland, “Economic Interdependence and War: A Theory of Trade Expectations,” International Security, vol. 20, no. 4 (Spring 1996), pp. 5-41.

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relationship. 308 In general, the case of China supports trade expectation theory, but it is also noteworthy that China places political relations as the most salient aspect of

U.S.-China relations. In other words, it is not economic interdependence per se, but how the Chinese leadership perceives it that is most important in deciding their policy toward the U.S.

This chapter employs trade expectation theory to contend that China’s perception of the trade relationship affects its policy toward the U.S. I will demonstrate the importance and benefits of trade in China’s overall economic development in terms of gross domestic product (GDP), with reference to China’s views on economic interdependence and globalization. In addition, I will explore China’s perceptions of trade with the U.S. In the past, China oftentimes perceived opening economically to the outside world as in its own interest, but was cautious of negative influences that could come along with foreign capital and technology. Therefore, while economic interdependence played an indispensible role in stabilizing U.S.-China relations, it also constituted a problem when economic issues, such as trade imbalance and China’s most-favored-nation status (MFN), were politicized. The conditions under which trade expectations are important in China’s

U.S. policy should be further noted. In China’s eyes, while frictions over trade issues are expected to continue in the future, the bottom line is to prevent trade frictions from exacerbating overall U.S.-China relations. This explains why China (and the U.S.) sought to further institutionalize bilateral venues to consolidate their trading relationship. Other commercial issues, such as China’s U.S. bond and asset holdings, are beyond the scope of this chapter because these issues became salient after China’s shift towards an

308 My own interviews in summer 2008; Yan Xuetong, “Jiada de Zhenzhi Yingxiangli” [Magnified Political Influence], Guoji Maoyi, no. 12 (2002), pp. 16-17.

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accommodative posture with the U.S. However, given the sensitivity of these issues, I will provide a brief analysis of their influence on future U.S.-China relations in Chapter

Trade Expectation Theory and China’s U.S. Policy

While accommodation is underexplored in the realist camp, another school of thought in IR—liberalism—has provided certain explanations for state cooperation, explanations which, I argue, could complement the realist explanation of state behavior.

Scholars in this camp agree with the realists that the U.S. enjoys unipolar status after the

Cold War, but attribute the sustainability of this unipolar system to different causes. 309

Economic interdependence, as Richard Rosecrance maintains, could help to foster peace among “trading states” that usually see trading as more profitable than invading by increasing communication, and, consequently, mutual trust in their dyadic relations.310

Such scholars seem more sanguine about Sino-American relations than realists, because the growing trade volume since the 1990s between China and the U.S. has played a crucial role in preventing direct conflict in their dyadic relations and the high volume of

309 These scholars often maintain that economic interdependence, international institutions, and democracy help to sustain peace, if not U.S. primacy. E.g. Michael Doyle, “Liberalism and World Politics,” American Political Science Review, vol. 80, no. 4 (December 1986), pp.1151-1169; Bruce Russett and John Oneal, “The Classic Liberals Were Right: Democracy, Interdependence, and Conflict, 1950-1985,” International Studies Quarterly, vol. 41, no. 2 (June 1997), pp. 267-294. 310 Richard Rosecrance, The Rise of the Trading State: Commerce and Conquest in the Modern World (NY: Basic Books, 1986); and “A New Concert of Power,” Foreign Affairs, vol. 71, no. 2 (Spring 1992), pp. 64-82. I should point out that Rosecrance’s argument is actually originated from the Cobden-Angell thesis that firstly popularized in the 1850s and then prior to the WWI. Also see Michael Doyle, Ways of War and Peace: Realism, Liberalism, and Socialism (NY: WW Norton & Company, 1997), ch. 8. For more refined views on whether trade could promote peace, see Edward Mansfield and Brian Pollins, eds., Economic Interdependence and International Conflict: New Perspectives on an Enduring Debate (Ann Arbor: U of Michigan, 2003), pp. 207-221.

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trade has helped to forge a strong interest in peace. 311 In addition, some have noted that,

with burgeoning regional arrangements in Asia, the U.S. and China have in place the

mechanisms necessary to communicate with each other, which in turn could at least

reduce mistrust and even nurture mutual trust. 312

Though this sort of statement seems logically sound, many critics are suspicious of assertions of a causal relationship between trade and peace. While liberals argue that trade could lead to peace, the evidence also suggests that, in the face of deep trade relations with other European countries, Germany still engaged in WWI and WWII. In addition, by considering a snapshot of the level of trade relations at a single point in time, the causal arrow could be reversed so as to suggest that it is peace that leads to trade.

Therefore, the relationship between trade and peace deserves further exploration in considering overall U.S.-China relations. The trade leads to peace argument contributes to our understanding of the current Chinese policy, because it allows for the possibility that states cooperate for profits. Indeed, Chinese leaders have continued to underline the salience of economic development in the country’s political agenda. However, if deeper trade relations unconditionally lead to peace, then China’s accommodative policy should have followed smoothly, without setbacks, once it established formal trade relations with the U.S. in 1979, in spite of the negative impact of the 1989 Tiananmen incident. Along the same lines, the accommodative policy should have immediately bounced back in

1993, when China, according to its own official records, started to enjoy a trade surplus

311 For how trade affects the international relations in Asia, see James Richardson, “Asia-Pacific: The Case for Geopolitical Optimism,” National Interest, no. 38 (Winter 1994/95), pp. 28-39. Robert Ross makes a great overview on the role of engagement in U.S. policy toward China, in: Robert S. Ross, “Engagement in U.S. China Policy,” in Alastair Iain Johnston and Robert S. Ross, eds., Engaging China: The Management of an Emerging Power (NY: Routledge, 1999), pp. 176-206. 312 Alastair Iain Johnston and Paul Evans, “China’s Engagement with Multilateral Security Institutions,” in Alastair Iain Johnston and Robert S. Ross, eds., Engaging China: The Management of an Emerging Power (NY: Routledge, 1999), pp. 235-272.

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with the U.S. for the first time ever.

To avoid this “snapshot fallacy”—the focus on only a single specific point in time and its corresponding state behavior—while taking into account the impact of economic interdependence on state behavior, I employ Dale Copeland’s trade expectation theory to examine China’s policy in the early 1990s and its shift toward accommodation since the mid-1990s. Trade expectation theory is more persuasive than the liberal unidirectional reasoning that trade leads to peace, because it takes states’ perceptions about the payoffs of cooperation and the costs of defection from such agreement into consideration in its analysis.

According to trade expectation theory, if trade expectations are positive, the dependent state will expect to gain positive benefits from future trade relations with the more powerful counterpart and thus be more inclined to accommodation than confrontation in their asymmetric trading relations. If the state is pessimistic about future trade, then these negative expectations will push the state toward aggression. 313

Following this logic, a state’s policy shift to accommodation is more likely when it is

expecting increasing returns in trade value from the improved relations with its

counterpart.

Trade expectation theory can help us to explore how the Chinese leadership’s

expectation of future U.S.-China trade relations would affect China’s behavior. If China

still prioritizes the course of economic reform, and does not have other vital interests that

seem likely to cause a collision with the U.S. in the near future, then we can expect China

to pursue its accommodative policy. Vital interests to China by now seemed limited to

313 Dale Copeland, “Economic Interdependence and the Future of U.S.-Chinese Relations,” in G. John Ikenberry and Michael Mastanduno, eds., International Relations Theory and the Asia-Pacific (NY: Columbia University Press, 2003), pp. 323-352.

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national integrity and sovereignty that could severely undermine the CCP legitimacy. 314

Research on other cases of accommodation in international relations scholarship has

suggested that economic interests can motivate leaders to abandon confrontational

policies and pursue accommodative ones. For instance, Tuomas Forsberg and Richard

Ned Lebow respectively point out that the expected economic benefit from the West is a

necessary condition to explain Gorbachev’s acceptance of German unification and the

change in Eastern Europe in the late 1980s. 315

My above description of the increase of trade volume between the U.S. and China from 1979 to 2008 provides a general picture. The trade surplus between the two nations began to favor China in 1993, which further prompted Chinese officials to expect more benefits from trading with the U.S. As the head of China’s Ministry of Foreign Trade and

Economic Cooperation (MOFTEC) 316 Wu Yi suggested in 1997, “We are immersed in the irreversible trend [toward] worldwide economic integration…. This in turn portends that possibility for successful cooperation is much greater in the future.” 317

My research accepts the liberal assumption that economic interdependence changes state preferences and raises costs of conflict, thus potentially altering state behavior.

314 Wang Yizhou, “Guojia Liyi yu Guojia Zeren” [National Interest and National Responsibility], in Wang Jisi, ed., Shijie he Zhongguo 2007-2008 [World and China 2007-2008] (Beijing: Xinshijie Chubanshe, 2008), pp. 119-123; Qin Zhilai, “Kaifang Tiaojianxia de Zhongguo Guojia Liyi” [China’s National Interest under Economic Reform and Opening], in Wang Jisi, ed., Shijie he Zhongguo 2007-2008 [World and China 2007-2008] (Beijing: Xinshijie Chubanshe, 2008), pp. 124-129. 315 Tuomas Forsberg, “Power, Interests and Trust: Explaining Gorbachev’s Choices at the End of the Cold War,” Review of International Studies, no. 25 (1999), pp. 603-621; Richard Ned Lebow, “The Search for Accommodation: Gorbachev in Comparative Perspective,” in Richard Ned Lebow and Thomas Risse, eds., International Relations Theory and the End of the Cold War (NY: Columbia University Press, 1995), pp. 167-186. 316 MOFTEC was reorganized into the Ministry of Commerce (MOFCOM) in March 2003 as part of the institutional reform of the State Council. 317 Wu Yi, “Prospects for China’s Foreign Economic and Trade Development,” Beijing Review , February 17, 1997, p. 16.

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However, while the liberal view adopts a snapshot analysis that focuses on a single point of time in which trade coexists with peace between two nations, I employ Copeland’s trade expectation theory to explain the change of China’s policy towards the U.S. from confrontation to accommodation since the mid-1990s as an effect of the logical expectation of the Chinese leadership. In Copeland’s theory, he identifies the volume of trade as one suitable indicator effecting leaders’ cost-benefit calculus, as other scholars suggest when employing the trade/GDP ratio to measure the level of dependence. 318

In my research, I employ trade volume as the indicator to explore China’s expectations in trading with the U.S. For one, the volume of trade, as other scholars suggest, is associated with the occurrence of conflict. 319 Second, Chinese scholars also

318 Stephen D. Krasner, “State Power and the Structure of International Trade,” World Politics , vol. 28, no. 3 (April 1976), p. 328. Copeland then identifies other factors such as the access to market and to vital goods (such as oil) that are also important in influencing leaders’ expectations of future trade, without specifying how to measure these two additional factors. These two factors are more mercantilist than trade volume. Copeland attributes Japan’s decision to wage war with the U.S. in the 1940s to the growing protectionism in the U.S. market and the decreasing access to vital goods, which lowered Japan’s expectations of future trade with other Western nations. Dale Copeland, “Economic Interdependence and War: A Theory of Trade Expectations,” International Security, vol. 20, no. 4 (Spring 1996), pp. 26-27, footnote 44; Dale Copeland, “Economic Interdependence and the Future of U.S.-Chinese Relations,” in G. John Ikenberry and Michael Mastanduno, eds., International Relations Theory and the Asia-Pacific (NY: Columbia University Press, 2003), pp. 329-334. However, these other two factors Copeland incorporates—access to alternative markets and to vital goods—are less significant throughout the period of my research. As to market access, the Chinese leadership promoted the policy of “market diversification” in the early 1990s—which failed due to concrete business capabilities that made U.S. firms better able to make timely payments than their European counterparts. Hence, China cared more about whether it could continue to trade with the U.S. than its share of U.S. market, and trade volume—as Chinese officials suggested—was the main concern in their expectations of bilateral trade during China’s shift to accommodation. In addition, China’s access to oil, a vital good, had not significantly affected its expectations of the trade with U.S. in the 1990s. For one, China did not become a net importer of oil until 1993. And, oil market mechanisms such as the Organization of the Petroleum Exporting Countries (OPEC), to a degree ensured China’s access to oil, or at least prevented the U.S. from controlling China’s access to oil suppliers. These views are generated from my interview #6, Beijing, June 25, 2008. 319 Though the correlation or causation between trade and peace is still under contestation, these works at least suggested that the two are associated. Mark J. Gasiorowski and Solomon W. Polachek, “Conflict and Interdependence: East-West Trade and Linkages in the Era of Detente,” Journal of Conflict Resolution , vol. 26, no. 4 (December 1982), pp. 709-729; Mark J. Gasiorowski, “Economic Interdependence and International Conflict: Some Cross-national Evidence,” International Studies Quarterly , vol. 30, no. 1 (March 1986), pp. 22-38; Solomon W. Polachek, “Conflict and Trade,” Journal of Conflict Research , vol. 24, no. 1 (March 1980), pp. 55-78; and Edward D. Mansfield, Power, Trade, and War (Princeton: Princeton University Press, 1994).

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maintain that the growth of trade volume is the indication of a good trading relationship with the U.S. 320 More importantly, in the period currently under scrutiny—since the early

1990s to 2006—Chinese officials from MOFTEC/MOFCOM have repeatedly underlined

the importance of annual bilateral trade volumes in referring to the trade relations

between the two nations. 321 In recent years, Chinese officials even claimed that China has

no intention to pursue a large trade surplus with the U.S., indicating China’s moderate

view of the issue of distribution of trade benefits between the two nations. 322 This

seemed to suggest that China has put more emphasis on “absolute gains” when faced with

economic and trade cooperation issues, as indicated in Jiang Zemin’s “win-win”

comment on China’s negotiations with U.S. over the WTO membership. To provide the

reasoning behind China’s emphasis on the importance of “absolute gains,” a Chinese

analyst noted that, since China began its economic development from a very low point in

terms of GDP, any increase in return from economic cooperation would be seen as

positive and beneficial to China. 323

Therefore, the volume of trade constitutes the key indicator of China’s expectations of future trade with the U.S. The shift to accommodation, according to Copeland’s trade expectation theory, is more likely when the state is expecting increasing returns in trade value from improved relations with its counterpart. In the case of China’s policy toward

320 Interviews #2, Beijing, June 16, 2008; #5, Beijing, June 20, 2008. 321 Chinese officials emphasize the importance of trade volume, sometimes along with the foreign direct investment from the U.S., when making statement to trade relations with the U.S. Sun Zhengyu, “ZhongMei Jingmao Guanxi de Xianzhuang yu Qianjing” [The Current Status and Prospects of Sino-U.S. Economic and Trade Relations], Guoji Maoyi , no. 6 (1992), pp. 15-17; Wang Zhiquan, “Xunqiu Gengjia Shengqi Bobo de Hezuo” [To Seek further Cooperation], Guoji Maoyi , no. 5 (1998), pp. 13-15; Si Si, “ZhongMei Jingmao, Haikuo Tiankong” [Economic and Trade Relations between China and U.S.A.: Boundless Opportunities], Zhongguo Jingmao , no. 4 (April 2006), pp. 52-57. 322 Public Broadcasting Service (PBS), “Exclusive Interview with China's Commerce Minister Bo Xilai,” June 2, 2005, http://www.pbs.org/nbr/site/onair/transcripts/050602_chinacommerce1 (accessed 3/13/2009). 323 This analyst further used this view to explain why China has been doing better and stable than others had predicted after its accession to the WTO. Interview #5, Beijing, June 20, 2008.

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the U.S. after the Cold War, I generate the hypothesis as follows:

Hypothesis 3: If trade volume continues to grow between China and the U.S., which

leads to China’s higher expectations of future trade, then China will

continue to choose accommodation over confrontation.

Trade expectation theory emphasizes the importance of expectations of future trade between the trading partners. If trade between them is substantial and expected to flourish significantly in the future and the costs of war are substantially high, then the states will be less willing to resort to military force in coping with disputes. If states expect trade volume to decline and expect to lose fundamental national interests in the process, then they may be tempted to resort to military force to preserve what they have. It should be noted that economic development has been a long-term goal for China and the Chinese leadership has expected the U.S. to participate in the process. However, China’s accommodation with the U.S. has been affected by the expectations of trade with the U.S.; as in the early 1990s, when China desired U.S. participation in its development, U.S. linkage of trade with human rights issues undermined China’s expectation of bilateral future trade.

Given that my first hypothesis (H1) explored Chinese concerns about U.S. military primacy to show the costs of waging war even with asymmetric strategies, I expect that if economic reform remains China’s policy priority that could be negatively affected by war and that China does not have interest conflict over national sovereignty with the U.S. in the near future, then we can expect China to pursue its accommodative policy. This

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hypothesis H3 can be nullified if China perceives economic with the U.S. as irrelevant to their political relations, or if trade volume declines but China’s accommodation continues.

And it could be falsified if China perceives the increase of trade returns but nonetheless adopts a confrontational policy toward the U.S.

Trade Dependence, China’s Economic Development, and Globalization

China’s GDP has been growing since 1978 as the paramount leader Deng Xiaoping had upheld opening to the outside world as a national goal. In the 1980s, China became more and more interdependent with the international market, a change which gradually led to China’s emphasis on economic interdependence and willingness to join international trade arrangements. For instance, as Chinese chief negotiator on the WTO membership Long Yongtu points out, China’s participation in the Multi-Fibre

Arrangement (MFA) in 1983—which governed the quotas of world trade in textiles and garments that developing countries could export to developed countries—indicated that

China had realized the importance of engaging in international trade arrangements.

Textiles constituted a great share of China’s exports, and being left out would inevitably damage China’s economic interests. 324

In the meantime, the official Chinese mouthpieces also began to discuss the positive

implications of economic interdependence and globalization for China. As Thomas

Robinson aptly noted, in the peak of the reform era before the 1989 Tiananmen incident,

Chinese analysts gradually accepted the necessity of opening the door to the outside

324 Long Yongtu, “Guanyu Zhongguo ‘Rushi’ de Renshi Wenti” [Understanding China’s ‘Accession to WTO’], Zhonggong Zhongyang Dangxiao Baogaoxuan, no. 18 (1999), pp. 17-18.

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world, the indivisibility between domestic economic reform and external interdependence, and the need to join global economic organizations.325 When the term “globalization”

appeared in Renmin Ribao in the mid-1980s, it referred to the internationalization of trade

and capital flows, a meaning close and restricted to that of economic interdependence. 326

And, while upholding open policies and integrating with the world economy as a national strategy, the Chinese leadership had been trying hard to sort out the relationship between market economy and planned economy, with the hope that a middle-ground conception could sustain the CCP’s control over the economy while still enjoying benefits from trading with other market economies. 327

The 1989 Tiananmen incident, events of peaceful evolution in East Europe, the collapse of the Soviet Union, and the resultant end of Cold War worried the Chinese leadership and put a hold on China’s marketization. The Chinese leadership became more cautious about the relationship between economic development and political stability, with the ultimate goal of maintaining the CCP’s political monopoly. Deng Xiaoping explicitly commented that China needed to recognize state sovereignty and security as its first priority. In the meantime, however, Deng still desired to forward his economic reform and opening policy, as indicated in 1992, when he pushed for bolder economic reform policies during his tour through the economically advanced southern Chinese cities.

However, given the anxiety over the Western idea of peaceful evolution, it was

325 Thomas W. Robinson, “[In][ter]dependence in China’s Post-Cold War Foreign Relations,” in Samuel S. Kim, ed., China and the World: Chinese Foreign Policy Faces the New Millennium, 4 th Edition (Boulder, Colorado: Westview Press, 1998), pp. 201-202. 326 Zhang Liang, “Xijuan Quanqiu de ‘Jinrong Geming’” [Finance Revolution is Sweeping the World], Renmin Ribao , August 13, 1986, p. 7. 327 Renmin Ribao , February 20, 1988, p. 7; Liu Shan, “Shijie Jingji Huodong de Quanqiuhua Qushi” [The Trend of Globalization in World Economy], Renmin Ribao , August 12, 1988, p. 7.

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important for the reform-minded Chinese leaders to justify why and how economic interdependence could help China internationally and economically. As demonstrated in

Chapter 2, the Chinese leadership was hoping that the process of multipolarization could further weaken the perceived declining U.S. and alleviate the pressure put on China by the international system. Economic interdependence and globalization were seen as a contributing factor to the process of multipolarization. The Chinese leadership noted that

U.S. economic status was in decline in relation to that of Japan and West Germany, leading to their struggle for overseas markets. Regional economic integration in West

Europe and Asia further diffused the economic power of the U.S. 328 Moreover, the developing countries were further exploited by the developed because of unequal trade: the former exported low-priced raw materials to and imported manufactured goods from the developed countries and accrued high foreign debt to developed countries. With the seemingly possible alliance with developing countries and frictions among developed countries, the Chinese leadership thus concluded that the trend of economic interdependence could serve China’s interest because it helped to increase economic benefits to China and to undermine U.S. economic and political status internationally.

Proponents of trading with the U.S. have long suggested that it was conducive to stabilizing the bilateral political relations between the two nations.

It should be noted that, in the late 1980s to early 1990s, official Chinese mouthpieces seemed to conflate the terms of interdependence and globalization and limit both terms to strict economic meanings. Exceptions were in scholarly discourse where some analysts noted the basic characteristics of “mutual influence” in the term

328 Li Hong and Sun Yi, “Shijie Jingji Fazhan zhong Yiren Zhuyi de Tedian” [Features of the Development of World Economy], Renmin Ribao , January 3, 1990, p. 7.

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“interdependence.” 329 While the leadership saw the term “interdependence” as a Western pretext to intervene in China’s domestic affairs, as Steven Levine and Thomas Robinson respectively pointed out, this term “interdependence” became less common in Chinese scholarly discussions in the 1990s. 330

Although wary of the negative impacts of interdependence, China’s economic interdependence in terms of trade continued to grow in the post-Cold War era. Figure 4.1 shows that, from 1991 to 2006, China’s foreign trade—including exports and imports—was crucial to the increase of its GDP. The ratio of foreign trade in China’s

GDP increased from 33.2% in 1991 to 66.9% in 2006. 331

Figure 4.1 China’s Foreign Trade and GDP, 1991-2006

GDP Total Value of Trade

250000

200000

150000

100000

100 million Yuan million 100 50000

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year

Source: National Bureau of Statistics of China, Zhongguo Maoyi Waijing Tongji Nianjian 2007 [China Trade and External Economic Statistical Yearbook 2007] (Beijing: National

329 Thomas G. Moore, “Chinese Foreign Policy in the Age of Globalization,” in Yong Deng and Feiling Wang, eds., China Rising: Power and Motivation in Chinese Foreign Policy (Lanham, MD: Rowman & Littlefield Publisher, 2005), p. 124. 330 Steven I. Levine, “Sino-American Relations: Practicing Damage Control,” in Samuel S. Kim, ed., China and the World: Chinese Foreign Policy Faces the New Millennium, 4 th Edition (Boulder, Colorado: Westview Press, 1998), p. 98; Thomas W. Robinson, “[In][ter]dependence in China’s Post-Cold War Foreign Relations,” in Samuel S. Kim, ed., China and the World: Chinese Foreign Policy Faces the New Millennium, 4 th Edition (Boulder, Colorado: Westview Press, 1998), p. 203. 331 Calculated from National Bureau of Statistics of China, Zhongguo Maoyi Waijing Tongji Nianjian 2007 [China Trade and External Economic Statistical Yearbook 2007] (Beijing: National Bureau of Statistics of China, 2008), pp. 590 and 593.

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Bureau of Statistics of China, 2008), pp. 590 and 593.

By another count, as Figure 4.2 shows, the ratio of China’s export trade with foreign countries, which results in positive returns for the GDP, also increased steadily from

17.6% in 1991 to 36.8% in 2006. 332 China’s overall trade surplus also increased from

US$8.05 billion in 1991 to US$177.48 billion in 2006. 333 This figure reflects the

significance of China’s export to its overall economic development.

Figure 4.2 China’s Exports Ratio to GDP, 1991-2006

40 35 30 25 20 15

Percentage (%) Percentage 10 5 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year

Source: National Bureau of Statistics of China, Zhongguo Maoyi Waijing Tongji Nianjian 2007 [China Trade and External Economic Statistical Yearbook 2007] (Beijing: National Bureau of Statistics of China, 2008), p. 593.

With the increasing returns from trading with the outside world, the Chinese leadership formally began to embrace the term “economic globalization” and to see it as an “unstoppable trend” since the mid-1990s, in connection with multipolarization. In

332 National Bureau of Statistics of China, Zhongguo Maoyi Waijing Tongji Nianjian 2007 [China Trade and External Economic Statistical Yearbook 2007] (Beijing: National Bureau of Statistics of China, 2008), p. 593. 333 National Bureau of Statistics of China, Zhongguo Maoyi Waijing Tongji Nianjian 2007 [China Trade and External Economic Statistical Yearbook 2007] (Beijing: National Bureau of Statistics of China, 2008), p. 589.

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1996, Chinese Foreign Minister Qian Qichen repeatedly described economic globalization as a “tide” and as a rare opportunity for all countries to enhance cooperation on economic as well as non-economic issues, such as the external debt of developing countries and environmental protection. 334 Chinese top leader Jiang Zemin, in his political report to the Fifteenth National Congress of the CCP (Party Congress) in

September 1997, provided the first official statement on the relevance of globalization to

China’s domestic and foreign policy: “Opening to the outside world is a long-term basic state policy. Confronted with globalization trends in economic, scientific and technological development, we should take an even more active stance in the world by improving the pattern of opening up in all directions, at all levels and in a wide range, developing an open economy, enhancing our international competitiveness, optimizing our economic structure and improving the quality of our national economy.”335

China’s perception of globalization continued to focus on the duality that the term could bring about and to emphasize the importance of maximizing the positive aspects and minimizing the negative, such as unemployment, of this double-edged sword. For instance, in the above-mentioned political report to the Fifteenth Party Congress, Jiang described China’s commitment to the expansion of trade relations with other countries, to tariff reductions, to the attraction of foreign capitals, and so on, as means to cope with the trend of economic globalization. In another occasion in 1998, Jiang attributed the trend of economic globalization to the advancement of information technology (IT) in the Western nations and to the prioritizing of economic development in many countries. Economic

334 Qian Qichen, Speech to the UN General Assembly, September 25, 1996, UN Document A/51/PV.8. 335 Jiang Zemin, “Hold High the Great Banner of Deng Xiaoping Theory for an All-round Advancement of the Cause of Building Socialism With Chinese Characteristics Into the 21st Century,” Report Delivered at the 15th National Congress of the Communist Party of China, Beijing, September 12, 1997.

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globalization posed challenges for China, if it could not improve its own competitiveness, especially with regard to certain sectors, such as telecommunication and services. 336

Jiang’s statement continued to express China’s willingness to integrate economically with the world as a national strategy.

Despite Jiang’s consistency, the CCP leadership housed divided views. Leftist ideologues and conservatives such as Li Peng, ministries in charge of economic planning and less competitive industries, and state-owned enterprises (SOEs) were concerned about the downside of economic globalization, including the threat to China’s sovereignty and security and the survivability of SOEs and other industries while facing international competition without government subsidies. 337 These views skeptical of globalization within the leadership were further complicated by the nationalistic sentiments in the society as a whole. As Long Yongtu observed, when China pursued negotiations with trading partners in 1994 as the final boost for China’s accession to the General Agreement on Tariffs and Trade (GATT, succeeded by WTO in 1995), the State Planning

Commission refused Long’s proposal to relax the import quotas of raw wool from New

Zealand because the Chinese leadership was politically concerned about “the solidarity and stability of the livelihood of [Chinese] minorities.” 338

Many of the opponents of globalization proposed that China should return to

socialist values as well as planned economy as an alternative to integration into the world

economy. However, as Banning Garrett maintains, these alternatives to globalization

were not attractive to the top leaders, because the Chinese public considered economic

336 Jiang Zemin Wenxuan Vol. II [Selected Works of Jiang Zemin Vol. II] (Beijing: Renmin Chubanshe, 2006), pp. 195-206. 337 Banning Garrett, “China Faces, Debates, the Contradictions of Globalization,” Asian Survey, vol. 41, no. 3 (May/June 2001), pp. 409-427. 338 Long Yongtu, “Guanyu Zhongguo Jiaru Shijie Maoyi Zuzhi de Wenti” [Questions Regarding China’s Accession to WTO], Zhonggong Zhongyang Dangxiao Baogaoxuan, no. 11 (1998), p. 6.

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benefits as more desirable than the return to the socialist planned economy. 339 In other words, the views and policy alternatives promoted by those opposed to globalization might be attractive but were not practical given the priorities of the Chinese public. It is still unclear whether and to what extent public opinion has an imprint on China’s foreign policy making. However, there seems to be agreement that economic development is crucial to legitimize CCP’s rule. 340 Several of my interviewees in Beijing agreed that

“policy mistakes” could delegitimize the CCP’s rule, and a severe man-made economic

downturn is certainly one of them. 341

Some critics of globalization also see participation in economic globalization as

beneficial to China’s future. In a Neibu Canyue (Internal Reference) article, Li Shenming,

the Vice-President of the Chinese Academy of Social Sciences (CASS) and a critic of

globalization, maintains that economic globalization is the revival of Western capitalism

and colonialism because it only serves the interests of the small group of people in the

West at the expense of Third World. However, Li also agrees that the foremost task for

the Chinese leadership is to participate in the process of globalization to enhance China’s

strengths with the help of foreign capitals, technology, managerial experiences, and

international markets. Only by doing so can China be strong to achieve success in its

struggle with the West. 342 As a result of convincing arguments, like those of Li, Chinese

339 Banning Garrett, “China Faces, Debates, the Contradictions of Globalization,” Asian Survey, vol. 41, no. 3 (May/June 2001), p. 418. 340 Fei-Ling Wang, “Beijing’s Incentive Structure: The Pursuit of Preservation, Prosperity, and Power,” in Yong Deng and Fei-Ling Wang, eds., China Rising: Power and Motivation in Chinese Foreign Policy (Lanham, MD: Roman & Littlefield, 2005), pp. 19-49; Thomas J. Christensen, “Pride, Pressure, and Politics: The roots of China’s Worldview,” in Yong Deng and Fei-Ling Wang, eds., In the Eyes of the Dragon: China Views the World (Lanham, MD: Roman & Littlefield, 1999), pp. 239-256. 341 Interviews #5, Beijing, June 20, 2008; #10, Beijing, July 4, 2008; #12, Beijing, July 9, 2008. 342 Li Shenming, “Xifang Jingji Quanqiuhua dui Disan Shijie de Yingxiang” [The Influence of Western Economic Globalization on the Third World]. Neibu Canyue, no. 27 (2000), pp. 27-32. Also see Chen Yongcheng, “’Jingji Quanqiuhua’ dui Fazhanzhong Guojia Yiweizhe Sheme” [What Does “Economic Globalization” Mean to Developing Countries?] Neibu Canyue, no. 4 (1999), pp. 29-32.

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leadership and officials continued to focus on how to manage the negative economic consequences of, rather than oppose entirely, the process of economic globalization.

Increased returns from trade helped the Chinese leadership to limit the process of globalization to economic issues in the late 1990s, while the incidents of September 11 th in 2001 broadened the Chinese conception of globalization to include security issues. In

2001, China for the first time described the question of security as “becoming increasingly multifaceted and globalized,” 343 indicating a shift from Deng’s emphasis on the state’s exclusive control over security to a more inclusive perspective that security has permeated to issue-areas such as finance, technology, culture and others, and thus countries can cooperate for the better good. 344 The international systemic constraint put

forth by the irreversible trend of globalization contributed to China’s understanding of the

importance of the trade relations with the U.S., because trading with the U.S. could

increase China’s international economic competitiveness. As Thomas Moore and Dixia

Yang aptly suggest, when economic interdependence and globalization have become a reality that every country needs to cope with, it is more important for researchers to explore how China responds and adapts to the trend than to debate whether the Chinese leadership has wholeheartedly embraced globalization as a norm or valued goal that can dictate China’s international behavior. 345 Against this backdrop of globalization, I will

demonstrate why and how China manages its economic interdependent relations with the

U.S.

343 Tang Jiaxuan, Speech to the UN General Assembly, A/56/PV.46, November 11, 2001. 344 Thomas G. Moore, “Chinese Foreign Policy in the Age of Globalization,” in Yong Deng and Feiling Wang, eds., China Rising: Power and Motivation in Chinese Foreign Policy (Lanham, MD: Rowman & Littlefield Publisher, 2005), pp. 135-136. 345 Thomas G. Moore and Dixia Yang, “Empowered and Restrained: Chinese Foreign Policy in the Age of Economic Interdependence,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 191-229.

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U.S.-China Trade Relations: Ballast and Hot Button Issues

Trading with the outside world has contributed to China’s overall growth in GDP, and the U.S. has played a crucial role in this process. For instance, in 2005, the majority of Chinese goods were destined for the U.S. with China enjoying a trade surplus of

US$114.2 billion, followed by Germany where China enjoyed a US$1.8 billion surplus. 346

Table 4.1 U.S.-China Merchandise Trade Statistics, 1991-2005 (Millions of U.S. dollars) US Trade with China (US Data) China Trade with US (Chinese Data) Year Export Import Balance Export Import Balance 1991 6287 20305 -14018 6198 8010 -1812 1992 7470 27410 -19943 8599 8903 -304 1993 8767 31183 -22416 16976 10633 6343 1994 9287 41362 -32075 21421 13977 7444 1995 11749 48521 -36772 24744 16123 8621 1996 11978 54409 -42431 26731 16179 10552 1997 12805 65832 -53027 32744 16290 16454 1998 14258 75109 -60851 38001 16997 21004 1999 13118 81786 -68668 41946 19480 22466 2000 16253 100063 -83810 52104 22363 29741 2001 19234 102280 -83046 54300 26200 28100 2002 22053 125167 -103115 69959 27227 42731 2003 26806 151620 -123960 92510 33882 58628 2004 34721 196699 -161978 124973 44652 80321 2005 41836 243462 -201626 162938 48734 114204 Source: U.S. Department of Commerce, and PRC’s General Administration of Customs. Cited from Wang Yong, Zhongmei Jingmao Guanxi [The Political Economy of China-US Trade Relations] (Beijing: Zhongguo Shichang Chubanshe, 2007), p. 126.

346 Daniel Workman, “China’s Trading Partners: Chinese Exports & Imports Soar,” June 26, 2006, http://internationaltrade.suite101.com/article.cfm/chinas_top_trading_partners (accessed 1/14/ 2009).

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Table 4.1 documents the official trade statistics from the U.S. and China, but different methods of compilation led to different volumes of trade imbalance, complicating the already difficult question as to who is responsible for the trade imbalance and how to deal with it. 347 Having said this, the U.S. has evidently contributed to China’s economic development even by China’s own count, given the fact that the trade surplus of the latter continued to grow even geometrically throughout this period, as shown in figure 4.3. And, for the purpose of testing Copeland’s trade expectation theory,

Table 4.1 shows that the trade volume has kept growing, indicating that it would be more likely that China would accommodate with the U.S. overtime.

347 The key issue here is the intermediary role of Hong Kong. According to U.S. trade analysis, only about 20% of Chinese export goods were directly shipped to the U.S., while the remaining 80% passed through via Hong Kong as entrepot trade. However, the U.S. treated those re-exports from Hong Kong as China’s exports to the U.S., leading to about a 50% to 30% overestimation of the trade imbalance against China. As to the U.S. exports to China, the entrepot trade via Hong Kong to China was ignored in U.S. calculation, which led to an underestimation about 75% of real U.S. exports to China. In addition to the issue of entrepot trade, the U.S. has a different method of calculation for its exports/imports compared to other countries. The U.S. calculation of its exports to China did not include the costs of loading the goods to the vessel or aircraft, which led to a 1% underestimation of U.S. exports to China. The U.S. calculated its imports from China included the costs of insurance and transportation to the U.S., leading to a 10% overestimation of its imports from China. U.S. calculations also skew the trade balance with regards to the “rules of origin”—how the good’s country of origin is assigned. The U.S. calculated products from China as all China’s gains, based on WTO’s rules of origin—the product been produced in more than one country is regulated to have the origin in the country where the “last substantial transformation” took place. However, this method of calculation ignores the processing trade from which China only earns a portion of the profit of final products, while other intermediary countries also benefited from China’s export of final products to the U.S. Taken together, these different methods of calculation are responsible for U.S. overestimation about 50% of its trade deficit with China from 1989 to 2000 as Nicholas Lardy suggests. U.S.-China Business Council, “Understanding the US-China Balance of Trade,” http://www.uschina.org/public/wto/uscbc/balanceotrade.html (accessed 3/15/2009); Sarah Y. Tong, “The U.S.-China Trade Imbalance: How Big is it Really?” China: An International Journal , vol. 3, no. 1 (March 2005), pp. 131-154; Information Office of the State Council of PRC, “On Sino-U.S. Trade Balance,” March 1997, http://news.xinhuanet.com/employment/2002-11/18/content_633193.htm (accessed 10/22/2008).

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Figure 4.3 China’s Trade Surplus with the U.S., 1991-2005

140000

120000

100000

80000

60000

40000 millions of US dollars US of millions 20000

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 -20000 Year

Source: Drawn from the Chinese data in Table 4.1.

China’s exports rely heavily on the U.S. market, as figure 4.4 indicates. The ratio of exports to the U.S. in China’s total exports increased from 8.6% in 1991, to 20.7% in

1998, and has been essentially constant to 21.4% in 2005. 348

348 Figures from General Administration of Customs of PRC. Figures of exports to U.S. are cited from Wang Yong, Zhongmei Jingmao Guanxi [The Political Economy of China-US Trade Relations] (Beijing: Zhongguo Shichang Chubanshe, 2007), p. 126. Figures of total exports are from National Bureau of Statistics of China, Zhongguo Maoyi Waijing Tongji Nianjian 2007 [China Trade and External Economic Statistical Yearbook 2007] (Beijing: National Bureau of Statistics of China, 2008), p. 589.

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Figure 4.4 Ratio of Exports to U.S. in China’s Total Exports, 1991-2005

10 Percentage(%) 5

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year

Source: Calculated from data of General Administration of Customs of PRC. Figures of exports to U.S. are cited from Wang Yong, Zhongmei Jingmao Guanxi [The Political Economy of China-US Trade Relations] (Beijing: Zhongguo Shichang Chubanshe, 2007), p. 126. Figures of total exports are from National Bureau of Statistics of China, Zhongguo Maoyi Waijing Tongji Nianjian 2007 [China Trade and External Economic Statistical Yearbook 2007] (Beijing: National Bureau of Statistics of China, 2008), p. 589. China’s growing dependence on the U.S. market has played an indispensible role in

the cost-benefit calculations of the Chinese leadership. Since the 1989 Tiananmen

incident, China has been suspicious of a U.S. political intention of Westernizing,

weakening, and splitting China. However, in the meantime, China has continued to enjoy

a surplus from trading with the U.S. since 1993. In my interviews, Chinese scholars and

analysts suggested that China’s comparative advantages and U.S. openness as a market

economy have contributed to the growing trade imbalance. 349 The Chinese leadership from time to time described the trade relationship between the two nations as “mutually beneficial.” For instance, the first time Jiang Zemin officially employed the term

“win-win” with the U.S. was when commenting on the success of bilateral negotiations regarding China’s WTO accession that were expected to deepen trade relations between

349 Interviews #4, Beijing, June 17, 2008; #2, Beijing, June 16, 2008; #6, Beijing, June 25, 2008.

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the U.S. and China. 350

The other issue that Chinese officials have mentioned regarding U.S.-China economic and trade relations is U.S. investment in China, indicating that the U.S. has taken a positive role in China’s economic development. 351 Figure 4.5 demonstrates the

American share in China’s overall realized foreign direct investment (FDI) and foreign

other investment (FOI). The increase in the U.S. share of investment seemed to

correspond to China’s accommodation since the mid- to late-1990s. However, while

Chinese officials seem to see the FDI “the more, the better,” this trend begins to drop in

2002 as China’s accommodative policy toward the U.S. continues, suggesting that the

role of FDI is less significant than that of trade volume in shaping China’s policy.

Figure 4.5 U.S. Share in China’s Total Realized FDI/FOI, 1991-2006

4 Percentage (%) Percentage

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year

Source: Calculated from data of National Bureau of Statistics of China, Zhongguo Maoyi Waijing

350 Renmin Ribao , November 16, 1999, p. 1. However, Jiang and other Chinese officials have not mention how the benefits should be distributed in this “win-win” situation. Thanks to Prof. Harding for bringing this to my attention. 351 Sun Zhengyu, “Guanyu Zhongmei Maoyi Nicha Wenti de Jidian Sikao” [Some Thoughts on the Issues of Trade Deficit in Sino-U.S. Trading Relations], Guoji Maoyi Wenti , no. 3 (1994), pp. 2-3; Wang Zhiquan, “Gonggu he Fazhan Zhongmei Jingmao Guanxi” [To Consolidate and Develop Sino-U.S. Economic and Trade Relations], Guoji Maoyi , no. 1 (1995), pp. 16-18; Wang Zhiquan, “Shanchong Shuifu, Zonghui Yuolu” [Though Mountains and Waters ahead, There must be a Way out], Guoji Maoyi , no. 7 (1995), pp. 17-19.

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Tongji Nianjian, various years [China Trade and External Economic Statistical Yearbook, various years].

As to the issues that strained the relationship on both sides, the growing trade imbalance seemed to be the major concern. In addition, the U.S. asked for more access to

China’s market, while the MFN became a lever used by Congress and the American public to pressure China for human rights improvement. Further, the poor record of the

Chinese with respect to intellectual property rights protection irritated American producers and manufacturers. China, on the other hand, saw the linkage of trade and human rights issues in the early 1990s as unwelcome intrusions into China’s domestic affairs, viewed the U.S. trade deficit as a result of its own strict export control toward

China, but agreed to provide more access for U.S. businesses in China, and undertook measures to protect intellectual property under U.S. pressure.

Trade Imbalance

According to the statistics of the U.S. Department of Commerce, China has enjoyed a trade surplus from as early as the mid-1980s and China’s policies, such as government subsidies, high tariffs, and limited access to foreign companies, have exacerbated the U.S. trade deficit. However, the Chinese government claims that the trade imbalance was overstated because the U.S. calculated the goods imported from but added value via

Hong Kong into China’s overall export to the U.S. 352 Table 4.1 documents the differences

between the U.S. and Chinese official statistics.

According to Nicholas Lardy, an American expert on China’s economy, the U.S.

352 Jialin Zhang, “Sino-US Trade Issues after the WTO Deal: A Chinese Perspective,” Journal of Contemporary China, vol. 9, no. 24 (2000), pp. 312-313.

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trade deficit with China between 1990 and 1996 was consistently overstated by half. 353

Besides, China attributed the trade deficit to U.S. strict controls on selling high-tech equipment to China. Both sides reached a bilateral market access agreement in 1992, in which China agreed to alleviate tariff and non-tariff trade barriers such as quotas and license requirements, but the implementation of the agreement was still in question. 354

MFN Trading Status

Chapter 3 has demonstrated that trading with China became a highly political issue in the U.S. after the Tiananmen incident. As Julia Chang Bloch notes, the trade issues were complicated by politics in the early 1990s – by the “American practice of linking noncommercial objectives to trade and economic policies,” and by the “Chinese tactic of holding business hostage to political interests” in that China tends to use its domestic market to reward politically amicable partners while punishing those critical of China. 355

This situation was further exacerbated by the Chinese perception of why the U.S.

criticized human rights practice in China now but not in the 1970s when that record was

significantly worse. 356 The U.S. Congress and President Clinton’s attempts to link human

rights issues to China’s MFN status in the early 1990s curtailed China’s expectations for

bilateral trade relations and justified its confrontational policy, as represented in the

“pessimistic views” in the following discussion.

353 Nicholas R. Lardy, “Is China an Effective Foreign Policy Tool?” Background paper prepared for testimony to the Senate Foreign Relations Committee, Subcommittee on East Asian and Pacific Affairs, May 22, 1997. 354 Nicholas R. Lardy, Integrating China into the Global Economy (Washington DC: Brookings Institution Press, 2002), pp. 136-141. 355 Julia Chang Bloch, “Commercial Diplomacy,” in Ezra F. Vogel, ed., Living with China: U.S.-China Relations in the Twenty-first Century (NY: W.W. Norton & Company, 1997), p. 196. 356 Ezra F. Vogel, “Introduction,” in Ezra F. Vogel, ed., Living with China: U.S.-China Relations in the Twenty-first Century (NY: W.W. Norton & Company, 1997), p. 27.

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Intellectual Property Rights

In the bilateral trade agreement of 1979, China and the U.S. agreed to mutual protection of intellectual property rights. In the early 1990s, Chinese piracy of American entertainment products and software aroused concerns from American industries and the public, especially when U.S. trade deficits continued to grow. Thus, the U.S. initiated the

“Special 301” investigations of IPR protection in 1991 and 1994, which threatened punitive sanctions against China. This resulted in a joint Memorandum of Understanding on IPR in January 1992 and a new agreement in 1996 to improve China’s enforcement.

This development seemed to serve both American immediate and Chinese long-term interests. 357 As Julia Chang Bloch notes, under this external pressure, the Chinese

government gradually incorporated Western capitalist concepts such as intellectual

property and ownership into its socialist legal system. 358 Although there have been enforcement problems in various levels of governments in China, the U.S. pressure has had a long-term effect on China’s agreeing to broad protection of patents, copy-rights, and trade secrets that conform to international standards. 359

In the early 1990s, the U.S.-China disagreement over trade centered on the above issues.360 When China and the United States began to accommodate politically since the second half of the 1990s, trade deficit, a freer market, and the appreciation of Chinese

357 Robert S. Ross, “Engagement in U.S. China Policy,” in Alastair Iain Johnston and Robert S. Ross, eds., Engaging China: The Management of an Emerging Power (NY: Routledge, 1999), pp. 186-187. 358 Julia Chang Bloch, “Commercial Diplomacy,” in Ezra F. Vogel, ed., Living with China: U.S.-China Relations in the Twenty-first Century (NY: W.W. Norton & Company, 1997), p. 199. 359 Andrew C. Mertha, The Politics of Piracy: Intellectual Property in Contemporary China (Ithaca, NY: Cornell University, 2005). 360 Wang Yingying and Xu Chingjiang, “Lun Zhongmei Jingmao Moca de Jige Redian Wenti” [On Certain Hot Issues in Sino-U.S. Economic and Trade Relations], Gaige yu Zhanlue, no. 3 (1996), pp. 58-62.

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currency renminbi (RMB) became the key concerns on the U.S. side. 361 And, this disagreement had to a degree delayed China’s accommodation with the U.S. even when the total trade volume continued to increase.

Chinese Perceptions of the Trading Relationship

In China, three different representations of China’s trade relations with the United

States have circulated at different times and amongst different groups. A group of

scholars contends that trade issues have hampered the possible improvements in the

bilateral relations between China and the U.S. This group’s views were mostly seen in the

early to mid-1990s, when China was suspicious of U.S. intent and there was virtually no

mutual trust between the two nations. Another camp of experts holds an optimistic view,

arguing that despite their ups and downs, trade and economic interactions indeed have

helped both sides to stabilize U.S.-China political relations since the late 1970s. In

between these two extremes, Chinese officials see Sino-U.S. trade relations in a

cautiously optimistic way, taking both positive and negative factors into account to

evaluate how trade relations affect China’s foreign policy toward the United States.

A. Pessimistic Views: Politicization and Securitization of Trade Issues

In the aftermath of the 1989 Tiananmen incident, many in China suggested that

U.S.-China economic and trade relations were highly related to their political relations,

but in a negative way. For instance, due to the frictions over political and human rights

361 Wang Chen, “Zhongmei Jingmao Fengyu Jianchen 13 Nian” [13 Years of Hardships in Sino-U.S. Economic and Trade Relations], Caijing Shibao , October 18, 2002, p. A07.

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issues in the early 1990s, many experts upheld a pessimistic view that future U.S.-China economic relations would continue to be bogged down by these issues. 362

Even after the Clinton Administration decided to de-link human rights issues from

China’s MFN status in 1994, many observers still predicted that other issues, such as the

trade surplus favoring China, have the potential to exacerbate overall U.S.-China

relations. Advocates of this view found it likely that even purely economic issues would

be “politicized” and become difficult for both sides to resolve. This pessimism can be

attributed in large part to American electoral politics in which China oftentimes becomes

the scapegoat for U.S. domestic economic downturns.363

“Securitization,” as these pessimists suggest, also characterizes the trade policy of

the United States. When the United States attributes its trade deficit to China’s refusal to

further liberalize its market, these Chinese experts argue that the U.S. rejection of China’s

demand for American hi-tech products for so-called national security concerns is

responsible for the imbalanced trade. 364 And, as many analysts argue, the U.S., with its strategic concerns, employs a relatively restricted commercial policy to prevent China from monopolizing crucial strategic commodities and from degrading U.S. influence

362 Wang Wei, “Zhongmei Jingmao Guanxi Jianba Nuzhang” [Sino-U.S. Economic and Trade Relations with Swords Unsheathed and Bows Drawn], Guoji Jingji Hezuo, no. 2 (1995), p. 1; Zeng Ziyi, “Zhongmei Jingmao Chongtu zhong de Zhengzhi Yinsu” [Political Factors in Sino-U.S. Economic and Trade Conflicts], Xiandai Guoji Guanxi, no. 11 (1998), pp. 22-25. 363 Zhang Aijun, “Yingxiang Zhongmei Hezuo de Xiaoji Yinsu” [Negative Factors in Sino-U.S. Economic and Trade Cooperation], Guoji Jingji Hezuo, no. 10 (2007), pp. 67-72; Wang Xiaobo, “Zhongmei Jingmao Fenzheng yu Beiho de Zhengzhi Luoji” [The Political Logic behind Sino-U.S. Economic and Trade Disputes], Shanghai Zhengquan Bao , August 27, 2007, p. B08; Song Hong, “Guanyu Zhongmei Jingmao Guanxi de Jidian Butong Jiedu” [Different Interpretations on Sino-U.S. Economic and Trade Relations], Guoji Jingji Pinglun, no. 7-8 (2007), pp. 27-28. 364 Liu Jie and Chen Wei, “Zhongmei Jingmao Guanxi zhong de Feijingji Yingsu,” [Non-Economic Factors in Sino-U.S. Economic and Trade Relations], Shijie Jingji Yanjiu, no. 3 (1999), pp. 23-27; Zhang Aijun, “Zhongmei Jingmao Wenti de Zhengzhihua Quxiang” [The Tendency of Politicization of Sino-U.S. Economic and Trade Issues], Zhonggong Jinan Shiwei Dangxiao Xuebao, no. 3 (2007), pp. 100-104.

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internationally. 365 To them, U.S. domestic opposition to the Chinese state-owned

CNOOC’s 366 bid for an American oil explorer, UNOCAL, in 2005, illustrated U.S.

concerns over China’s potential holding of critical strategic resources. Opposition from

U.S. Congress, at last, led to CNOOC’s withdrawal of the bid, which the Chinese

government claimed was an “essentially business” transaction. 367

B. Optimism: Trade Interaction as the Ballast for Sino-U.S. Relations

Optimistic views on Sino-U.S. trade relations can be traced back to as early as the

1972 Shanghai Communiqué and such views have become more salient since the

mid-1990s. Compared to US$5 million in 1971, the trade volume between China and the

U.S. had increased to US$100 million in 1972. Hence, this group of experts contends that

China’s economic reform and the increase of U.S.-China trade volume are highly related

and mutually beneficial. 368

Aside from the above point of view that political rapprochement between the two

sides is the driving force behind their economic interactions, some members of this group

also argue that growing and increasingly deeper economic interactions constitute a

cornerstone in overall U.S.-China bilateral relations. They further assert that the United

States will continue to employ an “economic engagement” policy toward China, which

365 Wu Xinbo, “Zhongmei Jingmao Guanxi de Xingeju ji qi dui Shuangbian Guanxi de Yingxiang” [The New Landscape in Sino-U.S. Economic and Trade Relations and Its Impact on Bilateral Ties], Fudan Xuebao, no. 1 (2007), pp. 1-10. 366 China National Offshore Oil Corporation (CNOOC) is the third largest state-owned oil company in China. 367 Xinhua News Agency, China Daily , July 1, 2005. 368 Huang Renwei, “‘Shanghai Gongbao’ yu Zhongmei Jingmao Guanxi de Fazhan” [“Shanghai Communiqué” and the Development of Sino-U.S. Economic and Trade Relations], Meiguo Yenjiu, no. 2 (1997), pp. 147-150; Chen Baosen, “Shanghai Gongbao yu Zhongmei Jingmao Guanxi”[Shanghai Communiqué and Sino-U.S. Economic and Trade Relations], Renmin Ribao , February 9, 2002, p. 3.

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would benefit both sides and in turn stabilize their political relationship;369 and some of them even suggest that close economic ties even contributes to narrow ideological differences between both sides. For instance, a professor in the University of

International Business and Economics (UIBE) in Beijing and affiliated with the CCP

Central Party School contends that “economic engagement is a crucial part of U.S. China policy, and is intended to serve the U.S. goal of gradually transforming China.” He noted that China has benefited economically from this U.S. policy, leading China to “gradually accept certain points that the U.S. made, such as marketization and even democracy.” 370

Another optimistic argument emphasizes that trading with the U.S. serves China’s own economic interests. A professor in the Peking University specializing in U.S.-China economic and trade relations contends that, “in the early 1990s, the Chinese leadership proposed the idea of ‘market diversification,’ meaning that China should be more engaged with other markets such as Europe and Japan…However, this idea soon faded away because the U.S. market was too big to ignore and because U.S. firms always make fast payments.” 371

China also started to see the U.S. pressure on trade issues as benefiting China’s

further development. As to the U.S. pressure on China’s IPR protection or non-tariff

barriers, the professor in the UIBE contends that, “since the mid-1990s, China began to

see this sort of pressure as not all negative.” Because more and more Chinese enterprises

are investing in research and development (R&D), they need government legal

369 Zhuang Rui, “Dangqian Zhongmei Jingmao Guanxi de Liangda Beilun” [Two Paradoxes in the Current Sino-U.S. Economic and Trade Relations], Shijie Jingji yu Zhengzhi Luntan , no. 1 (2003), pp. 26-29, and 34; Liu Jianfei, “Fazhan Zhongmei Jingmao Guanxi de Zhanlue Yiyi” [Strategic Significance of the Development of Sino-U.S. Economic and Trade Relations], Zhongguo Dangzheng Ganbu Luntan , no. 7 (2002), pp. 43-44, and 39. 370 Interview #2, Beijing, June 16, 2008. 371 Interview #6, Beijing, June 25, 2008.

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protections on their trade secrets. 372 The Minister of Foreign Trade and Economic

Cooperation Wu Yi once commented that China’s protection on intellectual property can

further help China to attract foreign investment on advanced technologies. 373

Furthermore, more and more Chinese manufacturers complain about the cut-throat

competition, in which manufacturers need to lower their prices to almost non-profit levels

to compete with one another in the market. Therefore, “they expect to see whether the

government can put an end to this price war with regulations under the pressure of U.S.

anti-dumping measures.” 374

When reviewing the period of the early 1990s, many Chinese scholars and analysts contend that the closer economic relationship has contributed to stabilizing troublesome political relations. 375 A senior professor at the Tsinghua University even contends that the

trade relationship between the U.S. and China “has replaced the role of the Soviet Union

in the 1980s in that it provides a common ground for China and the U.S. to cooperate.” 376

In other words, this optimistic view suggests that a closer economic relationship can

serve as the ballast for an overall Sino-U.S. relationship. 377

C. Official Tone: Cautious Optimism

Chinese officials present a pragmatic view between these two extremes. While the

372 Interview #2, Beijing, June 16, 2008. 373 Wu Yi, “Woguo Duiwai Jingji Maoyi de Gaige yu Fazheng” [Reform and Development of China’s Foreign Trade and Economic Cooperation], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 10 (1997), pp. 2-10. 374 Interview #2, Beijing, June 16, 2008. 375 Interviews #1, Beijing, June 12, 2008; #4, Beijing, June 17, 2008; #7, Beijing, June 30, 2008; #10, Beijing, July 4, 2008. 376 Interview #7, Beijing, June 30, 2008. 377 Chen Baosen, “Toushi Zhongmei Jingmao Hezuo” [A Perspective on Sino-U.S. Economic and Trade Cooperation], Xinhua Net , February 16, 2004; Wu Xinbo, “Zhongmei Jingmao Guanxi de Xingeju ji qi dui Shuangbian Guanxi de Yingxiang” [The New Landscape in Sino-U.S. Economic and Trade Relations and Its Impact on Bilateral Ties], Fudan Xuebao , no. 1 (2007), pp. 1-10.

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bilateral relations between the U.S. and China suffered from political quarrels in the early

1990s, the Chinese officials worked to explain why trade deficit issues had been overstated. Meanwhile, if they perceived U.S. pressure as unreasonable, especially over human rights issues, they were not afraid to resort to retaliation, at least in rhetoric. When

China’s MFN status was in question in 1994, Chinese official Wu Yi once declared, the outcome of “sanctions…will be the outbreak of a trade war.” 378

President Clinton’s de-linkage of human rights and China’s MFN status in May

1994 cleared up the cloudy sky and helped both sides to consolidate pragmatically their

economic and trade relations. As Director General of the Department of American and

Oceania Affairs in MOFTEC Wang Zhiquan once noted that it is “in accordance with the

interests of the people in both countries to pursue economic and trade relations.” 379

In the second half of the 1990s, the Chinese government had become more optimistic about the prospects of Sino-U.S. economic and trade relations, given that both sides decided to politically accommodate each other after the 1996 Taiwan Strait crisis as shown in the 1997 and 1998 bilateral summit meetings. As stated above, Chinese officials such as Wu Yi often expressed their positive views on Sino-U.S. economic and trade relations. A MOFTEC official stated that “there will always be a solution” for trade frictions between China and U.S. 380 Jiang Zemin also expressed China’s “expectation to work closely with the U.S. to deepen trade relations between the two nations.” 381

378 Sun Zhengyu, “Guanyu Zhongmei Maoyi Nicha Wenti de Jidian Sikao” [Some Thoughts on the Issues of Trade Deficit in Sino-U.S. Trading Relations], Guoji Maoyi Wenti , no. 3 (1994), pp. 2-3, and 56; Michael Richardson, “China Threatens Retaliation in U.S. Trade,” International Herald Tribune , May 13, 1994. 379 Wang Zhiquan, “Gonggu he Fazhan Zhongmei Jingmao Guanxi” [To Consolidate and Develop Sino-U.S. Economic and Trade Relations], Guoji Maoyi , no. 1 (1995), pp. 16-18; Wang Zhiquan, “Shanchong Shuifu, Zonghui Yuolu” [Though Mountains and Waters ahead, There must be a Way out], Guoji Maoyi , no. 7 (1995), pp. 17-19. 380 Wang Zhiquan, “Xunqiu Gengjia Shengqi Bobo de Hezuo” [To Seek further Cooperation], Guoji Maoyi , no. 5 (1998), pp. 13-15. 381 Xinhua , November 13, 2001.

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But it is also worth noting that they are aware of the setbacks possible in this supposedly win-win situation. Such issues include the appreciation of Renminbi, which has been a heated one since 2002; and also the IPR issue, with the U.S. elevating China to the Priority Watch List in 2005 and demanding stricter provincial level law enforcement in China. More importantly, while Chinese officials have noted the increasing returns from complementarities and the division of labor between China and the U.S. in their trading relations, many have begun not only to pursue an equal footing with their

American counterparts but also to stress the importance of a stabilized political relationship with the U.S. To these analysts, China has become the 4 th largest market for

U.S. exports since 2006 and the increase in Chinese holdings of U.S. assets have contributed to a more symmetric relationship between the two nations, in which the U.S. has less economic leverage over China over non-economic issues. 382 The negotiations on

China’s WTO membership between the two countries were a case in point to demonstrate

how expectations on future trade and political relations shaped China’s cost-benefit

calculations.

WTO Membership: How Expectation Affects China’s Decision

The case of China’s accession to the WTO deserves more discussion on the

relationship between political and trade issues. China had been pursuing to join the

GATT/WTO since mid-1980s, but it was Jiang Zemin’s political decision to resume

382 Wu Xinbo, “Zhongmei Jingmao Guanxi de Xingeju ji qi dui Shuangbian Guanxi de Yingxiang” [The New Landscape in Sino-U.S. Economic and Trade Relations and Its Impact on Bilateral Ties], Fudan Xuebao , no. 1 (2007), pp. 7-9; Li Changjiu, “Zhongmei Jingmao yu Zhengzhi Guanxi de Fazhan Xincheng Xianming Duizhao” [A Stark Contrast between Sino-U.S. Economic and Political Relations], Xiandai Guoji Guanxi , no. 6 (2001), pp. 17-20.

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negotiations with the U.S. that finalized China’s accession in 1999. This case is important because for the Chinese leadership, accession into the WTO was expected to serve

China’s long-term economic interest under the trend of economic globalization, and to improve the management of bilateral relations with the U.S.

Integrating into the international economy to achieve national wealth and power has long been China’s national strategy that can be dated back to the late 1970s. 383

Chinese officials perceived the GATT/WTO admission serves its national interests for both political and economic reasons. First, for political purpose, China as a permanent member in the UN Security Council was in pursuit of a status as an economic power, and desired to be admitted into the WTO ahead of Taiwan, who obtained the “observer” status in the GATT in 1992. Second, given China’s status as the world’s 11 th largest trading country in 1997, it was necessary for China to further integrate into the international economy. Third, China could benefit from the rule-based WTO, especially from the liberalization of world market and on principles such as non-discrimination. These developments were good for China’s competitive industries such as textile exports.

Fourth, in the world market economy governed by rules, China could play a greater role in shaping international trading rules to protect national interest through the WTO multilateral negotiation and dispute resolution mechanism. Also, China hoped that the

WTO could help to prevent negative “spill-over” effect of trade friction on its political relations with other countries, especially with the U.S. Fifth, the WTO admission could deepen China’s domestic economic reforms in SOEs and other regulations. Sixth, China’s

383 Harry Harding, “China, the WTO, and the United States,” Testimony before the U.S. Trade Deficit Review Commission, Washington, D.C., February 24, 2000; Margret M. Pearson, “China’s Integration into the International Trade and Investment Regimes,” in Elizabeth Economy and Michel Oksenberg, eds., China Joins the World: Progress and Prospects (New York: Council on Foreign Relations Press, 1999), pp. 161-205.

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WTO accession could be a showcase of its willingness to further integrate into the world, serving to alleviate the China Threat theory in certain countries. Last but not least, since the early 1990s, Chinese leaders also hoped that accession to WTO would lead to the elimination of the annual U.S. congressional review of its MFN status, or that China could resort to a countermeasure in the WTO to review the U.S. discrimination against

China. 384 As to the negative consequences of the WTO membership, Chinese officials noted the challenges to China’s uncompetitive industries and opaque trade regulations posed by trade liberalization.

However, China’s accession to the WTO was a tortuous process. Margret Pearson aptly notes that although China maintained its course on integrating into the world trade system, China became reluctant in the early to mid-1990s – during the period I define as confrontation – because of the realization that China could not be admitted as a founding member in the WTO by 1995. 385 China was willing to resort to retaliation while facing

U.S. threat of punitive sanctions incurred by frictions over intellectual property rights protection and market access. In addition, China as a socialist market economy was under relatively stringent scrutiny by Western countries who desired to use China’s terms as a template for other Eastern European countries. 386 But China insisted on being designated

as a developing country to gradually phase out tariff and non-tariff barriers, and the

difference soured its negotiations with the U.S. In 1995 to 1996, the Taiwan issue further

384 Wu Yi, “Woguo Duiwai Jingji Maoyi de Gaige yu Fazheng” [Reform and Development of China’s Foreign Trade and Economic Cooperation], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 10 (1997), pp. 2-10; Long Yongtu, “Guanyu Zhongguo ‘Rushi’ de Renshi Wenti” [Understanding China’s ‘Accession to WTO’], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 18 (1999), pp. 16-37. 385 Margret M. Pearson, “China’s Integration into the International Trade and Investment Regimes,” in Elizabeth Economy and Michel Oksenberg, eds., China Joins the World: Progress and Prospects (New York: Council on Foreign Relations Press, 1999), pp. 167-175. 386 Nicholas R. Lardy, Integrating China into the Global Economy (Washington DC: Brookings Institution Press, 2002), p. 63.

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strained the political will of Clinton and Jiang to continue bilateral negotiations on WTO.

Under these circumstances, the Chinese leadership slowed down the process and began to change their cost-benefit calculations, especially when China was granted the unconditional MFN status by several major trading partners without the obligations of formal WTO membership. 387

As Margret Pearson notes, it was only in late 1996 that both U.S. and China

regained the momentum to resume WTO negotiations. 388 This was in part due to China’s willingness to continue benefiting from foreign trade and investment. For instance, in the

1995 APEC meeting, Jiang Zemin made a commitment that China would reduce tariffs on 4,000 import items by 30% or more to deepen its trade liberalization. 389 And, a

relatively stable political relationship between the U.S. and China in the aftermath of the

1996 Taiwan crisis also contributed to the resumption of negotiations. Jiang Zemin made

another commitment of tariff reduction during his visit to the U.S. in October 1997 to

boost China’s image as a responsible economic power, wherein President Clinton also

agreed to seek China’s accession to WTO.

China became more enthusiastic in bilateral negotiations with the U.S. on the WTO

admission in 1998, with the expectation that both sides could close a deal prior to the

start of Seattle round of WTO talks on trade liberalization the following year. President

Clinton also wrote several personal letters to Jiang Zemin to express his hope to conclude

387 Long Yongtu, “Guanyu Zhongguo Jiaru Shijie Maoyi Zuzhi de Wenti” [Questions Regarding China’s Accession to WTO], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 11 (1998), p. 13; Margret M. Pearson, “China’s Integration into the International Trade and Investment Regimes,” in Elizabeth Economy and Michel Oksenberg, eds., China Joins the World: Progress and Prospects (New York: Council on Foreign Relations Press, 1999), pp. 181-184. 388 Margret M. Pearson, “The Case of China’s Accession to GATT/WTO,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 341-343. 389 Zhong Zhicheng, Weile Shijie geng Meihao: Jiang Zemin Chufang Jishi [For a Better World: A Record of Jiang Zemin’s Overseas Visits] (Beijing: Xinhua Shudian, 2006), pp. 144-148.

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the deal with China. As a result, Chinese Premier Zhu Rongji visited the U.S. in April

1999 with a package that intended to satisfy his American counterparts. However,

President Clinton – under the suggestion from his advisors that Congress would vote against the deal if Clinton could not receive the support or at least understandings from

U.S. labor unions and industries – decided to retreat from Zhu’s offer. 390 It became even more difficult for both sides to close the deal after the U.S. accidentally bombed the

Chinese embassy in Belgrade in May 1999, an incident that aroused strong anti-American sentiments in China. A former official in the Clinton administration concludes that Zhu

Rongji’s April visit to U.S. was a “big failure” for both sides, and the embassy bombing accident in May “made it more difficult to deal with China.” 391

China perceived that the negotiation with the U.S. on the WTO admission was highly politicized. After President Clinton’s refusal to Zhu’s proposal in April 1999, the

U.S. Trade Representative office (USTR), post on their websites the areas where Zhu

Rongji made concessions in his proposal to make China’s offer a fait accompli. This

revelation put China, especially Zhu Rongji, in a difficult situation, and Jiang Zemin

distanced himself from Zhu who was accused of “selling out” China’s interests.

However, in order to amend bilateral relations with China as well as to consider his

own legacies, President Clinton personally persuaded Jiang to conclude the WTO deal at

the APEC summit meeting in September 1999, in addition to his efforts in sending

several American envoys to China to improve relations in the summer. 392

In October, as a favorable response to Clinton’s personal persuasion, Jiang Zemin

390 Joseph Fewsmith, “China and the WTO: The Politics behind the Agreement,” National Bureau of Asian Research Report, November 1999. 391 Interview #25, Washington D.C., March 13, 2009. 392 Interview #25, Washington D.C., March 13, 2009.

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restated that China should be admitted as a developing country if both sides were to pin down the deal. On November 15, 1999, both sides reached an agreement on China’s accession to WTO, which Jiang deemed as “win-win” to overall U.S.-China relations. 393

In the agreement, China committed to lower tariffs on key agricultural products from

31% to 14% by 2004, to cut auto tariffs from 80 to 100% to 25% by 2006, and to decrease tariffs on most industrial products from an average of 24.6% to an average of

9.4% by 2005. China also agreed to eliminate all tariffs on semiconductors, computers, and telecommunications equipment, and to further open its market to U.S. services sector such as banking and insurance. 394

Although conservatives within the CCP led by Li Peng criticized Zhu Rongji’s concession to the U.S., American China watchers such as Margret Pearson believed the final deal was much like the one Zhu originally proposed in April 1999. Moreover, Susan

Shirk contends that the overall final agreement “could be said to be as good as the original one”. 395 Why then did China agree to such concessions in November? China’s

expectation of future political and trade relations with the U.S. plays a salient role in

explaining this question.

First, China’s asymmetric dependence on the American market makes it very costly

for China to be involved in trade conflict with the U.S. As Deputy Minister of MOFTEC

Long Yongtu suggests, given China’s dependence on the American market has been more

393 Renmin Ribao , November 16, 1999, p. 1. 394 “The Bilateral Agreement and the United States,” The China Business Review (January-February 2000), pp. 20-27. 395 Margret M. Pearson, “The Case of China’s Accession to GATT/WTO,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), p. 345; Susan Shirk, China: Fragile Superpower (NY: Oxford University Press, 2007), p. 306 fn. 51.

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than 15% but China’s share in U.S. total exports was less than 2%, it would be irrational for China to wage a trade war against the U.S. and to lose the largest share of its own export market. 396

Second, such unilateral concessions as tariff reduction were not inherently harmful to China’s short-term economic interests, and the WTO admission was expected to serve

China’s long-term economic interests. Chinese officials saw the tariff reduction as a means to demonstrate China’s determination to further engage in the process of economic globalization and to attract foreign investment. 397 In other words, it was the “admission fee” that China needed to pay to integrate with the world. 398 Besides, tariff cuts helped to

decrease the incentives of smuggling to avoid high tariffs. 399 As Nicholas Lardy suggests,

when the Chinese custom service initiated a crackdown in 1998, the imports of

high-tariffs items increased accordingly and contributed to China’s tariff revenue in the

following years. 400 Yang Donghui, Secretary-General of the China National Federation of Textile Industries, expressed an opinion that WTO membership has a long-run advantage to China, because “the [country] will then be able to enjoy stable multilateral preferential trade policies in a rules-based market.” 401

Third, with Clinton’s persuasion, it was clearly Jiang Zemin’s political decision to

396 Long Yongtu, “Guanyu Zhongguo ‘Rushi’ de Renshi Wenti” [Understanding China’s ‘Accession to WTO’], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 18 (1999), p. 22. 397 Long Yongtu, “Guanyu Zhongguo ‘Rushi’ de Renshi Wenti” [Understanding China’s ‘Accession to WTO’], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 18 (1999), p. 26. 398 Gu Yuqing and Wu Yimin, “Rongna Shijie Rongru Shijie – Guowuyuan Fazhan Yenjiu Zhongxin Zhang Xiaoji Boshi tan Zhongguo Rushi Qianjing” [Accommodate the World and Integrate with the World – Interview with Dr. Zhang Xiaoji of the State Council’s Development Research Center], Renmin Ribao , November 25, 1999, p. 7. 399 Long Yongtu, “Guanyu Zhongguo Jiaru Shijie Maoyi Zuzhi de Wenti” [Questions Regarding China’s Accession to WTO], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 11 (1998), pp. 15-16. 400 Nicholas R. Lardy, Integrating China into the Global Economy (Washington DC: Brookings Institution Press, 2002), pp. 37-38. 401 People’s Daily , December 27, 1999.

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finalize the deal in November 1999. Chinese officials noted that China’s WTO admission had become a political issue after the 1989 Tiananmen incident, and they hoped that the accession would put an end to the annual review of its MFN status in U.S. Congress. 402

Dale Copeland contends that the Chinese leadership understood the necessity to make

such unilateral concessions to reach the agreement with the Clinton administration, in

order to secure China’s MFN/PNTR trading status with Congress in the following year.

This in turn would produce a stable trading environment for China and its major trading

partner, the United States. 403 The U.S. government formally granted China normal trade status in the end of 2001, after China was legally admitted into the WTO.

To cope with the politicized WTO admission, China changed its negotiating strategy to prioritize the deal with the U.S., an important indication that the Chinese leadership has taken strategic and political considerations as more fundamental than trade relationship. As Long Yongtu once noted, while seeking the membership of GATT, China forged a strategy to deal with relatively smaller trading partners as Australia and New

Zealand, then with Western European countries and Japan, and finally with the U.S. But, as Presidents Clinton and Jiang agreed to facilitate negotiations of China’s WTO membership in the 1997 summit meeting, Jiang became more involved into the process and prioritized the negotiations with the U.S. A strategist at CICIR notes that in the aftermath of the embassy bombing incident, “it was Jiang’s decision to deal first with the

U.S. in late 1999, otherwise China would have talked to Japan and other European

402 Long Yongtu, “Guanyu Zhongguo ‘Rushi’ de Renshi Wenti” [Understanding China’s ‘Accession to WTO’], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 18 (1999), p. 36. 403 Dale Copeland, “Economic Interdependence and the Future of U.S.-Chinese Relations,” in G. John Ikenberry and Michael Mastanduno, eds., International Relations Theory and the Asia-Pacific (NY: Columbia University Press, 2003), pp. 338-340.

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countries first.” 404 Chinese scholar Wang Yong of the Peking University points out that the Chinese leadership needed to make separate side-payments to domestic economic interest groups in order to garner their support for the agreement. 405 For instance, the

Chinese government committed a special rate of compensation in the WTO deal for the sector of agriculture to remain its competitiveness. 406 This all demonstrated the Chinese leadership’s political determination to push the deal through at the last minute.

Managing Bilateral Trade Issues

With the acknowledgement that economic globalization is an irreversible trend,

China gradually integrated with and benefited from the world economy through international trade and other regimes. As the trade volume grew, China’s asymmetric dependence on and economic returns from the U.S. market have contributed to its willingness to stabilize the relationship with the U.S. However, in the meantime, if the

Chinese leadership perceived U.S. pressure as unreasonable, especially over human rights

404 Interview #9, Beijing, July 2, 2008. 405 It remains unclear to the public what kind of side-payments that Zhu had granted to disadvantaged sectors of the Chinese economy. Wang Yong, a Chinese specialist on political economy, however, speculates the disadvantaged sectors that could be influenced by China’s accession into WTO would gain compensation, including agriculture, telecommunications, semi-conductor, and state-owned enterprises, etc., without specifying what side-payments were. Margret Pearson also points out that there seemed to be “lobbying” occurring to the central leadership from various branches of the Chinese government during the negotiation, yet still she doesn’t provide specific cases in her research. Wang Yong, “China’s Stake in WTO Accession: The Internal Decision-Making Process,” in Heike Holbig and Robert Ash, eds., China’s Accession to the World Trade Organization: National and International Perspectives (London: Routledge Curzon Press, 2002), pp. 34-35; Margret M. Pearson, “The Case of China’s Accession to GATT/WTO,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 351-352. 406 In Accordance with WTO regulations, China negotiated with other trading partners in order to apply an 8.5% tariff rate as compensation to protect its own agricultural product. When faced with certain situation as a fall in price of imported produce or an increase in the volume of imported products, the Chinese government can apply this special 8.5% tariff rate to imported agricultural products while the usual rate as 5%. “Rushihou Nongchanpin Butie 8.5%”, China.org.com, December 5, 2001, http://big5.china.com.cn/chinese/PI-c/83337.htm (accessed 4/30/2009).

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issues, they were not afraid to respond more confrontationally as in the early 1990s.

China’s accession to the WTO and the growing trade volume with the U.S. is not a guarantee to a smooth trade relationship. The WTO dispute resolution mechanism, in

China’s hope, could help to “de-politicize” such bilateral trade frictions and to normalize trade relations with the U.S. As Long Yongtu suggests, in the absence of suitable dispute

resolution mechanisms, any purely trade friction such as the IPR issues, if deteriorated,

could threaten bilateral high-level exchanges and cost the overall U.S.-China relations. 407

Therefore, China expected to have a stable relationship as other U.S. trading partners do, in that bilateral political relations are relatively free from trade frictions through appropriate and effective management.

When trade frictions have continued to arise between China and the U.S. in recent years – over trade imbalance and China’s monetary policies, among other things – the

Chinese leadership has made further efforts in institutionalizing bilateral mechanisms to cope with the differences. For instance, the cabinet-level China-U.S. Joint Committee on

Commerce and Trade (JCCT) was established in 1983, where Chinese Minster of

Commerce and U.S. Secretary of Commerce worked together to manage bilateral major trade concerns and to cope with China’s implementation of WTO-related issues in recent years. Since 2004, the Chinese leadership elevated it to a higher jurisdictional level and designated Vice Premier Wu Yi to head the delegation. 408 A senior professor in the

Renmin University of China notes that “the elevation of JCCT to the vice premier level indicated China’s resolve to improve its trade relationship with the U.S.” 409 To China, the

407 Long Yongtu, “Guanyu Zhongguo ‘Rushi’ de Renshi Wenti” [Understanding China’s ‘Accession to WTO’], Zhonggong Zhongyang Dangxiao Baogaoxuan , no. 18 (1999), p. 24. 408 Office of the United State Trade Representative, “The U.S.-China JCCT: Outcomes on Major U.S. Trade Concerns,” April 21, 2004. 409 Interview #8, Beijing, July 1, 2008.

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JCCT also yielded some benefits when both sides agreed to cooperate under the U.S. export control policy, with the hope to enhance bilateral high technology and strategic trade. 410

Another effort devoted to improving U.S.-China trade relations came from the U.S. government, when President Bush accepted Secretary of the Treasury Henry Paulson’s proposal to deepen economic engagement with China via the venue of Strategic

Economic Dialogue (SED) in 2006. 411 China’s President Hu Jintao agreed to the U.S.

proposal, 412 and this high-level mechanism led by Chinese Vice Premier (Wu Yi and then

her successor Wang Qishan) and by U.S. Secretary of the Treasury (Henry Paulson) aimed to coping with immediate trade concerns as well as to expanding the bilateral relationship over the long run. Issues discussed in the SED covered China’s financial sector reform, overall environment for investment, monetary policies such as the appreciation of RMB, and other long term issues on which both sides sought cooperation, including energy, environmental protection, and sustainable development.

In general, Chinese scholars and analysts welcomed the establishment of the SED, with praise for the U.S. employment of the term “strategic.” 413 They were satisfied that

the SED aimed to forge overall long-term relations between the U.S. and China, but some

of them were concerned about how the U.S. weighed the immediate and short-term goals

against long-term objectives. For instance, when Paulson noted China’s appreciation of

RMB against the dollar by 20% on a nominal basis and 23% on a real basis from July

410 U.S. Department of Commerce, “Department of Commerce Announces Signing of ‘Guidelines for U.S.-China High Technology and Strategic Trade Development,” December 11, 2007. 411 Henry M. Paulson, “A Strategic Economic Engagement: Strengthening U.S.-Chinese Ties,” Foreign Affairs, vol. 87, no. 5 (September/October 2008), pp. 59-77; Interview #8, Beijing, July 1, 2008. 412 Interview #8, Beijing, July 1, 2008. 413 Interviews #8, Beijing, July 1, 2008; #5, Beijing, June 20, 2008; #7, Beijing, June 30, 2008; #10, Beijing, July 4, 2008; #19, Beijing, October 14, 2008.

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2005 to mid-2008 as a benchmark of the SED, a Chinese strategist at CICIR contended that “the reevaluation of RMB shouldn’t be an issue in the SED…The SED should be focusing on long-term benefits for both sides, such as how to manage the negative effects of globalization.” 414 In the same vein, a senior professor at the Renmin University of

China maintains that another venue between the Bush administration and China, the

Senior Dialogue, played a more important role in China’s calculations, “because the

Senior Dialogue aimed to nurture mutual trust for long-term cooperation and to decrease

unnecessary suspicion against each other.” 415

In a nutshell, China tended to prioritize political and strategic relations with the U.S.

Although the impact of trade relations on political relations may not be a linear development, 416 most of my interviewees agreed that trade relations played a crucial role in stabilizing over all U.S.-China relations in the early 1990s. 417 And, they expect that trade frictions could complicate but not deteriorate overall U.S.-China relations in the future would. A senior professor at the China Foreign Affairs University concludes that

“after all, in China’s eyes, the trade relationship needs to serve the overall U.S.-China relations.” 418 Wang Yong of the Peking University aptly notes that overall U.S.-China

security and political relations have a greater impact on their trade relations – as long as a

strategic and security common ground exists between China and the U.S. Even when

trade frictions occur, the U.S. government usually would fend off the pressure from its

414 Henry M. Paulson, “A Strategic Economic Engagement: Strengthening U.S.-Chinese Ties,” Foreign Affairs, vol. 87, no. 5 (September/October 2008), p. 67; interview #5, June 20, 2008. 415 Interview #8, Beijing, July 1, 2008. 416 Noted by a scholar at CASS, interview #21, Beijing, October 16, 2008. 417 Interviews #1, Beijing, June 12, 2008; #2, Beijing, June 16, 2008; #4, Beijing, June 17, 2008; #7, Beijing, June 30, 2008; #8, Beijing, July 1, 2008; #10, Beijing, July 4, 2008; #12, Beijing, July 9, 2008; #18, Beijing, October 12, 2008; #19, Beijing, October 14, 2008. 418 Interview #10, Beijing, July 4, 2008.

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domestic interest groups to stabilize the overall security and political relations with

China. 419

Conclusion

Trade is one of the most salient common interests between China and the U.S, as indicated in the Shanghai Communiqué when both sides tried to access the other’s market.

The promotion of trade liberalization and elimination of trade barriers in the world market seem to be another point of cooperation for both sides. The case of U.S.-China relations proves the liberal prediction that trade could lead to peace to be problematic. At the same time, offensive realism is insufficient for explaining China’s accommodation to the U.S. in the post-Cold War era, because both sides should be focusing on how to increase relative gains vis-à-vis each other, which renders accommodation difficult, if not impossible.

Dale Copeland’s theory of trade expectation has provided an alternative to two of the dominant schools in IR scholarship. Trade expectation theory has improved our understanding of state behavior and helped us further ascertain the conditions under which two trading partners would resort to war to solve their disputes. In his own analyses, Copeland is right in that we need to take economic issues into account while analyzing why states would go to war if the decision makers foresee the future possibilities to be worse than the present scenario. Although the current literature in IR scholarship concentrates on how trading relationship affects the possibilities of peace or

419 Wang Yong, Zhongmei Jingmao Guanxi [The Political Economy of China-US Trade Relations] (Beijing: Zhongguo Shichang Chubanshe, 2007), pp. 403-404.

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war, those works do provide explanations of the role that trade plays to forge cooperation among states. They are therefore important in understanding China’s cooperating and accommodative behavior toward the U.S.

When China perceived economic interdependence and globalization as an

irreversible trend, its leadership decided to continue the national strategy of integrating

with the world economy. Besides, China’s asymmetric dependence on the U.S. market

(and also the gap of military capabilities vis-à-vis the U.S. as chapter 2 shows) increases

the cost if the Chinese leadership chose a confrontational rather than accommodative

approach toward the U.S. This case also suggests that the increasing return from trading

with each other has helped stabilize overall Sino-U.S. relations. With the common goal of

expanding economic interests and with proper management, trade issues are less likely to

be a part of the problem in overall U.S.-China relations.

It should be further noted that China tends to put priority on political concerns and security rather than purely trade relations, with the bottom line of preventing trade frictions from deteriorating overall U.S.-China relations. Jiang Zemin’s political decision to reach the agreement with the U.S. on WTO membership, and China’s employment of bilateral mechanisms to manage trade frictions deserve our attention. While economic interdependence to a certain degree served as the ballast in the U.S.-China relations in the early 1990s, it might not be so when the Chinese leadership felt vital interests were under challenge. National sovereignty issues usually catch leadership’s immediate attention and the political power reconfiguration may shape the outcome as seen in the 1995-96 Taiwan

Strait crisis.

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Chapter 5 Domestic Political Context: Is anyone still a Hardliner?

Chapter 2 of this research explores the international systemic explanations of

China’s policy toward the U.S. after the Cold War. While offensive realists like John

Mearsheimer argue that states should balance against stronger ones due to the scarcity of security in the international system, defensive realists such as Kenneth Waltz suggest that the distribution of capabilities in the international system in fact constrains state behavior and that balancing is very costly to those states that only try to maximizing their security rather than power. However, others contend that state foreign policy is not preordained by the international system. 420 As in the camp of defensive realism as Waltz, Stephen Walt contends that the perception of threat is crucial to explaining state balancing behavior. As

Chapter 3 demonstrates, cooperative reciprocity can reduce threat perceptions between two antagonist nations, leading to cooperation in their future iterated interactions. In addition to the constraints explored by the defensive realist camp, Chapter 4 explores how economic benefits affect state behavior, as when China’s accommodation toward the

U.S. has been increasing along with its expectation of benefit from trading with the U.S.

In addition to these explanations from the international structure and bilateral interactions, a group of realists attributes state foreign policy to domestic politics.

Neo-classical realist Randall Schweller argues that states, because of domestic factors,

420 Gideon Rose, “Neoclassical Realism and Theories of Foreign Policy,” World Politics , vol. 51, no. 1 (October 1998), pp. 157-165; Jeffrey Taliaferro, “Security Seeking under Anarchy: Defensive Realism Revisited,” International Security , vol. 25, no. 3 (Winter 2000/01), pp. 128-161.

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assess and adapt to structural-systemic changes differently. 421 State behavior can be based upon domestic factors such as whether the leaders can make prudent judgment and are capable of implementing their policy. And, these analyses of neo-classical realism demonstrate how structural realists overemphasize the effects of the international system on state behavior and overlook one of the basic assumptions of realism—elites’ eagerness to remain in power. 422 Thomas Christensen provides domestic mobilization theory to explain state confrontational behavior.423 To Christensen, it is this goal of surviving internationally and domestically that made the Truman administration and the Maoist regime “useful adversaries.” Even in the case of Soviet accommodation of the U.S.,

Gorbachev was using “new thinking” and economic reforms to cope with severe domestic problems, while political survival remained the driving force behind this change in policy. Unfortunately, his overconfidence and the Soviet dysfunctional domestic

421 Randall Schweller, Unanswered Threats: Political Constraints on the Balance of Power (Princeton: Princeton University Press, 2006), p. 10; and Schweller, “The Progressiveness of Neoclassical Realism,” in Colin Elman and Miriam Elman, eds., Progress in International Relations Theories (Cambridge, MA: MIT Press, 2003), pp. 311-347. 422 Schweller employs state-level variables, including elite consensus, regime vulnerability, and elite and social cohesion, to explain states’ balancing or underbalancing, and concludes that it is the lack of elite consensus and social cohesion that leads to state’s underbalancing behavior. He concludes that when crisis occurs, political elites have to deal with the internal-external nexus in terms of stability. Under this circumstance, incoherent and fragmented states are unwilling and unable to balance against threats because elites view the domestic risks to be too high, and they are unable to mobilize the required resources from a divided society. In other words, balancing is simply too costly to implement. See Randall Schweller, Unanswered Threats: Political Constraints on the Balance of Power . Another line of reasoning—domestic mobilization to strengthen leaders’ political base – is seen at Thomas Christensen, Useful Adversaries: Grand Strategy, Domestic Mobilization, and Sino-American Conflict, 1947-1958 (Princeton: Princeton University Press, 1996). 423 Christensen investigates the strategic thinking of leaders and argues that the enmity between U.S. and China during the early Cold War years was first driven by shifting distributions of power in the international system, and then by their own domestic policy priorities. Although in the immediate aftermath of WWII many people in the U.S. favored a normalized relationship with communist China, the need to mobilize the domestic population for long-term confrontation with the looming Soviet threat motivated the Truman administration to describe the Maoist regime as a threat. On the Chinese side, U.S. also somewhat served as a straw man for rising Soviet hegemony. Both governments across the Pacific acted rationally given their larger strategic objectives and adopted confrontation as the suitable policy. Thomas Christensen, Useful Adversaries: Grand Strategy, Domestic Mobilization, and Sino-American Conflict, 1947-1958 (Princeton: Princeton University Press, 1996).

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institutions failed the reforms and brought about the demise of the Soviet Union. 424

In recent years, scholars and analysts in the West and China alike have tended to trace China’s international behavior to domestic roots, particularly in the Chinese literature. For instance, a professor in the Party History Institute of the CCP Central

Committee, Zhang Baijia, continues to maintain that China’s international behavior is a reflection of the growth of strength and change of thinking on the domestic front. 425

When the Chinese leadership frequently expresses their conviction that a stable international environment is necessary for its priorities—economic development, among other things—it is worth noting that the CCP’s, especially its top leaders’, desire for political survival plays a significant role in China’s policy toward the U.S. 426 Following

Zhang’s logic, in the first decade of normalized diplomatic relations with the U.S. following 1979, China enjoyed strategic protection and economic aid from the U.S., while wary of being tactically exploited or politically polluted by the U.S. 427 The CCP’s

424 See William Wohlforth, The Elusive Balance: Power and Perception during the Cold War (Ithaca, NY: Cornell University Press, 1993). 425 Zhang Baijia, “An Outline History of China’s Foreign Policy in Evolution during the Period of Reform and Expansion of Internaitonal Ties (1992-2002),” Far Eastern Affai s, vol. 31, no. 4 (October-December 2003), pp. 36-48; Zhang Baijia, “Renshi Shijie, Renshi Ziwo” [Know the World, and Know Ourselves], Shijie Zhishi, no. 24 (1998), p. 11; Zhang Baijia, “Gaibian Ziji, Yingxiang Shijie” [Change Ourselves, and Influence the World], Zhongguo Shehui Kexue , no. 1 (January 2002), pp. 4-19; Zhang Baijia, “Jiushi Niandai de Zhongguo Neizheng yu Waijiao” [China’s Domestic Politics and Foreign Relations in the 1990s], Zhonggong Dangshi Yanjiu , no. 6 (2001), pp. 29-34. 426 Many scholars in the West point out the CCP holds economic development to be the most important source of legitimacy to continue the party’s rule. If the two goals collide, they believe that party survival would prevail and the leaders would be willing to sacrifice economic development under the banner of “domestic stability.” Fei-Ling Wang, “Beijing’s Incentive Structure: The Pursuit of Preservation, Prosperity, and Power,” in Yong Deng and Fei-Ling Wang, eds., China Rising: Power and Motivation in Chinese Foreign Policy (Lanham, MD: Roman & Littlefield, 2005), pp. 19-49. Robert Sutter provides another more recent attempt to refer to domestic factors as explanations for China’s international behavior while treating regime survival as the paramount goal of the Chinese leadership. Robert G. Sutter, Chinese Foreign Relations: Power and Policy since the Cold War (Lanham, MD: Rowman & Littlefield Publishing Group, Inc., 2008). 427 Harry Harding, “China’s American Dilemma,” Annals of the American Academy of Political and Social Science 519 (January 1992), pp. 12-25, and Harry Harding, “China’s Cooperative Behavior,” in Thomas Robinson and David Shambaugh, eds., Chinese Foreign Policy: Theory and Practice (NY: Oxford University Press, 1994), pp. 376-382.

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pursuit of political preservation was evident in the leadership’s choice to violently conclude the 1989 Tiananmen incident. For the early 1990s, when offensive realists argue that the end of Cold War sufficiently justified China’s confrontation with a dominant U.S., they ignore that the fear of “peaceful evolution” from the West was the real concern of the Chinese leadership. This fear of domestic instability and the conservatives’ suspicion of Western influence prevented Deng Xiaoping’s hand-picked and reform-minded successor, Jiang Zemin, from consolidating his political power within the Chinese leadership and accommodating U.S. 428 The issue-linkage of bilateral trade with human

rights issues in the early 1990s made the U.S. the “useful adversary” to justify China’s

confrontational policy.

It was Deng’s deep commitment to economic development expressed in his 1992

Southern Tour Speech, coupled with the military’s endorsement that trumped

conservative proposals within the Party and restored economic development as the

priority for the CCP’s continuing rule. Jiang gradually assumed control over the army

from Deng, secured his own power, and began to shift from confrontational policies to

accommodative ones when dealing with the U.S.

With regard to the current studies of Chinese foreign policy, many scholars have

noticed the diffusion of the power of policy-making in the Chinese leadership and have

shared the view that the decision-making process is more institutionalized in process and

less personal and idiosyncratic in structure than it was during the Mao and Deng

periods.429 With more players engaged, it would be more difficult for the leaders to

428 Xiaoming Huang, “Managing Fluctuations in U.S.-China Relations: World Politics, National Priorities, and Policy Leadership,” Asian Survey , vol. 40, no. 2 (March/April 2000), p. 289. 429 David Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001).

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generate necessary consensus over certain issues and to manage bureaucratic interests, especially after the military representatives joined the Foreign Affairs Leading Small

Group (FALSG) of the CCP Politburo—the highest foreign policy decision-making body of China—since the late-1980s. 430 With regard to China’s policy toward the U.S., it has been a salient task for top leaders Jiang Zemin and subsequently Hu Jintao to cope with conservatives in the Politburo Standing Committee (PBSC) and the military who oftentimes advocate hawkish initiatives vis-à-vis the U.S.

My research basically adopts the defensive realist view that focuses on the international system, bilateral interactions, and Copeland’s trade expectation theory, to explain China’s gradual shift to accommodation. However, given China’s decision-making process as discussed above, the dynamics between the reform-minded top leaders and the conservatives and military plays an indispensible role in understanding China’s policy towards the U.S.

Thus, this chapter aims to answer the question: “Was there dissensus on how to cope with the U.S. within the leadership?” When Chinese analysts such as Zhang Baijia contend that accommodating with the U.S. has long been China’s goal, they cannot explain why accommodation had not occurred in the immediate aftermath of the Cold

War. To improve our understanding of China’s accommodation toward the U.S., this chapter will identify the dissent within the leadership that hinders the top leaders’ decision to accommodate with the U.S. and the way the top leaders dealt with these dissenting opinions from the conservative and PLA. I will employ three crises between

China and the U.S. after the Cold War as the background.

430 Lu Ning, The Dynamics of Foreign-Policy Decisionmaking in China (Boulder, CO: Westview Press, 1997).

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Political Survival as an Explanation

Neo-classical realists demonstrate that while structural realists as Mearsheimer and

Waltz overemphasize the effect of system on state behavior, they overlook one of the basic assumptions of realism—the elites’ eagerness to remain power. 431 In this chapter,

the “elite” refers to the individual top leaders, especially Jiang Zemin. As Susan Shirk

suggests, most political leaders are short-sighted: they care more about their own political

survival than about the overall stability of the socialist system. 432 Therefore, what Jiang

Zemin cared most is his own power base and the need to secure his reform-oriented faction and defeat those conservative opponents within the Politburo. While taking the

CCP leadership as a whole, as Fei-ling Wang suggests, economic development and social stability in the form of elite and societal consensus are the means to ensure the CCP’s monopoly of political power. 433

The goal of economic development seems to be a contributing factor that can legitimate the top leaders’ choice to accommodate the U.S. As Cheng Li suggests, unlike

Mao and Deng who enjoyed personal authority from charisma and revolutionary experiences, Jiang and his technocratic colleagues had to “seek and consolidate their

431 Waltz’s rebuttal is that his theory only regards the international system, and does not to explain specific state behavior or predict a specific foreign policy. However, in this 1997 piece, he almost abandons the capability of “prediction”—one of his own criteria (the other two include description and explanation)—as to judge a theory in his groundbreaking 1979 work, stating that “success in explanation, not predicting, is the ultimate criterion of good theory.” This self-righteous statement makes me think that Waltzian realism is more parsimonious than its proponents have thought, and may not be very useful in terms of problem-solving, another prevalent standard to judge good IR theories nowadays. 432 Susan Shirk, “The Domestic Roots of China’s Post-Tiananmen Foreign Policy,” International Review (Winter 1990/91), p. 33. 433 Fei-Ling Wang, “Beijing’s Incentive Structure: The Pursuit of Preservation, Prosperity, and Power,” in Yong Deng and Fei-Ling Wang, eds., China Rising: Power and Motivation in Chinese Foreign Policy (Lanham, MD: Roman & Littlefield, 2005), pp. 19-49.

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legitimacy through economic success.” 434 Based upon the assumption that a peaceful environment was a necessity for economic development and to gain the economic resources the U.S. could provide, it is understandable that accommodation with the U.S. would be the best choice for the Chinese leadership. I therefore focus on how Jiang

Zemin’s power consolidation as the core of the leadership gradually led to China’s accommodation with the U.S. after the Cold War.

As Robert Ross points out, the end of the Cold War drove some analysts in America to emphasize domestic foundations of China policy because perceived U.S. strength produces more options, and thus more debate. This is also, though to a lesser degree, evident in China’s policy toward the U.S., and conservative Chinese elites took it as a political instrument in power struggles to accuse the opponents for being “too soft” to the

American “hegemony.” 435 Susan Shirk echoes Ross’s view, maintaining that “[a]s elite

factions contend for power, they use foreign policy to attract supporters by demonstrating

the strength of their faction.” 436 For instance, China decided to prioritize the relationship with the Soviet Union in the post-Tiananmen period when that with the U.S. was at the lowest ebb since the early 1970s and when the CCP conservatives were highly critical of

Gorbachev and perestroika. This decision, Susan Shirk suggests, signaled a power shift in the CCP leadership; it had shifted to the conservatives as Li Peng, Yao Yilin, and Yang

Shangkun, and away from Deng Xiaoping and the reformists who had constantly put

434 Cheng Li, “Jiang Zemin’s Successors: The Rise of the Fourth Generation of Leaders in the PRC,” The China Quarterly , no. 161 (2000), p. 37. 435 Robert S. Ross, “The Strategic and Bilateral Context of Policy-Making in China and the United States: Why Domestic Factors Matter,” in Robert S. Ross, ed., After the Cold War: Domestic Factors and U.S.-China Relations (Armonk, NY: M.E. Sharpe, Inc., 1998), pp.3-39. 436 Susan Shirk, “The Domestic Roots of China’s Post-Tiananmen Foreign Policy,” International Review (Winter 1990/91), p. 33.

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normalization with the U.S. before that with the Soviet Union. 437

According to this domestic context, it was evident that a policy of accommodation with the U.S. is controversial and under challenge from the conservatives from time to time, mostly due to the ideological and political differences that delegitimize economic benefits China enjoys from the bilateral relations. The following analysis is based upon the assumption that the top leader needs to generate consensus to defeat challenges from the conservative faction within the PBSC and to accommodate the U.S.

As shown in the early 1990s, Deng Xiaoping’s guideline of reform and opening was under contestation, and so were China’s relations with the U.S. The 1996 U.S.-China confrontation over Taiwan made Chinese technocratic leaders generate the consensus to realize the military weakness of China. Political survival is the main concern of the top leaders such as Deng and Jiang, and they achieved this ultimate goal through mechanisms such as domestic political coalition building within the PBSC or international sources of

legitimization.

Legitimacy from “bonding” with other world leaders can also strengthen a leader’s

political base at home. In his analysis on how others react to U.S. influence, Stephen Walt

suggests that some leaders choose accommodation over opposition to U.S. power in the

hope that they can build personal “bonds” with U.S. leaders to achieve favored

international outcomes and strengthen their own political legitimacy at home. 438 This reasoning properly explained Deng’s cooperative inclination toward the U.S. in the 1980s in exchange for the latter’s participating in China’s economic development. Stabilizing

437 Susan Shirk, “The Domestic Roots of China’s Post-Tiananmen Foreign Policy,” International Review (Winter 1990/91), p. 33. 438 Stephen M. Walt, Taming American Power: The Global Response to U.S. Primacy (NY: WW Norton & Company, 2005), pp. 180-217.

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relations with the U.S. as a political credential also contributed to Jiang’s inclination to accommodation in the late 1990s. When Jiang was under severe criticism within the Party for his futile peace initiative with Taiwan and his failure to block Taiwanese President

Lee Teng-hui’s visit to the U.S. in 1995, summit meetings with President Clinton helped

Jiang to regain support domestically and China then agreed to resume certain high-level exchanges with the U.S. President Clinton’s announcement that the U.S. did not support

Taiwan independence (“Three Noes”), seemed to legitimize Jiang’s and the CCP’s rule internationally after the Tiananmen incident.

During the period of isolation in the early 1990s, it was more convenient for Jiang to unite the Party under the banner of stability and to seek to counter Western influence, which echoed Christensen’s theory. However, as Jiang gradually consolidated his military power with Deng’s help, he also satisfied the military with what they wanted to keep them in his coalition. Jiang continued to be active on foreign relations and took over the chairmanship of FALSG after Li Peng’s relocation to the National People’s Congress

(NPC) in 1998; Jiang’s associates in government branches assisted Jiang on many issues

(as the accession to WTO) and contributed to the consolidation of Jiang’s power base.

During his tenure, Jiang continued to prioritize the relationship with the U.S. 439

In the following sections, I explain why and how to use the case of three crises between China and the U.S.—the 1995-96 Taiwan Strait Crisis, the 1999 Chinese embassy bombing incident, and the 2001 EP-3 incident—to demonstrate how the Chinese

439 A senior professor of the Renmin University of China and consultant to the Ministry of Foreign Affairs told me the anecdote: “President Jiang’s daily schedule always starts with issues regarding the U.S. After managing relations with U.S., then he would ask about the situation in Japan, Europe, and other neighboring countries in late afternoon. And at last, he would be informed the news from developing countries before going to bed.” Interview #8, Beijing, July 1, 2008.

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leadership, especially Jiang Zemin, utilized these opportunities to cope with the dissenting views within the leadership and to adopt accommodation with the U.S.

Crisis as a Catalyst for Policy Shift

In China, as in many other countries, “foreign policy is the extension of China’s domestic policies.” 440 The pursuit of strength and wealth has long been China’s goal,

especially evident in Deng Xiaoping’s reform and opening policy that has focused on the

economic system since 1978. In the immediate aftermath of normalization, Deng

emphasized the importance of U.S. participation in China’s development. 441 When commenting on his official visit to the U.S., Deng stated that one of his tasks was to

“understand American people, to understand your (American) life, and to understand your (American) experiences on construction, and to learn about everything useful to us

(China).” 442

After a power consolidation, as David Bachman and others contend, China’s new top leaders tend to put forth a “general line” or a guiding principle that addresses major political needs in a relatively effective way. 443 Deng’s reform and opening up has become

the “general line” or “guideline” for Chinese foreign policy, which explicitly points out

440 “Qian Qichen on the World Situation,” Beijing Review , vol. 33, no. 3 (January 15-21, 1990), p. 16. 441 Gong Li, “Gaige Kaifang yu Zhongmei Guanxi Fazheng de Neicai Dongli” [Reform and Opening up Policy and Internal Motives of Sino-U.S. Relations], Xin Yuanjian (November 2008), p. 18. 442 Gong Li, “Gaige Kaifang yu Zhongmei Guanxi Fazheng de Neicai Dongli” [Reform and Opening up Policy and Internal Motives of Sino-U.S. Relations], Xin Yuanjian (November 2008), p. 18. 443 David Bachman, “Succession Politics and China’s Future,” Journal of International Affairs , vol. 49, no. 2 (Winter 1996), p. 375; Guoli Liu, “Leadership Transition and Chinese Foreign Policy,” Journal of Chinese Political Science , vol. 8, no. 1&2 (Fall 2003), pp. 101-117; H. Lyman Miller and Liu Xiaohong, “The Foreign Policy Outlook of China’s ‘Third Generation’ Elite,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 123-150.

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that the task of Chinese foreign policy is “to grasp the opportunity to serve the growing

[needs of] reform and the construction and modernization of socialism…China’s policy toward the U.S. is to serve the greater purpose of China’s economic development.” 444

Bachman and Gouli Liu both reach the conclusion that as leadership transition has become more institutionalized since the 1990s, political succession more often than not results in continuity rather than change or departure in the area of Chinese foreign policy. 445 Leadership transitions from Deng to Jiang, and from Jiang to Hu seemed to confirm this observation. 446 It should be noted that this statement does not necessarily exclude changes in other issue areas, where successors may differ from predecessors over the priorities of domestic issues. For instance, Hu Jintao downplayed the elitist orientation in Jiang’s “Three Represents,” and turned to focus on “the interests of the vast majority of the Chinese people” in the formula.447

As when Deng Xiaoping endeavored to preserve his reform policy while working to assure continuity through his selected successors, however, changes have occurred when there have been strong external and internal pressures on the leadership. 448

444 Gong Li, “Gaige Kaifang yu Zhongmei Guanxi Fazheng de Neicai Dongli” [Reform and Opening up Policy and Internal Motives of Sino-U.S. Relations], Xin Yuanjian (November 2008), p. 23. 445 David Bachman, “Succession Politics and China’s Future,” Journal of International Affairs , vol. 49, no. 2 (Winter 1996), pp. 370-389; Guoli Liu, “Leadership Transition and Chinese Foreign Policy,” Journal of Chinese Political Science , vol. 8, no. 1&2 (Fall 2003), pp. 101-117; Zhiyue Bo, “Political Succession and Elite Politics in Twenty-First Century China: Toward a Perspective of ‘Power Balancing’,” Issues & Studies , vol. 41, no. 1 (March 2005), pp. 162-189. Of course, there is the chance that the new leaders would add new themes as their imprint on foreign policy as Jiang did. H. Lyman Miller and Liu Xiaohong, “The Foreign Policy Outlook of China’s ‘Third Generation’ Elite,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 143-145. 446 Interview #5, Beijing, June 20, 2008; Guoli Liu, “Leadership Transition and Chinese Foreign Policy,” Journal of Chinese Political Science , vol. 8, no. 1&2 (Fall 2003), pp. 101-117. 447 Bruce J. Dickson, “Beijing’s Ambivalent Reformers,” Current History , vol. 103, no. 674 (September 2004), pp. 249-255. 448 Carol Lee Hamrin, “Elite Politics and the Development of China’s Foreign Relations,” in Thomas W. Robinson and David Shambaugh, eds., Chinese Foreign Policy: Theory and Practice (NY: Oxford University Press, 1994), p. 106.

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China’s changing perceptions of the U.S. and the policy debate within the leadership immediately following the 1989 Tiananmen incident were a case in point. As Carol Lee

Hamrin suggests, the occurrence of crisis was the potent causal factor for the shift in

Chinese international behavior—“to discover the origins of significant change, the best approach then may be to explore [those episodes] when domestic and foreign dynamics converge in forcing change in the national adaptation process in order to reconstitute an equilibrium or balance among demands.” 449 This statement resonates with the traditional

Chinese fear that internal chaos ( neiyiu ) and external calamity ( waihuan ) tend to come

together and exacerbate each other. H. Lyman Miller and Liu Xiaohong echoed this view,

arguing that policy debates during crises have had a direct impact on China foreign policy

after the Cold War. 450

Therefore, times of crisis play an important role in Chinese foreign policy change, because the top leader is required to cope with major external and internal dynamics at the same time in order to legitimize his rule and to survive politically.

The Tiananmen incident was a crisis to the Chinese leadership. As Shirk points out, the student demonstrations reminded the reformist Deng Xiaoping of street politics in the

Cultural Revolution, resulting in Deng’s joint decision with the conservatives to resort to repression. 451 After the Tiananmen incident, Western economic sanctions and China’s

subsequent diplomatic isolation produced feelings of insecurity among the Chinese

leadership, which then justified the call by conservatives’ (such as Chen Yun) for a return

449 Carol Lee Hamrin, “Elite Politics and the Development of China’s Foreign Relations,” in Thomas W. Robinson and David Shambaugh, eds., Chinese Foreign Policy: Theory and Practice (NY: Oxford University Press, 1994), pp. 94, 107. 450 H. Lyman Miller and Liu Xiaohong, “The Foreign Policy Outlook of China’s ‘Third Generation’ Elite,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 139-143. 451 Susan Shirk, “The Domestic Roots of China’s Post-Tiananmen Foreign Policy,” International Review (Winter 1990/91), p. 32.

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to orthodoxy and closer control over the economy and society. 452 The Tiananmen

incident prolonged the controversies over the degree to which China should be involved

with the U.S. for economic benefits or disengage to be free from political pollution.

The incident inevitably increased the dissenting views on China’s policy toward the

U.S. and resulted in Deng’s compromise with the conservatives that allowed for the

adaptation of a relatively confrontational policy towards U.S. Although Deng at the time

was seen as a strong leader who should have been capable of compelling consensus

within the leadership, his concern over U.S. intentions in regard to the idea of “peaceful

evolution” prevailed over his pro-U.S. stance and forced out any accommodating options

toward the U.S.

On the other hand, subsequent crises between the two nations (over Taiwan, the

Belgrade embassy bombing, and the EP-3 incident) provided the greater chance for elite

consensus and strengthened Jiang Zemin’s power base vis-à-vis his opponents, because

even the hardliners—civilian conservative and military—realized the difficulty to

completely break up with the U.S. These developments together led to Jiang’s

accommodation to the U.S. My own interviews also suggest that in practice, the timing of

these crises served as a catalyst to improve China’s relations with the U.S. in the

post-Cold War era. 453

Institutional factors also played a role. While many scholars point out that it is still very difficult to conclusively depict Chinese foreign policy-making processes, 454 they

452 Carol Lee Hamrin, “Elite Politics and the Development of China’s Foreign Relations,” in Thomas W. Robinson and David Shambaugh, eds., Chinese Foreign Policy: Theory and Practice (NY: Oxford University Press, 1994), pp. 105-106. 453 Interviews #5, Beijing, June 20, 2008; #8, Beijing, July 1, 2008; #9, Beijing, July 2, 2008; #10, Beijing, July 4, 2008. 454 Robert Sutter, Chinese Foreign Relations: Power and Policy since the Cold War (Lanham, MD: Roman & Littlefield, 2008).

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agree that the management of foreign affairs in China has long been reserved to the paramount leader or the leading circle of one or two members the paramount leader personally designates. 455 From 1992 to 1995, the circle consisted of Deng Xiaoping,

Chen Yun, Jiang Zemin, and Yang Shangkun. After Yang Shangkun’s retirement in 1992

and Chen’s death in 1995, the small group consisted of, Jiang, Li Peng, and an ailing

Deng Xiaoping 456 . Since 1999, Jiang and Zhu Rongji together established several important foreign and defense policies. Under this model, the paramount leader and the leadership nuclear circle enjoys ultimate foreign policy decision-making power in China with their authority to “veto or ratify decisions [made] by the Politiburo.” 457 The Taiwan

Affairs Leading Small Group (TALSG, led by the chair of the CMC) and Foreign Affairs

Leading Small Group (FALSG, usually headed by the premier) exist to assist the leaders with the formulation of foreign policy by providing information, consultation, and policy coordination.

An interesting counterfactual question is: would there have been any difference if the conservative Li Peng had succeeded Deng? One of my Chinese interlocutors agreed with me that there would have been a difference and that a more confrontational U.S. policy would have become possible. 458 He suggested a possible deterioration in relations with the U.S. if Li had led the Party and the state, arguing “that U.S. dislike of Li Peng, would have led to forging unfavorable policies toward China,” and, “as a result, China

455 Lu Ning, “The Central Leadership , Supraministry Coordinating Bodies, State Council Ministries, and Party Departments,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 39-60; Susan Shirk, China: Fragile Superpower (NY: Oxford University Press, 2007), p. 77. 456 Deng Passed away in February 1997. 457 Lu Ning, “The Central Leadership , Supraministry Coordinating Bodies, State Council Ministries, and Party Departments,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), p. 41. 458 Interview #2, Beijing, June 16, 2008.

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would inevitably react with hawkish policies.” 459 I agree with this individual-level

analysis, and as another interviewee suggests, Jiang was personally interested in and

tended to prioritize the relationship with the U.S., which has led to a more

accommodative U.S. policy. 460

However, as the case on the Taiwan Strait crisis shows, institutional arrangements also make a difference, and U.S. behavior would not necessarily be responsible for souring the relationship with Li’s China. When Li was in charge of FALSG, it did put pressure on Jiang’s policy choices.

Besides, although they might have shared the agreement that economic development or long-term prosperity of China, compared to reform-minded leaders such as Deng and

Jiang, Li’s preference for planned economy had led him and other conservatives to be more suspicious of the Western conceptions of market economy and of the capitalist U.S.

In other words, even when Jiang and Li agreed to pursue China’s prosperity, they differed on how to achieve this goal; and as a consequence, they would have differed on the role that the U.S. could provide and the policies that follow. 461 Li’s inclination toward planned

economy rather than opening up may have decreased the importance of the U.S. if Li

needed to consolidate his political power, adding fuel to the already estranged bilateral

relations after the Tiananmen. However, as the following sections will show, the

international structural constraints shaped the perceptions of both reformists and

conservatives within the Chinese leadership and thus their policy choices.

459 Interview #2, Beijing, June 16, 2008 460 See Footnote 439, interview #8, Beijing, July 1, 2008. 461 Ma Licheng, Jiaofeng Sanshinian [Crossed Swords for 30 Years] (Nanjing: Jiangsu Renmin Chubanshe, 2008).

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The 1995-96 Taiwan Strait Crisis

The announcement of the Chinese President Jiang Zemin’s Eight-Point Proposal in

1995 and the subsequent developments were a watershed in terms of the cross-strait relations between China and Taiwan. 462 The Chinese leadership turned to re-emphasize the role of military measures in coping with Taiwan, as they had during in the 1950s to

1970s.463

Jiang’s Eight-Point Proposal was an indication of his consolidation of political power following the Fourth Plenum of the Fourteenth Party Congress, wherein Jiang arguably assumed Deng’s power of decision-making at the “core” of the leadership—he was then able to convene the meetings of Political Bureau and PBSC, and to make final decision on “the most important issues” such as foreign and Taiwan policies. 464

Institutionally, Jiang Zemin and his cronies had grasped the power over Taiwan policy decision-making. Jiang replaced Yang Shangkun to head the Taiwan Affairs

462 Jiang Zemin, “Continue to Promote the Reunification of the Motherland, January 30, 1995,” http:// www.china-un.org. These points include insisting on "one China" and peaceful reunification, agreeing on the development of non-governmental economic and cultural ties by Taiwan with other countries, proceeding negotiations to reach on officially ending the state of hostility between the two sides, Chinese should not fight fellow Chinese, making great efforts to expand economic exchanges and cooperation between the two sides, people on both sides should inherit and carry forward the fine traditions of the Chinese culture, Beijing will fully respect the Taiwanese people’s lifestyle and their wish to be the masters of our country, and leaders of the Taiwan authorities are welcome to pay visits in appropriate capacities. The proposal was issued during the Chinese New Year, a highly symbolic occasion of the Chinese tradition, and undoubtedly filled with nationalist discourse. In addition, while expressing China’s refusal to renounce the use of force, also of note was Jiang’s proposal that Chinese should not fight fellow Chinese. The meaning of this argument is at least twofold: as long as the people on Taiwan identify themselves as the Chinese people, peaceful reunification is the optimal outcome; however, if the people on the island no loner regard themselves as Chinese, the reunification through force will be inevitable. 463 You Ji, “Changing Leadership Consensus: The Domestic Context of War Games,” in Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis (NY: Routledge, 1999), pp. 77-98. 464 Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), p. 201; Michael D. Swaine, “Chinese Decisionmaking Regarding Taiwan, 1979-2000,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform (Stanford: Standford University Press, 2001), p. 293.

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Leading Small Group (TALSG) in 1993. 465 The TALSG was streamlined from twelve to

six members. Qian Qichen served as the TALSG deputy head while concurrently serving

as the deputy of FALSG and the roster was rounded out with Wang Daohan, Chairman of

ARATS and Jiang’s political mentor and advisor , and Xiong Guangkai, the head of

Second Department of the General Staff Department of the CMC. 466 The composition of

TALSG was relatively more congenial to Jiang than the Politburo was, where he needed to address the challenges posed by his chief opponent Qiao Shi. 467 This is the institutional background when Jiang initiated his Eight-point Proposal in 1995

In TALSG, Jiang Zemin and Qian Qichen regarded the external environment as relatively favorable to further co-opt Taiwanese authorities. First, Taiwan’s leader Lee

Teng-hui had gradually consolidated his own power base by defeating other contenders

(such as Yu Guo-hua, Li Huan, and Hau Pei-tsun) within the Kuomintang (KMT) in 1993, leading Jiang to qualify Lee as a negotiating counterpart for ultimate unification. Second, economic ties between China and Taiwan and the expected spill-over effect led reform-oriented CCP senior officials such as Zhu Rongji, Li Lanqing, and Wu Yi to suggest further steps for political integration. Third, a relatively relaxed international environment due to relatively stabilized Sino-U.S. relations and Clinton’s delinkage of human rights and trade issues, emboldened Jiang to cope with Taiwan by peaceful means.

Lastly, the Chinese leadership was suspicious of Lee’s inclinations towards independence,

465 You Ji, “Taiwan in the Political Calculations of the Chinese Leadership,” The China Journal , no. 36 (July 1996), p. 121. 466 Other two members are Wang Zhaoguo (the head of the CCP United Front Work Department and the head of the CCP/State Council Taiwan Affairs Office) and Jia Chunwang (the head of the Ministry of State Security). 467 Yun-han Chu, “Making Sense of Beijing’s Policy Toward Taiwan: The Prospect of Cross-Strait Relations during the Jiang Zemin Era,” in Hung-mao Tien and Yun-han Chu, eds., China under Jiang Zemin (Boulder, CO: Lynne Rienner Publishers, Inc., 2000), pp. 195-200.

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but attempted to co-opt Lee back to unification with a peaceful overture. 468

China was, however, under certain external pressure. First of all, the “China threat” theory had spread since 1991, validating Beijing’s permanent suspicion that an intervention of foreign powers would be the most formidable barrier to reunifying

Taiwan. 469 In addition, Taiwan’s democratization, pragmatic diplomacy, and bid for U.N. membership all undermined mutual trust across the Strait in terms of national unification and anti-Taiwan independence. This situation was exacerbated by Lee Teng-hui’s statement of the sorrow of being a Taiwanese. 470 Under these circumstances, nationalist rhetoric was widely spread in China in the mid-1990s.471 As some analysts point out, the leaders of the Chinese third generation are all nationalists. 472 For instance, Li Ruihuan was perceived by analysts of Chinese politics as an advocate for domestic economic reform, but also as a hard-line nationalist when it came to Taiwan.

Lee’s private visit to the United States in June 1995 offset his own previous positive response to Jiang’s proposal. 473 The U.S. decision on Lee’s trip also caught China by

468 Bruce Gilley, Tiger on the Brink: Jiang Zemin and China’s New Elite (Berkeley: University of California Press, 1998), pp. 248-251; Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 201-204; Susan Shirk, China: Fragile Superpower (NY: Oxford University Press, 2007), p. 188. 469 Suisheng Zhao, “Chinese Nationalism and Beijing’s Taiwan Policy: A China Threat?” Issues and Studies , vol. 36, no. 1 (January/February 2000), p. 85. 470 Lee made the statement during a conversation with Japanese writer Ryotaro Shima in 1994, suggesting it was fortunate to be Japanese. Sheng Lijun, China’s Dilemma: The Taiwan Issue (Singapore: Institute of Southeast Asian Studies, 2001), pp. 97-98. Also in Taiwan Affairs Office of the State Council, PRC, Zhongguo Taiwan Wenti [China’s Taiwan Question] (Beijing: Jiuzhou Cubanshe, 1998), pp. 87-90. 471 Suisheng Zhao, “Chinese Intellectuals' Quest for National Greatness and Nationalistic Writing in the 1990s,” pp. 730-731. 472 You Ji, “Making Sense of War Games in the Taiwan Strait;” Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 200-201. 473 On April 8, 1995, Lee Teng-hui formally responded with a “six-point proposal” to: “pursue China ’s unification based on the reality that the two sides are governed respectively by two governments; strengthen bilateral exchanges based on Chinese culture; enhance trade and economic relations to develop a mutually beneficial and complementary relationship; ensure that both sides join international organizations on an equal footing and that leaders on both sides meet in a natural setting; adhere to the principle of resolving all disputes by peaceful means; and jointly safeguard prosperity and promote democracy in Hong

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surprise, as the Clinton administration had just a month before promised the Chinese leadership that the U.S. would not grant Lee’s visa. Thus, according to Qian Qichen, the

Chinese leadership felt “shocked and angry” by the lack of trustworthiness with the U.S.: “U.S. permission for Lee Teng-hui’s visit…seriously damaged the political foundation of Sino-U.S. relations, catering to Lee Teng-hui’s whim of creating ‘two Chinas’ or ‘one China, one Taiwan,’ and adding fuel to the bluster of Taiwan authorities and international anti-China forces.” 474

Lee’s speech at Cornell University, including such terms as “the Republic of China on Taiwan” and “popular sovereignty”, further worsened Jiang Zemin and Qian Qichen’s status within the leadership. 475 The Chinese leadership perceived Clinton’s decision as a

diplomatic provocation that needed to be answered with a powerful response to compel

the U.S. to “really realize the seriousness of the issue.” 476 China called off several planned military-to-military contacts as an immediate response in late May 1995.477

Within the Chinese leadership, Jiang was under pressure from the conservative elders and military. While You Ji points out that the 1995-96 Taiwan crisis served as a focal point to unite reformers and conservatives, other evidence shows that the Chinese leaders differed on the means China should employ. 478 According to Bruce Gilley, Qiao Shi

Kong and Macau.” 474 Qian Qichen, Waijiao Shiji [Ten Stories of A Diplomat] (Beijing: Shijie Zhishi Chubanshe, 2003), pp. 306-307. 475 Bruce Gilley, Tiger on the Brink: Jiang Zemin and China’s New Elite (Berkeley: University of California Press, 1998), p. 251. 476 Qian Qichen, Waijiao Shiji [Ten Stories of A Diplomat] (Beijing: Shijie Zhishi Chubanshe, 2003), p. 308; Niu Jun, “Chinese Decision Making in Three Military Actions Across the Taiwan Strait,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), p. 307. 477 China’s Defense Minister Chi Haotian called off his trip to the United States, and the Air Force Commander Yu Zhenwu cut short his trip and returned to China. 478 You Ji, “Changing Leadership Consensus: The Domestic Context of War Games,” in Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis (NY: Routledge, 1999), pp. 77-98. Michael Swaine also shares the view that there is no deep division regarding Taiwan within the

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initiated a propaganda assault on Lee Teng-hui through official mouthpieces Xinhua and

Renmin Ribao in July and August 1995, while Jiang preferred to limit China’s reaction to political responses that held “peaceful means as the norm”—recalling the Chinese

Ambassador to the United States, for example. 479

The PLA, however, maintained a hard line towards Taiwan and challenged Jiang’s

Eight-Point Proposal, which was supposed to receive the endorsement from the Politburo.

Many analysts agree that the military employed events like Lee Teng-hui’s U.S. visit for its own institutional benefit, including the request to increase budget and make personnel appointments and promotions. 480 Chinese Defense Minister Chi Haotian delivered a speech in late 1994 in which he wished the military to “step up combat readiness [while] preparing to deal with armed intervention by the United States and its allies over the

Taiwan issue.” 481 Senior military officials such as Liu Huaqing and Zhang Zhen, both

Chinese top leadership. Instead, Swaine contends, both Chinese civilian and military leaders were aware of the possibility that a violent political power struggle may end up with social unrest, which would conclude the rule of the Party as a whole. Michael D. Swaine, “Chinese Decisionmaking Regarding Taiwan, 1979-2000,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform (Stanford: Standford University Press, 2001), pp. 289-336. However, the other group of analysts maintain that there was a split within the leadership, in which the military was critical of Jiang’s goodwill overtures to Taiwan and tried to use specific events to constrain Jiang’s options and to promote a though policy on Taiwan: Robert L. Suettinger, Beyond Tiananmen: The Politics of U.S.-China Relations, 1989-2000 (Washington, DC: Brookings Institution Press, 2003), pp. 200-263; John Garver, Face Off: China, the United States, and Taiwan’s Democratization (Seattle: University of Washington Press, 1997); Tai Ming Cheung, “The Influence of the Gun: China’s Central Military Commission and Its Relationship with the Military, Party, and State Decision-Making Systems,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform (Stanford: Standford University Press, 2001), 61-90; Willy Wo-Lap Lam, The Era of Jiang Zemin (NY: Prentice Hall, 1999); Ellis Joffe, “The People’s Liberation Army and Politics: After the Fifteenth Party Congress,” in Hung-mao Tien and Yun-han Chu, eds., China under Jiang Zemin (Boulder, CO: Lynne Rienner Publishers, Inc., 2000), pp. 99-114; and Jianhai Bi, “The Role of the Military in the PRC Taiwan Policymaking: A Case Study of the Taiwan Strait Crisis of 1995-1996,” Journal of Contemporary China vol. 11, no. 32 (2002), pp. 539-572. 479 Bruce Gilley, Tiger on the Brink: Jiang Zemin and China’s New Elite (Berkeley: University of California Press, 1998), pp. 252-253. 480 Jianhai Bi, “The Role of the Military in the PRC Taiwan Policymaking: A Case Study of the Taiwan Strait Crisis of 1995-1996,” Journal of Contemporary China , vol. 11, no. 32 (2002), pp. 567-572; John W. Garver , “The PLA as an Interest Group in Chinese Foreign Policy,” in C. Dennison Lane, Mark Weisenbloom, and Dimon Liu, eds., Chinese Military Modernization (Washington, DC: AEI Press, 1996), pp. 246-281; Susan Shirk, China: Fragile Superpower (NY: Oxford University Press, 2007), pp. 190-195. 481 Jianhai Bi, “The Role of the Military in the PRC Taiwan Policymaking: A Case Study of the Taiwan

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serving as Vice-Chairmen of the Central Military Commission (CMC), challenged Jiang

Zemin’s warm overtures to Taiwan and to the U.S. in May and June 1995. 482 Chinese

General Xiong Guangkai, then Deputy Chief of General Staff Department (GSD) of PLA

and of Military Intelligence who was believed to be close to Jiang Zemin on military and

Taiwan issues, expressed the view that the Chinese leadership was ready to sacrifice

millions of people in a nuclear war with the U.S. This deterrence strategy was based on

the assumption that the U.S. “cares more about L.A. than about Taipei.” 483

Contenders for political succession of Deng Xiaoping within the Chinese leadership further exploited this hawkish view presented by the military. At the time,

FALSG—which was in charge of overall foreign affairs including policy toward the

U.S.—was led by Li Peng, while TALSG was led by Jiang Zemin. Qiao Shi, Li Peng, and even Li Ruihuan, for instance, joined Generals Liu Huaqing and Zhang Zhen to label

Qian Qichen’s (and Jiang’s) weak responses to the U.S. as a “Right-deviationist mistake” in May 1995. 484 As a compromise to his critics and the military, Jiang Zemin authorized

Li Peng, Liu Huaqing, and Zhang Zhen’s initiative to flex China’s muscle by firing

missiles into the East China Sea in July 1995. 485

On the diplomatic front, Jiang Zemin and Qian Qichen required some face-saving

gestures from the U.S. to justify their relatively mild policy. Qian Qichen received U.S.

Strait Crisis of 1995-1996,” Journal of Contemporary China , vol. 11, no. 32 (2002), p. 568. 482 Jianhai Bi, “The Role of the Military in the PRC Taiwan Policymaking: A Case Study of the Taiwan Strait Crisis of 1995-1996,” Journal of Contemporary China , vol. 11, no. 32 (2002), pp. 569-570. 483 Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), p. 220; James Mann, About Face: A History of America’s Curious Relationship with China from Nixon to Clinton (NY: Alfred Knopf, 1998), p. 334. 484 Jianhai Bi, “The Role of the Military in the PRC Taiwan Policymaking: A Case Study of the Taiwan Strait Crisis of 1995-1996,” Journal of Contemporary China , vol. 11, no. 32 (2002), p. 572; Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 208, 213. 485 Bruce Gilley, Tiger on the Brink: Jiang Zemin and China’s New Elite (Berkeley: University of California Press, 1998), p. 253.

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assurances that Lee’s visit was strictly “private,” a U.S. invitation for Jiang’s visit, along with a reiteration of America’s “one China” policy.486 In the Politburo Beidaihe meeting in August 1995, Qian Qichen’s report conveyed the policy agenda that the Chinese leadership “would insist on achieving reunification with Taiwan through concrete negotiation”; but in the meantime, “when national sovereignty and territorial integrity is at stake, we would insist on resorting to military measures.” 487 To alleviate pressure from

conservatives within the leadership, and with Deng Xiaoping’s support, Qian was critical

of U.S. China policy, stating that “national unification is, and will be, higher than

Sino-U.S. relations as it has always been.” 488

However, another setback on the diplomatic front once again forced Jiang to harden

his stance as a response to the conservatives’ attack. The disagreement over whether Jiang

would make an “official, state visit” to the U.S., and “separatist” Lee Teng-hui’s formal

entry into the race for Taiwan’s presidency in late August 1995 provided just cause for

Jiang’s contenders to continue to challenge his policy. 489 For his own political survival,

Jiang Zemin decided to re-emphasize the importance of the “stick” in the “carrot and stick” Taiwan policy. 490

486 Qian Qichen, Waijiao Shiji [Ten Stories of A Diplomat] (Beijing: Shijie Zhishi Chubanshe, 2003), pp. 309-312. 487 Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 210-212. 488 Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 209, 212; You Ji, “Changing Leadership Consensus: The Domestic Context of War Games,” in Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis (NY: Routledge, 1999), p. 88. 489 Suisheng Zhao, “Changing Leadership Perceptions: The Adoption of a Coercive Strategy,” in Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis (NY: Routledge, 1999), pp. 99-125. 490 Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 213-214.

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PLA and Confrontation

Against this backdrop, Jiang needed to fight a dual-front war: he needed to toughen his stance, but in the meantime a relatively stabilized relationship with the U.S. could prove his political skills, which could help to demonstrate that he was the competent

“first” among other “equal” contenders to succeed Deng Xiaoping’s power. 491 Before his

“work visit” to New York, Jiang attended a combined-forces operation in October 1995

with four Vice-Chairmen of CMC—Liu Huaqing, Zhang Zhen, Zhang Wannian, and Chi

Haotian. This was the first time that Jiang had been accompanied by the CMC leadership

to visit the PLA Navy, and the military also expressed their support of Jiang’s “stressing

politics” speech a month before. Together with his efforts in raising the defense budget

and his approval for war games against Taiwan, Jiang seemed to have kept the military on

his side in 1995. 492

During the meeting with Clinton in October 1995, however, Jiang noted that the

Taiwan issue is “the most important and the most sensitive issue” in U.S.-China relations, and yet Jiang failed to correctly perceive Clinton’s seriousness about the U.S. attitude, though ambiguous, to Taiwan based on the Taiwan Relations Act (TRA). 493 Instead, the

Chinese leadership judged that Lee Teng-hui’s action reflected his intentions towards

Taiwan independence, and believed that implicit U.S. support of Lee to be a threat to

491 Political skills to deal with the U.S. are believed to be a requirement for Chinese top leaders. Interview #2, Beijing, June 16, 2008. 492 Bruce Gilley, Tiger on the Brink: Jiang Zemin and China’s New Elite (Berkeley: University of California Press, 1998), pp. 253-255; Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), p. 217; Ellis Joffe, “The People’s Liberation Army and Politics: After the Fifteenth Party Congress,” in Hung-mao Tien and Yun-han Chu, eds., China under Jiang Zemin (Boulder, CO: Lynne Rienner Publishers, Inc., 2000), pp. 103-104; You Ji, “Changing Leadership Consensus: The Domestic Context of War Games,” in Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis (NY: Routledge, 1999), pp. 87-88. 493 Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 217-218.

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China’s vital interest. 494

With a sense of urgency, the Chinese leadership decided to continue the strategy of coercive diplomacy—a diplomatic measure in which a country employs the use of force to exert political influence over, not conquest of, another country 495 —toward Taiwan, and to a lesser degree, to the U.S. The limited goals of the Chinese leadership in the consecutive military exercises in 1995 and 1996 included: first, to remind the U.S. of

China’s “seriousness” regarding the Taiwan issue, and to warn anti-China forces against provocative action. In addition, the leadership sought to influence domestic politics in

Taiwan and to deter the trend of Taiwan independence. 496 The Chinese deemed this measure as necessary to demonstrate China’s resolve on the Taiwan issue.

Despite U.S. warnings, the PLA continued to conduct military drills in early 1996, including the launch of missiles to targeted areas outside Taiwan, to influence the outcome of the first direct presidential election in Taiwan, in which “separatist” Lee

Teng-hui was to retain his presidency. The Clinton administration decided to ensure regional stability with the demonstration of its resolve and capabilities, sending two

494 Robert S. Ross, “The 1995-96 Taiwan Strait Confrontation,” International Security , vol. 25, no. 2 (Fall 2000), pp. 87-123; Thomas J. Christensen, “Posing Problems without Catching Up: China’s Rise and Challenge for U.S. Security Policy,” International Security , vol. 25, no. 4 (Spring 2001), pp. 5-40; Allen S. Whiting, “China’s Use of Force, 1950-1996, and Taiwan,” International Security , vol. 26, no. 2 (Fall 2001), pp. 103-131; Suisheng Zhao, “Changing Leadership Perceptions: The Adoption of a Coercive Strategy,” in Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis (NY: Routledge, 1999), pp. 99-125; Richard C. Bush, Untying the Knot: Making Peace in the Taiwan Strait (Washington, DC: Brookings Institution Press, 2005). 495 Alexander George, Forceful Persuasion: Coercive Diplomacy as an Alternative to War (Washington, DC: United States Institute of Peace Press, 1991) . 496 Qian Qichen, Waijiao Shiji [Ten Stories of A Diplomat] (Beijing: Shijie Zhishi Chubanshe, 2003), p. 308; Niu Jun, “Sanci Taiwan Haixia Junshi Douzheng Juece Yanjiu” [Chinese Decision-Making in Three Military Actions across the Taiwan Strait], Zhongguo Shehui Kexue , no. 5 (September 2004), pp. 49-50; Niu Jun, “Chinese Decision-Making in Three Military Actions across the Taiwan Strait,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), pp. 293-326; Su Ge, Meiguo Duihua Zhengce yu Taiwan Wenti [U.S. Policy toward China and the Taiwan Issue] (Beijing: Shijie Zhishi Chubanshe, 1998).

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aircraft carriers to the vicinity in March 1996. On March 23, 1996, the presidential election in Taiwan concluded with Lee Teng-hui’s reelection, garnering 55% of the vote.

The PLA then phased out military exercises.

Aftermath

The Chinese leadership claimed that the series of military exercises was necessary and successful, making the pro-Taiwan independence candidate obtain only 21% of the vote in the presidential election.

Whether the Chinese leadership foresaw the U.S. reaction of deploying the aircraft carriers remains unclear. For instance, Chinese analyst Su Ge suggests that the Chinese leadership should have foreseen the possibility of U.S. “gunboat diplomacy” in January

1996, when the U.S. media revealed the fact that USS Nimitz had passed through the

Taiwan Strait a month before. 497 Niu Jun, on the other hand, remains dubious of whether and to what extent China had ever made preparations for a U.S. military response. 498

However, the Chinese leadership has surely learned about the U.S. resolve in protecting its vital interests in the Asia-Pacific region. The MFA under Qian Qichen provided an evaluation of the effectiveness of military exercises in late-March 1996. This evaluation acknowledged the necessity of keeping military pressure on Taiwan, but also directed attention to the “cost” of the confrontational policy. 499

The military exercises, the MFA report suggested, were financially costly in the

497 Su Ge, Meiguo Duihua Zhengce yu Taiwan Wenti [U.S. Policy toward China and the Taiwan Issue] (Beijing: Shijie Zhishi Chubanshe, 1998), pp. 747-750. 498 Niu Jun, “Chinese Decision-Making in Three Military Actions across the Taiwan Strait,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), p. 316. 499 Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 230-232.

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amount of about 18 billion yuan , which constituted a considerable burden to China’s

economic development. Military means also produced political and security uncertainties

for China, with neighboring countries becoming even more suspicious of Chinese

intentions. The MFA report thus concluded that the employment of diplomatic and

political measures were crucial to China’s future Taiwan and U.S. policies, and that

military means should be utilized only as the last resort. 500

The MFA evaluation report on the 1995-96 military exercises arguably revealed a re-emergent consensus regarding Jiang’s overtures to Taiwan and the U.S. within the

Chinese leadership. When Jiang’s own political survival was called into question by his critics, 501 he needed to toughen the stance on Taiwan in order to regain the support from the military, and a confrontational policy became a reasonable choice to him. As Deng

Xiaoping lamented, in China’s internal debates “‘Left’ always prevails over ‘Right’.” 502

This is particularly true regarding the Taiwan issue, with being too soft on Taiwan

translating to political suicide for Chinese leaders.

In addition, the military had more influence on foreign and Taiwan policy during the

process of Jiang’s consolidation of power. The role of the military in China’s foreign

policy decision-making is largely limited to certain activities, rather than a well-defined,

general PLA interest in foreign policy. 503 For instance, in mid-1995, Xiang Guangkai from the Second Department in charge of intelligence analysis of the GSD was promoted

500 Yang Zhongmei, Zhonggong Waijiao Jiaofu Qian Qichen [Godfather of China’s Foreign Affairs—Qian Qichen] (Taipei: China Times, 1999), pp. 230-232. 501 Ma Licheng, Jiaofeng Sanshinian [Crossed Swords for 30 Years] (Nanjing: Jiangsu Renmin Chubanshe, 2008). 502 Susan Shirk, China: Fragile Superpower (NY: Oxford University Press, 2007), pp. 197-198. 503 Lu Ning, “The Central Leadership , Supraministry Coordinating Bodies, State Council Ministries, and Party Departments,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 54-55.

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to the TALSG, suggesting that the military had more say on the Taiwan issue. 504 It should

be noted that, while the hawkish view was dominant in the PLA, another camp in the

military had argued that vested economic interests could serve to prevent Taiwan

independence, especially those who had business relationships with Taiwan in the

Guangzhou and Nanjing military regions. 505

However, whether “bonding” with the U.S. helped to consolidate Jiang’s political

power remains ambiguous. It was unclear whether a simple “state visit” to the U.S. would

have helped Jiang strengthen his status within the Chinese leadership after the backlash

inspired by Lee’s visit to the U.S. in 1995. In summer 1995, the Clinton Administration

articulated the “Three No’s” and Jiang did get a significant payoff from the U.S. However,

as Qian Qichen noted, these gestures were simply the “bait” in exchange for the

resumption of high-level consultations between two nations, rather than goodwill

overtures to strengthen Jiang’s political position. U.S. refusal to grant Jiang Zemin a

“state visit” further frustrated Qian and Jiang, who read it as an indication of American

reluctance to restore its relationship with China. 506

Therefore, many analysts have attributed the crises between U.S. and China to the

deterioration of their overall relations. To them, a serious deterioration of bilateral

relations could harden mutual hostile perceptions and could make the leaders on both

sides more sympathetic to hard-liners in a crisis. 507

504 Jianhai Bi, “The Role of the Military in the PRC Taiwan Policymaking: A Case Study of the Taiwan Strait Crisis of 1995-1996,” Journal of Contemporary China , vol. 11, no. 32 (2002), p. 571. 505 You Ji, “Taiwan in the Political Calculations of the Chinese Leadership,” The China Journal , no. 36 (July 1996), p. 122; June Teufel Dreyer, “The People’s Army: Serving Whose Interests?” Current History , vol. 93, no. 584 (September 1994), pp. 265-269; Allen S. Whiting, “The PLA and China’s Threat Perceptions,” The China Quarterly , no. 146 (June 1996), p. 607. 506 Qian Qichen, Waijiao Shiji [Ten Stories of A Diplomat] (Beijing: Shijie Zhishi Chubanshe, 2003), pp. 310-314. 507 Michael D. Swaine, “Conclusion: Implications, Questions, and Recommendation,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case

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It is worth noting that American and Chinese analysts both suggest that the 1996

Taiwan Strait crisis has contributed to U.S. closeness to its allies in Asia, especially with

Japan, and to China’s realization of U.S. resolve and its capability to protect its vital interests in the Asia-Pacific region. 508 This realization led China to uphold Mao Zedong’s

“on just grounds, to our advantage, and with restraint” ( youli, youli, youjie ) principle that stresses the importance of preserving realistic and limited goals with the avoidance of an all-out confrontation with the U.S. in the times of crisis. 509

The 1999 Embassy Bombing Incident

After the 1996 confrontation, the U.S. and China began to renegotiate their relations, as shown in the two bilateral summit meetings in 1997 and 1998. However, as a U.S. scholar who served in the Clinton administration aptly points out, “the positive moment

[of the summit meeting] had soon faded away” by fall 1998. This and China’s disagreement over the role of NATO in the Kosovo crisis, together with Zhu Rongji’s

“failure” visit to U.S. in April 1999, all exacerbated tensions in U.S.-China relations. 510

Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), pp. 423-452; Wang Jisi and Xu Hui, “Pattern of Sino-American Crises: A Chinese Perspective,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), pp. 133-148; Niu Jun, “Sanci Taiwan Haixia Junshi Douzheng Juece Yanjiu” [Chinese Decision-Making in Three Military Actions across the Taiwan Strait], Zhongguo Shehui Kexue , no. 5 (September 2004), pp. 37-50; Tao Wenzhao, “1995-1996 Taihai Fengyun jiqi Yingxiang” [1995-1996 Taiwan Strait Crisis and Its Implications], Harbin Gongye Daxue Xuebao , vol. 6, no. 2 (March 2004), pp. 1-10; Wang Jisi and Xu Hui, “ZhongMei Weiji Xingwei Bijiao Fenxi” [A Comparison of Chinese and American Crisis Behavior], Meiguo Yanjiu , vol. 19, no. 2 (Summer 2005), pp. 22-46. 508 James Mann, About Face: A History of America’s Curious Relationship with China from Nixon to Clinton (NY: Alfred Knopf, 1998), p. 338; Tao Wenzhao, “1995-1996 Taihai Fengyun jiqi Yingxiang” [1995-1996 Taiwan Strait Crisis and Its Implications], Harbin Gongye Daxue Xuebao , vol. 6, no. 2 (March 2004), pp. 1-10. 509 Wang Jisi and Xu Hui, “Pattern of Sino-American Crises: A Chinese Perspective,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), pp. 141-143. 510 Interview #25, Washington, DC, March 13, 2009.

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Against this background, on May 7 (May 8 in Beijing), 1999, an USAF B-2 accidentally bombarded the Chinese embassy in Belgrade during the execution of an air attack on Yugoslavia. China’s immediate reaction to this incident was imbued with suspicion and anger, and Chinese society was flooded with nationalistic anti-American sentiments.

Debate

The Chinese leadership convened a Politburo meeting on the morning of May 8, and

Jiang Zemin had to demonstrate his political skills by both addressing criticism of “being soft” from within the leadership, and restoring and stabilizing relations with the U.S. that were deemed beneficial to China’s development. 511 However, it should be noted that, unlike in the 1995-96 Taiwan Strait crisis, Jiang’s political status was more consolidated within the top leadership after the Fifteenth Party Congress in 1997. 512

In the Politburo meeting, participants reached the consensus that it was important to keep the incident a diplomatic issue, and, in order to “struggle with, but not break with

[the U.S.]” ( dou er bu po ), Hu Jintao was assigned to make a public speech in order to maintain China’s flexibility and to prevent further deterioration in U.S.-China relations if the speech did not receive positive response from the American counterpart and contain students’ nationalist demonstration in the street. 513 Also, the participants shared an

511 Joseph Fewsmith, China since Tiananmen: The Politics of Transition (NY: Cambridge University Press, 2001), p. 211. 512 Wang Gungwu and Zheng Yongnian, “Introduction: Jiang Zemin and His Reign Over the Party,” in Wang Gungwu and Zheng Yongnian, eds., Damage Control: The Chinese Communist Party in the Jiang Zemin Era (Singapore: Eastern Universities Press, 2003), pp. 1-24. 513 During the meeting, Zhu Rongji and Qian Qichen explicitly suggested Jiang Zemin to deliver the speech, but at last Hu, voluntarily or not, was assigned for the job. Zong Hairen, Zhu Rongji zai 1999 [Zhu Rongji in 1999], “The Bombing of China’s Embassy in Yugoslavia,” translated in Chinese Law and Government , vol. 35, no. 1 (January/February 2002), p. 75; Yang Zhongmei, Zhonggong Xinlingxiu—Hu Jintao [CCP’s New Leader: Hu Jintao] (Taipei: China Times Press, 2002), p. 237. Others suggested that Hu

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agreement that the “deliberate” bombing incident was the U.S. plot to “probe” China’s

“bottom-line” to forbear when faced with provocative and dominant U.S. behavior. 514

Aside from the consensus on maintaining policy flexibility, however, factions

within the leadership requested that Jiang Zemin toughen his stance. The military called

for a strong and determined response to demonstrate China’s prowess, while civilian

leaders including Li Peng and Li Ruihuan maintained that the U.S. was not a partner but

an enemy, and that China should harden its stance and defer any negotiations with the

U.S. on the WTO membership. 515

Jiang Zemin regarded the incident as a wider U.S. plot to ascertain the capabilities of the Chinese government in coping with crisis, including how to manage nationalistic sentiments and demands from society. More important, this crisis could distract China from further economic development and financially burden China if it decided to go to war. Therefore, Jiang claimed that, “we must have a clear understanding of the situation” while “reserving the right to react strongly.” 516 Jiang’s statement in the meeting suggested that he thought the leadership should not react immediately with radical and military measures.

Jiang’s opinion was echoed by Zhu Rongji and Qian Qichen, who contended that was designated because Jiang wanted to shift the blame to Hu if the speech failed to contain excessive nationalist demonstration. See Zheng Yongnian, “Minzu Zhuyi, Quanqiu Zhuyi he Zhongguo de Guoji Guanxi” [Nationalism, Globalism and China’s International Relations], in Lin Jialong and Zheng Yongnian, eds., Minzu Zhuyi yu Liangan Guanxi [Nationalism and the Cross-Strait Relations] (Taipei: Xin Ziran Chubanshe, 2001), pp. 433-455. 514 Zong Hairen, Zhu Rongji zai 1999 [Zhu Rongji in 1999], “The Bombing of China’s Embassy in Yugoslavia,” translated in Chinese Law and Government , vol. 35, no. 1 (January/February 2002), pp. 81-82. 515 Zong Hairen, Zhu Rongji zai 1999 [Zhu Rongji in 1999], “The Bombing of China’s Embassy in Yugoslavia,” translated in Chinese Law and Government , vol. 35, no. 1 (January/February 2002), pp. 76-81, 83-85; Robert L. Suettinger, Beyond Tiananmen: The Politics of U.S.-China Relations, 1989-2000 (Washington, DC: Brookings Institution Press, 2003), pp. 374-375. 516 Zong Hairen, Zhu Rongji zai 1999 [Zhu Rongji in 1999], “The Bombing of China’s Embassy in Yugoslavia,” translated in Chinese Law and Government , vol. 35, no. 1 (January/February 2002), pp. 81-82.

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stability and economic development should prevail and the struggle should be confined to the diplomatic front. However, Zhu and Qian both suggested Jiang Zemin to make public speech to pacify the public. 517

According to the conclusion of the Politburo meeting, the MFA on May 10 presented a four-point note to the U.S., demanding: (1) a public and formal apology to the

Chinese government, people, and the relatives of the victims; (2) a comprehensive investigation of the incident; (3) a prompt and detailed release of the investigation, and (4) severe punishment of the persons responsible for the incident. 518 Also, the Chinese

government declared the suspension of military contacts and postponed consultations on

human rights and security issues to mollify the hawkish military. 519

International Structural Constraints and the Conservatives within the

Chinese Leadership

The U.S. took actions and tried to repair its relations with China. U.S. Ambassador

James R. Sasser visited the MFA on the morning of May 8 to deliver his condolences, and

President Clinton the next day sent personal letter to Jiang expressing his “apologies and

sincere condolence for the pain and casualties” caused by the incident. 520

517 Zong Hairen, Zhu Rongji zai 1999 [Zhu Rongji in 1999], “The Bombing of China’s Embassy in Yugoslavia,” translated in Chinese Law and Government , vol. 35, no. 1 (January/February 2002), pp. 80-83. 518 Zong Hairen, Zhu Rongji zai 1999 [Zhu Rongji in 1999], “The Bombing of China’s Embassy in Yugoslavia,” translated in Chinese Law and Government , vol. 35, no. 1 (January/February 2002), pp. 75-76. 519 Paul H.B. Godwin, “Decision-making under Stress: The Unintentional Bombing of China’s Belgrade Embassy and the EP-3 Collision,” in Andrew Scobell and Larry Wortzel, eds., Chinese National Security Decision-Making under Stress (Carlisle, PA: U.S. Army War College, 2005), p. 166; Yang Zhongmei, Zhonggong Xinlingxiu—Hu Jintao [CCP’s New Leader: Hu Jintao] (Taipei: China Times Press, 2002), p. 240. 520 Kurt M. Campell and Richard Weitz, “The Chinese Embassy Bombing: Evidence of Crisis Management?” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International

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However, enraged Chinese crowds began to protest outside the U.S. embassy in

Beijing and consulate facilities in other cities. This public reaction demanded that the

Chinese leadership appear tougher to prove that it reflected the people’s strong sentiments, while working out a way to stabilize the relationship with the U.S. 521 As a result, Hu

Jintao’s televised speech on May 9 emphasized the importance of solidarity and stability,

calming down the demonstration that could in turn endanger the rule of CCP.

U.S. official gestures helped Jiang to mitigate the dilemma he faced within the

leadership and society. President Clinton personally apologized in the White House on

May 10 and May 13, and the Chinese media started to release the formal apologies by

Secretary of State Madeline Albright and President Clinton earlier on. Jiang then

delivered a public speech to stress the importance of the continuation of economic reform

and development, and the most important, social stability, indicating his willingness to

conclude the crisis. 522 Qian Qichen also delivered the message that “China does not want a confrontation with the United States.” 523

Following the incident, U.S.-China bilateral relations were gradually restored

leading up to the Clinton-Jiang meeting at the September 1999 APEC. In December 1999,

both sides agreed on a compensation agreement that required the U.S. to pay $28 million

dollars to China, and for China to pay $2.8 million for the damage to U.S. embassy and

Peace, 2006), p. 338. 521 Wu Baiyi, “Chinese Crisis Management During the 1999 Embassy Bombing Incident,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), pp. 357-359; Simon Shen, “Nationalism or Nationalist Foreign Policy? Contemporary Chinese Nationalism and its Role in Shaping Chinese Foreign Policy in Response to the Belgrade Embassy Bombing,” Politics , vol. 24, no. 2 (2004), pp. 122-130. 522 Wu Baiyi, “Chinese Crisis Management During the 1999 Embassy Bombing Incident,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), p. 360. 523 Paul H.B. Godwin, “Decision-making under Stress: The Unintentional Bombing of China’s Belgrade Embassy and the EP-3 Collision,” in Andrew Scobell and Larry Wortzel, eds., Chinese National Security Decision-Making under Stress (Carlisle, PA: U.S. Army War College, 2005), p. 168.

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consulates in China. In April 2000, the CIA declared its punishment of those officers responsible for the mistake. 524

Many analyses in the U.S. maintain that there was a deep schism within the Chinese leadership during the bombing incident. For instance, Joseph Fewsmith and Robert

Suettinger respectively contend that there was a division between a hawkish, confrontational approach and the pragmatic policy toward the U.S. that prevailed during the crisis. 525 Also, Zhu Rongji’s “failure” visit to the U.S. seemed to weaken the moderate and reformist views within the top leadership. 526

However, this view ignored the fact that Jiang Zemin had gradually consolidated his grip on China’s policy toward the U.S. through institutional arrangements. In the

Fifteenth Party Congress in 1997, Jiang successfully forced his opponent Qiao Shi to retire, but was forced to share power with protégés of his opponents. In March 1998, after

Zhu Rongji succeeded Li Peng as the Premier, Jiang Zemin took charge as the head of the

FALSG, the position traditionally occupied by the premier. Thus, for the first time in its history the FALSG was led by the top leader himself. Additionally, Premier Zhu Rongji and Vice-Premier Qian Qichen served as deputy heads of the group, and members included State Councilor Wu Yi, Foreign Minister Tang Jiaxuan, CMC Vice-Chairman and Defense Minister Chi Haotian, and Minster of State Security Xu Yongyue. 527 And, it

524 Kurt M. Campell and Richard Weitz, “The Chinese Embassy Bombing: Evidence of Crisis Management?” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), pp. 342-344. 525 Joseph Fewsmith, China since Tiananmen: The Politics of Transition (NY: Cambridge University Press, 2001), p. 212; Robert L. Suettinger, Beyond Tiananmen: The Politics of U.S.-China Relations, 1989-2000 (Washington, DC: Brookings Institution Press, 2003), pp. 373-377. 526 Yang Zhongmei, Zhonggong Xinlingxiu—Hu Jintao [CCP’s New Leader: Hu Jintao] (Taipei: China Times Press, 2002), p. 236. 527 Lu Ning, “The Central Leadership , Supraministry Coordinating Bodies, State Council Ministries, and

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is worth noting that Tang Jiaxuan succeeded Qian Qichen as head of the MFA, not Li

Peng’s preferred candidate, State Council Foreign Affairs Office (SCFAO) Director Liu

Huaqiu. Liu Huaqiu’s attempt to expand the function of SCFAO in policy formulation such as the role of National Security Council (NSC) of the U.S. was defeated in

September 1998, and the SCFAO was reorganized under the CCP Central FAO, serving a role of policy consultation. 528 These institutional developments further strengthened

Jiang’s power base in generating consensus within the Politburo.

Given the international environment at the time as Chapter 2 discussed, the U.S. not only enjoyed military prowess, but for China it was difficult to form a counter-balance alliance against the U.S. This structural constraint had an impact on the perceptions of the

Chinese leadership as a whole and on that of the conservatives. The debate within the leadership during its response to the incident also suggested that economic development remained the mainstream concern and that other policy options might not be viable. Li

Peng, for instance, while pointing out that the U.S. was more like an enemy than a partner, also admitted that it was very difficult for China to rally other countries to counter U.S., because even Russia “will soften [its] stand so long as it is given U.S. dollars.” 529 Though the Chinese leadership found the U.S. untrustworthy even after both sides agreed to move toward with a “constructive strategic partnership” in 1997, a full-blown confrontation

Party Departments,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 42-45. 528 Lu Ning, “The Central Leadership , Supraministry Coordinating Bodies, State Council Ministries, and Party Departments,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), p. 47; H. Lyman Miller and Liu Xiaohong, “The Foreign Policy Outlook of China’s ‘Third Generation’ Elite,” in David M. Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford, CA: Stanford University Press, 2001), pp. 143-145. 529 Zong Hairen, Zhu Rongji zai 1999 [Zhu Rongji in 1999], “The Bombing of China’s Embassy in Yugoslavia,” translated in Chinese Law and Government , vol. 35, no. 1 (January/February 2002), pp. 76-77.

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with the U.S. was not a viable option.

The PLA was also confined in terms of its options. As stated earlier, the view of the

PLA is not monolithic; more often than not the view varies according to department. As discussed in Chapter 2, the Kosovo War and the accident bombing of the Chinese embassy in Belgrade had a direct impact on the Chinese leadership’s perceptions of the distribution of capabilities in the international system. The Chinese leadership perceived the U.S. as more threatening, but also realized that it would be difficult to find reliable partners to jointly counterbalance the U.S. The PLA also shared these perceptions with the Chinese leadership, but they differed on how China should react to the external pressure. 530 The first group includes those who held that Mao Zedong’s “people’s war” strategy was still relevant; the second group advocated for further advancement of high-tech weapons to catch-up the West, suggesting a plan for arms race; and the last group pragmatically believed that a combination of what China has and the employment of asymmetric warfare was the best strategy to survive U.S. provocation. 531

As June Teufel Dreyer points out, a pragmatic strategy for China—to maximize the effectiveness of existing equipment to counter U.S. militarily—seemed to be prevalent.

530 David Shambaugh, “China’s Military Views the World: Ambivalent Security,” International Security , vol. 24, no. 3 (Winter 1999/2000), pp. 52-79; June Teufel Dreyer, “The PLA and Kosovo: A Strategy Debate,” Issues & Studies , vol. 36, no. 1 (January/February 2000), pp. 100-119. When Shambaugh contends that that some in the PLA perceived a less-threatening U.S., it should be noted that he gained this impression from interviews that were conducted prior to the bombing incident. 531 June Teufel Dreyer relies on Jiefangjun Bao (PLA Daily), the official newspaper of the PLA, to discern and analyze these views. June Teufel Dreyer, “The PLA and Kosovo: A Strategy Debate,” Issues & Studies , vol. 36, no. 1 (January/February 2000), pp. 100-119. According to Dreyer, proponents for the utilization of “people’s war” stressed that the spirit of ordinary people and guerilla-style warfare are decisive to survive the attacks of U.S. high-tech weapons. Mobilization is the key to the long-term victory. The second group, the advocates of military advancement and build-up on high-tech weaponry, contends that retaliation is the only way for survival. Despite the possession of nuclear weapons, this group asks for hardware advancement as well as personnel training with science and technology. A strong defense equipped with high-tech weaponry and human resources is required for China to deter bullying by the West again. The third view is a compromise of the above two extremes, arguing that a pragmatic strategy for China is to maximize the effectiveness of existing equipments to counter U.S. militarily.

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Since the bombing incident was perceived as a deliberate U.S. action to probe China’s capabilities and to decelerate China’s economic development, it would have been unwise and dangerous if China were to get entrapped in an endless arms race with the U.S.

Therefore, to utilize existing equipment rather than purchase high-tech weaponry, together with the China’s techniques of asymmetric warfare such as blinding the command system of the U.S., was believed to be the pragmatic way of coping with the

U.S.

Other internal circulation materials also echoed Dreyer’s research. For instance, an expert from the Academy of Military Science (AMS) who provides analyses for the CMC pointed out that high-tech weaponry is a contributing factor to win a limited local war under high-tech conditions, but what is more important is the national cohesion that prevailed in every “people’s war” throughout the PRC’s history. 532 Wang Zuxun, the

president of AMS, also contends that while the U.S.-led NATO would use humanitarian

intervention as a pretext to interfere China’s domestic affairs in the future, it is still of

importance that China not to be entrapped in a renewed arms race with the U.S. 533

According to Dreyer, in summer 1999, Jiang Zemin concluded that it was still necessary to address the U.S. via political and diplomatic channels, but also agreed to certain budgetary demands from the military. 534 Jiang authorized a military exercise, and

with a promise to discuss this incident with President Clinton, Jiang successfully

restrained the hawkish militant actors from taking real action.

532 The AMS expert Peng Guangqian made this comment. Yang Minqing and Jia Yong, “Shiji Zhijiao de Wuoguo Anquan Qingshi” [China’s Security Situation in the Turn of the Century], Banyuetan Neibuban , no. 6 (1999), pp. 15-19. 533 Wang Zuxun, “Kesouwuo Zhanzheng Gaosu Shijie Sheme?” [What Did the Kosovo War Tell the World?], Banyuetan Neibuban , no. 6 (1999), pp. 20-22. 534 June Teufel Dreyer, “The PLA and Kosovo: A Strategy Debate,” Issues & Studies , vol. 36, no. 1 (January/February 2000), p. 116; Yang Zhongmei, Zhonggong Xinlingxiu—Hu Jintao [CCP’s New Leader: Hu Jintao] (Taipei: China Times Press, 2002), p. 240.

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In addition to Jiang’s solidified status as the “core” of the leadership, other influential leaders also shared the view that solidarity and stability should always prevail, and continued economic development was crucial to achieve their goal of remaining in power. The demonstration of the Falun Gong outside the Zhongnanhai compound (the location of Central Government) just two weeks before the bombing incident deepened the leadership’s worries regarding social instability.

Conciliatory American gestures contributed to Jiang’s adoption of a relatively calm policy in this case. As Paul Godwin suggests, the U.S. strategy of resolving the crisis quickly with its admission of the mistake actually helped Jiang. 535 It was in Jiang’s interest to prolong the process to demonstrate his toughness toward the U.S., and the formal and arguably timely apologies from the U.S. saved Jiang’s face while he was under criticism for being too soft. In other words, Jiang demonstrated his political skills in stabilizing China’s overall relations with the U.S. during the embassy bombing crisis.

2001 EP-3 Incident

An American EP-3 surveillance aircraft was involved in a collision with a Chinese

F-8II fighter in the air near China’s territorial waters on April 1, 2001. This encounter ended up with the loss of the Chinese pilot and the emergency landing of the EP-3 on

China’s Hainan Island. According to Wu Jianmin, former head of the Chinese Foreign

Affairs College and foreign policy insider, the Chinese leadership perceived that the overall U.S.-China relations had been relatively stable since Qian Qichen’s U.S. visit in

March 2001, in comparison with the uncertainties aroused by George W. Bush’s hawkish

535 Paul H.B. Godwin, “Decision-making under Stress: The Unintentional Bombing of China’s Belgrade Embassy and the EP-3 Collision,” in Andrew Scobell and Larry Wortzel, eds., Chinese National Security Decision-Making under Stress (Carlisle, PA: U.S. Army War College, 2005), p. 171.

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rhetoric during the campaign a year previously. 536 However, the cost of the life of a

Chinese pilot and the alleged violation of China’s territorial sovereignty put the Chinese leadership in a hard situation.

The Chinese, with information exclusively held by the military, claimed that the

EP-3 was responsible for the incident, and its landing without permission constituted a further violation of Chinese sovereignty. The U.S. side refuted the Chinese accusation, arguing that it was the Chinese pilot’s provocative behavior that led to unavoidable consequences. President Bush, on April 1, requested the Chinese government to release the crew in a timely fashion.

Chinese Response and Negotiation

In this relatively recent incident, the process of decision-making on the Chinese side

still remains opaque, though Wu Jianmin’s work provides some clues. In general, the

Chinese leadership, especially the civilian leaders, seemed to agree that it was unrealistic

for China to have a head-on confrontation with the U.S. immediately. As indicated in the

debate within the leadership during the 1999 Belgrade embassy bombing, even hardliners

like Li Peng became aware of the difficulty of partnering with Russia to counterbalance

the U.S. My own interviews also confirmed this observation. 537

However, as James Mulvenon demonstrated, military leaders such as Chi Haotian continued to employ hawkish language during the crisis, accusing America of pursuing

“hegemonism and power politics,” and threatening to retaliate militarily if the U.S.

536 Wu Jianmin, Waijiao Anli [Case Studies in Diplomacy] (Beijing: Zhongguo Renmin Daxue Chubanshe, 2007), pp. 323-325. 537 Interviews #5, Beijing, June 20, 2008; #9, Beijing, July 2, 2008.

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refused to take full responsibility for the incident. 538 Because information on the incident

was held exclusively by the military, the Chinese government immediately took the

military version as the official story of the incident. 539

On the other hand, as Wu Jianmin suggests, the Chinese leadership reached the

decision to “separate out the handling of the crew and the aircraft” 540 the day after the

incident in order to avoid a hostage situation that would arouse unnecessary resentment

from the U.S. people that would be counterproductive to China’s national interest. 541 As a result, Jiang Zemin on April 4 outlined four demands to the U.S.: “an apology for the collision, an explanation of the incident, compensation for China’s losses, and a halt to all future reconnaissance flights.” 542

To the Chinese leadership, the attribution of responsibility was the key for both sides to work out a resolution. 543 Although the Chinese official version of the incident adopted the military’s stance, Jiang Zemin delegated the MFA to handle negotiations with the U.S.

With Jiang’s authorization, Chinese Foreign Minster Tang Jiaxuan expressed that with

U.S. taking full responsibility, the Chinese government would release the crew after receiving a formal apology. 544

538 James Mulvenon, “Civil-Military Relations and the EP-3 Crisis: A Content Analysis,” China Leadership Monitor , no. 1 (Winter 2002), p. 7. 539 Susan Shirk, China: Fragile Superpower (NY: Oxford University Press, 2007), p. 235. 540 This is, as professor Harry Harding argues, one key to building a consensus is to find policies that can satisfy the hawks and the doves simultaneously. He labels this as “revised mainstream policy,” defined by the Bush Administration, that took the Clinton Administration’s China policy but tweaked it slightly in ways that increased its appeal to conservatives. 541 Wu Jianmin, Waijiao Anli [Case Studies in Diplomacy] (Beijing: Zhongguo Renmin Daxue Chubanshe, 2007), pp. 326-327. 542 James Mulvenon, “Civil-Military Relations and the EP-3 Crisis: A Content Analysis,” China Leadership Monitor , No. 1 (Winter 2002), p. 5. 543 Wu Xinbo, “Understanding Chinese and U.S. Crisis Behavior,” The Washington Quarterly , vol, 31, no. 1 (Winter 2007-08), pp. 61-76. 544 Zhang Tuosheng, “The Sino-American Aircraft Collision: Lessons for Crisis Management,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), p. 398.

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The U.S. began to send out goodwill gestures to the Chinese leadership, as indicated in President Bush’s and Secretary of State Colin Powell’s expression of “regret” over

China’s loss on April 5. The MFA and the State Department then agreed to begin the negotiating process toward the release of the crew.545 However, the Chinese still insisted on a formal apology from the U.S. government.

U.S. domestic politics also exerted its influence on the negotiating process.

Vice-President Dick Cheney insisted there was “no need to apologize” to China, suggesting that the impasse would inevitably damage long-term U.S.-China relations if

China insisted. 546 In the meantime, however, State Secretary Powell for the first time used the word “sorry” while expressing the sorrow of the loss of life. 547

The MFA continued its consultations with the Department of State, and finally agreed to compromise on the U.S. statement of “very sorry”. The Chinese side translated

“very sorry” as “expressing deep apology” [ shen biao qian yi ] in Chinese, released the crew on April 12, and declared “the crisis has been defused.” 548 The EP-3 aircraft was shipped back to the U.S. in July, but the dispute over compensation has not settled to date.549

545 Paul H.B. Godwin, “Decision-making under Stress: The Unintentional Bombing of China’s Belgrade Embassy and the EP-3 Collision,” in Andrew Scobell and Larry Wortzel, eds., Chinese National Security Decision-Making under Stress (Carlisle, PA: U.S. Army War College, 2005), pp. 177-178. 546 Wu Jianmin, Waijiao Anli [Case Studies in Diplomacy] (Beijing: Zhongguo Renmin Daxue Chubanshe, 2007), p. 328. 547 Zhang Tuosheng, “The Sino-American Aircraft Collision: Lessons for Crisis Management,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), p. 400. 548 Zhang Tuosheng, “The Sino-American Aircraft Collision: Lessons for Crisis Management,” in Michael D. Swaine and Zhang Tuosheng with Danielle F.S. Cohen, eds., Managing Sino-American Crises: Case Studies and Analysis (Washington, DC: Carnegie Endowment for International Peace, 2006), p. 400; Wu Jianmin, Waijiao Anli [Case Studies in Diplomacy] (Beijing: Zhongguo Renmin Daxue Chubanshe, 2007), p. 334. 549 The last time both sides wrangled over this issue was in early August 2001, while China strongly expressed its discontent with the compensation of “U.S. $34,567” in total. Xinhua , August 12, 2001, p. 4; Shi He, “Cong 34,567 Meiyuan kan Meiguo ‘Wulai’ Waijiao” [From U.S.$34,567 to See the U.S. ‘Hooligan’ Diplomacy], Guangming Ribao , August 17, 2001, p. C01.

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In hindsight, the 2001 EP-3 incident provides some insights for us to further explore the effect of Chinese domestic politics on its foreign policy. First, there seemed to be little evidence suggesting that other civilian Chinese leaders were vying with Jiang over whether China should retaliate militarily against the U.S. For instance, Li Peng, in his diary, only stressed that the U.S. should be responsible for the incident, but did not ask

Jiang to react with military countermeasures. 550 This seems to reflect the fact that since

1999 the Chinese leadership has gradually accepted the difficulty inherent in challenging

the U.S.

An internally circulated article also reflected the contributing factors that helped

Jiang to ward off dissenting views within the civilian leadership and pursue accommodation with the U.S. Xiao Gongqin, an outspoken Chinese scholar who admires a strong state, 551 contends that the Chinese government and the public were aware of the nature of the crisis—an accident—because they were persuaded that the 24 Americans would not risk their own lives to fight a Chinese pilot in the mid-air. In addition, the

Chinese government had realized that radical nationalism is not beneficial to China’s stability and modernization. Xiao further suggests, there seems to be no strong faction of conservatives in China now, and that Chinese leaders share in the consensus that it is important to maintain a good working relationship with Western countries. 552

Second, the role of military was again proved to be limited when there was no deep

550 Li Peng, Heping, Fazhan, Hezuo: Li Peng Waishi Riji Vol. II [Peace, Development, Cooperation: Li Peng’s Dairy on Foreign Affairs Vol. II] (Beijing: Xinhua Chubanshe, 2008), pp. 864-866. 551 Joseph Fewsmith labels Xiao Gongqin as one of those who embrace neo-authoritarianism in China—that a strong state can use its power to bring about a liberal and democratic polity. Joseph Fewsmith, China since Tiananmen: The Politics of Transition (NY: Cambridge University Press, 2001), p. 217. 552 “Zhuangji Shijian yu ZhongMei Guanxi” [The EP-3 Incident and Sino-U.S. Relations], Neibu Canyue , no. 19 (May 18, 2001), pp. 26-32.

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schism within the top civilian leadership. In the 1995-96 Taiwan Strait crisis, one reason

Jiang adopted a confrontational policy was the challenge he faced from conservatives within the Chinese leadership, and being tough and co-opting the policy agenda of the military became important to his political survival. In the EP-3 incident, in the first place, because of the nature and sensitivity of the crisis, the PLA monopolized the critical information flow about the incident, including where and how the collision occurred and whether the American EP-3 had asked for emergency landing, which made it difficult for the civilian leaders to disconfirm the PLA-version story. In addition, Jiang Zemin likely had a personal reason to back the PLA’s line, because he needed the military seniors to support his retention of power in the CMC after stepping down as the Party general secretary and state president in 2002. 553 Some analysts argue that the hawkish tones between China and the U.S. revealed the complicated relationship between Jiang and other Chinese leaders, making Jiang be seen as tough enough if necessary and as indispensible to work out a solution with the U.S. 554

However, Jiang Zemin soon designated the MFA to lead the negotiation, in order to

“comprehensively handle the situation from a political perspective.” 555 This decision, to a

degree, was to maintain the friendly atmosphere followed Qian’s U.S. visit a month

before. In other words, the military was confined to its role as an information provider,

rather than being elevated as a participant in the process of decision-making and

implementation in this case. 556 While the military, as James Mulvenon suggests, had held

553 James Mulvenon, “Civil-Military Relations and the EP-3 Crisis: A Content Analysis,” China Leadership Monitor , no. 1 (Winter 2002). 554 Willy Wo-Lap Lam, “Diplomatic Pain, Political Gain for Jiang,” CNN.com, April 11, 2001. 555 Yang Jiemian, Houlengzhan Shiqi de ZhongMei Guanxi: Weiji Guanli de Lilun yu Shijian [Sino-U.S. Relations in the Post-Cold War Era: Theory and Practice in Crisis Management] (Shanghai: Renmin Chubanshe, 2004), p. 144. 556 Interviews #5, Beijing, June 20, 2008; #9, Beijing, July 2, 2008.

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a radical and hawkish view from the start of the crisis, 557 Jiang’s decision to delegate the

process of negotiation with the U.S. to the MFA reflected his willingness to stabilize the

bilateral relations with the U.S.

Although its hawkish tones are evident in Mulvenon’s research, the PLA remains in line with the civilian leadership in terms of policy suggestion while facing the international constraint put forth by the U.S. capabilities. For instance, two articles in

Neibu Canyue written by the experts from the National Defense University begin their

analyses with strong criticism of U.S. hegemonism; then, they share the view that this

mid-air collision was an “accident” and contend that is a critical moment for both sides to

improve bilateral relations. To conclude, both articles suggest that China should pursue

cooperation and avoid confrontation with the U.S. 558

Finally, maintaining a good working relationship with the U.S. remains important to

the Chinese leadership. This was evident when Jiang implied that both sides might need

to share the responsibility of the incident by stating that it is common to apologize when

people bump into one another in the street. 559 And, when President Bush on April 8 reacted harshly with the threat of an immediate downturn in the U.S.-China relations if

China refused to release the crew, the Chinese did not escalate the crisis or call off the meeting between U.S. officials and the crew. Instead, China grasped the face-saving opportunity to defuse the situation when Secretary of State Powell used the word “sorry” the same day.

557 James Mulvenon, “Civil-Military Relations and the EP-3 Crisis: A Content Analysis,” China Leadership Monitor , No. 1 (Winter 2002). 558 Zhou Bolin, “ZhongMei Guanxi Zaici Zoudao Shizi Lukou” [Sino-U.S. Relations Are once again in the Crossroad], Neibu Canyue , no. 20 (May 25, 2001), pp. 27-32; Li Daguang, “Zhong Mei Er Sanguo Xinde Dasanjiao Guanxi” [A New Triangular Relationship among China, U.S., and Russia], Neibu Canyue , no. 37 (September 21, 2001), pp. 16-23. 559 Susan Shirk, China: Fragile Superpower (NY: Oxford University Press, 2007), p. 238.

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These cases present a picture that the reform-oriented Chinese leaders are prone to maintain a good working relationship with the U.S. to deepen China’s economic development. Their critics, who often prefer planned economy and thus decrease the importance of U.S. in China’s development, tend to challenge the reform-oriented core leader. However, both reform-minded leaders and conservatives realize the importance of avoiding public splits in the leadership, because it would result in social unrest and undermine, if not terminate, the rule of CCP. Also, even the conservatives and hardliners have gradually recognized the difficulty inherent in mounting a serious challenge to the

U.S. When frictions occur with the U.S., being tough while maintaining a manageable relationship with the U.S. becomes the key task to the core leader within the leadership.

Conclusion

Neo-classical realists claim that domestic political factors to a degree account for state international behavior. In the case of China in the post-Cold War era, consensus-building has become the key characteristic when it comes to the decision-making process. The Chinese political structure gives most salience to the top leader or the “core” of the collective leadership.

When reformists and conservatives within the Chinese leadership share the view that prosperity is the prominent goal, their approaches to achieve this goal vary and so do their attitudes toward the U.S. Conservatives such as Li Peng who prefer planned economy if not autarky tended to downplay the contributions of the U.S. to China’s economic development, and as a result a more hawkish stand toward the U.S.

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As indicated in times of crisis, Jiang Zemin attempted to cope with these dissenting views within the leadership, while trying to appear “tough” facing the U.S. challenges.

Jiang’s attempt to win the military’s support pushed the leadership to authorize military exercises and led to the peak of crisis in March 1996. In the aftermath of the possible military failure, the PBSC’s approval of the MFA evaluation report to a degree revealed the consolidation of Jiang’s power on foreign affairs, which contributed to China’s gradual shift to accommodation with the U.S.

There are some caveats to be pointed out here. My research basically employs the international structural factors to explain China’s adoption of accommodative policy toward the U.S., and argues that the domestic context needs to be examined with the external environment. Specifically, overwhelming U.S. power and China’s commitment to further economic reforms are the basic elements accountable for China’s accommodation, and China’s domestic political structure and process help to provide the conditions to realize accommodative policies. If the current international factors change, with other things being equal in terms of domestic political context, then China would change its behavior in the direction corresponding to its external environment.

In addition, as I stated, national sovereignty and territorial integrity still constitute the core and most sensitive issues in China’s foreign policy. As indicated in 1995 and

1996 on the Taiwan issue, the Chinese leadership chose to shift from a relatively moderate means of peaceful resolution to a hawkish policy that emphasized the use of force.

Finally, if another “paramount” leader emerges who enjoys as much authority and legitimacy as Mao did and can overturn the current policy-making procedures in China, then it is possible that he or she could alter Chinese foreign policy despite the

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international system. Some scholars have pointed out that the pattern of “Mao in command” may reappear in the near future in the sense that consultation will be less a prominent piece of the process, though the top leader may lack of personal charisma as

Mao enjoyed. 560 Thus, we should not presume that the domestic political context alone is a sufficient explanation for peaceful or non-peaceful state behavior.

560 Samuel S. Kim, “Chinese Foreign Policy in Theory and Practice,” in Samuel S. Kim, ed., China and the World: Chinese Foreign Policy Faces the New Millennium, 4 th Edition (Boulder, Colorado: Westview Press, 1998), p. 16.

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Chapter 6 Conclusion

Findings

This research aims to contribute to IR scholarship by providing a problem-oriented analysis of China’s policy toward the United States. When the end of Cold War proved the insufficiency of IR theory in terms of predictability, 561 many scholars began to forgo

an either/or, clear-cut approach based on the assumptions and causalities of a single

school of thought, and in turn adopted a more syncretic and problem-oriented analysis.

When the mainstream theories in IR academia share certain basic assumptions—that the

international system is anarchic, and that state behavior is more or less driven by material

interests, for example, a group of scholars has tended to investigate world events with

eclectic tools. For instance, given the complicated interplay between power, interest, and

norms in the real world, Peter Katzenstein and Nobuo Okawara propose in their research

on East Asian security regimes that analytical eclecticism is needed for the further

development of IR theory. 562 Motivations for state behavior, they argued, are made more intelligible by drawing selectively on different paradigms. To them, it is necessary for IR scholars to escape from “paradigmatic clashes” caused by parsimonious explanations.

This research agrees with Peter Katzenstein that motivations of state behavior are complex and multiple, however, it is difficult to combine different theories that focus on

561 John Lewis Gaddis, “International Relations Theory and the End of the Cold War,” International Security , vol. 17, no. 3 (Winter 1992/93), pp. 5-58. 562 Peter Katzenstein and Nobuo Okawara, “Japan, Asian-Pacific Security, and the Case for Analytical Eclecticism,” International Security , vol. 26, no. 3 (Winter 2001/02), pp. 153-185; Christopher Hemmer and Peter J. Katzenstein, “Why is There No NATO in Asia? Collective Identity, Regionalism, and the Origins of Multilateralism,” International Organization , vol. 56, no. 3 (Summer 2002), pp. 575-607.

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different levels of analysis unless identifying the conditions under which this analytical eclecticism works first.

While there is no single theory that satisfactorily explains the case in question, there does exist a number of theories that, when put together, provide a powerful explanation, we should then probe the possibility of employing such analytical eclecticism.

Furthermore, my research suggests that China’s U.S. policy after the Cold War is a product of cost-benefit calculations that took into account the distribution of capabilities in the international system, Chinese perceptions of this distribution and of American threat, and China’s increasing returns from trading relations with the U.S..

As I demonstrated in Chapter 2, different strands of neo-realism share the same assumption that states need to respond to their external environment, but they differ on the degree to which a state can act on its own will and use the resources at its own disposal. As a result, they see individual countries as similar units all intent on the struggle for power. With these basic motivations in place, the distribution of power in the international structure and the individual state’s capabilities then determine its behavior.

To me, offensive realism is power-determinism in that a state would maximize its power to attain hegemonic status and that power distribution in the anarchic international system determines, if not dictates, state behavior. Offensive realism as Mearsheimer’s predictions thus leaves little, if any, room for possible change in state behavior. Therefore, offensive realist reasoning alone cannot explain why states—especially one as significant as China in terms of material capabilities—choose accommodation over confrontation as their policy.

This research on China’s policy toward the U.S. in the post-Cold War era follows a realist perspective, in which power and interests both play significant role in shaping the

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thinking of the leadership, to explain foreign policy.

Neorealism and China’s Accommodative Behavior

Chapter 2 provides a neo-realist structural explanation of China’s accommodation with the U.S. since the end of the Cold War, contending that China’s U.S. policy is a response to the distribution of capabilities among nations and Waltz’s theory of balance-of-power applies. The realist explanation is correct in that balancing is costly, and it is the high cost of China’s balancing policy toward the U.S. after the Cold War that led to its gradual replacement by accommodation as China recognized the widening power disparity between the two countries and re-calculated the costs and benefits of balancing. However, while the perception of the distribution of capabilities constrains the choices and strategies a state might have to prudently respond to external pressure, the perception of threat determines the source of threat and whom a state needs to respond to.

Neorealism has taken us so far in discerning Chinese perceptions of the U.S. and of the international system that has constrained China’s U.S. policy. As Chapter 2 shows, perceived power distribution set the foundation and constraints for China’s response to a threatening U.S. However, Waltz does not satisfactorily explain why the U.S. becomes an existential threat to China or whether these feelings could be mended through interactions between two nations at odds. This is why we should further explore the origins of threat from the Chinese perspective. In his study on the formation of alliances, Stephen Walt accurately identifies that the perception of threat was the driving force behind India’s allying itself with the Soviets through the 1960s.

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Perception of Threat and Reciprocated Interactions

To a degree Stephen Walt’s “balance-of-threat” argument takes perception into account, making it more possible to account for a state’s changing behavior. More important, Walt’s reasoning introduces the issues of perception into a realist model mainly concerned with considerations of power.

On the other hand, many analysts in China argue that now the Chinese leadership and people have a more sophisticated, balanced, and objective view of the U.S. These analysts maintain that the evolution of China’s perception of the U.S. is the outcome of the interactions between the two nations. To explain China’s changing perceptions of the

U.S., Chapter 3 explores how the interactions between China and the U.S. gradually changed China’s threat perceptions, which resonates with China’s view that interactions among states constitute an integral part of the international structure. This chapter demonstrates that while China perceived the U.S. as a threat in the 1990s, cooperative reciprocity significantly reduced China’s fears of the American threat over time.

The issue of human rights occupied the core of U.S.-China relations in the post-Cold

War era and, for the most part, constitutes an “impasse” for both sides as Harry Harding has suggested. Punitive reciprocity emerged in the early 1990s after the U.S. demanded improved human rights as a precondition to further relations with China. China, out of the fear of political subversion, accused the U.S. of brutal interference in China’s internal affairs.

Chinese scholars deem the human rights issue one of the “most important points of contention” in U.S.-China relations since the end of the Cold War. Compared to other conflicts over trade and arms control, human rights has been more difficult to address because of its roots in history and ideological and political differences. However, as the

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U.S. lessened its criticisms, China has gradually changed its perspective on how the issue of human rights should be addressed.

As Chapter 3 indicates, China was more willing to accommodate the U.S. on human rights when it expected the U.S. would reciprocate positively. And it should be noted that most of the time, it was the U.S.—with its stronger material capabilities—that took the lead in the dyadic relations. Additionally, as China gradually generated confidence from positive interactions with the U.S. following the 1997 summit meeting, it was able to be more proactive in coping with the U.S. in 2001, in hopes that bilateral interactions could ameliorate the pressure put forth by the U.S.-dominated international structure. This

Chinese hope for better relations with the U.S. was evident in Qian Qichen’s visit to the

U.S. in March 2001, and in Jiang Zemin’s and Hu Jintao’s respective proposals to regularize higher-level channels of communication with the Bush administration.

The Chinese leadership sees the human rights issue as contingent on overall political relations with the U.S. and is more concerned about how the U.S. defines the bilateral relationship—be it “constructive strategic partnership,” “strategic competitor,”

“constructive and cooperative relations,” or “responsible stakeholder”. As Wang Jisi suggests, when the U.S. changed its focus from the release of prominent Chinese dissidents (seeking immediate positive media attention) to long-term judiciary assistance and institutional support, China gradually realized that human rights and the promotion of democratic ideas constitutes an integral part of U.S. foreign policy.

Economic Interdependence and Increasing Returns

Chapters 2 and 3 deal with the “costs” of Chinese confrontations with the U.S.,

Chapter 4 aims to discern the other side of the coin—the “benefits” of Chinese

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cooperation with the U.S. Trade is one of the most salient common interests between

China and the U.S, as indicated in the 1972 Shanghai Communiqué that allowed both sides greater access to the other’s market. The promotion of trade liberalization and elimination of trade barriers in the world market seem to be another point of cooperation.

U.S.-China relations, however, proves to be problematic the liberal prediction that trade can lead to peace. At the same time, the offensive realist argument on trade as exemplified by Robert Gilpin is insufficient for explaining China’s accommodation of the

U.S. in the post-Cold War era, because both sides should be focusing on how to increase relative gains vis-à-vis each other, which would render accommodation difficult, if not impossible.

Dale Copeland’s theory of trade expectation has helped us to some degree to think against or around two of the dominant schools in IR scholarship. In his own analysis,

Copeland is right in claiming that we need to take economic issues into account while analyzing why states would go to war if decision makers foresee a future worse than the present.

When China perceived economic interdependence and globalization as irreversible trends, its leadership decided to continue the national strategy of integrating with the world economy. In addition, China’s asymmetric dependence on the U.S. market increases the costs to the Chinese leadership of choosing a confrontational rather than accommodative approach to the U.S.

When it is unclear how to define “trade value” in Copeland’s study, my research helps to introduce “trade volume” as the indicator to explore China’s expectation of trading with the U.S. For one, in the period under scrutiny in my research, beginning in the early 1990s, Chinese officials from MOFTEC/MOFCOM have repeatedly underlined

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the importance of annual bilateral trade volumes while referring to the trade relations between the two nations. 563 Chinese scholars also maintain that the growth of trade volume is the indication of a good trading relationship with the U.S. 564 More importantly, in recent years, Chinese officials have further claimed that China has no intention of pursuing a large trade surplus against the U.S., indicating China’s moderate view of overall (rather than distributive) trade benefits between the two nations. 565 This seems to suggest that China put more emphasis on “absolute gains” when faced economic and trade cooperation issues, as indicated in Jiang Zemin’s “win-win” comment on China’s negotiations with U.S. over the WTO membership. A Chinese analyst noted that, since

China began its economic development from a very low point in terms of GDP, any increase in return from economic cooperation would be seen as positive and beneficial to

China. 566 In addition, a group of analysts emphasizes that China gains “equal footing” with the U.S. on economic issues. In recent years, China has become the 4 th largest market of the U.S. exports and the increase in Chinese holdings of U.S. assets have contributed to a more symmetric relationship between the two nations, in which the U.S. has less economic leverage against China over non-economic issues. 567

563 Chinese officials emphasize the importance of trade volume, sometimes along with the foreign direct investment from the U.S., when making statement to trade relations with the U.S. Sun Zhengyu, “ZhongMei Jingmao Guanxi de Xianzhuang yu Qianjing” [The Current Status and Prospects of Sino-U.S. Economic and Trade Relations], Guoji Maoyi , no. 6 (1992), pp. 15-17; Wang Zhiquan, “Xunqiu Gengjia Shengqi Bobo de Hezuo” [To Seek further Cooperation], Guoji Maoyi , no. 5 (1998), pp. 13-15; Si Si, “ZhongMei Jingmao, Haikuo Tiankong” [Economic and Trade Relations between China and U.S.A.: Boundless Opportunities], Zhongguo Jingmao , no. 4 (April 2006), pp. 52-57. 564 Interviews #2, Beijing, June 16, 2008; #5, Beijing, June 20, 2008. 565 Public Broadcasting Service (PBS), “Exclusive Interview with China's Commerce Minister Bo Xilai,” June 2, 2005, http://www.pbs.org/nbr/site/onair/transcripts/050602_chinacommerce1 (accessed 3/13/2009). 566 This analyst further used this view to explain why China has been doing better and stable than others had predicted after its accession to the WTO. Interview #5, Beijing, June 20, 2008. 567 Wu Xinbo, “Zhongmei Jingmao Guanxi de Xingeju ji qi dui Shuangbian Guanxi de Yingxiang” [The New Landscape in Sino-U.S. Economic and Trade Relations and Its Impact on Bilateral Ties], Fudan Xuebao , no. 1 (2007), pp. 7-9; Li Changjiu, “Zhongmei Jingmao yu Zhengzhi Guanxi de Fazhan Xincheng Xianming Duizhao” [A Stark Contrast between Sino-U.S. Economic and Political Relations], Xiandai Guoji Guanxi , no. 6 (2001), pp. 17-20.

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This finding contributes to our understanding of the relationship between trade and peace: trade seems to play an indirect role in that it increases the costs of breaking up bilateral relations, thus increasing the costs of war or confrontation. It should be further noted that China tends to put a priority on political stability and security over and above purely economic interests and trade relations, with the bottom line of preventing trade frictions from deteriorating overall U.S.-China relations. In other words, trade expectation theory needs to be more nuanced about the conditions under which two trading partners would resort to war to solve their disputes. It should be noted that the existent literature on the impact of economic interdependence in international relations explores the causality between the levels of trade and the probability of armed conflict, indicating that “war” is the specific dependent variable. In U.S.-China relations, the question is not whether they will actually wage war against each other, but the extent to which peace—characterized by accommodation and cooperation—would occur and persist. Thus, the liberal argument that economic returns could promote peace and cooperation is correct and Copeland’s trade expectations theory applies to the case of

China’s policy toward the U.S.

Domestic Politics and Foreign Policy

Chapter 5 analyzes Chinese domestic political factors that are accountable for its international behavior. Consensus-building becomes the key when it comes to the decision-making process while the domestic political structure gives the most salience to the top leader or “core” of the collective leadership. It is thus important for top Chinese leaders to cope with the dissenting views within the leadership that deem accommodating the U.S. as dangerous to Chinese national interests.

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The Chinese analysts tend to emphasize the impact of China’s domestic politics on its international behavior, arguing that domestic roots of political stability and economic development are crucial to the understanding of China’s cooperative and accommodative international behavior. 568 And, many Chinese analysts maintain that the Chinese top leaders’ prudent decision to forbear U.S. hawkish policies is crucial to stabilized

U.S.-China relations. Through the case studies focusing on the times of crisis, I find that

Jiang Zemin’s consolidation of power and ability to generate an elite consensus on U.S. policy did contribute to China’s adoption of accommodative policy toward the United

States.

However, Jiang’s prudence is contingent on other political elites’ perception of the international structural factors as evidenced by U.S. military prowess in the time of crisis.

If the current international factors change, with other things being equal in terms of domestic political context, then China could possibly change its behavior in the direction corresponding to its external environment.

In addition, as I stated in Chapter 5, national sovereignty and territorial integrity still constitute the core and most sensitive issues in China’s foreign policy. As indicated by the

Taiwan issue between 1995 and 1996, the Chinese leadership had shifted from a relatively moderate means of peaceful resolution to a hawkish policy that emphasized the use of force. Thus, we should not presume that the domestic political context alone is a sufficient explanation accountable for a state’s peaceful or non-peaceful behavior.

568 Zhang Baijia, “An Outline History of China’s Foreign Policy in Evolution during the Period of Reform and Expansion of Internaitonal Ties (1992-2002),” Far Eastern Affai rs, vol. 31, no. 4 (October-December 2003), pp. 36-48.

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Hypotheses Revisited

With the inclusion of systemic and domestic context and of power and interest analyses, my research to a lesser extent investigates the conditions under which states would adopt “accommodative” policy. This research aims to provide a problem-solving explanation for state behavior, namely, the shift from a confrontational policy to an accommodative one toward another state. With its rigid and parsimonious assumptions, offensive realism only explains why and how states balance against each other. Offensive realists such as Mearsheimer do not pay heed to any state behavior other than balancing.

They usually render bandwagoning and accommodation as choices only for weak and small states, and restrain themselves from providing insight to other behaviors of states.

As abovementioned, Katzenstein’s analytical eclecticism provides a problem-solving approach in explaining state behaviors; however, it suffers a difficulty in identifying the conditions under which this eclecticism will work. And, in the case of Chinese foreign policy in the post-Cold War era, as my research shows, the decisions of the Chinese leadership highlight the importance of national interests in either confronting in the early

1990s or accommodating the U.S. since the second half of the 1990s. As a rational actor,

China’s international behavior reflects the calculus of cost and benefit analysis.

While Mearsheimer concludes with the pessimistic view that a rising China will eventually collide with the U.S. in the Pacific, my research provides a more pragmatic view supported by evidence that China has gradually shifted from confrontation to accommodation in terms of its U.S. policy since the mid-1990s. Accommodation refers to

China’s nascent acceptance of U.S. claims and demands on certain issues while differences over other fundamental issues remain.

The Waltzian structural realist hypothesis (hypothesis 1) explains, to a degree, why

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China decided to accommodate.

While China perceives the U.S. as a threat, my findings suggest that power does matter and that the Chinese perception of U.S. military capabilities underwent profound changes between 1996 and1999 compared with elite Chinese perceptions in the early

1990s. Distribution of military power between the U.S. and China had restrained the latter’s policy choices, but offensive realism could not explain why China has not continued to pursue military alliances with other states to target the U.S.

Confirming Walt’s perception of threat theory, this research also confirms to a degree the current, if limited, research on accommodation in IR scholarship, in that dyadic reciprocity (hypothesis 2) is of importance for states to reduce threat perceptions

and to create a virtuous circle of interaction, or at least to avoid a downward spiral in

their bilateral relations. Reciprocity is defined as giving the other side what they want

with the expectation that they will offer up what you desire in return. Whether or not

reciprocity is a precondition to accommodation, however, remains inconclusive if we do

not relate it to Walt’s threat perception theory. This research proposed that China tended

to attribute negative interactions to the U.S. wrongful policy insensitive to China’s

interests, while maintaining that positive interactions provided an opportunity for China

and the U.S. to move towards better engagement.

China more often than not claims that the U.S. is responsible for any deterioration in

their bilateral relations, implying that reciprocity is crucial to China’s policy toward the

U.S. China often forgets, however, that in a reciprocal relationship both sides are equally

responsible. In my research, I find China’s understanding of reciprocity and how it relates

to China’s accommodative behavior to be problematic. The Chinese leadership tends to

contend that China has suffered under a U.S. policy insensitive to China’s interests,

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which suggests that China sees itself stabilizing the overall bilateral relations while U.S. time and again spoils their relationship. While stressing the reactive nature of China’s policy toward the U.S., China tends to routinely blame the U.S. whenever the dyadic relationship is at the low ebb.

Increasing economic returns from engagement with the U.S. (hypothesis 3) may help us to understand China’s accommodative behavior. While one strand of liberalism assumes that trade would lead to peace, its static snapshot view—that focuses only on a specific point of time and its corresponding state behavior—could not capture the dynamic relationship between China and U.S. Furthermore, following the linear trade-leads-to-peace explanation, then the cooperative relations Sino- U.S. initiated in

1979 should have continued rather than retreating in the aftermath of the 1989 Tiananmen incident, or at least should have bounced back to normal in 1993 when the trade surplus began to favor China. This historical perspective proves that a pure liberal explanation is problematic. Copeland’s trade expectation theory is more persuasive. As my research demonstrates, the Chinese leadership’s expectations regarding future trade volume also helps explain why China adapted to accommodation in the mid-1990s.

However, my research on China’s accommodation to the U.S. also leads me to revisit Copeland’s original argument. Specifically, the Chinese leadership’s emphasis on political relations with the U.S. sometimes trumped the purely economic cost-benefit calculation, as indicated in China’s WTO negotiations with the U.S. This case may lead us to reconsider standard trade expectations theory: we need to identify the political priorities and gains that can outweigh short-term economic costs to the leadership.

Neoclassical realism brings our attention to the domestic political structure in explaining why states choose to respond differently while facing pressure from the same

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international system. This research finds that the cost-benefit calculations of the decision-maker on his own political survival are important in understanding Chinese responses to external actions. However, this research also highlights the difficulty in discerning the domestic factors at play as one cannot generally acquire detailed information about coalition and consensus-building within the Chinese leadership.

My research finds these factors to be rather complementary. Taken together, my

provision of the case of China’s policy shift from confrontation to accommodation in the

post-Cold War era, along with other case studies in IR literature, can improve our

understanding of state behavior more comprehensively than balancing theory can.

Future Research Agenda

To conclude this dissertation, I lay out some suggestions for future research. This

research is a single-case study that tracks the variation in a state’s foreign policy as it

shifts from confrontation to accommodation. As my findings suggest, there is a

multi-causal relationship between the independent variables under examination

(international power and threat perception, reciprocity, trade expectation, and domestic

politics) that helped shaped the outcome (from confrontation to accommodation). To

some extent, this research enriches our understanding of state behavior when facing

different constraints from either the international system or domestic political structure.

However, a comparative study with other cases could further advance our knowledge of

state accommodative foreign policy in addition to my single-case study. As I mentioned

in different chapters, IR scholars and comparative theorists have in various degrees

contributed to the explanation of a state’s accommodation to others. Yet most studies in

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the extant literature are conducted as single-case studies that employ a single explanation.

For instance, Robert Ross conducts several in-depth analyses on China’s reassessment of the international environment over time, concluding that power disparity alone explains

China’s accommodation to the U.S. under the Reagan administration. 569 He also explores how and why other East Asian nations have accommodated China since the 1990s, but he still attributes it to China’s military power vis-à-vis individual Asian nations. 570 While providing the realist explanation of state accommodative behavior, Ross admits that he might be ignoring other important factors, such as economic interdependence, that do play a role in shaping a state’s cost-benefit calculation, especially in the case of South

Korea’s and Taiwan’s accommodation to China, with both nations enjoying considerable economic benefits from trading with and investing in China.

Other scholars from different theoretical perspectives also provide their explanations on how states accommodate another stronger state. In addition to the power explanation,

Henry Nau contends that Japan shares a democratic identity with the U.S., thus ensuring the regional stability and peace in the Asia-Pacific region. 571 In the case of China, David

Kang examines why Asian nations has been accommodating to a militarily and economically growing China in his latest work.572 Kang begins with the historical explanation that Asian nations seem to be used to a hierarchical regional order leading by

569 Robert S. Ross, “China Learns to Compromise: Change in U.S.-China Relations, 1982-1984,” The China Quarterly , no. 128 (December 1991), pp, 742-773. His other similar arguments that emphasize the role of power disparity and how U.S. military preponderance assures its security include: Robert S. Ross, “The Geography of the Peace: East Asia in the Twenty-First Century,” International Security , vol. 23, no. 4 (Spring 1999), pp. 81-118; Robert S. Ross, “The 1995-96 Taiwan Strait Confrontation: Coercion, Credibility, and the Use of Force,” International Security , vol. 25, no. 2 (Autumn 2000), pp. 87-123. 570 Robert S. Ross, “Balance of Power Politics and the Rise of China: Accommodation and Balancing in East Asia,” Security Studies , vol. 15, no. 3 (July-September 2006), pp. 355-395. 571 Henry R. Nau, “Identity and the Balance of Power in Asia,” in G. John Ikenberry and Michael Mastanduno, eds., International Relations Theory and the Asia-Pacific (NY: Columbia University Press, 2003), pp. 213-241. 572 David C. Kang, China Rising: Peace, Power, and Order in East Asia (NY: Columbia University Press, 2007).

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China that went basically unchallenged between 1300 and 1900. Having established this historical preference of Asian nations for regional stability anchored by China’s status,

Kang continues on to suggest that the revival of China’s economic and military power since the end of the Cold War has been seen as a contributing factor for regional stability again in the eyes of other Asian nations. Therefore, Kang concludes, a rising China would bring about accommodation from other Asian nations and thus peace and stability rather than threats in East Asia.

These studies contribute to our understanding of state accommodation. For instance, while Ross and Kang provide different reasons to explain why South Korea has been accommodating towards China, they both point out the importance of China’s military capabilities in shaping South Korea’s policy choices. However, they both ignore the role of U.S. military presence in the Asia-Pacific region (especially in the form of the

U.S.-ROK and U.S.-Japan alliances) that provides security protection as Nau suggests.

This security protection from the U.S., to a degree, might have mitigated South Korea’s perception of China’s military threat and thus facilitated South Korea’s doing business with China. Therefore, I think a comparison between different cases with different theoretical angles will further contribute to the scholarship.

In addition, for researchers interested in Chinese foreign policy, it is important to further unpack the process of elite decision-making. For instance, a major part of this research is based upon Chinese scholarly discussion, publications, and interviews with scholars and analysts in universities and think tanks. Although one can readily have the sense that the growing role of these specialists in the process of decision-making, how they contribute to Chinese international behavior still needs further exploration. In

Chapter 2 I identify the limitation of utilizing these scholarly discussions and debates in

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explaining China’s foreign policy, with the evaluation that one should not overestimate the influence of scholars in China’s foreign policy decision-making process while acknowledging the growing role that they can play. It should be noted that the mechanism through which intellectuals exert their influence on policy outcome is relatively opaque and deserves more attention in the future. This is important if one wants to apply other approaches in international relations, such as constructivism, to explain China’s international behavior. For instance, Thomas Risse’s and others’ research on how ideas promoted by transnational epistemic communities transcend state boundaries, within domestic political institutions, and between the state and society can lead to policy changes may shed light on future research in the case of China. 573

In terms of the study of U.S.-China relations, this dissertation provides the policy

insight that the Chinese leadership makes policy choices based upon cost-benefit analyses,

characterized by pragmatism in China’s policy shift from confrontation to

accommodation with the U.S. following the Cold War. With the suitable employment of

carrots and sticks, the future of U.S.-China relations can be expected to be more

cooperative than the predictions of those who believe in the power-determinist

explanation.

First of all, as Chapter 2 demonstrates, China’s perceptions of the distribution of

capabilities among states help to shape its international behavior. As a result, U.S.

maintenance of its high degree of comprehensive national power is crucial to help China

573 Thomas Risse-Kappen, “Ideas Do Not Float Freely: Transnational Coalitions, Domestic Structures, and the End of the Cold War,” International Organization , vol. 48, no. 2 (Spring 1994), pp. 184-214; Thomas Risse, “Transnational Actors and World Politics,” in Walter Carlsnaes, Thomas Risse and Beth A. Simmons, eds., Handbook of International Relations (London: SAGE Publications, 2002), pp. 255-274; Jeff Checkel, “Ideas, Institutions and the Gorbachev Foreign Policy Revolution,” World Politics , vol. 45, no. 2 (January 1993), pp. 271-300.

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realize the costs of any attempt to counterbalance America’s hegemonic status. In the meantime, the U.S. should continue to reassure China, as President Bush did when meeting with Qian Qichen in March 2001, that it does not pose a threat to China’s fundamental interests.

Second, when China puts more emphasis on bilateral interactions, U.S.-China relations will be more cooperative when both sides work to reciprocate the accommodative gestures made by the other. Chapter 3 demonstrates how cooperative interactions between the U.S. and China helped to reduce China’s fears of the American threat and induced China to accommodation. Positive and cooperative reciprocity will work more effectively in reducing the threat perceptions if both sides are clear as to the other side’s expectations.

Moreover, the U.S. should increase China’s expectations of the benefits of accommodation and cooperation. As Chapter 4 indicates, the pursuit of prosperity has long been a goal of China, but how to achieve this goal is also shaped by the expectations of the Chinese leadership about the future. Increasing returns from further integration with the U.S. and world markets help to encourage cooperative Chinese behavior internationally. Thus, the U.S. should remain open to Chinese exports and continue to investment in China, in order to extend China’s expectations of a stable relationship, encouraging Beijing to perceive the attractive gains to be made from accommodating the

U.S. In the meantime, it is important for both nations to take more steps to frankly manage future relations, exemplified by China’s wish to manage trade issues with the U.S. through the WTO dispute resolution mechanism.

In recent years, many issues have emerged as the point of concern to lowering

China’s expectations from the future bilateral trading relations when the U.S. demanded

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China to take action. To name a few, these issues include trade imbalance, the revaluation of RMB, China’s increasing holdings of the American assets as foreign exchange reserves, and the U.S. proposed carbon tariffs that can increase the costs of China’s ever-lasting economic development.

Mismanagement of these issues has the potential to decrease China’s expectations of

trading with the U.S. And, it will become possible for China to return to confrontation if

it feels coerced to make a concession under the pressure resulted from American electoral

politics, as did in the early 1990s. Interactions between the two nations in the present

global economic recession are the case in point. When U.S. Congress called for a new bill

on China’s “currency manipulation,” senior Chinese officials expressed their complaint of

the dollar recently. People’s Bank of China Governor Zhou Xiaochuan in March 2009

suggested a new “super-sovereign reserve currency” as the replacement of the dollar for

worldwide foreign exchange reserves. Zhou’s proposal was seen as a challenge to the

dominant role of the dollar and of the U.S. 574

To the U.S., notably Congress, the revaluation of RMB seems to be the solution for other domestic economic problems such as trade imbalance and the loss of job. However,

China sees the RMB issue as the scapegoat rather than a justified cause for the American and global economic downturn. As a latest study shows, when RMB has begun to appreciate aginst the dollar in July 2005, the U.S. trade deficit with China still raised over time, suggesting that the importance of the revaluation of RMB to the reduction of U.S. trade deficit may be overstated. 575

574 Dexter Roberts, “China Talks Tough with Call to Dump Dollars,” BusinessWeek , March 25, 2009, http://www.businessweek.com/globalbiz/content/mar2009/gb20090325_407723.htm (accessed 7/3/2009). 575 According to Derek Scissors, the U.S. trade deficit with China continued to grow from $186 billion (12 months in 2004-2005) to $261 billion (12 months in 2007-2008). Derek Scissors, “U.S.-China Trade: Do’s and Don’ts for Congress,” Backgrounder, no. 2299, July 20, 2009, p. 4.

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Another issue that concerns the U.S. is China’s large foreign exchange reserves

accrued from foreign trade since the late 1970s. According to the Chinese official record,

at the end of 2008 China held $1.95 trillion foreign exchange reserves, with the majority

of these reserves in dollar-based assets such as U.S. bonds. 576 Chinese growing holdings

of American assets worry the U.S. because China’s any decision to sell these assets in the

world financial market could result in the devaluation of the dollar and thus constrain the

U.S. financial policy choices. However, as Lampton and others pointed out, China’s

heavy reliance on dollar-based assets also limits its freedom to sell, because dumping U.S.

bonds in global financial markets may lead to the depreciation of these assets, and in turn

decrease the total value of China’s own foreign reserves. 577

These two issues indicate the nature of interdependence of U.S.-China economic relations. And, as Chinese officials complained about the dollar, the Chinese government still keeps buying U.S. bonds. 578 With limited alternatives but to have more reliable U.S. assets, China’s complaint of the dominant role of the dollar signals its intent to increase its voice in global financial affairs rather than challenge the U.S. status. When bilateral mechanisms such as the SED in recent years have stabilized fluctuations in U.S.-China trade relations, it is possible to remain China’s expectations of future trading relationship with the U.S. via effective joint management rather than political pressure.

576 David M. Lampton, The Three Faces of Chinese Power: Might, Money, and Minds (Berkeley: University of California Press, 2008), p. 95; Brad Setser and Arpana Pandey, “China’s $1.7 Trillion Bet: China’s External Portfolio and Dollar Reserves,” Working Paper, the Council on Foreign Relations, January 2009. 577 David M. Lampton, The Three Faces of Chinese Power: Might, Money, and Minds (Berkeley: University of California Press, 2008), p. 96; Jamil Anderlini, “China stuck in ‘dollar trap’,” Financial Times , May 24, 2009, http://www.ft.com/cms/s/5b47c8f8-488c-11de-8870-00144feabdc0,dwp_uuid=eaa4d862-6d69-11da-a4df-0 000779e2340,print=yes.html (accessed 7/3/2009). 578 According to the U.S. Treasury, China’s holding of U.S. securities increased to $767.9 billion in March 2009 from US$744.2 billion the previous month. “China still Buying U.S. Treasury Bonds,” Taipei Times , May 18, 2009, http://www.taipeitimes.com/News/worldbiz/archives/2009/05/18/2003443843 (accessed 7/3/2009).

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Finally, Chapter 5 suggests that the calculations on political survival are of significance to understanding the decisions made by top Chinese leaders. If China continues with its accommodative policy toward the U.S., then U.S. gestures of goodwill may help to consolidate the political power of these leaders by forging a more accommodative consensus among political elites during times of crisis. Therefore, a better U.S. understanding of top Chinese leaders’ need for political survival would further contribute to China’s accommodating behavior.

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