The Age of Uncertainty: the U.S.-China-Japan Triangle From

The Age of uncertainty

The U.S.-China-Japan Triangle from Tiananmen (1989) to 9/11 (2001)

Edited by Ezra F. Vogel Yuan Ming Akihiko Tanaka

This on-line text published by the Harvard University Asia Center The Age of Uncertainty The U.S.-China-Japan Triangle from Tiananmen (1989) to 9/11 (2001)

Harvard East Asian Monographs Online

The Age of Uncertainty The U.S.-China-Japan Triangle from

Tiananmen (1989) to 9/11 (2001)

Edited by

Ezra F. Vogel Yuan Ming Akihiko Tanaka

Printed in the United States of America

The Harvard University Asia Center publishes a monograph series and, in coordination with the Fairbank Center for East Asian Research, the Korea Institute, the Reis- chauer Institute of Japanese Studies, and other faculties and institutes, administers research projects designed to further scholarly understanding of China, Japan, Vietnam, Korea, and other Asian countries. The Center also sponsors projects addressing mul- tidisciplinary and regional issues in Asia.

Contents

Introduction Ezra Vogel, “The United States Perspective” 3 Yuan Ming, “The Chinese Perspective” 18 Akihiko Tanaka, “The Japanese Perspective” 23

Part I Domestic Politics Michael Nacht, “Domestic Roots of U.S. China Policy (with Thoughts on Japan) from Clinton Through 2001 39 Zhang Baijia, “Chinese Domestic and Foreign Policies in the 1990s” 61 Shin’ichi Kitaoka and Matake Kamiya, “Japanese Politics and Security Policy, 1990–2001” (preliminary version) 82

Part II U.S.-China Relations Robert Ross, “From Denial to Leadership:The Clinton Administration and China” 125 Jia Qingguo, “Narrowing Differences but Diverging Priorities: Sino-American Relations, 1992–2000” 154 vi Contents

Part III U.S.-Japanese Relations

Gerald Curtis, “U.S. Policy Toward Japan in the 1990s” 185 Koji Murata, “Japan’s Policy Toward the United States During the 1990s” 204

Part IV Sino-Japanese Relations Zhang Tuosheng, “Sino-Japanese Relations at the Turn of the Century” 227 Akio Takahara, “Japan’s Policy Toward China in the 1990s” 254 The Age of Uncertainty The U.S.-China-Japan Triangle from Tiananmen (1989) to 9/11 (2001)

Introduction

The United States Perspective Ezra F. Vogel

How did the three powers in the Asia-Pacific region—the United States, China, and Japan—adjust their relations in the uncertain environment after Tiananmen (June 4, 1989) and the end of the Cold War? We approach these questions from both a domestic and a foreign policy perspective. Three scholars describe the domestic context in each of the three countries. Each of the three bilateral relationships is examined by two scholars, one from each country involved. The essays in this volume were first presented at the third conference on the relationship between the United States, China, and Japan from the end of World War II to the close of the twentieth century. The papers from the first conference, held at Harvard in May 1998, are available on a web site: http://www.fas.harvard.edu/~asiactr/ sino-Japanese/index.htm. Those from the second conference, held in Tokyo in January 2000, are available in The Golden Age of the U.S.- China-Japan Triangle, 1972–1989 (Cambridge, Mass.: Harvard Univer- sity Asia Center, 2002). The third conference, on which the chapters in this volume are based, was held in Beijing in April 2001; the chapter were subsequently revised to take into account the impact of Sep- tember 11.

————— Ezra F. Vogel is Henry Ford II Research Professor at Harvard University. © The President and Fellows of Harvard College 2004. This essay may not be repro- duced without permission from the Harvard University Asia Center.

3 4 Ezra F. Vogel

The editors, who were also the organizers of the three conferences, believe that in the twenty-first century peace and security, not only in Asia but in the entire world, require effective working relationships between the three great powers of the Asia-Pacific region. The conferences were organized so that scholars from the United States, China, and Japan might contribute to the goal of constructive cooperation by seeking a common understanding of the forces that have affected relations between their three countries in recent decades. At the time the conferences were launched, Yuan Ming was the director of the International Relations program at Peking University, and Ezra Vogel was the director of the Asia Center and the Fairbank Center for East Asian Research at Harvard. Tanaka Akihito became the director of the Institute of Oriental Culture at the University of Tokyo in April 2002. Each in turn drew on leading specialists in his own country. *** The years 1972–89, leading up to the period covered by this volume, were not easy, as China turned against its former ally, the Soviet Un- ion, and began working with the United States and Japan. But, although the process was complex, the three nations’ common strategic interests gave them a positive basis for cooperation. This strategic rationale, bringing together China, Japan, and the United States against their mutual enemy, the Soviet Union, ended abruptly in 1989 with the collapse of the Berlin Wall and the ensuring breakup of the Soviet Union and of the Soviet Communist Party. The result was a new period of great uncertainty, with many ups and downs. De- spite the increased tensions, however, in the 1990s the level of mutual economic activity, exchange of people, and communication between the three countries continued to grow. In the period from 1972 to 1989, interactions between China and the other two powers were very limited, and the relationships could be managed by a small number of people who were concerned with national strategy. In the 1990s these relations, now greatly expanded, became more enmeshed in domestic concerns and domestic politics and were more difficult for a small group of leaders to control.

U.S.-China Relations By 1989 it was clear that Deng Xiaoping’s strategy of opening and reform, launched a decade earlier, was enormously successful, and the nation’s GDP was beginning to grow at a rate exceeding 10 percent a year. With China’s population surpassing that of Europe and North

The United States Perspective 5

America combined, a major global change was taking place. China was starting from a very low base, but it was modernizing not only its industry and infrastructure but also its military. The rise of any country creates anxieties in its neighbors, and China, with its long history, rich civilization, and huge population, naturally provoked new concerns in Southeast Asia, in Japan, and in the United States. The United States’ foreign policy, as Henry Kissinger and others have pointed out, has long been composed of two pillars: one flows from a realistic assessment of national power and interests, the other from a desire to affirm the values for which America stands. During the Cold War, with the perceived dangers from the Soviet bloc, the balance between these two pillars shifted toward a realistic concern with national power and interests. With the Cold War over, it seemed to many Americans that the United States no longer needed to support dictatorships that had allied with it against the Soviets. The United States’ foreign policy therefore had more leeway to demonstrate support for American values. There are many countries in the world that do not behave in accord with U.S. standards of human rights. But the drama of the crackdown around Tiananmen Square on June 4, 1989, vividly con- veyed by television around the world, occurred just at the time that the balance of concerns in U.S. foreign policy began to shirt more toward affirming the country’s values than looking after its strategic interests. China, with its size and sense of grandeur, and now the dramatic Tiananmen Incident, immediately became a major symbol for many Americans concerned with human rights. This concern was vigorously put forward by Chinese students in the United States whose friends were among those demonstrators, and their voices were reinforced by continued numbers of political dissidents within China who found refuge in the United States. Soon other U.S. groups, including those opposed to abortion, those concerned with strengthening the military, and those supporting propagation of religious faith, also made China the focus of their efforts. Some of the most influential critics of China either were from Taiwan or were Taiwanese who had immigrated to the United States. In 1947, within Taiwan, the KMT (Kuomintang), in retreat from the mainland, had brutally cracked down on local Taiwanese. From then on the KMT relied heavily on military rule and the secret police to maintain discipline—until 1987, when Taiwan ended military rule and lifted the ban on opposition parties. Thus two years later, when the Tiananmen Incident occurred, Taiwan authorities trying to win American support could contrast their democracy with

6 Ezra F. Vogel the brutal totalitarian crackdown of June 4, 1989, in Beijing. And the Taiwanese who had come to the United States could, like other American ethnic groups, use the American political process to gain public support. Since the executive branch had been more concerned with strategic and other international issues that required cooperation with China, Taiwan and its U.S. supporters took their case to Congress. The Tibetan exile community, led by the marvelously charismatic Dalai Lama, also pleaded its case before U.S. public opinion and Congress. After 1989, therefore, the United States’ China policy became a contested issue, as critics of China, strange bedfellows from the right and left, were balanced by pragmatists, business people, and political leaders who realized that the pursuit of U.S. interests required cooperation with China; by Chinese Americans; and by those who took part in cultural and academic exchanges with China.1 Changes in Taiwan led to a questioning of the agreements between the United States and China that had been made in 1972, 1978, and 1982. At the time of the Shanghai Communiqué in 1972, both the KMT in Taiwan and the Communists on the mainland claimed that they represented the mainland. The KMT was still proclaiming its intention of retaking the mainland. In 1972 in the Shanghai Commu- niqué, therefore, the United States had acknowledged that both sides of the Taiwan Strait claimed that Taiwan was part of China and that the United States did not contest that view. In the normalization of relations between China and the United States, negotiated in 1978, the United States ended formal government-to-government relations with Taiwan and replaced those with formal government relations with the mainland. In 1982 the United States announced that it would gradually reduce weapons sales to Taiwan. But by the end of the 1980s, the issue of Taiwan had become much more complicated. Leaders in Taiwan, aware that they had no chance of retaking the mainland, hoped that by renouncing their unrealistic claims to the mainland they would become more accepted in international organizations. Their reorganized government claimed to represent only the people of Taiwan. Once democracy took root in Taiwan after 1987, the “local” people whose ancestors had been in

————— 1. Two excellent books on U.S.-China relations in this period are: Robert L. Suet- tinger, Beyond Tiananmen: The Politics of U.S.-China Relations. 1989–2000 (Washington, D.C.: Brookings Institution, 2003); and David M. Lampton, Same Bed, Different Dreams: Managing U.S. China Relations, 1989–2000 (Berkeley: University of California Press, 2001).

The United States Perspective 7

Taiwan for centuries gained relative to the “mainlanders,” the 15 percent of the population that had fled the mainland in the late 1940s when the KMT lost the civil war. Many local people had less interest in the mainland, and President Lee Teng Hui, who was born in Tai- wan, tried in the 1990s to lay the basis for increasing independence by stressing local culture, the local language, and local history. Rela- tions between Beijing, trying to restrain the Taiwan efforts toward independence, and Washington, more sympathetic to Taiwan than in 1978, grew very tense. From the Chinese point of view, Taiwan had for centuries been part of China, even before the 1680s when it became a prefecture of China. In 1949, as the KMT army was retreating from its defeats in the civil war, the KMT government and army fled to Taiwan as their last holdout. It was then widely expected that Communist troops would invade Taiwan within a year or two, to complete the civil war. But in 1950 when the Korean War broke out, the United States, concerned about possible Communist Chinese aid to North Korea, blockaded the Taiwan Strait. Thus in Chinese eyes, the United States had interfered in the completion of the Chinese civil war. In 1978 in the normalization of relations with China, the United States had agreed not to maintain government relations with top officials in Taiwan, and there had been an understanding that high- level Taiwan officials would not be allowed to visit the United States. When Lee Teng Hui was allowed to visit the United States in 1995, China voiced strong objections. Tensions between the United States and China reached a peak in 1996 when China, concerned about increasing efforts for independence by Lee Teng Hui, fired missiles off the coast of Taiwan. The United States then sent carrier task forces near Taiwan. The tensions forced both sides to consider more deeply the costs of confrontation, and both countries began working together to maintain a better relationship. The Clinton administration, which had taken office in 1993 determined to carry out its policy of pushing China much harder on human rights, thus developed much closer ties with China from 1996 to 2001. American voices critical of China continued to make themselves heard, and the Chinese press publicized them to the Chinese people, creating a strong popular reaction. When the United States bombed the Chinese Embassy in Yugoslavia in 1998, Chinese criticisms grew furious. Most Chinese leaders and the concerned public firmly believed the bombing had been intentional. And yet Chinese leaders, like their U.S. counterparts, felt it was necessary for Chinese interests

8 Ezra F. Vogel to continue to work with the United States in world affairs. In short, after 1996, in both countries popular criticisms of the other country were kept under control by pragmatic leaders who believed that it was in their national interest to work with the other power.

The Reaffirmation of the U.S.-Japan Alliance What role should the U.S.-Japan alliance play once the Cold War was over and the Soviet Union, the main target of the alliance, was no longer a threat? Was the alliance still necessary? Could the U.S. military in Japan be greatly reduced?2 After 1989 Japan’s basic political structure, which had developed in the context of the Cold War, began to collapse. The Liberal Democ- ratic Party (LDP) had come together in 1955 to respond to the union of the socialists that occurred earlier in the year. From then until 1993, the LDP, which embraced capitalism and the alliance with the capitalist West, had ruled Japan. The opposition, composed of the progressive parties, the Socialists and Communists, had never been strong enough to take power. But supported by labor, the opposition’s presence was significant enough to force the LDP to remain united. The LDP, which had drawn heavily on its rural constituency, was gradually weakened by the massive migration to the cities, but the Socialist Party offered voters few viable alternatives since it had difficulty maintaining its commitment to radical change when the livelihood of the working class was improving so rapidly. By the time that the So- viet Union collapsed, it was clear to most Japanese that the open market countries were doing much better than the communist countries, and with the collapse of the communist world structure, the domestic support for Japan’s Socialist Party also collapsed. But once the LDP was no longer bound together by a strong opposition, the LDP members who lost out in intra-LDP battles felt no pressure to stay in the party. They split off. After 1993 the LDP no longer had the coherence to maintain power. Since then Japanese politics have been in constant turmoil, as all administrations have been composed of fleeting coali-

————— 2. The Edwin O. Reischauer Center of the School of Advanced International Stud- ies, Johns Hopkins University, in Washington, D.C., publishes an annual volume entitled The United States and Japan. It is a very useful way to track the relationship during this time period. See also Ralph Cossa, ed., Restructuring the U.S.-Japan Alliance (Wash- ington, D.C.: Center for Strategic and International Studies, 1997); and Michael J. Green and Patrick M. Cronin, eds., The U.S.-Japan Alliance: Past, Present, and Future (New York: Council on Foreign Relations, 1999).

The United States Perspective 9 tions that have lacked the basis for sustained power and the ability to pursue a coherent foreign policy. And yet, although the uncertainties made forceful action difficult, the overall consensus in Japanese society supporting the U.S.-Japan alliance and the consistency of leadership within the bureaucracy managed to continue the basic direction of foreign policy. Even the remnants of the Socialist Party found it difficult to continue to object to the alliance with the United States. Within the United States, the end of the Cold War unleashed long- suppressed U.S. business frustrations over the difficulty of breaking into the Japanese markets. These frustrations had grown in the late 1980s, when the Japanese economy seemed so strong and powerful in its heavy industry, particularly steel and automobiles, and high technology. At the time these frustrations had been kept under control by high U.S. officials who felt that the pressures on Japan should be muted because of the importance of maintaining the military alliance against communism. With the end of the Cold War, it was hard to argue that the United States should moderate its efforts to open further the Japanese market. Thus when the Clinton administration took office in 1993, it let loose powerful pressures on Japan to set targets for importing U.S. goods. The Japanese, however, with the increasing importance of multilateral resolution of trade disputes and with a strong economy, no longer felt they had to yield to pressure, and when top Japanese and American leaders met in February 1994, for the first time there was no agreement on trade issues. This mood dampened but did not destroy the basis for cooperation on security matters. From the U.S. point of view, the Gulf War was a turning point in its expectations of Japan, which it felt should make a greater contribution to global security. After global public opinion criticized Japan for sending only money to help with the Gulf War, Japan began moving, albeit slowly, to send forces to international peacekeeping operations and to consider responsibilities for defending not only the Japanese islands but the region around Japan. In the early 1990s the United States began to reduce its forces in East Asia, and by 1994 Japanese defense planners, uncertain as to what role the United States might play in the future in Asia, began to wonder how to draw up their next five-year defense plan. In response to these great uncertainties, in 1994 the U.S. and Japanese governments undertook a series of broad, multilevel discussions about security. There was a strong momentum in the relationship among officials on both sides who had worked together for some

10 Ezra F. Vogel time to maintain stability in the region. The tension on the Korean Peninsula in 1993–95, when the United States was pressuring North Korea to stop its production of plutonium and North Korea was threatening aggression, created a sense of urgency and demonstrated to many the necessity for close cooperation even after the Soviet Un- ion had collapsed. The wide-ranging discussions among current and former officials in the United States and Japan led to a basic consensus on continuing the alliance, with some modifications. Officials on both sides were convinced that even without an enemy, the alliance was important for maintaining stability in the region and for cooperating in responding to emergencies. The rationale was harder to explain to the U.S. public than the threat of a communist enemy, but the issues were not highly politicized and the discussions went relatively smoothly. The agreements were affirmed by President Clinton and Prime Minister Ryutaro Hashimoto when they met in Japan in early 1996. Although the Chinese were suspicious that the alliance was anti-Chinese, China was not an issue for those involved in the discussions. In fact, they wanted to increase cooperation with China to help maintain stability in the region. Japan and the United States worked together to develop more detailed guidelines for cooperation, but many issues remained to be dealt with and many contingencies required continued cooperation in planning. How would the two nations respond to various kinds of emergencies? How large a role should Japan play in the region? How far could it go in becoming a “normal” country without causing strained relations with its neighbors? How much could Japan contribute to international peacekeeping efforts? And how could popular opposition to the heavy concentration of U.S. bases in Okinawa be managed while doing what was necessary to respond to emergencies? Issues became much more complex than in the simpler days of the Cold War, but the long years of cooperation among security officials on the two sides of the Pacific and the many linkages between Japan and the Untied States at all levels of society provided a strong basis for continued cooperation in dealing with these complex issues.

Relations Between Japan and China As the previous volume in this series makes clear, the Japanese response to the 1989 Tiananmen Incident was different from that of the United States. Although the Japanese were horrified at the crackdown and the Japanese government was sensitive to the reactions of

The United States Perspective 11 the United States and Europe, Japan was more willing to maintain good relations with China. Japan had never made morality such a key to its foreign policy. With the memory of widespread Japanese atrocities against the Chinese from 1931 to 1945, the Japanese did not feel in a strong position to lecture Chinese leaders. They also put a high priority on restoring and maintaining good relations with their neighbors. Therefore Japan played a special role among the industrialized countries of the world in 1989–92 in maintaining relatively good relations with China. It was in this context that President Jiang Zemin visited Japan and the emperor of Japan, for the first time in history, visited China. There was hope that the two nations were embarking on a road of positive cooperation when for the first time in centuries both China and Japan were strong countries. By 1993 Europe and North American countries were resuming their pre-1989 level of activity with China, and the Chinese no longer felt that Japan had the unique importance in further opening the window to the outside that it had immediately after the Tiananmen Incident. The Chinese were therefore less constrained by their concerns about Japan. At the same time, they were disturbed by the extension of Japanese security planning from the islands of Japan to the surrounding region. China’s firsthand contact with Japan in 1931–45 had left a powerful image of a militaristic people, and the low level of contact between China and Japan after 1945 gave few Chinese an understanding of how deep the Japanese revulsion to militarism had become. The Chinese had many suspicions of Japan. Was the extension of the defense perimeter to the areas surrounding Japan the first step toward the revival of militarism? Japan had maintained especially close ties with Taiwan, which had been a Japanese colony for fifty years, and Taiwan’s president Lee Teng Hui spoke Japanese more naturally than he spoke Chinese. Was Japan plotting to do what it could to prevent China from retaking Taiwan? In 1995, on the fortieth anniversary of the end of World War II, Chinese media were filled with the horrible memories of the war and with warnings about the importance of remaining vigilant with regard to Japanese intentions. Why were the Japanese rewriting their textbooks, and why were Japanese politicians visiting the Yasukuni Shrine commemorating the war dead and making statements that understated the horrors of what Japan had done in World War II? Many Japanese, who had felt quite guilty about their role in China in World War II and had since then been willing to be generous when China seemed weak, became increasingly concerned about

12 Ezra F. Vogel

Chinese criticisms of Japan as the prospects of China’s becoming a great economic power and possibly a great military power grew stronger. If China harbored such hatred of Japan, how would China behave when it became more powerful? Would it not be better for Japan to stop yielding to Chinese pressure and to show China that it could not continue to make Japan bend to its demands? Tensions between Japan and China thus grew strong in the mid- 1990s. Japanese public reactions perhaps reached a height in 1998, when President Jiang Zemin visited Japan and repeatedly demanded that the Japanese apologize more deeply and express this in a written apology. The Japanese public became incensed and supported Prime Minister Keizo Obuchi’s decision not to make a written statement. Yet both Japanese and Chinese leaders recognized the dangers of confrontation and began after 1998 to make an effort to control the mutual tensions and to manage the relationship so that the two nations could avoid conflict and cooperate on their many common interests.

Post-9/11 (2001): U.S.–East Asia Relations Stabilize, Sino-Japanese Tensions Continue In the first months of 2001, after he came to office, President George W. Bush announced that he would “do whatever it takes to support Taiwan.” Chinese were concerned that his support for Taiwan might indicate a fundamental change in U.S. policy and encourage politicians in Taiwan seeking independence. Beijing dispatched Vice Pre- mier Qian Qichen to discuss these and other issues relating to U.S.- China relations, but the new administration’s policies had not yet been clarified, and the visit was less than satisfactory. Then at the end of March a U.S. reconnaissance plane collided with a Chinese plane off the coast of Hainan. American ambassador Joseph Pruher in Beijing and administration officials in Washington attempted to establish early contact with the Chinese, but the Chi- nese did not respond immediately. Meanwhile U.S. airmen were being held in Hainan, pending resolution of the issues. Since the U.S. administration did not yet have a full team of specialists in place at the time, top Department of Defense officials were personally involved in dealing with the issue and came to believe that high-level Chinese officials were initially not being forthright about the events. Strong statements from Washington were matched by strong state-

The United States Perspective 13 ments from Beijing. But within eleven days a statement by President Bush which the Chinese could take as an apology was issued, and within two weeks the issue was resolved, with the release of airmen. China also released the airplane to the United States. The resolution of this issue, and discussions that followed stabilized the Taiwan issue and reduced U.S.-Chinese tensions. The visits of State Department Policy Planning Director Richard Haas in June 2001, followed by the visit of Secretary of State Colin Powell, helped improve the atmosphere between the two countries. When 9/11 occurred, a few weeks after Secretary Powell’s visit to Beijing, the Chinese quickly responded with condolences and expressions of support for U.S. efforts to deal with terrorism. Chinese, long concerned with terrorist attacks by Uighurs in Xinjiang and long apprehensive that human rights activists in other countries might regard the Uighurs as freedom fighters, were quick to stress that China stood with the United States in addressing their common effort to combat terrorism. China, which had long maintained a close relationship with Pakistan, encouraged Pakistan president Pervez Musharraf to cooperate with the United States against the Taliban, and U.S. officials appreciated this assistance. In this context, the United States reaffirmed its commitment to the one-China policy and cautioned Taiwan to avoid provoking mainland China, indicating that if provocations caused Chinese reactions, the United States would not necessarily support Taiwan. A meeting between President Bush and Chairman Jiang Zemin at the Asia-Pacific Economic Cooperation (APEC) meeting in Shanghai, President Bush’s later visit to Beijing, Hu Jintao’s visit to the United States, and Jiang Zemin’s visit to President Bush in Crawford, Texas, were opportunities that were used by both sides to strengthen the U.S.-China relationship. In short, although U.S.-China relations had begun to improve, the events of 9/11 helped to strengthen and consolidate better U.S.-China relations. Relations between Japan and the United States have remained relatively stable since 9/11. Prime Minister Koizumi Junichiro responded promptly to the terrorists acts of 9/11 with declarations of support for the United States’ campaign against terrorism. The Japa- nese government was quick to offer to send ships to the Indian Ocean to assist U.S. efforts in the region. The Japanese Diet passed new legislation to support the sending of Self-Defense Forces abroad, and the Japanese government has been playing a central role in as- sisting the reconstruction of Afghanistan. After the United States

14 Ezra F. Vogel invaded Iraq, Prime Minister Koizumi, despite public opinion polls opposing the U.S. attack and despite the lack of a U.N. resolution to support the U.S. action, expressed positive support for President Bush’s efforts in Iraq. Prime Minister Koizumi took the initiative of visiting North Ko- rea and initially the Japanese public was very enthusiastic about his visit, especially since North Korea agreed to return Japanese hostages. But when North Korea announced that a large number of hostages had died in North Korea and that other hostages were still unaccounted for, the Japanese public became furious. The hostage issue has continued to dominate Japanese policy toward North Ko- rea, but still many Japanese were very concerned when American officials talked about the axis of evil and implied that the United States might take military action against North Korea. The fear of being dragged into a conflict by the United States has led Japan to want more room for independent maneuver, such as expanding its own intelligence capacities, strengthening military-to-military contacts with other countries, and promoting multilateral activities among Asians. China also opposed any U.S. military action against North Korea but strongly supported coercive diplomacy and made it clear to North Korea that it firmly opposed North Korea’s becoming a nuclear power. Although U.S. relations with China and Japan have thus become quite stable since 9/11, relations between China and Japan have remained tense and awkward. Shortly after the Sixteenth Party Congress in late 2002, People’s Daily commentator Ma Licheng published an article in an influential Chinese journal, Strategy and Man- agement, advocating the improvement of Sino-Japanese relations. He argued that Chinese had not adequately recognized antimilitarist trends in Japan and suggested that China and Japan should embark on a more cooperative path. His article stirred a great deal of interest in both China and Japan, but in China the government has not taken any important initiatives to improve the relationship. Al- though trade, Japanese industrial investment in China, and two- way tourism have grown rapidly, public opinion in both countries is critical of the other country, and the governments have done little to improve the relationship. Businesses and governments in both countries have managed to maintain reasonable working relationships but at a deep emotional level, mutual antagonism remains strong, and the relationship between the two countries remains fragile.

The United States Perspective 15

The Search for Explanation What explains the changing relations between the countries since 1989? The key factors at the beginning of the period of uncertain relations between China and the United States were anti-Chinese opinion in the United States following the Tiananmen Incident and the loss of the strategic rationale for the relationship after the collapse of the Soviet Union and the Soviet Communist Party. Since the Tiananmen Incident, in U.S. presidential election campaigns, the challenger has capitalized on the anti-Chinese mood of the U.S. public to criticize the incumbent president for being soft on China. But within a year or two after the new president is elected, the advantages of working with China to avoid confrontation over the Taiwan Straits and to deal with a host of international issues where Chinese cooperation is needed have led the newly elected president to develop a more cooperative relationship with China. The growing importance of China as an important trading nation with a growing global political role has made it increasingly important for the United States to maintain good working relations with China. Historically, some combination of strategic interests and U.S. values have always played a role in shaping U.S. foreign policy. At times of crisis, the strategic concerns dominate, and at times of reduced international risks, values tend to gain in importance. The concerns with terrorism after 9/11 have elevated strategic concerns to a greater height. On the Chinese side, the experience with two periods of great tension with the United States, over the U.S. bombing of the Chinese Embassy in Yugoslavia and the airplane accident off Hainan, apparently led Chinese leaders to conclude that even if they consider China to be the victim, they have a strong national interest in maintaining good relations with the United States. They apparently concluded that these broad national interests were more important than making a strong response to the incidents. The political structure of China is such that the Chinese have a core of leaders, partially insu- lated from public opinion, able to focus on what they consider key national interests. The relationship between Japan and the United States has now developed into a stable alliance based on overall interests between the two largest economies in the world. Both countries have democratic processes and a high level of interaction in all major sectors that serves to stabilize the relationship. Given the problems that would

16 Ezra F. Vogel be created if Japan were to aim to become an independent military power—problems with neighbors, problems with the budget in a stagnant economy, problems of recruitment into the military— Japanese officials have concluded that it is in Japan’s interest to maintain a strong alliance with the United States, with perhaps a little more room for independent action. Why have China and Japan been unable to resolve their underlying emotional antagonism despite their high level of economic interaction? It is not only the history of conflict. The United States and Ja- pan as well as France and Germany began working more closely after World War II despite the history of hostility. The continuing emotional mood reflects an underlying rivalry as well as Chinese fear of an independent Japanese military and the appeal in China of anti-Japanese sentiment in enhancing national unity. And the Japa- nese public mood is such that Japan will not automatically do what China asks it to do.

The Proto-Triangle At the time of the reaffirmation of the U.S.-Japan security alliance in 1995–96, Beijing became concerned that the strengthened U.S.-Japan alliance, no longer aimed at the Soviet Union, was now aimed elsewhere, at China. The Chinese worried that Japan, with new military technology from the United States, might pursue a more independent foreign policy. These fears were heightened as a result of Clinton’s visit to Japan in early 1996, during which he reaffirmed the alliance. After the 1996 confrontation between China and the United States over Taiwan, U.S. and Chinese leaders began working together to reduce the risks of conflict. This led to a series of consultations that culminated in Clinton’s nine-day visit to China in 1998, when he did not mention Japan. Moreover, his failure to stop in Japan on the way to or from China, as leaders had done in the past, gave rise to enormous anxieties in Japan that the United States was abandoning Japan for China. Yet today, China’s level of involvement in the economy of the region and the world is too great for stability to be achieved by a strong alliance between the United States and Japan against China. As a neighbor to China, Japan’s economy will increasingly be linked to that of the mainland, and Japan must accommodate itself to the realities of Chinese power, even while it maintains an alliance with the United States that may help make it clear to China that military aggression against any country in the region is unacceptable. And

The United States Perspective 17 both China and Japan have relationships with the United States that are too significant to allow them to make an alliance against the United States. Nor can the three countries create a condominium of power without considering the interests and views of other neighbors, including Korea, Russia, and the Southeast Asian countries. It is therefore the task of leaders of these three countries to find ways in which all three powers can cooperate in responding to issues like the future of the Korean Peninsula and to see that in bilateral relations the interests and concerns of the third are fully considered and dealt with.

The Chinese Perspective Yuan Ming

There are many triangles in international relations. But “strategic triangle” carries special weight. Here “strategic” refers not to the overall foreign policy goals of one country but to the structure of a relationship among countries with special strengths and influences, in either global or regional affairs. By working together, this configura- tion of countries may bring peace and prosperity. But conflicts among them may also lead to disaster. Whether positive or negative, the influences of the relationship are profound, both internationally and domestically. U.S.-China-Japan relations belong to this category. The past 150 years have witnessed many changes in the relationship, and we will doubtless see more in the years ahead. The primary geographical stage for U.S.-China-Japan relations is East Asia, a region that took no part in the Westphalia settlement inaugurating the modern European state system. The region’s indigenous political concepts and practices differ greatly from the European and Ameri- can experience. Its mainstream culture, however, has over time ex- hibited great flexibility. In modern times this attribute has helped both China and Japan to learn from the West. The process of learning

————— Yuan Ming is Professor of International Relations and Director of the American Center at Peking University. © The President and Fellows of Harvard College 2004. This essay may not be repro- duced without permission from the Harvard University Asia Center.

18 The Chinese Perspective 19 has lasted for more than a century, and so far there is no sign of a change in the direction of the tide. Ironically, in a region that produced neither the Westphalia system nor concepts such as raison d’état, people are now talking increasingly about their “national interest.” A more interesting phenomenon is that when people think about their own national interest, the other main international players are often regarded as troublemakers rather than as supporters. This was particularly evident in the 1990s, after the Cold War ended. Rhetoric in Japan, joined by voices in the United States, lobbied against the so-called China threat. Some extreme rightists even won reputations by saying “no” to China to show their “patriotism.” The “no” fashion quickly spread to China. The mid-1990s saw numerous Chinese publications with titles carrying a big “no” to both the Americans and the Japanese. In the United States, the nationalistic mood also remained high. Many Americans believed that the Cold War was won by their value system as well as by their political and economic systems. This sense of superiority led them to look at everything in the world primarily through an American lens. Not only the United States but also Japan and China became increasingly inward-looking in this decade; politicians talked about “threats,” “rivals,” “competitors,” and even “enemies.” The mass media in each country created negative stories and images of the other two. None of this was encouraging. However, as our previous volume The Golden Age of the U.S.- China-Japan Triangle, 1972-1989, shows, the United States, China, and Japan enjoyed positive relations with one another during that earlier period. These positive relations not only helped the three states to survive their own respective domestic difficulties but also contributed a great deal to the peace and development of East Asia overall. The biggest troublemaker, at that time, was the Soviet Union. Then the Soviet Union collapsed. The “golden age” of the triangle ended. The inner logic seems to be that there must be an external threat for the parties involved to enjoy positive relations. But this logic is wrong. Things are much more complicated. The main historical force behind the collapse of the Soviet Union was not the U.S.-China-Japan triangle but the strong course of globalization. The forces of globalization are so deeply rooted in history that they cannot be stopped by any simple exercise of power by individuals or states. As Thomas Friedman argued in The Lexus and the Olive Tree—Understanding Globalization: “Globalization is not the only thing influencing events in the world today, but to the extent that there is a North Star and a worldwide shaping force, it is the 20 Yuan Ming system.” Friedman calls this system the “One Big Thing.” Having analyzed the economic, environmental, military, social, and political dimensions of the deepening process of globalization, Joseph Nye reaches this conclusion: “Globalization at its core refers to worldwide networks of interdependence.” In his speech to hundreds of students at the School of International Studies of Peking University in 2000, Vice Premier Qian Qichen, also the dean of the school, reminded the audience to be sensitive to the main features of our time: economic integration, the information revolution, the resur- gence of religious fundamentalism, and so on. In the meantime, many observers in Japan have also shared their insights on various aspects of globalization. Unfortunately the need for global integration is always forgotten when people talk about “national interests.” In many cases, emotions prevail over knowledge. The vision of the complex of globalization is overshadowed by much more simplistic nationalistic suspicions and distrust. This can be seen in each of the three countries examined in this volume. Globalization in its modern form began in the Enlightenment in eighteenth-century Europe and was then followed by the Industrial Revolution and the European expansion around the world. Through the nineteenth century, it was characterized by widespread materialism, which was certainly not the dream of the Enlightenment think- ers. Modern materialism calls attention to everything visible and powerful, with military might as its highest symbol. There is no doubt that it contributed enormously to the improvement in the quality of people’s lives. Materialism did not offer enough room for those reaching for higher ideals who were often marginalized in the pursuit of materialism and “national interests.” After three hundred years of development, the Western world now finds itself in a great dilemma brought on by the double-edged sword of globalization. On the one hand, the West has to continue its efforts to keep itself on the frontiers of modern science and technology and maintain its basic political institutions and values. On the other hand, it is facing unexpected difficulties and challenges. One of the major challenges may come not from the outside but from within. As Robert Scalapino once noted: “At this moment when almost the whole world is paying respect to democracy, democracy itself is falling deeply into jeopardy. This is true even in countries that created democratic systems. The central issue is this: what kind of relation in the current era should we maintain between freedom and authority, right and responsibility?” If this is an issue for the West- The Chinese Perspective 21 ern world, especially the United States, it is even more so in Japan and China. That is, people in this region are far from a real understanding of the essence of democracy and the balance of freedom and responsibility. Globalization has made three Asia-Pacific powers, especially their leaders, realize that there is no way to keep themselves totally out of the world. We are now living in an era when domestic issues are in- ternationalized while international issues extend to the domestic scene. The United States, Japan, and China are now at quite different stages of development. All of them, however, are facing the common challenge of maintaining the stability and order of the world, not to mention East Asia. And the basis for reaching that goal is the proper balance of freedom and responsibility. It should start on the individual level, but it is more crucial on the state level. Major powers must take on major responsibilities. The U.S.-China-Japan triangle belongs in this category. September 11, 2001, was a wake-up call not only for Americans but for the whole world. It revealed the dark side of globalization. It also set an ominous model for those who fail to adapt to global changes. Its negative influences are still unfolding. There are many reasons for people to work together against this global threat. In the introduction for the Golden Age volume, Ezra Vogel used the word “constructive” to describe the relationship enjoyed by the United States, China, and Japan during the period 1972–89. In the post–September 11 period, we should borrow his term. To deal with the dark side of globalization is not an easy job. It must be a joint, long-lasting, and constructive effort. The current agenda for the United States, China, and Japan already seems quite full. The premier task is to stabilize the world economy. Second, the three countries have to mobilize the necessary resources to fight terrorism. Third, the three countries should take joint steps against the proliferation of weapons of mass destruction. Fourth is the energy issue, especially as the Gulf situation undergoes critical changes. Fifth, the three countries, joined by others, should give more attention to “nontraditional” security issues: drug dealing, illegal immigration, HIV, smuggling, and so on. The most urgent common concern at this moment is the situation in the Korean Pen- insula. More constructive ideas are needed to quiet the mood there and make it a truly nuclear-free area. Thanks to the hard work of scholars from the United States, China, and Japan, and especially thanks to Ezra Vogel’s insight and enormous organizing work, we have completed a series of confer- 22 Yuan Ming ences on the U.S.-China-Japan triangle from World War II to the contemporary period and published the Golden Age volume. We hope that volume and this one will remind our readers, especially the younger generation of the three countries, that we must learn from history while keeping an eye on the future. The Japanese Perspective Akihiko Tanaka

The triangular relationship among the United States, China, and Ja- pan has been important since the end of World War II, but it is becoming more so as the twenty-first century begins. As our project has demonstrated, the wider strategic environment has dominated the relations of the three nations. Initially, the early Cold War period provided the context within which the Tokyo-Washington alliance was formed and China joined the Soviet bloc. When the Korean War broke out, normal relations between Washington and Beijing became impossible. In the Cold War strategic environment, the United States deemed a military presence in Japan essential. In Japan, the Yoshida Shigeru administration also found it in Japan’s interest to allow the American bases; this course appeared to be Japan’s only means of preserving its security without a full-blown remilitarization. Rearm- ing was an impossible option given domestic opposition and the country’s need to focus on economic recovery. The tradeoff of Ameri- can bases for Japanese security was Japan’s strategic calculation behind both the San Francisco Peace Treaty, concluding World War II, and the U.S.-Japan Security Treaty. Tokyo, under these circumstances, could not delay choosing between Beijing and Taipei; John Foster

————— Akihiko Tanaka is a Professor at the University of Tokyo. © The President and Fellows of Harvard College 2004. This essay may not be repro- duced without permission from the Harvard University Asia Center.

23 24 Akihiko Tanaka

Dulles told Yoshida that unless Japan chose Taipei, ratification of the San Francisco Treaty by the U.S. Congress might be difficult. Japan concluded a treaty with the Republic of China in 1952. The change of strategic environment in the late 1950s and early 1960s seems to have prompted Mao Zedong to reconsider the validity of the Sino-Soviet alliance. Khrushchev refused to give China the nuclear technology it wanted in the late 1950s and did not appear to Mao to be dependable in incidents such as the 1958 Taiwan Strait crisis. In the 1960s the Soviet military along the Sino-Soviet border became increasingly menacing. China was not able to cope with this threat, as demonstrated in the 1969 military clashes over Chen- bao/Damansky Island. As Mao Zedong came to believe that the So- viet Union now constituted China’s number-one enemy, Mao and Richard Nixon found a new strategic context and in the early 1970s formed a united front against their common enemy. The Japanese desire to normalize relations with Beijing would have been impossible to carry out without this strategic change. The strategic environment thus created was the basis of what might be termed the “golden age of the U.S.-China-Japan triangle.” A series of events—the Sino-Japanese Peace and Friendship Treaty (August 1978), the Soviet-Vietnam Treaty of Friendship and Coop- eration (November 1978), the Vietnamese invasion of Cambodia (December 1978), the normalization of relations between the United States and China (January 1979), the Sino-Vietnamese war (February 1979), the Soviet invasion of Afghanistan (December 1979)—created an impression that China, the United States, and Japan formed a virtual alliance against the Soviet Union (and Vietnam). Partly because of tensions with the United States over Taiwan after the election of Ronald Reagan as U.S. president, China reassessed its close ties with the United States and in September 1982 announced its “independent and peaceful foreign policy.” Thus the virtual alliance among the three did not last long. But the existence of the Soviet Union as the major and common concern during the 1980s nevertheless prevented relations among the three from deteriorating to any great extent. The Tiananmen Incident of June 1989 and the end of the Cold War dealt strong blows to the triangular relationship. The image of China as a country in gross violation of human rights became widespread, especially as the Cold War came to an end and communist regimes in Eastern Europe were replaced by newly emerging democracies. But although the United States, Japan, and other countries applied sanctions against China, the first Bush administration and the Uno Sosuke and Kaifu Toshiki administrations in Japan remained rather The Japanese Perspective 25 cautious. Observing the large-scale protests, they were more concerned about possible chaos and instability in China than about human rights violations there. Virtually all important sanctions were lifted by the Houston G7 summit the following year. By 1992 Deng Xiaoping had reiterated the importance of the policy of “reform and open door” (gaige kaifang), and China was able to restore normal relations with the rest of the world. The Japanese emperor made a state visit to China in the autumn of 1992, the first such visit in history. The impact of the Tiananmen Incident, in this sense, was limited. The implications of the end of the Cold War were far more wide- ranging. The disappearance of the common enemy created a situation in which strategic calculations became unstable and the real threat unclear. The first candidate to replace the Soviet Union was Japan. This perception of Japan threatening the outside world became most apparent in the United States during the late 1980s, even before the collapse of the Soviet Union. Although the Cold War was not quite over, some suggested that economic power was more important than military power in the measurement of national power and that the rise of Japanese economic power therefore constituted a threat. By the end of the 1980s, articles and book with titles like Con- taining Japan or The Coming War with Japan became popular in the United States. A similar perception of Japan was rising in some quarters in China as well. In the view of some Chinese, Japan, now that it had attained a position of economic power, was contemplating becoming a political power, then a military power. In the United States, the basis of this perspective was the so-called revisionist view of Ja- pan that considered the political-economic system of Japan intrinsi- cally different from that of the United States and other Western countries. According to this understanding, in order to resolve economic issues with Japan, a simple resort to policies based upon market mechanisms would not work and some kind of coercive diplomacy to impose “numerical targets” was needed. The Clinton administration’s negotiation with Japan in the Framework talks (1993–95) was largely based on this thinking. Ironically, by the time the Clinton administration started its negotiations, the bubble had already burst, and the foundation of the “threat from Japan” had largely evaporated. As the perception of the threat from Japan receded in the United States, the “threat from China” attracted the attention of not only the media but also decision-making circles in Washington, Tokyo, and elsewhere. This view coalesced sometime in 1992, when China re- emerged as an economic dynamo from its near isolation after the 26 Akihiko Tanaka

Tiananmen Incident of 1989. After Deng Xiaoping’s call for the reac- tivation of an open-door policy in 1992, China resumed its double- digit economic growth. The World Bank and the IMF’s estimates of GDP of countries of the world in terms of purchasing power parity (PPP) had a significant impact on people’s perceptions: a World Bank report predicted that the combined economic power of China, Hong Kong, and Taiwan might surpass that of the United States in the early years of the twenty-first century. The growth of China’s defense budget appeared less reassuring; its growth rate was nearly 15 percent, higher than the GDP growth rate. The purchase of military equipment, mainly from the former Soviet Union, became a source of concern among neighboring countries. A rumor that China might be buying a full-fledged aircraft carrier persisted for several years. Chinese naval activities in the South China Sea were a further concern; China constructed permanent facilities on the Mischief Reef, which the Philippines also claimed, in 1995. Statements by People’s Liberation Army admirals and Chinese publications were not reassuring, either; they emphasized Chinese maritime interests and the new role of the PLA navy as the protector of these interests. Chinese military exercises in the Taiwan Strait in March 1996 added further concerns. As a result, lively debates occurred in Washington, Tokyo, and various capitals of Asia. A book entitled The Coming Conflict with China was published in the United States in 1996, and the journal Foreign Affairs featured the pros and cons of the China threat thesis; the debate between “engagement” and “containment” was waged in Washington, especially after the 1996 Taiwan Strait crisis. In Japan, too, various articles were written emphasizing the potential power of China. The rise of the “China threat” thesis evoked a strong reaction from China; Chinese officials pointed out that many of the arguments of the thesis were exaggerated. In addition, unofficial and often quite emotional antiforeign publications appeared in China, including a book entitled China Can Say No (Zhongguo keyi shuo bu). Although the Chinese did not frame their views in terms of an “America threat” thesis, China has long described the United States as the source of international problems. Two waves of books and articles have pointed out the “hegemonism” (banquan zhuyi) and “power politics” (qiangquan zhengzhi) of the United States. The first wave came in the immediate aftermath of the Tiananmen Incident and the Gulf War, and the second came in 1998, especially after the Kosovo crisis and the NATO bombing of the Chinese Embassy in Belgrade. The basic perception common to these two waves was the The Japanese Perspective 27 current dominance of American power in the post–Cold War period. While Chinese leaders often emphasized that the basic trend of the post–Cold War period was one of “multipolarization” (duojihua) and that this trend was desirable, they also noted that the United States was the only superpower (zhaoji daguo). Sometimes the Chinese analysts described this combination as a system composed one superpower and many strong powers (yizhao duoqiang). This dominant superpower was perceived in China to be threatening in at least two ways: first, in its perceived intention and, second, in its military capability. Chinese concerns about U.S. intentions were most acute in the years immediately following Tiananmen. In Chinese eyes, the United States was plotting a conspiracy of “peaceful evolution” (hep- ing yanbian)—a conspiracy to topple communist governments by nonmilitary means—just as the United States was perceived to have done in Eastern Europe. In the late 1990s, the Chinese stressed not the intention of toppling the communist governments but the intention of interfering in internal affairs, most notably in Taiwan as well as in Tibet. U.S. military might was demonstrated to Chinese eyes first and most vividly by the Gulf War and then by the NATO bombing in Kosovo in the late 1990s. The Chinese did not oppose the Gulf War per se. China was critical of Saddam Hussein; what worried Bei- jing was the sheer military might displayed through CNN. The Kos- ovo intervention, in contrast, was doubly threatening; it indicated the U.S. intention of interfering in the internal affairs of other countries as well as its ability to conduct highly sophisticated warfare with pinpoint bombing on its military targets. The somewhat para- noiac reaction against NATO’s bombing of the Chinese Embassy in Belgrade was understandable from this perspective. The bombing fit nicely with the perception of U.S. hegemonism threatening China. The period after the end of the Cold War, however, also coincided with the period of “globalization.” On the one hand, the disappearance of the Soviet threat deprived the United States, China, and Japan of their common enemy and created a heated debate regarding who was to replace it. These conditions produced much mutual suspicion and friction. On the other hand, the increasing globalization and deepening interdependence of the 1990s connected the three economies and societies to an unprecedented degree. The rapid and impressive economic growth of China, which caused the perception of threat from China, was possible only with the influx of massive foreign capital from abroad, mostly from the United States and Japan. This increasing interdependence now constitutes another aspect of the strategic environment of the triangular relationship. Despite the 28 Akihiko Tanaka fluctuating sense of mutual threat among the three, they also found it in their mutual interest to preserve and develop their increasingly interdependent economic relationship, the source of their mutual economic gains. As the triangular relationship enters the twenty-first century, its management has become more complex than before. Domestic politics are another factor in the triangular relationship. The strong anticommunist sentiment in the United States in the early 1950s clearly reinforced its hostile attitudes toward Beijing while making it easier for Taiwan to conduct its lobbying activities in Washington. In Japan anticommunism sentiment was not as strong as in the United States, while consciousness of guilt toward the Chi- nese and pragmatic economic concerns mitigated the hostile nature of Japan’s policy toward China in the same period. Despite Japan’s strategic decision to ally with the United States, domestic pressures to open and broaden unofficial ties with mainland China continued to exist in Japan in the 1950s. In China, unexpected radicalization and changes in its external posture, especially toward Japan, could be explained only by the country’s domestic changes. China’s abrupt termination of its unofficial trade relationship with Japan in May 1958 and its willingness to resume these unofficial trade ties in 1962 were closely connected with the coming of the Great Leap Forward and its disastrous consequences. The rise of Chinese hostility toward Moscow can be explained not only by the changing strategic context but also by Mao’s personal idiosyncrasies as well as the domestic political turmoil created by his behavior. Domestic politics also shook the bilateral relationship between Japan and the United States. The turmoil in Japan surrounding the revision of the security treaty in 1960, which forced President Dwight Eisenhower to cancel his trip there, was largely caused by Japan’s domestic politics; Prime Minis- ter Kishi Nobusuke’s domestic policies, rather than the content of the revised security treaty, prompted Japanese youth to take to the streets in protest. The beginning of the perennial trade frictions between Japan and the United States can also be traced back to the late 1950s, when Japan’s textile exports created strong reactions in the U.S. textile industries. Richard Nixon’s decision to pursue a diplomatic breakthrough with Beijing, a highly strategic move, was also motivated by domestic concerns; in order for him to secure re-election in 1972, it was necessary for him to show the Americans that he was making progress to end the country’s disastrous involvement in Vietnam. In Ja- pan, although Tanaka Kakuei’s decision to go to China to normalize relations with Beijing was made possible with the changing strategic The Japanese Perspective 29 context, it should not be forgotten that there were persistent and increasing Japanese calls for official ties with Beijing in the late 1960s and early 1970s. The 1970s and 1980s were the “golden age” of the triangle largely because of the strategic environment. But its stability was reinforced by the Chinese domestic context as well. The comeback and the subsequent reign of Deng Xiaoping in China formed one of the foundations of the stable triangular relationship. His commitment to reform and to an open-door policy came as China no longer felt it wise to maintain a united front against the Soviet Union after 1982. In the Japan-U.S. relationship of the 1980s, the combination of Ronald Reagan in Washington and Nakasone Yasuhiro in Japan (the Ron- Yasu relationship) was a clearly stabilizing element. Nakasone tried to create a similar personal relationship with Hu Yaobang in China but failed as Hu lost power in the late 1990s. On the other hand, the “golden age” was not devoid of conflicts or strain. Although no conflicts during these years did lasting damage to the triangular relationship, they were nevertheless trouble- some and becoming more serious by the end of the 1980s. In many ways, domestic politics was the source of these frictions among the three countries. A typical case was the controversies over “history” between Japan and China. One should not forget that it was not until 1982 that the controversies emerged as diplomatic issues between Tokyo and Bei- jing. The content of middle school and high school textbooks had been the subject of politically charged domestic debate in Japan since the 1950s, especially regarding how to interpret the Japanese wars in the modern period. But until 1982, China had not initiated any criticism. It is not clear why China did not do so earlier; the details of the Japanese textbook screening process may not have been well understood by Chinese specialists until the 1970s. In any case, the content of Japanese textbooks has been a source of controversy between Beijing and To- kyo since then, as the Japanese domestic controversy spilt over into Sino-Japanese bilateral relations. The left-wing advocates in Tokyo use Chinese criticism as evidence of their argument, while the right- wing advocates fan nationalistic sentiment in Japan by citing Chinese opposition as undue interference into Japanese domestic affairs. The prime ministers’ visits to the Yasukuni Shrine, dedicated to Japan’s war dead, is another aspect of the Sino-Japanese ‘history” controversies. As in the case of the textbook issue, the Yasukuni Shrine had been controversial in domestic politics long before it became controversial in Sino-Japanese relations. Despite significant 30 Akihiko Tanaka domestic opposition, largely based on the imperative of the separation of church and state, to the prime ministers’ visits to the shrine, many prime ministers have visited the shrine since the 1950s. Chi- nese criticism was first made on the occasion of Prime Minister Nakasone’s “official” visit to the shrine on August 15, 1985. China’s objections stemmed from the fact that the shrine is the site where the “Class A” war criminals of the Tokyo Military Tribunal such as Tojo Hideki are enshrined and deified. These “Class A” criminals were enshrined in the shrine in 1978, but the Chinese did not raise the issue until 1985. Probably the Chinese specialists again were not very familiar with the issue until the middle 1980s. As a result of the strong criticism from China, Prime Minister Nakasone decided not to visit the shrine, the criticism was interpreted in Japan as closely related to Chinese internal politics, where Hu Yaobang was being criticized for his pro-Japanese posture as well as for his liberal policies in other areas. Nakasone, in order to avoid damaging his friend Hu, decided not to visit the shrine. Subsequent prime ministers of Japan in the late 1980s and the early 1990s also did not visit the shrine, but this created frustration among some Japanese nationalists and the veterans’ association (izokukai); why, they asked, was it necessary for Japanese prime ministers to kowtow to foreign pressure and to stop paying respect to those who had contributed to the nation? What was the motivation of China and other countries that started criticizing only in the 1980s? These questions constituted the backdrop for Prime Minister Hashimoto Ryutaro’s visit to the shrine in 1996 on his birthday and Prime Minister Koizumi Jun’ichiro’s visit to the shrine in August 2001. After the Tiananmen Incident and the end of the Cold war, two issues loomed large in the triangular relationship: human rights and Taiwan. Human rights, though a universal concern, are in practice in the triangular relationship a matter of contention largely between the United States and China. As already noted, the Bush administration was rather reluctant to apply strong sanctions against China after Tiananmen, which caused domestic controversy. For several years after Tiananmen, controversies over the awarding of most-favored nation status to China became an annual ritual in the U.S. Congress. Presidential candidate Bill Clinton openly criticized President Bush for not taking human rights seriously and promised to use the MFN process to influence Chinese human rights behavior once he assumed the presidency. As it turned out, it became very difficult to fine-tune economic means to change what the Chinese leaders believed to be strictly domestic concerns. The Clinton administration The Japanese Perspective 31 had to return to the attitude of the Bush administration with respect to human rights issues in China: the MFN was not the right vehicle with which to affect human rights conditions in China. The case of Taiwan involves both international and domestic issues for all three countries. Beijing has insisted on its domestic nature; because Taiwan is an integral part of China, it feels that China alone is entitled to be involved in its resolution. But because Taiwan has strong lobbies in Washington and in Tokyo, the Taiwan issue is also a matter of domestic concern in both capitals. The Taiwan Rela- tions Act, which defined U.S. relations with Taiwan, was made possible because of Taiwan’s strong support in Congress. After the democratization of Taiwan, however, pro-Taiwan sentiment in Washington and Tokyo became much more broadly shared than before. Previously, anticommunism had been the ideological basis for supporting Taiwan. After democratization, increasing numbers of liberal politicians discovered in Taiwan new political trends they were in sympathy with; now, for example, there are as many Taiwan supporters in the Democratic Party of Japan as in the Liberal Democ- ratic Party in Tokyo. There may be some sentimental factors involved in the friction between Japan and China over Taiwan. A typical case in point is Lee Teng-hui, the first democratically elected president of the Republic of China. In China, Lee has been depicted as a notorious troublemaker. But to many Japanese visitors to Taipei, especially young politicians, Lee, a graduate of Kyoto Imperial Uni- versity who speaks flawless Japanese, has been a grandfatherly wise man. It is hard for them to understand why the Chinese denounce him as a treacherous figure. As international politics evolve in the twenty-first century, the triangular relationship among Washington, Beijing, and Tokyo becomes critical, especially with regard to the future of East Asia. There are at least three challenges that the three countries need to consider: new international politics after September 11, the Korean Peninsula, and the emerging new regionalism in East Asia. Although not totally unpredicted, the terrorist attacks on the Un- tied States on September 11, 2001, changed many aspects of international politics. The rise of nonstate actors in general and the emergence of “new terrorism” in particular introduced still another element in strategic calculations in international politics. On the one hand, it necessitated more cooperation among sovereign states; transnational terrorists with apocalyptic and fundamentalist world- views are common enemies of most states. Without cooperation, it is difficult to cope with nonstate, nonterritorial networks. It is no acci- 32 Akihiko Tanaka dent that many countries, including China and Japan, are willing to cooperate with the United States in the “war against terrorism.” On the other hand, it may be difficult to agree on approaches and strategies to cope with this new situation. As the new national security strategy of the United States indicates, deterrence may not work against transnational terrorists; pre-emptive action may be needed in certain circumstances. But there may be some areas of disagreement with respect to the strategy toward “rogue states.” Does deterrence not work against them? Is pre-emptive action needed or justified against them? These differences emerged when the United States decided to attack Iraq in March 2003. France, Germany, and Russia expressed their open opposition to U.S. logic. In this instance, Japan supported the United States. China expressed an attitude similar to that of France, Germany, and Russia but refrained from making its opposition very visible. In this sense, the cleavage across the Atlantic appeared more visible than that across the Pacific. But the question of how to cope with transnational terrorism, especially the possible connection between transnational terrorism and “rogue states,” is a serious and potentially divisive issue for the triangular relationship. The second and related challenge is the Korean Peninsula. It is true that the Korean Peninsula has always been an important issue for the triangular relationship; the Korean War was critical in shaping the relationship in the period after World War II. However, during the Cold War, though dangerous, the relationship between North Korea and South Korea was militarily balanced; both were supported by their respective allies, but at the same time they were restrained by these allies from launching dangerous attacks. Domes- tically, the governments of both North and South Korea were stable and in no likelihood of collapse. This condition changed with the end of the Cold War. With the sudden fall of the Soviet Union, North Korea lost the critical support of both its security and its material resources. China has continued to support North Korea to some extent, but its support has not been sufficient. North Korea may have had intentions of developing nuclear weapons without such strategic changes, but with the end of the Cold War, it accelerated its nuclear programs as well as its ballistic missile development programs. Py- ongyang refused to cooperate with the International Atomic Energy Agency (IAEA) inspectors and threatened to withdraw from the nonproliferation treaty. Serious economic sanctions were about to be imposed in the summer of 1994 by the United Nations when Kim Il Sung and Jimmy Carter, the former U.S. president, agreed to defuse the crisis. The United States and North Korea concluded the Agreed The Japanese Perspective 33

Framework in late 1994, the terms of which became the basis of international relations between North Korea, on the one hand, and the United States, South Korea, Japan, and the other neighboring countries, on the other. As Kim Jong Il solidified his regime after the three-year mourning period for the Great Leader, he took initiatives to improve his country’s relationship with the outside world. One such attempt was his invitation of South Korea’s Kim Dae Jung to visit Pyongyang in June 2000. Another was his invitation of Prime Minister Koizumi in Sep- tember 2002. Unfortunately, the initiatives, which first appeared to be positive, ended in disappointment in the former case and near disaster in the latter. To Koizumi, contrary to previous persistent denials, Kim candidly confessed that North Korea had in fact abducted many Japanese, some of whom were already dead. Immediately after Kim Jong Il signed the Japan–North Korea Pyongyang declaration, in which the North agreed to abide by all international agreements, Pyongyang confessed to Jim Kelly, assistant secretary of state for East Asia and Pacific Affairs, that North Korea was engaged in a uranium enrichment program. Because the United States did not accept the North Korean demand to conclude a nonaggression pact, Pyongyang declared its intention to resume its nuclear programs, frozen under the Agreed Framework, thus endangering the structure that had maintained peace on the Korean Peninsula since 1994. Although North Korea is one of the countries that President George W. Bush included in his “axis of evil,” it is not a suitable country against which to contemplate a pre-emptive military action. As of 2003, consensus appears to exist that diplomatic approaches should be taken to persuade Pyongyang to give up its nuclear weapons program. However, the challenges are formidable. If North Ko- rea does not listen and continues to engage in a dangerous game of brinkmanship, the risk of war increases despite the current reluctance of all parties concerned to engage in military action. Close coordination among the triangular countries as well as South Korea and Moscow is essential. The third challenge that faces the triangular countries in the long term is the future of East Asian regionalism. If wars on the Korean Peninsula and over the Taiwan Strait are to be avoided in coming decades, a significant diplomatic challenge for countries in East Asia is to create what Prime Minister Koizumi calls a “community that acts together and advances together.” Because current attempts at such community making in East Asia do not assume the participation of the United States, this situation should be monitored carefully 34 Akihiko Tanaka and wisely by Japan, China, and the United States. It is well known that the East Asian Economic Caucus (EAEC), which Malaysia’s Prime Minister Mahathir Mohamad proposed in the early 1990s, attracted strong criticism from the first Bush administration. Ma- hathir’s scheme, as a result, failed to materialize. But the current framework, ASEAN+3, that emerged in late 1997 has the same membership that Mahathir envisioned—the ASEAN countries plus China, South Korea, and Japan. ASEAN+3 summits are now convened annually, and numerous functional meetings—finance ministers’ meetings, economic ministers’ meetings, lower-level meetings of various bureaucratic echelons—are now held frequently. One of reasons for the success of ASEAN+3 has been the lack of U.S. opposition; the Clinton administration had a more relaxed attitude toward regional and multilateral activities in East Asia. At the same time, ASEAN+3 countries have taken pains that this framework not become unfriendly to the United States. In other words, the ASEAN+3 process has so far developed without creating much friction with the United States. But part of the reason for the smooth development may well be the group’s insignificant substance; because ASEAN+3 has not achieved much substantive agreement, it may not have attracted much criticism from nonmembers. Washington may not care as long as the ASEAN+3 remains a “talk shop.” After six years of existence, however, the ASEAN+3 process is entering into a substantive period. In 2002 China concluded an agreement with the ASEAN countries for establishing a free trade area, while Japan also reached an agreement in principle with ASEAN to form a “comprehensive economic partnership” with free trade agreements. Both China and Japan now consider an increasingly integrated East Asia to be an essential factor in their respective economic development. Because the U.S. economy continues to be critical to the Japanese, the Chinese, and, for that matter, the entire East Asian economy, the growth of the regional framework in East Asia cannot and should not be hostile to the United States. Furthermore, in the security and political arenas, at least for Japan, the alliance with the Untied States continues to be critical. In these senses, the formation of an East Asian community should be compatible with continuing friendship and, for the traditional U.S. allies, security ties with Washington. As East Asian regionalism increases its substance and institutionalization, care should be taken so as not to damage the relationship between the United States and the East Asian countries. In this critical and potentially very constructive area of regional development, the triangular The Japanese Perspective 35 relationship among Washington, Beijing, and Tokyo could become even more important in the coming decades. The future of East Asia as well as the world is becoming more opaque as the world becomes more complex after September 11. The task of conducting the war against terrorism is daunting. Manage- ment of unstable regions in the world, including the Korean Penin- sula, continues to be at least as difficult as before. With the proliferation of weapons of mass destruction, the situation may become even more difficult. To preserve peace on the Korean Peninsula and over the Taiwan Strait, cooperation among the United States, China, and Japan is now more important than ever. The triangular relationship will be judged successful if it achieves this. But it will be evaluated even more positively if it contributes to the formation of an East Asian community friendly to the United States, a historically unprecedented achievement in the long history of East Asia.

Part I Domestic Politics

Domestic Roots of U.S. China Policy (with Thoughts on Japan) from Clinton Through 2001 Michael Nacht

In examining the complexities of the U.S.-China-Japan triangular relationship, one can easily fall into the trap of considering each government’s policies as though they were the product of a rational cal- culus reflecting strengths and weaknesses relevant to the national interest that were generated by a tiny group of leaders in Washing- ton, Beijing, and Tokyo. This “black box” approach to foreign policy analysis was espoused by the eminent scholar Hans Morgenthau in the late 1940s when he articulated the “realist school” of international relations, declaring that interaction among sovereign states was all about a struggle for power among them.1

————— Michael Nacht is Aaron Wildavsky Dean and Professor of Public Policy at the Gold- man School of Public Policy at the University of California, Berkeley.

1. Morgenthau’s ideas were articulated in The Power of Nations (New York: Knopf, 1948) and in numerous subsequent editions and related writings. See John Mears- heimer, The Tragedy of Great Power Politics (New York: Norton, 2001), for a modern interpretation of realism.

39 40 Michael Nacht

It is not that Morgenthau was wrong but that his analysis was incomplete, especially with reference to contemporary times. Fifty years of careful scholarship by many with access to primary documents has revealed that a large number of other considerations frequently help shape foreign policy. These include historical perspectives and the “analogies” learned by leaders from these experiences; the ideological framework that leaders bring to their responsibilities as well as their perceptions of what is and is not important; the competition among and within government agencies over policy formulation, including clashes between the executive and legislative branches; the influence of public opinion—both “elites” with special knowledge and interests, including representatives of the private sector, and the mass public; and the role of nongovernmental groups including the press, members of the academic community, and “think tanks.”2 This paper is intended to disaggregate the elements that influenced U.S. policy toward China from 1992 to the fall of 2001 to better understand one leg of the vital U.S.-China-Japan triangle. It focuses on the players, their interactions and their motivations in the policy process, rather than an analysis of the course of the Sino-American bilateral relationship during this period. This disaggregated approach is also applied briefly to an examination of U.S. policy toward Japan during the 1990s as well as reflections on the early Bush administration approach.

Historical Legacies Morgenthau may have had it about right in the days before Ameri- can policymaking became complex. In the early phases of the Ameri- can democracy and, indeed, through the days of Woodrow Wilson and into the Great Depression, foreign policy issues were indeed handled by the president and a small group of his advisors. The number of influential players inside the government was indeed ————— 2. There is a vast literature now in each of these subfields. To begin, the reader might refer to the following: Richard Neustadt and Ernest May, Thinking in Time (Cambridge, Mass.: Harvard University Press, 1986) for an analysis of the influence of historical reasoning on decision-making; Robert Jervis, Perception and Misperception in International Politics (Princeton: Princeton University Press 1976) for the application of psychological concepts; Graham Allison, Essence of Decision (Boston: Little Brown, 1971) and the revised edition in 1999, for the definitive account of bureaucratic politics; the voluminous writings of Ole Holsti for the influence and limitations of public opinion on policymaking; and Craufurd Goodwin and Michael Nacht, eds., Beyond Government (Boulder, Colo.: Westview, 1995), for many examples of the influence of nongovernmental actors, including the press and think tanks, on the policymaking process. Domestic Roots of U.S. China Policy 41 very small. But U.S. policymaking was altered fundamentally when the election of Franklin Roosevelt in 1932 ushered in the age of big government. Executive branch agencies proliferated during Roose- velt’s twelve years in office, and the policymaking process became far more fluid, subject not only to compromises within and across agencies but to the views of special interest groups in different sectors of American society. This was far more the case in domestic than in foreign policy, but the Roosevelt experience set the stage for what was to follow. In the national security field, the Truman administration created the modern architecture that is still largely in place today (although it has since been modified in the wake of the September 11 terrorist attacks on the World Trade Center in New York and the Pentagon). The 1947 National Security Act established the Department of De- fense, the Joint Chiefs of Staff, the National Security Council, and the Central Intelligence Agency. The Cold War stimulated a proliferation of agencies and specialists in all fields and subfields of Amer- ica’s foreign relations, reflecting the fact that for the first time in its history, the United States had become a “superpower” with interests throughout the world.3 The Truman years were also crucial because it was during this period that a critical aspect of American domestic thought toward China became a permanent fixture of the political landscape. Prior to this period, American perceptions of China were influenced by the few who had had economic contact with Chinese or who had participated in acts of religious proselytizing. Indeed, some of the most prominent early U.S. scholarly specialists on China were themselves offspring of these religious missionaries (John Fairbank and Lucian Pye, for example).4 However, when Mao Zedong successfully completed the Chinese communist revolution in 1949, and Chiang Kai- shek and the Kuomintang retreated to Taiwan, an enormous domestic debate arose about “who lost China.” This debate, somewhat silly

————— 3. The term “superpower” was coined by Professor William T. R. Fox, who, for more than three decades, directed Columbia University’s Institute of War and Peace Studies. 4. It has been observed that one clear difference between the evolution of Chinese studies and Soviet/Russian studies in the United States is that many China specialists came to their subject with intrinsic respect, admiration, and even warmth for China. By contrast, many of the most prominent American Soviet specialists—Richard Pipes, Adam Ulam, and Zbigniew Brzezinski, for example—were natives of Poland who held deeply skeptical and even antagonistic perspectives of Mother Russia as well as Soviet communism. 42 Michael Nacht in retrospect (since the United States never had any realistic prospect of influencing decisively the outcome of the Chinese revolution), nonetheless left an indelible mark on the internal character of Ameri- can thinking about its China policy. What is the nature of this mark? Truman and his top lieutenants, especially former Army Chief of Staff George C. Marshall and Secre- tary of State Dean Acheson, were blamed primarily by Republican critics for “permitting” the Chinese communists to succeed and for failing to back at crucial moments Chiang Kai-shek and his associates. Consider the context in which these allegations were advanced. By 1949, the United States and the Soviet Union were deeply em- bedded in the Cold War. The Berlin airlift had only recently been used to avert a conflict over that divided city. The North Atlantic Treaty Organization had been established, as had the Marshall Plan—a concerted effort to bolster Western Europe militarily and economically. Mao and his colleagues were linked, at least in the American mind, with Stalin and the spread of communism, which was perceived as posing a fundamental threat to the survival of Western democracy. Not long thereafter, the Korean War began, which led to the first armed conflict between Chinese and American forces. These were dangerous times indeed. The lessons learned by the Democrats from this searing experience was that it was politically dangerous to be “soft” or “moderate” toward China.5 So even when Washington began to appreciate that a genuine Sino-Soviet rift had taken place in the early 1960s, neither the Kennedy nor Johnson administrations could reach out to China for fear of again being chastised as “soft on communism.” Indeed, the escalation of the Vietnam War during this time seemed only to validate the judgment that China and the United States were on a collision course, in a deadly “zero-sum game.” The Nixon-Kissinger opening to China, culminating in the spec- tacular February 1972 visit and the Shanghai communiqué, was made possible not only because Mao and Nixon calculated that each had much to gain from this rapprochement. On the American side, it

————— 5. Some claim that the “loss of China” allegation against the Democrats lost its clout over time and that it was not a serious consideration during the Clinton years. But this author is skeptical of such criticism. Indeed, in a discussion of Clinton’s approach to China, the journalist Patrick Tyler noted that after the deep unhappiness of Beijing with Clinton’s linking of human rights to economic policy, the influential Li Peng claimed that Clinton and Christopher would be blamed for “losing China.” See Patrick Tyler, A Great Wall (New York: Public Affairs, 1999), p. 408 and the footnote on that page. Domestic Roots of U.S. China Policy 43 was feasible only because Nixon had staked out such an unassailable record as an anticommunist that he could not be attacked from the political right as Truman had been more than two decades earlier.6 The Nixon initiative definitely made it easier for a Democratic president to work with China, but only up to a point. The Carter/ Brzezinski movement to complete normalization of relations with China in 1979 was made possible only by Nixon’s earlier move. It was greatly enhanced by the ascendancy in Beijing of Deng Xiaoping and his commitment to economic modernization. Yet President Carter and his national security advisor still had to make the case for this normalization in terms of balancing Soviet power in order to win Congressional approval.7 The Reagan/Bush years were relatively crisis-free in terms of relations with Beijing except for the 1989 Tianamen Square episode that mesmerized millions of American television watchers for two weeks in June of that year. The brutality with which the PLA put down the student revolt, while understandable to some realpolitik proponents, was widely condemned throughout the U.S. body politic. When President Bush sent his national security advisor, Brent Scowcroft, to Beijing shortly after the incident to ensure communication between the two governments would stay on a sound footing, his move was broadly criticized. Ironically, the growth of Chinese economic power in the 1980s and beyond produced a dilemma among Republicans in fashioning a China policy that claimed broad support within their political base. On the one hand, the large and influential U.S. corporate community, overwhelming supporters of the Republican Party, increasingly saw trade and investment in the vast Chinese market as vitally important. Corporate leaders and their representatives became powerful advocates for moderate U.S. policies toward China that would facilitate closer bilateral economic and political relations. On the other, those influenced primarily by a deep anticommunist ideology or by a threat assessment that yielded China as America’s primary adversary after the collapse of the Soviet Union, also strong supporters of Republican political philosophy, consistently argued for a hard-line policy toward Beijing, irrespective of the deleterious consequences to the bilateral economic relationship. It was this tension that marked

————— 6. See Henry Kissinger, White House Years (Boston: Little Brown, 1979), pp. 1049–96. 7. Zbigniew Brzezinski, Power and Principle (New York: Farrar, Straus, Giroux, 1983), pp. 196–233. 44 Michael Nacht the challenge for President George Herbert Walker Bush in fashioning his China policy from 1989 to 1992. Candidate Clinton, a “new Democrat,” sought to position himself in the middle of the American political spectrum after the humiliating electoral defeats of Carter in 1980, Mondale in 1984, and Dukakis in 1988. By the time of the 1992 presidential election, the Cold War was over, the Soviet Union had disappeared, and foreign policy issues were largely nonexistent during a campaign dominated by Clinton’s phrase “It’s the economy, stupid.” The United States was mired in a deep economic recession, and domestic issues were virtually all that Bush and Clinton debated. But Clinton did accuse Bush of “coddling dictators,” an explicit critique of how the Bush administration handled or, rather, did not handle the Tianamen crisis. This was the political and intellectual inheritance handed to Clin- ton when he entered the White House in January 1993.

How Clinton Dealt with Multiple Constituencies President Clinton was focused “like a laser beam” on the economy during his first year in office and also had to deal with the debacle over Hillary’s failed efforts to gain congressional support for a national health care system. He established a National Economic Coun- cil (NEC) on a par with the National Security Council (NSC), with the talented Wall Street financier Robert Rubin in charge. Not only did Rubin range widely over issues both foreign and domestic, but he helped shape Clinton’s thinking that in the “post–Cold War world” foreign policy is economic policy. Not a single member of the Clinton policy hierarchy was a spe- cialist on China (or Japan for that matter). Secretary of State Warren Christopher, a lawyer who sought to focus on mediation, quickly turned to the Middle East as the region where he thought he could make his mark. Strobe Talbott, who became deputy secretary of state after the first year, was Clinton’s roommate at Oxford when both were Rhodes scholars, and a lifelong student of the Soviet Un- ion and Russian affairs. National Security Advisor Tony Lake, a diplomatic veteran with Vietnam experience, was interested primarily in developing countries, especially Africa, and conflict resolution in small countries such as Ireland, Somalia, and Haiti. He became increasingly focused on the Balkans and issues of ethnic cleansing during the first Clinton term. His deputy, Sandy Berger, who succeeded Lake in the second Clinton term, was a political associate of

Domestic Roots of U.S. China Policy 45 the president from their days together in the 1972 McGovern presidential campaign. He was a Washington, D.C., trade lawyer with a substantial practice representing the Japanese auto industry. Les Aspin, the first secretary of defense, was a defense intellectual with many years of congressional experience, who became embroiled in and lost his job after the first year over the failed military intervention in Somalia. His successor, Bill Perry, a veteran of the Carter Department of Defense with deep ties to the defense industry, focused primarily on the denuclearization of the former Soviet Union, where he made great strides. He had, however, visited China on several occasions under the guidance of Stanford sinologist John Lewis. The secretary of the treasury, former senator Lloyd Bentsen, was a political veteran who became fatigued with the job and resigned after two years. The director of the Central Intelligence Agency, Jim Woolsey, a prominent defense intellectual who had held posts in several administrations, paid some attention to Chi- nese military developments. However, he became frustrated over his lack of access to the president and to key decision-making ven- ues and also resigned after two years. The U.S. special trade representative (USTR), Clinton’s friend Mickey Kantor in the first term, Washington attorney Charlene Barshevsky in the second, was consistently engaged in the key elements of U.S. economic policy toward China and Japan. Most of the time, the job of the USTR is to gain concessions from other governments concerning such issues as the reduction of nontariff trade barriers and compliance with trading norms embraced by the international community. Their experiences with Chinese officials were, not surprisingly, often tension-filled. But the net effect of their prodigious efforts was to pave the way for congressional support for China’s admission to the World Trade Organization (WTO) and the Permanent Normal Trade Relations bill that eliminated the need for annual congressional review of the status of the bilateral Sino- American trade relationship. The main responsibility for development of China policy rested initially with Winston Lord on the diplomatic/political side and Rubin on the economic. Lord had been with Nixon and Kissinger in the breakthrough 1972 visit. Married to a noted author, Betty Bao Lord, and a Republican, Lord was appointed assistant secretary of state for East Asian and Pacific affairs after he had publicly criticized the Bush administration for its seeming disregard for the abuse of human rights in China during the Tianamen crisis. 46 Michael Nacht

Unlike Russia policy, which benefited through the vetting of a continuous and elaborate interagency process led by Strobe Talbott,8 China policy was largely promulgated in small groups, with Lord playing a key leadership role. The U.S. orientation began with an overarching theme and a set of grievances. The theme was the promotion of China as a member of the international community, especially with respect to multilateral economic institutions. This approach, later termed “engagement,” was part of the overall Clinton policy goal of promoting democracy and market economies worldwide.9 The grievance list included Chi- nese violations of the human rights of its own citizens; the abuse of intellectual property rights, including international copyright laws, that permitted China to reproduce many goods cheaply and sell them well below world market prices; and the proliferation of weapons of mass destruction, including M-11 medium-range ballistic missiles and nuclear weapons technology to Pakistan. The “linkage” policy that was initially tried explicitly connected Clinton administration support for “most-favored nation” (MFN) status for China with improved human rights policies. The limitations and the abandonment of this approach are discussed in detail in Robert Ross’s chapter in this volume. Suffice it to say that the dual approach met important domestic needs for the president. On the one hand, as a “new Democrat,” Clinton wished to demonstrate his support for American business promoting trade with and foreign direct investment in China. This would also please moderate Democrats and many Republicans. At the same time, he would take a tough line on human rights, a position supported strongly by liberal Democrats such as California Representative Nancy Pelosi and many nongovernmental organizations. However, after Christopher and Lord were rebuffed on their trip to Beijing in the spring of 1994, Clinton’s enthusiasm for this approach waned, as did Christopher’s interest in and Lord’s influence on U.S. China policy.10

————— 8. This author, assistant director of the U.S. Arms Control and Disarmament Agency from 1994 to 1997, participated regularly in this process. He also had episodic interactions with a number of players who helped shape the administration’s China policy, although he was not one of them. 9. Anthony Lake first articulated the overall Clinton strategy in “From Contain- ment to Enlargement,” an address delivered at the Johns Hopkins School of Advanced International Studies, Washington, D.C., Sept. 23, 1993. 10. Christopher only made one more trip to China during his four-year tenure. By contrast he made more than two dozen trips to Syria as part of his efforts to mediate a peace settlement in the Arab-Israeli dispute. The substantive details of the failed Domestic Roots of U.S. China Policy 47

On the proliferation issue, Clinton was ultimately persuaded that only engagement might change China’s behavior. Therefore, he approved a visit by Secretary of Defense Perry to China in October 1994. The trip had two main purposes: the first was to re-establish military-to-military ties between the two armed forces, including port visits, the sending of officers to their respective war colleges, and the commencement of a “defense conversion” program funded by the United States; the second was to enlist Chinese support to persuade North Korea to accept economic and energy assistance in return for a cessation of the operation of nuclear reactors whose spent fuel could be utilized to obtain weapons-grade material. This visit produced tangible results. Port visits commenced between the respective navies. Each side sent senior military officers to the war colleges in Beijing and Washington, D.C. A “defense conversion commission” was established whereby U.S. funds were ostensibly to be used to convert aging Chinese military facilities into more productive agents for civilian purposes. And, with respect to the very dangerous situation involving North Korea, the Chinese leadership professed to Perry an inability to influence Pyongyang. Yet shortly after the Perry trip, North Korea changed its negotiating position with the United States in Geneva that led to the “Agreed Framework,” diffusing the crisis.11

The Congress Takes Control Non-Americans have a difficult time believing that the U.S. Congress can block executive branch initiatives and can have great influence over aspects of U.S. foreign policy. Anyone who doubts the validity of this judgment need only examine the record after the Republicans took control of both the House of Representatives and the U.S. Sen- ate in the November 1994 elections. This was nothing less than a political earthquake in Washington. Led by Georgia Representative Newt Gingrich, the Republicans es-

————— Christopher/Lord approach are offered in Tyler, A Great Wall, pp. 393–412. One of the chief skeptics of this strategy from the beginning was Stapleton Roy, among the most senior sinologists in the U.S. Foreign Service and U.S. ambassador to China from 1991 to 1995. 11. The author of this chapter was a member of the Perry delegation to China. The agreement with North Korea was the product of work primarily by the chief U.S. negotiator, Robert Gallucci. Perry’s views on how to engage China and simultaneously strengthen U.S.-Japan relations are contained in Ashton Carter and William Perry, Preventive Defense (Washington, D.C.: Brookings, 1999), pp. 92–122. 48 Michael Nacht sentially declared political war on all of Clinton’s major policy initiatives and sought to thwart him at every turn. Gingrich proclaimed in 1995 that Clinton was no longer relevant to the making of policy, foreign or domestic. This was an extraordinary assertion, that nonetheless carried sufficient political weight that Clinton was forced to make a statement that he was indeed “still relevant.” At this time Clinton surely seemed to political observers as a one-term president. It was during this period that Clinton turned to former political adviser Dick Morris for guidance. Morris developed a strategy of “triangulation” where Clinton would do enough for the Democrats to hold his political base while taking over many Republican issues (such as reducing crime by placing many more cops on the beat) and co-opting more conservative voters. On China, Clinton had little room for maneuver. Two of the key committee chairs in the Senate, Foreign Relations and Armed Ser- vices, were now headed by Jesse Helms and Strom Thurmond, respectively, two of the most conservative southern senators. Whereas many Republicans represented strong business interests that endorsed continued economic ties with China, Helms and Thurmond were from the ideological right wing of the party. They saw China as the final communist threat and were interested in promoting containment, not engagement, in U.S. China policy. In short order, the defense conversion program with China was denied further funding, and a spate of congressional hearings documented the spread of Chinese missile and weapons technology to other states. Clinton’s overall engagement philosophy was frequently challenged by a coalition of conservative Republicans and liberal Democrats (personified by criticism from both Jesse Helms and Nancy Pelosi). Clinton simply could not appear too “forward leaning” toward China to have any hope of support on Capitol Hill or for his re- election prospects. The absence of an offsetting Russia also weakened Clinton’s hand on China. Recall that Democrats in particular had to justify their moving closer to China as part of an anti-Soviet strategy. But with the collapse of the Soviet Union and Clinton’s embrace of Yeltsin, this assertion was now vacuous. Maintaining stronger ties with China now had to be defined on their own terms. This was very hard to do in front of a skeptical and often hostile Congress, whose members continued to harp about Beijing’s policies on human rights, intellectual property, and weapons proliferation. Congressional attitudes on China, of course, cannot be understood without taking into account the importance of Taiwan. Ini- Domestic Roots of U.S. China Policy 49 tially, in the 1950s, Taiwan’s leadership was linked to the conservative wing of the Republican Party. This was slowly but steadily revised as representatives of Taiwan began to broaden their contacts and linkages with senators and representatives virtually across the U.S. political spectrum. It is widely felt that Israel and Taiwan have the two most effective lobbying efforts on Capitol Hill. And, by the mid-1990s, the Taiwanese had a great deal to discuss. They had made the transition form a poverty-stricken economy run by an austere and authoritarian regime to one of the “tigers” of East Asia with a very high per capita income and over $100 billion in currency reserves. Taiwan had become the focus of some of the most sophisticated computer chip manufacturing in the world, and its firms were closely linked to Apple Computer and many of the most noted firms in Silicon Valley. And, in political terms, Taiwan had made the full transition to a working democracy, holding free elections and sustaining a free and critical press. While some in Congress argued that the “Taiwanese tail shouldn’t wag the Chinese dog” in U.S. policy, others pointed to Taiwan’s political and economic characteristics as the basis for supporting Taipei and opposing Beijing. Nonetheless the Congress each year continued to approve most- favored nation status for China, and the majority of the legislative body tended to support the engagement strategy with China and a cautious approach to Taiwan. This bifurcation in Congressional attitudes toward China was reflected in nongovernmental groups. Take the press, for example. The more liberal major newspapers, the New York Times and the Washing- ton Post, generally endorsed Clinton’s engagement policy. The more conservative Wall Street Journal was far more critical, although still supportive of business-to-business ties. And the highly conservative Washington Times consistently ran articles and opinion pieces de- nouncing Clinton’s approach. This spectrum of views was reflected in the think-tank community as well. The more liberal Brookings Institution pushed for a closer U.S.-China arms control dialogue. The right-of-center Ameri- can Enterprise Institute was far more skeptical, although still supportive of American corporate trade with and direct foreign investment in China. And the highly conservative Heritage Foundation called for an unambiguous U.S. alliance with Taiwan.12

————— 12. It is no wonder that in the first recent book by an “insider” in U.S. China policymaking, the author concludes that after Tiananmen, “the bilateral relationship lost its insulation from domestic politics” and that the relationship was driven by events 50 Michael Nacht

A Shift in U.S. China Policy, the Key Players, and the Connection to Japan Policy By 1995, Clinton had begun to make notable policy shifts on several fronts with respect to East Asia. With the decline of Christopher’s interest and the downgrading of Lord’s influence, Deputy National Security Advisor Sandy Berger began to assume greater responsibility for restoring a stable Sino-American relationship in which economic relations would remain productive without the president being vulnerable to criticisms of being “soft” on China. Clinton might not have any longer been concerned about “losing China,” but he could not afford to be seen as “soft,” especially in light of his 1992 presidential campaign criticism of President Bush for “coddling dictators.” At the same time Robert Rubin replaced Bentsen as secretary of the treasury and became the chief architect of managing U.S. macro- economic and international economic policies so that Clinton would be in the strongest possible position to run for re-election on the basis of economic prosperity during the 1996 presidential race. Increas- ingly, Rubin was seen as one of the most important—if not the most important—of Clinton’s policy lieutenants. Also, U.S. Japan policy surfaced for the first time in a way that impacted directly on China. In the fall of 1994, Joseph Nye, who had begun in the administration as director of the National Intelligence Council (NIC) within the In- telligence Community Staff, assumed the post of assistant secretary of defense for international security affairs.13 Together with his for-

————— “without unifying principles or concord.” See Robert Suettinger, Beyond Tiananmen: The Politics of U.S.-China Relations, 1989-2000 (Washington, D.C.: Brookings, 2003). Chinese reactions to the shifts in U.S. China policy are analyzed in Edward Friedman, “Lone Eagle, Lone Dragon?” in Eagle Adrift: American Foreign Policy at the End of the Century, ed. Robert J. Lieber (New York: Longman, 1997). 13. Even some of those attentive to foreign policy are confused about the organizational structure of the U.S. intelligence community. The director of central intelligence (DCI) is the nation’s chief intelligence officer. Historically he has also been director of the Central Intelligence Agency, although this is not required. In addition to having all the organizational elements of the intelligence structure reporting to him—including the National Security Agency, the National Reconnaissance Office, and the Defense Intelligence Agency—the DCI has his own staff that reports directly to him. This unit, the Intelligence Community Staff (ICS), has within it the NIC that produces numerous and frequent National Intelligence Estimates (NIE) on countries and subjects vital to American national security. The production of each NIE is the responsibility of a national intelligence officer (NIO) who serves on the NIC. Vogel, therefore, was the NIO responsible for producing the NIE on East Asia for the NIC. Domestic Roots of U.S. China Policy 51 mer Harvard colleague Ezra Vogel, who was the national intelligence officer for East Asia on the NIC, Nye fashioned a rethinking and restatement of the U.S.-Japan security relationship with the support of the “principals” in the administration.14 Recall that progressively through the 1980s, the major concern about Tokyo among the American political and business elite was that Japan was an economic giant that posed a potential threat to American economic supremacy. Japanese financial interests had purchased icons of the American business and cultural scene—from Rockefeller Center in New York City to the Dunes Hotel in Las Ve- gas to Pebble Beach Golf Course in northern California. Continuing tensions over reducing Japanese nontariff trade barriers was the hallmark of the bilateral relationship for many years. It is no wonder that reaching agreements to facilitate the smooth export- ing of U.S. auto parts into Japan, for example, were at the center of bilateral trade negotiations. But by the mid-1990s, it became increasingly clear that Japan was in the throes of a deep economic recession. Slowly but surely the view changed in the White House and the Treasury Department that Japanese economic weakness was more the problem than Japanese economic strength (a view that persisted at the start of the George W. Bush administration). Both Tokyo and Washington had for decades sought to insulate the bilateral security relationship from the vicissitudes of economic relations and trade tensions between the two. This was largely successful. But by the mid-1990s, with China beginning to loom as a threat to American national interests for the first time since the Nixon opening in the early 1970s, and with some believing that America’s tough China policy was leading Tokyo to move closer to Beijing, Nye and Vogel, with approval of their superiors, thought it propitious to clarify Japan’s security commitment.

————— 14. In U.S. governmental parlance, the term “principals” carries significant weight. The main mode of interagency deliberation is the Principals Committee, which includes the secretaries of state and defense, the director of central intelligence, the chairman of the Joint Chiefs of Staff, and the secretary of the treasury. In Clinton’s first term, other members included the U.S. representative to the United Nations and the national security advisor to the vice president. The committee was chaired by the assistant to the president for national security affairs. Actions unanimously approved by the Principals Committee were usually routinely approved by the president. If the committee was divided, the president, with the advice of the vice president, would make the final determination. A clarification of the security relationship with Japan would surely have been authorized by the Principals Committee. 52 Michael Nacht

This bilateral security arrangement has been asymmetric from its inception. The Security Treaty, signed in 1951 and revised in 1960, calls for the United States to come to the aid of Japan in the event the Japanese territories are attacked. Given that this agreement was originally a product of U.S. Cold War, anti-communist strategy created in the aftermath of Japan’s complete devastation during World War II, there was never any consideration given to articulating a Japanese commitment to similarly assist the United States in the event the latter was attacked. The key point of the Nye/Vogel effort relevant to U.S.-China relations was to leave open the possibility that Japan would use its military forces to assist the United States in the event of American defense of Taiwan in the aftermath of a Chinese attack on the island- nation. This commitment was not explicitly spelled out, but it left open the possibility of such assistance, the first time Japan had even hinted in writing to such involvement. This rhetorical revision not surprisingly inflamed senior officials in Beijing, who accused Washington of constructing an explicit anti- Chinese U.S.-Japan alliance. While this allegation was denied on numerous occasions by senior American and Japanese officials, the net effect was to introduce into Chinese thinking the need to take Japanese involvement into account in any contingency planning it was developing with regard to military action against Taiwan. The period 1995-96 was a high watermark in U.S.-Japan relations during the Clinton years. Until this time, it was common to observe that U.S. policy had shifted from “Japan bashing” to “Japan passing.” Except for the irritations over trade policy, Japan barely seemed to register as an element of American foreign policy. And there was no overt evidence of a purposeful American triangular strategy with a careful modulation of Washington’s relations with Tokyo and Beijing. The Nye/Vogel initiative, however, sandwiched between a visit by the Japanese emperor to Washington in 1994 and Clinton’s visit to Tokyo in 1996, was the one tangible manifestation of an American initiative toward Japan motivated in part to alter policy thinking in China.

Three Jolts to the Bilateral Relationship Clinton had to manage three jolts to his engagement strategy with China: one before his re-election and two afterward. The first was the missile crisis of March 1996. This crisis was precipitated by Tai- wan President Lee Teng-hui’s visit to Cornell University to obtain an Domestic Roots of U.S. China Policy 53 honorary degree in June 1995 and his subsequent statements suggesting a possible shift by his government toward a declaration of independence from China. After China fired missiles over Taiwan, Clinton had no choice but to respond in a muscular fashion. To be sure, since the Shanghai communiqué, American policy toward Tai- wan’s security has been ambiguous: a strongly stated desire for a peaceful resolution of the China-Taiwan dispute, but silence about U.S. actions in the event armed conflict begins. The missile crisis produced a huge Taiwan stock market drop and a temporary flight of capital. Under these circumstances, Clin- ton’s deployment of two carrier battle groups in or near the Taiwan Straits was intended to signal the U.S. willingness to defend Taiwan from attack. And, in a U.S. presidential election year, it was also intended to demonstrate to the Republicans and to the general elec- torate that Clinton would not stand by and “lose Taiwan” as Tru- man had “lost China.” The missile crisis also provided additional political support for American missile defense programs that in turn introduced new tensions in the bilateral relationship. Clinton had entered office and quickly came to the conclusion that theater missile defenses (TMD) were needed to defend U.S. forces stationed abroad and key Ameri- can allies from short- and intermediate-range missile attack. The vulnerability of U.S. forces and Israel to such attacks from Iraq during the Persian Gulf War of 1991 had stimulated the Congress to pass the Missile Defense Act of 1991 and every year thereafter in support of such systems. Democratic Senator Sam Nunn and Democ- ratic Congressman Les Aspin were the original proponents of this legislation, and only a few liberal Democrats opposed appropria- tions for these systems. National missile defense (NMD) was another matter, however. Clinton sought throughout his administration to keep open the option of deploying an NMD system by reaching an agreement with Russia to permit such measures under a modification of the Anti- Ballistic Missile (ABM) Treaty that had been originally signed by the United States and the Soviet Union in 1972. This treaty limited to negligible amounts the missile defense interceptors each side could deploy. But an NMD system, even if designed to defend the United States against small numbers of attacking missiles from so-called rogue states (e.g., North Korea, Iraq or Iran) could, according to the Chi- nese, seriously degrade the Chinese nuclear deterrent against a U.S. nuclear attack. China mounted a serious and sustained diplomatic 54 Michael Nacht and political effort to dissuade the United States from moving ahead with such system. What was actually behind this difference on missile defense had to do with concerns about a Taiwan scenario. According to reasoning often invoked, Chinese military planners were mapping out strategies and tactics to wage war against Taiwan. As part of these plans they had to assume that the United States would come to the military aid of Taiwan. In order to deter U.S. conventional force intervention, China might threaten to attack American West Coast targets with its intercontinental-range nuclear weapons, threatening the United States with “the loss of Los Angeles to save Taipei,” as was stated at one point by a senior Chinese official during the 1996 missile crisis. The rationale behind a combination of U.S. TMD systems that could protect Japan and Taiwan coupled with a U.S. NMD program is that this “layered defense system” could be a credible counter to such a Chinese nuclear threat. In sum, U.S. missile defense systems are proposed in part to support credible conventional force intervention to defend Taiwan.15 The second jolt came after the 1996 election when a Taiwan-born, Los Alamos nuclear physicist, Wan Ho Lee, was arrested for espionage. The case is a long and complex one and ended with the U.S. government, in a plea bargain, dropping all but one of the 59 felony counts against Lee in exchange for his pleading guilty to one count of mishandling classified information and “time served.” Lee never revealed why he had downloaded to unclassified computer systems more than 400,000 pages of classified information on U.S. nuclear weapons. Speculation abounds as to Lee’s motivations. Some claim he was spying for China. Others believe that he was spying for Taiwan. Still others judge that he was just accumulating sensitive information that he hoped to sell to the highest bidder. And a few support Lee’s own contention that he transferred the information merely for the ease of working at home. But whatever the truth, the net effect was to fuel suspicion among the public and some elite groups that China was in fact an adversary of the United States, not the “strategic partner” that had become Clinton’s characterization of the relationship. The Cox Commission Report, issued by California Republican Congressman Chris Cox after Lee was arrested, was deeply critical of Clinton China policy, the lax security procedures at the U.S.

————— 15. For more on these issues, see Michael Nacht, “Ballistic Missile Defenses: An American Perspective,” French Institute of International Relations, Nov. 2001. Domestic Roots of U.S. China Policy 55 weapons laboratories, and pointed to the alleged willingness of the Clinton administration to “look the other way” about China’s proliferation assistance to Pakistan and Iran. The third jolt began to build after the 1996 election and surfaced in the 2000 Bush-Gore campaign concerning Chinese government financial support for Clinton’s 1996 re-election campaign. Although hard, detailed evidence was lacking, there were circumstantial claims repeatedly offered by the Republicans that Clinton (and Gore) purposefully refused to invoke sanctions required by law against China for its proliferatory activities toward Pakistan and perhaps Iran and North Korea because of the financial support they received for their political activities. These persistent allegations undercut Clinton’s ability to promote U.S. China policies that would claim widespread support. The net effect of these jolts was to heighten the sense of threat posed by China to Americans. In a public opinion poll taken in the spring of 1998, for example, Americans feared a nuclear attack from China more than from Russia or any other sovereign state and second only to nuclear attack from terrorist groups.16

Ending on a Relatively High Note The schizophrenia within the Congress, and the broader body politic, toward China was reflected in two of Clinton’s final initiatives: endorsing China’s membership in the WTO and securing congressional approval of Permanent Normal Trade Relations (PNTR) with China. In the last portion of Clinton’s second term, despite all the ob- stacles cited above, the president continued to drive for greater Chi- nese engagement in the international economic community. He de- voted enormous personal attention to achieving both objectives and was successful on both counts.17 Clinton also directed a great deal of energy in his final days to reaching an agreement with North Korea to suspend its ballistic

————— 16. See Bill Gertz, “Americans Fear China More than Russia,” Washington Times, May 9, 1998. The polling data was accurate, although the Washington Times may have sought to use its results to support its political perspective emphasizing the Chinese threat. 17. In 1998 Clinton adopted the “three Nos” toward Taiwan—no support for Tai- wan independence, no support for a two-China policy, no support for Taiwan’s membership in international organizations on the basis of statehood. Yet China perceived a strengthening of U.S.-Taiwan ties! See Bates Gill, “Limited Engagement,” Foreign Af- fairs, July/Aug. 1999, pp. 65–76. 56 Michael Nacht missile development programs. He sought Chinese support for these efforts but was not able to put all the pieces together before leaving office. Of course, these actions were not goals but means to broader ends. Clinton in his final day in office retained his overarching view that the more China is engaged in the international community and the more it prospers economically, the more likely it will evolve into a pluralistic democracy with a capitalist economy. This is the propo- sition he has left to his successor.

Domestic Challenges for President Bush The election of President George W. Bush returned to the White House a conservative Republican with a razor-thin majority in both houses of Congress, who lost control of the Senate in the summer of 2001 when Vermont Senator Jim Jeffords shifted his allegiance from the Republican Party to “independent.” Bush was immediately torn between the two roots of Republican attitudes toward China: the pro-business, pragmatic wing and the ideological, conservative wing. The former has sought to have Bush pursue policies not very different from Clinton’s. The latter has sought to have Bush pursue a much tougher line than Clinton. Although Bush visited China when his father served there as the U.S. representative, he assumed his position with limited knowledge of foreign policy. In his first year in office, prior to September 11, several points became clear: 1. During the presidential campaign, Bush claimed that Clinton’s characterization of China as a “strategic partner” should be replaced by “strategic competitor.” Except, however, for one explicit statement supporting the U.S. defense of Taiwan in case it was attacked by China, which he then sought to soft-pedal, Bush, in office, has not rhetorically challenged China or fundamentally altered U.S. declara- tory policy toward the People’s Republic. This approach flies in the face of commentary by National Security Adviser Condoleeza Rice and others during the 2000 presidential campaign that Bush would return to great power politics and address the Russian and Chinese rivalries with the United States rather than emulate Clinton’s osten- sible emphasis on secondary concerns in Somalia, Haiti, and Bosnia. 2. Bush decided to begin his foreign policy meetings with the leaders of America’s neighbors (Mexico and Canada), then U.S. allies (Europe and Japan/Korea), and only then with the heads of Russia Domestic Roots of U.S. China Policy 57 and China. He ultimately met with Chinese President Jiang Zemin at the fall 2001 Asia-Pacific Economic Council meetings. 3. Tensions with China surfaced quickly over U.S. missile defense programs that could degrade the Chinese nuclear deterrent. Chinese detention of several U.S. academics as intelligence operatives and Beijing’s crackdown on members of the Falun Gong movement exacerbated matters. 4. The premier issue between the United States and China, as it has been for five decades, remained Taiwan. Bush made decisions on arms sales to Taiwan but chose not to approve the sale of advanced Aegis ships to Taiwan that could be deployed with missiles to defend the island against an attack from the mainland. Meanwhile, China continued to vastly increase the number of short-range missiles deployed in southeast China within easy range of Taiwan. 5. Bush’s major foreign policy appointees did not include China specialists, and most were not considered supporters of Clinton’s approach. Vice President Richard B. Cheney, Secretary of Defense Donald Rumsfeld, and Deputy Secretary of Defense Paul Wolfowitz were all in an ideological camp supportive of a tougher line toward Beijing. Moreover, there were some in the Department of Defense who seemed to see China as the next enemy, in the aftermath of the collapse of the Soviet Union. They were also wary of closer Russia- China military cooperation. The views of Secretary of State Colin Powell and National Security Advisor Rice were less certain. Deputy Secretary of State Richard Armitage has long had close ties with Taiwan and has been notable in pressing Japan to increase its military capabilities. USTR Robert B. Zoellick, on the other hand, despite writing some tough articles about China when out of office, was a fierce advocate of free trade, a position that might place him closer to the Clinton engagement position. Secretary of the Treasury Paul O’Neill spoke out early against further aid to Russia but did not discuss China publicly. He was replaced after two years by John Snow, ostensibly for articulating views publicly at odds with administration policy. Snow has sought only to encourage U.S.-China economic relations. 6. Published accounts claim that Bush has learned from his father’s experience to be more attentive to the conservative wing of the Republican Party. The son seems generally more comfortable with this wing than his father, which could mean tougher times ahead in U.S.-China relations. Yet, even in the aftermath of the forced landing of a U.S. reconnaissance aircraft by Chinese military aircraft on Hainan Island in April 2001, Bush seemed squarely on the engage- 58 Michael Nacht ment course with the People’s Republic. He and his colleagues resolved the issue quickly and quietly. In response to the September 11 terrorist attacks on the United States, President Bush has proclaimed that fighting terrorism is by far his top priority. Working with Secretary of State Powell, he has worked assiduously to forge a global antiterrorism coalition. Since China itself faces a serious problem with Muslim separatists in its western Xinjiang province, China and the United States have found a powerful common interest that might trump continued differences over economic, human rights, weapons proliferation, and Taiwan policies. The admission of China into the WTO and U.S. support that led to the selection of Beijing as host for the Olympics in 2008 have been important positive elements in the bilateral relationship during Bush’s initial period in office. Some Americans speculate that China’s adherence to the requirements of WTO membership and the inevitable societal opening required in hosting the Olympics place Beijing on an inexorable course toward greater political pluralism and economic entrepreneurship that should integrate it further into the community of nations. Nonetheless there is also evidence of a subtle containment policy being practiced by the Bush administration toward China, with notable improved U.S. strategic relations with India, Pakistan, and Rus- sia. It is plausible that should the war on terrorism recede in importance, tensions between Beijing and Washington could once again resurface at significant levels.

Some General Conclusions There are deep inconsistencies in the domestic roots of U.S. policy toward China. There appears to be a broad consensus in the middle of both major political parties, reflected in successive Democratic and Republican administrations, the Congress, public opinion, pressure groups, and the scholarly community. This consensus holds that engagement with China and a concerted effort to promote economic, political, cultural, scientific, and, in some cases, military ties are in the U.S. national interest and are likely, over a very long period of time, to strengthen forces for moderation and pluralism in the People’s Re- public. The main issues between Beijing and Washington—Taiwan, weapons proliferation, human rights, missile defense, intellectual property rights—all remain unresolved but can best be “worked” by patient incremental measures sustained over many years. Domestic Roots of U.S. China Policy 59

Extremes on the right in the Republican Party and on the left in the Democratic Party remain allied in opposition to this approach, and they have adherents throughout the major institutions of Ameri- can society. Many of these individuals represent small, dedicated, single-issue pressure groups. Some see China as the successor to the Soviet Union in the capacity of the chief enemy or rival of the United States. Others focus on human rights violations and/or the denial of religious freedoms in China, pointing to the oppression of the Falun Gong or to Tibet. Still others point to the issue of Taiwan as central to the impending conflict between the two countries. In “working” the American political process, there are notable asymmetries between Beijing and Taipei. The former has dealt in a formal manner with administration officials in the U.S. executive branch. Literalness, an “official quality,” and remoteness character- ize many of these interactions. The latter has dealt in a far more sophisticated manner, more with the Congress than with the executive. There is a flexibility, a more nuanced approach, to these often unofficial interactions. There appears to be less room for maneuver toward China with Democratic administrations. It could be argued, for example, that even with respect to the sensitive matter of dealing with North Ko- rea in the late 1990s, Clinton needed to call on former Secretary of Defense Perry to develop a credible game plan for the administration because he alone had the knowledge and bipartisan respect to resolve the issue. This experience was a two-sided political coin: it demonstrated the constraints that Clinton had to endure, but it also illustrated how flexible, American-style policy development can fi- nesse a deeply divided government. Striking during the Clinton years is the relative absence of an overt triangular strategy by Washington seeking to work with both Beijing and Tokyo to further American national interests with both. Relations with China fluctuated from periods of normal productivity to sporadic crises. Relations with Japan generally captured far less high-level attention, except for brief spurts over trade frictions and the overhaul of the security treaty. It may be, however, that if the Bush administration decides to pursue a China policy predicated more on containment than engagement, then a more aggressive approach to encouraging greater Japanese military capability will be an element of this strategy. This approach, however, is not in the political cards so long as the global war on terrorism dominates U.S. national security decision-making. 60 Michael Nacht

Another way to judge the American mood about China is that there is a relatively broad consensus on the goals of U.S. policy— improve human rights, promote democracy, enhance economic relations and openness, and mute the threatening aspects of Chinese foreign policy. Where there are deep differences, however, is about the means required to achieve these goals. Henry Kissinger and others have noted that, at its root, American foreign policy is a mixture of tough-minded realpolitik in pursuit of the national interest, exemplified by the policies of Theodore Roose- velt, and high-minded idealism about human liberties and the virtues of the individual as personified by the views of Woodrow Wil- son. These tensions are readily apparent in the domestic roots of U.S. China policy. They are not likely to disappear anytime soon.

Chinese Domestic and Foreign Policies in the 1990s Zhang Baijia

This chapter examines the relationship between Chinese domestic politics and foreign policy in the 1990s by analyzing three issues: (1) how China overcame the shocks of domestic and foreign events in the late 1980s and early 1990s; (2) the process leading to the establishment of the socialist market economy and its impact on the reform of the political system; and (3) China’s diplomacy after 1992.

Emerging from the Shadow of June 4, 1989, and the Collapse of the Soviet Union The year 1989 was the tenth year of China’s reform and opening. Al- though there were tremendous achievements in the first ten years, there were also mounting social problems. The serious inflation in 1988 and the political turbulence in1989 were explosions resulting from these problems. After taking strong measures to suppress the turbulence, China faced the trials and tribulations of sanctions

————— Zhang Baijia is a Researcher at the Central Party School of the Chinese Communist Party.

61 62 Zhang Baijia imposed by the West, sudden changes in the East European countries, and the collapse of the Soviet Union. China thus entered the 1990s under very difficult circumstances. In June 23, 1989, when the Chinese Communist Party (CCP) convened the Fourth Plenary of the Thirteenth Party Congress, some personnel changes were made at the top. In this complicated situation, the new group of collective leadership followed the domestic and foreign policies set by Deng Xiaoping, which were guided by the principles of maintaining domestic stability and upholding reform and opening.1 In foreign relations, Deng wanted to resist Western pressure and suggested a guiding principle of “observing with cool objectivity, firmly maintaining one’s position, responding with confidence, hiding one’s ambition, and never taking the lead.”2 When Jiang Zemin was chosen party general secretary, he immediately gave reassurances about the continuity of party line and basic policy on reform and opening upheld after the Third Plenary of the Elev- enth Party Congress, and promised to carry them out completely.3 In November of the same year, Deng resigned from his last position of the chairman of the CCP Military Committee. The power transfer was basically completed. The new CCP leadership, in addition to stabilizing the political situation, focused on straightening out the economy, lowering inflation, improving the budget balance, and strengthening and implementing various reforms. In order to overcome the political instabilities of the late 1980s, it was obviously necessary first to stabilize the economy. This task, begun in fall 1988, was almost completed by the end of 1991. During this period, 1988–91, the growth rate of the Chi- nese economy experienced a U curve.4 Although there were many unresolved problems in implementation and in the economic system, the momentum of economic development was restored. The new leadership also attached importance to foreign relations. This was not only because of the need to break the sanctions imposed by the West in order to continue the reform and opening, it

————— 1. For details, see my chapter covering 1972–89 in The Golden Age of the U.S.-Japan- China Triangle, 1972-1989, ed. by Ezra F. Vogel et al. (Cambridge, Mass.: Harvard Uni- versity Asia Center, 2001), pp. 38–51. 2. Historical Events of the New Period in CPC History, ed. Party History Research Center, Central Committee of the Communist Party of China (Beijing: CPC History Publishing House, 1998), pp. 284, 315. 3. Ibid., p. 280. 4. According to the figures from the State Statistical Bureau, the GDP growth rate was 11.3 percent in 1988, 4.1 percent in 1989, 3.8 percent in 1990, and 9.2 percent in 1991. Chinese Domestic and Foreign Policies in the 1990s 63 was also due to the fundamental changes in the international systems that resulted from a series of major events. In August of 1990, Iraq invaded Kuwait, and early the next year, the crisis in the Persian Gulf turned into the Gulf War. As a result, the multinational forces headed by the United States achieved an overwhelming victory. Chinese scholars and officials almost unanimously believed that the war broke out at the moment when one side of the bipolar world collapsed, creating an imbalance among the powers of the world. Beyond the apparent relaxation of tensions, various kinds of power politics as well as hegemony continued to threaten world peace and stability. The international situation was in fact unstable. It was important, in Chinese views, to maintain peace and resist the dangers of hegemony. In early 1990, the Chinese leadership paid particular attention to the changing situation of the Soviet Union. The collapse of the Soviet Union sent shockwaves to the CCP. As the Soviet Union was dis- membered, there was a debate among the CCP on what lessons to draw from the Soviet Union and Eastern Europe and to prevent “peaceful evolution” in China. During spring 1989, many young students and some intellectuals demonstrated a fanatic worship of the Western democratic political system and a desire to destroy the political system as Mikhail Gorbachev had done. Considering these factors, the CCP leadership was naturally concerned. In the course of debate, some people advanced the priority of preventing peaceful evolution that could lead to collapse in China, as in the Soviet Union. Some even suggested renewing the ideological debate with the Sovi- ets. However, this suggestion was not adopted. The principle set by Deng Xiaoping was to stabilize relations with Russia, no matter what happened there, and to avoid debate.5 When the issue was resolved, Jiang Zemin summarized the debate by pointing out that there were many factors that had led to the change in Eastern Europe and the former Soviet Union. Although there were Western efforts pushing for peaceful evolution, domestic factors in these countries played the decisive role. Communist leaders in Eastern Europe and the former Soviet Union had become seriously detached from the masses, pursued a wrong policy, and, most important, failed to handle the economy well. He believed that China should draw several lessons from this: never give up the ruling position of the communist party, retain the socialist economic system with public ownership as the main part of the economy, and never lessen the absolute control of the

————— 5. Selected Works of Deng Xiaoping (Beijing: People’s Publishing House, 1993), p. 353.

64 Zhang Baijia army by the party. The best way to prevent collapse from peaceful evolution was to handle domestic matters well and to uphold reform and openness. There should not be two central tasks; there should be only one—development.6 The result of this debate was very significant in helping to stabilize China and in shaping domestic and foreign policies. After two years of observation, the new leadership in Beijing formed their view of the international situation. They believed that the old world order of the preceding forty years was broken, and a new one was being formed in which multipolarity was strong. Al- though there was regional turbulence, Deng Xiaoping’s characterization in mid-1980s of peace and development as the two main themes of international relations still held true. This judgment made the new leadership believe that China should not change the basic principles of foreign policy set in the 1980s. In 1991, both Jiang and Li Peng stressed repeatedly that the basic task and fundamental goal of foreign policy was to serve China’s agenda of reform and openness and economic construction. They should strive to maintain a peaceful international environment. For that purpose, China’s basic foreign policy would not change. It would continue to carry out an independent and peaceful foreign policy, improving relations with all countries in the world on the basis of five principles of peaceful co-existence. China would not use differing ideologies or political systems as the rationale in managing relations with foreign countries. It would oppose hegemony and consolidate political and economic cooperation with the developing world.7 From the end of 1989 to the beginning of 1992, there were two priorities in Chinese foreign relations: first, to pursue a “good neighbor” policy, to develop and consolidate relations with the neighboring countries, and to unite with the countries in the Third World; and second, to use the conflicts and contradictions among the West to break Western sanctions, restoring and stabilizing relationships with the developed countries. The achievements in Chinese foreign relations proved better than expected. These two years constituted one of the best periods in history for Chinese relations with neighboring countries. Relations with the Third World also improved substantially. China resumed diplomatic

————— 6. Jiang’s several speeches and instructions, June 10, July 24, July 31, and Dec. 7, 1991. 7. Li Peng’s speeches on Mar. 23 and July 24, 1991, and Jiang Zemin’s speech on July 24, 1991. Chinese Domestic and Foreign Policies in the 1990s 65 relations with Indonesia; normalized diplomatic relations with Sin- gapore, Brunei, South Korea, Saudi Arabia, and Israel; improved relations with India and Vietnam; and established diplomatic relations with every newly born state from the former Soviet Union. After the Beijing storms of 1989, the Chinese political situation also stabilized rapidly, and the economy continued to develop. This exceeded the expectations of Western politicians. China played a pivotal role in resolving the Cambodian issue. The Gulf War of 1990 also provided China with an opportunity to increase its role in the international arena. Under these circumstances, it was difficult for Western sanctions against China to have much impact. To end the Western sanctions as quickly as possible, China pushed for the improvement of relations with Japan as the first step, combin- ing both political and economic means. Meanwhile, China also used both official and unofficial channels to invite various Japanese groups to China. As a second step, China tried to normalize relations with Western European countries. As a result, Japan was the first to end sanctions against China in the G-7 summit in 1990, resuming the third governmental loan to Beijing. In 1991, some other Western countries and some international organizations quietly reduced or eliminated sanctions. Head-of-state visits were also resumed in 1991. In August, the Japanese prime minister visited China, and in September, the Brit- ish prime minister also paid a formal visit to Beijing. Although Sino- American relations were still at a low ebb, high-level contacts were retained. And, of greatest concern to Chinese leaders, U.S. normal trade relations with China were never revoked. The improvements in the domestic economic situation and in foreign relations provided Deng with a new opportunity. Deng was not content with the pace of economic system reform at home. Now, he was determined to use his great personal authority to give China’s reform a big push forward. In January and February 1992, Deng visited Wuhan, Shenzhen, Zhuhai, and Shanghai, making his famous “southern talks” that severely criticized the “leftist” and conservative ideas then fashionable in China.8 His talks got a quick response from the new leadership. On March 9, Jiang Zemin convened a Pol- itburo meeting, during which he gave full support to Deng’s “southern talks.” China’s reform process resumed its momentum. From the end of the 1980s to the beginning of the 1990s, China experienced the most severe tests since reforms began. The shocks from both internal and external sources might have caused a devia-

————— 8. For details, see the next section of this chapter.

66 Zhang Baijia tion from the reform course. Fortunately, Deng Xiaoping was still in control of the rudder. The Chinese masses became dissatisfied with the increasing corruption and a level of inflation they had not experienced for thirty years. But they had also tasted the fruits of reform and were willing to go ahead with this hopeful direction. Therefore China was able to regain stability quickly. With three years of effort, China overcame various difficulties and gradually emerged from the shadow of the 1989 Tiananmin Square event.

Economic and Political System Reform in the 1990s China’s economic reform entered a new era, while political reform, after a severe setback, resumed.

CONFIRMING THE GOAL OF A SOCIALIST MARKET ECONOMY AND OF IMPLEMENTING THE TRANSFORMATION OF THE ECONOMIC SYSTEM What was the goal of Chinese economic system reform? Was it to perfect the planned economy? Or to establish a new market economy? This debate continued throughout the whole process of reform and opening. It is both an economic issue and a political one. In fall 1992, the Fourteenth Party Congress decided on the goal of establishing a socialist market economy. This decision influenced domestic developments in China, but it also meant a closer link between China and the world. According to the Soviet model and Stalinist theory, the planned economy is a feature of socialism, and the market economy is associated with capitalism. This view also had significant influence in China. But after almost thirty years of experience, Chinese leaders deeply felt the need not to eliminate markets entirely. By the end of 1970s, at the beginning of reform, the guiding principle of leaders in charge of economic work like Chen Yun and Li Xiannian was to combine the plan and the market, relying primarily on planning and secondarily on markets that would adapt and complement the planned economy.9 Although in concept planning was to play the main role, it left a space for the market to develop. This made it possible for Chinese reform of the economic structure to take quite a different road. Contrary to the impression of most people, China’s reform initially started in urban rather than in rural areas. The method

————— 9. Historical Events in the New Period of the CCP, p. 12. Chinese Domestic and Foreign Policies in the 1990s 67 adopted was to improve enterprise management and to give more power to the enterprises. However, that kind of reform of state enterprises lacked a new perspective and, constrained by various factors, brought few results. Meanwhile, reform in some rural areas achieved obvious results when peasants initiated the “contract down to the household” as the main system of responsibility for production. This won the support of reform-minded officials. Thus the structural reform of the economy achieved its first breakthrough in the countryside. The important issue in the Chinese reform of the economic structure was whether it was necessary to break through the traditional view that planning should play the main role in the economy. Some economists involved in decision-making realized the importance of this issue. In the early 1980s, they advocated the eventual abandonment of the planned economy and the transformation of Chinese economy into a market one with the state providing macro-level guidance. But a majority did not accept this idea at the time, partly because of the constraints in peoples’ minds and partly because of the practical difficulties. The old system had to continue for a while. If the old system were suddenly abandoned, the economy might collapse, which might lead to chaos. Putting the economic system on a new track would inevitably create new problems, and Chinese cadres, workers, and the masses were neither psychologically nor economically ready to accept the change. China had lacked the competition mechanism for a long time, as well as the insurance and welfare systems found in Western societies. With the support of Deng Xiaoping, Chinese economic reformers adopted a strategy of what economists called “reforms to increase quantity,” first carrying on reforms “outside the formal structure.” This meant that reform would focus not on state-owned enterprises but on the nonstate sector instead, creating market-oriented enterprises and relying on them for economic growth. The collectively owned town and village (TV) enterprises then achieved a vigorous takeoff. After the strategy to increase quantity achieved obvious success in the rural areas, reform-minded leaders quickly extended it to other areas. The establishment of joint ventures and foreign-owned and private enterprises in the coastal cities promoted growth in the nonstate sectors.10 This strategy broke through the bottlenecks in the

————— 10. Wu Jinglian, Economic Reform Strategy and Practice in Contemporary China (Shanghai: Far East Publishing House 1999), pp. 74–80.

68 Zhang Baijia system reform and greatly increased the market sector of the Chinese economy. However, the problem of which part, the market or the plan, should be dominant in the Chinese economy was still not resolved. China’s reform in the 1980s was a matter of “groping for stones to cross the river,” that is, solving the problem case by case. When they temporarily encountered problems that were hard to resolve, the leaders would take a detour. As reform deepened, it became more difficult to achieve results this way, especially in the mid-1980s, when the plan and markets co-existed. The two–track system created many new problems, such the increasingly bad balance sheets of state enterprises, inflation, and corruption among some officials. Chinese reformers realized that they had to push for comprehensive reform, including in the state sector, to achieve a market economy for the entire economic system. In the mid-1980s, the CCP gradually abandoned the idea of “relying primarily on planning and secondarily on markets” in its push for comprehensive reform. The party resolution stressed “the need to break the traditional concept that the planned economy and the commodity economy are opposed to each other” and the need to “speed up the development of a socialist market economy and gradually develop a basic framework for a planned commodity economy.”11 Meanwhile, proposals for comprehensive reform were under discussion. In April 1986, the State Council created the Eco- nomic System Reform Office, and in the following months, it designed a set of reform plans for the next two to three years in the key areas of prices, taxation, budget, finance, and trade. Although Deng Xiaoping supported this plan, in the end it was not possible to implement it,12 apparently because China’s political and economic situation entered a sensitive period. After the hyperinflation and political turbulence of 1988 and 1989, the idea of “relying primarily on planning, secondarily on markets” became more popular again, triggering heated debate in theoretical circles. People who were “planning oriented” believed that the serious economic and political problems of the previous two years had resulted because the reforms had taken the wrong direction. They believed that “market orientation was equivalent to capitalism” and

————— 11. Party History Research Center, Important Documents Since the Twelfth Party Con- gress (1986), p. 586; Important Documents Since the Thirteenth Party Congress (1991), p. 26. 12. Wu Jinglian, Economic Reform Strategy and Practice in Contemporary China, p. 90. Chinese Domestic and Foreign Policies in the 1990s 69 that a market economy would eventually lead to “capitalism, the rejection of communist leadership and the socialist system.” In their view, the basic content of “marketization” was “capitalism and peaceful evolution.”13 When reform was on the verge of possibly losing its direction, Deng Xiaoping again played an important role. In fact, he was always doubtful about the necessity of linking the planned economy with socialism. Early in 1979, he suggested, “Socialism can also have a market economy.”14 In the early 1990s, when theoretical circles were locked in debate between the two views, he made several speeches about market economics reiterating that “the distinction between socialism and capitalism should not be judged by planning or marketing. Socialism can also have some markets while capitalism can have some planning and control.”15 In early 1992, in his famous “southern talks,” Deng put it even more sharply, “the pace of reform and openness is not fast enough. The main reason is the fear of being called ‘capitalist,’ or talking the capitalist road. The key in determining what should be called ‘capitalism’ and ‘socialism’; the main criteria of judgment should be whether it can promote the development of socialist production force, enhance the overall power of the socialist state, and raise the people’s standard of living.” Deng said, “In China we should be vigilant against rightists, but our main vigilance should be against the leftists.” 16 Encouraged by Deng Xiaoping, on May 16, 1992, the Central Pol- itburo passed a plan to hasten the achievement of a new stage by speeding up reform and expanding opening. On June 9, Jiang Zem- ing, in a speech at the CCP Central Party School, expressed his deep support for the spirit of Deng’s “southern talks” and supported the use of Deng’s term “socialist market economy.”17 In October, at the Fourteenth Party Congress, the CCP officially proclaimed that the “goal of economic system reform is to establish a socialist market economy.” In the fall of 1993, the CCP passed “a decision on some problems of establishing a socialist market economy” in the Third Plenum of Fourteenth Party Congress, establishing the overall guidelines and program for implementation of economic reform.

————— 13. Xie Chuntiao, “Debates over the Planned Economy and or the Market Econ- omy—An interview with Wu Jinglian,” Bainianchao 1998, no. 2. 14. Selected Works of Deng Xiaoping, 2: 236. 15. Ibid., 3: 364, 373. 16. Ibid., pp. 372, 375 17. Historical Events of the New Period in CCP History, p. 363.

70 Zhang Baijia

For the course of Chinese reform and openness, setting a clear goal of establishing a socialist market economy had deep meaning. It ended the period of “groping for rocks to cross the river” and ushered in a new stage of comprehensive systematic reform. At the same time, it also eliminated the political uncertainty that resulted from differences of opinion and whittled away the influence of the conservatives. In retrospect, it was a good thing to have gone through ten years of exploration and practice before specifying the goals of economic system reform. The ambiguity of the goals helped China avoid the trauma that Russia suffered from its “shock ther- apy,” which had a clearly defined goal. From 1993 on, centering around central responsibility for establishing the socialist economic market reform, China systematically pushed for a series of reforms, including the change of the operation of state-owned enterprises and the change from command planning to indicative planning. Meanwhile, China also pushed through reforms in areas such as prices, taxation, finance, foreign trade, social welfare, housing, and land use to accord with the overall socialist market. In pushing for these reforms, the Chinese government learned from the lessons of the late 1980s, paying special attention to the establishment of the government’s macro-economic controls. From 1993 to 1995, again facing inflationary pressures, the Chinese government adopted a series of powerful measures to clean up and restore order in the financial sector. In 1996, the Chinese economy made a “soft landing.” In 1997, China also successfully handled the shock of the Asian financial crisis and then the unprecedented defla- tionary pressures. In the complicated environment of the second half of the 1990s, China maintained steady and rapid growth and has gradually developed a market-oriented economic system with macro state control. Although China in the 1990s achieved significant progress in its economic system reform, the reform was not yet completed, and it is continuing.

THE GRADUAL REFORM OF THE POLITICAL SYSTEM Compared to economic reform, the pace of political reform was much slower. Although Deng’s initial reform plan included “reform of the political system,”18 this clearly encountered many more difficulties. The constraints came from two sides: on the one side, large- scale economic reform needed a relatively stable political environ-

————— 18. Selected Works of Deng Xiaoping, 3: 176. Chinese Domestic and Foreign Policies in the 1990s 71 ment; on the other side, political reform encountered enormous pressures from both the left and the right wing, even though the goal of reform was very limited. Overall, economic reform was the leading and driving force of reform, as well as a drag on political reform. In the early 1980s, Deng Xiaoping advocated reform of the party and state leadership structure. The main issues were to advance democracy, to separate the party from government administration, and to end the tenure system for party and state leaders.19 These concepts require some explanation. First, what Deng said about advancing democracy was aimed at breaking down rigid views that might hinder reform. He thus allowed different opinions to be expressed both within the party and in society at large. But the purpose was to strengthen rather than weaken the party’s ruling position. Second, the separation of the party and government administration was to avoid overlapping and duplication in the party’s and the state’s ju- risdictions. The role of the party should be to provide the general policy line in order to guarantee the political and economic direction of the state, while the role of the state was to administer and implement the policy line. The party should not interfere in the detailed affairs of government administration. In the mid-1980s, Deng Xiaoping tried to accelerate the pace of political reform. He set three goals: (1) to maintain the vitality of the party and the state; (2) to overcome bureaucratism and raise effi- ciency; and (3) to increase the enthusiasm of basic-level workers, peasants, and intellectuals.20 By then Deng had realized that political reform in China was still too difficult. He said, “The country is so large and things are so complicated, it is not easy to reform. Therefore in determining policies we must be cautious, and resolve issues only when we are likely to succeed.”21 The Tiananmen Square event of 1989 frustrated the efforts for political reform. After that, especially when the failure of Soviet reform led to the collapse of the Soviet Un- ion, Chinese leaders strongly felt the need to be extremely cautious in political reform. At the same time, young Chinese students and intellectuals also realized from the chaotic situation in Russia that the ordinary people would be the ones to pay the painful costs of failure. This caused them to see radical reform as less attractive. In 1992, the efforts to establish market-oriented economic system gave a new push to political reform. In the next eight years, the

————— 19. Ibid., 2: 320, 3: 116. 20. Ibid., 3: 179–80. 21. Ibid., pp. 176–77.

72 Zhang Baijia clearest advance was made in governmental readjustment, the purpose of which was to adapt the role of the government function to the transformation from a planned economy to a market one. At the same time, there were changes that were not easy for the outside world to notice: (1) the Chinese political system has gradually been transformed from a highly centralized system to a less centralized system in which the local governments gained certain powers. The local governments now have more power than at any time since 1949, including the power to manage their finances and appoint local bureaucrats. Provinces have been granted the power to pass legislation alongside the national government. (2) Policymaking procedures at the center have also undergone certain changes. The decision-making group and the circles from which opinions are solicited before decisions are made has been expanded. The highest-level decision-makers must consider and balance the opinions and interests of each of the institutions. The making of “the tenth five-year plan” was the classic case. When making the plan, the government not only solicited the opinions of various economic departments of the government and of economists but also announced the draft plan on the Internet and sought the responses of ordinary people. Early decisions of this sort had previously been kept absolutely confidential before they were finally completed. (3) The Chinese government began to reform the cadre system by enhancing supervision of cadres and increasing the role of democracy in their selection. In the process of promoting cadres, the candidates’ names were announced and put to the test of public opinion before the final decision was made. Higher-level leaders and supervisors sought different opinions. In selecting lower-level people and some middle- and high-level cadre positions, openings were publicly announced and competitions were used. (4) To broaden low-level democracy, village committees were directly elected in rural areas. According to preliminary estimates, by now almost 600 million peasants have taken part in grass-root elections, with participation rates as high as 80 percent. For a country lacking democratic traditions, this from-the-ground-up democratic reform may have significant impact in improving society. At this time, it might be still too early to assess the results of political reform. From an optimistic perspective, China’s political reform still resembles the period of China’s economic reform in the early 1980s, when China was still groping for the right system. In the 1990s, Chinese leaders gave greater weight to the maintenance of political balance and stability. With political stability, they could devote more attention to the resolution of issues they regard as more urgent. Chinese Domestic and Foreign Policies in the 1990s 73

China’s Diplomacy After 1992 Beginning in the 1980s, the nature of the interaction between Chinese domestic politics and foreign relations was different from before. In the 1990s, these features became even more striking. First, foreign policy was even more intertwined with domestic goals. When considering foreign relations issues, Chinese leaders consciously put them into the context of domestic economics and politics. Foreign policies became more pragmatic. Second, the foreign policy–making process became more complicated, with more factors and more groups being considered. Now, not only do government departments in foreign, economic, and military affairs provide information and suggestions to the top decision-makers through direct channels, but top leaders also give more attention to the opinions of scholars and specialists. Chinese political reform has had a subtle and profound impact on Chinese foreign policy–making. In the last few years of the twentieth century, China’s diplomacy revolved around three tasks: (1) supporting the development of the socialist market economy and negotiating for entrance into World Trade Organization (WTO); (2) assuring the smooth return of Hong Kong and Macao; and (3) stabilizing relations with the big powers and neighboring countries and taking new initiatives to lay the structure for foreign relations in the new century.

ENTRANCE INTO WTO Efforts to enter the WTO were closely related to Chinese economic reform. When China announced that it wanted to establish a socialist market economy, the pace of these efforts accelerated and Chinese leaders began to pay more attention to them. China was a founding member of the General Agreement on Trade and Tariffs (GATT) in 1948. For various internal and external reasons, Beijing did not participate in the GATT after the establishment of the PRC. In July 1986, after the policy of reform and opening, the CCP decided to submit an application to resume China’s position as a founding member. In 1988, the GATT began to review China’s application, but the negotiations with China over this matter were soon halted by the United States and other countries because of the 1989 Tiananmen incident and were not resumed until the end of 1991. In early 1992, China’s reform and opening got a second start. In May, the leadership decided to take active steps to regain China’s membership in GATT as quickly as possible. In October, the CCP

74 Zhang Baijia announced the establishment of the socialist market economy as the goal of economic reform. After that, GATT set up a working group to deliberate and decide when the negotiations with China were completed. Thus China and the GATT entered into a stage of substantive negotiations over market entry. China decided upon three principles to guide its negotiations over market access: 1. The GATT was an international organization, and without China, the largest developing country in the world, GATT was incomplete. 2. China should enter as a developing country. 3. There should be a balance between China’s rights and obligations in this organization.22 In the ensuing negotiations, China held consistently to these three principles. The negotiations were difficult and tortuous. In order to enter the WTO as a founding member in January 1995, China entered into intensive negotiations with various GATT member-countries at the end of 1994. Since China could not accept the demands of the United States and other Western countries, agreement was not reached. In July 1995, China’ resumed negotiations for entry into WTO. In the next two years, each party stuck to its position, negotiations were pe- riodically interrupted, and progress was slow. Since China had already missed its chance of becoming a founding member, and because of domestic resistance, especially from those sectors and enterprises that had reservations about entering into WTO so soon, the Chinese government was not in a hurry to enter and took a relaxed attitude. The 1997 Asian financial crisis made Chinese leaders more determined to maintain autonomy, to control the pace of opening, and to be more cautious about joining WTO. In winter 1998, the chance came when Bill Clinton sent a letter to Jiang Zemin on No- vember 6, proposing to end the negotiations between China and the United States in the first quarter of 1999. In the April 1999, when Chinese premier Zhu Rongji visited America, although no agreement was reached, the United States affirmed its support for China’s entrance in 1999. However, the following month, the U.S. bombing of the Chinese Embassy in Belgrade interrupted the negotiations, which were not reopened until after the Jiang-Clinton meeting in Auckland,

————— 22. Jiang Zemin first enunciated these three principles in his meeting with Presi- dent Clinton at the APEC Leaders Meeting in Seattle in November 1993. Chinese Domestic and Foreign Policies in the 1990s 75

New Zealand, on September 11. In Beijing in mid-November, Sino- American agreement was reached after heated bargaining. Both sides call it a “win-win” result. After that, China’s negotiations with other member-countries went smoothly. In the process of several years’ negotiation, the goal of China’s entrance became clearer than before. From the government’s perspective, there were three main goals. First, entry will help create a more favorable external environment for China’s domestic economic reform and development; it will also be an important link in China’s integration into the world. By complying with widely practiced rules of international trade, increasing the transparency of its trade policy and management, and participating in the making of new rules, China could be seen as a responsible economic power. This could be helpful in the effort to eliminate the “China threat” argument. At the same time, China needs a stable, transparent. and predictable institu- tional mechanism, which includes unconditional most-favorable- nation treatment to protect it and help China resist other countries’ discriminatory constraints. The WTO framework could help China resolve trade disputes and further reduce the government’s role in trade. Second, entrance into WTO will further domestic economic system reform. External pressure will hasten the readjustment of the domestic production structure, promote the development of modern management systems, and increase the competitive power of Chi- nese enterprises. Third, it would help strengthen economic ties and trade between Taiwan and Mainland China, maintain state sovereignty, and contribute to the completion of the great task of national unification. China wanted to avoid a situation in which Taiwan would enter the WTO ahead of China.23 The views in Chinese business circles toward WTO entry thus underwent a change. Generally speaking, in the first half of the 1990s, the business community, especially the large state-owned enterprises (SOE) had misgivings about immediate entrance into the WTO. But by the end of the 1990s, this attitude had clearly changed. Two factors led to this change. First, after two decades of reform and opening, it was evident that those industrial sectors that the country opened first, such as textiles, machinery, and electronics, developed the quickest and were the first to become competitive in international markets. Those industries continuously protected by state de-

————— 23. These views were first expressed in internal discussions in Chinese academic circle and in internal documents. They were then revealed to the public in newspapers and journals.

76 Zhang Baijia veloped very slowly and remain uncompetitive. Second, a large number of enterprises, especially those large enterprises that succeeded in the market economy, began to view WTO as a guarantee for the state to implement further economic and political reform. They hope China’s entrance into WTO will reduce governmental interference, increase their autonomy obtained from two decades of reform and opening, and make the domestic economic system more subject to standards and more transparent. Thus, entrance into the WTO has not only become the goal of the government but has also increasingly gained more powerful support from the business community. China was finally gained membership in the organization at the end of 2001. However, neither the Chinese government nor the business community was fully prepared for admission. Therefore, the period immediately after China’s entry into the WTO will provide both opportunities and challenges.

THE RETURN OF HONG KONG AND MACAO In the 1990s, the return of Hong Kong and Macao had been an important item on the agenda of the Chinese government. As a foreign policy issue, the return of these two territories is unique and separate from other issues, but it also has profound implications because it is an important component of China’s effort to stabilize the domestic political situation and overall foreign relations. Since the founding of the PRC, the Chinese government has consistently held the position that both Hong Kong and Macao are Chi- nese territories and that the unequal treaties imposed on China should be null and void. These two historical inherited problems should be resolved through peaceful negotiations when the situation was ripe. Until that time, the status quo would be maintained. In fact, all along—from the 1950s to the 1970s, Macao and, especially, Hong Kong have been bases for China to make connections with foreign economic activities. China’s policy was to “utilize Hong Kong and Macao for a long period of time,” and for of this reason, the CCP did not take the initiative to take them back. At the beginning of the 1980s, the British became anxious about determining the future of Hong Kong, but the CCP had not yet made up its mind whether to regain Hong Kong or not.24 In mid-1981, Deng asked Liao Chengzhi

————— 24. On March 29, 1979, Deng Xiaoping met with Hong Kong Governor McElhose and indicated that in 1997, China would resolve the situation either by resuming con- Chinese Domestic and Foreign Policies in the 1990s 77 to form a small group to study the Hong Kong issue. In the fall of 1981, Deng Xiaoping gradually came up with the idea of “one country, two systems.” Although this idea was originally proposed to resolve the Taiwan issue, it was quickly applied to resolve the Hong Kong issue. In December, a conference of the CCP Secretariat decided that on July 1, 1997, China would resume sovereignty over Hong Kong.25 In June 1982, Deng Xiaoping, announced that China’s policy in handling the Hong Kong issue was to “resume sovereignty, maintain prosperity, keep the system unchanged, and let the Hong Kong people rule Hong Kong.”26 In September 1982, China and Great Britain began their two year- long negotiations over Hong Kong and in December 1984 signed the joint statement. In the next thirteen years of transition, Sino-British relations suffered ups and downs over the issue of Hong Kong. Dur- ing the first five years, the two sides basically maintained cooperative relations. After 1989, the British began to take an uncooperative attitude toward China. The stance of Christopher Patten, appointed governor of Hong Kong in July 1992, was more confrontational. He tried to use Britain’s power of governance to decide unilaterally the future of Hong Kong after 1997 and present China with a fait accompli, in the hope of maintaining the long-term British influence over Hong Kong. The Chinese government responded with an equally strong stance and established a preparatory committee for the Hong Kong Special Administrative Region to plan independently for China’s resumption of sovereignty over Hong Kong and to work out the details for the establishment of the Hong Kong administrative government. Since the British had few cards to play, it was difficult for them to maintain their confrontational policy. In summer 1994, London readjusted its policy toward China and Hong Kong, soften- ing its attitude. In the last three years before 1997, Sino-British relations were characterized both by cooperation and by struggle. In comparison, the return of Macao was much easier. In April 1974, the Portuguese government, newly established after a coup, announced that Portugal would renounce all its overseas colonies and recognized that Macao was not a colony but a territory of China. On February 8, 1979, the two countries normalized diplomatic rela- ————— trol of Hong Kong or maintaining the status quo. See the Chronicle of Deng Xiaoping’s Thought, 1998, p. 114. 25. Jin Zhong, “The Decision Making Process for Resuming Sovereignty over Hong Kong” Openness 1997, no. 1. 26. Party History Research Center, Third Department, The History of 20 Years Re- form and Openness in China (Liaoning Publishing House, 1998), pp. 171–72.

78 Zhang Baijia tions. Although there was no mention of Macao in the joint commu- niqué, the two governments reached a “secret agreement over the status of Macao,” which clearly defined Macao as a Chinese territory currently under the administration of Portugal that would be returned to China. As for the time and manner of the return, it would be settled by negotiation between the two governments at the appropriate time.27 In April 1987, the governments of China and Portu- gal formally signed a “joint communiqué.” After that, both sides maintained smooth cooperative relations for the next twelve years of transition. On July 1, 1997, the Chinese government resumed sovereignty over Hong Kong and, on December 20, 1999, resumed sovereignty over Macao. In general, the process went smoothly. China had originally prepared for medium-scale chaos, but not only was there no large-scale chaos, there was not even small-scale chaos. In the eyes of Chinese, the return of Hong Kong and Macao was a major event, wiping out a century of national humiliation. It greatly enhanced Chinese national confidence. Naturally, after the return of Hong Kong and Macao, the Taiwan problem became more prominent. The resolution of the Taiwan Strait problem has become the final critical step for national unification.

BUILDING A NEW FOREIGN RELATIONS FRAMEWORK FOR THE NEW CENTURY By the late 1990s, an important responsibility in Chinese foreign relations was to establish a framework of foreign relations for the new century. In the new century, the domestic tasks China confronts are clear, that is, to continue modernization and development and to complete national unification. For this, China needs a peaceful, stable external environment; favorable to development. At the same time it must reduce or eliminate any possible interference with Chinese unification. In building the future framework, the Chinese leadership needs to consider these basic elements. At the same time, they must also realize the challenge imposed by the economic globalization and the inevitability of China’s integration into the world economy. In the late 1980s, when looking forward at the prospects for the 1990s, the Chinese leadership was relatively optimistic. At the time, international relations were heading toward détente and the possibility of multipolarity with the powers relatively balanced. With this

————— 27. Wang Junyan, The Story of Macao (World Knowledge Press, 1999), p. 487. Chinese Domestic and Foreign Policies in the 1990s 79 hope, Chinese leaders advocated a new international political order based on the five principles of peaceful coexistence and a new international economic order based on equality and mutual benefit.28 Throughout the 1990s, Chinese leaders reiterated this stance in various international meetings and publicly advocated a multipolar world. However, as a matter of fact, the post–Cold War world was seriously unbalanced, unstable, and more complicated, with frequent changes. The multipolar world that China anticipated was still a remote picture. In the decade of 1990s, although the Chinese security environment was relatively sound, shocks and interference from the outside were more frequent than in the 1980s. This has gradually made the Chinese leadership more cool-headed and pragmatic in its handling of international affairs. For a long time, Chinese foreign relations have been divided into three levels: relations with big powers, relations with neighboring countries, and relations with Third World countries. Chinese leaders also began the new foreign relations framework from these three levels. Yet, in the past ten years, we have witnessed some new trends. In dealing with the big powers, Chinese leaders stressed the importance of developing new kinds of relations characterized as non- aligned, nonconfrontational, and not aimed at a third country. For this purpose, China developed a new basic framework for the twenty-first century in its relations with the United States, Russia, France, Great Britain, Canada, and Japan. In these ten years, China had undoubtedly put the stability and expansion of Sino-American relations at the top of its agenda. In No- vember 1993, Jiang Zemin met with U.S. President Clinton in Seattle, the first summit since February 1989. Jiang Zemin suggested that both countries should aim to “increase trust, reduce troubles, expand cooperation, and avoid confrontation,” emphasizing the importance of putting the bilateral relationship in a worldwide context looking toward the next century. The top leaders exchanged state visits in October 1997 and June 1998, putting the bilateral relationship back on a normal track. In April 1999, when there was an anti-China mood in the United States and different opinions within China about the United States, the CCP Central Committee decided to send Pre-

————— 28. Deng Xiaoping originally raised this idea at the time when he met with visiting Indian Prime Minister Rajiv Gandhi on Dec. 12, 1988. Three days later, it was confirmed at CCP Politburo meeting. See Selected Works of Deng Xiaoping, 3: 281; and His- torical Events of the New Period in the CCP History, pp. 263–64.

80 Zhang Baijia mier Zhu Rongji to visit the United States as scheduled, hoping to maintain the basic framework of the Sino-American relations. How- ever, the efforts to stabilize Sino-American relations were not very effective. In May 1995, the U.S. government allowed Taiwan leader Lee Teng-hui to visit the United States. In May 1999, the American Air Force bombed the Chinese Embassy in Yugoslavia during the war in Kosovo, which caused a severe shock to China. In April 2001, just as Sino-U.S. relations took a turn for the better, the EP-3 incident happened. Although China had become accustomed to the ups and downs of Sino-American relations, Chinese leaders became increasingly concerned. This concern led the Chinese leadership to pay more attention to the significance of multipolarity and even to advocate democracy in international politics, trying to balance U.S. efforts toward unilateralism. The uncertain years end with September 11. By the end of 2001, Sino-American relations appeared to stabilize. By the end of the twentieth century, China’s relations with the other great powers had developed to varying degrees. First, Sino- Russian relations had developed quite smoothly. Unlike the Sino- Soviet alignment against the United States in the 1950s, both China and Russia had no intention of aligning with each other. Each side wanted only to rely on the other to increase its leverage in dealing with the United States. Both China and Russia are against U.S. hegemony, but both try to improve and stabilize their relations with the United States. With the gradual return of social stability and economic recovery in Russia, Sino-Russian relations have a bright future with great potential. Since the attitudes of European countries toward China have been rational, China decided that in the future it would devote more attention to developing better relations with European countries. Not only have Sino-German and Sino-French relations advanced, but Sino-British relations have also improved rapidly since the Hong Kong issue was resolved. During this period, Sino-Japanese relations were basically stable. One trend worth not- ing is that China, in carrying out its economic and political reform, began increasingly to pay more attention to European experiences. In the 1990s China gave importance to stabilizing and developing relations with neighboring countries. The new and important development was the establishment of the summit mechanism among China, Russia, Kazakstan, Kyrgystan, and Tajikistan, forming the “Shanghai Five Group.” This mechanism helps to maintain stability and tranquility on China’s northwest frontier. With Vietnam, North Korea, Laos, South Korea, Thailand, Cambodia, Burma, and Paki- stan, China extended and improved harmonious relations. China Chinese Domestic and Foreign Policies in the 1990s 81 also endeavored to improve relations with India. With the principle of “claiming sovereignty while shelving disputes and promoting common development,” China improved relations in the disputed areas of south China and maintained basic stability in the region. Generally speaking, at the beginning of the twenty-first century, China has achieved a stable neighboring environment. In the last decade of the twentieth century, China’s relations with Third World countries also developed. Besides using traditional bilateral mechanisms, China has paid increasing attention to multilateral mechanisms for increasing consultation and coordination with Third World countries, strengthening the mutual protection of legitimate interests and rights of developing countries. China has played an important role in such structures as the UN, Asian-Pacific Economic Cooperation (APEC), the Asia-Europe Conference, informal China–Eastern Europe meetings, and the China-ASEAN leaders’ conference. The new problem China needs to resolve, as it domestically becomes a market economy, is how to develop economic relations with Third World countries and how to make effective use of foreign aid. As the new century began, China’s efforts to develop a new structure of foreign relations was not yet complete. There are still a number of unpredictable factors. But in the foreseeable future, China’s domestic reform and the process of China’s integration into the world economy will continue to be stable forces driving Chinese diplomacy. And China’s present foreign policies are likely to continue, because those factors that contributed to foreign policy stability in the 1990s are likely to remain.

Japanese Politics and Security Policy, 1990–2001 Shin’ichi Kitaoka and Matake Kamiya (Preliminary Version)

Throughout the 1990s, domestic politics in Japan was much more fluid than in the 1970s and 1980s.1 From 1990 to the spring of 2001, nine men served as prime minister—Toshiki Kaifu, Kiichi Miyazawa, Morihiro Hosokawa, Tsutomu Hata, Tomiichi Murayama, Ryutaro Hashimoto, Keizo Obuchi, Toshiro Mori, and Jun’ichiro Koizumi. The one-party dominance by the Liberal Democratic Party (LDP) that began in 1955 ended in the summer of 1993 when the LDP split.2 Since then, all governments have been coalitions. Many new parties were formed, but most of them were short-lived. The LDP survived as the largest party in both houses of the Diet. However, the Japan

————— Shin’ichi Kitaoka is a Professor at the University of Tokyo; Matake Kamiya is a Pro- fessor at the National Defense Academy of Japan.

1. For a concise overview of Japanese politics during the 1970s and the 1980s by one of the authors, see Matake Kamiya, “Japanese Politics and Asian Policy,” in The Golden Age of the U.S.-China-Japan Triangle, 1972–1989, ed. Ezra F. Vogel et al. (Cam- bridge, Mass.: Harvard University Asia Center, 2002). 2. For a detailed analysis of the one-party dominant system in Japanese politics since 1955 with the LDP as the predominant party, see Seizaburo Sato and Tetsuhisa Matsuzaki, Jiminto seiken (Tokyo: Chuo koronsha, 1986).

82 Japanese Politics and Security Policy, 1990–2001 83

Socialist Party (JSP), which had been the number-one opposition party for 38 years, gradually lost its political influence and became marginal by the year 2000. The Gulf Crisis, from 1990 to 1991, eventually led to the splits within the LDP and to the formation of the non-LDP Hosokawa administration in August 1993. The Hosokawa administration lasted only for eight months. In June 1994, after two months of the Hata administration, in June 1994, the LDP, the JSP, and a new party, the Sakigake, formed a coalition government with JSP chairperson Mu- rayama as prime minister. In January 1996, within the same three-party coalition, the LDP regained the premiership, when LDP president Hashimoto replaced Murayama. Hashimoto was able to form a single-party cabinet after the LDP victory in the October 1996 general elections. Hashimoto, however, had to resign after an unexpected LDP defeat in the July 1998 upper house election, and he was replaced by Obuchi. In Janu- ary 1999, Obuchi formed a coalition cabinet with the Liberal Party; the Komeito Party joined the coalition in October of that year. In April 2000, after Obuchi’s sudden death, Yoshiro Mori of the LDP formed a new coalition cabinet with the Komeito Party and the Con- servative Party, a small new party that formed after a split in the Liberal Party earlier in that month. The approval ratings for the Mori administration were consistently low, and the LDP experienced a severe slump in the June 2000 general elections. In April 2001, Mori was replaced by Koizumi, who was heralded by the Japanese public as a bold reformer. Despite these fluid political circumstances, Japan witnessed many changes in security policy during the 1990s. During the Gulf War, Japan faced bitter international criticism for not doing more than paying some U.S.$13 billion to support the multilateral forces. After- ward the Japanese government somewhat timidly started to assume wider roles in regional and global security affairs, including the dispatch of the Self-Defense Forces overseas to work with other countries in noncombat operations. In June 1992, the Diet passed the Peacekeeping Operations (PKO) Law, which authorized the dispatch of the Self-Defense Forces’ personnel for U.N. peacekeeping and humanitarian relief operations. In 1993, when Hosokawa became the first non-LDP premier since 1955, his administration decided to maintain the security alliance with the United States and started an examination of possible new directions for Japan’s security policy within that framework, which resulted in the issuance of the New National Defense Program Outline in November 1995. Under the

84 Shin’ichi Kitaoka and Matake Kamiya

Murayama administration, the Socialist Party abandoned its long- cherished policy of unarmed neutrality and adopted the policy of maintaining firmly the U.S.-Japan Security Treaty. Under the Hashi- moto administration, the “Japan-U.S. Joint Declaration on Security— Alliance for the 21st Century” was issued by the leaders of the two countries in April 1996, and Tokyo and Washington revised the guidelines for the bilateral security cooperation in September 1997. Under the Obuchi administration, the Diet passed the Law Concern- ing Measures to Ensure the Peace and Security of Japan in Situations in Areas Surrounding Japan (the so-called guideline law) in May 1999. As a result of such changes, Japan’s security policy at the start of the new century was much more realistic and “normal” than at the beginning of the 1990s. Such changes, however, were not brought about all at once by a transfer of the premiership from one party to another. Nor were they brought about by a stable administration with a strong political power base. They took place gradually, during a period of successive weak administrations and constant and complex changes in party coalitions. How did such consistent changes toward a more realistic security policy occur under the extremely fluid and unstable domestic political environment? The central clue to answer this question can be found in the relationship between seiji kaikaku (political reform) and kokusai koken (international contributions), the two terms that represent the key to understanding the development of Japanese politics during the 1990s. Throughout this period, there was a growing dissatisfaction among Japanese citizens about the nature of domestic politics. While an increasing number of politicians attempted—or at least claimed to be attempting—to respond to such public demand in one way or another, most of them came to share the basic understanding that seiji kaikaku had to have two fronts: domestic politics and external policy. On the external front, virtually everyone agreed that Japan’s security policy had to be changed so that Japan would be able to make a greater kokusai koken to international peace and security, although there were divergent opinions as to what type of contributions suited Japan. The central lesson that the Japanese learned from the Gulf War was that Japan’s postwar pacifism had to be amended if Japan was to become a respected member of international society. For the first time since 1945, a vast majority of the Japanese people came to share the understanding that their country must take on a greater security responsibility in proportion to its economic power and contribute Japanese Politics and Security Policy, 1990–2001 85 more actively and visibly to the maintenance of international peace. Thus, despite the extreme fluidity and instability of Japanese politics throughout the period covered by this chapter, the issue of security policy reform, as the way for Japan to make international contributions, received considerable attention from the Japanese public, as well as from the politicians. This chapter will attempt to illustrate the changes and continuities in Japan’s security policy from the Gulf War to the resignation of the Mori cabinet in April 2001 by examining the relationship between security policy reform and domestic political reform during that period.

Seiji Kaikaku and Kokusai Koken In the context of Japanese politics since the early 1990s, the two terms seiji kaikaku and kokusai koken have had very specific meanings. The term seiji kaikaku was first used in the mid-1970s and has been a key item on the political agenda in Japan ever since. In the 1990s, however, seiji kaikaku acquired a new meaning. During the 1970s and the 1980s, the main purpose of political reform was by and large seen to be the elimination of political corruption (seiji fuhai) and money politics (kinken seiji). During the 1990s, as an increasing number of Japanese started to question the validity and effectiveness of LDP politics in solving the problems confronting Japan, including the pressing issue of economic restructuring, the focus of discussion about political reform shifted from the elimination of political corruption and money politics to the reform of the LDP and Japanese politics as a whole.3 The debate over political reform eventually led in 1994 to the reform of the electoral system of the House of the Representatives (the lower house). Under the traditional medium-sized constituency system, LDP candidates often had to compete not only against opposition party candidates but also against colleagues who belonged to different LDP factions. Since they belonged to the same party, their competition usually had little to do with policies. Foreign and security policies were among the least debated issues, because it was generally believed that foreign policy would not win votes. The LDP candidates competed with one another only to win a seat. In order to survive the competition, most, if not all, of the LDP candidates were forced to spend a vast amount of “meaningless” money. Meanwhile,

————— 3. Major works on political reform during the 1990s includes Takeshi Sasaki, Ima seiji ni nani ga dekiru ka; and Shin’ichi Kitaoka, Kokusaika jidai no seiji shido.

86 Shin’ichi Kitaoka and Matake Kamiya under the medium-sized constituency system, opposition parties were almost guaranteed survival. Because a number of seats (usually 3–5) were allocated each electoral district, the opposition parties could expect that they would win some seats in the elections and maintain some political influence. Content with such a state of affairs, the opposition parties were reluctant to change their unrealistic policies. One of the most typical example of such reluctance was the JSP’s maintenance of unarmed neutrality (hi-buso churitsu) as the central principle of its foreign and security policy until summer 1994, when Murayama became the first Socialist premier since 1948. Criti- cism of the medium-sized constituency system grew rapidly. The second term, kokusai koken, was relatively new in Japanese politics. It was used on some occasions during the period between Japan’s conclusion of the peace treaty with the Allies in 1951 and Ja- pan’s gaining membership in the United Nations in 1956. The ex- pression rarely appeared in Japanese politics after that. It was only after the outbreak of the Gulf crisis in August 1990 that kokusai koken became an important item on the political agenda in Japan. Reflect- ing on Japan’s behavior during that crisis, the Japanese started to discuss seriously in what ways their country should contribute to the international society. There are, of course, a variety of possibilities for Japan’s international contribution. During the 1990s, however, discussion of kokusai koken in Japan focused mainly on the issue of Japan’s possible role in the maintenance of world peace. It resulted in the fundamental review of Japan’s security policy, including the role of the Self-Defense Forces in it.

In the Aftermath of the Gulf War

JAPAN’S REACTION TO THE GULF CRISIS Japan’s initial reaction to the Iraqi invasion of Kuwait on August 2, 1990, was remarkably quick. Tokyo officially blamed Baghdad on August 5 and even decided to apply sanctions against it, including suspensions of economic assistance to Iraq and of imports of Iraqi crude oil, before the United Nations took equivalent actions. By mid-August, many countries, including the United States, had decided to dispatch military forces to the Gulf. As early as August 10, Canada sent two destroyers and one supply ship with 934 military personnel. Japan, however, did not announce any measures for contributing to multinational peace efforts in the Gulf until August 29. Even then, Japanese Politics and Security Policy, 1990–2001 87

Japan promised only a package of measures for “cooperation to restore peace in the region” and “cooperation with affected countries in the Middle East.” The former consisted of material, medical, transport, and financial support; the latter of economic assistance to help countries near the area of conflict, including assistance to refugees. Japan somehow failed to specify the total amount of its financial contribution until the next day. The announced amount, U.S.$1 billion, invited more criticism than praise from the international community. Many believed that the sum was far too small for the world’s second largest economic power. Responding to such criticism, the Kaifu administration announced an additional financial contribution of U.S.$3 billion on September 14. Tokyo’s slow and somewhat clumsy announcement of its contributions to the multilateral coalition against Iraq gave the world the undesirable impression that a reluctant Japan had been forced to increase its financial contribution under U.S. pressure and would probably make more contributions if pressure was increased. During the process, Japanese political leaders gave little, if any, consideration to what role Japan should assume in solving the problem and how Japan could give a favorable impression of its role to the world. On September 6, the New York Times carried an editorial that described Japan’s initial financial contribution as “modest.” It also insisted that although it was understandable that Japan and Germany would not be able to participate in any military operations because of constitutional restraints, Japan should be able to dispatch minesweepers, doctors, and transport planes to the Gulf. The editorial criticized Japan’s reluctance to take such measures for trivial domestic reasons while the United States risked the lives of its soldiers.4 The Japanese government in fact tried to send a medical team to the Gulf but failed to do so, because it tried to form such a team solely of civilians. In reality, only the Self-Defense Forces had the capability to conduct medical activities near a battlefield. The Japanese government tried to provide “transport support” using civilian aircraft. However, it failed to obtain the necessary cooperation from the civilian airline companies and was therefore forced to charter foreign aircraft for that purpose. From summer to autumn 1990, there was growing support among the Japanese that their country should make something more than material and financial contributions. No consensus was reached, however, as to what that something was. There was strong opposi-

————— 4. New York Times, Sept. 6, 1990.

88 Shin’ichi Kitaoka and Matake Kamiya tion to the dispatch of the Self-Defense Forces overseas, because of the pacifist orientation of postwar Japanese. The majority of Japanese seemed to believe that Japan’s contribution should be limited to nonmilitary fields in which the country possessed comparative strength. Under such circumstances, the government submitted to the Diet the U.N. Peace Cooperation Bill in October 1990. The bill was intended to establish a U.N. Peace Cooperation Corps, which would be composed of civilian volunteers as well as personnel sec- onded from other government branches, including the Self-Defense Forces. The bill would authorize the participation of the corps in noncombat activities not only in U.N. peacekeeping operations but also in U.N.–authorized enforcement operations. The bill, however, was severely criticized by the public as well as the opposition parties and did not pass even the House of Representatives, where the LDP commanded a majority. Even within the LDP, there was considerable reluctance to pass the bill. On October 22, the New York Times carried another editorial that urged Japan and Germany to make constitutional amendments. Ar- guing that the ideal of collective security required Japan and Ger- many not only to make financial contributions but also to fight against common enemies, the editorial admitted that it would be difficult for the two countries to actually fight because of the legacies of the World War II and the lingering anxieties of Japan’s neighbors. It insisted, however, that it should be politically realistic for Tokyo and Bonn to consider partial amendments to their respective constitu- tions so that they would be constitutionally able to dispatch military forces overseas to participate in collective security or international peacekeeping operations.5 After the Gulf War, the German government changed its constitutional interpretation in that direction so it could send military forces to areas outside NATO. The Japanese government, however, has still not changed the constitution or its interpretation of it. On November 29, the U.N. Security Council adopted a resolution authorizing member-states to take forcible actions against Iraq. The Gulf War started when the multilateral forces led by the United States launched “Operation Desert Storm” on January 17, 1991 and ended with the Iraqi surrender on February 28. When the war started, the Japanese government felt extremely nervous about the way the international community perceived the fact that Japan’s contribution to the multilateral efforts was virtually limited to the finan-

————— 5. Ibid., Nov. 29, 1990. Japanese Politics and Security Policy, 1990–2001 89 cial one of U.S.$4 billion. Japan, which relied most heavily on oil from the Middle East, played no visible and meaningful role in solving the crisis other than paying money. Japanese leaders, aware of the seriousness of foreign criticism, perceived it as really a dangerous situation for Japan. On January 24, the Japanese government therefore decided to contribute an additional U.S.$9 billion to the multilateral forces and to send Self-Defense Forces aircraft to Jordan for refugee transfers, although the war ended before Japan dispatched any aircraft to the region. If the Operation Desert Storm had not ended with such an easy and one-sided victory by the multilateral forces—in other words, if the multilateral forces had suffered many more casualties in the war—the international criticism against Japan’s inaction would have been even more severe. In fact, after the end of the war, when the Kuwaiti government placed a big advertisement in the Washington Post and other major U.S. newspapers to express its appreciation to some thirty countries that had contributed to the Gulf War, Japan was not even mentioned. Providing a total financial contribution of U.S. $13 billion—far more than any other country—to support the multilateral operation against Iraq, Japan received almost no thanks, only strong criticism from other countries in the world. Iraq condemned Japan for funding the war against it, but other countries in the world, including Japan’s Western allies, criticized Japan for being a nation unwilling to shoulder political and security responsibilities proportionate to its economic power for domestic reasons. One Japanese commentator called this incident “Japan’s defeat in 1991.”6 The Japanese government did send four minesweepers and two support ships to the gulf in April 1991 in a somewhat belated effort to silence international criticism of Japan for its failure to contribute more than cash to the allied military efforts. Although Japan took this action almost two months after the battles ended, sweeping mines was still a difficult task with considerable risk, and the dispatch of Self-Defense Forces ships to restore the safety of the high seas in the Gulf, therefore, won more praise than Japan’s earlier financial contributions. The issues connected with the Gulf War opened rifts among the members of the ruling LDP and eventually contributed to defections from the party in 1993. Toshiki Kaifu, Ichiro Ozawa, and two other LDP leaders, who had served as prime minister and the three top party executives (secretary-general, chairman of the Executive Coun-

————— 6. Ryuichi Tejima, 1991-nen Nihon no haiboku (Tokyo: Shinchosha, 1993).

90 Shin’ichi Kitaoka and Matake Kamiya cil, chairman of the Policy Affairs Research Council), respectively, during the Gulf Crisis, all left the LDP later in 1994 and formed the Shinshinto Party in 1994. These leaders urgently wanted political reform, but their departure was accelerated by their experiences during the Gulf War. As high-level LDP leaders, they were caught between the growing international demand that Japan fulfill security responsibilities commensurate with the size of its economy and the strong domestic resistance to meeting that request not only from the opposition parties but also from within their party itself. After a long period of struggle, they eventually failed to make Japan meet international expectations.

THE PKO LAW AND THE SDF’S PARTICIPATION IN UNTAC Following the end of the Gulf War, with increasing public support for Japan becoming more active in making contributions to international peace, a majority of LDP leaders, along with officials of the Ministry of Foreign Affairs and internationalists in other ministries and agencies of the government urged Japan to participate in U.N. peacekeeping operations. They also urged Japan to take an active role in U.N. peacekeeping operations in Cambodia, where Japan had played a major role in peace negotiations. The fact that Akashi, a Japanese official at the United Nations, had played a key role in U.N. activities in Cambodia helped Japanese officials mobilize public support for sending Japanese there. The LDP took the lead in developing the necessary legal framework for Japan to participate actively in U.N. peacekeeping operations. Shortly after the Gulf War, the LDP established the Special Committee on Japan’s Role in the Inter- national Society, headed by Ozawa, to examine the relationship between the concept of collective security and Japan’s Constitution. Al- though the process was slowed for a while because of Ozawa’s heart disease, the committee produced a report that argued that Japan should expand its participation in U.N. peacekeeping operations and assume a more assertive leadership role in regional security.7 In September 1991, the government submitted to the Diet the Bill Concerning Cooperation for the U.N. Peacekeeping Operations and Other Operations (the PKO Bill), to authorize the participation of Self-Defense Forces personnel in U.N. peacekeeping and humanitarian relief operations. Even with growing public support, the passage of the bill was difficult and took a considerable length of time. In Ja-

————— 7. [Reference is required.] Japanese Politics and Security Policy, 1990–2001 91 pan, aversion to the idea of sending the Self-Defense Forces abroad for any purpose was still widespread. There remained strong voices of dissent even with respect to the involvement of the Self-Defense Forces in disaster-relief efforts in foreign countries. After a long and intense debate, the bill finally passed the Diet in June 1992 with the support of the LDP, the Democratic Socialist Party, and the Komeito Party. In order to strike a compromise of the three parties, however, the government had to permit exceptionally strict restrictions on the activities of Japanese peacekeepers. For example, the so-called core functions (hontai gyomu) of peacekeeping forces were to be “frozen” until such time that a new separate law would “thaw” such functions. “Core functions” refers to the missions usually carried out by armed troops, such as monitoring disarmament, patrolling buffer zones, and inspecting for weapons. Consequently, possible contributions by the Self-Defense Forces to U.N. peacekeeping operations were limited to logistical support until the Diet finally passed the legislation to “thaw” these functions in December 2001. In addition, the government set much stricter guidelines on the use of weapons by Japanese peacekeepers than was the usual U.N. practice. Even with such restrictions on the activities of Japanese peacekeepers, JSP members, who had clung to an extremely idealistic policy of unarmed neutrality throughout the Cold War period, were still firmly against the bill. At the time when the PKO bill was deliber- ated in the Diet, the Socialists were actually ready to make some compromise with the government position and interpret the use of the minimum military force necessary to exercise the right of individual self-defense as constitutional. However, they could not accept sending Japanese forces overseas. During the Diet session in spring 1992, JSP members, lacking the votes needed to block the bill, utilized a Japanese style filibuster, including hours of gyuho (ox-walk) tactics, in which each JSP representative walked and voted as slowly as an ox in order to delay the passage of the bill. That represented the toughest resistance shown by the JSP in its history to oppose passage of a LDP-sponsored bill in the Diet. Despite such fierce opposition from the Socialists (and the Com- munists), the bill finally passed the Diet in June 1992. In the upper house election the following month, the JSP campaigned against the new PKO Law but suffered a humiliating defeat. In October, under the new law, an engineering battalion of Japan’s Ground Self- Defense Forces was sent to join the U.N. Transitional Authority in Cambodia (UNTAC). This marked the first time that Japanese troops participated in U.N. peacekeeping operations. Although two Japa-

92 Shin’ichi Kitaoka and Matake Kamiya nese lost their lives during the UNTAC operations—one civilian police officer and one U.N. volunteer—the Japanese mission fulfilled its obligations successfully, contributing to the success of the first national election in Cambodia in May 1993. The passage of the PKO Law and the dispatch of the Self-Defense Forces to Cambodia represented a watershed in Japanese attitudes toward overseas commitments. After summer 1992, domestic opposition to the participation of the Self-Defense Forces in noncombatant peacekeeping operations and humanitarian assistance activities rapidly weakened. The decision to send a small number of military personnel to be a part of the United Nations Operation in Mozambique (UNUMOZ) in May 1993 was calmly accepted by the Japanese public. When another Self-Defense Forces mission was sent to Zaïre to help Rwandan refugees from September to December 1994, it provoked barely a protest, though it represented the first time since the end of the World War II that Japan had dispatched its military units abroad under its own flag. Units of Self-Defense Forces have also been part of the United Nations Disengagement Observer Force (UNDOF) in the Golan Heights from February 1996 to the present and participated in the evacuation of the East Timor refugee centers from November 1999 to February 2000. The Japanese public gradually learned through these experiences that Japan’s active participation in international peacekeeping operations and humanitarian assistance activities could win high international esteem. Their initial concern that the dispatch of the Self-Defense Forces abroad might invite unwelcome criticism from East Asian neighbors that Japanese militarism was reviving was gradually replaced by confidence that Japanese peacekeepers could contribute effectively to peace and security in the region and elsewhere.

THE END OF LDP DOMINANCE It was remarkable that such a major policy shift took place at a time when Japanese politics were in utter turmoil. Throughout the early and mid-1990s, in particular, the most important item in the Japa- nese political agenda was seiji kaikaku. In the aftermath of the Cold War, an increasing number of Japanese started to question whether the 1955 system of LDP dominance could cope with problems created by rapidly changing domestic and international environments. Under nearly four decades of one-party dominance, the influence of zoku (tribe), groups of LDP politicians representing special interests in areas such as construction, agriculture, commerce, transportation, Japanese Politics and Security Policy, 1990–2001 93 education, and defense had become increasingly strong in political decision-making.8 Deliberation at Diet sessions had become increasingly nominal as behind-the-scenes negotiations among factions and zoku within the LDP and between the LDP, the permanent ruling party, and the permanent oppositions prevailed. Under such a system, the vested interests cherished by the zoku and opposition parties tended to be preserved. The situation also became a hotbed for money politics and a series of political scandals involving leading LDP politicians. From summer 1991 to summer 1993, as the public demand for change in such a political situation mounted, Prime Min- isters Kaifu and Miyazawa tried to promote political reform. Their failures eventually led to the end of LDP rule in August 1993. In summer 1991, Prime Minister Kaifu, whose term as president of the LDP was to expire in October, was eager to achieve political reform during his administration. He aimed to have the Diet pass the “three bills related to political reforms” before the upcoming LDP presidential election. However, deliberations on the bills in the Diet resulted in deadlock in late September. Kaifu stated that he would make a “grave resolution” to face the state of affairs, implying that he would dissolve the House of the Representatives if it did not pass the bills. Kaifu’s power within the LDP was, however, very weak. Being a member of a small faction within the LDP and not even a top leader of that faction, he had to depend totally on the support from the largest faction, led by Takeshita. When the leaders of that faction did not endorse Kaifu’s “grave resolution,” he had no option but to withdraw from the LDP presidential election. When Miyazawa became prime minister in November 1991, the public welcomed him as a full-fledged prime minister after more than two years of absence. Consequently, Miyazawa initially enjoyed a high support rate. His political power base within the LDP was, however, limited because he was a leader of the second largest faction and always required support from the Takeshita faction. His political power was severely damaged when that faction split into two in late 1992 because of another major political scandal in which major LDP leaders, including the vice president of the LDP and managing director of the Takeshita faction Shin Kanemaru, received a bribe from Tokyo Sagawa-Kyubin Transport Company. The majority and the minority groups within the Takeshita faction formed separate

————— 8. For a concise explanation of zoku and their political influence in English, see Ge- rald L. Curtis, The Japanese Way of Politics (New York: Columbia University Press, 1988), pp. 114–16.

94 Shin’ichi Kitaoka and Matake Kamiya factions and chose Keizo Obuchi and Tsutomu Hata, respectively, as their leaders. In the case of Hata’s group, it was widely believed that the real leader of the group was not Hata but Ozawa. Some of the media called the group the “Hata-Ozawa faction.” The Takeshita faction had its origin in the Tanaka faction. Beginning in 1974, the Ta- naka-Takeshita faction had always maintained its position as the largest faction in the LDP until the split. The split in the Takeshita faction, therefore, represents a watershed in Japanese politics. The Sagawa scandal took place only three years after Prime Minis- ter Noboru Takeshita’s resignation in June 1989 due to his involvement in the Recruit scandal. Viewing this as part of a series of political scandals since the Lockheed scandal and the arrest of former prime minister Kakuei Tanaka in 1976, the Japanese public was totally disgusted with the corruption among LDP politicians. Demands for political reform mounted. Even before the revelation of Kane- maru’s involvement in the Sagawa scandal in August 1992, there was a growing sense among the public that Japanese politics was at a total stalemate. The formation of the Japan New Party in May by former governor of Kumamoto prefecture and former LDP upper house member Morihiro Hosokawa, who insisted on the necessity of “reshuffling of political parties” (seikai saihen) in order to achieve political reform, was widely welcomed by the public. Facing this situation, Miyazawa, whose old-style leadership style attached importance to the adjustment of the interests within the LDP, was unable to meet growing public demands for political reform.9 In the Diet session that started in January 1993, a major agenda item was political reform, particularly the reform of the electoral system of the House of the Representatives. In the medium-sized constituencies, competition among candidates from the same party (the LDP) had little to do with policies. They competed only to win a seat. Such competition easily turned into a competition to bring back a larger share of the central government’s budget to the district and to gain a variety of material and financial benefits for the constituents. Furthermore, because candidates had to spend a huge amount of money to maintain the koenkai (support group) in the district, money politics was rampant. The negotiations to get a new constituency system proved very difficult. The LDP argued for a new system of smaller, single-seat districts. The opposition parties, convinced that the single-seat elec-

————— 9. Takeshi Igarashi, “Miyazawa Kiichi,” in Sengo Nihon no saisho tachi, ed. Akio Wa- tanabe (Tokyo: Chuo koronsha, 1995) p. 429. Japanese Politics and Security Policy, 1990–2001 95 toral constituency system would be disadvantageous for smaller parties, insisted on a proportional representation system. Moreover, within the LDP, a considerable number of Diet members opposed any change in the medium-sized constituency, which dated back to 1925. The very first attempt at a fundamental reform of that system almost seven decades after its creation surely represented an earth- shaking event for every politician. Prime Minister Miyazawa promised several times that he would formulate a concrete reform plan and submit it to the Diet, but he failed to do so. The opposition parties proposed a vote of no- confidence in the Miyazawa cabinet, and it passed in the lower house in June 1993, with the support of the Hata-Ozawa faction of the LDP. After Miyazawa dissolved the lower house, the Hata- Ozawa group formed the Shinseito Party, and a separate group of LDP Diet members headed by Masayoshi Takemura seceded from the party and formed the Sakigake. Hosokawa, Hata, Ozawa, and Takemura wanted political reform to entail more than just the reform of the electoral system for the lower house of the Diet. Ichiro Ozawa, the leading advocate of political reform and arguably the most influential figure in Japanese politics from the early to the mid-1990s, advocated reform both of domestic politics and foreign policy. In his best-selling Blueprint for a New Japan: The Rethinking of a Nation (1993), Ozawa urged that Japanese citizens must accept more responsibility in political decision-making so that their country would be able to adapt to post–Cold War realities.10 Postwar Japanese politics has been, fundamentally, quite cozy and unde- manding. While Japan concentrated on its own economic development and the distribution of its newly generated wealth, it left the maintenance of international order to the United States. The government had two relatively painless tasks: to hear the views of the opposition and to allocate budget funds as fairly as possible. “Consultation on allotments” accurately sums up the whole of our politics. There is no serious discussion or debate on Japan’s future course. This snug postwar structure, in which everyone makes deals with each other and no one bears responsibility for them, will have to be eradicated.11 Ozawa believed that Japan should become a nation that functioned independently and assumed responsibilities in accord with its eco-

————— 10. Ichiro Ozawa, Blueprint for a New Japan: The Rethinking of a Nation (Tokyo: Ko- dansha International, 1994). The original Japanese version was published in the previous year under the title Nihon kaizo keikaku (Tokyo: Kodansha, 1993). 11. Ozawa, Blueprint for a New Japan, p. 62.

96 Shin’ichi Kitaoka and Matake Kamiya nomic power. In order to do so, he argued, Japan must establish strong political leadership by concentrating more power in the hands of the prime minister. Ozawa also argued that Japan should become a “normal nation” (futsu no kuni), willing to assume the same kind of international political and security responsibilities as other nations. The issues of political reform and international contribution were thus closely connected in political debate in Japan in the early 1990s. Although Ozawa lost personal popularity, the powerful impact of foreign disapproval after the Gulf War helped his message gain widespread approval. Virtually every reformist politician wanted not only domestic political reform but also a foreign policy wherein Japan would make an international contribution as the second largest economic power in the world. This growing consensus explains why the passage of the PKO Law and the dispatch of the Self- Defense Forces to Cambodia, which had been unthinkable for decades under the stable LDP rule, became possible when Japanese politics was in utter turmoil.

From the Hosokawa Coalition to the LDP-Socialist-Sakigake Coalition

THE BIRTH OF THE HOSOKAWA ADMINISTRATION In the July 1993 general election following Miyazawa’s dissolution of the lower house, the two biggest losers were the LDP and the Social- ist Party.12 While the LDP failed to win a majority in the house, the JSP lost nearly half of its seats. In contrast, two of the new parties, the Shinseito and the Japan New Party, won a major victory. The number of seats of other major political parties remained almost the same as before the election. With the collapse of socialism in Eastern Europe, socialism lost its appeal. The LDP lost votes primarily because of faction leaders who made their factions independent. After the election, it was possible that the Sakigake and/or the Ja- pan New Party could form a coalition with the LDP, but at that moment Ozawa exercised the utmost of his political power and managed to form an anti-LDP coalition of the JSP, Shinseito, Komeito, Japan New Party, Democratic Socialist Party, and Sakigake. Conse-

————— 12. In this election, the major political parties won the following number of seats: the LDP 223 (before the election 227 seats), the Socialist Party 70 (137), the Shinseito 55 (36), the Komeito 51 (46), the Japan New Party 35 (0), the Democratic Socialist Party 15 (13), the Communist Party 15 (16), and the Sakigake 13 (10). Japanese Politics and Security Policy, 1990–2001 97 quently, the Hosokawa administration took office in August 1993, ending 38 years of LDP rule. The Hosokawa cabinet declared that it would stake its political fate on the reform of the electoral system of the House of the Repre- sentatives. The cabinet submitted a reform bill to the Diet in late 1993. Deliberation on the bill turned out to be long and messy. The agreed plan stated: (1) the lower house would consist of 500 seats; and (2) 300 of them would be elected under the single-seat electoral constituency system and 200 would be elected under a proportional representation system (the entire nation would be divided into eleven blocks). One of the major reason why Hosokawa could accomplish the reform of the electoral system of the lower house despite obstinate opposition from inside and outside the ruling coalition was the initial overwhelming public support for his cabinet, which exceeded well over 70 percent at that time. On the foreign policy front, the Hosokawa administration made some notable moves in the direction of making Japan a country that assumed responsibilities commensurate with its economic power. In August 1993, Hosokawa made a definite statement about Japan’s war responsibility, which invited criticism from domestic hawks but was well received abroad. Hosokawa also expressed Japan’s desire to become a permanent member of the U.N. Security Council. At the moment when the Uruguay Round of the General Agreement on Trade and Tariffs (GATT) was concluded in December 1992, the Hosokawa Administration made a decision that Japan would partially open its rice market. Most important, in February 1994, Hoso- kawa formed the Advisory Group on Defense Issues, which consisted of scholars, business people, and former high-ranking civilian and uniformed government officials and commissioned it to examine possible new directions in Japan’s security policy. The final report of the advisory group, which was submitted to the Murayama administration in August that year, advocated that “Japan should extricate itself from the security policy of the past that was, if anything, passive and henceforth play an active role in shaping a new [international] order” while maintaining and strengthening the U.S.-Japan alliance. This provided the basis for the New National Defense Pro- gram Outline issued in November 1995.13

————— 13. Advisory Group on Defense Issues, “The Modality of the Security and Defense Capability of Japan: The Outlook for the 21st Century,” Aug. 12, 1994. The quotation is from p. 7.

98 Shin’ichi Kitaoka and Matake Kamiya

Within the Hosokawa administration, the loose coalition could not maintain unity. There was a delicate relationship between the Shinseito Secretary-General Ozawa and Sakigake leader Masayoshi Takemura. In January 1994, Takemura published a book titled Small but Brilliant Country, Japan. In his book he criticized Ozawa’s assertion that Japan should become a “normal nation and instead advocated that Japan be a distinctive smaller power.”14 He agreed with Ozawa that Japan should make a more active international contribution but insisted that this contribution should be nonmilitary in accordance with his interpretation of Article 9 of the Constitution. Another major worrisome factor for the Hosokawa administration was the JSP, which turned more leftist after the humiliating defeat of right-wing Socialists in the July 1993 lower house election. After the election, the chairpersonship was transferred from the right-wing Sadao Yamahana to the left-wing Tomiichi Murayama. It was, however, Yamahana who became a cabinet member of the Hosokawa administration, while Murayama stayed out of the cabinet. It was obvious that he and many other JSP members were dissatisfied with many of the policy decisions made by the Hosokawa administration, including electoral reform and Japan’s external posture. A decisive confrontation came when Prime Minister Hosokawa announced a plan to establish a “national welfare tax” in February 1994, in which he proposed add a new tax that would be used exclusively for welfare purposes, raising the consumption tax rate from 3 to 6 percent. Takemura, who was serving as chief cabinet secretary of the Hosokawa administration, openly criticized the prime minister, saying the announcement on taxes was too abrupt. The Socialists were also strongly against the plan. In the end, the “national welfare tax” plan was withdrawn by Hosokawa but left a major crack in the coalition.

THE COLLAPSE OF THE HOSOKAWA COALITION Prime Minister Hosokawa’s sudden announcement of his resignation on April 8, 1994, astonished the entire Japanese public. When Hosokawa assumed the premiership, he enjoyed extraordinarily high popular support because of public expectation that he would be able to achieve the goal of political reform and make politics “cleaner.” But revelations by the LDP in spring 1994 of possible

————— 14. Masayoshi Takemura, Chiisaku-tomo kirari to hikaru kuni, Nippon (Tokyo: Kobunsha, 1994). Japanese Politics and Security Policy, 1990–2001 99

Hosokawa connections with the Sagawa Kyubin tainted him and seriously undermined the foundation of his political power. With the resignation of Hosokawa, many different factional alliances became possible. Ozawa tried to support a senior LDP politician Michio Watanabe for the premiership. In spring 1994, the situation on the Korean Peninsula was growing increasingly tense because of North Korea’s nuclear weapons program. Observing this, Ozawa believed that Japan needed a government that could exercise strong leadership and make timely security policy decisions in cooperation with the United States. He worried that an administration involving Takemura and the Socialists, who were sympathetic toward Pyongyang, would not be able to deal with the situation ap- propriately. He, therefore, wanted to form a new party by uniting those in the ruling coalition with some in the LDP, such as Watanabe and former Prime Minister Yasuhiro Nakasone, who shared a realistic stance toward security policy. Anticipating that a considerable number of people would leave the coalition if the Watanabe administration were formed, Ozawa urged him to leave the LDP with about a hundred followers. It soon became apparent, however, that Wata- nabe would not be able to gather as many followers as he and Ozawa expected. On April 19, Watanabe finally gave up the intention to leave the party and join Ozawa. On April 25, the Diet nominated Hata, who represented the same coalition as Hosokawa, to be the new prime minister. On the same day, however, Ozawa suddenly formed a new parliamentary bloc named Kaishin that included the Shinseito, Japan New Party, Ko- meito, and Democratic Socialist Party but excluded the Socialists. Angry at this move, the next day the JSP announced that it would leave the coalition. In the end, Hata formed a cabinet, but with the Socialists’ defec- tion it was a minority cabinet. In June, after the fiscal year 1994 budget finally passed the Diet, a vote of no-confidence in the Hata Cabinet was proposed in the lower house. Although Hata wanted to dissolve the lower house in response, Ozawa, the strong man of Hata’s coalition, was against the idea. Consequently, Hata had no option but to resign. Ozawa thought that the coalition should avoid the next lower house election until the new electoral system would take effect in December of that year. He also believed that the coalition would be able to remain in power even after Hata’s resignation if they supported former Prime Minister Toshiki Kaifu, a LDP reformist, for the premiership by gaining a new splinter group from the LDP.

100 Shin’ichi Kitaoka and Matake Kamiya

The process of nominating a new prime minister was very intri- cate. The ruling coalition, led by Ozawa, voted for Kaifu. Within the LDP, while Michio Watanabe and former Prime Minister Yasuhiro Nakasone supported Kaifu, the party executives, who had been strengthening linkages to the Socialists, decided to support the JSP Chair Murayama. This would ensure that Socialists would join their alliance and, they reasoned, that Murayama, with a small base and no governing experience, would leave them with considerable leverage. The result of the vote in the lower house gave Murayama a victory over Kaifu by 261 to 214. The unlikely marriage between the LDP and its traditional opponent was the product of the shared animosity toward Ozawa. While the Socialists were bitter about Ozawa’s harsh treatment of their party in April, many in the LDP resented him for splitting their party and depriving them of the status of members of the ruling party. The Sakigake, whose party leader Takemura had engaged in harsh confrontation with Ozawa while they were in the Hosokawa coalition, joined the LDP and the Social- ists to form a new coalition for the same reason.

THE PERIOD OF MURAYAMA’S PREMIERSHIP The sudden emergence of a JSP prime minister in Japan, at a time when the Socialist party had become much smaller, astonished almost everyone. Observers at home and abroad particularly worried what changes would take place in Japan’s security policy. The Social- ists had cherished an extremely pacifist policy of unarmed neutrality for over forty years. They had argued that Japan should abolish the unconstitutional Self-Defense Forces and abandon the Japan-U.S. Se- curity Treaty, and they had bitterly opposed the dispatch of Self- Defense Forces abroad for any purpose. And Murayama was known as a leftist within that party. It was he as the chair of the JSP Diet Administration Committee who had directed the Socialist diet members to employ notorious ox-walk tactics in the Diet session in the spring of 1992 to delay the passage of the PKO Bill. During Murayama’s premiership, however, Japan took a series of critical steps to redefine its security policy and its alliance with the United States in a more realistic direction. First, a sea change in JSP security policy took place soon after Murayama assumed office in June 1994. In early July, at the annual G-7 summit meeting in Naples, he assured U.S. President Bill Clinton that Japan’s diplomacy would not change under his administration and the U.S.-Japan Security Treaty would be maintained. On July 18 and 20, in his address before Japanese Politics and Security Policy, 1990–2001 101 the extraordinary Diet session, he repeated his intention of preserving the security treaty with the United States and accepted the con- stitutionality of the Self-Defense Forces. On July 21, he declared that the policy of unarmed neutrality had ended its historical role. These surprising policy shifts were officially approved by the annual JSP congress on September 6 without much struggles. Soon, the party also accepted Japan’s participation in international peacekeeping efforts under the auspices of the United Nations, including dispatch of the Self-Defense Forces for noncombat purposes, as a proper way for Japan to make an international contribution. From September to De- cember that year, Murayama sent the Ground Self-Defense Force troops to help Rwandan refugees in Zaïre. It was the very first time that in the postwar period that Japan had dispatched its military units abroad under its own flag. These ironic developments probably indicated that the Self-Defense Forces’ successes in Cambodia and Mozambique and the favorable international reactions to these operations had made Murayama and many other Socialists realize the limitations of their traditional security posture. In short, the Socialist- led administration brought a virtual end to the party’s traditional support of unarmed neutrality. It was during the nineteen months of the Murayama administration that the basic framework of Japan’s post–Cold War security policy, which continues to the present, was established.15 On August 12, 1994, Murayama received the final report of the Advisory Group on Defense Issues, which had been established by Hosokawa in Febru- ary. The report recommended that Japan should assume a more active security role to contribute to the international community. It advocated that the Self-Defense Forces be given a wider scope for that purpose. It also stressed the necessity of maintaining the U.S.-Japan Security Treaty and of enhancing the detailed security arrangements between the two countries. In accord with this report, the government revised the 1976 Na- tional Defense Program Outline and issued the new National De- fense Program Outline (NNDPO) in November 1995. It declared that Japan would maintain its traditional “exclusively defense-oriented policy” and emphasized that the U.S.-Japan Security Arrangements

————— 15. For concise explanations of the nature of Japanese security policy in the post– Cold War era, see Matake Kamiya, “Reisen-go no Nihon no anzen hosho seisaku: jizoku to henyo,” Motohide Saito, ed., Higashi Ajia kokusai kankei no dainamizumu (To- kyo: Toyo keizai shinposha, 1997); and Akihiko Tanaka, Anzen hosho: sengo 50-nen no mosaku (Tokyo: Yomiuri shinbunsha, 1997), chap. 10.

102 Shin’ichi Kitaoka and Matake Kamiya would continue to be indispensable for Japan’s security and for peace and stability in the region. The NNDPO insisted that: while the principal mission of the Self-Defense Forces continues to be the defense of Japan, the Self-Defense Forces, taking into account changes in domestic and international circumstances and Japan’s position in the international community, will also have to be prepared for various situations such as large-scale disasters which can have a significant impact on our highly developed and diversified society and play an appropriate role in a timely manner in the Government’s active efforts to establish a more stable security environment.16 Simultaneous with the revision of the National Defense Program Outline, the redefinition of the U.S.-Japan alliance was started on both sides of the Pacific in mid-1994 and was virtually completed while Murayama was in office. Tokyo and Washington originally planned to issue the final product of this process, the “Japan-U.S. Joint Declaration on Security,” between Prime Minister Murayama and President Clinton on the occasion of Clinton’s visit to Osaka to attend the annual APEC summit in November 1995, although the sudden cancellation of Clinton’s visit due to domestic matters forced the issuance of the declaration to be postponed until next April, after Murayama’s unexpected resignation in January. Through this process, Japan and the United States not only reaffirmed the continuing importance of the alliance between them and the maintenance of U.S. military presence in Japan but also transformed the nature of the alliance from a joint mechanism to counter a specific common threat (the Soviet Union during the Cold War period) to an international public good to serve as a regional stabilizer in the Asia-Pacific. This represented a sea change in Japan’s security policy.17 The deeply pacifist orientation among the postwar Japanese has its roots in collective Japanese memories of the country’s militarist past and still runs deep in Japanese elite and mass culture. The memory of World War II has produced among the Japanese people an unwavering determination that they must transform their country into a ————— 16. “National Defense Program Outline in and After FY 1996,” adopted by the Se- curity Council and by the CABINET on Nov. 28, 1995, section 3. 17. On Japan’s postwar culture of pacifism and antimilitarism, see Thomas U. Ber- ger, “From Sword to Chrysanthemum: Japan’s Culture of Anti-militarism,” Interna- tional Security 17, no. 4 (Spring 1993); Peter Katzenstein and Nobuo Okawara, “Japan’s National Security: Structures, Norms, and Policies,” International Security 17, no. 4 (Spring 1993); and Peter J. Katzenstein, Cultural Norms and National Security: Police and Military in Post-war Japan (Ithaca, N.Y.: Cornell University Press, 1996). Japanese Politics and Security Policy, 1990–2001 103

“nation of peace” (heiwa kokka) and should never again wage war. This determination has been strongly buttressed by the extremely negative image of the military in postwar Japanese society. Dis- gusted with the follies of their own military since the beginning of the 1930s, the Japanese people developed a deep distrust of the military and great skepticism about the legitimacy and usefulness of military power as a tool of external policy. There has been a strong aversion to military solutions to the problems of national security and world peace, because they are seen as contradictory to the ideals of peace embodied in the Preamble and the Article 9 of Japan’s Peace Constitution. Until as late as the early 1990s, strong public abhorrence of anything military-related, even including policies for the defense of Japan, militated strongly against Japan’s assuming security roles beyond self-defense in its narrowest sense. This represents the main reason for Japanese reluctance to participate in international peace operations and for substantial opposition to the right of collective self-defense. Although pacifist orientation remains strong in Japanese society today, Japanese views on peace and security have become much more realistic in the past several years. The widespread public support, or at least acceptance, of the U.S.-Japan alliance in the spring of 1996 reflected the changes in attitudes. The political power base of Prime Minister Murayama was weak. The JSP’s popularity rating had been dropping steadily since the 1970s, particularly after the end of the Cold War. It was widely believed that many of the incumbent Socialist lower house members would not be able to survive the next election under the new electoral system. The approval rating of the Murayama cabinet was modest at best. Outside of the LDP-JSP-Sakigake coalition, the remnants of the former Hosokawa coalition founded the Shinshinto Party (New Frontier Party) in December 1994. Holding 180 seats at the lower house, the Shinshinto soon proved to be a tough opposition for the ruling coalition. Earlier in 1995, it earned victories over the LDP in some by- and gubernatorial elections. In the upper house elections in July, the party gained 40 seats (22 from local constituencies and 18 from the nationwide proportional representation system), and the LDP gained 46 (31 from local constituencies and 15 from the proportional representation system). A number of domestic factors help to explain why major developments in Japan’s security policy could take place under the Mura-

104 Shin’ichi Kitaoka and Matake Kamiya yama administration despite its weak power base. First, the LDP- Socialist-Sakigake coalition as a whole commanded a comfortable majority in both houses of the Diet. Despite the repeated secessions of its Diet members from the party, the LDP remained the largest party in both houses by a wide margin. Under such circumstances, the most essential precondition for the government to make important political decisions was not obtaining the consent of the opposition but reaching a compromise and consensus among themselves, particularly between the LDP and the JSP. Second, since the Social- ists’ decided immediately after Murayama took office to abandon the policy of unarmed neutrality and to accept the existence of the Self- Defense Forces and the U.S.-Japan Security Treaty, the two parties could reach compromises with regard to security policies. Third, the Shinshinto was weak in policy planning because the main motivation behind its creation was not policies and ideals but a shared sense of anxiety among the opposition parties that smaller parties would not be able to survive in the coming lower house election under the new system.18 Fourth, the Shinshinto’s ability to resist the ruling coalition’s policy initiatives was further damaged by continuing intraparty quarrels. When the party was formed, former Prime Minister Kaifu was chosen as party leader. It was, however, Ozawa who was actually the most influential figure in the party and the architect of the party itself as well as most of its policies. Despite his capabilities as a politician, Ozawa’s high-handed political style repeatedly offended his colleagues, and many of them came to hold personal grudges against Ozawa. For example, former Prime Minis- ter Hata, another influential leader in the party and once a close ally of Ozawa, increasingly criticized Ozawa as too bossy and undemo- cratic. In the party election to choose the first party leader in Decem- ber 1994, Hata was badly beaten by Kaifu, who was supported by Ozawa. One year later, Hata and Ozawa engaged in a fierce struggle over the position of Kaifu’s successor as the second party leader. Ozawa won an overwhelming victory with support from the Ko- meito, but the bruising struggle left a strong sense of resentment within the party. Fifth, Ozawa and many other mainstream members of that party actually had few policy differences from the ruling party. In contrast to the 1955 system, there were no longer any ideological differences between the ruling and opposition parties with regard to security matters.

————— 18. Jun Iio, “Murayama Tomiichi,” in Sengo Nihon no saisho tachi, p. 458. Japanese Politics and Security Policy, 1990–2001 105

POLITICS OF HISTORICAL RECOGNITION Prime Minster Murayama, while basically following traditional conservative security policies, naturally sought foreign policy areas in which his government could take a socialist stance. The Teachers’ Union (Nikkyoso), a strong supporter of the JSP, had long criticized the Japanese military in World War II and maintained good relations with Chinese officials. Murayama thus started to pursue “history issues” to promote reconciliation between Japan and its neighbors on the fiftieth anniversary of the end of the World War II. In Japan, there was a growing recognition that the history issue, if not properly handled, could undermine Japan’s desire to expand its security role. The so-called textbook problem in regard to World War II history was first politicized in 1982. It began with newspaper reports in Ja- pan in late June of that year alleging that Japan’s Ministry of Educa- tion, through the official school textbook-screening system, had ordered the publishers of school history textbooks to replace the term “aggression” (shinryaku) with the term “advance” (shinshutsu) to describe Japan’s military actions in Asia before 1945. However, it was soon discovered that these reports were false.19 The erroneous allegation, nevertheless, was widely taken at face value throughout East Asia, and the Japanese government eventually apologized for the incident to China and Korea.20 The “history issues” became even more politicized in the 1990s when the “comfort women” (jugun ian-fu) issue came up21. Since the prewar period, the existence of so-called comfort places (ian-jo) near Japanese troop areas overseas was a well-known fact. Many of the women there had sold themselves into prostitution because of poverty. There were many Japanese comfort women, but even more Ko- reans because poverty was more prevalent in Korea than in mainland Japan in the prewar period. In the normalization treaty between Japan and South Korea that was concluded in 1965, however, the two governments agreed that all the issues between the two countries in the past were settled. Moreover, despite the Korean

————— 19. Watanabe Shoichi. 20. Akihiko Tanaka, Nitchu kankei, 1945–1990 (Tokyo: Tokyo daigaku shuppankai, 1991), pp. 120–25. 21. In Korea, the term teishintai (volunteer corps) is often used to indicate comfort women. This usage is, however, wrong. Teishintai was the term to indicate a scheme of mobilization of students to work during the war.

106 Shin’ichi Kitaoka and Matake Kamiya claim that those women were forcibly taken out of Korea and were forced to engage in prostitution by the Japanese authorities, no case has been found in which the Japanese governmental agencies were directly involved in forcibly mobilizing comfort women. In order to soothe international criticism against Japan over the comfort women issue, in 1993, Chief Cabinet Secretary Yohei Kono of the Miyazawa cabinet had issued a statement of apology. Mura- yama expressed essentially the same views in his statement in 1994 but wanted to do more. In 1995, his administration announced a plan to establish the nongovernmental Asian Women’s Fund, whose mission was to raise funds for former foreign comfort women and give them some compensation along with the prime minister’s apology. Although the JSP had long insisted on official compensation to former comfort women, Murayama was not able to get his coalition partners to agree and had to be satisfied with the establishment of the nongovernmental fund. Some criticized the fund, arguing that the Japanese government should pay official compensation to those women. For example, the U.N. Subcommittee on Women’s Right “took note” of a report on the comfort women issue submitted by a special reporter. The report advised Japan to offer official compensation to those women. The publication of this report further complicated the issue, because the research by some Japanese conservatives revealed that many of the cases of forcible mobilization of women by the Japanese government cited in the report were actually either false or groundless. In March 1998, however, the same reporter submitted another report to the same U.N. subcommittee that described the measures taken by the Japanese government with regard to the comfort women issue, such as the establishment of the Asian Women’s Fund, as welcome efforts. The U.N. Committee on Human Rights adopted a resolution acknowledging that the Japanese government was taking “positive steps” to deal with the issue. In August 1995, on the fiftieth anniversary of Japan’s defeat in the World War II, Prime Minister Murayama issued a statement (“Mu- rayama danwa”) acknowledging and apologizing for Japan’s aggression during the war. He also announced the formation of the Asian Women’s Fund and the Peace and Friendship Program between Ja- pan and its East Asian and Oceanic neighbors. The latter focused on bilateral joint history studies and youth exchange programs. He and the JSP also sought a Diet resolution to express Japan’s recognition of and self-reflection on its role and behavior in the war. Strong voices of objections against the idea were, however, raised by a consider- Japanese Politics and Security Policy, 1990–2001 107 able number of conservative members of the LDP, who argued that history is not an issue suitable for political resolutions by the Diet. In order to achieve a compromise within the ruling coalition, very ambiguous expressions and wordings were intentionally chosen for the resolution. When the lower house eventually adopted the resolution, however, only 251 members of the house out of the total of 502 attended the session. Members of the Shinshinto and other opposition parties expressed disagreement with the wording of the resolution and preferred to be absent from the session. This was really an unusual way to adopt a resolution in the Diet, because the established custom of the Diet is to adopt any resolution unanimously. Historically, it is common for all issues relating to a war to be settled by the surrender of one party, trials of war criminals, reparations, and the conclusion of the peace treaty. Japan has already gone through this process with regard to World War II. Some observers believe that Japan has never admitted its war responsibility, but they are wrong. The Far Eastern Tribunal of War Crimes determined that Japan conducted invasions, and the principal figures in charge of Ja- pan’s conduct of the war were executed. The San Francisco Peace Treaty prohibits Japan from denying the results of that tribunal. In addition, many other lower-ranking military officers and soldiers were also executed or imprisoned for war crimes. A considerable number of Japan’s postwar prime ministers made apologies for their country’s past behavior on occasions of foreign visits, although the wordings were sometime vague. If the traditional criteria are applied, Japan has taken its responsibility for World War II quite properly. One of the major reasons why Japan’s “history issue” has been brought up again in recent years may be that the world has entered into an era of peace and prosperity with the end of the Cold War. In the past, politics was preoccupied with the present and lacked the time to discuss the responsibilities of one country for a war that ended half a century before.

The LDP Regains the Premiership

LIMITED POWER BASE OF THE LDP In January 1996, after his support base had weakened, Murayama suddenly announced his resignation, and the LDP regained the premiership after two years and five months. Since then, the LDP has retained the office of prime minister without interruption to the present. However Japanese politics has not returned to the old days of

108 Shin’ichi Kitaoka and Matake Kamiya

LDP predominance. One can discern significant differences between Japanese politics after January 1996 and before August 1993. First, the LDP has not held a majority in the upper house since 1989. Cabinets have ruled by a coalition, and since 1996, politicians as well as the public have always recognized the real possibility of another change of power. Second, the Socialists, who had dominated the opposition for most of the postwar era were, after 1996, a small, marginal party in both houses. In the lower house elections in October 1996, they won only fifteen seats. The demise of the Socialists ensured that the days of highly ideological confrontation between supporters of the U.S.- Japan Security Treaty System and a free market economy on one side and advocates of unarmed neutrality and socialism on the other would never return. Third, the “reshuffling of political parties” (seikai saihen) has continued, especially among the opposition. Yet debate on Japanese security policy from January 1996 to the resignation of the Mori cabinet in April 2001 became much more frank, realistic, and pragmatic. The public, while maintaining the basic spirit of Japan’s postwar pacifism, took a much more realistic attitude toward security matters. The issuance of the Japan-U.S. Joint Declaration on Security in April 1996 and the new U.S.-Japan Defense Guidelines in September 1997 and the passage of the so-called Guideline Laws in May 1999, each of which could have provoked a bitter division in Japanese society in the old days, barely caused a protest. In this sense, Japan moved closer to becoming a “normal nation.” The fluid nature of Japanese politics and the limited power base of the LDP administrations, however, did constrain Japan’s security policy during this period. The LDP did not enjoy the luxury of making policy decisions unilaterally. The consent of other parties had to be obtained, and compromises had to be made. Through the process of interparty negotiations, the relatively cautious attitude toward an expansion of Japan’s security role held by the Socialists, the Saki- gake, the Komeito, and the former Socialists within the Democratic Party, often acted as a brake to slow the pace of policy changes. The LDP also had to pay close attention to the still prevalent pacifist orientation among the public. Generally speaking, the Japanese people came to accept the idea of Japan’s active “international contribution” in the field of peace and security but still remained hesitant about utilizing military power for that purpose. Many Japanese were and remain today attracted to the idea that Japan’s contribution to world peace should be pursued mainly by nonmilitary means and that its Japanese Politics and Security Policy, 1990–2001 109 military contribution should be kept minimal.22 Consequently, changes in Japanese security policy took place only incrementally.

REDEFINITION OF THE U.S.-JAPAN ALLIANCE During the period of Hashimoto’s premiership, the most remarkable development in Japan’s security policy was the issuance of the “Ja- pan-U.S. Joint Declaration on Security” in April 1996 and the revision of the U.S.-Japan Security Guidelines that followed. The end of the Cold War generated a pressing need for Tokyo and Washington to re-evaluate and restructure the U.S.-Japan Alliance to fit the new regional and global security environment now that the Soviet threat no longer existed. The Bush administration’s announcement of a plan for a gradual reduction of the U.S. military presence in East Asia caused anxiety in Japan. Moreover, the Clinton administration initially gave highest priority in its relations with Ja- pan to the issue of economic friction and showed little interest in security relations. The high-handed attitude of Clinton’s trade negotiators aroused bitter resentments in Japan. When the summit meeting between Prime Minister Hosokawa and President Clinton in Febru- ary 1994 failed to produce an agreement on the new “trade framework talks,” U.S.-Japan relations were nearly at a deadlock. The security policy communities both in Tokyo and in Washington worried seriously that the economic friction between the two allies could undermine the foundations of the U.S.-Japan Alliance. The North Korean nuclear crisis in the spring and summer of that year finally caused the two governments to recognize the importance of the security relationship and start the process of re-evaluation and restructuring the alliance. A series of in-depth discussions between Tokyo and Washington started in the autumn of that year to define new roles for the alliance in a changed international environment. In February 1995, in the so-called Nye Report, the Clinton administration declared that the U.S. forward deployment in East Asia would be maintained at roughly its present size of 100,000 for the foreseeable future, that is, for about twenty years. The report also called the

————— 22. A typical example of this type of argument is Yoichi Funabashi’s advocacy of Japan as a “global civilian power.” See Yoichi Funabashi, Nihon no taigai koso: reisen-go no bijon wo egaku (Tokyo: Iwanami shoten, 1993), chap. 6; and Yoichi Funabashi, “In- troduction: Japan’s International Agenda for the 1990s,” in Japan’s International Agenda, ed. Yoichi Funabashi (New York: New York University Press, 1994), pp. 11–13. The original Japanese version was published three years before under the title Nihon senryaku sengen: shibirian taikoku wo mezashite (Tokyo: Kodansha, 1991).

110 Shin’ichi Kitaoka and Matake Kamiya

U.S.-Japan Alliance the “linchpin of United States security policy in Asia” and acknowledged that the U.S. security policy in East Asia, including its military presence in the region, “relies on access to Japanese bases and Japanese support for United States operations.”23 In September 1995, however, the rape of a twelve-year-old schoolgirl by three U.S. marines in Okinawa severely strained the U.S.-Japan Alliance. The Japanese public was outraged over the nasty crime committed by foreign soldiers. In Okinawa, a small island prefecture where 75 percent of the U.S. base area in Japan is concentrated, the people’s rage was particularly fierce. Since the re- version of the islands from the United States to Japan in 1972, Oki- nawans had always felt that an excessive share of the burden to maintain the U.S.-Japan Alliance had been imposed on them by the central government in Tokyo. With this terrible incident, their frustration burst into anger and demands to reduce the U.S. bases on their islands. In order to overcome this crisis, both Tokyo and Wash- ington took sincere measures to sooth the anger of the Okinawans, including the establishment of the Special Action Committee on Okinawa (SACO) in November. In April 1996, shortly before Presi- dent Clinton’s visit to Japan, Tokyo and Washington reached an agreement on the return of the Futenma Marine Corps Air Station, one of the two largest U.S. bases in Okinawa. Then, on April 17, 1996, Prime Minister Hashimoto and President Clinton held a summit meeting in Tokyo and issued the “Japan-U.S. Joint Declaration on Security,” which officially confirmed that both countries shared a strong will to redefine and maintain their decades-old security alliance into the post–Cold War era as a stabilizing presence in the Asia-Pacific region. The two leaders not only reaffirmed the significance of the U.S.-Japan Alliance after the end of the Cold War but also expanded the purpose of the alliance and pledged that the two countries would undertake efforts to expand security cooperation in a number of fields. In this sense, the alliance was “redefined.” Following the issuance of the joint security declaration, the two governments initiated a process of revising the more specific 1978 Guidelines for U.S.-Japan Defense Cooperation, a task that was completed in September 1997. Under the U.S.-Japan Security Treaty, the United States promises to defend Japan in the case of an enemy attack. Until the Defense Guidelines were adopted in 1978, however,

————— 23. [citation necessary] Japanese Politics and Security Policy, 1990–2001 111 the two countries had lacked any kind of agreement as to the specific means of actual military cooperation in case of such contingencies for nearly three decades, since the conclusion of the original treaty in 1951. One of the main reasons why such an unusual state of affairs was tolerated for so many years was the overwhelming power of the United States over Japan during that period. In the mid-1990s, the attention of the two governments shifted from cases of enemy attack on Japan to cases of contingencies in the areas surrounding Japan (shuhen jitai). In the 1978 Defense Guide- lines, however, the means of military cooperation between the two countries in such contingencies were not specified at all. The crisis on the Korean Peninsula in 1994 suddenly awoke a sense of urgency in both capitals for improving this facet of their alliance. This has proved to be a delicate issue. Any moves by Japan and the United States to prepare for contingencies in the areas surrounding Japan have caused concern not only in North Korea but also in China because of the Taiwan issue. For Hashimoto, the issuance of the joint security declaration and the adoption of the new guidelines could finally be decided by his cabinet alone. In order to provide the content for the declaration and the new guidelines, however, he had to gain the consent not only of the LDP but also of the Socialists and the Sakigake. In reality, although the Socialist Party had agreed to maintain the U.S.- Japan Alliance, it was reluctant to strengthen it and opposed to many of the measures for that purpose, such as relocation of the core functions of the Futenma Air Station to somewhere else in Okinawa prefecture. It also opposed the passing of new laws concerning contingencies in the areas surrounding Japan (“guideline laws”). Even within the LDP, some influential leaders such as former Party Secretary-General Koichi Kato argued that relations among Japan, the United States, and China should take the shape of an isosceles triangle. They took a relatively cautious attitude toward the strengthening of the U.S.-Japan alliance. Thus, the process of taking concrete steps to give content to the joint declaration and the new guidelines was very slow. For example, Hashimoto’s plan to construct a heliport to relocate the core functions of the Futenma Air Station off the coast of Nago City in Okinawa had to be tabled, at least for the time being. Although the government submitted the Bills Concerning Contingencies in the Areas Surrounding Japan (the Guideline Bills) to the Diet session in 1998, the passage of the bill was delayed until May 1999.

112 Shin’ichi Kitaoka and Matake Kamiya

THE COLLAPSE OF THE HASHIMOTO CABINET In October 1996, the first lower house elections under the new electoral system were competed between Hashimoto’s LDP and Ozawa’s Shinshinto. Although the old “1955 system” was sometimes called a “two-party system,” the number of the JSP candidates who ran in each lower house election was limited to around 130, that is, one candidate in each of the 130 local constituencies. In fact, there had been only one occasion in which the number of the Socialist candidates exceeded half the total number of seats in the lower house, and that happened quite a long time before. These facts clearly meant that the JSP never expected to form a single-party government. In contrast, in the 1996 lower house elections, the LDP and the Shin- shinto fielded about the same number of candidates. In the elections, the LDP won 238 seats, and the Shinshinto 156 seats. The Democratic Party, which was founded shortly before the election by those who had left the Social Democratic Party (the new name of the Socialist Party after January 1996), and the Sakigake won 52 seats. Although the LDP was twelve seats short of a majority, it could still form a single-party government for the first time since the collapse of the Miyazawa administration in the summer of 1993, with support from the Social Democratic Party and the Sakigake from outside the cabinet. Having gained a victory in the October 1996 general elections, Hashimoto declared that he would make utmost efforts to accomplish what he called the “six major reforms” and started to wrestle with the task. The six major reforms were (1) administrative reform, such as reorganization of government ministries and agencies; (2) structural reform of the economy by relaxation of restrictions; (3) structural reform of the financial system; (4) banking reform, which was known as Japan’s version of “big bang”; (5) social security reform; and (6) educational reform. In the Diet session of 1997, Hashimoto successfully obtained the Diet approval for his financial reform bill. Hashimoto also organized the Administrative and Fi- nancial Reforms Council in summer 1997, which he chaired himself. He actively participated in the discussions of the council members and created the basic framework for the reorganization of ministries and agencies. Under such circumstances, he enjoyed a high approval rating and was re-elected president of the LDP in September 1996. Following the retirement of Prime Minister Eisaku Sato in 1972, the LDP had eleven presidents before Hashimoto. Except for former Prime Minister Yasuhiro Nakasone, who was elected to the presi- Japanese Politics and Security Policy, 1990–2001 113 dency for three terms, each served only one term. Despite the facts that the Hashimoto faction (the Obuchi faction) was not very big, that he was not even a top leader of that faction, and that he did not enjoy strong support from other LDP factions, he could still be re- elected because of his popularity among the public. Once the public turned their backs on him, his political power base quickly eroded. In this sense, it was a serious mistake for Hashimoto to appoint Takayuki Sato, who had been found guilty in the Lockheed scandal in the 1970s, as a cabinet minister when he reshuffled the cabinet right after his re-election as the LDP president. Public reaction to this appointment was very negative, and Hashimoto’s popularity began to drop sharply. In November 1997, the news of the bankruptcy of two of Japan’s major financial institutions, Yamaichi Security and the Hokkaido Takushoku Bank, came as enormous shocks. Although Hashimoto initiated several financial policies to cope with the situation, most of those actions came too late to have satisfactory effects. In the July 1998 upper house elections, the LDP suffered an unexpected loss, and Hashimoto was forced to resign. Keizo Obuchi of the LDP took over the premiership.

RESHUFFLING OF THE OPPOSITION PARTIES In the meantime, internal conflicts within the Shinshinto Party over party policy recurred continuously after the general elections in Oc- tober 1996. The party was dissolved in December 1997. By April 1997, a considerable number of the Shinshinto Diet members, including former Prime Ministers Hata and Hosokawa, had already left the party. What turned out to be critical for the fate of the party was Ozawa’s attempt to cooperate with the LDP after April. It was the base issue in Okinawa that made him take such a step. The Hashi- moto administration’s attempt to legislate a new law, which would enable the prime minister to force renewal of the leases without the consent of the governor of Okinawa prefecture, was opposed by the Socialists in the ruling coalition. Recognizing the importance of the Okinawa base issue for the maintenance of the U.S.-Japan Alliance, Ozawa actively approached the LDP to realize the “conservative- conservative” cooperation (between the LDP and the Shinshinto) to break the stalemate on the issue. Since the early 1990s, Ozawa had been known as an ardent advocate of reshuffling of political parties based on differences in policies and ideals. He repeatedly argued that the issues of security policy and international contribution should be the most important touch-

114 Shin’ichi Kitaoka and Matake Kamiya stone by which political parties should be formed.24 He regarded cooperation between the LDP, the Socialists, and the Sakigake as an il- legitimate marriage of convenience. He also regarded the composi- tion of his own party as inappropriate, because the Shinshinto itself was a product of a marriage of convenience among members of the former Hosokawa coalition formed out of a shared sense of anxiety that the smaller parties would not be able to survive the lower house elections under the new system. It was therefore natural for Ozawa to seek cooperation among those who shared the same view on security matters. When Ozawa won the party leader election in December 1997, he astonished the entire county by abruptly dissolving the Shinshinto for “purification,” that is, to establish a new party of his own that would solidly unite around him by excluding those unwilling to follow his neo-conservative policies and ideals. With 41 other lower house members and twelve upper house members, he founded the Liberal Party. Among the anti-Ozawa members of the former Shin- shinto, Michihiko Kano’s group, together with Hata’s group, who had left the party a year earlier, joined the Democratic Party in April 1998 to form a new Democratic Party. Forty-seven members of the lower house who had belonged to the Komeito formed the New Party Peace for a short period of time and then restored the Komeito in October 1998. Japanese politics from the collapse of the Miyazawa administration in August 1993 until the dissolution of the Shinshinto at the end of 1997 could be depicted as a series of pro-Ozawa versus anti- Ozawa confrontations. Ozawa’s strong, aggressive personality, his leadership style, and his arbitrary way of politics attracted some while it offended others. Since his new party—the Liberal Party— turned out to be merely a medium-sized one, the focus of Japanese politics shifted to the LDP versus the Democratic Party confrontation after April 1998. In April 1998, the Democratic Party was merely a middle-sized party with only about 90 seats in the lower house. In the upper house elections that took place three months later, it increased its seats remarkably and caused a stunning LDP defeat, leading to the resignation of Prime Minister Hashimoto.

————— 24. See, e.g., “Kokusai koken to anpo mondai wo seikai saihen no jiku ni: Ozawa Ichiro-shi kenkai,” Yomiuri shinbun, Sept. 18, 1993; “Seiji no shin-fukei: Nihon no shinro seikai saihen nirami anpo, kokusai koken . . . sakuso,” Yomiuri shinbun, Nov. 30, 1993; “Seiji ni sekinin to ketsudan wo: Shinseito Ozawa Ichiro-shi intabyu,” an interview with Ozawa, Yomiuri shinbun, Feb. 14, 1994. Japanese Politics and Security Policy, 1990–2001 115

FROM OBUCHI TO MORI Shortly after Obuchi succeeded to the premiership, his administration sought cooperation with the Liberal Party. The LDP, which did not have a simple majority in the House of Councilors (upper house, or Sangi-in), approached the party whose policies were the closest to its own. The Liberal Party wanted to join the ruling coalition to make the next election easier for them. It also hoped to utilize this opportunity to carry out the policies and ideals that it had been advocating. The coalition government between the LDP and the Liberal Party started in January 1999. Obuchi had been leader of a major LDP faction, but he had been known as a mediocre politician with an extremely nice personality. Shortly after he assumed office, one of the authors of this chapter wrote: “One of the weaknesses of the Obuchi Cabinet is the prime minister himself. He is awfully poor at making speeches.”25 Time magazine described him as a “cold pizza.”26 Initially public expectations for his administration were low; his approval rating was modest at best. In his eighteen months in office until his stroke in April 2000, however, Obuchi successfully got through a number of significant bills, each of which could have evoked harsh opposition in the past, including bills for the reorganization of ministries and agencies, amendment of the Diet Law concerning abolition of the system of seifu-iin (government committees), the law concerning the national anthem and the national flag, and the wiretapping law. In the security field, the Guideline Bill finally became law in May 1999, more than a year after its submission by the Hashimoto Cabinet. It represented another major step forward in the strengthening of the U.S.- Japan Alliance to stabilize the Asia Pacific. The Diet even formed a study group on the constitution and paved the way for a revision of Article 9 to expand Japan’s contribution to international security. Two domestic factors contributed to such remarkable achievements by Obuchi. On the one hand, Ozawa’s neo-conservative ideals and policies had a considerable impact, even though he was personally unpopular. The LDP came to take a more realistic policy line than before, particularly in the security field. On the other hand, joined by many of the former Shinshinto members in early 1998, the

————— 25. Shin’ichi Kitaoka, “Hashimoto naikaku to Obuchi naikaku: Jiminto seiji ha kawaru no ka,” in Shin’ichi Kitaoka, Futsu no kuni he (Tokyo: Chuo koron shinsha, 2000), p. 234. This article originally appeared in Chuo koron, Oct. 1998. 26. Citation necessary. Also need to check the actual wording.

116 Shin’ichi Kitaoka and Matake Kamiya

Democratic Party became centrist in the true sense of the word. Al- though there were a considerable number of former JSP leftists in the party, their influence on party policies, particularly in the security field, rapidly waned. In June 1999, the Democratic Party announced a security policy outline that was even more realistic than the LDP’s. The victory of Yukio Hatoyama, who during the campaign in the party representative election in September of that year, advocated amending the Constitution, possibly including Article 9, made the increasingly centrist nature of the Democratic Party even clearer. With the emergence of the centrist Democratic Party as a dominant opposition and a possible substitute for the LDP as a ruling party, cooperation in foreign and security policies has become possible in Japan for the first time in the postwar period. Sharing with the LDP the basic values and ideals of liberal democracy and the basic principles of Japan’s prosperity as described above, most of the De- mocrats have been ready to cooperate, negotiate, and make necessary compromises with the ruling party in the area of security policies. They have shared a basic understanding with the LDP that Japan’s international contribution must be increased in proportion to its economic size and that Japan’s security role must be expanded. Meanwhile, coalition politics continued. For Obuchi, forming a coalition with the Liberal Party was only the first step in consolidating and stabilizing the political power of his administration. Shortly after his re-election as party president in September 1999, he achieved an expanded coalition between the LDP, the Liberal Party, and the Komeito. The position of the Liberal Party and Ozawa in the renewed coalition was, however, delicate. First, the Liberals were afraid that the participation of the Komeito, which had more Diet seats than their party, could lower the value of the Liberal Party for the LDP and undermine their say in the coalition. Second, the Liber- als were reluctant to form a coalition with the Komeito, which had traditionally claimed to be a party of peace and welfare and shown quite a strong pacifist tendency. For example, in the deliberations on the PKO Bill in 1991–92, it was due mainly to the Komeito’s insistence that a number of additional restrictions on the activities of Japanese peacekeepers, such as the “freezing” of the “core functions” of peacekeeping forces and much stricter guidelines for the use of weapons by Japanese peacekeepers than standard U.N. practice, were introduced. The Liberals worried that Komeito policies, particularly on matters of Japan’s security and international contribution, quite often conflicted with those of the Liberal Party, a neo- conservative party. Japanese Politics and Security Policy, 1990–2001 117

After trying to secede from the coalition several times, the Liberal Party finally did so in April 2000. At that moment, however, more than half of the party formed a new Conservative Party and remained in the coalition. By then, Ozawa had alienated so many people that his prominence in Japanese politics greatly declined. Within the LDP, not everyone agreed with the formation of a coalition with the Komeito. The Komeito is based on a religious group called the Soka gakkai, an organization of believers in a newly established sect of Buddhism. Although the members of the Soka gakkai have given ardent support to the Komeito, public opinion polls have shown that a majority of Japanese voters outside that religious organization have consistently felt considerable antipathy toward the party. Many influential political leaders in the LDP, including Koichi Kato, a leader of one of the four major factions within the party, were negative about Obuchi’s decision to form a coalition government with the Komeito. Prime Minister Obuchi suffered a stroke the day after the seces- sion of the Liberal Party from the coalition and was forced to resign shortly afterward. Obuchi never regained consciousness before his death the next month, and the LDP leaders chose his successor not for the purpose of carrying out some specific policies but to protect the framework of the coalition. A leader of one of the major factions in the LDP, Yoshiro Mori had been known as a typically old-style ordinary politician skilled at balancing interests but not outstanding with regard to policies and ideals. Mori was, however, positive about maintaining relations with the Komeito, and the LDP wanted votes from the members of the Soka Gakkai more than anything. Mori suffered from a low approval rating from the beginning. He was one of the least popular and least respected prime ministers in postwar Japan. In the general elections in June 2000, the ruling coalition kept its majority in the lower house, but lost many seats. Although Mori narrowly put down the rebellion by former Party Secretary-General Koichi Kato in November 2000, his approval ratings continued to decrease until they reached single-digit levels near the end of his term because of a series of political scandals and Mori’s political blunders, such as his remark on May 15 that Japan was a “country of gods” (kami no kuni),27 invited harsh criticism both domestically and from neighboring nations.

————— 27. Although it is common to translate the Japanese word kami as “god” or “gods,” it should be noted that there is a wide difference in the meanings of kami in Japanese

118 Shin’ichi Kitaoka and Matake Kamiya

Under Mori not much progress was made with regard to Japan’s security policy. After the Diet passed the Guideline Law in May 1999, the foreign and security policies community in Japan expected that the legislation of contingency laws would be the next. Japan had no laws governing the conduct of the military under various contingencies, for example, a military crisis in the territory or territorial waters of Japan. This represents one of the major negative byprod- ucts of Japan’s postwar culture of pacifism under which frank discussion of military matters was long considered near taboo. Al- though there were some signs that Obuchi started to pay serious attentions to this issue after the passage of the Guidelines Law, with strong support from the Liberal Party, Mori remained largely passive on the issue, largely because of Komeito refusal to support the contingency law. The expansion of Japan’s participation in international peacekeeping operations, including the clarification of the core functions of peacekeeping forces, was not seriously pursued. When the new U.S. administration under President George W. Bush sig- naled that it would attach much greater importance to Japan as the most significant U.S. ally in Asia, the Mori administration failed to follow. Even without strong political leadership, however, Japan’s security policy was not paralyzed. Some progress was made in U.S.- Japan security relations, including the agreement by the two governments in September 2000 to co-establish a “coordination mechanism.” This would provide a framework for consultation and policy coordination between the two allies and joint operations and other types of security cooperation, such as Japan’s logistical support to the U.S. operations in case of enemy attack against Japan as well as contingencies in the areas surrounding Japan.

Conclusion Since the beginning of the 1990s, there have been considerable advances in Japanese security policy. Until the Gulf War, except for a small number of security experts, most Japanese considered events beyond the Japan’s territorial waters as beyond the scope of security policy of their country. The dispatch of the Self-Defense Forces overseas was out of the question even in cases of traditional peacekeeping or disaster relief. Such was the negative byproduct of Japan’s

————— and god in English. In the case of Mori’s remark on May 15, 2000, it is more proper to translate kami as “spirits.” Japanese Politics and Security Policy, 1990–2001 119 postwar culture of pacifism. Although security relations with the United Sates were central to the maintenance of Japan’s security under the Cold War environment, the Japanese people were quite reluctant to expand actual military cooperation with the United States. The basic structure of Japanese politics under the 1955 system buttressed Japanese reluctance to assume security roles beyond self- defense in its most narrowly defined sense. Because of the fundamentally antiestablishment nature of the Socialist Party, which per- manently dominated the opposition, the security debate could not avoid becoming a highly ideological dispute and easily turned into political turmoil. Under the political culture of nare-ai (collusion) and motare-ai (mutual dependence), the permanent ruling party, the LDP, tended to prefer avoidance of serious confrontation with the Social- ists and criticism from the public by doing nothing rather than attempting to change security policies. In the 1990s, Japan passed the PKO Law and gradually expanded its participation to international peacekeeping and humanitarian relief activities. The country adopted the New National Defense Pro- gram Outline in 1995, which expanded the mission of the Self- Defense Forces to include preparation for situations that could have “a significant impact on Japanese society” and the assumption of roles “in a timely manner in the Government’s active efforts to establish a more stable security environment.”28 As for the U.S.-Japan Al- liance, the Japanese government, in close cooperation with Washing- ton, redefined the alliance not only to reaffirm its importance but also to expand its role as regional stabilizer in the Asia-Pacific. Fol- lowing the joint security declaration in April 1996, the two allies adopted the new guidelines in September 1997 and Japan passed the Guideline Laws in May 1999 to take necessary measures to implement the contents of the new guidelines. The following domestic changes contributed to such progress in Japan’s security policy. First, the divergence on security policy among the political parties in Japan narrowed to a considerable extent. Under the 1955 system, enormous and unnegotiable differences of opinion existed between the LDP and the JSP with regard to security matters. With the demise of the JSP and the rise of more realistic, centrist oppositions, particularly of the Democratic Party after the spring of 1998, security debates in Japan were freed from ideological confrontation for the first time in the postwar period. Consequently, Japanese politicians finally started frank discussion on security is-

————— 28. “National Defense Program Outline in and After FY 1996,” section 3.

120 Shin’ichi Kitaoka and Matake Kamiya sues from the standpoint of national interest that was largely absent under the 1955 system. Second, the nature of Japan’s pacifism changed to a considerable extent. Throughout the postwar period, the Japanese people have maintained an unwavering determination that they would make Ja- pan a “nation of peace.” Until the Gulf War, they believed that Japan could achieve that goal by not doing anything in the security field except for self-defense. Being strongly determined that they would never let their country become an aggressor again, the postwar Japa- nese believed that Japan should not be involved militarily in security matters beyond its own territory and territorial waters and should avoid using its military capability for any purpose but individual self-defense, not even for U.N. peacekeeping operations or any other types of international peace efforts.29 What is equally important, they assumed that the international community wanted Japan to maintain such an attitude in the security field. The experience of the Gulf War taught the Japanese that such an assumption no longer applied. They learned that the international community wanted Japan to shoulder the security responsibility that went with its economic power beyond its border. Since then, the Japanese have sought to find a way to transform their postwar pacifism from “passive pacifism” to “pro- active pacifism.” An increasing number of the Japanese came to share the view that Japan should become a “nation of peace” not only in a sense that it would never again use its military forces for aggressive purposes but also in a sense that it would make every effort to maintain and promote international peace and security in cooperation with other countries in the world. Some may still argue that not much changed in Japan’s security policy throughout the period covered by this chapter. They are partially right. When Prime Minister Mori resigned and Jun’ichiro Koi- zumi came to power in April 2001, many desirable changes were yet to be made: the discussion about the legislation of contingency laws had barely started; the ban on exercising of the right of collective self- defense was maintained; core functions of peacekeeping forces remained frozen; and Article 9 of the Constitution remained unchanged.

————— 29. For the Japanese attitude toward the United Nations and other international peace operations, see Matake Kamiya, “Pacifism and the Japanese Attitude Toward the United Nations,” in Japan and Multilateral Diplomacy, ed. Philippe Régnier and Daniel Warner (Aldershot, U.K.: Ashgate, 2001). Japanese Politics and Security Policy, 1990–2001 121

Despite these unchanged aspects, substantial change in Japan’s security policy took place during the 1990s. Prime Minister Koizumi has brought about a series of astonishing changes in Japan’s security policy since the terrorist attack on the United States on September 11, 2001, including the dispatch of Maritime Self-Defense Forces ships to the Indian Ocean to provide logistical support to U.S. Navy ships engaging in the war against the terrorists in Afghanistan. This represents the first occasion in which the Japanese government sent the Self-Defense Forces overseas during wartime. Koizumi has also expressed his desire to complete the legislation of contingency laws. Many politicians, including Koizumi, in the Democratic Party as well as in the LDP, have started to argue that Japan needs to “review” the traditional policy of not exercising the right of the collective self- defense. In short, throughout the 1990s, Japanese politics was in constant flux around the issue of political restructuring. Many leading politicians shared the understanding that domestic politics as well as external policies of Japan required fundamental reform. They believed that without making a greater “international contribution” in the security field, Japan would never be a respected member of international society. Ichiro Ozawa, who led the movement toward political reform from the early to the mid-1990s, strongly believed that Japan had to “normalize” its security policy in order not to be isolated in international society. Thus, even in the tumultuous atmosphere of political reform, a new consensus emerged for an expansion of Ja- pan’s contribution to international unity in a multilateral context.

Part II U.S.-China Relations

From Denial to Leadership: The Clinton Administration and China Robert S. Ross

The Clinton administration was the first administration elected following the end of the Cold War. It thus was the first U.S. administration to develop security policy in a strategic setting in which the United States faced no great powers rivals and no immediate or even short-term threats to its vital security interests. These international changes affected not only U.S. foreign policy but also the domestic politics of U.S. foreign policy. In this unprecedented international and domestic context, U.S. foreign policy of the prior 55 years could not serve as a basic framework for the new administration. In many areas the Clinton administration had to develop U.S. security policy de novo. The Clinton’s administration faced its greatest foreign policy difficulties in developing policy toward China. During its two terms, it struggled to come to terms with the ongoing post–Cold War reality of Chi- nese power, the limits of American power, and the corresponding necessity of incorporating Chinese interests into U.S. foreign policy. In the best of circumstances, this would have been difficult. But the administration’s protracted inability to acknowledge Chinese importance

————— Robert S. Ross is a Professor of Political Science at Boston College.

125 126 Robert S. Ross to U.S. interests and its prioritization of domestic policy over foreign policy exacerbated the difficulty. This led to policy inconsistency. During the two terms of the Clinton presidency, American policy toward China went through three phases. In each phase the administration adopted policies that failed to acknowledge U.S. interest in taking into account Chinese power. In each phase, this overconfidence in American power resulted first in policy failure and then in policy cor- rection. Not until the end of its second term did the Clinton administration fully understand not only that Chinese power required the president to take international policy initiatives that acknowledge Chinese interests but also that the president must exercise domestic leadership to realize U.S. interests in U.S.-China relations. In the first phase of Clinton’s evolving China policy, from January 1993 to May 1994, the administration believed that the United States could use its market power to coerce China into accommodating U.S. demands regarding human rights in China. This period ended with delinkage of trade and human rights. In the second phase, from May 1994 to July 1997, the administration acted as if U.S. pre-eminence allowed it to ignore China. This led to policy drift, resulting in congressional activ- ism and destabilizing changes in U.S. policy toward Taiwan. This period ended with the President’s Clinton’s visit to China in 1997, to greater U.S. accommodation of Chinese interests on the Taiwan issue, and greater engagement of China regarding weapons proliferation. These changes reflected the administration’s new recognition that managing global weapons proliferation required Chinese participation in international arms control institutions. In the third phase, from late 1997 to November 2000, the administration remained reluctant to take the initiative and exercise domestic leadership to achieve an agreement with China on Chinese membership in the WTO. It ended when the United States and China concluded a WTO agreement and the Clinton administration then successfully fought for domestic legislation that ended the application of the Jackson-Vanik Amendment to the 1974 Trade Act to U.S.-China trade relations. President Clinton’s difficulty in developing a successful China policy was not unique to his administration. Each time since U.S.-China rapprochement in 1972 that control of the White House switched political parties, the new administration believed that it could adopt a stronger China policy that downgraded China’s strategic importance and, thus, placed less emphasis on U.S. accommodation of Chinese interests. This was also the experience of the Carter and Reagan administrations. But in each case, the new party in the White House was compelled to carry out a significant policy reversal as it came to terms with the reality of From Denial to Leadership 127

Chinese power and the corresponding necessity for negotiation and mutual compromise. As we shall see, what distinguished the Clinton administration from its predecessors was that its policy adjustment was so protracted and costly.

The Failure of Sanctions When the Clinton administration took office in January 1993, it struggled not only with developing a post-Cold War China policy but also with the legacy of the Chinese government’s violent June 4, 1989, crackdown on the Beijing student movement and with the Clinton presidential campaign’s statements on U.S. policy toward human rights in China. During the campaign, Clinton had argued that the Bush administration remained a captive of outdated Cold War security concerns that placed excessive importance on strategic cooperation with China. He assured the voters that unlike President Bush he would not “cod- dle” the dictators of Beijing and that he would not hesitate to use Chi- nese exports to the United States as leverage against China’s human rights abuses.1 It was this combination of confidence in post–Cold War U.S. power and a commitment to human rights that drove Clinton’s first efforts in China policy. One of President Clinton’s first decisions concerned trade with China. In the first months of his presidency, China had hoped that he would abandon his campaign rhetoric and recognize China continued importance in the post-Cold War order. It also sent a high-level trade delegation to the United States, which placed large orders for U.S. aircraft and automobiles.2 Nonetheless, rather than unconditionally extend China’s most-favored-nation (MFN) trade status, in late May 1993 Clin- ton issued an executive order linking continuation of China’s MFN trade status with its human rights practices. Whereas President Bush had resisted congressional efforts to link trade and human rights, Clin- ton embraced linkage as a presidential commitment. Clinton administration officials believed that the executive order had removed linkage

————— 1. New York Times, Apr. 2, 1992. The Democratic Party’s use of China policy as a campaign issue is well discussed in James Mann, About Face: A History of America’s Curious Re- lationship with China, from Nixon to Clinton (New York: Knopf, 1999), 260–64. 2. Chinese optimism is reflected in Guo Zhenyuan, “Clinton’s New Policy Toward China,” Shijie zhishi, Jan. 16, 1993, in FBIS, Jan. 28, 1993; and Zhang Xinhua, “An Analysis of U.S. Economic and Trade Strategy Toward China,” Jiefang ribao, May 10, 1993, in FBIS, May 24, 1993, pp. 8–10. On the trade mission and purchases, see China Daily, Apr. 5, 1993, in FBIS-China, Apr. 6, 1993, pp. 7–8; Xinhua, Apr. 9, 1993, in FBIS, Apr. 12, 1993, p. 6; and Xinhua, Apr. 14, 1993, in FBIS, Apr. 14, 1993, p. 6. 128 Robert S. Ross from congressional politics, thus enhancing White House flexibility, and that China would make some limited human rights changes that would make possible continued U.S. cooperation with China and the continuation of MFN. But the executive order further politicized China policy, for the president had made a personal commitment to impose punitive trade sanctions on China should Beijing not conform to U.S. demands. Yet even a presidential commitment and the obvious political costs for the president of retreat from linkage could not make credible to China the U.S. threat to disrupt U.S.-China trade. The administration made a strong effort to persuade China of its resolve and elicit Chinese compromise. President Clinton, Secretary of State Warren Christopher, and other officials personally pressured China to make reforms. In October 1993 Christopher warned Foreign Minister Qian Qichen that without quick progress on human rights, China would lose its MFN status. At the APEC meeting in Seattle, the president held a “frank” and “candid” discussion with Chinese Presi- dent Jiang Zemin. After Beijing released a small handful of dissidents, Christopher insisted that it had not done enough. In February 1994, As- sistant Secretary of State for Human Rights John Shattuck, during a visit to Beijing, held an unannounced meeting with Wei Jingsheng. The next month, Christopher visited China with the announced intention to withdraw MFN status unless China compromised. In May President Clinton told Chinese Vice Premier Zou Jihua that China had to make more concessions by June 3, the deadline for renewing China’s MFN status, if it expected to maintain normal trade relations.3 President Clinton had done all he could to persuade Chinese leaders that the United States would revoke China’s MFN status if they did not satisfy U.S. demands. The president had linked his personal credibility to this policy, suggesting that domestic political costs made compromise impossible. But Chinese leaders remained intransigent, adopting policies more hostile than those of 1992 and 1993. In meetings with administration officials, they expressed no willingness to meet U.S. conditions. Prior to Secretary Christopher’s visit to Beijing, Chinese leaders rearrested or detained at least thirteen dissidents, including Wei Jing- sheng and Wang Dan. In their meetings with Christopher, they refused to discuss human rights. Premier Li Peng insisted that China would endure U.S. sanctions rather that succumb to pressure. In May, as the June

————— 3. New York Times (hereafter NYT), Oct. 1, 1993; NYT, Oct. 21, 1993; NYT, Nov. 20, 1993; Far Eastern Economic Review (hereafter FEER), Dec. 2, 1993; NYT, Jan. 24, 1994; NYT, Feb. 28, 1994; NYT, Mar. 12, 1994; FEER, Mar. 24, 1994, pp. 18–20; NYT, May 3, 1994. From Denial to Leadership 129

3 deadline approached, Chinese police arrested four Shanghai democracy activists.4 Washington’s strenuous effort had failed to elicit Chinese concessions. Chinese leaders assessed American credibility by focusing on the costs and benefits for U.S. interests of imposing sanctions, and they concluded that American interest in Chinese treatment of political dissidents was far less than its interest in access to the Chinese market and stable U.S.-China political relations. They were correct. President Clin- ton, despite his commitment to retaliate against Chinese intransigence, flinched from the domestic political costs and from the national economic and security costs of disrupting U.S.-China trade. Chinese leaders successfully called the administration’s bluff. Denying MFN to China would have elicited PRC retaliation against American exports. Although American reliance on China’s market is insignificant compared to Chinese reliance on the U.S. market, key sectors of U.S. industry and the labor force would have been affected. The economies of Washington and Kansas, for example would have been significantly affected were Beijing to cancel orders from Boeing and purchase European Airbuses instead. In 1994, China purchased 13 percent of Boeing aircraft sales.5 Many states would have been affected were Beijing decide to buy wheat from other countries. American tele- communication, energy, and automobile corporations are in competition with their foreign counterparts for a share of China’s infrastructure and transportation sectors. Simply put, despite the administration’s confidence in U.S. post–Cold War power, China possessed considerable economic power that it was prepared to use to achieve political goals. Chinese leaders understood the importance of the Chinese market to the U.S. economy, and rather than compromise, they threatened to retaliate against U.S. sanctions.6 Just as politics had persuaded the president to link economic sanctions with China’s human rights policies, politics had pushed him to re- evaluate his policy. China’s warnings of economic and political retaliation affected the U.S. policy debate. During Christopher’s March 1994 visit to Beijing, executives from AT&T, General Electric, and Dow Jones sharply criticized the administration’s human rights policy. Executives of 450 California companies signed a petition urging the White House ————— 4. FEER, Mar. 17, 1994, p. 16; NYT, Mar. 5, 1994; NYT, Mar. 12, 1994; Washington Post (hereafter WP), Mar. 13, 1994; Wall Street Journal, May 10, 1994. 5. Dow Jones Newswires, June 25, 1996. 6. See, e.g., Zhongguo tongxunshe, Mar. 20, 1994, in FBIS, Apr. 1, 1994, pp. 4–5; and Xinhua, May 4, 1994, in FBIS, May 5, 1994, pp. 8–9; Also see the coverage of Foreign Min- ister Qian Qichen’s statement in the NYT, Mar. 21, 1994. 130 Robert S. Ross to delink trade relations. Nearly 800 companies wrote to the president to urge him to separate trade from human rights. Secretary of the Treasury Lloyd Bentsen and Director of the National Economic Council Robert Rubin distanced themselves from the State Department’s position by advocating delinkage. Under Secretary of Commerce Jeffrey Garten argued that the “economic stakes with China are enormous” and that the United States needed “to inject commercial considerations more into the policy.” In Congress, Democratic Representative Lee Hamilton, chairman of the House Foreign Affairs Committee, called for a “broader understanding of the national interest.” Leading Democratic and Republican senators, including Max Baucus, John Danforth, and Bill Bradley, advised Secretary Christopher to eschew sanctions, no matter how intransigent China might be. One hundred and six members of the House of Representatives, including Speaker Tom Foley, Minority Leader Robert Michel, and Minority Whip Newt Gingrich, advised President Clinton to approve unconditional renewal of China’s MFN status.7 Security considerations were also influential. Representative Hamil- ton warned that “single-minded emphasis” on human rights had interfered with U.S. pursuit of security interests. Former Secretaries of State Henry Kissinger, Cyrus Vance, and Lawrence Eagleburger criticized the threat of sanctions as a failure and advised the administration to place greater emphasis on such issues as arms control and regional security. Even Assistant Secretary of State Winston Lord, who had played a major role in developing the Clinton administration’s sanctions policy, acknowledged that U.S. preoccupation with human rights had undermined other American interests in U.S.-China relations and in regional affairs.8 In the weeks prior to the president’s decision, administration officials met many times to consider their options. The president spoke with former presidents and senior foreign policy advisors, and he met with members of Congress. On May 18, eight days prior to his announcement of delinkage, he met with his senior political and foreign policy advisors to elicit their advice. It was widely acknowledged that China had made only minimal concessions. Nonetheless, the president de-

————— 7. NYT, Mar. 14, 1994; FEER, May 12, 1994, p. 16; NYT, Mar. 19, 1994; NYT, Mar. 20, 1994; NYT, Mar. 27, 1994; NYT, Jan. 30, 1994; NYT, May 11, 1994; NYT, May 20, 1994; NYT, May 25, 1994. 8. NYT, Mar. 18, 1994; NYT, May 11, 1994; WP, Mar. 28, 1994; WP, May 5, 1994; Asian Wall Street Journal, May 11, 1994; FEER, May 19, 1994. From Denial to Leadership 131 cided to retreat from the brink. In May 26 he announced delinkage of China’s MFN status with its human rights policies.9 The U.S. threats failed to change Chinese behavior because in the U.S.-China relationship U.S. interest in Chinese dissidents was less important than U.S. economic and security interests. The White House had overestimated U.S. ability to compel China to conciliate U.S. pressure and underestimated Chinese retaliatory power, which encouraged it to allow domestic concerns to inform China policy. But it learned that despite U.S. pre-eminence, Chinese retaliation could inflict high costs on U.S. security and the U.S. economy. Indeed, China observed the pressures on the White House from both business sectors and political leaders and recognized the administration’s error. It called the Clinton administration’s bluff because it correctly assessed the relative importance of human rights in U.S. policy and the repercussions of disrupted U.S.-China trade for the president’s political situation. As one Chinese report characterized the administration’s dilemma, the president was “working furiously” to get himself out of the “self-inflicted trap” of linking MFN to human rights.10 The administration’s overconfidence in U.S. power vis-à-vis China and the president’s corresponding tendency to ignore Chinese interests and to allow domestic politics to determine foreign policy was also reflected in the Yinhe affair and the conflict over Chinese hosting of the 2000 Olympic Games. From late July until early September 1993, the administration accused the Yinhe, a Chinese ship, of carrying internationally proscribed chemical weapon precursor agents to Iran and demanded that China cease the shipment and that the Yinhe return to China before reaching Iran. Despite continued Chinese denials that the Yinhe carried any such chemicals, including a reported personal denial by President Jiang Zemin,11 the administration demanded that China allow U.S. inspectors to board the Yinhe and to search for the chemicals.

————— 9. For a close analysis of the decision-making leading to delinkage, see David M. Lampton, “America’s China Policy in the Age of the Finance Minister: Clinton Ends Link- age,” China Quarterly, no. 139 (Summer 1994). 10. Chen Dawei, “Clinton Faced With Decision on Problem of China’s Most-Favored- Nation Status, Zhongguo xinwenshe, May 16, 1994, in FBIS, May 17, 1994, p. 9. For other Chinese commentaries on the domestic politics of MFN, see, e.g., Xinhua, Mar. 26, 1994, FBIS, Mar. 28, 1994, pp. 3–4; Xinhua, May 4, 1994, in FBIS, May 5, 1994, pp. 8–9; Xinhua, May 5, 1994, in FBIS, May 5, 1994, p. 8; Xinhua, May 6, 1994, in FBIS, May 9, 1994, pp. 4–5; Xinhua, May 11, 1994, in FBIS, May 11, 1994, p. 7; Xinhua, May 18, 1994, in FBIS, May 19, 1994, p. 6. For a fuller analysis of why the sanctions failed, see Robert S. Ross, “China,” in Economic Sanctions and American Diplomacy, ed. Richard N. Haass (New York: Council on Foreign Relations, 1998). 11. See Kyodo, Aug. 18, 1993, in FBIS, Aug. 18, 1993, p. 2. 132 Robert S. Ross

Chinese leaders eventually consented. They directed the Yinhe to proceed to Saudi Arabia before unloading in Iran so that U.S. officials could board the ship. Yet the U.S. inspectors failed to find the proscribed chemicals. Chinese were angry that administration did not apologize and that it did not offer compensation to China for the ex- penses the ship incurred from the extensive delay in reaching Iran.12 Negotiations over Chinese missile proliferation reflected a similar U.S. tendency toward unilateralism. Following the Bush administration’s September 1992 decision to sell Taiwan 150 F-16 aircraft, in violation of the August 17, 1982, U.S.-China arms sales communiqué, Beijing retaliated by shipping M-11 missiles to Pakistan, thus violating its Feb- ruary 1992 bilateral pledge not to export missiles covered by the Missile Technology Control Regime (MTCR). China was not a member of the MTCR, and the United States refused to offer it membership. Washing- ton preferred to exclude China from the technical MTCR discussions and to retain the option of using the MTCR against Chinese exports. Nonetheless, in August 1993 the Clinton administration, apparently frustrated with China’s denials that it had exported proscribed missiles to Pakistan, imposed sanctions prohibiting export to China of selected advanced military-related technologies. It imposed these sanctions just as the United States and China were entangled in the Yinhe affair and Congress voted against China’s hosting of the 2000 Olympics.13 The administration ultimately failed to persuade China to acknowledge that it had transferred missiles to Pakistan in violation of its Feb- ruary 1992 agreement. The White House nonetheless lifted the August 1993 sanctions in October 1994 in return for a Chinese commitment not to export in the future missiles “featuring the primary parameters of the Missile Technology Control Regime—that is, inherently capable of reaching a range of at least 300km with a payload of at least 500kg.”14 Similar U.S. assumptions about Chinese accommodation to U.S. power were reflected in July and August 1993 when the House of Rep-

————— 12. NYT, Sept. 6, 1993. Chinese sources estimate the costs of the delay to be nearly $13 million. See Xinhua, Sept. 10, 1993, in FBIS, Sept. 10, 1993. According to interviews with former U.S. officials, the chemicals were never on the Yinhe because the Yinhe had left Shanghai for Iraq before the ship carrying the chemicals from Dalian arrived in Shanghai. For a fuller discussion of this issue, see Ross, “China”; and Robert S. Ross. “The Diplo- macy of Tiananmen: Two-Level Bargaining ad Great Power Cooperation,” Security Studies 10, no. 2 (forthcoming). 13. Xinhua, Aug. 25, 1993, in FBIS-China, Aug. 26, 1993, pp. 3–4; Xinhua, Aug. 26, 1993, and Aug. 27, 1993, in FBIS-China, Aug. 27, 1993, pp. 1–2. 14. See “Joint United States–People’s Republic of China Statement on Missile Prolifera- tion,” Oct. 4, 1994. From Denial to Leadership 133 resentatives and then the Senate passed resolutions calling on the Inter- national Olympic Committee not to award Beijing the 2000 Olympic Games. Rather than weigh in on the issue, the White House distanced itself from the congressional process, allowing Congress to speak for the United States. When the International Olympic Committee awarded the 2000 Olympics to Sidney, the resulting widespread anti-American backlash in China undermined U.S. efforts to encourage popular Chi- nese support for U.S. policies, including its human rights policies.

Policy by Default: Taiwan Policy and the Role of Congress The experience of linkage and delinkage, the Yinhe affair, and Chinese missile proliferation seemed to sour the administration on dealing with China. Thus, rather than accommodate itself to the reality of Chinese power and develop a more realistic policy, it turned its attention away from China, for the most part ignoring China policy. Although it had ceased purposefully challenging Chinese interests, the Clinton administration now acted as if it could simply ignore China’s importance to U.S. interests. The sole initiatives during the next year focused on China’s human rights violations. In addition to publicly condemning Chinese violations, for the first time the United States submitted a resolution condemning China to the United Nations Human Rights Com- mission in Geneva. White House inattention to U.S.-China relations created a domestic leadership vacuum. Congress filled the vacuum. And Taiwan, which had been unsuccessful in taking its case to the administration, took its case to Congress. Congress used White House passivity to change American policy toward Taiwan. As in the first phase of Clinton’s China policy, China policy failed in the second phase, once again requiring policy reversal. But this time the reversal inflicted even greater costs on U.S. interests. Many members of Congress could not understand why U.S. diplomats at whatever rank could not meet with their Taiwan counterparts. This pattern, which has been introduced after normalization of relations between China and the United States in 1979, seemed to members of Congress overly solicitous to Chinese concerns and insulting to Taiwan. When the restrictions placed on Lee Teng-hui in 1994 during his transit stopover in Honolulu were publicized and Taiwan’s lobbying efforts underscored the U.S. constraints on Taiwan’s diplomatic activities, Congress demanded change. The administration, concerned over the domestic politics of China policy, modified U.S. relations with Taiwan. 134 Robert S. Ross

The 1994 Taiwan Policy Review raised the level of U.S. diplomats permitted to travel to Taiwan and meet with their Taiwan counterparts in their offices.15 Congress’ next initiative concerned Lee’s request for a visa to visit Cornell University. In February 1995 Secretary of State Warren Christo- pher testified before Congress that allowing such a visit would be contrary to U.S. policy. In April 1995 he told Chinese Foreign Minister Qian Qichen that a visa for Lee Teng-hui would be “inconsistent with an unofficial relationship” with Taiwan. Within the administration, National Security Council officials argued against issuing the visa. But after the Senate voted 97–1 and the House of Representatives voted 360–0 in support of a visa in May, the president decided to allow Lee to visit the United States.16 The visa decision followed a succession of similarly important changes in U.S. Taiwan policy since the end of the Cold War. In 1992 George Bush approved the sale of 150 F-16 military planes to Taiwan. The sale violated the August 17, 1982, U.S.-China communiqué on U.S. arms sales to Taiwan and suggested increased political U.S. support for Taiwan.17 Then, in September 1994 the Clinton administration revised its policy on U.S. government contacts with Taiwan. As a leading Chi- nese authority observed, Washington’s visa decision was the latest step in a dangerous post–Cold War trend that could lead to a Taiwan declaration of independence.18 People’s Daily observed that if the trend con-

————— 15. On the Taiwan Policy Review, see NYT, Sept. 7, 1994. 16. Warren Christopher, In the Stream of History: Shaping Foreign Policy for a New Era (Stanford: Stanford University Press, 1998), pp. 286–87; interview with Robert Suettinger, director of Asian affairs, National Security Council. On the role of Congress and domestic politics in U.S. policy toward Taiwan, see Robert G. Sutter, “Domestic Politics and U.S.- China-Taiwan Triangle: The 1995–1996 Taiwan Strait Conflict and Its Aftermath,” in After the Cold War: Domestic Factors and U.S.-China Relations, ed. Robert S. Ross (Armonk, N.Y.: M. E. Sharpe, 1998). The best account of this episode is David M. Lampton, Same Bed, Dif- ferent Dreams: Managing U.S.-China Relations, 1989–2000 (Berkeley: University of California Press, 2001), pp. 49–50. 17. For a discussion of the arms sales communiqué, see John. H. Holdridge, Crossing the Divide: An Insider’s Account of Normalization of U.S.-China Relations (New York: Row- man and Littlefield, 1997), chaps. 13 and 14; and Robert S. Ross, Negotiating Cooperation: U.S.-China Relations, 1969–1989 (Stanford: Stanford University Press, 1995), chap. 6. See also James Mann, About Face: A History of America’s Curious Relationship with China, from Nixon to Clinton (New York: Knopf, 1999). 18. See the remarks by Wang Jisi in Wen wei po, Aug. 29, 1995, in FBIS-China, Sept. 13, 1995, pp. 6–7. See also the discussion of U.S. policy in 1994 in Wang Li, Bolan qifu: Zhong- Mei guanxi yanbian de quzhe licheng (Roaring waves: the tortuous process of the evolution of U.S.-China relations) (Beijing: Shijie zhishi chubanshe, 1998), p. 297–98. On the new U.S. policy toward Taiwan officials, see also Steven Greenhouse, “U.S., Despite Critics, Is From Denial to Leadership 135 tinued, “Lee Teng-hui will have less to fear in colluding with ‘Taiwan independence forces.’”19 Indeed, prior to his departure for Cornell Uni- versity, Taiwan announced that it was prepared spend U.S.$1 billion to secure admission to the United Nations.20 The administration was in conflict with China over Taiwan because it had ceded policy initiative to Congress. It now sought to rectify the situation by expecting China to accommodate itself to U.S. policy, rather than try to maintain cooperation by taking active measures to restore Chinese confidence in the U.S. commitment to the one-China policy. It dismissed Beijing’s demands for a formal restatement of U.S. policy and ignored Chinese military actions aimed at encouraging U.S. responsiveness. Apparent U.S. dismissal of Chinese interests in part led Beijing to escalate its military diplomacy, culminating in the March 1996 Taiwan Strait confrontation. Only after the confrontation did the administration acknowledge that China had the ability to undermine important U.S. interests in East Asia and that it would have to negotiate with Beijing on the Taiwan issue.21 In response to initial Chinese protests over the visa decision, the White House insisted that U.S. policy had not changed, despite its prior statements that such a visit was contrary to U.S. policy. President Clin- ton explained to Chinese Ambassador Li Daoyu that there had been no major change in U.S. policy. The State Department held that the decision was “completely consistent with the . . . three communiques that form the basis” of U.S.-China relations. Assistant Secretary of State Winston Lord dismissed the significance of the decision when he char-

————— to Expand Taiwan Ties,” NYT, Sept. 7, 1994, p. A5. 19. Author interviews with Chinese analysts. Ren Fan, “The U.S. Government Should Change Its Course Immediately,” People’s Daily, June 13, 1995, in FBIS-China, June 16, 1995, p. 7; Zhongguo tongxunshe, May 29, 1995, in FBIS-China, June 2, 1995, p. 5. 20. Commentary, “Where Does the United States Really Want to Lead Sino-U.S. Rela- tions?” Xinhua, June 17, 1995, in FBIS-China, June 19, 1995, pp. 10–12; Commentary, “A Self-Vindication of Advocacy for Splitting the Motherland,” Xinhua and People’s Daily, July 23, 1995, in FBIS-China, July 24, 1995, pp. 91–93. See also, e.g., Ren Fan, “The U.S. Government Should Change Its Course Immediately,” p. 7. Taiwan’s military exercises are reported in Lien-Ho Pao (Taipei), May 26, 1995, in FBIS-China, June 5, 1995, p. 89–90; Agence France-Presse, May 30, 1995, in FBIS-China, May 30, 1995, p. 85. For China’s reaction to the exercises, see Xinhua, June 27, 1995, in FBIS-China, June 27, 1995, p. 90. Tai- wan’s effort to enter the United Nations is discussed in Di Xiangqian, “Money Diplomacy Goes Against the Popular Will in Taiwan,” People’s Daily, July 12, 1995, in FBIS-China, July 18, 1995, pp. 77–78; and in Central News Agency (Taipei), June 28, 1995. 21. For a detailed analysis of 1995–96 U.S.-China diplomacy, see Robert S. Ross, “The 1995–96 Taiwan Strait Confrontation: Coercion, Credibility, and Use of Force,” Interna- tional Security 25, no. 2 (Spring 2000). 136 Robert S. Ross acterized it as a mere “tactical change.” Christopher said that the visit was “quite compatible” with unofficial U.S.-Taiwan relations.22 Beijing retaliated by canceling visits to Washington by Defense Min- ister Chi Haotian and State Counselor Li Guixian and by cutting short a visit to the United States by the Chinese air force chief of staff. It also suspended bilateral discussions over arms proliferation and human rights.23 More important, from July 21 to July 28 it conducted missile tests and naval and air exercises in the waters near Taiwan. Three days before Qian Qichen and Warren Christopher met in Brunei, it launched six surface-to-surface missiles approximately 100 miles from Taiwan.24 The Chinese Foreign Ministry spokesman explained that “what we are going to do is make the U.S. realize the importance of U.S.-China relations to prompt it to take the right track.”25 In Brunei Christopher presented Qian Qichen a confidential letter from President Clinton to President Jiang Zemin, in which Clinton stated that U.S. policy opposed Taiwan independence, did not support Taiwan membership in the United Nations, and did not support a two- China policy or a policy of one China and one Taiwan. These were basically the same confidential commitments American presidents had been making to Chinese leaders since Richard Nixon visited China in 1972.26 Christopher did not rule out future visits by Taiwan leaders to the United States but said that Lee Teng-hui’s visit was a “special” situation and that future visits would be personal, unofficial, rare, and decided on a case-by-case basis.27 As for Chinese military activities, he reiterated

————— 22. Author interview with NSC Director of Asian Affairs Suettinger; Department of State daily press briefing, May 24, 1995; and on-the-record briefing by Assistant Secretary of State Winston Lord, May 30, 1995. Christopher’s remarks were made on the July 11, 1995, Public Broadcasting System’s News Hour. See the Chinese analysis of U.S. “ambiguity” in He Chong, “Will the Talks Between the Chinese Foreign Minister and the U.S.- Secretary of State Improve Sino-U.S. Ties?” Zhongguo tongxunshe, Aug. 1, 1995, in FBIS- China, Aug. 1, 1995, p. 6. Author interviews with Chinese policy analysts. 23. On the cancellations, see Department of State daily press briefings, May 24 and May 26, 1995, and the May 30 press briefing by Assistant Secretary of State Lord; and Xin- hua, May 26, 1995, in FBIS-China, May 26, 1995, p. 3. For subsequent Chinese moves, see Xinhua, June 16, 1995, in FBIS-China, June 19, 1995, p. 1; and Agence France-Presse, June 22, 1995, in FBIS-China, June 22, 1995, p. 1. 24. Xinhua, July 18, 1995, in FBIS-China, July 19, 1995, p. 13; and Agence France-Press, Aug. 11, 1995, in FBIS-China, Aug. 11, 1995, p. 13. 25. Quoted in South China Morning Post, Aug. 1, 1995, in FBIS-China, Aug. 1, 1995, p. 5. 26. Mann, About Face, p. 330. On the commitments of previous administrations, also see Ross, Negotiating Cooperation. See also the Chinese account of the meeting in Xinhua, Aug. 1, 1995, FBIS-China, Aug. 2, 1995, p. 4. 27. Christopher, In the Stream of History, p. 289. See also Christopher’s July 28, 1995, speech to the National Press Club, Washington, D.C.; Michael Dobbs, “U.S., China Agree From Denial to Leadership 137 the State Department position that such activities do not contribute to “peace and stability in the area.”28 Qian said that Christopher’s statements were helpful but that the “true value of a promise is shown in real action.” Prime Minister Li Peng explained that although Christopher and Qian held a positive meeting in Brunei, “it is not enough to make oral statements and what is important is to translate the statements into actions.”29 Moreover, in late July, just a few days after China began its July military maneuvers, Taiwan launched its own missile and naval exercises. In August it announced that it would conduct live artillery tests. Lee was “still stubbornly challenging the ‘one-China’ principle.” Liu Huaqing, vice chairman of the Chinese Central Military Commission, observed that because Taiwan’s leaders had purchased foreign weaponry, they could be “cocky” and resist reunification.30 On August 15 Beijing began a second round of missile tests and naval exercises. These activities were scheduled to last until August 25, when Under Secretary of State Tarnoff arrived in China. The Chinese– influenced Hong Kong press reported that the naval exercises simu- lated a blockade of Taiwan and a response to U.S. military intervention.31 Chinese leaders explained to Tarnoff they would welcome a U.S.- China summit, but they also wanted public affirmation of the commitments that Clinton had made in his letter to Jiang Zemin. They suggested that a summit issue a U.S.-China communiqué that would address future visits to the United States by Taiwan’s leaders and embody the “three nos” in Clinton’s letter—no to Taiwan independence, no to a two-China policy, and no to Taiwan membership in the United Nations. Washington parried PRC demands. The State Department down- played the importance of Chinese exercises. and Tarnoff privately reiterated U.S. assurances regarding Taiwan’s independence and U.N. membership and reaffirmed that future visits to the United States by

————— to Talks On Relations,” WP, Aug. 2, 1995, p. A27. 28. Department of State daily press briefings, July 14 and Aug. 11, 1995; author interview with NSC Director of Asian Affairs Suettinger. 29. Xinhua, Aug. 1, 1995, in FBIS-China, Aug. 2, 1995, p. 4; Xinhua, Aug. 17, 1995, in FBIS-China, Aug. 17, 1995, p. 5. 30. Commentator, “Lee Teng-hui Stubbornly Challenges the ‘One-China’ Principle,” Xinhua, Aug. 23, 1995, in FBIS-China, Aug. 23, 1995, p. 50. On Taiwan’s maneuvers, see Agence France-Presse, July 25, 1995, in FBIS-China, July 25, 1995, p. 41; and Voice of Free China, Aug. 1, 1995, in FBIS-China, Aug. 2, 1995, p. 78. Liu’s comments are in Ta Kung Pao, Sept. 4, 1995, in FBIS-China, Sept. 7, 1995, p. 32. 31. Agence France-Press, Aug. 26, 1995, in FBIS-China, Aug. 28, 1995, pp. 81–82; Zhongguo tongxunshe, Aug. 15, 1995, in FBIS-China, Aug. 17, 1995, p. 57; and Ming Pao, Aug. 16, 1995, in FBIS-China, Aug. 18, 1995, pp. 27–28; 138 Robert S. Ross

Taiwan’s leaders would be rare. The Chinese Foreign Ministry responded that the talks were useful but maintained that “whether Sino- U.S. relations can be restored to normal depends on whether the U.S. side will take actions to honor its commitments.”32 Jiang Zemin told former President George Bush that “we demand . . . practical and effective measures” to remove the consequences of Lee’s visit and to “avert the recurrence of big ups and downs” in U.S.-China relations. Li Peng said that China wanted “concrete actions.”33 The dispute over Taiwan became enmeshed in negotiations over a possible summit. President Jiang was to be in New York in October 1995 to attend the celebration of the fiftieth anniversary of U.N. General Assembly and could travel to Washington for a summit. China wanted a summit to focus on the Taiwan issue, but the administration insisted that the summit address arms proliferation, trade issues, and human rights.34 The State Department declared that the U.S. position on Tai- wan was “abundantly clear” and it “is not going to change.” and that “the stage is over in the relationship” in which the United States would try to mollify Beijing’s concerns over the Taiwan issue.35 China faced a de facto U.S. ultimatum: either drop the Taiwan issue or forgo a summit. On October 2 China accepted the U.S. terms. Qian told Christopher that China would suspend its assistance to Iran’s nuclear energy program and that it was ready to work for greater cooperation. After three more rounds of Tarnoff-Li meetings, the two sides announced that Presidents Jiang and Clinton would meet on October 24 at Lincoln Center in New York. Beijing then announced that its ambassador would return to Washington, D.C. China also agreed to resume the U.S.-China military dialogue and to hold discussions on trade and other issues.36

————— 32. Gong Li, Zhong-Mei guanxi redian toushi (Perspective on hotspots in China-U.S. relations), (Harbin: Heilongjiang chubanshe, 1996, p. 159; Department of State daily press briefings, Aug. 11 and Aug. 28, 1995. Xinhua, Aug. 27, 1995, in FBIS-China, Aug. 28, 1995, p. 3; and Xinhua, Aug. 29, 1995, in FBIS-China, Aug. 30, 1995, p. 1. 33. Xinhua, Sept. 8, 1995, and Xinhua, Sept. 11, 1995, both in FBIS-China, Sept. 11, 1995, pp. 13–15. 34. NSC Director of Asian Affairs Suettinger and other administration officials. 35. Department of State daily press briefing, Sept. 18 and Sept. 21, 1995. 36. On the Chinese suspension of the nuclear energy agreement and the decision to move ahead with summit discussions between Tarnoff and Li, see Department of State daily press briefing, Sept. 29, 1995. Qian’s remarks are in Xinhua, Sept. 27, 1995, in FBIS- China, Sept. 28, 1995, pp. 11–12; and Xinhua, Oct. 1, 1995, in FBIS-China, Oct. 2, 1995, p. 11; The return of the ambassador is reported in Kyodo, Oct. 17, 1995, in FBIS-China, Oct. 17, 1995, p. 1. On military exchanges, see Zhongguo tongxunshe, Oct. 31, 1995, in FBIS-China, Nov. 1, 1995, p. 1. From Denial to Leadership 139

The Clinton administration had apparently resisted Chinese pressure regarding Taiwan and secured an important concession regarding nuclear energy cooperation with Iran. Clinton had merely reaffirmed to Jiang that visits by Taiwan leaders to the United States would be “unofficial, private, and rare” and would be decided on a case-by-case basis. He repeated confidential assurances that Washington opposed Tai- wan’s independence and U.N. membership.37 Although Beijing had wanted a “state visit,” replete with a formal banquet and military hon- ors; it agreed to the New York meeting rather than accept a working visit in Washington. Thus, Washington could use Beijing’s continued interest in a state visit to extract additional concessions.38 Assistant Secretary of State Lord reported that China accepted the U.S. position that “we have to get on with the broad agenda.” China understood that the administration had “reaffirmed as much as we’re capable of doing” concerning U.S. Taiwan policy. Director of Asian Affairs for the Na- tional Security Council Robert Suettinger believed that the summit enabled the two sides to make “significant progress.”39 But China had decided simply to shelve the Taiwan issue until its leverage improved. Following the summit, Qian said that Clinton and Jiang had held a “positive and useful meeting,” but “this does not mean that the Taiwan issue will not again be the main issue affecting U.S.- China relations.” He insisted said that the “differences and contradictions” between Washington and Beijing “need to be addressed and tackled.”40 In October, following the announcement of the New York summit, Jiang Zemin observed PLA Air Force and Navy exercises and boarded a command ship to observe a “high-tech war game” of submarines, destroyers, and missile launchings. The Foreign Ministry stressed that the maneuvers demonstrated China’s resolve to safeguard sovereignty and territorial integrity.41 On November 15, at the beginning of the two-

————— 37. See the Oct. 24, 1995, post-summit briefing in New York at the Warwick Hotel by State Department and NSC officials; Zhu Chenghu, ed., Zhong-Mei guanxi de fazhan bian- hua ji qi qushi (Developing change in China-U.S. relations and its trend) (Nanjing: Jiangsu renmin chubanshe, 1998), pp. 190–91; and Xinhua, Oct. 25, 1995, in FBIS-China, Oct. 25, 1995, p. 18; interview with and administration official. 38. Author interview with Policy Planning Staff Deputy Director. 39. Oct. 24, 1995, post-summit briefing in New York at the Warwick Hotel by State Department and NSC officials; briefing by Assistant Secretary of State Winston Lord at the Royal Hotel Osaka, Japan, Nov. 16, 1995. 40. Xinhua, Oct. 1, 1995, FBIS-China, Oct. 2, 1995, p. 11; Xinhua, Oct. 26, 1995, in FBIS- China, Oct. 27, 1995, pp. 2–3; and Nov. 16, 1995, press availability of Christopher and Qian at the New Otani Hotel, Tokyo. 41. Xinhua, Oct. 18, 1995, in FBIS-China, Oct. 18, 1995, pp. 25–26; and Zhongguo xin- 140 Robert S. Ross week campaign period before the Taiwan’s December 2 elections for members of the legislative assembly, China began another round of military activities aimed at maintaining the “unity” of China and resisting the “splittist” activities of the Taiwan independence forces. The exercise included a simulation of an amphibious PLA landing on a Tai- wan-held island and attacks on a mockup of Taiwan’s largest airport.42 The United States responded with conspicuous silence from the White House, the State Department, and the Defense Department. In his November visit to Beijing, Assistant Secretary of Defense Joseph Nye merely privately reiterated that China’s exercises were counter- productive. He focused his discussions on developments in the U.S.- Japan alliance, which he stressed were not aimed at China, and on renewal of the U.S.-China military dialogue.43 American officials understood that the White House had contributed to U.S.-China conflict by failing to keep its pledges regarding Taiwan, and they did not want to overreact to China’s exercises. They also believed that Beijing needed to vent its anger. And they wanted Taiwan to understand that “actions have consequences,” that provoking China is not cost-free.44 But China’s exercises aimed to coerce Washington to curtail its activities that encouraged Taiwan independence. Beijing thus concluded that the next round of PLA activities should be even more provocative.45 Moreover, these exercises would precede the March 23, 1996, direct Taiwan election for president. As the first democratic election of a Taiwan leader, it would add domestic and international legitimacy for sovereignty for Taiwan. Furthermore, campaign politics might encourage Lee to use the independence issue to raise support for his candi- dacy. Simultaneously, Taiwan stressed U.S. support for Taiwan. In late January it revealed that the Nimitz aircraft carrier had transited the Tai-

————— wenshe, Oct. 19, 1995, in FBIS-China, Oct. 20, 1995, p. 2. 42. For a discussion of the exercises, see Tang Zhengshui, Zhong-Mei qiju zhong de Tai- wan wenti, 1969.1–1999.12 (The Taiwan issue in the U.S.-China chess game, January 1969– December 1999) (Shanghai: Shanghai renmin chubanshe, 2000), p. 414; Xinhua, Nov. 25, 1995, in FBIS-China, 95–227; Ping Kuo Jih Pao, Nov. 27, 1995, in FBIS-China, Nov. 27, 1995, pp. 24–25; author interview with NSC Director of Asian Affairs Suettinger. On the Nye visit, see Zhongguo xinwenshe, Nov. 15, 1995, in FBIS-China, Nov. 16, 1995, p. 4–5. 43. Author interview with former Assistant Secretary of Defense for International Se- curity Affairs Joseph Nye; Patrick E. Tyler, “China-U.S. Ties Warm a Bit as China-Taiwan Relations Chill,” NYT, Nov. 18, 1995, p. A3; and “Perry Voices Concern for Taiwan,” NYT, Feb. 7, 1996, A3. Cf. John W. Garver, Face Off: China, the United States and Taiwan’s Democ- ratization (Seattle: University of Washington Press, 1997), pp. 85–86. 44. Author interviews with NSC Director of Asian Affairs Suettinger and former As- sistant Secretary of Defense Nye. 45. Author interviews with Chinese policy analysts. From Denial to Leadership 141

Taiwan Strait in December, expressed appreciation to the U.S. Congress for seeking expedited delivery of Patriot missiles to Taiwan, and announced antisubmarine exercises. It then announced delivery from the United States of a missile frigate, which would contribute to Taiwan’s antisubmarine and air defense, and a substantial increase in its defense budget to deal with the threat from the mainland.46 Washington did appear to support Taiwan’s independence drive. On January 6, the Clinton administration approved a visa for Taiwan Vice President Li Yuan-zu to transit Los Angeles on his way to Guatemala.47 Then on January 31, the White House approved two additional transit visas for Li to travel round-trip between Taiwan and Haiti. Although the administration needed more than a week to make the decision, it insisted that the visa was a “routine matter” that should not affect U.S.- China relations.48 From late January through February, the PLA massed over 100,000 troops in Fujian province.49 China’s deployments caught Washington’s attention. Assistant Secretary of State Lord told the Senate Foreign Rela- tions Committee that the administration had stressed to Beijing its “deep concern” over PLA activities. He warned that the administration was closely watching developments and that if hostilities occurred, the “impact . . . would be extremely serious.” The State Department announced that senior national security advisors had held a series of meetings to assess Beijing’s activities and that these meetings would continue.50 Nonetheless, on March 4, Beijing announced that the PLA would conduct surface-to-surface missile tests just off the coast of Tai- wan’s two largest port cities. Chinese leaders had concluded that if the target zones were not close to Taiwan, the tests would be ineffective in opposing Taiwan “splittism” and U.S. policy toward Taiwan.51 On

————— 46. See the extensive discussion of this period in Taiwan’s U.S. policy, in particular Taiwan’s manipulation of the passage of the Nimitz, in Tang Zhengshui, Zhong-Mei qiju zhong de Taiwan wenti, pp. 417–21. 47. ”U.S. Visa to Taiwan Aide,” NYT, Jan. 7, 1996, p. A9; and Department of State daily press briefing, Jan. 5, 1996; and Xinhua, Jan. 9, 1996, in FBIS-China, Jan. 11, 1996, p. 2. 48. Department of State daily press briefing, Jan. 23, 1996, and Jan. 31; and China Ra- dio International, Feb. 2, 1996, in FBIS-China, Feb. 2, 1996, p. 1. 49. Associated Press, Feb. 6, 1996; Department of State daily press briefing, Feb. 14, 1996; R. Jeffrey Smith, “China Plans Maneuvers off Taiwan,” WP, Feb. 5, 1996, p. A1; and Steven Mufson, “China Masses Troops on Coast near Taiwan,” WP, Feb. 14, 1996, p. A16. 50. Testimony by Assistant Secretary of State Winston Lord before the Subcommittee on East Asia and the Pacific, Senate Foreign Relations Committee, Feb. 7, 1996; and De- partment of State daily press briefings, Feb. 13 and Feb. 14, 1996. 51. Xinhua, Mar. 4, 1995, in FBIS-China, Mar. 5, 1996, p. 68; Central News Agency, Mar. 7, 1995, FBIS-China, Mar. 7, 1996, p. 81. Author interviews with Chinese policy ana- 142 Robert S. Ross

March 7, despite vigorous and repeated discussions between U.S. and Chinese diplomats, the PLA fired three M-9 missiles into the target zones.52 Although the Clinton administration understood that the PLA was not preparing to attack Taiwan, it feared that if the United States did not forcefully respond, China would doubt Washington’s commitment to a peaceful resolution of the Taiwan conflict. The Defense Department explained that Washington needed to communicate its determination that China resolve its differences with Taiwan peacefully. It could not allow Chinese leaders to conclude that “the U.S. had lost interest in that area of the world.” As Perry later recalled, the United States had to demonstrate its “military resolve” regarding its Taiwan policy.53 More- over, the United States’ reputation as a dependable ally of East Asian countries was at stake. Christopher explained that “because Asian and Pacific nations looked to the United States to preserve stability in the region, we had to take action to calm the situation.”54 On March 7, Vice Foreign Minister Liu Huaqiu visited Washington to hold prearranged discussions with National Security Adviser An- thony Lake. Earlier that day, China had tested its M-9 missiles. Secre- tary of State Christopher and Secretary of Defense Perry joined Lake for his evening meal with Liu. Perry charged that Chinese missile tests “bracketing Taiwan,” were “reckless” and “aggressive” and could be seen as a threat to American interests. He warned that the United States “had more than enough military capability to protect its vital national security interests in the region and is prepared to demonstrate that.” Lake insisted that the exercises threatened vital U.S. security interests in

————— lysts. 52. Agence France-Press, Mar. 8, 1996, FBIS-China, Mar. 8, 1996, p. 37; Department of State daily press briefing, Mar. 7 and Mar. 8, 1996; and White House press briefing, Mar. 7, 1996. Note that throughout the period, Chinese missile tests did not interfere with shipping in or out of Taiwan. See Central News Agency, Mar. 8, 1996, in FBIS-China, 96–47; and Central News Agency, Mar. 13, 1996, in FBIS-China, 96–50. 53. Department of Defense news briefing, Mar. 14, 1996; Ashton B. Carter and William J. Perry, Preventive Defense: A New Security Strategy for America (Washington, D.C.: Brook- ings, 1999), pp. 92–93. On the administration’s low assessment of the risk of war, see Sec- retary of Defense William Perry’s comments at the National Press Club, Washington, D.C., Feb. 28, 1996; Department of State daily press briefing, Mar. 5, 1996; and Depart- ment of Defense news briefing, Mar. 14, 1996. See also Christopher, In the Stream of His- tory, p. 427; Patrick E. Tyler, “China Signaling U.S. That It Will Not Invade Taiwan,” NYT, Mar. 13, 1996, p. A3; and author interviews with Chinese policy analysts. 54. Christopher, In the Stream of History, p. 427. See also Department of Defense news briefing, Mar. 14, 1996. From Denial to Leadership 143

the western Pacific.55 But on March 9 China announced that it would conduct air and naval exercises with live ammunition in the waters near Taiwan.56 Secretary of Defense Perry proposed that a carrier battle group transit the Taiwan Strait. But after consultations with NSC advisers, who advocated a less provocative display of force, and with General John Shalikashvili, who preferred to keep the carrier further from China’s coastal weaponry, Perry agreed to a more cautious plan.57 The United States deployed two aircraft carrier battle groups to the vicinity of Tai- wan to observe China’s behavior. The Independence moved to the waters east of Taiwan and the Nimitz moved to the Philippine Sea, which would allow it to join the Independence on short notice.58 China then launched its second set of March exercises and launched its fourth M-9 missile test. Then it announced that from March 18 to March 25 the PLA would conduct joint air, ground, and naval exercises near Pingtan island, within ten nautical miles from Taiwan-controlled islands.59

————— 55. See Perry’s comments at the Department of Defense news briefing, Dec. 8, 1996; and Carter and Perry, Preventive Defense, p. 96. 56. Xinhua, Mar. 9, 1996, in FBIS-China, Mar. 9, 1996, p. 54. 57. Author interview with NSC Director of Asian Affairs Suettinger. See also Mann, About Face, pp. 336–37. Cf. Carter and Perry, Preventative Defense, pp. 96–99; and Patrick Tyler, A Great Wall: Six Presidents and China (New York: Public Affairs, 1999), p. 33. 58. American Forces Press Service, Mar. 11, 1996. Also see Department of Defense news briefings, Mar. 12, Mar. 14, and Mar. 16, 1996; Department of State daily press briefing, Mar. 11, 1996; author interviews with NSC Director of Asian Affairs Suettinger and other administration officials. Note that although the Nimitz was ordered to proceed to waters near Taiwan, it was also ordered to sail at a deliberate pace, and it never reached the vicinity Taiwan but was close to the Philippines. Author interview with U.S. official. Note also that Chinese leaders were aware of the deliberate pace of the Nimitz. Author interview with Chinese policy analysts. 59. White House press briefing, Mar. 12, 1996; and interview with NSC Director of Asian Affairs Suettinger. Note that despite lack of tension, the NSC worked with the De- fense Department to prepare a number of scenarios in which U.S. forces would engage the PLA. Regarding the bravado, Secretary of Perry used China’s ongoing exercises to remind Beijing that the United States had the “best damn navy in the world.” See Rupert Cornwell, “Taiwan Fans Flames in the War of Words,” Independent (London), Mar. 20, 1996, p. 9; Department of State press briefing, Mar. 19, 1996. See also Mann, About Face, pp. 337–38. China demonstrated its own bravado after the dispatch of the carriers. See the interviews with PLA generals in Ta Kung Pao, Mar. 13, 1996, in FBIS-China, 96–50. Also note that on Mar. 22 the Defense Department and China reported that each had taken the initiative to delay a visit to the United States by Minister of Defense Chi Haotian. De- partment of Defense news release, ref. no. 149–96; and Xinhua, Mar. 22, 1996, in FBIS- China, Mar. 25, 1996, p. 3. See also Carter and Perry, Preventative Defense, p. 99. 144 Robert S. Ross

American military diplomacy had rescued its credibility to resist PRC use of force against Taiwan and its reputation in East Asia.60 But there was widespread recognition within the administration that the U.S.-China confrontation had risked conflict and that the relationship was “broke” and that it had to be “fixed.” Inattention to China policy had led to serious conflict, and the relationship had to be placed on more cooperative footing. In May 1996 Secretary of State Christopher presented the administration’s first major speech placing the U.S.-China relationship and the Taiwan issue within a larger, comprehensive strategic perspective. Then Washington reversed its position on a U.S.- China summit. In July in Beijing, NSC advisor Lake suggested that the two countries exchange summits. In November Clinton met Jiang in Manila and agreed to exchange state visits in 1997 and 1998.61 In contrast to the 1995 summit negotiations, in 1997 not only did the administration agree to discuss Taiwan, but it also made a concession. During the October summit, Clinton assured Jiang that the United States did not support a two-China policy, Taiwan independence, and Taiwan membership in the United Nations or in other international organizations requiring sovereignty for membership. For the first time, administration officials publicly reported the president’s assurances.62

————— 60. On China’s reaction, see Shi Yinhong, “Kunnan yu xuance: dui Taiwan wenti de sikao” (Difficulty and choice: thoughts on the Taiwan issue), Zhanlüe yu guanli (Strategy and management), no. 5, 1999, p. 4; Shi Yinhong, “Meiguo dui Hua zhengce he Taiwan wenti de weilai” (U.S. policy toward China and the future of the Taiwan issue), Zhanlüe yu guanli, no. 6, 2000; author interviews with Chinese policy analysts. Countries throughout the region adopted a cautious attitude toward the U.S. response, lest they alienate China on a sensitive issue in Chinese foreign policy. Their reaction reflected the common concern of allies of entrapment versus abandonment, and they chose to split the difference. They were concerned that although an enhanced U.S. commitment to the defense of Taiwan might enhance their security vis-à-vis China, it might also drag them into a conflict over Taiwan. See the discussion of entrapment and abandonment in Glenn H. Sny- der, “The Security Dilemma in Alliance Politics, World Politics 36, no. 4 (July 1984): 461– 95. Beneath the caution, there was evidence of general support for the U.S. response. See, e.g., the transcript of the Mar. 12, 1996, Japanese Foreign Ministry press conference in FBIS-East Asia, Mar. 13, 1996, pp. 7–12; Nigel Holloway, “Strait Talking,” FEER, Mar. 21, 1996, p. 16; “Asians Laud Us Privately,” FEER, Apr. 4, 1996, p. 17; and Strategic Survey, 1995/96 (London: Institute for International Strategic Studies, 1996), pp. 178–79. 61. Author interviews with NSC Director of Asian Affairs Suettinger and other administration officials. See Christopher’s speech, “American Interests and the U.S.-China Relationship” presented to the Asia Society, the Council on Foreign Relations, and the National Committee on U.S.-China Relations, May 17, 1996. Zhongguo tongxunshe, July 8, 1996, in FBIS-China, 96–133; and Central People’s Radio, June 8, 1996, in FBIS-China, July 9, 1996, pp. 6. On the Clinton-Jiang meeting in Manila, see Xinhua, Nov. 24, 1996, in FBIS-China, 96–228. 62. Background press briefing by senior administration officials, the White House, From Denial to Leadership 145

Taiwan remained on the agenda of Clinton’s June 1998 visit to Beijing. China wanted Clinton to make public U.S. policy toward Taiwan independence. In return for Chinese concessions, including providing the president with an opportunity to deliver on Chinese television an uned- ited speech and agreeing to a nuclear nontargeting pact, the president met China’s request. For the first time a U.S. president publicly stated that the U.S. did not support Taiwan independence.63 Prior to March 1996 Washington had refused to even consider restraining its Taiwan policy, regardless of Chinese quid pro quos. The new U.S. posture toward China was evident when Lee Teng-hui announced in July 1999 his “special state-to-state” approach to negotiations with the mainland, bringing Taiwan perilously close to the declaration of independence that Beijing had long maintained was a cause of war. The State Department held Lee responsible for the resulting suspension of the mainland-Taiwan dialogue and expected Taiwan to make the necessary clarifications to allow the dialogue to resume. Clin- ton called Jiang Zemin to reassure him that the United States held to its one-China policy. The president also announced postponement of an arms sales mission to Taiwan. When Clinton met Jiang in New Zealand in September, he reasserted U.S. support for a one-China policy and explained that Lee Teng-hui’s statement “had made things more difficult for both China and the United States.”64 The United States had effectively aligned itself with China against Lee’s statement and warned Taiwan that if it made moves toward independence it could not count on U.S. support. Recognition of China’s strategic importance was also reflected in the administration’s changing policy toward Chinese proliferation activities. In the past Washington had excluded China from international in-

————— Oct. 29, 1997; Department of State daily press briefing, Oct. 31, 1997; and interview with an administration official. Note that the president’s Aug. 1995 letter to Jiang Ze- min stated that Washington “opposed” independence for Taiwan. By the 1997 summit the administration had shifted to “does not support” independence for Taiwan. See Mann, About Face, pp. 330, 355–58. The president’s commitment had now become established policy. See Albright’s press conference at the Beijing International Club Hotel, Apr. 30, 1998. 63. See the president’s June 30, 1998, remarks at the Shanghai Library, the White House, Office of the Press Secretary (Shanghai, People’s Republic of China); and interview with NSC Director of Asian Affairs Suettinger. 64. Department of State daily press briefing, July 13 and July 14, 1999; testimony of Deputy Secretary of State Susan Shirk before the House International Relations Commit- tee, Asia and Pacific Subcommittee, Sept. 15, 1999; Philip Shenon, “U.S. Cancels Military Aides’ Visit to Taiwan,” NYT, July 22, 1999, p. A8; and David E. Sanger, “Clinton and Jiang Heal Rift and Set New Trade Course,” NYT, Sept. 12, 1999, p. A1. 146 Robert S. Ross stitutions governing weapons proliferation, yet it demanded that China abide by these institutions’ export restrictions. But beginning in 1998 the administration shifted course. It now sought Chinese membership in these institutions, in recognition that both U.S. interests and global stability required acceptance of Chinese participation in the institutions that establish the global rules. The administration first adjusted policy regarding nuclear proliferation. Prior to the October 1997 U.S.-China summit in Washington, the Clinton administration encouraged Beijing to join the Zangger Commit- tee, which is the implementation arm of the export control provisions of the Nonproliferation Treaty. Beijing soon agreed. Following this summit, Washington proposed that Beijing join the Nuclear Suppliers Group (NSG), which entails more restrictive “full scope safeguards” on exports of fissionable materials and related technologies associated with the nuclear nonproliferation.65 The administration then reversed policy regarding missile proliferation. In 1993 the Clinton administration had imposed sanctions on China for transferring M-11 missiles to Pakistan, despite Chinese exclu- sion from the MTCR. But at the 1998 U.S.-China summit in Beijing, Clinton suggested to Chinese leaders that China join the MTCR, in recognition that Chinese cooperation with U.S. interests require more than simply unilateral demands.66 When the issue of Chinese missiles transfers to Pakistan re-emerged in1999, the administration once again considered imposing sanctions in accordance with U.S. legislation. None- theless, although, as in 1993, China denied that it had transferred any proscribed weapons, the president waived the sanctions requirement, content to reached agreement with Beijing covering future Chinese activities. The administration did, however, impose targeted sanctions on Pakistan entities for their cooperation with China.67 The Clinton administration had come a long way since its May 1995 decision to allow Lee Teng-hui to visit Cornell University. But the ————— 65. On the Zangger Committee and the Nuclear Suppliers Group and on U.S. decisions with China on PRC membership in these institutions, see the transcript of the Oct. 29, 1997, White House background briefing on nuclear cooperation with China. Also see the U.S. Arms Control and Disarmament Agency’s fact sheet on multilateral nuclear export control regimes. 66. Office of the Press Secretary, the White House, Beijing, “Press Availability by President Clinton and President Jiang, June 27, 1998. For a discussion of Chinese membership in MTCR, see Lampton, Same Bed, Different Dreams, pp. 173–76. 67. See the July 8, 1999, press conference by Senior Advisor for Arms Control and Se- curity John D. Holum, U.S. Embassy, Beijing; U.S. Department of State press briefing, Aug. 9, 2000; U.S. Department of State press briefing, Nov. 21, 2000. Also see Nayan Chanda, “Final Deadline,” FEER, May 18, 2000. From Denial to Leadership 147

United States paid a price for the president’s inattention to Chinese power, policy drift, yielding of policy initiative to Congress, and ultimately failed policy and policy reversal. Not only had the United States been compelled to engage in a politically costly display of force with China, which continues to affect U.S.-China relations, but it made concessions on Taiwan that may well have been unnecessary had it better managed policymaking vis-à-vis Congress, better defended the status quo in U.S.-Taiwan relations, or better managed its diplomacy with Bei- jing following Lee’s visit to Cornell University. Moreover, the president had not even avoided domestic political costs. His statement in Shang- hai of the “three-nos” created domestic controversy and undermined support for his meetings in China.

Learning to Take the Initiative: China and the WTO In this third phase of administration policy, the Clinton administration continued to cooperate with China on Taiwan and on proliferation, but it remained reluctant to use its authority to promote greater economic cooperation with China. Only after a third major policy setback did the White House finally step forward to adopt a leadership role in domestic politics and take the initiative to promote U.S.-China relations by securing legislation to end the application of the 1974 Jackson-Vanik Amendment to trade with China, thus ending the annual congressional review of China’s human rights violations as a precondition to continued MFN status for China and facilitating a U.S.-Chinese agreement regarding Chinese membership in the WTO. The United States since 1988 had been negotiating with China over Chinese membership in the General Agreement on Tariffs and Trade (GATT) and then in the WTO. A tentative agreement had been reached in spring 1989, but in the aftermath of Beijing’s June 1989 repression of the Chinese student movement the Bush administration deferred final- izing the agreement. Negotiating Chinese admission to the GATT/ WTO thus became the responsibility of the Clinton administration. As China’s international importance grew with continued economic development, negotiating China’s entry into the international trade order became more difficult. Whereas in the late 1980s China’s level of development enabled the United States to encourage Chinese admission on fairly generous terms, by the mid-1990s, as a large economy, China had to be treated as a major trading power, regardless of its level of economic development. Without adequate reciprocity, China would be able to significantly penetrate the economies of the advanced indus- 148 Robert S. Ross trial economies, affecting their level of unemployment, without offering access to its own market. Not only would this be unfair, but nonrecip- rocity would undermine support for free trade with China in the domestic politics of the advanced industrial economies, creating pressure for protectionism. Thus, Chinese entry to the international economic order required significant Chinese concessions, regardless of China’s level of development or the risk to China’s inefficient and/or nascent domestic industries. The United States insisted that China would not receive the same treatment received by other developing nations seeking admission to the GATT/WTO. American interests, rather than principle, would guide the negotiations. But Chinese interests in the negotiations were as important or even more important than U.S. interests. Rapid Chinese compliance with GATT/WTO rules on trade and foreign investment might not only dis- place Chinese industries and financial institutions, thus undermining China’s development prospects, but might also lead to widespread unemployment and political instability. China’s economy was at the stage of development in which other economies, including South Korea and Taiwan, had used protectionist policies to shield their nascent industries and weak political systems. Ultimately, Chinese admission to the GATT/WTO required greater Chinese risk than American risk, for China had to make the adjustment to enter the existing international trade order. When the Clinton administration reopened negotiations with China regarding PRC entry into the GATT in 1993, China insisted that it receive developing-country status and thus be exempt from the GATT’s strict free-trade requirements.68 In 1994 the GATT membership completed negotiations on the formation of the WTO. Those countries that were members of the GATT at the end of 1994 would be considered founding members of the WTO. As the end of the year approached, China sought immediate admission into the GATT with developing status and high-level protectionism, refusing to make any concessions to U.S. interests in gaining access to the Chinese market. Nor was the United States ready to negotiate seriously. In 1993 and 1994, the Clinton administration remained focused on China’s violations of human rights; on its violation of rules governing textiles imports to the United States, exports of goods made by prison labor, and intellectual property

————— 68. Assistant U.S. Trade Representative W. Douglas Newkirk opened negotiations in Beijing in Mar. 1993. Xinhua, Mar. 1, 1993, in FBIS-China, Mar. 1, 1993, p. 8. U.S. Trade Representative Mickey Kantor met with Chinese negotiators in Beijing in late July. See Xinhua, July 29, 1993, FBIS-China, July 30, 1993, p. 1. From Denial to Leadership 149 rights; and on the negotiations for greater U.S. access to the Chinese market.69 When China did not enter the GATT by the end of 1994, the negotiations broke off, and there was little enthusiasm on either side for an early resumption. Negotiations for a U.S.-China WTO accession agreement lurched along with little progress until early 1999. By that time progress in U.S.- China relations following the 1998 Beijing summit and sustained Chi- nese economic growth had persuaded Chinese leaders to consider making significant concessions to enter the WTO. And President Clinton seemed intent on taking the lead on the issue. In November 1998 he wrote to Jiang Zemin suggesting that the WTO negotiations could be concluded by early 1999. He then wrote Jiang in February 1999 to suggest that an agreement be concluded during Prime Minister’s Zhu Rongji’s April visit to Washington. China seemed ready to deal. In advance of Zhu’s visit to Washington, the Chinese Communist Party Pol- itburo met and authorized Zhu to reach agreement with Clinton on the basis of a generous Chinese negotiating position.70 By the time Zhu Rongji arrived in Washington, China’s extensive concessions had drawn praise from U.S. officials. After the negotiations in Washington, the president’s senior trade, security, and China advisors agreed that China had offered the United States a very favorable agreement and that Washington should accept. And the president seemed to agree. In a major speech setting the stage for Zhu’s visit and the announcement of an agreement, Clinton said that it would be an “inexplicable mistake for the United States to say no” if China were willing to abide by global trade rules. American business leaders and lobbyists were told to prepare for the announcement of the agreement.71 But at the last minute, Clinton backed away from the agreement, deterred by his fear of the political costs associated with a trade agreement with China and the political battle necessary to win congressional agreement on permanent MFN status for China. In his meeting with Zhu on April 7, Clinton explained that he feared that ————— 69. On the various trade issues, see Xinhua, Sept. 4, 1993, in FBIS-China, Sept. 7, 1993, p. 15; China Daily, Oct. 31, 1993, FBIS-China, Nov. 1, 1993, pp. 7–8; Xinhua, Dec. 2, 1993, in FBIS-China, Dec. 2, 1993, p. 1. 70. See Joseph Fewsmith, China and the WTO: The Politics Behind the Agreement, NBR Report (Nov. 1999). For a discussion of U.S. and Chinese economic and political circumstances on the eve of Zhu’s visit, see Nicholas R. Lardy, China’s WTO Membership, Policy Brief, no. 47 (Washington, D.C.: Brookings Institution, Apr. 1999). 71. William Clinton, “U.S. Will ‘Seek Truth from Facts’ on China,” Mayflower Hotel, Washington, D.C., office of the press secretary, The White House, Apr. 7, 1999. See also WP, Mar. 5 and Nov. 10, 1999; Wall Street Journal, Mar. 25 and Apr. 9, 1999. The list of Chinese concessions was published by the Office of the U.S. Trade Representative. See the Apr. 8, 1999, “Backgrounder.” 150 Robert S. Ross with Zhu on April 7, Clinton explained that he feared that domestic opposition to the agreement would be insurmountable and that he preferred to defer announcement of an agreement. Zhu was dismayed with Clinton’s last-minute reversal, but he had little choice but to agree.72 As had been the case since 1993, the president did not adequately appreciate China’s global economic and political importance and the corresponding necessity to use presidential leadership in support of China policy. But this time, the president encountered significant domestic costs for allegedly lacking the political courage to lead on China policy. He encountered widespread bipartisan political criticism as well as criticism from business leaders for being unable to accept yes for an answer. Republican Senator Frank Murkowski suggested that “a good economic deal may indeed have been sacrificed on the altar of political—either ineptitude, incompetence or expediency.” Democratic Sena- tor Max Baucus argued that the United States “cannot let perfection be the enemy of the good.”73 The administration had misjudged the domestic dynamics of the summit and U.S.-China trade, and now for political reasons Clinton quickly moved to suggest that negotiations were on track and that he was committed to reaching a U.S.-China WTO agreement as soon as possible. On April 13, he telephoned Premier Zhu, who had left Wash- ington for New York, to try to salvage both the agreement and his political standing. The two leaders then issued their third joint statement, agreeing that for the two sides should “move intensively on negotiations toward resolution of the remaining issues in their talks” and that the “negotiations continue by the end of the month in Beijing.”74 But before the negotiations could fully resume, U.S.-China relations became embroiled in a series of disputes, including the April U.S. intervention in Yugoslavia without U.N. agreement, the May 7 U.S. bombing of the Chinese Embassy in Belgrade, the U.S. domestic controversy over alleged Chinese spying and illegal contributions to President Clin- ton’s presidential campaign, and Lee Teng-hui’s announcement of Tai- wan’s “special state-to-state” policy toward the mainland (discussed above). Clinton was not prepared to resume negotiations as long as the administration faced charges that it had taken Chinese campaign con-

————— 72. WP, Nov. 10, 1999; Wall Street Journal, Apr. 9, 1999; Fewsmith, China and the WTO. See also the joint press conference the next day. Joint Press Conference of the President and Premier Zhu Rongji of the People’s Republic of China, The White House, Apr. 8, 1999. 73. WP, Apr. 14, 1999; NYT, Apr. 15, 1999. 74. Joint U.S.-China Statement, The White House, Office of the Press Secretary, Apr. 13, 1999. NYT, Apr. 15, 1999. From Denial to Leadership 151 tributions and had failed to adequately investigate charges of Chinese spying. President Jiang was unwilling to negotiate with the United States until he could subdue China’s domestic reaction to the embassy bombing with an adequate U.S. explanation for the bombing and with a U.S. commitment to provide compensation to the families of the Chi- nese who died in the bombing. After the debacle of Zhu Rongji’s visit to Washington, the onus was on the president to persuade Jiang and Zhu that he was prepared to defend a trade agreement. He started this process on August 27 when he wrote to Jiang to seek a resumption of the negotiations. He reinforced his message in early September in New Zealand when he met with Jiang and urged him to resume the negotiations and expressed confidence that the two sides could resolve the remaining issues. After a number of rounds of exploratory negotiations in Beijing in August and September, on October 16 Clinton telephoned Jiang to reinforce his interest in reaching an agreement.75 But not until November did serious negotiations to resolve the im- passe begin. On November 6, Clinton again telephoned Jiang, under- scoring his interest in serious negotiations and his willingness to close a deal. The administration also indicated that it hoped to be able to announce an agreement before Clinton and Jiang met at the November 30 WTO meeting in Seattle.76 On November 15, after prolonged and extended negotiations in Beijing and repeated interventions by Zhu Rongji, the two sides reached a final agreement on China’s accession to the WTO. China agreed to significant liberalization of its foreign economic policies, including additional concessions since Zhu’s April visit to Washington. In particular, Beijing had made additional compromises regarding liberalization of its financial and agricultural sectors and allowing U.S. safeguards against import surges.77 The only quid-pro-quo the United States could offer in exchange for Chinese concessions was permanent MFN status. For the first time in his presidency, Clinton decided to draw on the support of U.S. business community to challenged directly the domestic opposition to U.S.-

————— 75. Press Briefing by National Security Advisor Sandy Berger, National Economic Ad- visor Gene Sperling, and Press Secretary Joe Lockhart, Auckland, New Zealand, Sept. 11, 1999; NYT, Nov. 2, 1999. 76. NYT, Oct. 26, 1999; NYT, Nov. 2, 1999; WP, Nov. 3, 1999; WP, Nov. 13, 1999; WP, Nov. 16, 1999. 77. On the conclusion of the agreement and a discussion of its main points, see “USTR Barshefsky’s Press Remarks Following Negotiations with China on the WTO,” American Embassy, Beijing, China, Nov. 15, 1999. See also the discussion of the agreement in China Business Review, Jan.–Feb. 2000. 152 Robert S. Ross

China cooperation, including organized labor, to win support for his China policy.78 The first round of politics occurred in the spring in preparation for the vote on permanent MFN status for China in the House of Representatives. The president personally called members of Congress to seek their votes and met with them in the Oval Office. He met with state governors in the Oval Office, arguing that the WTO agreement would be good for their local economies. He gave press conferences, wrote articles, and gave television interviews. He and his senior trade and security advisors traveled the country giving speeches explaining the importance of Chinese membership in the WTO and of granting China permanent MFN status. He sought the public support of former presidents and secretaries of state from both parties. And the administration cooperated with business groups to coordinate lobbying of potential congressional supporters, thus overcoming the influence of single-issue pressure groups and labor unions. In the end, the president won easily. On May 24, the House of Representatives voted 237 to 197 in support of permanent MFN status for China.79 The costs to the president were minimal. Indeed, he benefited from having achieved a significant political victory over his opponents. President Jiang telephoned president Clinton to thank him for his “leadership” on the House vote.80 The president repeated his political efforts in June in preparation for the Senate vote. The administration closely worked with a bipartisan group of senators, including Republican Senate Majority Leader Trent Lott, to ensure that the Senate passed legislation identical to the legislation passed by the House of Representatives, thus avoiding a House- Senate conference, revised legislation, and a second vote in both the House and the Senate. On September 19, the House version of the legislation granting China permanent MFN status passed in the Senate by an overwhelming 83–15 vote, confirming President Clinton’s leadership capabilities in defending his China policy.81 In his last eighteen months in office, President Clinton had moved from advocating an agreement calling for Chinese membership in the WTO, to resisting such an agreement, and then back to advocating it and fighting for it. This evolution reflected China’s ability to impose costs on U.S. economic interests and on the president’s domestic stand-

————— 78. See the discussion of labor opposition in NYT, May 14, 2000. 79. NYT, Mar. 10, 2000; WP, Apr. 4, 2000; NYT, Apr. 4, 2000; WP, May 3, 2000; NYT, May 10, 2000;, WP, May 24, 2000; WP, May 25, 2000. 80. WP, May 29, 2000. 81. NYT, June 21, 2000; NYT, July 12, 2000; WP, Sept. 20, 2000. From Denial to Leadership 153 ing, which compelled the president to ultimately ultimate recognize the importance of accommodating legitimate Chinese interests in order to achieve U.S. interests. When President Clinton ultimately decided to lead on this issue, he achieved not only a domestic political victory but also a victory for U.S. interests in U.S.-China relations and in a stable international economic order.

Conclusion The Clinton administration’s experience in dealing with China was not unique. Each time since U.S.-China rapprochement in 1972 that the control of the White House switched political parties, the new administration believed that it could adopt a stronger China policy that downgraded China’s strategic importance and, thus, placed less emphasis on U.S. accommodation of Chinese interests. This was the experience of the Carter and Reagan administrations. Within the first few months of his administration, President Jimmy Carter told National Security Advisor Zbigniew Brzezinski that his administration should be careful not to “ass-kiss” Chinese leaders “the way Nixon and Kissinger did” and that domestic political considerations should play a large role in his policy toward China. The result was an initial U.S. retreat from the concessions that the Nixon and Ford administrations had offered Beijing regarding U.S.-Taiwan relations in order to reach agreement on normalization of relations. But within eighteen months, after Deng Xiaoping categorically rejected the new administration’s less accommodating terms and the normalization negotiations stalemated, the Carter administration returned to the normalization policy of its predecessors.82 During his 1980 presidential campaign, Republican candidate Ronald Reagan insisted that he “would not pretend, as Carter does,” that the relationship “we now have with Taiwan is unofficial.” After entering the White House, Reagan also insisted that his administration would sell Taiwan whatever arms it needed for its defense, in accordance with the terms of the 1979 Taiwan Relations Act, including advanced military aircraft. But before long the Reagan administration had adopted the Carter administration’s policy regarding the diplomatic status of Taiwan, denying Taiwan government representatives in the United States many of the privileges enjoyed by official foreign diplomats. Moreover, after nearly eighteen months of sometimes very diffi-

————— 82. Zbigniew Brzezinski, Power and Principle: Memoirs of the National Security Advisor (New York: Farrar Straus Giroux, 1983), p. 200. 154 Robert S. Ross cult negotiations, the Reagan administration also negotiated with China restrictions on U.S. arms sales to Taiwan.83 As with President Clinton, who had promised in the 1992 campaign that unlike Bush he would use trade as leverage to change China’s human rights policies, Presidents Carter and Reagan were compelled to carry out a significant policy reversal as they came to terms with the reality of Chinese power and the necessity for negotiation and mutual compromise. But what distinguished the Clinton administration from its predecessors is not that its initial China policy failed and that it was compelled to reverse course and adopt a more cooperative posture, but that it took so long and that it entailed a costly confrontation in the Taiwan Strait. Whereas it took the Carter and Reagan administrations approximately eighteen months to return to the center, not until March 1996, after more than three years into his presidency, did President Clinton reconcile himself to negotiating cooperation with China over the Taiwan issue. And not until after April 1999 did he grasp the importance of exercising presidential leadership to ensure the success of his China policy. And whereas prior administrations managed to negotiate their differences with China over Taiwan and return to the center without excessive instability, the Clinton administration encountered a confrontation with the Chinese military in the Taiwan Strait before it finally adopted its predecessor’s Taiwan policy. The Clinton administration’s especially difficult and protracted policy adjustment reflects America’s unique post–Cold War strategic environment. America’s overwhelming strategic superiority enables Wash- ington to act on impulse, to make mistakes, and to allow domestic political concerns to dominate policymaking. Because the United States is so dominant, the imperative to collaborate is reduced, and the temp- tation to act unilaterally, including allowing domestic politics to determine foreign policy, can prove irresistible. Yet the experience of the Clinton administration reveals that overwhelming U.S. global superiority can produce overconfidence that the United States can simply expect cooperation from other countries. The history of the Clinton administration’s China policy reveals that China possesses the ability to impose costs on the United States, requiring the United States to take into account Chinese interests. In 2001 a new political party took control of the White House. Ex- pressing dissatisfaction with the repeated policy changes of the Clinton administration, the Bush administration seemed intent on establishing a consistent China policy based on Chinese respect for U.S. power. Some

————— 83. NYT, Aug. 26, 1980. From Denial to Leadership 155 officials in the new administration seemed to prefer engaging in a test of wills rather than managing conflicts of interests. Yet, thirty years after U.S.-China rapprochement and frequent aborted attempts by new administrations to correct the “mistakes” of their predecessors, it should be clear that the ultimate policy of the Clinton administration reflected U.S. national interest in negotiating cooperation with Chinese power. Thus, President George W. Bush had to relearn the lessons of his predecessors. Once again, a new administration endured a protracted period of U.S.-China conflict before its China policy returned to the center. Narrowing Differences but Diverging Priorities: Sino-American Relations, 1992–2000 Jia Qingguo

In examining the development of the Sino-American relationship since the early 1990s, one is confronted with a jarring irony: after twenty years of opening and reform, China has become more Ameri- can than at any time in history; yet Americans’ view of China has become more critical. Americans who visited China twenty years ago find China a very different place today. City streets are now dotted with McDonalds, Pizza Huts, and Kentucky Fried Chickens. Shops sell Colgate tooth- paste, Estée Lauder perfumes, Nike shoes, and Microsoft Window software. Cinemas are showing Titanic, Hannibal, Pearl Harbor, and other Hollywood hits. Chinese youth are fascinated with American stars like Michael Jackson, Madonna, and Michael Jordan. Colorful advertisements are omnipresent, courting the best and the worst de- sires of Chinese consumers. Cab drivers are unrestrained in venting their frustrations with various social evils and with the police. Mil-

————— Jia Qingguo is Professor Dean of International Relations at Peking University.

© The President and Fellows of Harvard College 2004. This essay may not be repro- duced without permission from the Harvard University Asia Center. Sino-American Relations, 1992–2000 157 lions of Chinese peasants regularly participate in competitive elections to choose their village heads. On top of all this, the Chinese government openly advocates human rights as universally applica- ble values and has engaged in dialogue with foreign governments and NGOs on the topic, although it insists on equality and mutual respect as a basis for the dialogue. As if none of these changes matters, many Americans have found more reasons to criticize China.1 Some say China is “against” free trade because it maintains “high” trade barriers and “low” business access for foreign companies. China “sells” dangerous weapons and technologies to the “rogue” states. China “conducts espionage” against the United States. China tries to influence American politics by “making illicit campaign contributions.” The Chinese human rights situation is “deteriorating.” China takes an “irresponsible” approach to international problems such as the Kosovo crisis. To some, China is more dangerous than the former Soviet Union because, unlike the former Soviet Union, China has a viable economy to sustain its military capabilities. In the eyes of some extreme anti- China American rightists, China and the United States are heading toward a conflict and Americans should prepare for it.2 Accommoda- tion, they warn, is tantamount to despicable appeasement. Therefore, it is necessary to oppose China’s ambitions. Many of the contested China’s bid to hold the Olympics. If the world allows China to host the Olympics, these people warned, it would legitimize all the wrongs associated with the Chinese government, and, sooner or later, Americans would find that freedom and democracy had been seriously damaged.3 How can one explain this phenomenon? What has gone wrong in this relationship? A close analysis of the development of Sino- American relations since the end of the Cold War suggests an answer: China and the United States may have fewer and fewer differences as a result of the drastic changes in China, but their priorities are diverging more and more. In its search for modernization, China must undergo three fundamental transitions: modernization, a systemic transition from a central planned economy to a market one,

————— 1. Program on International Policy Attitudes, “General Attitudes Toward China,” http://www.americans-world.org/digest/regional_issues/china/china1.cfm. 2. Lichade Boensitan and Luosi Mangluo, Jijiang daolai de Zhong-Mei chongtu, trans. of Richard Bernstein and Ross Munro, The Coming Conflict with China (Beijing: Xinhua Publishing House, 1997). 3. The U.S. House of Representatives passed a resolution opposing China’s bid to hold the Olympics in 2008. 158 Jia Qingguo and a leadership transition from a generation of charismatic leaders to one of techno-bureaucrats. Despite much progress in China, these transitions have generated increasing social tension and placed increasing pressures on the country’s relatively weak political institutions. Confronted with these challenges, the Chinese government has concluded that political stability is the precondition for China’s continued development. Accordingly, it has made political stability its top priority and will silence political dissent if it threatens political stability. Meanwhile, in its efforts to maintain security and continued U.S. access to Asia since the end of the Cold War, Washington has declared that preventing the rise of a hegemonic state hostile to the United States in Asia is a critical national interest. As China’s economy continues to grow rapidly and its international influence ex- pands, many in Washington feel increasing uncomfortable. To them, a powerful but ideologically different China presents threatens U.S. national interests in Asia. Although they may doubt China’s ability to overcome monumental developmental difficulties and remain communist, they fear that China may succeed. Accordingly, they believe it is of utmost importance for the United States to prevent this from happening. They may be able to tolerate China’s development; but they feel that the United States must ensure that China changes in such a way that it does not pose a threat. This means that the United States must persuade China to abandon its ideology and its political system. Because of such views, the U.S. Government at- taches increasing importance to changing China through both car- rots and sticks. Since the mid-1990s, this conflict in priorities has become an increasingly important factor in shaping Sino-American relations. As the United States steps up its efforts to pressure China to observe human rights and introduce democracy, China increasingly feels threatened and considers it necessary to fight back. As China resists U.S. pressures, the United States finds more reason to worry that its worst nightmares might become true and it therefore increases pressures on China. This situation has made the relationship increasingly difficult for the two countries to manage and led to the irony discussed at the beginning of this chapter.

The Drift Toward Confrontation In retrospect, the development of Sino-American relations since 1992 can be divided roughly into three periods: (1) a drift toward confron-

Sino-American Relations, 1992–2000 159 tation; (2) an attempt to build a constructive strategic partnership; and (3) a search for the ground rules of a new game. The election of Bill Clinton as U.S. president in 1992 generated fresh uncertainties in Sino-American relations. During the presidential campaign, Clinton went out of his way to condemn President George Bush’s China policy. Among other things, he claimed that Bush had coddled the “dictators” in Beijing. He promised that, if elected, he would get tough with China.4 After his election, many people were interested in seeing what forms getting tough with China would take. The Clinton administration found plenty of issues on which it could confront China. As Winston Lord, assistant secretary of state for East Asia, told American lawmakers, these issues included Bei- jing’s human rights behavior, arms sales to regions where the United States believed they would heighten instability, and a growing trade imbalance in China’s favor.5 Times had changed, the Clinton administration argued. The old days when the United States needed China for strategic cooperation against Soviet expansionism were over. Fol- lowing the collapse of the Soviet Union, the United States had become the only superpower in the world and, more than ever before, believed that it should push for democratization abroad. Conse- quently, the United States could take advantage of this situation to change China in a way consistent with American values and way of life (and indeed should do so).6 Soon after Clinton took office, he advocated steps to make China change its human rights practices. On February 28, 1993, a White House spokesman said that the president believed that the United States could attach conditions to the renewal of China’s most- favored nation status (MFN—later renamed “normal trade relations,” or NTR), such as an improvement in human rights and the practice of democracy.7 On May 3, in a conversation with Chris Pat-

————— 4. Jia Qingguo, “Shilun Kelindun zhizheng yilai de Zhong-Mei guanxi” (On Sino- American relations since Clinton took office), in Liang Shoude et al. eds., Mianxiang 21 shiji de Zhongguo guoji zhanlüe (China’s international strategy for facing the 21st century) (Beijing: Zhongguo shehui kexue Publishing House, 1998), p. 42. 5. Liu Liandi, ed., Zhong-Mei guanxi zhongyao wenxian ziliao xuanbian (Selected important documents on Sino-American relations) (Beijing: Shishi Publishing House, 1996), p. 349. 6. Jia Qingguo, Jishou de hezuo: Zhong-Mei guanxi de xianzhuang yu qianzhan (Diffi- cult cooperation: current status and future prospects of Sino-American relations) (Bei- jing: Wenhua Yishu Publishing House, 1998), p. 94. 7. Ibid., p. 95. 160 Jia Qingguo tern, the British governor of Hong Kong at the time, Clinton said that China’s achievements in reforming its economy had to be accompanied by responsible behavior, such as respect for human rights and progress in democratization.8 On May 28, the White House issued an executive order on the extension of China’s MFN status. Although agreeing to renew China’s MFN status for the coming year, it set seven conditions for the renewal of the MFN status the following year.9 In explaining its position on the MFN issue, the administration made no secret of its intentions. On June 8, Winston Lord told a group of American congressmen that Clinton wanted to use access to American market as a stimulus to improve human rights in China. He also said that China had no alternative but to comply with the conditions listed in the executive order. If it failed to do so, the United States would not hesitate to suspend China’s MFN status.10 That action would severely damage the Chinese economy and the political control of the Chinese government. In response to pressures from the Clinton administration, the Chinese government argued that it was committed to the improvement of human rights and that it had made much progress. How- ever, for historical and other reasons, China confronted a different set of problems in the area of human rights from those faced by other countries. Dealing with these problems required an approach adapted to Chinese circumstances. China was willing to exchange views with foreign governments and NGOs on how to improve human rights. Such exchanges, however, should be conducted on the basis of equality and mutual respect. No government had the right to impose its own values and priorities on China. In a talk with the edi- tor in chief of the US News & Daily Report on February 23, 1993, President Jiang Zemin said that the Chinese government was more concerned about its domestic human rights situation than any other government in the world. China had 1.1 billion people, and improving the quality of their life was an extremely difficult task. The Chi- nese government had been trying hard to do so ever since the founding of the People’s Republic of China in 1949. The Chinese constitution provides fundamental protections of various rights. The Chinese government had also signed a series of international treaties to protect human rights. Beijing believed that a mutual understand-

————— 8. Liu Liandi, Zhong-Mei guanxi zhongyao wenxian ziliao xuanbian, p. 351. 9. Jia Qingguo, Jishou de hezuo: Zhong-Mei guanxi de xianzhuang yu qianzhan, p. 95. 10. Liu Liandi, Zhong-Mei guanxi zhongyao wenxian ziliao xuanbian, p. 353.

Sino-American Relations, 1992–2000 161 ing on human rights could arise from a dialogue of equals. This would be helpful for mutual understanding. Even if countries could not solve all the problems between them, they should seek common grounds and learn to live with their differences. Concerning the difference between China and the United States on the question of human rights, Jiang pointed out that China had advocated international dialogue but opposed foreign coercion. China opposed international interference in a country’s internal affairs whatever the pretext, including human rights. External pressures on China were not only objectionable but would be ineffective.11 In a May 29, 1993, statement on Clinton’s decision to attach conditions to the renewal of China’s MFN status for the following year, the Chinese government protested the decision on the grounds that it violated the three communiqués and trade agreements between the two countries and that it constituted serious interference in China’s internal affairs. The Chinese government pointed out that politicization of the trade issue, especially the attachment of conditions to the renewal of China’s MFN status, was not acceptable. Such a practice, it claimed, could only damage economic and trade cooperation between the two countries. Ultimately it would also hurt important U.S. interests. It urged the Clinton administration to revoke its decision in the best interests of the two countries.12 Not only did both countries stick to their respective positions on human rights, but the Clinton administration endeavored to make China conform to arms sale practices consistent with its perception of U.S. national interests. For some time, the U.S. government had been worried that China would sell Silkworm missiles to Iran and medium-ranged missiles to Saudi Arabia. It also suspected that China had been helping Pakistan and Iran develop nuclear weapons or at least had sold them technology and equipment that would enable them to develop nuclear weapons and delivery systems. Ac- cordingly, the first Bush administration had told the Chinese government to stop selling weapons to regions that it deemed unstable. Meanwhile, it pressured China to join the Nuclear Non-proliferation Treaty (NPT) and the Missile Technology Control Regime (MTCR). In its efforts to do so, the Bush administration used a carrot-and-stick approach. On the carrot side, it offered to lift some of the military sanctions imposed in the wake of the Tiananmen Incident in 1989. On the stick side, it suspended the review and approval of high-tech

————— 11. Ibid., p. 119. 12. Ibid., p. 121. 162 Jia Qingguo exports to China. In part because China had no interest in the proliferation of nuclear weapons and missile technologies and in part because China did not wish to let the arms sale issue jeopardize Sino- American relations (despite its belief that its arms sale had not breached any international treaties or agreements, China had agreed to some of the U.S. requests), the two countries had more or less worked out a compromise before Clinton assumed office.13 However, the Clinton administration took a heavy-handed approach to this issue. On July 23, 1993, U.S. officials told their Chinese counterparts that they had reliable information that a Chinese cargo ship, the Yinhe, was carrying substances that could be used to make chemical weapons. It demanded that the Chinese government stop the ship and unload the cargo. Following this démarche, the Clinton Administration sent warships and reconnaissance planes to follow the Yinhe and take pictures. The Chinese government quickly inves- tigated the matter and found that the ship carried no such chemical substances. However, when it told the Clinton administration this and demanded an end to U.S. harassment of the Chinese ship, Wash- ington insisted on its version and used its influence to prevent the ship from docking in nearby countries until it had been inspected. As a result, the Chinese ship had to drift at sea for more than twenty days, causing substantial financial loss to the shipping company. Af- ter consultation, the Chinese side agreed to let a third party conduct an onboard investigation. The investigation found none of the substances alleged to be on the ship. However, the Clinton administration remained unconvinced. At its insistence, the scope of the inspec- tion was expanded several times, and in the end it insisted that every container on the ship be inspected.14 Despite the fact that the ship was found to be carrying no materials that could be used in weapons manufacture, the Clinton administration refused to apologize to China or to compensate the company for the costs of the delay. These actions caused significant resentment on the Chinese side. Soon after the Yinhe debacle, the Clinton administration alleged that China had transferred missile technologies to Pakistan in violation of the MTCR regulations, and on August 25 it announced that it would prohibit the export of certain high-tech products to China for

————— 13. Gong Li, Zhong-Mei guanxi redian toushi (Analysis of the hot issues in Sino- American relations) (Heilongjiang: Heilongjiang Jiaoyu Publishing House, 1996), pp. 214–15. 14. Ibid., pp. 217–19.

Sino-American Relations, 1992–2000 163 two years.15 In response to the U.S. announcement, Liu Huaqiu, China’s vice minister of foreign affairs, issued a strong protest to the U.S. government. He pointed out that the United States was selling dangerous weapons to certain sensitive areas of China (meaning Taiwan), endangering China’s national security, while imposing sanctions against China on the basis of false allegations about China’s arms sale practices. Such actions were unreasonable and hegemonic. He said that the Chinese government had agreed to observe the MTCR rules because the United States had previously lifted sanctions on high-tech exports to China. If the Clinton administration was to restore such sanctions, China would have to reconsider its commitments to the MTCR rules and the U.S. side would bear the consequences.16 In addition to the human rights and the arms sale issues, the Clin- ton administration also thought that it could make China accept new arrangements for relations between Washington and Taipei. On Sep- tember 7, 1994, the Washington announced that it would adjust relations with Taipei. Among other actions, (1) U.S. officials would develop higher-level contacts with Taiwan authorities; (2) the U.S. government would approve a request to change the name of the office representing the Taiwan authorities in Washington from the Co- ordination Council for North American Affairs to the Economic and Cultural Representative Office of Taipei; and (3) although the United States would continue not to support Taiwan’s admission to the United Nations, it would support its membership in other international organizations if participation did not require nation-state status.17 Washington’s efforts to upgrade U.S.-Taiwan relations immediately brought an angry response from Beijing. On September 10, Chinese Vice Foreign Minister Liu Huaqiu summoned U.S. Ambas- sador Stapleton Roy and strongly protested the U.S. move. He said that the action had seriously violated the three communiqués between China and the United States and constituted blatant interference in China’s internal affairs. After reiterating the Chinese government’s policy on the Taiwan question, he pointed out that Beijing would not compromise its principles. If the Taiwan authorities took major steps toward independence with foreign assistance, the Chi- nese government would not sit idly by. Should that happen, the

————— 15. Ibid., p. 220. 16. Renmin ribao, Aug. 28, 1993. 17. Gong Li, Zhong-Mei guanxi redian toushi, p.156. 164 Jia Qingguo whole region, including the United States, would be negatively affected. The Taiwan question, Hua pointed out, was an “explosive issue.” He urged the Clinton administration to refrain from roiling Sino-American relations and instead to facilitate cooperation between the two countries.18 On human rights, arms sales, Taiwan, and other issues, the Clin- ton administration sought to change China. When Clinton first came to office, he thought that such efforts were quite promising despite Chinese resistance. After all, the United States was strong and China weak. And with the Soviet Union gone, the United States could devote more efforts and resources to making China comply with U.S. demands. After all, as China-U.S. economic relations expanded, China was becoming more dependent on the United States, especially in trade and investment. What alternative did China have other than compliance? However, it did not take long before the Clinton people realized that it could not so easily change China. Contrary to its expectations, the administration’s heavy-handed approach had put the Chinese on the defensive and generated one crisis after another in the relationship until the administration found it necessary to back down, with considerable political embarrassment. As time passed, the Clinton administration found that China was not going to meet the human rights conditions the United States had attached to the renewal of its MFN status. The administration found itself caught in a difficult dilemma. Having publicly stated that it would suspend China’s MFN status if China failed to meet its conditions, it was under political pressure to carry out the threat. How- ever, suspension of China’s MFN was not what it really wanted, and it soon realized the high domestic political costs. Suspension of China’s MNF status would seriously affect American exports to China, damage the interests of the American consumers who wanted Chinese products, and threaten American investment in China. On top of all this, it promised to do little to improve human rights in China. Powerful American business interests began to pressure the administration not to sacrifice their interests in an unrealistic human rights crusade. Increasing numbers of Americans argued that China’s human rights situation was more likely to improve if the United States kept China engaged with the outside world rather than isolated from it.19

————— 18. Liu Liandi, Zhong-Mei guanxi zhongyao wenxian ziliao xuanbian, pp. 152–54. 19. Gong Li, Zhong-Mei guanxi redian toushi, pp. 269–70.

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The Clinton administration increasingly sought to find a way out of the dilemma. At first, it opted to step up pressures to make China comply with its conditions. It sent John Shattuck, assistant secretary of state for human rights, to China to pursue this policy. During his visit to Beijing, without prior consultation with the Chinese government, Shattuck met with Wei Jingsheng, an outspoken but often irresponsible critic of the Chinese government. The Chinese government was infuriated by what it perceived as a deliberate provocation. As it became convinced that the Clinton administration had no intention of respecting China’s legitimate interests, Beijing became even less willing to compromise with Shattuck.20 Shattuck’s visit made U.S. objectives harder to achieve. In mid-March, Secretary of State Warren Christopher decided to go to Beijing himself. On the eve of his visit, the U.S. Senate passed a resolution in support of the Clinton approach by a two-thirds margin. With congressional support behind him, Christopher demanded that the Chinese government meet the human rights conditions listed in Clinton’s executive order. He threatened that a failure to meet these conditions would lead to suspension of China’s MFN status. The Chinese government, however, did not buy the threat. Qian Qichen, Chinese vice premier and foreign minister, told Chris- topher that the jurisdiction of U.S. executive orders and U.S. laws did not extend to China, and China was under no obligation to implement them. The Chinese government did not believe that coercion was the way to resolve differences between the two countries. The only way to do so, Qian argued, was through consultation on an equal basis.21 Although top Chinese leaders did agree to meet him, Christopher returned to the United States empty-handed. Some media reported that the Chinese leaders had deliberately slighted Christopher. To be fair, the Chinese leaders had no intention of slighting him or of allowing Sino-American relations to drift toward confrontation. In fact, they did not object to efforts to improve the Chinese human rights situation. They made it known that that was exactly what they had long been trying to do. However, they also knew that this was easier said than done. China was undergoing drastic changes. Although such changes had facilitated resolution of some long-standing problems, they had also exacerbated others and generated new challenges. These problems and challenges were seriously straining China’s political institutions and threatening to un-

————— 20. Ibid., p. 267. 21. Renmin ribao, Mar. 15, 1994. 166 Jia Qingguo dermine its political stability. Under the circumstances, the Chinese government felt that it had to silence certain individuals whose behavior it believed posed serious threats to China’s political stability. It feared that if people were given complete freedom to challenge the political authority, China would descend into political instability, if not chaos. That would end China’s economic development and political progress. What the Clinton Administration was demanding of China was precisely to let these individuals have a free hand to challenge the Chinese government. In the eyes of the Chinese government, the U.S. demands went against China’s vital national interests and therefore it felt it could not afford to give Christopher what he wanted, even if led to U.S. suspension of China’s MFN status. When the time to decide whether to renew China’s MFN status came in the spring of 1994, anti-China groups in the United States gathered under the banner of human rights and demanded that Clin- ton deliver on his threat to China. At the same time, large American businesses and others who wanted to see more cooperation between the two countries stepped up their efforts to achieve a renewal of China’s MFN status. After long and careful weighing of the pros and cons, Clinton finally decided to opt for renewing China’s MFN status. He publicly acknowledged that his policy of linking trade and human rights issues had not achieved its purpose. And he now believed that suspending China’s MFN status would not facilitate American objectives and interests. Accordingly, his administration would discontinue linking MFN renewal to Chinese progress on human rights. In a statement explaining his decision, Clinton wrote that the linkage policy had reached its logical end. The annual debate on renewal of China’s MFN status might hinder progress on important security and economic issues. Furthermore, linkage was unlikely to lead to significant progress even on human rights. The administration concluded that the best way to promote human rights in China was to increase contacts, promote trade, enhance international cooperation, and seek extensive and frequent dialogues on the question of human rights.22 Pragmatic considerations not only prompted this policy switch but also led to a compromise on the arms sale issue. China repeatedly told the United States that its exports to Pakistan did not violate the technical requirements of the existing control regimes. The United States may have reasons to suspect Chinese violations of these regimes. However, as in the case of Yinhe, it is also conceivable

————— 22. Liu Liandi, Zhong-Mei guanxi zhongyao wenxian ziliao xuanbian, pp. 375–78.

Sino-American Relations, 1992–2000 167 that its suspicions were not well founded. It imposed sanctions on China without solid evidence. The Chinese government also warned that if the U.S. sanctions against China continued, China might refuse to honor its previous commitments to the United States on the arms sale issue and might also refuse to cooperate on other security issues such as security dialogue and the Korean Peninsula. This clearly went against U.S. interests. Since the stakes were high, after extracting additional commitments from China to adhere to the MTCR requirements in its arms exports, the U.S. administration finally agreed to begin lifting sanctions that had been imposed on China since August 1993.23 The Taiwan question proved more difficult for the administration. Clinton’s decision to upgrade U.S. relations with Taiwan appeared to have emboldened Lee Teng-hui, the separatist leader of Taiwan, in his efforts for Taiwan independence. As a person educated and influenced more by Japanese culture than Chinese, Lee had been carefully manipulating Taiwan toward independence since he consolidated his power in the early 1990s. Among other things, he had been pushing for the so-called pragmatic diplomacy, which called for promotion of Taiwan’s ties with foreign countries through an active and flexible approach so as to gain broader international recognition of Taiwan’s separate “sovereign statehood.” In doing so, Taiwan authorities had used aid and even bribes to lure potential target countries. In this respect, no other country represented a greater prize than the United States. Lee Teng-hui figured that the independence cause would be greatly advanced if he could get the United States to alter its one-China policy. However, to his dismay, the Clinton administration, just as its predecessors, did not wish to jeopardize American national interests just to accommodate Lee’s aspirations, however sympathetic they might have been to his efforts. Under the circumstances, Lee decided to work around the administration to achieve his goals. Lee and his associates helped arrange for Lee Teng-hui to visit his alma mater, Cornell University, where he had received his Ph.D. They arranged a handsome donation of a few million U.S. dollars to Cornell and suggested that more could come if Lee’s visit could be arranged. As a private educational institution, Cornell had every interest in attracting alumni donations, particularly at a time when its president was undertaking an ambitious fundraising program in Asia. Consequently, it extended an invitation to Lee. Lee used the

————— 23. Gong Li, Zhong-Mei guanxi redian toushi, pp. 221–22. 168 Jia Qingguo occasion to take his case to the U.S. Congress. Taiwan hired a high- powered public relations firm in Washington and bombarded U.S. lawmakers with appeals as well as favors. With the scenes of Tiananmen suppression still fresh in their minds and frustrated with China’s defiance of U.S. demands over the years, most American congressmen felt that the Clinton administration should let Lee travel to Cornell. They saw no reason for the U.S. government to be sensitive to Chinese feelings. After all, from an American perspective, what was wrong with a student visiting his alma mater, especially in a private capacity? Accordingly, resolutions urging the administration to allow Lee to visit Cornell were introduced in the Congress and passed with overwhelming margins in both the Senate and the House.24 Initially, the Clinton Administration chose not to allow Lee to visit. It was aware of the strong Chinese feelings on this question and anticipated substantial disruptions in Sino-American relations should it approve Lee’s visit. In the light of these considerations, it stated publicly and privately that it would not consider Lee’s case.25 However, as domestic pressures built, the politically vulnerable Clinton felt that he could not afford to offend Congress. He abruptly reversed the administration’s position and gave Lee Teng-hui the visa he had been craving. In its official announcement on the decision, the Clinton administration claimed that it considered such a visit an individual’s right, one that the rights-conscious American government should not deny. In an attempt to moderate Chinese reactions to this about-face, the Clinton administration claimed that Lee’s visit was strictly private and the decision should not be con- strued as a change of the U.S. policy with regard its commitment to the one-China principle.26 After gaining U.S. permission to visit Cornell, Lee Teng-hui became dizzy with success. He ignored the administration’s request that he keep his visit low-key and nonpolitical. Instead, he traveled to Cornell with all the pretensions of a head of state and delivered a highly political speech there. Among other things, he tried to emphasize Taiwan’s status as a separate sovereign state by inserting the “ROC” or the “ROC at Taiwan” eighteen times in his 4,500-word speech. He claimed that some people had said that the Taiwan au-

————— 24. Su Ge, Meiguo duihua zhengce yu Taiwan wenti (U.S. China policy and the Tai- wan question) (Beijing: Shijie Zhishi Publishing House, 1998), p. 736. 25. Liu Liandi, Zhong-Mei guanxi zhongyao wenxian ziliao xuanbian, pp. 391, 419. 26. Ibid., pp. 421–22.

Sino-American Relations, 1992–2000 169 thorities could not break its international isolation and that he for one did not believe it. He further stated that he wanted to dare the impossible, that is, Taiwan’s separation from China. He appealed to Americans to support his efforts in this regard.27 All this was too much for the Chinese government to tolerate. The administration’s about-face on Lee Teng-hui’s visit took the Chinese government by surprise. Until the last moment, the Clinton administration had assured the Chinese government that it would not approve Lee’s visit. Prior to Clinton’s decision, some Americans had told the Chinese government that it should not rule out the possibility that the Clinton administration might cave in to domestic political pressures and approve Lee’s visit. Some Chinese also made a similar case at internal meetings. However, high-ranking officials of the Clinton administration continued to assure the Chinese government that it was government policy not to approve Lee’s visit, almost until the last minute. The Chinese government naturally felt betrayed. As Chinese Foreign Minister Qian Qichen later told a U.S. visitor, “I was assured a visa would not be issued. Imagine what I thought and what was thought of me when the visa was granted.”28 Confronted with this situation, the Chinese government decided that it had to react, and react strongly, if it ever wished to maintain domestic political unity as well as to defend China’s vital national interests. On May 26, following the announcement of Clinton’s decision, the Chinese government announced that it would postpone the Chinese defense minister’s scheduled visit to the United States as well as discontinue planning for the visit of State Councilor Li Guixian and Commander in Chief of the Chinese Air Force Yu Zhenwu to the United States. On May 28, the Chinese government decided to suspend consultations between Chinese and American specialists on MTCR cooperation and nuclear energy development issues. It also canceled the upcoming visits by American officials from the U.S. State Department and the Arms Control and Disar- mament Agency. Lee’s provocative behavior and speech at Cornell infuriated the Chinese government further. Out of nationalistic sentiments as well as domestic political considerations, it felt that it must do something more. It recalled its ambassador to Washington on June 17. The following day, U.S. Ambassador Stapleton Roy left Beijing since his

————— 27. Su Ge, Meiguo duihua zhengce yu Taiwan wenti, pp. 741–42. 28. John W. Garver, Face Off: China, the United States, and Taiwan’s Democratization (Seattle: University of Washington Press, 1997), pp. 69–70. 170 Jia Qingguo term had ended. With the outbreak of the Taiwan crisis, Beijing delayed its agreement to the appointment of a new American ambassador. As a result, for the first time since the normalization or relations in 1979, neither country had an ambassador in the other’s capital. Relations between the two countries dropped to their lowest point since normalization.29 To demonstrate its determination to defend its territorial integrity, Beijing announced plans to conduct military exercises in the Taiwan Strait. Between July 1995 and March 1996, the People’s Liberation Army would conduct “missile tests” and hold military exercises in the Taiwan Strait. Following the first wave of military exercises and missile “tests” in July and August 1995, the United States tried to minimize public demonstrations of the U.S. commitment to defend Taiwan and at the same time resist Beijing’s demand that Washing- ton give a firm commitment that it would not again allow Lee Teng- hui and other top Taiwan leaders to visit the United States. In meetings with Qian Qichen on August 1 in Brunei, Warren Christopher tried to be conciliatory. He told Qian that he would deliver a letter from President Clinton to President Jiang expressing the U.S. intention to develop a cooperative relationship with China. He also proposed a summit meeting during Jiang’s upcoming visit to New York on the occasion of United Nation’s fiftieth anniversary. With regard to the U.S. position on future visits by the Taiwan authorities, although Christopher refused to give in to China’s demands, he assured his Chinese counterpart that the United States would handle such visits with extreme caution and care.30 By this time, Beijing probably concluded that it had achieved its objectives despite the fact that the United States had not completely met its demands. After all, the United States was strong, and China was weak. There was not much more that Beijing could do to address its perceived injustice. Accordingly, it announced that its ambassador would return to Washington and that General Li Xilin would represent Defense Minister Chi Haotian at the ceremonies at Pearl Harbor in September commemorating the end of World War II. In September, Beijing also approved the posting of James Sasser as U.S. ambassador to China. On October 24, Presidents Jiang and Clin- ton met in New York, and both expressed a desire to promote a healthy and stable relationship between the two countries. Sino- American relations appeared to be moving back on track.

————— 29. Jia Qingguo and Tang Wei, op. cit., p. 32. 30 Garver, Face Off, pp. 74–79.

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However, that was not the end of the story. Beijing still wanted to teach Lee Teng-hui a lesson. In March 1996, Beijing conducted another round of military exercises in the Taiwan Strait. This time, the People’s Liberation Army fired missiles at areas close to Kaohsiung and Keelung, Taiwan’s two major harbors. Lee Teng-hui had continued the provocative and defiant behavior that followed his return to Taiwan from the United States. Beijing wanted to use the exercises to restrain his behavior and to reduce his chance of re-election as the leader of the Taiwan authorities in the forthcoming “presidential” election in Taiwan. The tension in the Taiwan Strait caused great concern in Washing- ton. In an attempt to avoid appearing weak at home, Clinton dispatched two U.S. aircraft carrier task forces to the vicinity of Taiwan. He also hoped to deter a sudden Chinese military takeover of Tai- wan.31 China went ahead with its missile “tests” despite the U.S. deployment. Chinese missiles hit the targets accurately, and Beijing declared victory. Despite the tensions in the Taiwan Strait, during the exercises both the Chinese and the American governments acted with great caution. Nevertheless, it was a sobering experience for both sides because both realized how close to a devastating military confrontation they were as a result of Lee Teng-hui’s manipulations for his own political agenda. Much was said about the effect of Beijing’s military maneuvers in the Taiwan Strait between 1995 and 1996. Some argued that it was a total failure. According to this view, Beijing failed to achieve its objectives. It did not bring the Taiwan authorities to their knees. It further alienated the residents of Taiwan.32 It increased rather than decreased Lee Teng-hui’s vote count in Taiwan’s “presidential” election became the DPP supporters supported Lee for fear of war with the mainland. It also alarmed Japan and provided it with a good reason to cooperate with the United States more closely, especially on the Theater Missile Defense (TMD) question.33

————— 31. Dennis Van Vranken Hicky, “The Taiwan Strait Crisis of 1996: Implications for US Security Policy,” in Zhao Suisheng, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis (New York: Routledge, 1999), p. 279. 32. Jean-Pierre Cabestan, “The Mainland China Factor in Taiwan’s 1995 and 1996 Elections: A Secondary Role,” in Greg Austin, ed., Missile Diplomacy and Taiwan’s Fu- ture: Innovations in Politics and Military Power (Canberra: Australian National Univer- sity, 1997), pp. 49–51. 33. Greg Austin, “Taiwan and PRC Military Power in Japan’s Domestic Politics,” in Austin, Missile Diplomacy and Taiwan’s Future, pp. 105–8. 172 Jia Qingguo

Some, however, believed that Beijing was successful in achieving its objectives. In this perspective, through these exercises, Beijing managed to draw a clear line in the Taiwan Straits for Washington and Taipei as to how far they could go on the Taiwan issue. This was important because misunderstandings arising from ambiguity could lead to real military confrontation. In addition, the military exercises also helped restrain separatists in Taiwan. Although Lee Teng-hui may have received more votes in the election, he got them from the Taiwan separatists such as DPP supporters. As a result, the Taiwan separatist party DPP experienced a substantial loss in the election.34 In the meantime, the New Party, which endorses the goal of eventual reunification, gained a significant percentage of votes. Finally, although the exercises did provide Japan with an excuse to enhance its security relations with the United States, including developing TMD, the real reason Japan did so was its perceived vulnerability as a result of its continuing economic stagnation and China’s concurrent rapid development. In other words, Japan would have probably done the same thing even if the military exercises had not occurred. Although both arguments have some validity, on balance, it appears that the military exercises were at least useful in clarifying the limits to which all parties concerned could go on the Taiwan question. Short of such clarity, opportunistic behavior on the part of some parties might have led to a larger and more dangerous crisis in the Taiwan Strait. In part because of this, following the Taiwan crisis, Washington reiterated its adherence to the one-China policy. Al- though Washington resisted Beijing’s pressures to rule out future visits by Lee Teng-hui, Secretary of State Warren Christopher found it necessary to assure his Chinese counterpart that such visits would be handled with extreme caution in the future.35 Nonofficial relations between Taiwan and the United States might expand in the years to come, but the United States was unlikely to upgrade the relationship soon. The Taiwan authorities also got the message from the exercises. Confronted with Beijing’s pressures and Washington’s ire at Taipei’s manipulations, Taipei decided that it was necessary to repeat the one-China principle and promised to make additional efforts to improve its rapidly deteriorating relations with Beijing after the presidential election in Taiwan. On March 9, 1996, Lee Teng-hui said that

————— 34. This can be seen in the setback suffered by the DPP in the recent “presidential” election in Taiwan (Taiwan yanjiu 1996, no. 2: 8-9). 35. Ibid., 1996, no. 1: 89.

Sino-American Relations, 1992–2000 173

Taipei would gradually expand economic and trade relations with the mainland to the areas of culture exchanges and would make that one of Taiwan’s five developmental goals in the next four years. He repeatedly claimed that the priority of his new presidential term would be to “resolve the hostile situation between the two sides of the Taiwan Strait.”36 For a while, it appeared that Lee Teng-hui finally realized what a dangerous situation he had created for the very people he claimed to defend. Beijing also learned from this experience. To many in Beijing, peaceful reunification was preferable, but there were certain limits to it. Recent developments on Taiwan suggested that the peaceful reunification policy itself was insufficient to induce Taipei to toe the line. Additional pressures were necessary to change Taipei’s structure of interests so that it would not go too far toward political independence. These include selective use of military deterrence. There were risks in applying military pressures and the stake involved was high, but territorial integrity was not something that could be compromised. Although Beijing was unlikely to attempt a military takeover of Taiwan in the near term, it felt it had to be prepared for a military showdown if Taiwan separatists pushed the island to be independent.37 The Clinton administration’s efforts to force changes on China lasted from 1993 to 1996. In some areas, it accomplished its goals. For example, its pressures played a role in the Chinese government’s decision to release some prisoners that the Clinton administration classified as political dissidents. It also managed to extract more commitments on the part of the Chinese government to adherence to arms control regimes. However, its policy was largely a failure. Most notably it failed to prepare Americans for the development of a constructive relationship between the two countries as they approached the twenty-first century. Ironically, the administration eventually realized that it was easier to change its policy than to change China.

Building a Constructive Strategic Partnership The catchword of the new policy orientation of the Clinton administration was “engagement.” By the time the Taiwan Strait crisis ended in 1996, the engagement policy had already been in place for

————— 36. Ibid., 1996, no. 2: 96. 37. You Ji, “Missile Diplomacy and PRC Domestic Politics,” in Austin, Missile Di- plomacy and Taiwan’s Future, pp. 53–54. 174 Jia Qingguo more than two years. As early as summer 1993, concerned about the negative implications of the rapid deterioration in Sino-American relations, some in the administration began to advocate more official, especially military, contacts and dialogue between the two countries. This eventually led to the drafting of an action memorandum under the leadership of Anthony Lake, Clinton’s national security advisor. Among other things, the memorandum called for “broad engagement” with China. After approving the policy proposal in September 1993, the Clinton administration formally communicated this new policy orientation to the Chinese side later in the month. This led to a series of visits by senior administration officials to China in the subsequent months culminating in the summit between Jiang and Clin- ton in November 1993 at the APEC meeting in Seattle.38 When President Clinton first put forth the engagement policy, it was meant to be a moderate approach to dealing with China. How- ever, given the harsh words Clinton had used on the China question during the presidential election campaign and what he had done on this issue since he assumed office, it is not surprising that many Americans had a difficult time keeping up with him. To various degrees, Clinton’s about-face had disappointed American China- bashers while puzzling those Americans who favored better relations with China. Whereas the former complained bitterly and loudly that Clinton had betrayed them, the latter wondered whether Clinton really meant what he said. From the very beginning, the engagement policy failed to obtain a true domestic consensus in the United States. Although most Ameri- cans interested in Sino-American relations paid lip service to the concept, the word “engagement” meant different things to different people. Some Americans interpreted the engagement policy as one of promoting mutually beneficial relations with China.39 Some believed that it was another means of changing China peacefully according to American values.40 Some viewed it as a euphemism for keeping China in an inferior position, if not backwardness, and, if that could not be achieved, for

————— 38. Su Ge, Meiguo duihua zhengce yu Taiwan wenti, pp. 680-85. 39. Xiao Fulideman, “Zhong-Mei guanxi: huidao jichu” (U.S.-China relations: back to the basics), trans. Wang Xuehong, Dashiye (Big vision), July 1997, pp. 9–13. 40. Andelu Nasen and Luobote Luosi, Changcheng yu kongchengji: Zhongguo dui an- quan de xunqiu, trans. of Andrew Nathan and Robert Ross, The Great Wall and the Empty Fortress (Beijing: Xinhua Publishing House, 1997), pp. 225–31.

Sino-American Relations, 1992–2000 175 confronting China.41 As a result, as soon as the policy was announced, it became a victim of partisan and interest group politics. Different parties vied to impose their interpretation of engagement on U.S. China policy, while the Clinton administration spent so much time and efforts defining and defending it that it barely had energy to practice it. If Americans found it difficult to adjust to the Clinton administration’s drastic turn toward engagement, so did the Chinese. For quite some time after the policy was announced, many Chinese remained puzzled and suspicious of the Clinton administration real intentions. Like their American counterparts, they found it difficult to believe that the same U.S. president who had been so critical of China and who had adopted a series of measures bordering on confrontation with China could really be serious in promoting an engagement policy that aimed at building a mutually beneficial relationship with China. The problem was further compounded by the feeble defense of the policy initially mounted by the Clinton administration. When the policy was first announced, the administration justified it negatively. The United States, according to the Clinton administration’s explanation, did not find sufficient progress in China’s protection of human rights. In fact, in its view, China fell far short of expectations. How- ever, the administration believed that confrontation with China could not bring the desired changes. Only through engagement could the United States produce such changes in China. Accord- ingly, the United States would abandon the policy of linking extension of China’s MFN status to improvement of its human rights situation, but it now looked to engagement, meaning dialogues and consultations, to bring about the desired changes.42 Once the engagement policy was defended this way, the Clinton administration found itself trapped in a position of justifying its China policy by how much it was changing China. However, China is a large country, and the way things happen there has its own logic and often defies external intervention. Moreover, the United States had few resources to change China within a short period of time. This was especially true during the period immediately following the Cold War when most Americans were more interested in enjoy- ing the peace dividend than supporting their government’s engage-

————— 41. Lichade Boensitan and Luosi Mangluo, Jijiang daolai de Zhong-Mei chongtu, pp. 169–83. 42. Liu Liandi, Zhong-Mei guanxi zhongyao wenxian ziliao xuanbian, p. 377. 176 Jia Qingguo ment in large-scale international programs or adventures. On top of this, even if U.S. efforts sometimes had an impact on some particular issues, the Chinese government did not want to acknowledge the role of American pressure because of domestic political considerations.43 Under the circumstances, it was difficult for the Clinton administration to find and use Chinese concessions to justify its engagement policy. Consequently, those skeptical of the engagement policy had more reasons to be skeptical, and the China-bashers had a field day ridiculing and condemning it. To make things worse, having consolidated his power in Taiwan, Lee Teng-hui found it increasingly difficult to put up with the fact that his presidency had little formal international recognition. With help from his friends in the U.S. Congress, he had managed to get the Clinton administration to issue him a visa to visit his alma mater, Cornell University. Lee’s highly publicized tour of the United States provoked an angry response from Beijing and led to a crisis in the Taiwan Strait. In an attempt to stabilize the situation, the Clinton administration found it necessary to dispatch two aircraft carrier task forces to the Taiwan Strait. After the crisis, Lee found himself worse off than before because both Beijing and Washington were frustrated by his highly irresponsible political maneuvers and decided to block such attempts in the future. One unintended conse- quence of this episode, however, was that the Clinton administration found it even more difficult to defend its policy of engagement. By sending the aircraft carriers, Clinton confirmed the China-bashers’ argument that the United States had to resort to confrontation, military confrontation if necessary, to attain American objectives in dealing with China. On top of all this, the engagement policy was implemented at a time when China was undergoing drastic fundamental transitions, namely, modernization, broad-scale social changes, and a leadership transition. The rapidity of modernization and the transformation of China’s centrally planned economy into a market economy has created a great deal of social and political tension in Chinese society, the leadership transition left China with weak institutions as well as a leadership weak in authority in comparison with the previous generations of leaders headed by Mao Zedong and Deng Xiaoping. Con- sequently, the Chinese political order was (and is) under tremendous stress. Fully aware of this situation, the Chinese government believes

————— 43. For example, China’s release of some prisoners whom the United States believed were being held for political dissent.

Sino-American Relations, 1992–2000 177 that China’s future depends on maintaining political stability at home.44 Accordingly, it finds it necessary to suppress open challenges to its authority. However, when it did this, the Clinton administration’s critics found more excuses to condemn the engagement policy. As time went by, Chinese views of the engagement policy began to take shape. A brief analysis reveals three different Chinese readings of the engagement policy. The first reading regarded the policy as a sham, a euphemism for de facto containment. People holding this view argued that both the track record and some official statements of the U.S. government have shown that the true intention of the engagement policy was to contain China and transform it into a U.S. political and economic appendage. As a group of young authors claimed in their highly inflammatory book China Can Say No, “‘Con- taining China’ has already become a long-term strategy of the US.” Accordingly, they argue that Chinese should have no illusions in dealing with the United States. 45 The second reading acknowledged that the engagement policy was different from the containment policy. According to this view, although the United States did not hide its desire to change China according to its own criteria and objectives, the engagement policy, unlike the containment policy, did not advocate confrontation with China and recognized the need for mutual accommodation. There- fore, it could not be regarded as a hostile policy. As far as China was concerned, this policy could provide a basis for development of an acceptable, mutually beneficial relationship.46 The third reading was that neither of the other two readings was accurate. The engagement policy was by no means a pure policy either of engagement or of containment. Rather it was a mixture of the

————— 44. As Jiang Zemin, general secretary of the Chinese Communist Party and the president of the People’s Republic of China, put it: “China cannot accomplish any thing without political stability”; see Jiang Zemin, “Gaoju Deng Xiaoping lilun weida qizhi, ba jianshe you Zhongguo tese de shehuizhuyi shiye quanmian tuixiang qianjin” (Uphold the great banner of the Deng Xiaoping theory and carry forward the course of building socialism with Chinese characteristics into the 21st century), in Shiwuda baogao duben (Reader of the reports at the Fifteenth Party Congress) (Beijing: Renmin Publishing House, 1998), p. 18. 45. Song Qiang et al., Zhongguo keyi shuobu (China can say no) (Beijing: Zhonghua gongshan lianhe Publishing House, 1996), p. 61. 46. Zhan Shiliang, “Cong shiji zhijiao Meiguo quanqiu zhanlüe kan Meiguo dui- Hua zhengce” (U.S. China policy as viewed from U.S. global strategy at the turn of the century), in Liang Shoude et al. eds., Mianxiang 21 shiji de Zhongguo guoji zhanlüe, pp. 25–33. 178 Jia Qingguo two. It was a policy of engagement in the sense that it sought contacts and dialogue with China as opposed to confrontation. It was a policy of containment because its aim was to limit the growth of China’s national capabilities and international influence. The new U.S. policy therefore presented Sino-American relations with both challenges and opportunities. Since China was ready to coexist peacefully with the United States, whether the two countries could find a way to advance their national interests through developing a cooperative relationship between them depended entirely on the United States.47 The relative influence of the three readings waxed and waned over time with fluctuations in U.S. domestic politics over its China policy. The first reading was more popular during the period immediately following the announcement of the engagement policy. Ac- cording to a survey conducted by Zhongguo qingnian bao (China youth daily) in 1995, most of the respondents regarded the United States as the least friendly country.48 As the Clinton administration persisted in advocating the engagement policy despite fierce domestic political opposition, the third reading gained increasing acceptance. After President Jiang visited the United States in 1997 and concluded an agreement with President Clinton pledging to build a constructive strategic partnership, the second reading became more popular. After President Clinton’s visit to China, this reading became even more popular. However, beginning in early 1999, as American criticisms of China mounted, the first reading resurfaced. The NATO bombing of the Federal Republic of Yugoslavia and particularly its surprise attack on the Chinese Embassy in Belgrade appeared to make it the most influential among the three. Following the collision between an U.S. spy plane and a Chinese fighter plane near the Chinese coast as well as some tough talk on U.S. China policy on the part of the second Bush administration, most Chinese concerned with Sino-American relations find it hard to abandon the first two readings. It was only during its last years that the Clinton administration decided to take a more positive approach to justifying its policy of engagement by openly acknowledging the progress China had made. Defending his decision to invite President Jiang Zemin to

————— 47. Wang Jisi, “ ‘Ezhi’ haishi ‘jiaowang’?: ping lengzhan hou Meiguo dui-Hua zhengce” (“Containment” or “engagement”?: on U.S. China policy during the post- Cold War period), Guoji wenti yanjiu (International studies), Jan. 1996, pp. 1-6. 48. Zhongguo qingnian bao (China youth daily), Sept. 27, 1995, p. 4.

Sino-American Relations, 1992–2000 179 make an official visit to the United States in 1997, President Clinton said in a joint press conference with President Jiang on October 29, 1997: “The American people greatly admire China’s extraordinary economic transformation, and we understand the importance that your own experiences and your present challenges lead you to place upon maintaining stability. We also appreciate the fact that human rights have been advanced in China by greater freedom from want, freedom of movement in career choice, and widely held local elections.”49 The Clinton administration’s open acknowledgment of the progress China had achieved was favorably received by the Chinese. Jiang’s visit to the United States and Clinton’s subsequent visit to China the following year saw relations between the two countries improve, and the two countries agreed to work toward a strategic partnership. For a while, the engagement policy appeared to acquire considerable significance. Although the administration’s new justification made its engagement policy more defensible, it may have come too late. The old justification of the policy had already taken root, and it must have been difficult for the American public to appreciate the argument that China had made progress, especially in the political field, after being told so many times that China’s human rights situation was deteriorating. Meanwhile, beginning in 1997, the Clinton administration’s critics launched wave after wave of attacks against China and the administration’s China policy on a whole range of issues. American public media were full of allegations against China, from nuclear proliferation to human rights violation, from illegal campaign contributions to espionage. Even though many allegations had no fac- tual basis, their high visibility and the frequency with which they appeared in American media, along with the absence of adequate efforts to examine their validity, ensured that many Americans accepted the allegations at face value. and this turned them against China. Anti-China feelings in the United States reached a boiling point. To some extent, Premier Zhu Rongji’s visit to the United States in 1999 helped to reduce the intensity of such feelings. The premier claimed that the purpose of his trip was to provide Americans an opportunity to vent their frustrations against China. His candor, humor, and friendly gestures struck a responsive chord and pro-

————— 49. “Transcript: Clinton/Jiang 10/29 Joint Press Conference” (U.S. welcomes China’s emergence as constructive partner) (5470), http://www.usia.gov/abtusia/ posts/HK1//wwhpw0d.html. 180 Jia Qingguo duced much goodwill for China among Americans. For a while, it appeared that the difficult time in Sino-American relations was over, and the relationship was back on track. However, on May 7, a crisis erupted because of the U.S. bombing of the Chinese Embassy in Bel- grade. The bombing killed three Chinese journalists and diplomats and led to widespread angry protests against the United States in China. For a few days after the bombing, domestic political considerations on the part of the Chinese government made it impossible for the two governments even to communicate with each other. Ironically the angry response of Chinese youth gave Clinton’s critics an opportunity to revive anti-China feelings among Americans. Both the Chinese and the U.S. governments were fully aware of the danger of letting the relationship drift toward confrontation. Ac- cordingly, both took a series of measures to control the escalation of the crisis. For example, repeated U.S. efforts were made to apologize for and explain the bombing and to initiate negotiations between the two sides on the question of compensation for Chinese casualties and property damage. However, although the downward spiral of the relationship may have been arrested, for months the relationship could only be stabilized at a fairly low level. As time passed, some new progress was made in the year 2000. Through long and hard work, the two countries finally concluded the agreement on China’s membership in the WTO. Despite fierce opposition from some quarters in the United States, the Clinton administration also managed to get congressional approval of China’s permanent normal trading status. However, during November, with the American presidential election campaigns looming, and the China policy of the Clinton administration under constant attack, it was difficult to advance Sino-American relations.

Strategic Competitors? As in the previous American presidential election campaigns, China policy became an issue of contention in the presidential race in 2000. During the campaign, the Republican candidate, George W. Bush, attacked President Clinton’s handling of U.S. relations with China. He criticized Clinton for focusing too much attention on China at the expense of Japan, an American ally in Asia. He also expressed his difference with Clinton on the question of the National Missile De- fense (NMD) program and the Theater Missile Defense (TMD) program. He vowed that he would push for such programs if he were elected. China has opposed both programs. It believes that the two

Sino-American Relations, 1992–2000 181 programs threaten to undermine the existing balance of power in Asia as well as in the world and have serious implications for China’s national security. Finally, Bush also said that he wanted to change the United States’ Taiwan policy from one of strategic ambiguity to one of strategic clarity. He stated that the United States should make it clear to China that it would intervene militarily if the PLA attacked Taiwan. He also said that he supported more arms sale to Taiwan and endorsed the Taiwan Enhancement Act advocated by some pro-Taiwan congressmen and strongly opposed by the Chinese government. In summary, Bush argued that the relationship between China and the United States is not one of strategic partnership. In- stead, it is one of strategic competition. Bush’s campaign remarks caused considerable uneasiness among the Chinese. They differed, however, as to the implications of the remarks. Some believed that Bush was going to get tough with China, and Sino-American relations would deteriorate sharply if he came to power. Others argued that Bush’s tough talk was merely campaign rhetoric. It was politically useful for him to differ from Clinton during the presidential campaign in order to win election. Otherwise, how could he persuade American voters that he would make a difference if he were elected? Ultimately, he would adopt a China policy similar to that of Clinton since it served American national interests best. Still others believed that Bush’s China policy would be different from that of Clinton. In their eyes, like other Re- publicans, Bush was likely to attach more importance to high-profile political issues such as national security than to low-profile issues such as trade and human rights in foreign policy. Consequently, one was likely to see more conflicts between China and the United States on security and Taiwan but fewer conflicts on trade and human rights. However, the net impact of this kind of China policy on Sino- American relations would be moderate. The Bush people traveling to China before and immediately after his election appeared to be positive on the future development of relations between the two countries. Of course, the Bush administration did explain it was going to take a tougher line on a range of issues that concern China. However, the new administration’s policy was also going to be more realistic, consistent, and therefore predictable. That meant that it was unlikely to subject the relationship to the same wild ride as Clinton’s China policy had done. That appeared to be good news for Sino-American relations. However, recent developments such as China’s alleged technical assistance to Iraq in improving the latter’s communication system, the U.S. introduction of a 182 Jia Qingguo resolution condemning China’s human rights practice at the annual meeting of the U.N. Human Rights Commission in Geneva, the Pen- tagon’s new restrictions on military contacts between the two countries, and the large U.S. arms sale to Taiwan appeared to suggest otherwise. On top of all this was the Bush administration’s tough rhetoric concerning the collision of a U.S. spy plane with a Chinese fighter plane near China’s coast. What will happen in Sino-American relations in the days to come is therefore highly uncertain. However, if the history of Sino-American relations offers any guidance, the relationship is likely to continue to fluctuate within limits. As pointed out in my essay reviewing Sino-American relations between 1972 and 1992 in the predecessor to this volume, despite the emotional intensity evoked at different phases of development, the two countries have neither forged a formal military alliance nor engaged in formal warfare since they first established contact. They have been unable, however, to realize a higher level of cooperation because they have too many differences. Yet they cannot engage in full-scale confrontation because they have too many important overlapping interests that they must preserve. Despite the many changes both between and within the two countries over time, the nature of the relationship has remained largely unchanged. Thirty years ago, in an historic move, China and the United States reached out to each other, effectively ending twenty year s of comprehensive confrontation. Since then, much has happened within and between the two countries. Among other things, relations have evolved from a narrow focus on strategic cooperation against the Soviet Union to a comprehensive engagement covering political, economic, cultural, as well as strategic interactions. As a result of the unexpected performance of the U.S. economy and the sustained rise of China during the 1990s, the relationship between the two countries has assumed an unprecedented importance both for the two countries and for the rest of the world. At this junction, foresight and courage are the virtues that the two countries most need in their leadership. Leadership with foresight and courage would enable the two countries to overcome their differences and develop a genuine constructive partnership in the best interests of the two countries and of the world at large. Shortsighted and cowardly leadership would compound the problems and generate additional sufferings and mistrust between the two countries and damage the interests of the two countries and those of the world. Given the many uncertainties, we should hope for the best, but we must be prepared for the worst.

Part III U.S.-Japanese Relations

U.S. Policy Toward Japan in the 1990s Gerald Curtis

President Bill Clinton, who was in office for almost the entire decade under consideration in this volume, came into the presidency with a seemingly new and tough, even belligerent, approach to Japan. Yet the fundamental thrust of his policy was in many key respects a continuation of patterns that had developed over the previous several decades. Clinton was criticized for bypassing Japan in his dealings with China, but the absence of close consultations with Japan over China policy had been a characteristic of U.S. diplomacy since the days of Richard Nixon and Henry Kissinger. As upset as Japanese leaders may have been that Clinton would spend ten days in China without even passing through Japan, it did not compare to their shock at learning that President Nixon had sent Henry Kissinger to talk to Chinese leaders in Beijing. Clinton adopted an ill-fated “results-oriented” trade policy, but this was hardly the first time an American administration had sought Japanese acquiescence to managed trade agreements. Indeed, the idea for results-oriented trade first surfaced not in the early years ————— Gerald Curtis is Burgess Professor of Political Science at Columbia University.

185 186 Gerald Curtis of the Clinton administration but in the last years of the preceding Bush administration. The Clinton administration strengthened security ties with Japan even as it bitterly criticized Japanese economic policy. It kept a high firewall between the two, just as every preceding administration, again back to the Nixon era, had done. It combined indifference interrupted by sporadic bouts of attention to Japan by the president, secretary of state, and key foreign policy advisors with successful bureaucratic management of the relationship. This also was very much in line with the practices of previous administrations. The Clinton administration did not accomplish much in its Japan policy, but evidence that the relationship suffered more under Clin- ton than it did under previous administrations is elusive at best. As Clinton approached the end of his first term, and especially after re- election to a second one, with the U.S. economy booming and the Japanese one tanking, Clinton dropped the results-oriented trade policy that he had championed so forcefully when he first came into office. The security relationship was reinvigorated with a reaffirmation of the security treaty and an agreement to draw up new guidelines for cooperation in the event of military contingencies occurring in the areas surrounding Japan. Japan all but dropped off the U.S. foreign policy radar screen. The problem with the Clinton administration’s policies toward Japan was not that it broke the thread of continuity with the policies that had evolved over previous years. The problem was that the president was far more interested in domestic and personal issues than foreign policy and never himself articulated a coherent strategy for dealing with Japan or foreign policy more generally. The Clinton administration came to power at a time of dramatic changes in the geopolitical situation in East Asia and in the East Asian regional and global economy. Yet it failed to articulate a strategy to contend with these new political and economic forces. It also seemed nearly oblivious to the impact of its rhetoric and policy pronouncements on the Japanese public and Japanese policymakers. Its seeming readiness to bypass Japan on the way to China and to push for managed trade agreements with Japan produced a degree of distrust among Japanese leaders that was far greater than had been true during previous administrations. The penchant among the administration’s top officials for lecturing the Japanese about how they should run their economy (i.e., that they should run it the way the Americans ran theirs) created a great deal of irritation in Japan without having the intended effect of changing Japanese policies. U.S. Policy Toward Japan in the 1990s 187

In the end perhaps no great damage was done. Despite the fail- ings of President Clinton and his key foreign policy people, the pro- fessionalism of the bureaucracy that was tasked with managing relations with Japan and the efforts of key individuals in developing sensible policies and handling sensitive bilateral issues kept the relationship on a relatively even keel. As ambassador to Japan, Walter Mondale handled with skill and sensitivity a terrible incident in Okinawa in which several marines sexually attacked a young girl. His successor, Ambassador Thomas Foley, performed with equally admirable skill in responding to the tragedy caused by the accidental sinking of a marine vocational Japanese high school study ship by a U.S. submarine in the waters off Hawaii. Clinton himself did a lot of on-the-job training. As was true of his foreign policy in general, his interest in Japan or East Asia was spasmodic. When events demanded it, however, he could focus on Japan with prodigious concentration. Multilateral and bilateral summits and his decision to fly to Tokyo to attend the funeral of Prime Minister Obuchi brought him to Japan more times than any previous American president. Preparations for these trips forced the government machinery to produce position papers that defined U.S. policy and raised the level of knowledge and understanding of the president and cabinet officials. Clinton also brought his formidable political skills into play in Japan. His televised town meetings in To- kyo charmed the Japanese audience about as much as they did American ones. If one were to assign a grade to the Clinton administration for its Japan policy, even allowing for a degree of grade inflation, a C for the first term and a B for the second would seem about right. Any- thing lower would suggest that he did irreparable harm to the relationship. That is impossible to document, and in any case it seems unlikely. A higher grade would imply that he made some positive contribution to strengthening relations with Japan, and there is no evidence for that. Japanese leaders seemed relieved that the Clinton years had come to an end and that his vice president had not been elected president. Their enthusiasm for George W. Bush, replete with what were surely unrealistic expectations about a new “pro-Japan” policy in the White House, was a reflection of their unhappiness with Bill Clinton. And the two major sources of that unhappiness were U.S. policies toward China and toward trade relations with Ja- pan. 188 Gerald Curtis

The U.S.-China-Japan Triangle As with previous administrations going back to Nixon, China loomed as a major issue in U.S.-Japan relations for the Clinton administration. It came into office with one set of policies toward China and went out with another entirely different one. Clinton criticized the Bush administration in the 1992 presidential campaign for coddling the “butchers of Beijing” and committed himself to make most- favored-nation (MFN) treatment of China conditional on improvement in its human-rights policy. Within a year, he had discarded that policy and pushed for unconditional MFN treatment of China and a policy of “engagement.” By Clinton’s second term, engagement had been expanded to a substantively vague but rhetorically robust emphasis on the need to build a “strategic partnership” with China. This phrase sounded rather odd to those who had thought that Japan was the United States’ strategic partner in Asia. Clinton never explained how China was a “partner” and in what sense that evolving partnership should be viewed as “strategic.” The ambiguity in U.S. thinking about China and East Asia combined with the extravagant language used to express it was very unsettling to Japanese leaders. Like most of its predecessors, the Clinton administration paid little attention to consultations with Japan in developing its policies toward China. Moreover, it appears that it never carefully assessed how its China policy might affect relations with Japan or Japanese policy toward China. The absence of extensive consultations with Japan about China in itself was nothing new. That had been U.S. practice since the first Nixon shock. Indifference to Japanese views, a concern about possible leaks, and a Japanese unwillingness to express views if consulted that might complicate its own relations with China all contributed to this pattern of behavior. East Asia, however, was a very different region when Bill Clinton came to power than it had been when Richard Nixon initiated the American opening to China. There was no longer a Cold War and a Soviet threat to draw the U.S. and Japan together. China had emerged as an increasingly powerful economy and important player in international relations in the region. The Japanese economy was suffering the aftereffects of the collapse of the economic bubble. Its economy was in recession, while China continued its remarkable economic expansion. Its financial system was in a state of crisis. The entire region, with the notable exception of China, suffered a huge financial collapse in 1997 and the United States and Japan disagreed on what to do about it. When the Japanese floated the idea of creat- U.S. Policy Toward Japan in the 1990s 189 ing an Asian Monetary Fund, the United States quickly and publicly squashed it. The Clinton administration did not seem to carefully consider how its China policy might affect relations with Japan in this changed environment. The result was the emergence for the first time of rather sharp divergence in U.S. and Japanese policies and strategies for dealing with China. In the 1970s when Nixon opened relations with China and Carter normalized them, Japan made sure to stay in step with U.S. policy. It was not happy that the U.S. did not consult with or inform Japan about its China policy, but it was con- fident that a strengthening of Sino-American relations in the context of a Cold War struggle with the Soviet Union would not come at the expense of U.S.-Japan ties. There had been no U.S.-China-Japan “triangle” during these years because Japan was solidly in the U.S. corner in a bipolar struggle with the Soviet Union. In the 1980s under Reagan and Bush, the United States and Japan pursued parallel policies toward China. Even Japan’s quick ending of Tiananmen massacre sanctions against Beijing had the tacit support of President Bush, who would have done just the same as the Japanese if it had not been for Congressional opposition. U.S.-Japan relations with respect to China during the Clinton years were another matter. By the time the Clinton administration came to power, the Cold War had ended, Sino-Japanese economic ties had grown strong, and the Japanese were no longer worried about missing the bus to China, as they had been in the 1970s. Now they seemed more concerned to avoid having Japanese policy whip- lashed by Washington’s erratic steering of the United States’ China policy. When Clinton came to power, then Prime Minister Miyazawa urged him to avoid a confrontational stance with regard to human rights issues in China and to accord China unconditional MFN treatment. Later the Japanese reacted with caution to the Clinton administration’s embrace of a new policy of strategic partnership with China, concerned that Clinton seemed to be playing down the importance of the one truly meaningful strategic partnership that the United States had in East Asia, the one with Japan, in favor of developing a new one with China. As the 1990s unfolded, for the first time U.S.-Japan-China relations began to evince a triangular quality. Since the need to balance the Soviet Union was no longer a factor, relations among the three countries took on a new dynamic. The Chinese, for example, who had given tacit support to the U.S.-Japan security treaty for years, reacted strongly to the Clinton- 190 Gerald Curtis

Hashimoto April 1996 Joint Declaration on Security and the decision to revise the Guidelines for U.S.-Japan Defense Cooperation. They demanded unsuccessfully that the United States and Japan publicly state that Taiwan lay outside the area to which the guidelines applied and expressed concern that the security declaration was intended to encourage Japan to play a regional military role. A little more than a year later, in October 1997, Chinese president Jiang Zemin made a very public stopover in Hawaii on his way to a meeting with Clinton in Washington. The visit to the battleship Ari- zona was full of intended symbolism about the old friendship between the United States and China and old enmity between the United States and Japan. A year later, in November 1998, Jiang visited Tokyo, apparently expecting, and in any case demanding, a written apology for Japa- nese aggression against China and cruelties toward the Chinese people during the World War II. South Korean president Kim Dae Jung had received a comparable apology during a visit to Tokyo a month earlier. The Japanese were unwilling to do the same for Jiang, making it clear to him that a written apology would come only after China made changes in its approach to dealing with Japan. Kim had publicly declared that the two nations should face the future rather the past. The Chinese, however, were not ready to do the same. This left the Japanese taking a hard line toward China precisely at a time when the Clinton administration, emphasizing engagement and strategic partnership, was taking a soft one. This neatly reversed the situation that prevailed when Clinton first came into office. At that time the Japanese took a soft line toward China, and the Clinton administration took a hard one on human rights. The United States’ and Japan’s China policies were seriously out of sync. In June 1998 Clinton made a ten-day trip to China. Much has been made of the fact that he did not stop in Japan either on his way to or from China. Not doing so probably was a mistake, but the decision not to visit Tokyo was not as important as what Clinton said about Japan while he was in China. After the Asian financial crisis broke out in the summer of 1997, the Clinton administration became increasingly agitated at Japan’s failure to take the drastic actions the administration believed were necessary to restore soundness to Ja- pan’s banking system and to get its economy back on the road to growth. In a joint press conference with Jiang in Beijing on June 27, 1998, Clinton applauded China for its “great statesmanship and strength in making a strong contribution to the stability . . . of the

U.S. Policy Toward Japan in the 1990s 191 entire region by maintaining the value of its currency.” He then went on to point an accusing finger at Japan and seemed to say that in the U.S.-China-Japan triangle Japan had now become a common problem for the United States and China. “The United States, as you know,” Clinton remarked, “has worked hard to try to support the stability of the Japanese yen and to help growth resume in Japan. The key here, I believe, is for the plans to reform the financial institutions in Japan and take other steps that will get growth going and get investments going in Japan to be made.” He then added, just to show the Chinese audience perhaps just how chummy he and Jiang had become, “I think that ultimately while President Jiang and I would give anything to be able to just wave a wand and have all of this go away, we are not the only actors in this drama. And a lot of this must be done by the Japanese government and the Japanese people. And we can be supportive but they have to make the right decisions.” The imagery of Clinton and Jiang hand in hand with a magic wand that they wished they could use to deal with Japan caused considerable consternation in Tokyo, where it was interpreted as further evidence of the United States “passing” Japan and drawing closer to China. Previous administrations had undertaken initiatives toward China without consulting with Japan. In the context of the Cold War, however, this left Japan with injured pride but not with serious concerns that rapprochement with Beijing might lead to a kind of abandonment of Japan. Clinton was the first president to raise serious doubts about the implications of U.S. China policy for U.S. relations with Japan. Japan did not scurry to get its policies in line with the United States. Instead it put greater emphasis on developing its political ties with other nations on China’s periphery that also were unhappy with what they saw as the Clinton administration’s naïve enthusiasm for China. Eventually Clinton was able to assuage Japanese concerns that the United States was “passing” Japan in favor of forging a closer relationship with China. His China policy, after all, was just that, a policy toward China, rather than an element in a well thought out and comprehensive regional or global strategy. The Japanese remained wary to the end of the Clinton administration’s approach to China, but fears that the Clinton administration was moving away from emphasizing relations with Japan as the centerpiece of U.S. policy in East Asia, something stressed repeatedly by the Japanese mass media, subsided. 192 Gerald Curtis

The Framework Agreement In February 1989, the Advisory Committee on Trade Policy and Ne- gotiations, the most senior private-sector advisory committee of the Office of the United States Trade Representative, issued a report calling on the Bush administration to adopt a “results-oriented trade strategy.” The committee recommended that the United States identify those sectors where “an increase in US exports could be expected if Japan were to act like other industrial countries with similar economic attributes” and “insist on appropriate sectoral import levels that properly reflect the international competitiveness of US” and other foreign suppliers.1 The Bush administration did not have time to act on this recommendation, but Clinton did, leading to the most contentious and least productive period in postwar U.S.-Japan trade relations. In a sense the Clinton administration paid the price of years of bitter battles between the United States and Japan over trade issues. With the United States moving toward a results-oriented trade policy, which, it should be noted again, was initiated in the last years of the Bush administration, Japanese resentment and anger boiled over. The Clinton administration came into office just at the time that so-called revisionist thinking about Japan was at the peak of its influence. Clinton and the senior people on his economic team swal- lowed this theory hook, line, and sinker. According to the then- popular theory, Japan was not a normal country, and there was no way to level the playing field, given the peculiar nature of Japan’s institutions and the mindset of its people. Special measures were needed to gain access for foreign goods in Japan and to prevent Ja- pan from surpassing the United States to become the world’s most powerful economy. Negotiations that focused on process and the elimination of barriers, as had been the case earlier with the Market Oriented Specific Sector or Structural Impediments Initiative talks, were bound to fail. Japan would simply drag out the negotiations, and even when it agreed to make a change requested by the Ameri- cans, it would find a way to make sure it did not have the consequences the United States expected. It was foolish to think that Americans could change the way the Japanese ran their economy. The only thing to do was to decide what market share or what kind of access the outside world should have in key industries in Japan ————— 1. Advisory Committee on Trade Policy and Negotiations, Analysis of the U.S.-Japan Trade Problem (Washington, D.C., 1989). U.S. Policy Toward Japan in the 1990s 193 and then negotiate a results-oriented agreement, leaving it to the Japanese to figure out how to do it. So went the revisionist argument, and so went the Clinton Administration. This strategy flew in the face of U.S. support for a rules-based multilateral trade regime, and it was propelled by a self-defeating ar- rogance: Clinton’s trade negotiators seem never to have considered what to do should the Japanese refuse to play the game that Clinton was now insisting on playing. They could not imagine that the Japa- nese would say no to U.S. demands. But that is exactly what the Japanese did, and it left the Clinton administration scrambling for a response. In Tokyo on July 10,1993, Prime Minister Miyazawa and President Clinton announced the successful conclusion of a new agreement, officially called the United States-Japan Framework for New Economic Partnership. According to Miyazawa, the agreement would “improve the bilateral relationship and benefit the world economy.” What it actually provided was a framework for the most bitter and ultimately the most unsuccessful period in the entire postwar history of U.S.-Japan trade negotiations. Clinton had gone to Tokyo determined to come home with nothing less than an agreement that would provide a scaffolding for results-oriented trade negotiations. Miyazawa, in rather typical Japa- nese style, wanted to avoid sending the president home empty- handed and so aimed at getting an agreement that seemed to give the Americans what they wanted without actually committing Japan to the “qualitative and quantitative measurements” that Clinton insisted upon. Clinton and his team left Tokyo believing that the Japanese had agreed to do what the U.S. administration wanted them to do with respect to trade negotiations. The Japanese seemed relieved that they had succeeded in avoiding a confrontation and managed to send Clinton home with a face-saving and not very meaningful agreement. Clinton had no sooner claimed success in getting Japan to agree to use measurable indicators than the chairman of Keidanren praised the accord precisely for not including numerical targets. The Clinton administration believed that the framework agreement meant concrete Japanese concessions on matters relating to autos and auto parts, high technology, and medical equipment. The Japa- nese government claimed success for having avoided making any commitments that went much beyond the “series of seminars to encourage automakers to purchase U.S. auto parts” that MITI officials had offered to set up. 194 Gerald Curtis

For years the United States and Japan had been engaged in trade wars that actually amounted to elaborate and well-scripted games in which the goal was to contain Congressional pressures for protectionist measures and avoid a serious rupture in the relationship. In the course of developing the games’ rules, and as the world economy changed and globalization became more intense, the goal of the game became less one of restricting Japanese access to the American market and more one of expanding U.S. access to markets in Japan. Instead of securing changes in Japanese procedures and laws to improve access for foreigners to Japanese markets, Clinton wanted to negotiate trade agreements that would guarantee concrete results for foreign manufacturers. Miyazawa and the trade bureaucrats in Japan understood that Clinton wanted to change the rules of the game, and they were determined to derail his efforts to do so. Under the trade game as it had been played, the U.S. administration worked with Japan to contain Congress. This is what frustrated trade negotiators like Clyde Prestowitz, who complained that “instead of a negotiator, the U.S. trade team became an adviser to the government of Japan on how to handle the U.S. Congress.”2 In the new game that Clinton decided to play, the U.S. administration would enlist Congress to contain the much talked about and feared Japanese economic threat. The negotiations were led on the American side by Mickey Kan- tor, the trade representative, and on the Japanese side by Hashimoto Ryutaro, the minister of international trade and industry. Having decided to follow the revisionists’ script, Kantor insisted that Japan agree to quantitative targets, as it had done in the Semiconductor Agreement that had been negotiated during the Reagan administration. The Americans saw the semiconductor agreement as the model to be followed in their negotiations with Japan and seem to have convinced themselves that Japan would succumb to U.S. pressure. The Japanese, however, regretted ever signing the semiconductor agreement and were determined not to make an agreement that would guarantee market share to foreign companies again. The Clinton administration ended up with little to show for the rancor generated by Kantor’s trade negotiations with Hashimoto. Hashimoto’s domestic popularity soared. He appeared to be tough in standing up for Japan against the Americans. In a picture published in all the major Japanese newspapers, Kantor is shown hold-

————— 2. Clyde V. Prestowitz, Jr., Trading Places: How We Allowed Japan to Take the Lead (New York: Basic Books, 1988), p.281. U.S. Policy Toward Japan in the 1990s 195 ing a kendo staff to Hashimoto’s throat. Hashimoto, an accomplished kendo player, had given him the staff as a present and himself set up the pose with it pointing to his own throat. The symbolism of the American negotiator threatening without knowing what he was doing and fated to be defeated by his more sophisticated Japanese opponent was not lost on the Japanese public. The negotiations turned out to be a public relations bonanza for Japan. Despite a history of Japanese protectionism and American openness, suddenly Japan was claiming to defend the principles of free trade against a U.S. government intent on imposing managed trade agreements. The Clinton administration’s trade policy toward Japan provoked a strongly negative reaction throughout Asia, where leaders worried that if the U.S. effort to establish a results-oriented trade regime with Japan succeeded, the United States would use the same approach to strike bilateral deals with other countries in the region that were much less powerful than Japan. Clinton, to his credit, was unlike any earlier president in the importance he attached to international economic issues. He seemed to understand instinctively that economic relations were an integral component of national security. Convinced that the United States’ future well-being depended on its being the leader of the global economy, he seemed far more interested in economic issues than in the geopolitical ones that were the staple of the foreign policy establishment. He was not well informed about Japan, however, and he surrounded himself with advisors who believed that Japan would do what they demanded and who had prepared no fallback position if their demands were not met. Clinton personally and aggressively advanced the administration’s revisionist agenda with Japan. During the G-7 summit in To- kyo in the summer of 1993, after the Diet’s vote of no-confidence in Miyazawa and in the middle of the election campaign for the Lower House, Clinton used a reception at the American Embassy to meet leaders of the opposition parties. He left the impression among Japa- nese that he preferred the opposition to the LDP and expected that if the opposition parties came to power, they would curtail the bureaucracy’s powers and push economic reform. The LDP never for- gave him, and it was one reason the party’s leaders were so pleased to see Clinton’s chosen successor, Al Gore, defeated in the November 2000 presidential election. Parties opposed to the LDP did take control of the government in the autumn of 1993, but when Prime Minister Hosokawa visited Washington in February 1994, Clinton greeted him with demands 196 Gerald Curtis that Japan accept quantitative indicators and market sharing guarantees. While criticizing Japan for putting too much power in the hands of the bureaucrats, Clinton was asking for the kind of guarantees that could be made only if the bureaucracy enforced them. Hoso- kawa refused to bend to Clinton’s demands and the summit ended in a standoff. For the first time in postwar U.S.-Japan relations a meeting between the leaders of the two countries did not produce some kind of an agreement. Hosokawa, who had been weakened domestically by a fiasco involving a proposal to increase the consumption tax and by conflict among the ruling coalition parties, des- perately wanted an agreement with Clinton to demonstrate his leadership abilities. His refusal to cave under American pressure brought him some short-lived applause for being the first prime minister to say no to the United States, but his failure to manage the American relationship contributed to his fall from power a couple of months later. Whatever their anger about Clinton’s trade policy, Japanese business and political leaders understood that they needed a good relationship with the United States. After Hosokawa’s fall, Japan continued to dig in its heels about being opposed to “managed trade,” with senior bureaucrats in MITI saying not only that they would resist the Clinton administration’s specific demands, but also that they would insist from that future trade negotiations focus on multilateral agreements rather than bilateral deals. The Clinton administration approached the end of its first term with the effort to pursue a results-oriented trade policy toward Japan having produced little more than frustration, disappointment, and bitter feelings all around. By the time of his re-election, however, Ja- pan was no longer the perceived threat that it had been when Clin- ton first came into office. The stock market and real estate bubble of the late 1980s had burst, leaving Japan with economic problems that grew only more serious as the new decade unfolded. The revisionist assumption that Japanese global economic dominance could not be stopped unless the United States departed from the normal rules of international trade and imposed a managed trade regime on Japan looked rather silly in the face of America’s economic renaissance and Japan’s financial and economic mess. The focus of attention in Clinton’s second term shifted from trade to finance, and to the dangers that Japan’s banking crisis posed to the international economy. The key administration player in Japan relations now was not the trade representative but Secretary of the Treasury Robert Rubin. Enormous pressure was put on Japan, in- U.S. Policy Toward Japan in the 1990s 197 cluding repeated public scolding of Japan’s leaders for not dealing more forthrightly with the crisis in the financial system. How effective this was is hard to say, but it is probably the case that U.S. pressure at least contributed to speeding the decision taken by Prime Minister Obuchi in the fall of 1997 to nationalize the long-term credit bank, which was eventually sold to an American consortium, and inject public funds into the banking system. Japanese indecisiveness with respect to finance system reform was a source of intense frustration in Washington, for which Rubin became the primary spokesman. Clinton came into office thinking that one of his major foreign policy challenges was how to deal with Japan’s global international power, but in his last years as president what he had to worry about was the danger to the international system posed by Japan’s economic weakness and the fragility of its financial system. One other economic issue in U.S.-Japan relations during the Clin- ton years deserves mention. That is the sharply negative American reaction to the Japanese proposal to create an Asian Monetary Fund (AMF). No sooner had Japan floated this proposal than U.S. Treas- ury officials rejected it. There appear to have been two reasons for the American reaction. One was the concern that an AMF would open a soft window for loans to countries that suffered from the Asian financial crisis and thus undermine the tough policies of the IMF. The other was that the AMF would be used by Japan to expand its regional political influence at the expense of the United States. A good case can be made that the United States overreacted to this Japanese initiative, or at least reacted too quickly. It would have made more sense to ask Japan to put its money on the table, to spell out exactly what it was proposing, and to negotiate the details after- wards. There would be time to reject the proposal later, if that seemed the best course of action. To the extent that there was concern that this was an effort on Japan’s part to gain political influence in East Asia at U.S. expense, that reflected an overestimation of Ja- pan’s ability to exercise political leadership in East Asia and a kind of knee-jerk reaction to anything that suggested a break with the status quo.

Enhanced Bilateralism One of the successes of the Clinton administration in its dealing with Japan relates to its handling of North Korea. This issue was managed with considerable skill by Clinton’s special representative to review 198 Gerald Curtis policy vis-à-vis North Korea, former secretary of defense William Perry. Perry consulted closely with South Korea and with Japan on the North Korean issue, and the pattern of trilateral consultations that he employed provides something of a model for the future. Traditional multilateral institutions are weak in East Asia, and they are likely to pretty much stay that way. The Asia Pacific Eco- nomic Cooperation (APEC) forum and the ASEAN Regional Forum (ARF) are useful organizations in terms of creating multilateral channels of communication about economic and security issues. They are not likely to develop into much more than that. The necessary ingredients for effective multilateral institution building are much more scarce in East Asia than they are in Western Europe or even in South America. Levels of economic development vary widely, and political systems range from democratic to authoritarian. A sense that East (including North and Southeast) Asia is a dis- crete region with common interests is growing stronger, but it is still weak. It will be many years at best before strong regional multilateral institutions develop. U.S.–Japan–South Korean consultations about North Korea, however, reflect what might be characterized as “enhanced bilateralism.” Perry consulted with Japan and with South Korea, and Japan and South Korea consulted with each other and with the United States. No trilateral institution was created, but effective tripartite dialogue and policy coordination were achieved. This kind of non- institutionalized multi-nation cooperation is occurring with respect to other issues as well. It offers a more appropriate model for East Asia for the foreseeable future than the Western European type of regional organization does. A related point, and related to the American response to the proposal for an AMF, is U.S. policy toward East Asian regional dialogues and organizations. The United States reacted strongly against Malaysian prime minister Mahathir Mohamad’s proposal for an East Asian Economic Caucus (EAEC), in part at least because Mahathir himself was so overtly anti-western. But now the EAEC exists in all but name in the form of ASEAN+three, and no great damage has been done to American interests as a result. It makes sense for the United States to lighten up in its criticism of East Asian regional initiatives from which it is excluded. Japan can play a greater political as well as economic role in East Asia without threatening American interests; indeed, in some ways a higher-profile Japanese role in the region can help further U.S. interests. If it results in Japan’s becoming a bigger market for the exports of other East Asian countries, for U.S. Policy Toward Japan in the 1990s 199 example, that would be good news for the world economy and for Japan. Fears that Japan might somehow surpass the United States as the dominant political force in the region lack any grounding in reality. Other countries in East Asia, especially Japan’s nearest neighbors Korea and China, would resist strenuously if Japan embarked on a drive for regional power, replete with the military means to project Japanese power.

Managing the Alliance The picture I have drawn of the Clinton administration’s Japan policy is not a flattering one. Clinton did not bring people into his inner circle of advisors who knew much (as distinct from thinking they knew much) about Japan or about the people who hold important positions in politics, government, and business in Japan. He did not give relations with Japan the attention it deserved, and he himself did not articulate a strategy that placed relations with Japan in the larger context of U.S. policy in East Asia. This is not as damning an indictment of the Clinton administration as it may appear, however. Previous administrations dealt with Japan in a rather similar manner, as I argued in my chapter in the previous volume in this series. This overall picture does not comport well with the idea that the relationship with Japan is the United States’ most important bilateral relationship bar none, as the late ambassador to Japan Mike Mansfield was fond of saying and many others are fond of repeating. For a relationship that is supposed to be so crucially important, the pattern of inattention on the part of top American leaders is quite remarkable. Yet what is more remarkable and more important is that the U.S.- Japan relationship is strong and stable and that the two countries are becoming ever more interdependent. Three factors help explain this reality. The most important is that government leaders in the United States, and in Japan as well, whatever the bilateral frictions of the moment, never lost sight of the reality that good relations between the United States and Japan were in their country’s vital national interests. Thus economic frictions were not permitted to affect security ties adversely, and trade conflicts were contained by the perceived need to avoid a real trade war. Japan was not consulted to any great extent by the United States as it developed its China policies, but no administration permitted China policy to undermine relations with Japan. The failures of U.S. policy toward Japan are primarily a mat- 200 Gerald Curtis ter of lost opportunities to engage Japan more fully in the resolution of a variety of international issues. A second factor accounting for the strength of U.S.-Japan relations is that governments are only a part and in many ways a small part of the relationship. The economic interdependence that exists and that is intensifying between Japan and the United States is the result of decisions taken for reasons of self-interest on the part of private sector actors in both countries. This chapter has focused on government and diplomacy, but a full treatment of U.S.-Japan relations in any period needs to analyze these private sector interactions. Finally, the relationship has remained strong because at the governmental level it is managed by professionals who are committed to maintaining good relations. The roles of individuals with responsibilities for Japan in the Defense Department and the Department of State, and of the ambassador to Japan, though weaker than they were in the early postwar period when a relatively coordinated Ja- pan policy could be managed from the Japan Desk at the State De- partment, remain critical to the effective management of the alliance. Professionals in the bureaucracy (who in the American case need not be professional bureaucrats) have played a key role through successive administrations in managing this alliance and keeping it on an even keel.

Some Thoughts About the New Bush Administration Whenever a newly elected president is not from the same party as the outgoing incumbent, his election is invariably accompanied by promises of important changes in foreign policy. So it was with George W. Bush. When he succeeded Bill Clinton in the White House, he promised, among other things, to take a harder line with China and to pay more attention to working closer with Japan. He came into office saying all the right things about consulting closely with Japan and encouraging it to define its own role rather than badgering it to play the roles the United States wanted it to play. He also appointed people who had considerable experience dealing with Japan to key positions in his administration. The history of postwar U.S. foreign policy is a story of how these promises for change go largely unrealized as the pressures for continuity gradually succeed in dominating the foreign policy decision- making process. Bill Clinton came into office promising to be tougher with China than outgoing President Bush and left office ad- U.S. Policy Toward Japan in the 1990s 201 vocating a strategic partnership and downplaying Chinese human rights issues. George W. Bush’s claim that China was a strategic competitor instead of partner led to speculation that the new administration was going to emphasize the dangers of an emerging China threat and seek to rally Japan and others to contain it. Within a few months after Bush came into office, the forces at work to pull China policy back toward the center were in full swing. Whatever the long-term security concerns, there was nothing to be gained politically, especially once the election was over, from tenser relations with China, and there were powerful economic reasons for trying to maintain good relations with China. China is, after all, a huge and growing market and the target of an increasing amount of U.S. foreign direct investment. The Bush administration is far more of a businessman’s government than was the Clinton administration, and several of its most important members have had experience in international business. Once in office, President Bush began the search for a China policy that would balance economic interests and security concerns, which is precisely what his predecessor found himself doing. With respect to Japan, the promise of closer consultations especially on regional security issues was premised on the assumption that the Japanese were eager to engage in frank discussions and make new meaningful commitments as a result of those discussions. If previous experience were to be an accurate guide, it would not take long before the administration concluded that these expectations were unrealistic. In the absence of a problem emerging that made a focus on relations with Japan imperative, it seemed to be only a matter of time before the Bush administration turned its attention away from Japan and focused on problems that needed to be solved and on countries that could help solve them. It was unlikely that Japan would consume much of the time that the president or his chief advisors gave to foreign policy. This was the situation before September 11, 2001. The terrorist attacks on the World Trade Center buildings in New York City and the Pentagon in Washington changed the American understanding of what national security means, and it also changed American understanding of what it means to be an ally. The implications for U.S.- Japan relations are profound. During the long years of the Cold War, U.S. security policy had two overriding objectives. One was to maintain a credible deterrence against a nuclear attack on the U.S. homeland, and the other was to be able to project its force far from American shores to assist allies 202 Gerald Curtis and other friendly nations against aggression by third countries. The need for homeland defense against anything other than a nuclear attack by the Soviet Union was all but inconceivable. September 11 changed that thinking. Americans were made pain- fully and horrifically aware that they are vulnerable to attacks by transnational networks of terrorist organizations. Reducing this threat requires not only military action but also a worldwide cooperative effort to interrupt the flow of money to these organizations, to gather and share intelligence about them, and to use political and economic tools of diplomacy to reduce the ability of these terrorist groups to attract new recruits. The alliance the United States forged with Japan, obligating the United States to defend Japan but imposing no reciprocal burden on Japan in case of an attack on the United States, served the interests of both countries during the Cold War years. The U.S. could take care of itself; the problem was to assist the weaker state. The explicit asymmetry in responsibilities was necessary to make the treaty compatible with the war-renouncing clause in Article 9 of Japan’s constitution and to reassure other countries worried about a potential revival of Japanese militarism and of Japan’s return to the status of a major regional military power. Whatever the limits of the legal obligations Japan assumed under the U.S.-Japan Security Treaty and however restrictive the limits on the roles of the Self-Defense Forces imposed by the current government interpretation of Article 9, the view of Japan as an “ally” of the United States would not have survived a Japanese failure to become involved in the U.S.-led effort in the aftermath of September 11 to reduce the terrorist threat posed by Osama bin Ladin and his al- Qaeda organization. Prime Minister Koizumi recognized this reality. He got the Diet to pass legislation that made it possible for Japan to provide rear-area support in the Indian Ocean for U.S. military actions, to provide security for refugee camps in Afghanistan, and to assume the task of protecting the security of U.S. military bases in Japan. Various public opinion polls indicated that his decision to stand firmly with the United States in fighting terrorism was supported by a majority of the Japanese public. It is far too early to say how September 11 will affect U.S.-Japan relations, and Japanese foreign and military policy more broadly. Three points deserve to be emphasized. One is that U.S.-Japan relations would be in crisis had Koizumi not acted as decisively as he did. The second is that U.S. and Japanese leaders need to repeatedly emphasize the point that what is at issue is not what Japan should U.S. Policy Toward Japan in the 1990s 203 do in response to U.S. demands, but what Japan should do in its own self-interest in cooperation with the United States and other countries to combat terrorism. If the issue is phrased in terms of responding to U.S. pressure, the only outcome can be U.S. displeasure that the Japanese response is not bigger and Japanese resentment that they are being dictated to by the Americans. Koizumi has been careful to put the issue in terms of Japanese self-interest. The mass media’s penchant for looking for U.S. “pressure” and for presenting Japanese government policy as a response to that presumed pressure, however, remain as strong after the traumatic events of Sep- tember 11 as it was before. U.S. relations with Japan grew stronger in the immediate aftermath of the terrorist attack on the United States. As time goes on, however, the geopolitics of East Asia will re-emerge in the form of new challenges to American and Japanese policymakers. The terrorist threat has suppressed rivalry and stimulated new patterns of cooperation among states, including U.S. relations with China and with Russia. Agreement that there needs to be a global coalition to counter terrorism also muted Chinese and Korean concerns about the participation of Japanese military forces in support of U.S. actions in Afghanistan. Over time, however, the security issues that were of concern to the United States and Japan before September 11, including North Korea and Taiwan and how to maintain a balance of power in East Asia, will reassert themselves. Economic issues may surface even more quickly, given the depth of Japan’s economic problems and the adverse bimpact of the terrorist attack on the U.S. and world economy. The challenge of managing relations with Japan in a manner that contributes positively to U.S. national interests will be even greater in the future than it has been in the past.

Japan’s Policy Toward the United States During the 1990s Koji Murata

The 1990s are often called Japan’s “lost decade.” In this decade, Ja- pan faced a series of international crises and domestic political and economic disruptions. Nonetheless, the U.S.-Japan alliance grew stronger during the decade, and the prime minister played a critical role in this effort. This chapter examines Japan’s policy toward the United States, in the international and domestic contexts of the time. The first half focuses on how Japan responded to the security crises during the early and mid-1990s, and the second half on the process of strengthening the U.S.-Japan alliance.

Security Crises The 1990s were the first decade after the end of the Cold War. In Janu- ary 1989, the Showa Emperor passed away at the peak of prosperity in postwar Japanese society. At the end of the 1980s, Japan’s Gross Na- tional Product (GNP) accounted for about 15 percent of the total world GNP. It was often said, in those days, that the real threat for the

————— Koji Murata is Professor of Diplomatic History at Doshisha University.

204 Japan’s Policy Toward the United States During the 1990s 205

United States was not Soviet military power but Japanese economic power and that the real victor of the Cold War was not the United States but Japan and West Germany. Nonetheless, Japan soon demonstrated that it was not the real victor of the Cold War.1 As Kitaoka Shin’ichi points out, in the early and mid-1990s, Japan faced serious security challenges, internationally, regionally, and domestically.2

THE GULF CRISIS AND THE PKO BILL First, Japan failed to respond promptly and properly to the Gulf CRISIS in 1990. On August 2, 1990, Iraq invaded Kuwait, and announced the annexation of Kuwait on August 8. During the Cold War era, Iraq would have been prevented from taking such an action by the Soviet Union for fear of a clash with the United States. The Gulf crisis was the first serious security crisis in the post–Cold War era. The United Nations passed a resolution asking Iraq to withdraw from Kuwait. In mid-August, the United States and other countries decided to dispatch armed forces to the Middle East. Washington expected Japan to play a substantial role in the crisis. Money was not enough. During a visit to Washington, Tanba Mi- noru, deputy director-general of North American Affairs Bureau of the Ministry of Foreign Affairs (MOFA), sent a message to Tokyo that the gap between the two countries was very serious and that Tokyo should take strong measures, for Japan’s response would decide the future of U.S.-Japan relations for the next ten to twenty years.3 Although the Japanese economy depends heavily on Middle Eastern oil, Japan nonetheless decided to contribute only economic assistance to the multinational forces let by the United States. On August 30, the Japanese government under Prime Minister Kaifu To- shiki announced economic assistance of U.S.$1 billion for recovering peace in nonmilitary areas such as medical aid and refugee assistance. On September 14, the Kaifu administration decided to add $3 billion more. Japan’s contribution was criticized by the United States and other countries as “too little and too late.”

————— 1. Iokibe Makoto, ed. Sengo Nihon gaikoshi (Postwar Japanese diplomatic history) (Tokyo: Yuhikaku, 1999), pp. 226–27. 2. Kitaoka Shin’ichi, “Nihon no anzen hosho: reisengo 10 nen no chiten kara” (Ja- pan’s security ten years after the end of the Cold War), Gaiko Forum, special issue of 1999. 3. Kunimasa Takeshige, Wangan senso to iu tenkanten (The Gulf War as the turning point) (Tokyo: Iwanami shoten, 1999), pp. 30–31. 206 Koji Murata

Japan, which tended to understand international military conflicts as either defensive or offensive wars, lacked a sense of responsibility for international security affairs. During the crisis, Japan failed to pass the United Nations Peace Cooperation bill in the National Diet. According to a public opinion survey in November 1990, 78 percent opposed dispatching the Self Defense-Forces (SDF) abroad, and only 15 percent supported it. After Prime Minister Kaifu submitted the bill to the National Diet, his approval ratings decreased from over 50 percent to 33 percent.4 It was unfortunate that at this critical moment the Japanese government was under the weak leadership of Prime Minister Kaifu. Since the Japanese public saw him as a clean politician at a time of political scandals, Kaifu enjoyed relatively high public support. However, he belonged to the smallest faction in the Liberal Democ- ratic Party (LDP). Prior to assuming the prime ministership, Kaifu was known as a dove who lacked experience in foreign and security affairs. Prime Minister Kaifu hated even to meet with senior officials of Japan Defense Agency (JDA) during the crisis. On January 17, 1991, the multinational forces led by the United States began air raids against Iraq. Japan immediately decided to contribute $9 billion more to the multinational forces. Ozawa Ichiro, powerful secretary-general of the LDP, was an advocate of dispatching the SDF to the Middle East. He recalls: “The dreams of peace in Japan were broken by the Gulf War. In this sense, it was like the Black Ships at the end of the Edo era.”5 Ozawa also introduced an interesting story. A SDF officer met an American officer and told him that each Japanese was contributing about $100 to solving the crisis. The American responded: “I will pay you $100. So, would you go to the war on my behalf.”6 Michael Armacost, then U.S. ambassador to Tokyo, who was often called “Mr. Gaiatsu” (Mr. External Pressure), recalls: The hesitancy of Japan’s initial response, the multitude of conditions imposed on its financial contribution, its reluctance to share the risks as well as the costs of a major multilateral venture, and its tendency to reach tough decisions only under the most intense international pressure prompted questions among many Americans about its reliability as an ally and global diplomatic partner. At the same time, many Japanese were irritated by the intensity of US criticism and resented the fact that their financial support for

————— 4. Asahi shinbun, Nov. 6, 1990. 5. Ibid. 6. Ibid. Japan’s Policy Toward the United States During the 1990s 207

Desert Storm was all too often ignored in Western celebrations of the coalition’s victory.7 Under Ozawa’s leadership, on April 26, after the end of the war, Japan dispatched minesweepers to the Persian Gulf. This decision caused wide controversy in Japan and created a split in the LDP. The minesweepers served in the Gulf and returned to Japan on October 30. As the end of his term as the president of the LDP drew near, Kaifu repeatedly expressed his “indomitable resolve” for political reform. The Takeshita faction, the majority faction in the LDP, however, decided not to support him. On October 4, 1991, Kaifu with- drew from the race for president of the LDP. On November 23, supported by the Takeshita faction, Miyazawa Kiichi was elected as the next prime minister. Miyazawa, a longtime prime ministerial candidate, was one of the most brilliant and experienced politicians in the LDP. Based on the lesson of the Gulf crisis, on June 6, 1991, Ozawa created in the LDP a special committee on the role of Japan in the international community. Then, the LDP tried to pass in the National Diet the Peacekeeping Operations (PKO) bill. Given Japan’s important role in the Cambodian peace process, Ozawa and others wanted to have the SDF participate in the United Nations Transitional Authority in Cam- bodia (UNTAC). The bill was, however, not passed in the National Diet during the extraordinary session of 1991. Many LDP members criticized Prime Minister Miyazawa, a well-known dove, for not pushing the bill enough to pass it. Miyazawa, realizing the bill was crucial to his political survival, then supported it more vigorously. Finally, on June 15, 1992, supported by the LDP as well as the Clean Party or Komeito and the Social Democratic Party, the so-called PKO bill was passed in the National Diet. Under the new law, the SDF was able to participate in PKO activities under the United Nations. This was Japan’s first step for international security beyond its own territorial defense since the end of World War II. Nonetheless, Japan’s participation in U.N. peacekeeping operations is still limited to logistical support assignments such as medical care, transportation, communications, and construction services. The assignment of peacekeeping forces for monitoring disarmament, as well as for garrisoning and patrolling buffer zones, is “frozen” pending new legislation. Prescribing limits for military activity has been a common pattern of postwar

————— 7. Michel H. Armacost, Friends or Rivals: The Insider’s Account of U.S.-Japan Relations (New York: Columbia University Press, 1996), pp. 51–52. 208 Koji Murata

Japanese defense policy.8 The Japan Socialist Party (JSP) and the Communist Party, however, made repeated efforts in the National Diet to resist the passing of even this moderate bill. Under this new law, more than 1,200 SDF members participated in UNTAC.

THE NORTH KOREAN NUCLEAR CRISIS In February 1993, the International Atomic Energy Agency (IAEA) demanded the right to inspect nuclear facilities in North Korea. In March, North Korea announced its withdrawal from the Nuclear Nonproliferation Treaty (NPT). In spring 1994, the United States dispatched five aircraft carriers to the sea around North Korea. In those days, a slim majority of the American public thought that it was “worth risking war” to prevent North Korea from manufacturing nuclear weapons. The Department of Defense under Secretary Wil- liam Perry drew up a detailed contingency plan for bombing North Korean nuclear facilities. Based on experiences in Vietnam and Per- sian Gulf, General Gary Luck, the U.S. commander in Korea, esti- mated that as many as a million people would be killed in a full- scale war on the Korean Peninsula, including 80,000 to 100,000 Americans.9 It was the most serious security challenge in Northeast Asia since the end of the Cold War. The United States prepared an Operation Plan “50-27.” Accord- ing to this plan, Japan was expected to exercise its right of self- defense in case of a Korean contingency. Washington wanted to discuss the plan with Tokyo because, according to General Robert Riscassi, former commander of U.S. forces in Korea, Japan was an “integral part” of the operation. Tokyo, however, reportedly refused even to discuss it.10 In those days, Japan suffered from a terrible political vacuum. In the July 1993 general elections for the House of Representatives, the LDP lost its majority and Prime Minister Miyazawa resigned. In the new coalition government under Prime Minister Hosokawa Mori- hiro, many cabinet members, including the prime minister himself, lacked experience in foreign and security affairs. Furthermore,

————— 8. Koji Murata, “Japan,” in Asia Pacific Security Outlook 2000, ed. Richard W. Baker and Charles E. Morrison (Tokyo: Japan Center for International Exchange [JCIE], 2000), p. 102. 9. Don Oberdorfer, Two Koreas: A Contemporary History (Reading, Mass.: Addison- Wesley, 1997), pp. 323–24. 10. Funabashi Yoichi, Domei hyoryu (Alliance adrift) (Tokyo: Iwanami shoten, 1997), p. 314. Japan’s Policy Toward the United States During the 1990s 209

Hosokawa abruptly resigned eight months later, and the Hata Tsu- tomu cabinet that followed lasted only for 64 days. The United States unofficially asked Japan about the possibility of dispatching minesweepers to protect U.S. aircraft carriers. The JDA refused, saying it was unconstitutional. In the Gulf crisis, Japan had dispatched them only after the end of military actions. But the JDA realized that logistical support and intelligence exchanges with the United States were necessary in the event of an emergency on the Korean Peninsula. In this political vacuum, the bureaucracies took the initiative. The Cabinet National Security Affairs Office organized a working group to examine Japan’s possible contributions in the case of a conflict in Korea. Officials from the JDA, the MOFA, the National Police Agency, and the Cabinet National Security Affairs Office participated in this four-agency meeting. When, in spring 1994, the United States demanded that Japan contribute 1,059 items, the working group was expanded. Reportedly, soon after the Hosokawa cabinet was established, the government completed a policy paper for responding to issues such as Japanese civilian evacuation from South Korea and ship inspec- tions on the high seas. Also, when the Hata Cabinet was established in April 1994, the government was almost ready to submit several bills to support the U.S. forces and to enhance the activities of the SDF in case of contingencies in Korea.11 Nonetheless, basic questions still remained unanswered. First, it was not clear if Japan could exercise the right of collective self-defense. Second, it was also unclear how the Japanese government would ask for cooperation from local governments, which controlled civilian ports and airports, to support U.S. forces under the Status of Forces Agreement (SOFA) between Japan and the United States. Third, under the prior consultation system, it was not certain if the Japanese government would respond affirmatively to the direct dispatch of the U.S. fighters to combat areas in the Korean Peninsula. Fortunately, the crisis was averted after former U.S. President Jimmy Carter’s visit to Pyongyang. Nonetheless, this experience reminded the U.S.-Japan security policy community of the lack of readiness of the alliance. Ishihara Nobuo, then deputy chief cabinet secretary, recalls: The United States believed that because the embargo aimed at preventing North Korea from developing nuclear weapons was for the security of Ja- pan, Japan should cooperate with the United States as much as possible. I ————— 11. Asahi shinbun, Sept. 16 and 17, 1996. 210 Koji Murata thought at that time if the situation became worse, it would be a big problem. I was concerned that the relations with the United States might fall into trouble and that the operations of the U.S.-Japan Security Treaty might mal- function. So, I pointed out the necessity of making a crisis manual immediately to the ministries and agencies concerned.12 The discrepancy between American and Japanese attitudes toward the security of Korea was clear. Japan tried to respond to the crisis in the context of U.S.-Japan relations.

THE OKINAWA PROBLEM When the tragic rape incident occurred in Okinawa on September 4, 1995, the foundations of the U.S.-Japan alliance were again seriously shaken. Joseph Nye, then assistant secretary of defense for international security affairs, recalls, “It was a shock like a typhoon.”13 American responses were quick. On September 12, Aloysius O’Neill, counsel general in Okinawa, visited Governor of Okinawa Ota Masa- hide to apologize. On September 21, President Bill Clinton stated in a radio address that the United States deeply regretted the incident. On the other hand, neither Prime Minister Murayama Tomiichi, the JSP leader, nor Foreign Minister Kono Yohei apologized to Okinawa about this incident. Governor Ota resentfully recalls, “While the Japanese government always emphasizes the importance of the U.S.- Japan security relationship, without any apology, it took an indiffer- ent attitude toward the rape incident in Okinawa, the core place of the alliance.”14 In fact, although Okinawa comprises only about 0.6 percent of Japan’s total land mass, about 75 percent of all U.S. military installations in Japan are on Okinawa. The Murayama cabinet also failed to respond properly to other crises such as the Hanshin- Awaji earthquake in January 1995 and terrorism by a religious cult group in Tokyo in May 1995, which consequently expanded the Japanese sense of insecurity and accentuated the balance of crisis management. Nishimura Kumao, former director-general of the Treaty Bureau, MOFA, expressed the essence of the asymmetrical character of U.S.- Japan alliance as “cooperation between the material factor and the

————— 12. Ishihara Nobuo, Shusho kantei no ketsudan (Decisions in the prime minister’s office) (Tokyo: Chuo koronsha, 1997), p. 142. 13. Funabashi, Domei hyoryu. 14. Ota Masahide, Okinawa no ketsudan (Decisions on Okinawa) (Tokyo: Asahi shinbunsha, 2000), pp. 174–75. Japan’s Policy Toward the United States During the 1990s 211 human factor.”15 The former refers to the U.S. bases in Japan, and the latter to the U.S. armed forces. Now, there was a possibility that the core of U.S.-Japan security relations, America’s stable use of its military facilities in Japan, might be seriously endangered. One reason this incident generated such a large public outcry was that the U.S. soldiers suspected of the crime remained under the control of the U.S. military under the SOFA. Japanese police were not allowed to take suspects into custody until there was an indictment.16 The United States agreed to revise the way in which SOFA was implemented. Through the initiative of Ambassador Walter Mondale during a visit by Secretary of Defense Perry to Japan at the end of Oc- tober, the Special Action Committee on Facilities and Areas in Okinawa (SACO) was established to talk about reduction and re- alignment of U.S. bases on Okinawa. In retrospect, however, it was a mistake for the Japanese and the U.S. authorities not to specify the conditions under which Japanese police would be allowed to take American suspects into custody before indictment. For, when another rape incident happened in June 2001, it still took five days before an American soldier suspected of the crime was taken into custody by Japanese police, which again sparked a large outcry in Okinawa. Prime Minister Hashimoto Ryutaro, who succeeded Murayama in January 1996, was eager to resolve U.S.-Japan tensions and to consolidate U.S. bases on Okinawa. In 1996 alone, he met Governor Ota five times. Hashimoto also established a private consultative body on Okinawa for the chief cabinet secretary headed by Shimada Ha- ruo, a professor of economics at Keio University, and appointed Okamoto Yukio, a former MOFA official, as special assistant to the prime minister on Okinawa. They frequently visited Okinawa. In April 1996, under the interim report of SACO, the U.S. government agreed to relocate the Marine Corps air station at Futenma, one of the most controversial bases in Okinawa, within five to seven years—providing another suitable location was found for those forces. The final report in December 1996 called for the return of eleven U.S. military facilities, accounting for approximately 21 percent of the total acreage of the U.S. bases on Okinawa. The return of

————— 15. Nishimura Kumao, San Francisco heiwa joyaku, Nichi-Bei anpo joyaku (The San Francisco Peace Treaty and the U.S.-Japan Security Treaty) (Tokyo: Chuko bunko, 1999), p. 48. 16. Research Institute for Peace and Security (RIPS), ed., Asian Security, 1996–1997 (Tokyo: RIPS, 1997), p. 21. 212 Koji Murata seven of these are contingent on successful relocation within Oki- nawa prefecture.17 The final SACO report, however, did not resolve the Okinawa base issue. Under the Special Law Governing Land for Armed Forces Stationed in Japan, it was possible for the government to forcibly lease land from individuals who would refuse to voluntarily enter into land-lease contracts. But the law required that in such a case the mayor or the governor must sign the lease contract in place of the landowner. In the event that the governor should refuse, the central government must initiate proceedings against him to force him to carry his duties. Then, the issue would go to the Land Expropriation Committee. In the case of the U.S. military’s Sobe Communications facility, scheduled to expire in May 1997, more than 3,000 landowners refused to renew their leases. Governor Ota also refused to sign the documents required to continue the forced lease of the land. In August 1997, the Supreme Court allowed the central government to take action to force the governor to carry out his duties. Then, Gov- ernor Ota accepted this judgment and signed the documents. Ota feared that if he continued to refuse, the central government would revise the Special Law Governing Land for Armed Forces in Japan. During this process, however, the Hashimoto administration reached the conclusion that the law should be revised. Although Hashimoto failed to obtain the support from the JSP, then a member of the governing coalition, he succeeded in receiving support from the New Progressive Party (Shinshinto) led by Ozawa Ichiro. On April 17, the law was passed in the National Diet with an overwhelming majority. Under the revised law, even after an expiration of contract, with proper compensations for landowners, the central government can temporarily use the land until legal proceedings are completed. Governor Ota, who had once compromised, felt betrayed by the government.18 In the gubernatorial election in Okinawa on November 15, 1998, Inamine Keiichi, a local business leader supported by the LDP, defeated Ota. He appealed to voters to overcome the recession in Oki- nawa by restoring healthy relations with the central government, which had provided limited economic aid to Okinawa while Gover- nor Ota had been uncooperative. He received 374,833 votes to Ota’s 337,369. Inamine proposed the construction of new airport in Nago

————— 17. Eiichi Katahara, “Japan,” in Asia Pacific Security Outlook, 1998, ed. Richard W. Baker and Charles E. Morrison (Tokyo: JCIE, 1998), p. 73. 18. Ota, Okinawa no ketsudan, p. 256. Japan’s Policy Toward the United States During the 1990s 213 city for shared use by civil aviation and the U.S. military over a period of fifteen years. The prospects for base reductions in Okinawa, however, remain uncertain. Michael Green observes, “The modus operandi of base issues will have to change to converge with an increasingly fluid Japanese political scene and growing Japanese aspirations for control of the modalities of the alliance.”19 What do these crises reflect about Japan’s security policy during the early and mid-1990s? First, the Gulf War made clear the lack of a Japanese sense of responsibility for international security beyond its own territorial defense in the post–Cold War era. One effort to address this resulted in the PKO Law, although the law restricted Ja- pan’s participation in U.N. peacekeeping operations to logistical support activities. Second, the North Korean nuclear crisis revealed Japan’s lack of preparation for cooperating with the United States in regional security emergencies. Experts both in Tokyo and in Wash- ington realized the necessity of establishing a new framework for the U.S.-Japan alliance in the highly volatile East Asian security environment. Third, tensions over the Okinawa base issue created a problem for a stable long-term U.S.-Japan alliance. In order to reduce the U.S. bases in Okinawa, Japan needed to take action, but the tensions between the national government and Okinawa officials has made it difficult to resolve base issues in a timely fashion. The crux for resolving these issues, however, lay in Japan’ s domestic political uncertainties and the U.S. approach to Japan under Presidents George Bush and William Clinton, which concentrated on pressuring Japan for economic openings. President Bush, for example, brought senior auto executives with him to Tokyo in January 1992 in order to highlight trade issues with Japan. When President Clinton came to power in January 1993, he brought into government officials who were even more eager to push Japan on economic issues. The alliance seemed to drift.

The Guidelines for U.S.-Japan Defense Cooperation In February, 1994, Prime Minister Hosokawa established a committee headed by Higuchi Kotaro, the president of Asahi Beer, to consult with him on defense issues. Other core members included Wata- nabe Akio, professor emeritus of the University of Tokyo, and

————— 19. Michael J. Green, “The Challenges of Managing U.S.-Japan Security Relations After the Cold War,” in New Perspectives on U.S.-Japan Relations, ed. Gerald L. Curtis (Tokyo: JCIE, 2000), pp. 250–51. 214 Koji Murata

Nishihiro Seiki, former administrative vice minister of defense. Ac- cording to Prime Minister Hosokawa, he chose Nishihiro because he was the most liberal of the former senior JDA officials. Hosokawa believed that Japan needed a new defense policy after the end of the Cold War. He expected a drastic reform and asked the Higuchi Commission to discuss ideas that could for the basis of a new Na- tional Defense Program Outline (NDPO). The original NDPO had been adopted in October 1976, and this was to be the first major revision since then. In August 1994, after meeting twenty times, the commission submitted its report to Prime Minister Murayama. The report, widely known as the “Higuchi Report,” was entitled “Modality of the Secu- rity and Defense Capability of Japan: Outlook for the Twenty-First Century.” It was a very bold report that reaffirmed the importance of the U.S.-Japan alliance in the post–Cold War era. For public acceptance it was important that the report was conducted under the leadership of a prime minister, not just by the JDA bureaucracy. Former Prime Minister Hosokawa, who had initiated this process, however, reportedly felt betrayed because the strong pro-alliance content of the report seemed to him a reflection of JDA views.20 Also, the Higu- chi report advised the expansion of multilateral efforts as the new direction for Japanese security policy. This caused fears among some security specialists in Washington. Soon, two young security specialists, Patrick Cronin and Michael Green, responded to the Higuchi report by publishing their own report, “Redefining the U.S.-Japan Alliance.” In general, American security experts tend to call the reexamination of security relations a “redefinition,” whereas the Japa- nese government uses the less drastic term “reaffirmation.” In this report, the two authors suggested the possibility of revising the Guidelines for U.S.-Japan Defense Cooperation of 1978 for strengthening the alliance.21 Watanabe Akio, however, notes: “There was nothing to undermine the importance of the U.S.-Japan alliance. . . . We just tried to trace the logic from the multilateral theme to the bilateral theme and to Japan’s own defense policy.”22 In fact, as Michael Mochizuki points out, the original Japanese word for multilateral was takakuteki.

————— 20. Funabashi, Domei hyoryu, pp. 261–64. 21. Patrick M. Cronin and Michael J. Green, Redefining the U.S.-Japan Alliance: To- kyo’s National Defense Program (Washington, D.C.: Institute for National Strategic Stud- ies, National Defense University, 1994). 22. Interview with Professor Watanabe Akio, Hiroshima, Dec. 5, 1998. Japan’s Policy Toward the United States During the 1990s 215

This Japanese word could also be translated as “multidimensional.” If it had been translated in this way, the concept would probably have been less provocative.23 Perhaps American uneasiness stemmed from two sources. The first is the fact that the report was submitted to Murayama, a Social- ist prime minister who had long denied the importance of the U.S.- Japan alliance. Ironically enough, however, it was lucky that the process of restrengthening the U.S.-Japan alliance was initiated under the Murayama cabinet, since it was difficult for leftist forces to attack a Socialist prime minister. It is interesting that it was the left wing instead of the right wing of the JSP that had promoted the formation of a coalition government with the LDP.24 The second is that President Clinton had paid little attention to the U.S.-Japan alliance. In fall 1994, Joseph Nye, a prominent Har- vard professor of international politics, assumed the position of assistant secretary of defense for international security affairs. Since the U.S.-Japan alliance was adrift, Nye wanted to strengthen the alliance. In November, he visited Tokyo and exchanged opinions with Japanese policy elites. Helped by Ezra Vogel, his Harvard colleague and a famous Japan expert, in February 1995 Nye and his bureau of the Department of Defense (DOD) completed the report, entitled “The United States’ Security Strategy in East Asia and the Pacific,” or the so-called Nye Report. The DOD report of 1990, “East Asian Strategic Review” (EASI), had outlined a process for restructuring and reducing the U.S. forces in the region “without jeopard- izing [U.S.] ability to meet its security commitments” in three phases.25 The intended readers of the 1990 report had been the U.S. public and the Congress, who had wanted the “peace dividend” after the Cold War. For the Nye Report, they were the American allies in Asia who were concerned about possible further force reductions in the region. The Nye Report includes several important points for the U.S.- Japan alliance, which will have an important influence on Japan’s national peace and security. First, it demonstrated the U.S. defense commitments in the region by maintaining a forward presence of

————— 23. Mike M. Mochizuki, ed., Toward A True Alliance: Restructuring U.S.-Japan Secu- rity Relations (Washington, D.C.: Brookings Institution, 1997), p. 37. 24. Hara Yoshihisa, Sengoshi no naka no Nihon shakaito (The Japan Socialist Party in postwar history) (Tokyo: Chuko shinsho, 2000), pp. 312–14. 25. A Strategic Framework for the Asian Pacific Rim: Looking Toward the 21st Century (Washington, D.C.: U.S. Department of Defense, 1990). 216 Koji Murata about 100,000 U.S. troops for the foreseeable future. Second, it emphasized the extreme importance of the U.S.-Japan alliance in the region. Third, it also expressed the U.S. determination to promote multilateral cooperation and dialogue.26 By 1995, the JDA had already been preparing for the revision of the NDPO for five years. The Nye Report helped this process very much. In fact, Murata Naoaki, then administrative vice minister of defense, reportedly said that it was “an ideal time” to revise the NDPO.27 In the new NDPO, adopted in November 1995, the term “U.S.-Japan security arrangements” is mentioned eleven times (in the old NDPO of 1976, the term appears only twice). The new document also refers to the possibility of taking appropriate responses in the areas surrounding Japan by ensuring the effective implementation of the U.S.-Japan Security Arrangements. Report- edly, the Cabinet Legislative Bureau was concerned about the con- stitutionality of going beyond a strictly self-defense oriented doc- trine as in the 1976 NDPO.28 The Okinawa rape incident, however, made these bureaucratic efforts both in Washington and in Tokyo insufficient. Now, higher political leadership was required. In November 1995, President Clinton was scheduled to meet Prime Minister Murayama in the Osaka meeting of the Asia Pacific Economic Cooperation (APEC) forum. Due to the urgency of the U.S. budget debate in the United States, Clinton’s visit to Japan was postponed until April 1996. Dur- ing this delay, several important things happened to the U.S.-Japan alliance. First, responding to Taiwanese President Lee Teng-hui’s visit to the United States in July 1995 and the Taiwanese presidential election in May 1996, China conducted provocative missile exercises near Taiwan. These incidents convinced Tokyo and Wash- ington of the importance of the U.S.-Japan alliance in the volatile East Asian security environment. Second, in January 1996, Prime Minister Murayama resigned, and Hashimoto Ryutaro, a LDP conservative leader who was keen on defense issues, replaced him. In the LDP, Kawara Tsutomu, former JDA director-general, was appointed chairman of Security Policy Research Commission. As for further strengthening the U.S.-Japan alliance, Kawara played a key ————— 26. Office of International Security Affairs, United States Security Strategy for the East Asia-Pacific Region (Washington, D.C.: U.S. Department of Defense, 1995). 27. Murata Naoaki, “Tomen suru boei mondai” (Urgent defense issues), Nihon no anzen hosho ni kansuru koenshu (Collection of speeches on Japan’s security) (Tokyo: Ni- hon sekai senryaku forum, 1997), p. 219. 28. Mainichi Shinbun, Aug. 9, 1996. Japan’s Policy Toward the United States During the 1990s 217 role in building consensus among LDP and JDA officials.29 Third, in February 1996, Prime Minister Hashimoto met President Clinton in California, and the two agreed on the consolidation and reduction of U.S. bases in Okinawa. In April 1996, when President Clinton visited Tokyo, he and Prime Minister Hashimoto made public the Joint Security Declara- tion. The declaration affirmed that the U.S.-Japan security relationship “remains the cornerstone for achieving common security objectives, and for maintaining a stable and prosperous environment for the Asia-Pacific region as well as we enter the twenty-first century” and that “a continued US military presence is also essential for preserving peace and stability in the Asia-Pacific region.” Clinton also reaffirmed that the United States would meet its commitments in the prevailing security environment and that it would be necessary to maintain “its current force structure of about 100,000 forward deployed military personnel in the region.” The two leaders further agreed to initiate a review of the Guidelines for U.S.-Japan Defense Cooperation of 1978.30 Based on the U.S.-Japan Declaration on Security, the guidelines were revised in September 1997. Because the new guidelines define the role of U.S.-Japan alliance in a post–Cold War era, their scope is much wider than that of the 1978 guidelines. The new guidelines, for example, mention the U.N. Charter and include humanitarian activities such as emergency relief operations. They also set forth more concrete terms. While the new guidelines “will not obligate either Government to take legislative, budgetary or administrative measures,” “the two Governments are expected to reflect in an appropriate way the results of these efforts, based on their judgments, in their specific policies and measures.” At the heart of the new guidelines are the sections related to a “situation in areas surrounding Japan.” They read: When a situation in areas surrounding Japan is anticipated, the two Gov- ernments will intensify information and intelligence sharing and policy consultations, including efforts to reach a common assessment of the situation. The two Governments will take appropriate measures, to include preventing further deterioration of situations, in response to situations in areas sur- ————— 29. Nakajima Kuniko, “Nihon no gaiko seisaku kettei katei ni okeru Jiyuminshuto Seimu chosakai no yakuwari” (Role of Policy Research Commission of the Liberal Democratic Party in the foreign-policy decision-making process), in Nihon no gaiko seisaku kettei yoin (Domestic determinants of Japanese foreign policy), ed. Gaiko seisaku kettei yoin kenkyukai (Tokyo: PHP kenkyusho, 1999), p, 84. 30. RIPS, Asian Security, 1996–1997 (Tokyo: RIPS, 1997), pp. 18-19. 218 Koji Murata rounding Japan. . . . They will support each other as necessary in accordance with appropriate arrangements. As situations in areas surrounding Japan have an important influence on Japan’s peace and security, the Self-Defense Forces will conduct such activities as intelligence gathering, surveillance and minesweeping, to protect lives and property and to ensure navigational safety. U.S. Forces will conduct operations to restore the peace and security affected by situations in areas surrounding Japan.31 The new guidelines also make an attempt at bilateral defense planning and mutual cooperation planning. The latter aims at “to respond smoothly and effectively to situations in areas surrounding Japan in peacetime.” The promotion of mutual cooperation planning is a sort of overdue homework that should have taken place under the 1978 guidelines. The new guidelines also establish “a bilateral coordination mechanism involving the relevant agencies of the two countries to coordinate respective activities in case of an armed attack against Japan and in situations in areas surrounding Japan.” When the guidelines were issued, Prime Minister Hashimoto told reporters that “we have a massive amount of work before us, such as working out specific legislation and government ordinances.”32 In order to do so, in fact, policy coordination among almost all central agencies (probably, except for the Imperial Household Agency and the Ministry of Education), local governing bodies, and the private sector under strong political leadership was required. It was, therefore, very unfortunate that the Hashimoto cabinet had to devote itself to cope with the Asian financial crisis in July 1997. Hashimoto’s economic policy, especially the increase in a sales tax, also caused a serious recession in Japan. In 1997, Japan’s Gross Domestic Product (GDP) decreased 0.7 percent over the previous year. It was the first time Japan had suffered from negative economic growth in 23 years. In April 1998, the Japanese government finally submitted to the Diet bills to implement the new guidelines: (1) a new bill providing for rear-area support to U.S. forces during an emergency in a surrounding area; (2) the revision of the Acquisition and Cross- Servicing Agreement (ACSA); (3) the revision of the SDF Law to allow the dispatch of Maritime SDF ships to evacuate Japanese nationals; and (4) a new basic bill to allow Japan to search suspicious vessels during an emergency. In July, however, the LDP lost the upper house elections, and Hashimoto had to resign. Obuchi Keizo, Hashi-

————— 31. “The Guidelines for U.S.-Japan Defense Cooperation,” Sept. 23, 1997. 32. RIPS, Asian Security, 1998-99 (Tokyo: RIPS, 1998), p. 63. Japan’s Policy Toward the United States During the 1990s 219 moto’s successor, could not pass the bills in the National Diet because of the serious confrontation with the Democratic Party, the biggest opposition party, over the finance recovery bill. In August 1998, North Korea launched a ballistic missile (as Japan believes) or a satellite (as North Korea claims) over Japanese territory. Although Japan had already been within the range of North Korean missiles, this incident shocked the public. The Japanese government quickly decided to suspend its financial aid to the Korean Energy Development Organization (KEDO). It later agreed to resume it in October. Washington and Seoul were concerned about the deterioration of the KEDO regime. The Japanese government also responded quickly, determining that it should develop its own reconnaissance satellites, a proposal endorsed by U.S. Defense Secretary William Cohen. And in March 1999, two North Korean ships were found in Japanese waters near the Noto Peninsula. The Japanese government authorized the Maritime SDF to engage these ships, which had ignored an order to stop in the Japanese territorial waters. This was the first such order since the SDF was established in 1954. These incidents increased the sensitivity on security affairs of the Japanese public. Furthermore, between these incidents, Prime Minis- ter Obuchi formed a coalition government that included the Ozawa Ichiro–led Liberal Party in January 1999. Then, supported by the governing parties and the Clean Government Party, the guidelines- related bills were finally passed by the National Diet in May 1999. The major issues, and the government response, were as follows: 1. Should the bill make it clear that it comes within the framework of the U.S.-Japan Security Treaty? The final bill states that it is within the framework of the treaty. 2. What is the definition of “situations in areas surrounding Ja- pan”? The concept is not geographical but situational; included in the final bill is the qualification: “for example, cases that may develop into a direct military attack on Japan if let alone.” 3. Do plans for action by the SDF require advance approval by the National Diet? Diet approval is required in principle, but in emergencies approval can be retroactive. 4. Is a U.N. Security Council resolution required for the SDF to inspect suspicious ships on the high seas? The Liberal Party was strongly opposed to this condition. The bill on this issue was sepa- rately passed in December 2000. Under the law, either a U.N. resolution or an agreement from a flag country is required. 5. Is it possible to distinguish clearly between a combat area and a rear area (in which case the SDF would provide logistical support to 220 Koji Murata

U.S. forces in an action)? The newly established Constitutional Re- search Commission of the National Diet will discuss the question together with the concept of collective self-defense. 6. How specific must the government be in requests to local governing bodies and the private sector for their cooperation with U.S. forces? On this question the government sought to demonstrate the degree of specificity by providing ten examples.33 Two things should be examined about the above-mentioned process: the Sino-U.S.-Japan relationship and changes in policymaking process in Japan. First, China has repeatedly expressed its concerns about the new guidelines, and these Chinese attitudes have influenced Japanese domestic politics. Soon after the interim report of the new guidelines was made public in June 1997, for example, Kato Koichi, then secretary-general of the LDP, said in Washington that the Tai- wan Strait should be excluded from the areas surrounding Japan. Responding to these remarks, however, Kajiyama Seiroku, then chief cabinet secretary, noted that the strait should naturally be considered one of these areas. During a visit to Beijing in September 1997, Prime Minister Hashimoto, therefore, felt compelled to reassure China that “no specific areas are being discussed” with regard to “situations in areas surrounding Japan.”34 Whether Taiwan is included in “situations in areas surrounding Japan” or not, however, cannot be determined in advance for it depends on Beijing’s and Taipei’s behavior. The Clinton administration’s attitudes toward Japan shifted from “Japan bashing” to “Japan passing.” Serious trouble began to affect the U.S.-Japan relations soon after Clinton was inaugurated and continued until the summer of 1995. To resolve economic disputes, Washington applied pressure on Japan to achieve a number of numerical targets. For the first time, anti-U.S. groups emerged among elite bureaucrats and business leaders who had previously been pro- American. That was why Nye and others were seriously concerned about the future of the U.S.-Japan alliance. Then, after strengthening security ties with Japan, in June 1998 Clinton visited China to improve relations with it, but failed to stop in Tokyo at either end of the China visit. During his talks with Presi- dent Jiang Zemin of China, Washington’s new “strategic partner,” Clinton made disparaging remarks about Japan’s economic difficul- ————— 33. Murata, “Japan,” pp. 98–99. 34. Murata Koji, “Do the New Guidelines Make the Japan-U.S. Alliance More Ef- fective?,” in, The Japan-U.S. Alliance: New Challenges for the 21st Century, ed. Nishihara Masashi (Tokyo: JCIE, 2000), p. 31. Japan’s Policy Toward the United States During the 1990s 221 ties. But this “Japan passing” was only a slightly annoying episode in the U.S.-Japan relations.35 The real problem lies neither in Clin- ton’s failure to stop in Tokyo nor in what he said in Beijing to Jiang. It lies in what he did not say there. In Beijing, President Clinton should have talked about the importance of the U.S.-Japan security relationship, for it is important for Beijing to understand that the U.S.-Japan alliance will remain firm.36 Second, the process of revising the guidelines had an impact on Japan’s defense policy in several ways. First, it reflected a greater promotion and institutionalization of the U.S.-Japan security dialogues. Second, it influenced relations between the MOFA and the JDA, which became more horizontal as more JDA officials became familiar with strategic issues. Third, the influence of uniformed officers of the SDF in defense policymaking also increased. And finally, the integration of SDF’s three service functions is progressing through dialogues with their U.S. counterparts. After the passage of the guidelines-related bills, however, the bureaucracies tended to lose clear policy goals on security issues. Fur- thermore, a series of scandals weakened the influence of bureaucracies on the policymaking process in general. The MOFA and the JDA are, of course, not exceptions. In October 1999, Prime Minister Obu- chi made a strong coalition government with the Liberal Party and the Clean Government Party. This made it more difficult, however, to coordinate security policy among the governing parties. Obuchi also decided to hold the 2000 summit meeting in Okinawa in order to demonstrate Okinawa’s contribution to regional security and to stimulate the local economy. But, in April 2000, he suddenly passed away. Now there was a vacuum since the power of the bureaucrats had declined but politicians were not yet strong enough to manage highly debatable policies. The frequent changes of prime minister and the difficulty in gaining political consensus greatly complicated Japan’s decision-making and implementation on security issues. Kaifu, a dovish prime minister, failed to respond properly to the Gulf crisis, the first serious security challenge in the post–Cold War world. Although Miyazawa passed the PKO act, his attitudes to the security affairs were reactive and passive. Believing in the necessity of a new liberal security framework for the post–Cold war environment, Hosokawa initiated the review of Japan’s new defense policy, which ironically led to the

————— 35. Iokibe Makoto, “Good Signs for the Alliance,” Japan Times, Mar. 19, 2001. 36. Comment of a former senior Japanese government official. 222 Koji Murata strengthening of the U.S.-Japan alliance, since this was not his intention. Hata, due to his extremely short prime ministership, did not do anything substantial. Murayama failed to respond to crises such as the Okinawa rape incident, the Hanshin-Awaji Earthquake, and the terrorism by the religious cult. Ironically again, however, this Social- ist prime minister played a role in promoting the redefinition or reaffirmation of the U.S.-Japan alliance. Hashimoto himself was convinced of the importance of solving the Okinawa problem and strengthening the U.S.-Japan alliance. Faced with the Asian economic crisis and the defeat in the upper house elections, however, he could not achieve his goals. Obuchi tried to achieve these goals politically more carefully than Hashimoto, but his sudden death unfortunately brought an abrupt end to his efforts.

Lessons It seems to be safe to say that, faced with serious security challenges, Japan succeeded in strengthening its alliance with the United States during the 1990s. Despite domestic political and economic problems, Japan demonstrated its adaptability in the area of security affairs. Without this, the 1990s would have really have been a “lost decade.” In this sense, as Tanaka Akihiko points out, the Japanese government’s experiences in the 1970s when it adopted the original NDPO and the original guidelines under the new security environment may have worked as rehearsals for those in the 1990s.37 Nonetheless, Tokyo’s approaches to the security issues were very incremental and reactive to a series of crises. This was true of postwar Japanese security policy before the 1990s and remained true beyond the 1990s. In critical moments, bureaucrats tended to play a key role. Occasionally, politicians took an initiative, but not for long. Although new frameworks such as the new guidelines were established, basic questions such as the possibility of exercising the right of collective defense are still open. The new security frameworks such as the new guidelines and the guidelines-related acts were too complicated for the general public to understand. Public education about the security affairs is inadequate. The continuing fear among Japanese of being entrapped in U.S. military actions remains a serious obstacle. Soon after the guidelines were adopted, for example, in November 1997 a public opinion survey conducted in both Japan

————— 37. Tanaka Akihiko, “1970 nendai no anzen hosho seisaku no tenkan” (Changes in Japanese security policy in the 1970s), Gaiko Forum, special issue, 1996. Japan’s Policy Toward the United States During the 1990s 223 and the United State found that 39 percent of American respondents expected that Japan would take military actions in response to a military emergency in Korea, but only 2 percent of Japanese did.38 The Japanese public must be prudent in its readiness to take military action in response to military contingencies in Taiwan because of the danger of conflict with mainland China. In order to strengthening the U.S.-Japan alliance, there are a number of lessons we should learn from the experiences of the 1990s. First, Japan should examine its security policy not only from the perspective of what Washington wants but also from the perspective of what it needs. Second, Japan and the United States should further promote security dialogues at political, bureaucratic, and academic levels. Third, whatever the short-term costs, Japanese politicians and bureaucrats should undertake a broader effort to educate the public on security issues. We should avoid overemphasizing a single factor such as the North Korean military threat to justify the importance of the U.S.-Japan alliance. Fourth, Japan and the United States should promote multilateral security cooperation as well as bilateral cooperation. The revival of multilateral diplomacy was one of the significant characteristics in East Asian international politics in the 1990s. There is no doubt that the U.S.-Japan alliance needs to cultivate healthy multilateral frameworks that can include other countries. 39

————— 38. Yomiuri shinbun, Nov. 24, 1997. 39. Akihiko Tanaka, “International Context of U.S.-Japan Relations in the 1990s,” in New Perspectives on U.S.-Japan Relations, p. 290.

Part IV Sino-Japanese Relations

Sino-Japanese Relations at the Turn of the Century (1992 to 2001) Zhang Tuosheng

In 1992, both China and Japan solemnly commemorated the twentieth anniversary of relations, dispelling the shadow over the bilateral relationship since 1989. Relations between the two countries were fully restored and were moving forward. Sino-Japanese relations during these twenty years experienced friction and setbacks, yet the dominant trend was toward friendly cooperation. However, in the early 1990s, new waves of problems arose between China and Japan. By the mid-1990s, the overall atmosphere had become very tense as bilateral relations reached their lowest point since the re- establishment of diplomatic relations in 1972. Where Sino-Japanese relations would head became a serious concern of the governments and peoples of both countries. As history enters the twenty-first century, with efforts from both sides, the bilateral relations have basically recaptured a momentum of smooth development and have formed a new framework for the future. Although the path ahead is

————— Zhang Tuosheng is a Researcher at the China Foundation for International and Strategic Studies.

227 228 Zhang Tuosheng still tortuous and bumpy, there is reason to expect Sino-Japanese relations are off to a good start for the new century. This review of Sino-Japanese relations from 1992 to 2001 is divided into three sections: the basic situation of the Sino-Japanese relations, how to view the major differences between the two countries, and the conclusion.

The Three Periods of Sino-Japanese Relations in the 1990s Sino-Japanese relations underwent twists and turns in the decade after 1992. The decade witnessed a relative smooth start and conclusion, but, in between, relations deteriorated for some time. Devel- opments in the decade can be divided into three periods.

1992–94 In the first period, bilateral relations were stable and smooth with progress in many years. Generally speaking, bilateral relations did not change significantly from the end of the Cold War until 1994. In 1992 China and Japan achieved a high tide of friendly cooperation as they solemnly commemorated the twentieth anniversary of the normalization of relations between the two countries. Beginning in 1994, old frictions returned and new frictions cropped up, cooling the relationship. The high tide in 1992 was symbolized politically in the exchange of visits between General Secretary Jiang Zemin and Emperor Aki- hito. Japan pointed out to China its desire for developing stronger Sino-Japanese relations while maintaining strong Japan-U.S. relations, the so-called two-wheel diplomacy. Through frequent high- level contacts, both sides reiterated their determination to continue to develop Sino-Japanese relations on the basis of the Joint Commu- niqué and Friendship Treaty. Economically, the two countries in 1993 achieved three “firsts”: Sino-Japanese trade set a historical record as Japan became China’s number-one trading partner and China became Japan’s second- largest trading partner. In Chinese technology imports, Japan ranked first. The investment of Japanese enterprises in China leaped also to first place.1

————— 1. Liu Jiangyong, ed., Japan at the Turn of the Century: New Political, Economic and Diplomatic Trends (Beijing: Shishi Publishing House, 1995), p. 403. Sino-Japanese Relations at the Turn of the Century 229

In the security area, the two countries in 1993 held the first round of security dialogues and in 1994 restored military contact that had terminated in 1989. Furthermore, international cooperation between the two sides was strengthened as cultural and personnel exchanges expanded rapidly. Even during this period of good relations, some frustrations occurred. For example, in 1992, the adoption of the PKO Bill in Japan, permitting Japanese armed forces to go overseas, aroused concern in China. In 1994, after the formation of a coalition government (composed of three parties—the LDP, Socialist Party, and Sakigake Party), Japanese political and social trends grew more conservative. Japan became concerned with China’s “increase in defense spending,” and public support grew for linking economic aid to China with China ending its nuclear tests. Despite Chinese protests, Japan invited Xu Lide (vice chair of the Executive Yuan of Taiwan) to visit Japan. Na- gano Shigeru and some other cabinet ministers distorted Japan’s aggressive history against China. All these cast dark shadows over the smooth development of Sino-Japanese relations.

1995–96 With the redefinition of U.S.-Japan relations, it became clear that the positive strategic cooperation between China and Japan against the Soviet Union in the Cold War had come to an end. Some Japanese politicians made comments on Taiwan and on history that heated friction between the two countries. By 1996 the severe escalation of frictions and differences between the two countries had made bilateral relations fall to their lowest point since the re-establishment of diplomatic relations. The growth in bilateral economic relations slowed but still grew at a fast pace, and this bond prevented relations from further deterioration. To forestall further deterioration, the Japanese government adopted some measures to improve bilateral relations.2 The Chinese government, on the one hand, made some stern representations to Japan while, on the other, it exercised

————— 2. In November 1996, after the second Hashimoto cabinet was formed, the new cabinet soon announced a policy of improving Sino-Japanese relations. Hashimoto emphasized this policy repeatedly on important occasions, such as the summit meeting of the two countries in Manila, where he said, “Sino-Japanese relations are as important as U.S.-Japan relations.” He announced that Japan would adhere to the “Murayama acknowledgment” on the history issue. The summit meeting in Manila became the basis for resuming and advancing Sino-Japanese relations. 230 Zhang Tuosheng considerable restraint. By the end of 1996, bilateral relations began turning for the better, and tensions eased. Many frictions and disputes between the two countries appeared during these two years. By politicizing economic aid, Japan exerted pressures on China to stop its nuclear tests by a 95 percent cut in untied grants and threatened to freeze government loans. China strongly protested this pressure on its nuclear testing. Japanese rightist forces used the occasion of the fiftieth anniversary of the victory in the worldwide anti-fascist war to engage in large-scale organized activities to reverse the judgment of history.3 This made the “no war” clause adopted by the Japanese Diet an empty measure. This decision represented a refusal to conduct a sincere re-examination of the past.4 In 1996, Hashimoto, in his capacity as prime minister, openly paid homage at the Yasukuni Shrine, where the tablets of the first-grade war criminals are kept.5 His visit to the Yasukuni Shrine underlined the mutual differences between the two countries over the history issue. Concerning the Taiwan issue, Japan attempted to invite Lee Teng-hui to Osaka for the 1995 APEC meeting, then issued a “protest” to China on its missile exercises against Taiwan’s “independence forces” in 1996, becoming the only Asian country that showed this support for Taiwan. In 1996, Japan and the United States issued their Joint Declaration, which redefined the Japan-U.S. alliance and brought profound changes in Japanese-U.S. security cooperation. This new move triggered strong concern in China. In the same year, some Japanese right-wing organizations landed on the Diaoyu Islands a number of times, but the Japanese government ————— 3. For example, over 200 LDP members formed the “Parliamentarians’ League for the 50th Anniversary of the End of the War” to hinder the Diet from adopting a resolution reflecting on Japan’s role in World War II. The “People’s Committee for the 50th Anniversary of the End of the War,” with more than 5 million members, launched a campaign to collect signatures demanding the Diet not use the words “aggression,” “colonial rule,” and “territorial expansion” in the resolution reflecting on Japan’s role in World War II. 4. In the summer of 1995, the Japanese Diet adopted the “Bill on Drawing Lessons from History and Reiterating Our Determination to Preserve Peace.” It delivered condolences, without distinguishing the invader from the invaded, completely avoided acknowledgment of the aggressive nature of the war; and stated that there were many instances of colonial rule and invasion in history so as to cover up Japan’s role as the main state that embarked on aggression and colonial rule in World War II. Japan promised only a “re-examination” to victimized people and countries but refused to apologize. For this reason, this resolution was severely criticized by progressive groups in Japan and by other Asian countries. 5. Hashimoto’s action broke precedent—no prime minister had paid homage at the Yasukuni Shrine since 1985. Sino-Japanese Relations at the Turn of the Century 231 adopted a quietly permissive attitude, which revived the territorial disputes between the two countries that had been quiescent. Yet, even during this period, some aspects of bilateral relations made some progress. Economically, Japanese investment continued to increase. The total contracted investment set a new record of U.S.$7.59 billion in 1995, which then made Japan the second-largest investor following the United States in China. Bilateral trade continued to grow, exceeding U.S.$60 billion in 1996. Politically, the changes in Japan’s attitudes toward the “no war clause” received a very poor response from Asian countries, Prime Minister Mura- yama, in August 1995, made a speech on Japan’s aggressive history on behalf of the Japanese government.6 This speech was well received by the Chinese government and was significant in suggesting how the two countries might successfully manage the history issue in the future. Furthermore, China and Japan maintained high-level contacts and cooperated in international affairs in many areas. Prime Minister Murayama visited China in May 1995,7 and he met Presi- dent Jiang Zemin at the end of the year in New York. The meeting between President Jiang and Prime Minister Hashimoto, as well as the meeting between the foreign ministers of the two countries at APEC at the end of 1996 in Manila, laid a strong foundation for improving bilateral relations in the years to come.

1997–2001 In this third period, frictions and disputes between the two countries still existed, but they were brought under better control with joint effort by both countries. Bilateral relations gradually improved, and by 2000 there was a new momentum of overall improvement. The new trend of bilateral relations heralds the hope that in the early twenty- first century relations may gradually emerge from protracted difficulties in adapting to the end of the Cold War and enter a new period of relatively stable and normal development.

————— 6. In this speech Murayama stated, “In a period not long ago, an erroneous state policy took Japan to war. . . . The colonial rule and invasion caused untold destruction and suffering in many countries, especially Asian countries. . . . Without reservation, I face up to this historical fact and again express my deep re-examination and sincere apology.” 7. Murayama was the first Japanese prime minister to visit the Lugou Bridge, the site where Japan launched its comprehensive invasion of China. He inscribed his name in the visitor’s book with the comment, “acknowledge history, pray for friendship and lasting peace between Japan and China.” 232 Zhang Tuosheng

The major progress made between the two countries during 1997– 2001 is as follows: Politically, through strengthening high-level dialogues, the two sides reached an agreement to make joint efforts to achieve a friendly and cooperative partnership.8 This move estab- lishes a new framework for developing Sino-Japanese relations in the twenty-first century. In 1997, Prime Ministers Hashimoto and Li Peng exchanged visits. In 1998, President Jiang Zemin paid a state visit to Japan.9 In 1999 and 2000, Prime Minister Obuchi and Premier Zhu Rongji exchanged visits.10 In 2001, Prime Minister Koizumi paid a working visit to China.11 These high-level exchanges played an important role in shaping the new framework of bilateral relations. Economically, due to the impact of the East Asian financial crisis, bilateral trade volume and Japanese direct investment in China had begun to slow down and even to decline. But in 1999, the trade volume began to rise, and since 2000 trade growth accelerated, reaching new peaks of U.S.$83.17 billion in that year and $87.75 billion the following year. Direct investment topped $4.35 billion in 2001, 49 percent higher than that of 2000. In 1999 Japan took the lead among developed countries in reaching an agreement with

————— 8. The definition of the partnership goes beyond the traditional bilateral relationship. The two countries expressed their determination to enhance their international cooperation, while continuously promoting friendly bilateral cooperation. This has significance for the future development of their bilateral relations. 9. During this visit the leaders of both countries decided to establish a partnership, set up a hot line, and exchange visits of national leaders every two years. They signed 33 agreements. Furthermore, the two sides addressed the handling of the issues on history and Taiwan, on which they still had differences, and important results were achieved. For example, Japan acknowledged its aggression of China in history explicitly in the Joint Declaration and made an oral apology; Japan declared its will to continue to observe the position on the question of Taiwan expressed in the 1972 Joint Statement and reiterated that there is but one China and that Japan will only maintain people-to-people and regional contacts with Taiwan. 10. Premier Zhu Rongji’s visit to Japan, aiming to “increase trust and reduce suspicion,” was a complete success. He carried on spontaneous dialogue with Japanese on live TV, making a favorable impression on the Japanese audience. 11. To resolve the difficulty in bilateral relations caused by Japanese history textbook and homage to the Yasukuni Shrine by Japanese prime ministers, Prime Minister Koizumi paid a one-day working visit to China on August 8, 2001. Upon arrival in Beijing, he immediately went to Lugou Bridge, where the Japanese aggression broke out, paid homage to the Chinese People’s Memorial of the War Against Japanese Ag- gression, and delivered on the spot a speech of apology to the Chinese people, remorse of history and the desire against waging war again. President Jiang Zemin and Premier Zhu Rongji held meetings with the Japanese prime minister. Then in late Oc- tober Chinese and Japanese leaders met again when the prime minister attended the APEC Informal Leadership Meeting in Shanghai. Sino-Japanese Relations at the Turn of the Century 233

China on China’s entry into the WTO. In recent years, the two countries have seriously explored cooperation on China’s “western development program.” With the progress of the so-called “10+3” dialogue between ASEAN on the one hand and China, Japan, and South Korea on the other, both countries have adopted a more positive attitude on multilateral economic cooperation and regional economic integration in East Asia. The two countries gradually enhanced their military and security consultative mechanisms through successful exchange of visits of high-level military leaders.12 In 1999 both sides signed a memorandum, beginning the process of disposing of the chemical weapons left behind in China by the Japanese army in World War II. The two countries also consulted on setting up a mutual notification mechanism for marine investigation and reached an agreement on reciprocal visits by naval fleets as well. Cultural exchanges and personnel visits were also fruitful. In 2000, Japan organized a delegation of 5,000 people to visit China and opened its tourist market to China, marking a new phase in people-to-people exchange between the two countries. In 1997–2001 a number of issues served as sources of friction between the two countries. A series of measures for intensifying the Japan-U.S. military alliance and the rising voices for amending the Japanese Constitution deepened China’s concern over Japan’s future direction. Japan also expressed grave concern over China’s increase in military spending. The activities of pro-Taiwan groups in Japan, such as publicly asserting that the Japan-U.S. Security Treaty covers Taiwan and inviting Lee Teng-hui, the representative of Taiwan independence forces, to Japan,13 triggered strong opposition from China. On the history issue, there were many instances when Japa- nese distorted and negated their aggressive history.14 In 2001, differ-

————— 12. In 1998 and 1999, the two sides successfully conducted the exchange of visits between the defense minister of China and the director general of the Japan Defense Agency and also between the general chief of staff of the PLA of China and the director general of Japan's Joint Chiefs of Staff. The two sides elevated the irregular diplomatic and defense consultations of the personnel concerned, begun in 1997, to regular security dialogues at the bureau chief level and later the ministerial level. 13. See the statement of Seiroku Kajiyama, the chief Cabinet secretary, on emergencies in the surrounding areas in August 1997, in Yomiuri, Aug. 18, 1997. 14. Summary of the War in East Asia, published in 1997 in Japan, completely and systematically propagates a positive view of the war. This book aroused a shock among top leaders in China. The book was edited by the “History Research Commis- sion,” a group of 105 Diet members with Hashimoto as an advisor. According to some Japanese scholars, the book is not influential in Japan, and many Japanese have never 234 Zhang Tuosheng ences on history issues resurfaced as the Japanese government released two history textbooks that overtly beautified and denied the history of Japanese aggression,15 and newly elected Prime Minister Koizumi visited the Yasukuni Shrine amid strong opposition from China, ROK, and other countries. The appearance of Chinese research vessels in areas disputed by the two countries and of naval vessels in the area adjacent to Japan aroused strong responses from the Japanese media. At the same time, the issue of reducing ODA to China again came to the fore. The year 2001 also saw the first serious trade war between the two countries.16 In addition, the rise in crimes committed by Chinese nationals in Japan, and the default on debts from the bankruptcy of Chinese companies, such as GITIC, added to the frictions between the two countries.

The Major Differences Between the Two Countries Clearly, Sino-Japanese relations at the turn of the century had made progress, but frictions and differences were growing, bringing about negative impacts on bilateral relations. Some differences have disappeared, some are hopefully being resolved step by step, but many of them may continue for a long time to come. It is important to analyze the differences in order to reduce disturbances and uncertainties and to realize a healthy development of bilateral relations in the future. During this period, the major issues creating frictions between the two countries are China’s nuclear tests, Japan’s efforts to reduce ODA to China, historical issues, the Taiwan issue, Diaoyu Island, and the renewal of the Japan-U.S. military alliance. Underlying all these problems is a more significant issue, the strategic suspicion between China and Japan.

FRICTION OVER CHINA’S NUCLEAR TESTS Nuclear testing was the first serious issue to emerge between the two countries after 1992. Russia, Britain, the United States, and other nu- ————— heard of it. This just reflects the complexity and sensitivity of the history issue between the two countries. 15. The issue of Japanese history textbooks caused serious problems in Sino- Japanese relations in 1982 and 1986. 16. In April 2001, Japan decided to exercise “temporary urgent restrictions” over the import of three Chinese agricultural produces. China considered the Japanese move against WTO rules and, when the effort to urge a negotiated solution failed, was forced to take countermeasures by increasing tariffs over automobiles, handheld or vehicle-mounted mobile phones, and air conditioners. Sino-Japanese Relations at the Turn of the Century 235 clear powers declared moratoria on nuclear testing in early 1990s. The international community began to negotiate for the conclusion of a comprehensive nuclear test ban treaty (CTBT) in 1995. Against this background, while supporting the conclusion of CTBT, China, as the latest power to develop nuclear weapons, conducted its last four nuclear tests in 1995 and 1996. Japan reacted strongly to the tests, not only lodging protests but also exerting economic pressure by threatening to stop ODA to China. Japan’s action set off a serious dispute between the two countries. The dispute did not reflect fundamental differences over the two countries’ views of arms control and the prevention of nuclear proliferation. Rather, it reflected certain policy differences caused by their different experiences and situations. Japan is the only country to have been the victim of nuclear explosion and is the only major power to have foresworn the development of nuclear weapons. Therefore it is understandable that the Japanese people are especially sensitive to nuclear testing and advocated an early signing of the comprehensive ban on nuclear tests. Japanese public opinion exerted strong pressure on the Japanese government. However, on the Chi- nese side, as a country that has long lived under a nuclear threat, China developed its nuclear weapons only for its own survival. From the time it first developed nuclear weapons, China has solemnly declared it will never be the first to use nuclear weapons and has undertaken far fewer nuclear tests than other nuclear states. It was therefore understandable for China to conduct the last few nuclear tests to guarantee its nuclear weapons’ safety before signing the CTBT, and the Chinese people supported this policy. Under these circumstances, the temporary difference should have been tackled through consultations and mutual understanding, but the Japanese government adopted the method of exerting economic and political pressure on China. Japan’s demands were naturally rejected by China. The Chinese believe that Japan overresponded. In the Chinese view, (1) Japan is a country under the protection of a nuclear umbrella, and its status is thus very different from that of other states that do not possess nuclear weapons. (2) Japan had uttered not a word in the past when the United States conducted nuclear test explosions but now strongly criticized China, whereas the numbers of tests conducted by China and the United States were not even comparable.17 (3) The fact that Japan linked ODA with China’s nuclear

————— 17. Before declaring a moratorium on nuclear testing in October 1992, the United States had conducted 1,030 tests. Before a similar declaration in July 1996, China had 236 Zhang Tuosheng tests was in fact politicizing economic aid and interfering in China’s internal affairs. At that time, the sanctions against China by some Western countries, led by the United States since 1989, had not been totally lifted, and Japan’s linkage of the political issue with the economic issue could only heighten China’s resentment at such pressure. During the ODA dispute, the Japanese Foreign Ministry supported the reduction of aid grants to China but, in consideration of Japan’s national interests and the overall Sino-Japanese relations, was not in favor of stopping all loans. Its efforts played a role in preserving loans to China and prevented a further escalation of the bilateral dispute. Since China and Japan have no fundamental differences over the basic direction of international arms control and nonproliferation efforts, this dispute ended when China declared a moratorium on nuclear tests in July 1996 and signed the CTBT in the October 1996. It is worth pointing out that the dispute over the nuclear issue did not last long, but it had far-reaching unfavorable effects on the bilateral relationship. At the time, Japanese media made use of this issue to propagate the “China threat,” which had a very negative impact on Japanese public opinion toward China.

FRICTION OVER JAPAN’S ODA TO CHINA This is a problem for the bilateral relationship that first emerged in 1992. This problem is not very serious in comparison with other issues. However, if it is not handled properly, it could have a damaging impact on bilateral relations in the future. Until now, bilateral friction over ODA has been in the following three areas: (1) Japan’s tendency to politicize economic aid; (2) Japan’s criticism that China gives little publicity to Japan’s ODA; and, (3) the growth of public opinion in Japan to cancel ODA. Japan first began politicizing economic aid in the mid-1980s, but this did not affect the giving of aid to China before the early 1990s. Japan further politicized the issue when the Four Principles on ODA18 were officially put forward by the Japanese government in

————— conducted a total number of 45 tests. The figures are still the total numbers of tests by the two countries up to now. 18. While conducting economic aid, Japan will take into account the following factors: (1) the military spending of the recipient countries, (2) weapons development and production of the recipient countries; (3) weapons import and export of the recipient countries; and, (4) the extent of democratization, a free market economy, basic human rights, and the guarantee of freedom in the recipient countries. Sino-Japanese Relations at the Turn of the Century 237

1992. Japan linked ODA with China’s nuclear tests in 1995 and 1996, taking the first step toward adjusting economic aid on the basis of political criteria. In 1999 and 2000, the issue of “Chinese research vessels” led Japan again to use ODA to pressure China. Why does Japan politicize its aid policy? Perhaps Japan’s chief consideration is to use its economic strength as a lever to increase its political power and promote its political influence. However, practices in international relations suggest that it is not strange at all to provide economic aid with political strings, but any such move as a tool for pressure openly usually fails to achieve its political objective and harms bilateral trade relations, especially when the object of pressure is a major power like China. In the Chinese view, this is pouring oil on the fire. It achieves no constructive results. Therefore, the Japa- nese might well seriously consider whether to do it again or not in the future. With respect to China’s attitude toward Japan’s ODA, the Japa- nese government expressed dissatisfaction time and again, and the Japanese media’s reactions have been even stronger.19 The Japanese argument is that Japan provides China with huge amounts of annual economic aid, but the Chinese government seldom gives it publicity, fails to express appropriate appreciation, and the Chinese people have little knowledge of it. This is puzzling for the Japanese people.20 This Japanese perspective is at best incomplete. In fact, since starting the cooperation of governmental funds between the two countries in 1979, for a fairly long period of time, China had always spoken highly of it, explaining that the aid from Japan supported Chinese reform and opening and played an important role in speeding Chinese modernization. During a short period in the 1990s, there was less publicity and less praise for Japanese aid. There are perhaps two reasons. First, Japan’s politicizing of economic aid caused dissatisfaction and concern among Chinese. Second, some Chinese had begun to take Japanese economic aid for granted.21 Actually, the fundamental ————— 19. When Japan provided ODA to China at the very beginning, the Japanese politicians felt, on the one hand, like the rich helping his poor neighbor and, on the other, as providing for some compensation for China’s giving up the war indemnity demand. As a result, they were quite low key about ODA. Huge changes took place in this regard in the 1990s. 20. Kono Yohei, “Establishing Genuine Friendly and Cooperative Partnership,” Ja- pan Bulletin, no. 124, Cultural Section, Embassy of Japan to China, Oct. 31, 2000, p. 20. 21. According to this view, since the Japanese invasion caused China an astro- nomical and incalculable loss and China gave up its claim for war indemnity, Japan should naturally give economic aid to China. It is understandable why some wished to link Japanese economic aid to China with China’s abandonment of war reparations, 238 Zhang Tuosheng reason was that the friendly sentiment of the Chinese toward the Japanese people had begun to fade away as a result of increased friction over the issue of history. In the autumn of 2000, as bilateral relations began to improve, the Chinese government held a solemn ceremony to commemorate the twentieth anniversary of Japan’s governmental aid to China. Furthermore, during a visit to Japan, Premier Zhu Rongji praised Japanese economic aid highly and promised more publicity for it in the future. These efforts demonstrated China’s formal position on ODA and played a positive role in rooting out misunderstanding and reducing friction. Japanese demands for reducing or even canceling ODA has several roots. One is the above-mentioned frictions and the influence of the “China threat” theory. Another is the Japanese government’s budget constraints caused by the economic stagnation in the 1990s. These problems have had an unfavorable impact on the cooperative atmosphere between the two countries, although it has not directly damaged bilateral governmental funding. The Japanese government has taken a prudent attitude toward this problem. While reassessing ODA to China, it continues carrying out the agreements for cooperation and continues to consult with China over this matter. It is wise for Japan to take this stance. Japan’s ODA to China is beneficial not only to Chinese economic development but also to Japanese economic development. This cooperation has become an important symbol22 for the friendly and cooperative relationship. A change in this policy would have a serious unfavorable impact on their bilateral relations. It is likely that after the completion of the fourth pref- erential Japanese government loan, Japan will still continue ODA to China if there are no serious setbacks in Sino-Japanese relations and if the Japanese economy improves, although there may be some changes in content, form and volume.

————— but it is inappropriate to do so because it runs counter to the decision by Chairman Mao Zedong and Premier Zhou Enlai. At the time, China’s decision to give up war reparations was based on two considerations: (1) showing friendship to the Japanese people and freeing them from the hardship of the payment, and (2) drawing lessons from learning from the history after World War I (the Treaty of Versailles, which specified that Germany should pay a tremendous amount of war reparations, plunged the Germans into serious difficulties, thus triggering German desire for revenge). China in no way considers it appropriate to substitute aid for reparations. Japanese economic aid to China is mutually beneficial cooperation based on bilateral willingness. 22. At present, China receives the largest amount of Japanese ODA, and Japan ranks first among the countries providing ODA to China. Sino-Japanese Relations at the Turn of the Century 239

DIFFERENT VIEWS OF HISTORY Different views of history have been an old, core problem in Sino- Japanese relations. It caused trouble for the bilateral relationship several times in the 1980s and became more serious in the 1990s. The continuing problems arising from “slips of the tongue” by Japanese cabinet ministers in 1993 and 1994, to the large-scale and well- organized activities of the right wing for reversing history in 1995, 1996, and to the incident of Japanese textbook and the problem of Yasukuni Shrine in 2001, indicate that the settlement of the history issue between the two countries has a long way to go. As in the 1980s, frictions in bilateral relations in the 1990s were again caused mainly by the Japanese side, and the biggest source of trouble was the Japanese rightist forces. Their repeated denial of Ja- pan’s history of aggression and glorification of wartime activities evoked very strong reactions from Chinese people and the government. However, the situation in the 1990s differed from that of the 1980s. This decade saw obvious development of the Japanese society in a more conservative direction. The weakening of progressive forces made them less capable of exerting adequate political pressure on the wrong actions of the Japanese government. In this situation, the Japa- nese rightist forces run rampant in distorting history. Meanwhile, China and Japan began to diverge further away from each other in history education. As time passed by, the young generation in Japan knew little about history as a result of intentional neglect of education in modern history. Whereas in China, patriotic education stressed in the 1990s focused very much on that history of humiliation that must not be forgotten. As a result, the two people increasingly saw history differently. At the same time, with the rapid expansion of public media, any news event, once it occurred, has a far more rapid and extensive influence than in the past. The coverage by the media sometimes “reflected” and “magnified” the reactions of both sides. Therefore, it is actually not difficult to understand why the frictions between the two countries on the historical issue escalated. In the Chinese view, Japan has consistently failed to look seriously at its own provocations while accusing China of overreacting. In recent years, as Japan’s sense of guilt faded and nationalism rose, Japan has developed “apology fatigue.” Japanese say they are tired of China’s demand for an “apology” and do not want to talk about the problem any more. They say China will never be satisfied, and China wishes to manipulate the history card. These views have 240 Zhang Tuosheng gained support among the new generation of Japanese leaders,23 but Chinese believe these views are unfounded. Long before the re-establishment of Sino-Japanese diplomatic ties, Chinese leaders often mentioned three things when meeting Japa- nese friends: (1) The Japanese are a great people. (2) The responsibility for World War II rests with a small number of militarists, not with the Japanese people, who were also the victims. (3) Since Japan had apologized for what it had done in the past, China was willing to let bygones be bygones, and that the two countries should look to the future. This attitude was reiterated by China when the two countries re-established diplomatic relations in 1972 and when they signed the Peace and Friendship Treaty in 1978. It is clear that had it not been for serious incidents in which Japan continuously glorified and denied its history of aggression, China would not have tangled with Japan on the history issue. Of course, since the 1970s, Japanese leaders have, indeed, made some apologies to China and progressed in acknowledging the aggressive war.24 However, as Premier Zhu Rongji said during his visit to Japan in 2000, so far Japan has not made a formal, written apology to China. Meanwhile, the frequent denials of its aggressive history and the “slips of the tongue” by many high-level officials detract from the apologies. It is unfortunate that twice in the 1990s Japan missed opportunities to rid itself completely of historical burdens. Once was in 1995, the fiftieth anniversary of World War II. At that time, Asian countries universally expected the Japanese Diet to adopt a sincere resolution of self-reexamination, apology, and renunciation of war in order to address the historical issue. However, the resolution passed by the Diet deeply disappointed them, leading to severe criticism from the media in Asian countries, including progressives in Japan itself. The second chance was President Jiang Zemin’s 1998 visit to Japan, when China expected Japan to make a formal apology on the ————— 23. Michael J. Green, Japan’s Reluctant Realism (New York: Palgrave, 2001), p. 94. 24. During his visit to China in 1972, Prime Minister Tanaka’s attitude on the historical issue was: “During the past few decades, my country created a lot of troubles for the Chinese people. . . . I expressed my deep self-reexamination.” After serious criticism from Premier Zhou Enlai, the Japanese side in the “China-Japan Joint Com- muniqué” added the following paragraph, “The Japanese side deeply felt the responsibility of inflicting major destruction on the Chinese people because of the war and expressed deep self-reexamination.” In the 1980s, Prime Minister Nakasone for the first time recognized that to China the war was a war of aggression. In the 1990s, the attitudes of Hosokawa and Murayama on the history issue were universally praised by China and other Asian countries. Sino-Japanese Relations at the Turn of the Century 241 history issue in the Joint Declaration. This would have completely settled the problem and created prospects for improved bilateral relations. But, in the end, China’s goodwill was rejected by Japan. South Korea and Japan announced in 1998 that they had solved the problem of history, but friction has returned because of the Japanese textbook and the Yasukuni Shrine problems. Such events make other Asians think that although an official resolution or apology is important because it is legally binding, considering the current situation in Japan, the history issue is unlikely to be resolved once and for all.25 Despite these difficulties, the history issue does not necessarily have to plague Sino-Japanese relations long into the future. The unfortunate history occurred more than fifty years ago, and Japanese society has undergone profound changes. Although remnants of militarism still exist, since the overwhelming majority of Japanese people despise them, the militarists cannot rise again. For China, what really merits attention is Japan’s current policy and future direction. Regarding the erroneous views of history that exist in Japan, we should rely on Japan’s farsighted politicians, objective scholars, and fair-minded media to educate the Japanese public and increase their awareness in order to finally resolve the issues. In this long- term process, whether the friendly relations and cooperation between China and Japan can continue developing is vital. Keen foreign observers will have already noticed that, when talking about the history issue and Sino-Japanese relations, Chinese leaders often used the saying, “If the past is not forgotten, it can be a guide for the future.” But in recent years, they often quote another saying, “Take history as a mirror and face the future.” To me, this change is very significant.26 The latter saying reflects a more pragmatic attitude of the Chinese government toward the history issue, as well as its sincere wish to look to the future. This new attitude influences China’s policy to Japan, and if it receives a positive response ————— 25. There are very complex reasons for this situation in Japan. It has something to do with unique Japanese religious and cultural background and the sense of tragedy stemming from its history as a victim of the atomic bomb attack. But the most fundamental reason is the uncompleted post–World War II democratic reform. In this regard, the United States must shoulder responsibility. It kept the monarchy and adjusted its Japan policy purely out of its own strategic interests with the appearance of the Cold War and the outbreak of the Korean War. As a result, Japan actually failed to clean up militarism, and the general public on the whole has not had a clear view of history. 26. According to the literal meaning of the two sayings in Chinese, “Past experience, if not forgotten, is a guide for the future” is similar to “take history as a mirror.” “Face up to the future” is a new idea not implied in the former. 242 Zhang Tuosheng from Japan, both countries may transcend history and embark on a path like the reconciliation between Germany and France.27

FRICTION ON THE TAIWAN ISSUE The Taiwan issue, the major political precondition for normalizing relations between China and Japan, was addressed and resolved by the Three Principles for re-establishing diplomatic relations.28 After normalization of relations between the two countries in the 1970s and 1980s, there were no serious bilateral frictions on this issue. But, since 1993, the Japanese government, responding to Taiwan’s “pragmatic diplomacy” has continuously elevated Taiwan-Japan relations and promoted official exchanges. In addition, Japan had been critical of China in its struggle against Taiwan independence. This problem extended beyond political to security issues, creating serious frictions involving both areas. After World War II, the Japanese retained strong pro-Taiwan sentiments and maintained many kinds of ties with Taiwan, including with Taiwan “independent forces.” Their anti-China and pro-Taiwan position resulted from their anti-Communist ideology and nostalgia for the era of colonial rule over Taiwan. The links with Taiwan were the major obstacle to re-establishing diplomatic relations between China and Japan, but their influence weakened as Japanese ties with China expanded. Since the 1990s, Taiwan’s “democratization” and Lee Teng-hui’s pro-Japan policy have enhanced Taiwan’s influence on the newer generation of Japanese politicians and most of the major political parties in Japan, increasing their affinity for Taiwan. These new pro-Taiwan forces are taking root in Japanese political circles. This development has not yet thoroughly changed Japan’s basic policy on Taiwan, but it has become a strong motive for elevat- ing relations with Taiwan.29 Japanese policy readjustment on Taiwan also has a deeper layer of geopolitical causes. Some Japanese politicians believe that as China continues to rise rapidly, it will seek a hegemonic position in Asia.

————— 27. Germany and France were enemies that had hated each other for generations. They have accomplished genuine and thorough reconciliation since World War II. This is the historical lesson that we can draw for Sino-Japanese relations. 28. The Three Principles established for the restoration of diplomatic relations are: (1) The PRC is the only legitimate government of China; (2) Taiwan is an unalienable part of the PRC; and (3) the Japan-Taiwan Treaty is illegal and invalid and should be abolished. 29. Green, Japan’s Reluctant Realism, p. 83. Sino-Japanese Relations at the Turn of the Century 243

Taiwan’s reunification with the mainland means not only the rise of China but also control of Japan’s lifeline—the sea lanes—which would be detrimental to Japan. Therefore a no-war and no-peace stalemate across the Taiwan Strait is in Japan’s national interests. Some even hold that Japan should consider the possibility of helping the United States carry out a joint military intervention in the Taiwan Strait, although other Japanese believe it would be a nightmare for Japan to become involved in such a conflict. Presently such strategic considerations are not yet presented in official publications but have become an open “secret” in the Japanese media, in papers written by Japanese research institutes, and particularly in the propaganda by Japanese right-wing forces. This causes China great worry and it to be high alert. In face of the fierce friction on the Taiwan issue and the overall difficulties in bilateral relations in 1996, the Japanese government has stated on many occasions that Japan’s position on Taiwan, which was defined in the Japan-China Joint Communiqué in 1972, will not change. Japan has also delivered the clear-cut commitment not to support Taiwan’s independence. Thus, tensions over the Taiwan issue have gradually relaxed. In 1999, Lee Teng-hui openly put forward his “state-to-state” theory. In 2000, the DPP, a party that advocates Taiwan’s independence, came to power. Because the Japanese government took a fairly cautious attitude toward these dramatic changes, no major setbacks occurred between the two countries on the Taiwan issue. However, in April 2001, in disregard of strong opposition from China, the Japanese government allowed Lee Teng-hui to visit Japan on medical grounds, forcing China to cancel a planned visit by Chairman Li Peng of the National People’s Congress to Ja- pan within the year. The new friction highlighted the serious differences between the two countries on the question of Taiwan. In the future, difference on the Taiwan problem may remain for a long time. If not handle properly, this could become the biggest challenge confronted by the two countries in the early part of this century.

THE DISPUTE OVER THE DIAOYU ISLANDS AND THE SURROUNDING WATERS The dispute between China and Japan over the Diaoyu Islands and the surrounding waters has a long history. In the 1970s, in order to normalize Sino-Japanese relations and conclude the Sino-Japanese Peace and Friendship Treaty, the leaders of the two countries wisely decided to shelve the dispute. In the 1980s, although there was some 244 Zhang Tuosheng friction on this issue between the two sides, the overall situation was stable. In the 1990s, however, friction escalated. In the summer of 1996, some members of Japanese right-wing organizations landed on one of the Diaoyu Islands and built a lighthouse and some memorial monuments. The Japanese government adopted an indulgent attitude, which heightened tensions. Around the same time, disagree- ments over marine rights also increased. The dispute over the issue of “Chinese research vessel” that broke out in 2000 was a reflection of the rising tensions. There are many reasons for the increasing aggravations: (1) Even though the Chinese government has assumed a very pragmatic attitude toward the Diaoyu Islands issue,30 the Japanese government has refused to acknowledge the existence of a territorial dispute. Therefore it is impossible for the two sides to work together to solve the problem, and the lack of forward motion is bound to lead to more frictions. (2) Since the end of the Cold War, all nations have focused their attention on economic development. Japan, as an island country, is heavily dependent on the seas. Since sea products and maritime activities play a significant role in the two countries’ development strategy, when interests do collide, the problems are more serious. (3) It also has something to do with the sentiments of the peoples. As mutual misgivings increase and friendly feelings decrease, coupled with exaggerated media coverage, any dispute on specific issues may escalate into serious ones. One aspect of this dispute deserves special mention. In 1996, when serious friction occurred between the two countries on Diaoyu, Japan announced that the Japan-U.S. Security Treaty covered that area. Initially the U.S. government was neutral, but later, under Japanese diplomatic pressure, senior U.S. Defense Department officials announced that the United States was obliged to defend the “Senkakus” against attack according to the Security Treaty.31 This produced a very strong response from China, which took this as a dangerous signal that Japan would use the U.S.-Japan military alliance to deal with China. However, after 1997, there has been some progress in dealing with this issue. For example, Japanese rightists reduced their activities on the islands; the agreement on fisheries, slow in coming, fi- ————— 30. China has proposed two policies for solving this dispute: (1) shelving the dispute for common development, and, (2) if the above is difficult to achieve, the two countries should take the overall situation into account to avoid any conflict and leave it to the next generation. 31. Green, Japan’s Reluctant Realism, p. 87. Sino-Japanese Relations at the Turn of the Century 245 nally went into effect in 2000, delineating jointly administered areas. In the same year, to solve the problem of research vessels in disputed areas, through consultation both sides agreed on a prior notification mechanism, which was soon put into practice. As a matter of fact, on matters related to territorial disputes, the rejection of dialogue and the resort to provocative actions can only intensify conflicts and are detrimental to the interests of both sides. With sincere and serious consultations and dialogues, the issue can be managed successfully, even if it is not thoroughly resolved. Statesmen with vision in the two countries should make common efforts to resolve these territorial disputes. From a long-term perspective, “shelving the dispute and promoting joint development,” as advocated by the late Chinese leader Deng Xiaoping, is still the best means to handle this problem.

FRICTION OVER THE JAPAN-U.S. SECURITY ALLIANCE AND THE TMD ISSUE The Japan-U.S. Joint Declaration on Security was issued in 1996, and the New Defense Guidelines to the military alliance were adopted in 1997. In 1998, Japan decided to participate in the U.S. development of TMD and in 1999 passed related legislation. During these years, plans for strengthening their alliance were basically realized. In the process of redefinition, the content and nature of the alliance has undergone major changes: expanding the Japanese operations, shifting to new defense targets, increasing Japan’s role in the alliance, turning the nature of the alliance from defense to offense. After Septem- ber 11, 2001, Japan quickly adopted an anti-terrorism law32 and set three warships in November to the Indian Ocean to take part in the U.S.-led war against terror. Although Japan claimed that the Japa- nese forces would provide only logistical support to U.S. forces, this was only a step toward actually participating in war. The changes in the Japan-U.S. alliance and the prospect of Japan’s seeking to acting beyond its peace constitution has triggered deep worries in China and created deep frictions on security issues between China and Ja- pan. In response to China’s strong reactions, Japan indicated to China many times that the U.S.-Japan Alliance is not directed against

————— 32. The main feature of the act is to expand the scope of the self-defense forces acting overseas from the Asia-Pacific region to all international open seas, skies, and territories of third country with agreement of the parties concerned. Furthermore, it provides that there is no need to ask for prior approval by the Diet for sending the self- defense forces overseas and that the only necessary procedure is to report to the Diet within twenty days after the fact. 246 Zhang Tuosheng any third country, that “emergencies in the surrounding areas” is not a geographical concept, that the Security Treaty is within the scope of the Japanese Constitution, and that the basic content of the Japan- US alliance remains unchanged. Both Japan and the United States have strong reasons to redefine and strengthen the alliance. After the end of the Cold War, following the disappearance of the military threat posed by the USSR, the co- hesiveness of the alliance waned while trade frictions between the two countries increased. For a period of time, Americans raised a clamor over the “Japan threat.” The Clinton administration, which gave priority to economic issues, continuously pressured Japan, intensifying the conflicts between Japan and the United States. There- fore, easing tensions and consolidating the alliance was a major consideration in the redefinition of the U.S.-Japan alliance. Since 1992, by speeding up reform and opening, China’s economic takeoff became even more remarkable. Therefore the international community’s concern about “China’s collapse “33 was replaced by concern of the “China threat.” Some international relations theorists insist that a rising power is bound to challenge the existing international order. Needless to say, China is a rising power with a social system and values different from those in the Western world. Fend- ing off China thus helps strengthen their alliance. After the end of the Cold War, to maintain its dominant role in the Asia Pacific, the United States felt it needed help from Japan. At the same time, Japan’s national strategy has begun to change. Its longtime high priority for the economy and low priority for the military while relying on the United States has begun to shift to a strategy of building powerful and independent armed forces, seeking parity with the United States, and becoming a “normal country.” Because of national and international constraints, it is difficult—for the moment—for Japan to become a political and military power by gaining independence from the United States. It therefore seeks to realize its objective by strengthening the alliance. Thus the expansion of Ja- pan’s military role in the Asia Pacific region meets the needs of both countries.34 The tension on the Korean Peninsula, repeatedly empha-

————— 33. After the June 4 “Tiananmen Incident” in 1989, especially after the profound changes in the USSR and Eastern European countries, some anti-China forces in the international community predicted that the disintegration of the Chinese socialist system was expected soon. 34. While supporting a larger military role for Japan, many Americans still believe that the U.S.-Japan alliance should play the role of “cork in the bottle” with Japan. Sino-Japanese Relations at the Turn of the Century 247 sized by the United States and Japan, is naturally another important factor leading the two countries to intensify their alliance. In the 1970s and 1980s, there was strategic cooperation between China, Japan, and the United States against the Soviet Union. At that time, China did not oppose the Japan-U.S. alliance, but it also did not endorse it.35 For a fairly long period of time, China, the United States, and Japan formed a relatively balanced triangle, which was of course beneficial to regional security and stability. Nevertheless, after the end of the Cold War, when the international situation relaxed on the whole, the United States and Japan not only strengthened their military alliance but also took China as a potential target. This increased China’s sense of insecurity and affected the subtle balance of the triangular relationship. Deep worry and firm opposition have been expressed in China. Since the Japanese government still refuses to exclude Taiwan from the area covered by the alliance, and some Japanese government officials have even publicly advocated including it, there is a danger of strategic confrontation between China and Japan. It is in the basic interest of both countries to make every effort to avoid this scenario. To this end, Japan must keep its promise that the alliance is not directed at China, and Japan should exclude Tai- wan from its coverage. This is the only wise choice for Japan. In recent years, as an important alliance-strengthening measure, Japan and the United States have conducted joint research on TMD. This, in turn, further intensifies the divergences on security issues between China and Japan. In the view of Japanese and the U.S. officials, TMD will be an important tool for maintaining the security status quo in East Asia. But in fact it will be a major step to damage the status quo and may generate a new arms race in the region. The possibility that a TMD system might be used in the future to “protect Taiwan” has aroused strong concerns in China. There is an argument that China’s opposition to TMD is inconsistent with its no first-use policy, otherwise, why should China fear that TMD might threaten its nuclear forces?36 This logic is not convincing. China commits itself to no first-use of nuclear weapons, but it has the right to possess the necessary capability for retaliation—namely, a second-strike capability to ensure deterrence. China is naturally opposed to the joint development of BMD by the US and Japan, which might neutralize

————— 35. Ezra Vogel, Yuan Ming, and Tanaka Akihiko, eds., The Golden Age of the U.S.- China-Japan Triangle 1972–1989 (Cambridge, Mass.: Harvard University Asia Center, 2002), p. 243. 36. Green, Japan’s Reluctant Realism, p. 92. 248 Zhang Tuosheng

China’s minimum nuclear deterrent. How to solve this problem should be an important agenda item in China-Japan strategic dialogue.

“STRATEGIC SUSPICION” BETWEEN THE TWO SIDES Beginning in 1992, China has had worries over Japan’s “embarking on the road to become a big military power” and seeking a “joint domination of the Asia Pacific” with the United States. Since 1992, Japan has had seriously growing concerns about the “China threat” and China’s “search for hegemony.” This is a profound problem between the two sides. Other problems between China and Japan are all related to this underlying concern, and this “strategic suspicion” has made it more difficult for the two sides to resolve specific issues between them. In the 1970s and 1980s, China had some concern over Japan’s “revival of militarism.” By the mid-1980s, China began to worry that Japan was embarking on a path to becoming a military power. In the past, China suffered deeply from Japanese militarism. And in reality, there have always been people in Japan who have denied the history of aggression and even advocated militarism. In this situation, it was natural for China to feel worried and concerned. But at that time, the worry usually appeared in the company of bilateral frictions on the issues of history and the Taiwan question and gradually faded away when frictions were settled. And compared with the mainstream Chinese view toward Japan, the worries were insignificant. Since early 1990s, great changes took place. Japanese nationalism has grown, while calls to amend the constitution are rising rapidly. Japan’s military strength is also growing, and there is an increasing likelihood that Japan will follow the United States in using the military alliance to interfere in the internal affairs of other countries. All these have deepened Chinese worries over Japan’s future direction. Could the readjustment of Japan’s national strategy derail Japan from peaceful development? Could the enhancement of the Japan- U.S. military alliance lead to “joint domination of the Asia Pacific” by the two countries? These have become hot topics in diplomatic and academic circles in China.37 In such a situation, even though China’s general policy on Japan remains unchanged, and although ————— 37. In recent years, the “revival of Japanese militarism” has been rarely mentioned in Chinese academic circles. The focus has been on “preventing Japan from embarking on the road of becoming a big military power.” I believe the latter conforms more to the facts. Sino-Japanese Relations at the Turn of the Century 249

China’s basic wish is to develop long-term friendly cooperation with Japan, Chinese must remain vigilant over Japan’s changes. These issues will create more instabilities and uncertainties for its policy toward Japan. Japan’s concern with the “China threat” and “Chinese hegemony” has increased for the following reasons: 1. In the course of defense modernization, China’s increase in military expenditures for missiles and its nuclear arsenal have di- minished transparency. 2. To achieve reunification, China continuously threatens Taiwan with force and refuses to abandon the right to use force. Because of Japan’s dependence on open shipping lanes, this may constitute a serious security threat to Japan. 3. China pressures Japan on many issues and tries its best to prevent Japan from playing a larger role in regional and international affairs. Among these, the issue that angers Japan the most is China’s “ambiguous attitude” toward Japan’s wish to become a permanent member of the U.N. Security Council.38 4. With its rapid rise, China is bound to challenge the existing international order and compete with the United States and Japan for the dominant role in the Asia Pacific region. Japan’s “strategic suspicion” of China has gradually increased since the end of the Cold War. Although we cannot say its worries are entirely irrational, in general they are groundless. First, defense modernization is a natural part of China’s modernization drive, with an objective to defend its territory and sovereignty more effectively and to promote national reunification. However, in line with the policy mapped out by Deng Xiaoping, China’s defense modernization must be subordinate to and serve the central task of economic development. This policy cannot easily be changed. All objective observers acknowledge that China’s military strength is no match for that of the United States and, in many aspects, that of Ja- pan. This situation will remain unchanged for a long time. Regard- ing the defense budget, these two countries are not in a position to find fault with China. It is true that China’s military transparency

————— 38. Aside from the issue of Japan’s membership in the Security Council, Japan has raised some other issues such as Chinese and U.S. opposition in 1997 to Japan’s idea of setting up an Asian Monetary Fund and, in 1998, after Indian and Pakistani nuclear tests, China’s opposition to Japan’s proposal for emergency consultation by the five nuclear powers plus Japan and Germany. 250 Zhang Tuosheng needs to be enhanced,39 but this is not enough to justify the “China threat” theory. Second, it is China’s long-cherished wish that Taiwan be returned soon to the motherland. This is China’s internal affair. To this end, China’s policy is “peaceful reunification” and “one country, two systems.” Since the 1990s, with support from certain foreign forces, the momentum for independence in Taiwan has grown rapidly, and the situation across the Taiwan Strait has deteriorated. Therefore, China has struggled against Taiwan’s “independence forces” (including its missile exercises, which were in accord with international law) and reiterated that it will not renounce the right to use force. China’s aim is to deter the forces for independence in Taiwan and to try its utmost to avoid a situation in which it is compelled to resort to force. In fact, if the international community, especially the United States and Japan, adhere to the one-China policy thoroughly and give no support to Taiwanese independence forces, the situation across the Taiwan Strait will be much calmer and the process for peaceful reunification with Taiwan will go much more smoothly. Under this circumstance, Japan’s worry over the possibility of conflict resulting in obstruction of its sea lanes would be totally unnecessary. Third, in principle, since China supports multipolarity, it should support Japan’s efforts to become a major “pole” in the world and its assumption of a larger role in the international community. In fact, many Chinese scholars have continuously advocated this. Then why does China still have reservations about Japan playing a larger role in the international community and maintain an “ambiguous attitude” about its permanent membership in the U.N. Security Coun- cil? Although there is indeed an issue as to whether it is reasonable for China to respond to Japan’s appropriate wish for a larger international role,40 the fundamental issue appears to be a problem in Japan itself. Japan has not been able to unload completely its historical burden to win the trust of Asian countries. This is the real source of the “pressure” Japan feels. Therefore, if Japan genuinely intends to gain support from Asian countries, including China, for its effort to become a normal state and a great political power, it is of utmost importance to resolve the history issue and maintain its course of peaceful development. ————— 39. Since 1995, China has published three white papers on defense policies, arms control, and the disarmament of China. The practice will be further developed and become regular in the near future. 40. Shi Yanghong, “Reflections on the Severe Situation in China-U.S.-Japan Rela- tions,” in International Economic Review, no. 4 (2000): 58. Sino-Japanese Relations at the Turn of the Century 251

Fourth, the history of the last twenty years shows that China’s growth is achieved through following policies of reform, opening, and growing compatibility with the ways of the international community. China has stood for establishing a new international political and economic order. To this end, China should first join the existing international mechanisms and play an active role as a responsible and influential member so as to improve and perfect it step-by-step. Sine the 1990s, China has quickened its pace in joining existing international mechanisms and becoming a member of all major international organizations, including the major arms controls treaties. In 2001, China became a member of WTO. In light of these unquestionable realities, how can one put China on a par with those rising powers in history that fought the old colonial powers for the spheres of influence and used military force to upset the existing order? Unfortunately, in the past ten years, the idea of a “China threat” has been widely propagated in Japan. This results from a lack of understanding of China, propaganda by right-wing forces, and a failure of self-confidence in its own economic development. The sharp contrast between rapid economic growth in China and the economic recession in Japan since the early 1990s casts a heavy psychological shadow over the Japanese people. At present, the mutual lack of trust and strategic suspicion between China and Japan has received great attention from both governments. The slogan “increasing trust and reducing suspicion” is designed to respond to this problem. But this is easier said than done. To put it into practice will depend on many subjective and objective factors in both China and Japan, such as domestic politics, the courage and vision of the leaders, the prospects for bilateral economic cooperation, the settlement of the thorniest issues about history, the management of the Taiwan issue under the U.S.-Japan Security Treaty, as well as the evolution of the trilateral relationship between China, Japan, and the United States. But the key element is the future road of the two countries. If Japan can continue to keep on the road of peaceful development and does not seek status as a military power while China adheres to economic development as its focus and follows the independent foreign policy of peace, and, if both countries are resolutely opposed to hegemonism and neither seeks hegemony themselves (a major principle embodied in the China-Japan Peace and Friendship Treaty), then mutual strategic suspicion can be gradually dissolved through joint efforts by the two sides. 252 Zhang Tuosheng

Conclusions Through this brief review of the twists and turns in Sino-Japanese relations at the turn of the century and through the analysis and summary of the bilateral issues, three conclusions may be drawn. First, in comparison with the twenty years after the re- establishment of diplomatic relations, the Sino-Japanese relationship at the turn of the century has undergone dramatic changes—both in the outward manifestations and in the underlying fundamentals. There are three changes in underlying fundamentals: (1) With the disappearance of the shared security interests in dealing with the threat of the Soviet Union, security frictions between China and Ja- pan are on rise although there is still cooperation. (2) The rapid growth in bilateral economic and trade relations has become the strongest bond for maintaining good bilateral relationships. (3) Co- operation in international affairs in many areas has expanded and strengthened beyond the constraint of bilateral relations. As for outward manifestations, two trends are obvious. (1) The economic gap between the two countries has narrowed as China’s overall national strength grows, and the relationship is now one between two strong countries. (2) While the two countries have basically maintained a friendly and cooperative framework of relations, the atmosphere of bilateral friendship has clearly declined, and differences, suspicion, and competition are clearly on the rise. Friendship and cooperation coexists with friction and competition.41 Second, major changes in bilateral relations during this period have their profound domestic and international contexts. The main factors underlying these changes are the following: the end of the Cold War and disintegration of the Soviet Union, changes in Ameri- can policy on China, the rapid growth of the Chinese economy and its international influence, changes in Japanese domestic politics and foreign policy42 as well as its protracted economic stagnation, the escalation of the Taiwan issue, and the end of an old generation of leaders in both countries. Among these elements, the end of the Cold War is the most far-reaching and decisive. Because both China and

————— 41. Liu Jiangyong, Hesitant Japan (Tianjin: Tianjin Renmin Publishing House, 2000), p. 302. 42. The changes in Japanese domestic and foreign policy are manifested in its effort to seek the status of a normal country and shake off the shadow of a defeated country. This is actually a natural development with changed domestic and international situations. China has gradually realized this. Sino-Japanese Relations at the Turn of the Century 253

Japan were unprepared for the sudden change and its consequences, their thinking lagged behind the new situation, and the bilateral relationship entered a period in which they did not adapt to the new circumstances. From 1997 to 2000, bilateral relations gradually improved and developed relatively smoothly, as a result of the continuous efforts of both countries to adapt to the new environment in line with their national interests and the readjustment of their foreign policies. The joint decision to establish a friendly and cooperative partnership dedicated to peace and development is a major result of this readjustment. This readjustment is still going on and seems likely to continue for some time. Third, one can be cautiously optimistic about the Sino-Japanese relationship in the twenty-first century because in the past ten years bilateral relations still achieved striking advances on many fronts, even though differences and frictions increased. Although bilateral relations deteriorated for a while, the situation lasted only for a limited period of time, and differences were brought under control most of the time. If one drew a curve of the relationship from 1992 to 2001, there would be relatively smooth development at the two ends and deterioration in between. The current trend is upward. After so many twists and turns, the two countries have made up their minds to establish a partnership in order to maintain and develop their common interests, which has laid a solid foundation for bilateral relations in the new century. The September 11, 2001, terrorist attacks have had a profound influence on the international situation and the international strategic pattern. In face of a common threat, the possibilities for coordination and cooperation among powers are increasing. In this connection, China-U.S. relations have markedly improved and developed. This may be very positive for the furtherance of Sino-Japanese relations. It can be predicted that the Sino-Japanese relationship will continue to encounter twists and turns in the future, especially on issues of history and Taiwan. With Chinese membership in WTO, economic frictions will also grow between the two countries. But the shared interests of the two neighbors will over- whelm these risks in the end. Recent bilateral cooperation on regional economic affairs shows that there exists a greater potential for further improvement and development in the relationship. If both China and Japan can adhere to the new framework defined by the 1998 joint declaration and uphold the important principle of “increasing trust and reducing suspicion” agreed upon by their leaders in 2000, Sino-Japanese relations can gradually overcome difficulties that occurred in the post-Cold War decade and begin a relatively smooth and stable development for the new millennium.

Japan’s Policy Toward China in the 1990s Akio Takahara

As Japan conceived its policy toward China in the 1990s, it was indeed embarking on a voyage without a chart. The Cold War was over, and throughout the world nations were seeking a new order. In the initial part of this process, Japan’s alliance with the United States seemed, in some people’s eyes, to be “drifting.”1 Domestically, the “one-party rule” of the Liberal Democratic Party (LDP) was finally over. When the LDP returned to power in 1995, it formed a previously unthinkable alliance with the Socialist Party, its archen- emy for the past 40 years. The Japanese economy, which in the 1980s had seemed to be catching up with and even overtaking that of the United States, floundered in the wake of the bursting of the “bubble economy” in the early 1990s. The Japanese were losing self-confidence, while China, rising from the shock of the June Fourth Incident in 1989 and the collapse of the socialist camp in Europe, achieved stunning economic growth in the

————— Akio Takahara is a Professor at Rikkyo University.

1. Funabashi Yoichi, Domei hyoryu (An alliance adrift) (Tokyo: Iwanami shoten, 1997).

254 Japan’s Policy Toward China in the 1990s 255 mid-1990s, thanks to the mighty leadership of an octogenarian revolu- tionary. This occasioned far-reaching changes in China that became important factors in the making of Japan’s China policy. First, the Chinese enhanced their national pride, and the public started to express a wish to see their leaders “say no” to the United States and Ja- pan.2 Second, China’s involvement in the global market economy deepened, which increased not only interdependence and opportunities for Japanese firms but also China’s involvement and presence in the regional economy. According to the Japanese statistics, the amount of Japan-China trade reached U.S.$85.8 billion in 2000. China was then Japan’s third-largest trading partner after the United States and the European Union, while, according to Chinese statistics, Japan was China’s largest trading partner.3 Third, economic growth enabled the Chinese to quicken the pace of expanding and upgrading their military arsenal. All through the 1990s, the annual growth rate of China’s defense budget was in double digits, increasing fourfold from 25.1 billion RMB in 1989 to 107.6 billion in 1999.4 In this context, we cannot forget another significant development in the 1990s, namely, the further democratization of Taiwan and its increasing openness in expressing its unwillingness to be a part of the People’s Republic of China. Lee Teng-hui, who was brought up in Taiwan when it was a colony of Japan, revised the constitution of the Republic of China in 1991 and made it clear that the constitution applied only to the area that was then effectively under the rule of the KMT government. In other words, the Nationalists have since then acknowledged that the Communists are the legitimate rulers of the mainland. This led to the 1999 statement by Li that the relationship between Taiwan and the mainland amounted to a special, state- to-state relationship.5 In Chinese eyes, the United States loomed large behind Taiwan. In the beginning of the 1990s, the Gulf War made it clear to the world that the United States was far ahead of others in revolution-

————— 2. China Can Say No, a book filled with animosity against Japan and particularly against the United States, became a bestseller in 1996. 3. Yasuo Onishi, “China Growing into an Economic Power Stronger than Japan,” in Kayahara, Ikuo (ed.), Whither China?, ed. Kayahara Ikuo (Tokyo: Sososha, 2001), p. 142. 4. National Bureau of Statistics, ed., China Statistical Yearbook, 2000 (China Statistics Press, 2000), p. 262. 5. Akio Takahara, “War and Peace Between the Communists and the Nationalists: China-Taiwan Relations in the Latter Half of the 20th Century,” Heiwa kenkyu, no. 25 (Nov. 2000): 44–46.

256 Akio Takahara izing military affairs. At the end of the 1990s, U.S. participation in the bombing of Yugoslavia by NATO forces, particularly the bombing of the Chinese Embassy, made it clear that China had fallen further behind, despite its strenuous efforts to catch up. The United States’ strength and supremacy in information technology also led it to a dramatic economic recovery. Thus the United States emerged as a pre-eminent overall superpower. The gap between the United States and other countries was likely to continue for the foreseeable future, which created issues for both China and Japan. The Chinese benefited by increasing their exports to the U.S. market, but at the same time they tended to see the reconfirmation of the Japan-U.S. alliance and the expansion of NATO in Europe as part and parcel of a new strategy by the sole remaining superpower to dominate the globe. This chapter reviews some major episodes in Japan’s policy toward China in the 1990s and attempts to explore the Japanese interests and thinking that were involved. For the convenience of understanding the evolution of policies, I divide the decade into three periods: the good times, 1990–autumn 1994; the hard times, autumn 1994–autumn 1996; and the new period of an unsettled partnership, autumn 1996–present. In addition to the factors mentioned above that appeared for the first time in the 1990s, we cannot ignore others that continued from earlier days, such as the history issue. Special attention will be paid to those cases in which there were gaps in perception between Japan and China. In the conclusion, I try to identify the basic concerns and patterns of approaches or thinking in Japan’s policy toward China in the 1990s and discuss what should be done to improve the Sino-Japanese relations in the future.

The Good Times: 1990–Autumn 1994 In the wake of June 4, 1989, Japan’s policy was not to isolate China from the world. This was the case despite the dramatic deterioration in people’s perception of China as a result of the incident. According to the survey conducted by the Japanese government each year, the percentage of those who felt close to China fell from 68.5 percent in 1988 to 51.6 percent in 1989, while those who did not feel so rose from 26.4 percent in 1988 to 43.1 percent in 1989.6 Nevertheless, the Japanese government held to its policy of engaging China, and Japan

————— 6. Past results can be seen at http://www8.cao.go.jp/survey/gaikou_01/images/ zu28.gif and zu29.gif.

Japan’s Policy Toward China in the 1990s 257 was the first among the industrialized countries to end the sanctions and resume economic assistance. In August 1991 Prime Minister Kaifu became the first among the G-7 leaders to visit Beijing after June 1989. He made the following remarks: Since China adopted the reform and opening-up policies in 1978, cooperation between Japan and China has had a more positive meaning to the Asia- Pacific region. This is because the Chinese economy has been linked with the economy of the Asia-Pacific, which is the most dynamic in the world. Through supporting the Chinese economy, Japan can contribute not only to the stability and development of China but also to the stability and prosperity of the region as a whole.7 Note that Kaifu referred to the Asia-Pacific, a concept that was used to include the United States. And by emphasizing the important role that this region played in supporting the growth of the world economy, Kaifu wanted to convince the United States and Europe that Japan’s cooperation with China suited their interests as well.8 Japan was also concerned about the domestic politics of China. In the wake of June 4, it was unclear whether China would proceed with reform and opening or to revert to a more orthodox planned economy. In fact, a specific plan for recollectivizing agriculture was drafted and discussed at the Politburo and the executive meeting of the State Council, although it was rejected in the end.9 Finding an obvious interest in supporting the reformist camp, Japan believed that it should contribute to the Chinese economy by providing the know-how as well as the resources needed in promoting marketization. Despite the newly introduced ODA policy to take into account such factors as the development of weapons of mass destruction and arms exports by the recipient country, these principles were not strictly applied to China. This was because China’s stable development was regarded as vital to the interests of Japan and the re-

————— 7. A policy speech by Prime Minister Toshiki Kaifu at the Sino-Japanese Youth Ex- change Centre, Aug. 11 1991, in Nitchu kankei kihon shiryoshu 1949 nen–1997 nen (Basic materials on Japan-China Relations, 1949–97) (Tokyo: Kazankai, 1998), p. 770. 8. Tanaka Akihiko, “Relations with Japan,” in Chugoku soran, 1992 nenban (China almanac 1992) (Tokyo: Kazankai, 1992), p. 127. This almanac is published every other year, and Tanaka reviews Japan-China relations in detail in each volume. 9. Hearing the rumor that recollectivization was just around the corner, farmers started to cut fruit trees and kill cattle. This and other retrogressive policies are discussed in Akio Takahara, Head-on Collision: The Political Currents in China, Spring 1992, Discussion Paper for the Japan-U.S. Consultative Group on Policies Toward the Peo- ple’s Republic of China, Second Meeting: Political Issues, in Tokyo, cosponsored by the Asia Society and the Japan Institute of International Affairs, April 1992.

258 Akio Takahara gion.10 It was in the same spirit that Japan has consistently been strongly supportive of China’s joining the GATT and later the WTO. In its bilateral relations, Japan responded positively to China’s strong request for a visit by the emperor to commemorate the twentieth anniversary of the normalization of relations in 1992. This took place despite opposition from some LDP members who argued that the emperor’s visit should not be used politically.11 In his banquet speech in Beijing, the emperor acknowledged that there was a period when Japan had brought great hardship to the Chinese people and remarked that this caused him to feel deep sorrow. He continued that, based on deep remorse, the Japanese had firmly resolved that they should never repeat such a war and should remake Japan as a peaceful nation.12 In the following year, Premier Hosokawa, who led the first coalition government in almost 40 years, expressed deep remorse and apologized to those who suffered from Japanese invasion and colonial rule in a speech to the Diet.13 These remarks were made not as a tactical move in consideration of the Japan-U.S.-China triangle, that is to strengthen Japan’s position vis-à-vis the United States (Japan-U.S. relations were under a lot of stress at the time), but they were meant to consolidate further the basis for a long-term, cooperative relationship between Japan and China. During this period, there was a significant move in terms of regional security. The ASEAN Regional Forum (ARF) met for the first time in 1994. It took the shape of an ASEAN forum, but a good part of the original initiative stemmed from Japan.14 From the viewpoint of the Japanese, they would rather remain in the background, playing the role of a “shadow actor” (kuroko), since they thought Japan’s initiative in the area of security was not yet welcomed by the nations that suffered from Japanese aggression in World War II. One of the important aims of ARF was to obtain the participation of China. Co-

————— 10. See the Report on Aid to China, compiled and published by the Japan Interna- tional Cooperation Agency in December 1991. 11. Tanaka Akihiko, “Relations with Japan,” in Chugoku soran, 1994 nenban (China almanac, 1994) (Tokyo: Kazankai, 1994), p. 145. 12. Nitchu kankei kihon shiryoshu, 1949 nen–1997 nen, pp. 794–95. 13. Ibid., p. 802. 14. Seiichiro Takagi points out that Japanese Foreign Minister Taro Nakayama’s proposal for a regional security dialogue in July 1991 led to the establishment of ARF (Seiichiro Takagi, “In Search of a Sustainable Equal Partnership: Japan-China Rela- tions in the Post-Cold-War Era,” Japan Review of International Affairs 13, no. 1 [Spring 1999]: 25–26).

Japan’s Policy Toward China in the 1990s 259 opting a big neighbor in this manner was called the “Gulliver approach,” which had been adopted earlier by the Southeast Asian countries when they established ASEAN to engage Indonesia.15 In this period, China was facing a hostile Europe and North America and was eager to make a breakthrough by improving relations with Japan. Since the Clinton administration was especially critical of China in its initial phase, the Chinese seemed not at all uncomfortable when Hosokawa said “no” to the Americans but spoke softly to the Chinese. Initially, China was rather cautious about the Japanese expanding their role in the post–Cold War international political scene, especially with regard to their sending the Self-Defense Forces (SDF) overseas. However, China was beginning to get used to the idea that Japan was to become a “political power,” and in the end the participation of both the PLA and the SDF in the U.N. Peace- keeping Operation in Cambodia was seen positively by Beijing as well as by Tokyo.16

The Hard Times: Autumn 1994–Autumn 1996 This rosy picture did not last long, however. First, Taiwan became a hot issue. China protested vehemently against the reported idea of the Olympic Commission of Asia to invite President Lee Teng-hui to the Asian Olympic Games held in Hiroshima in October 1994. In the end it was Vice Premier Xu Lide who came from Taiwan in his capacity as chairman of the Committee for Inviting the 2002 Asian Olympic Games, but still a strong protest was made by Beijing. Obviously Japan had no intention of changing its basic policy regarding Taiwan, which was manifested in the 1972 Japan-China Joint Communiqué: Japan fully understands and respects China’s position stipulated in Article 8 of the Potsdam Declaration. This article obliged Japan to implement the clauses of the Cairo Declaration, which stated that one of the aims of the war against Japan was to force Japan to return Taiwan, as well as Manchuria, to the Republic of China, which was the government of China at the time.17

————— 15. Tatsumi Okabe, “Learning to Survive with ‘Gulliver,’ ” The World Today 52, no. 6 (June 1996): 155–56. 16. Akihiko Tanaka, “Relations with Japan,” in Chugoku soran, 1994 nenban, pp. 148–50. 17. Japan’s position on Taiwan’s status is detailed in Akio Takahara, “The Present and Future of Japan-China Relations,” Gaiko Forum English Edition, Summer 2000, p. 45.

260 Akio Takahara

However, Taiwan was now a democracy with an impressive record of economic development. The desire of the Taiwanese to acquire more global recognition, preserve the status quo, and avoid forceful reintegration with the mainland was growing. A democratic leader in Taiwan had no choice but to endeavor to achieve these de- sires of his people. These factors, together with the historical and cultural affinity that was personified in Lee Teng-hui, did contribute to the rise in sympathy among the Japanese public for the fate of the Taiwanese.18 China, for its part, had been disturbed by Lee Teng-hui’s “vaca- tion diplomacy” to the Southeast Asian countries and by his attempt to gain a seat in the United Nations for Taiwan. It was also the time that the complete transfer of power from the so-called second generation of leaders to the third generation was officially announced at the Fourth Plenum of the Fourteenth Party Central Committee in September 1994, and Jiang Zemin, the “core of the third generation of leaders,” had chosen Taiwan as the first major policy area to assert his own style of leadership. His conciliatory eight-point proposal was made in February 1995, but it bore little fruit.19 Later that year Lee Teng-hui visited the United States, which was understood to be the result of pressure on the Clinton administration from the overwhelming vote in Congress supporting his visit. Although this had no direct relation with Japan, Japan was soon deeply involved in an argument with China over the relationship between the Taiwan issue and the reconfirmation of the Japan-U.S. alliance. The reconfirmation of the Japan-U.S. alliance proved to be the largest issue in the Japan-China relations in the 1990s. For the Japa- nese policymakers, what mattered most was perhaps the political significance of the alliance with the United States. They had to explain to the public what the alliance meant after the Cold War. They feared that economic friction with the United States and the problems that arose from the U.S. bases in Japan and especially those in Okinawa could lead to stronger anti-U.S. feelings and questioning of the alliance. Since they regarded that canceling the alliance would fundamentally change the status quo in Japan and in the region,

————— 18. The interview of Lee Teng-hui by the prominent Japanese writer Ryotaro Shiba, published in Shukan Asahi (Weekly Asahi), expressed so much sympathy that it became notorious among the mainland Chinese. 19. Yamamoto Isao, Chu-Tai kankeishi (The history of China-Taiwan relations) (To- kyo: Fujiwara shoten, 1999), pp. 223–31.

Japan’s Policy Toward China in the 1990s 261 with which they and most other countries had been comfortable, they willingly cooperated with U.S. government officials to adjust the alliance to the new era.20 There is little doubt that when the Japanese and the U.S. governments talked about possible “circumstances surrounding Japan” in the new guideline for defense cooperation, they were alluding mainly to a war in the Korean Peninsula, where a crisis had just been overcome in 1994. As regards China, the April 1996 Japan-U.S. Joint Declaration on Security referred to it in the following way: “They [Hashimoto and Clinton] emphasized that it is extremely important for the stability and prosperity of the region that China play a positive and constructive role, and, in this context, stressed the interest of both countries in furthering cooperation with China.”21 Certainly it was with great sensitivity that the two sides composed this sentence, since it had turned out that the declaration was signed only a month after China launched missiles off the coast of Taiwan and the United States sent two aircraft carriers into the area. Neither Japan nor the United States wished to promote the “China threat theory” in their joint declaration. However, the Japanese as well as the Americans became increasingly concerned about China’s future in the mid-1990s. What caused this concern included the frictions arising from China’s nuclear testing, over which Japan held back aid to China, and the intensive anti- Japanese, patriotic propaganda to commemorate the fiftieth anniversary of the end of World War II. No matter what the intention of the patriotic education in China was, it effectively imprinted a very negative image of Japan and the Japanese on the minds of the Chi- nese, including children.22 The backdrop to Japan’s uneasiness about China at the time was the impressive economic growth of China, which was generally welcomed by the Japanese but then stood in stark contrast to the quag- mire into which the Japanese economy had fallen. The Chinese missile tests, aimed to intimidate Taiwan, took place just next to Yonakuni Island, the western tip of Japanese territory. This, together with the nuclear tests, enhanced the militaristic image of China in the minds of the Japanese. The percentage of those who felt close to ————— 20. See Funabashi, Domei hyoryu. 21. See http://www.jda.go.jp/e/policy/f_work/sengen_.htm. 22. I often encounter Chinese youths who reveal that the Japanese they have met are actually much “nicer” than they expected from the images that they had learned about and had seen in the Chinese media. They may be mistaken, of course, but the point on education still holds.

262 Akio Takahara

China in the government survey declined to 45.0 percent in 1996, its lowest in history so far, and the percentage of those who did not feel so rose to its highest point, at 51.3 percent.23 The Chinese, on the other hand, had reasons to be gravely concerned about the reconfirmation of the Japan-U.S. alliance. Many suspected that it was an integral part of the new U.S. strategy to dominate the globe in combination with the expansion of NATO in Europe, and that Japan would be playing a larger security role in the region as an agent of the United States. In addition to this, the Chi- nese official media seemed to identify a linkage between Hashi- moto’s visit to the Yasukuni Shrine and the construction of a lighthouse on the Senkaku Islands by right-wing activists, seeing these as part of a plot to revitalize militarism in Japan.24 The Chinese were becoming more apprehensive about the growing capability of the Japanese military and felt that the strengthening of the Japan-U.S. alliance betrayed their expectation of a stronger Japan serving as a counterbalance against the United States.25 There was an increasing nationalistic sentiment among the Chinese public, which seemed to be supported by the economic success and the patriotic education campaign. In 1996 an anti-U.S. and anti-Japanese book, China Can Say No, became a bestseller.26 The immediate question that worried the Chinese was whether the “circumstances surrounding Japan” would include the Taiwan Strait or not. Koichi Kato, the then secretary-general of the LDP, told Chinese leaders during a 1997 visit to Beijing that the new Japan-U.S. defense guidelines were not aimed against China. According to the Japanese press reports, Kato suggested that Taiwan should be excluded from the perimeter of the defense guidelines. His political rivals pounced on the remark. Seiroku Kajiyama, then the director of the Cabinet Secretariat, argued that the perimeter should not be specified and strongly hinted that Taiwan was also included.27 Offi- cially the Japanese government made a rather ambiguous explanation, saying that “circumstances surrounding Japan” was not a geo-

————— 23. See note 6 to this chapter. 24. See, e.g., the commentary by the Xinhua News Agency, Oct. 17, 1996, quoted in Funabashi, Domei hyoryu, p. 455. 25. Takagi, “In Search of a Sustainable Equal Partnership,” p.32. 26. The book was promptly translated into Japanese and published in Japan; see Song Qiang, et al., No to ieru Chugoku (Tokyo: Nihon keizai shinbunsha, 1996). 27. Akihiko Tanaka, “Relations with Japan,” in Chugoku soran, 1998 nenban (China almanac, 1998) (Tokyo: Kazankai, 1998), pp. 146–49; Funabashi, Domei hyoryu, pp. 437–38.

Japan’s Policy Toward China in the 1990s 263 graphical concept but a concept that focused on the nature of the circumstances. In any case, the intention of Japan was neither to encourage Taiwan’s independence nor to promote unification, but to prevent the use of force in solving the problem. Hostilities across the Taiwan Strait would be the worst nightmare for the Japanese, not only because of the geographical proximity but because of its potential to undermine the basis for stability and prosperity in the region.

The New Period of an Unsettled Partnership: Autumn 1996–Present Once the reconfirmation of the Japan-U.S. alliance was all but a fait accompli, Japan and China moved toward reconciliation and entered a new period in their relationship. The Japanese prime minister at the time was Ryutaro Hashimoto. When Hashimoto met Jiang Zemin in Manila in November 1996, Hashimoto told Jiang that he attached as much importance to Japan-China relations as he did to Japan-U.S. relations. He also stated that his cabinet shared the understanding of history with the Murayama cabinet, which had expressed deepest remorse and sincere apologies for Japan’s colonial rule and invasion in the past.28 A uniqueness of Hashimoto’s foreign policies existed in his advocacy of “Eurasian diplomacy,” placing China as the linchpin of the Asia-Pacific and the Eurasian continent. He understood well the importance of engaging Russia in handling the triangle with China and the United States. Hashimoto’s China policies were articulated in his speeches that were made just before and during his visit to China in September 1997. One of the points in the speeches was to compare Asia with the situation in post–Cold War Europe, pointing out that Asian countries, among them Japan and China, should be doing four things: to understand the variety of polities, economies, histories, re- ligions, and cultures that exist in Asia; to increase opportunities for dialogues; to promote cooperation and mutual learning; and to create a common order. Based on this framework, he proposed a regular annual summit meeting and the strengthening of the security dialogue between Japan and China. In addition to the dialogue and cooperation on bilateral issues, he argued that the two countries should discuss regional and global issues and tackle them jointly and constructively.

————— 28. For Prime Minister Tomiichi Murayama’s statement, see Nitchu kankei kihon shiryoshu, 1949 nen–1997 nen, pp. 819–20.

264 Akio Takahara

The idea was to place Japan-China relations in a wider context so as to relativize the relationship. The metaphor used among the Japa- nese officials was for Japan and China to get out of the stuffy, small room where they sat face to face and discuss matters in a large hall. The backdrop to this idea was the ongoing globalization and the consequent growing drive for regional integration. Perhaps the Chi- nese were still cautious when they responded negatively to the Japa- nese proposal to establish an Asian Monetary Fund not long after the eruption of the Asian financial crisis in July 1997. But the Chinese soon came to accept the spirit of regional cooperation, changed their minds about the Asian Monetary Fund, and eventually agreed on the extensive list of mutual cooperation announced at the time of Jiang’s visit to Japan in November 1998. As is well known, however, Jiang Zemin’s visit to Japan turned out to be a bumpy ride. He was angry that the Japanese did not agree to include the word “apology” in the Joint Declaration on Building a Friendship and Cooperative Partnership for Peace and Development, and that Prime Minister Keizo Obuchi apologized only verbally during the official summit meeting. While in Tokyo, the president repeatedly reminded the Japanese about their wartime deeds and the need to contain militarism, which was regarded by many Japanese as unnecessary, impolite, and irritating.29 Jiang was angry especially because Obuchi had apologized in writing when President Kim Dae Jung of South Korea visited Japan a month earlier. From the viewpoint of the Japanese, Japan had expressed its apologies to China on many occasions, including the emperor’s visit to Beijing, while it had not been done so to the Koreans. Even when the word “apology” was not uttered, the spirit had been clear and was accepted by the Chinese leadership of the times. Otherwise, it would not have been possible to normalize the relations and sign the Peace and Friendship Treaty in 1978. The 1972 Japan-China Joint Communiqué reads, “The Japanese side realizes keenly its responsibility as to the serious damage it inflicted on the Chinese people through the war and feels deep remorse.”30 Then, Zhou Enlai stated: The invasion of China by the Japanese militarists brought about an extreme disaster to the Chinese people and great damage to the Japanese people. “Past experience, if not forgotten, is a guide for the future.” We must firmly remember such experiences and lessons. The Chinese people have followed

————— 29. Ryosei Kokubun, “Japan-China Relations After the Cold War: The Transforma- tion of the ‘1972 Regime,’ ” Kokusai mondai, no. 490 (Jan. 2001): 43. 30. Nitchu kankei kihon shiryoshu, 1949 nen–1997 nen, p. 428.

Japan’s Policy Toward China in the 1990s 265 the teaching of Chairman Mao and have strictly distinguished the very small number of militarists and the majority of Japanese people. . . . The Chinese and the Japanese are both great nations and are both diligent and brave peoples. The peoples of the two countries must be friendly toward each other for generations and generations.31 It is well known that Mao and Zhou then decided to give up their claim for reparations, which was a great relief to the Japanese side. When Deng Xiaoping came to Japan and met the Showa Emperor in 1978, he said, let bygones be bygones and from now on we should look forward and construct a peaceful relationship between the two countries.32 Many Japanese were greatly moved by the magnanimity of these great leaders, but, in contrast, they were much disappointed with Jiang Zemin’s tenacity.33 In addition, Kim Dae Jung had made it clear that the Koreans would not take up the history issue in the future, while Jiang was apparently unwilling to make this promise. Obuchi was also under pressure from within the LDP not to give in to China this time. With China’s accelerated growth in the 1990s, the Japanese, like people elsewhere, could imagine the emergence of China as a major global power. Many Japanese felt the historical issues were sometimes used in China to strengthen Chinese nationalism and to pressure Japanese for economic concessions.34 As China grew stronger, Japanese could imagine further political pressure and economic competition from China, creating doubts about the wis- dom of a continued low posture toward China. The new perspective was strengthened as the proportion of Japanese who were adults in World War II declined and the proportion of those born after the war who felt they were not responsible for the war grew. The irritation among some Japanese had also stemmed from what seemed to be China’s tactic to belittle Japan to the United States. This took place as if it were a means to strengthen the image and author- ————— 31. For his speech at the welcoming banquet for Prime Minister Tanaka, see ibid., p. 420. 32. Ibid., pp. 518–19. 33. At the press conference held just before Jiang left Tokyo for Sendai city, a Japa- nese reporter asked in goodwill, “Mr. President, you have repeatedly raised the history issue in your meetings during this visit. Would you like to use this opportunity to send other messages you have brought to the Japanese public?” Jiang paused for a while and then burst out on the history point once again. The Xinhua News Agency had to change the question when it reported on this press conference. 34. One precedent was set in 1987, when Deng Xiaoping brought up China’s abandonment of reparations in demanding greater assistance from the Japanese during a conversation with Jun’ichiro Yano, the then leader of the Komei Party (see Nitchu kankei kihon shiryoshu, 1949 nen–1997 nen, p. 707).

266 Akio Takahara ity of Jiang Zemin after his re-election as party general-secretary in September 1997, seven months after the death of Deng Xiaoping. In the following month, Jiang made a stopover in Hawaii on his way to meet Clinton and visited Pearl Harbor, the implication of which was rather obvious. After the Asian financial crisis, the Chinese media repeatedly reprimanded Japan for its irresponsibility in letting the exchange rate of the yen fall. When Clinton reciprocated the Jiang visit the following year, he made the same argument, praising the Chinese for maintaining the value of the RMB and accusing the Japanese of letting the yen fall.35 The irritation on the part of the Japanese influenced the discussion over the review of ODA grants to China. Some members of the LDP complained vociferously that it was no use providing ODA to the Chinese, who took it for granted and were never grateful. Some ignored the earlier discussions on the application of ODA principles to China and insisted that ODA should not be provided in the light of China’s military buildup and arms exports. Negative reports in the right-wing Sankei shinbun about the Chinese using the ODA for military purposes fueled the indignation. In fact, considering the rapid growth, huge savings, and the foreign exchange reserves of China, and Japan’s economic stagnation and huge budget deficits, the economic rationale for aiding China looked rather thin. Nevertheless, the wise men’s group, convened by the Ministry of Foreign Affairs to review ODA to China, concluded in early 2001 that ODA should be continued for the stability and prosperity of China and of the region. However, the group recommended that the foci of the ODA should be shifted to environmental conservation and social development and that the amount should be adjusted in accordance with the fiscal conditions of Japan. During this period, however, Japan’s inclination toward regional cooperation continued, and the good news for Japan was that China became an active participant in regional forums. To the eyes of outside observers, it seemed that this switch became salient in 1999 in the wake of NATO’s decision on its new strategic concept and the bombing of Yugoslavia and the Chinese Embassy there. At the occasion of the ASEAN+3 meeting in Manila in November 1999, China agreed for the first time to attend the Japan-Korea-China triangle summit meeting. At the same meeting the following year in Singa- pore, it was agreed by the three parties that this meeting should be

————— 35. Akio Takahara, “The Political Economy of the Asian Financial Crisis: The Case of China,” Ajia kenkyu 45, no. 2 (Aug. 1999): 58–59.

Japan’s Policy Toward China in the 1990s 267 made a regular, annual event, and that the year 2002 be made a year of exchange among the three countries. The significance of this year was threefold: Japan and Korea jointly would host the World Cup Football Games; Japan and China would celebrate the thirtieth anniversary of the normalization of relations; and Korea and China would celebrate the tenth anniversary of normalization. China, in its meeting with ASEAN, proposed that they should aim for a free trade treaty, while ASEAN responded with a proposal to include Japan and Korea as well in forming an East Asian free trade area. After all, both Japan and China understood that regional cooperation was the trend of the times. Since 1999, despite the hiccups that occurred now and then, such as the chauvinist remarks on history by some Japanese politicians and the great publicity given to them in China, which helped to in- flame the issue, or China’s strong protest against the Japanese-U.S. joint research on theater missile defense, or Japan’s strong protest against Chinese naval and research vessels intruding into Japanese waters, both governments have basically maintained a conciliatory approach toward each other. There is a growing concern, however, about the vicious circle of friction and distrust between the general public in the two nations. This perhaps reflects the rise in nationalism in the two countries, which in turn could be attributed to the shared sense of uncertainty in the face of drastic systemic restructuring required by globalization. Not only Japan’s but also China’s policymakers could no longer ignore public opinion, and they had to think quickly of ways to foster mutual understanding and trust if they wanted to expand their room for maneuvering.

Concluding Remarks From the above analysis, it seems to me that Japan’s policies toward China in the 1990s were conceived in three contexts. First, there was the context of the Japan-U.S. alliance. In fact, one aspect of the reconfirmation of the alliance was directed toward China, not in an aggressive way but in a defensive way, although that was not the major aspect of it as far as Japan was concerned. It cannot be denied that many Japanese were increasingly worried about a stronger China and that some believed that reconfirming the alliance with the United States was essential in maintaining the power balance in the region. At the same time, Japan was undecided about its policy in the case of hostilities across the Taiwan Strait. It could only waffle on

268 Akio Takahara the issue, but it hoped that ambiguity would contribute to deterring the use of force. Second, there was the context of the growing regional integration. Japan was willing to provide further assistance to China in order to support its stable development, which would be beneficial to all the countries in the region. Japan consistently promoted the idea of regional cooperation, and the multilateral, Gulliver approach of the surrounding countries to engage China started to take effect, as China began to realize that regionalism was a historical trend and also a useful tool in extending its influence and interests without of- fending neighboring countries. China had actually faced a dilemma in pursuing policies of peace and development. China said it needed a peaceful environment for development, but once China developed, it posed a threat to the neighboring countries because of its size and its determination to build an even stronger military. In this context, all parties in the region began to see the merit of regional frameworks as a mechanism for “win-win” or “all-win” relationships. Third, there was the bilateral context. The official, conciliatory policy toward China was generally upheld throughout the period, although relations were strained in the mid-1990s by a combination of various factors including Taiwan, nuclear testing, historical issues, and territorial disputes. Needless to say, there was no advantage to Japan in allowing the relationship to deteriorate. Having said all these things, we easily can point out a basic dilemma that Japan, as well as the United States, faced in pursuing its China policy in the post–Cold War era. In terms of security concerns, Japan and the United States do not want to see China develop its military might to challenge the status quo in the region. On the other hand, Japan and the United States are willing to strengthen their economic ties with China. This will contribute to China’s economic development, which inevitably will lead to the expansion and modernization of the Chinese military. The United States may be able to bear this dilemma longer because of its wide lead in military capabilities and its geographical distance from China. Japan, however, lacks these advantages and will not be able to put up with the pressure for long. There is only one way to solve this dilemma of strategic confrontation and economic engagement: that is, to establish a multilateral security framework in the Asia- Pacific on top of the existing bilateral alliances. In this way, Japan will neither confront China strategically by depending exclusively on the United States, nor confront the United States by strengthening ties with China and the other countries of East Asia. Japan, to-

Japan’s Policy Toward China in the 1990s 269 gether with China and the United States, should take the initiative in implementing such an arrangement. In order to realize this idea, however, it is imperative that the vicious circle of friction and distrust be reversed between the Japanese and the Chinese. It seems to me that there is a basic psychological problem to be solved: the Japanese feel superior to the Chinese in terms of their economic and social development, while they feel inferior about culture, civilization, and the status and role in international politics; the situation is the opposite with the Chinese, who feel superior to the Japanese in terms of tradition and civilization and their influence in international politics but inferior about the level of economic and social development. Both sides become worried when they perceive that their superiority is being undermined. It will take time to alter these mindsets, but the only solution here is to engage at all levels, actively promote dialogue, and boldly question any seed of misunderstanding. An example is the mistaken statement that the Japanese do not admit there was a massacre in Nanjing in 1937. How many Japanese actually deny the massacre? Extremely few. No doubt, the Japanese should not forget the history of the war with China and deepen their understanding about the cause of the folly. The Chinese, on their part, should not forget the recent fifty-odd years of Japanese peace and contribution to the region and should see history as a trend and take the postwar years as an important reference in judging Japan. It would also help if the two nations could embark on exciting joint projects, such as the establishment of the Asian Monetary Fund and training facilities for the U.N. peacekeeping operations.