Washington Journal of Modern China Published by the U.S.-China Policy Foundation Editor Marcia R. Ristaino, Ph.D Assistant Editor Kelsey Strampe Publisher/Founder Wang Chi, Ph.D Editor’s Note: One might ask, what is changing in China’s bid for a more prominent voice in world affairs. In responding to this question, the first two Journal articles follow different paths. Pan Guang discusses China’s new emphasis on trying to institutionalize regional cooperation and multilateral interactions in Central Asia through the formation of the Shanghai Cooperative Organization. The new model is said to be based on partnerships rather than alliances, which recall the previous cold war approach. While linking economic cooperation and development with security concerns, the goal is to create a “harmonious Central Asia,” one that will also provide China with a peaceful period for development. Joshua Kurlantzick discusses China’s use of “soft power” or anything outside of military power (culture, diplomacy, aid and economic tools) to enhance its reputation and influence in the world. The field for interactions is greatly expanded under this new approach. Meheroo Jussawalla, by making comparisons between China and India, provides insight as to who the winners and losers will be in responding to the challenges of innovation in the 21st Century global economy. A different and special aspect of the U.S.-China relationship emerges from American adoptions of China’s children. Fang Gann describes this unusual relationship, its successes and pitfalls. Ed McCord, drawing upon the historical evidence of China’s experiences with militia, suggests more effective approaches for handling troublesome and widespread militia organizations in the world today. These and other included articles and book reviews are welcome additions to our understanding of China and the U.S.-China relationship. i The Washington Journal of Modern China is published twice a year. The journal is a policy- oriented publication on modern Chinese culture, economics, history, politics, and U.S.-China relations. The views expressed in the journal are those of the authors. The publishers, editors, and committee assume no responsibility for the statements of fact or opinion expressed by the contributors. The journal welcomes the submission of manuscripts and book reviews from scholars, policy makers, government officials, and other professionals on all aspects of modern China, including those that deal with Taiwan and Hong Kong, and from all points of view. Manuscript queries should be directed to the Editor, the Washington Journal of Modern China, The U.S.-China Policy Foundation, 316 Pennsylvania Avenue SE, Suite 201-202, Washington, D.C. 20003. Telephone: 202-547-8615. Fax: 202-547-8853. The annual subscription rate for institutions is $30.00; for individuals, $24.00. Back/sample issues are available at $14.00/issue. Subscription requests can be made online, at www.uscpf.org or sent to the address above. Advisory Committee Pieter Bottelier Leo Orleans SAIS of Johns Hopkins University U.S. -China Policy Foundation Chas. W. Freeman, Jr. James Przystup U.S.-China Policy Foundation National Defense University Bates Gill Robert G. Sutter Center for Strategic and International Georgetown University School of Studies Foreign Service William R. Johnson Richard P. Suttmeier George Washington University University of Oregon David M. Lampton Stephen Uhalley, Jr. SAIS of Johns Hopkins University University of San Francisco Nicholas Lardy Edward A. McCord Institute of International Economics George Washington University ii ISSN 1064-3028 Copyright, Academic Press of America, Inc. Main Course Pages Pan Guang A New Diplomatic Model A Chinese Perspective on the Shanghai Cooperative Organization Joshua Kurlantzick Charm Offensive: How China’s Soft Power is Transforming the World Meheroo Jussawalla Crouching Tiger Hidden Dragon The Challenge of Innovation: India and China Compared Fang Gann A Special U.S.-China Relationship American Adoptions of Chinese Children Around Town Stanton Jue U.S.-China Relations Lessons Learned, New Challenges Council on Foreign Relations The Candidates Views on U.S. Policy Toward China From the Archives Edward A. McCord Lessons from the Past Militia in Modern China iii On the Scene Bob Bergin A Kunming Museum China Remembers Aviation Heroes The Critics Wayne Bert The River Runs Black: The Environmental Challenge to China’s Future By Elizabeth C. Economy Managing the Chinese Environment By Robert Louis Edmonds, ed. The Retreat of the Elephants: an Environmental History of China By Mark Elvin Discovering Nature: Globalization and Environmental Culture in China and Taiwan By Robert P. Weller Kathy Ogawa Journey across the Four Seas: A Chinese Woman’s Search for Home By Veronica Li Robert Sutter China and Vietnam: The Politics of Asymmetry By Brantly Womack iv Contributors to this issue Bob Bergin is a former Foreign Service officer and Southeast Asia specialist who writes about the history of aviation in Southeast Asia and Chin. His specialty is the American Volunteer Group (AVG) Flying Tigers. Wayne Bert is author of The United States, China and Southeast Asian Security: A Changing of the Guard. During the 2005-2006 academic year, he taught international relations at the China Foreign Affairs University in Beijing. Stanton Jue is a retired Foreign Service Officer who held overseas assignments in Japan, South Korea, Taiwan, China, Vietnam, Cambodia, Australia, and in Washington, as China policy officer in USIA during Nixon’s historic visit to China in 1972. His professional experience focuses on China from the Cold War, through normalization of relations, to China’s recent rise as a dominant power in regional and global affairs. Meheroo Jussawalla is the Emerita research Fellow/Economist for Telecommunications at the East West Center in Honolulu. The author of 15 books in her field, she has recently published her memoirs with the title, On Six Dollars to America: A Tale of Adventure, Courage and Reward. Joshua Kurlantzick is a visiting scholar in the Carnegie Endowment’s China Program as well as a special correspondent for The New Republic and a senior correspondent for The American Prospect. Previously he was foreign editor at The New Republic, covered international economics and trade for U.S. News and World Report, and reported on Southeast Asia for The Economist. His articles have appeared in numerous other publications. Edward McCord is Associate professor of History and International Affairs, Elliott School of International Affairs, George Washington University. Kazuko Ogawa is Senior Operations Officer in the Europe and Central Asia Region of the World Bank. Her assignments in the World Bank have included working on the China Program from 1984 to 1998 (including a four-year assignment in Beijing) and more recently on the Bank’s programs for the countries v of the former Soviet Union (including a three-year assignment in Ukraine) and India. She currently resides in Washington, D.C. Pan Guang is Director of the Shanghai Cooperative Organization Studies Center in Shanghai, the Shanghai Center for International Studies, and the Institute of European and Asian Studies at the Shanghai Academy of Social Sciences. He has written books, book chapters, and articles on China, Central Asia, Russian relations, China’s role in the war on terrorism, and contemporary international relations crises. Yu Maochun is professor of East Asian and Military History at the U.S. Naval Academy, author of OSS in China: Prelude to Cold War and forthcoming, The Dragon’s War: Allied Operations and the Fate of China, 1937-1947. Marcia R. Ristaino, formerly of the Library of Congress, is author of China’s Art of Revolution: The Mobilization of Discontent; Port of Last Resort: The Diaspora Communities of Shanghai; and The Jacquinot Safe Zone: Wartime Refugees in Shanghai (forthcoming). She has written numerous articles and book chapters and is editor of this journal. Robert Sutter is a visiting Professor of Asian Studies at Georgetown University, Edmund A. Wash School of Foreign Service. His most recent book is Chinese Foreign Relations: Power and Policy since the Cold War. vi Main Course A Chinese Perspective on the Shanghai Cooperation Organization Pan Guang Introduction China established close links with Central Asia via the Silk Road as early as 2000 years ago. At the opening of the 21st century, in the light of China’s rapid economic growth, including in particular the further development of its western region and the country’s accelerating demand for energy, Central Asia is becoming more and more strategically significant for China. The Shanghai Cooperation Organization (SCO) has enabled China to build up unprecedentedly strong security, political, economic and cultural ties with local states, thus creating the conditions for it to play an active and constructive role in the region. Cooperation within the multilateral framework makes it possible for China to avoid friction with its neighbors while preserving and pursuing its own national interests. Throughout the process that began with the Shanghai Five in the mid-1990s and developed into the SCO by 2001, China has played the key role as a major driving force. This also symbolizes the entry of Chinese diplomacy into a new stage, with an orientation towards multilateral interactions. This study starts by looking at the SCO’s significance, both substantial and demonstrative, for China’s present-day strategic goals and at the ways in which China has played a driving role in the various stages of the SCO’s development. It goes on to discuss the SCO’s achievements and challenges in various spheres of cooperation and then highlights a number of sectoral and structural issues that, as seen from China, will be critical for the next phase of the SCO’s existence. Member countries are: China, Russia, Kazakhstan, Kirghizstan, Tadzhikistan, Uzbekistan; Observer countries are: India, Pakistan, Mongolia, Iran; Partner country: Afghanistan. 1 The Strategic Significance of the Shanghai Cooperation Organization for China From China’s perspective, the SCO has a many-sided strategic significance.