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THE PACIFIC TRIANGLE

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MANY OBSERVERS HAVE proclaimed that the world will soon enter “the Pacific century.” In their view, Europe dominated the nineteenth century, the United States became preeminent in the twentieth century, and the Pacific rim region will take center stage in the twenty-first century. They foresee this westward shift in history’s focal point as the dynamic economies of East Asia become the engine of world economic growth. But a perilous paradox—explosive prosperity combined with political instability—has clouded the region’s great potential. Whether the Pacific rim’s historical contribution will be greater wealth or greater conflict depends largely on how the United States manages its relations with the countries of the Pacific triangle: Japan, China, and Russia.

Enormous geographically, critical strategically, and dynamic economically, the nations of the Pacific rim—with a total population of almost 2 billion—have astonished the world with their recent achievements. Most of the world’s successful developing countries are in East Asia. Of the region’s twenty-three countries, eight have had average annual economic growth rates of at least 5 percent during the last decade, some of them averaging almost 10 percent. No Western European country experienced such explosive growth. With a total GNP of $4,410 billion, the Pacific rim commands 20 percent of the world economy. In 1989, trade between the United States and East Asia topped $300 billion, outstripping by far the $200 billion in U.S. trade with Western Europe.

Stability, however, has not accompanied prosperity in the Pacific rim. Since 1945, twelve major wars and armed conflicts have taken place in the region. The United States, whose involvement in World War II started and ended in the Pacific, fought two of its three major wars in the postwar period in Korea and Vietnam. Today, 1.5 million troops line both sides of the Korean armistice line, and Indochina remains mired in bloody guerrilla conflicts, while political turbulence plagues the Philippines, Thailand, New Guinea, and others. In addition, deep-rooted suspicions, recriminations, and rivalries pit many East Asian nations against each other.

Because of the lack of a formal security framework like NATO, the balance among the great powers becomes critical in determining the Pacific rim’s future. Only the United States possesses sufficient leverage with each of the corners of the Pacific triangle to balance and stabilize the region as each major power seeks to advance its interests:

—Japan, an economic heavyweight but a political and military lightweight, has stumbled as its leaders search for a new role in the world commensurate with its great resources.

—China, a potential economic superpower and a major political player, stands at a crossroads—its people seeking to break with the Communist past but its current leaders unwilling to relinquish their totalitarian control.

—Russia, a declining economic power but a towering military power in the Pacific, has the potential to convert its armed might into a greater presence politically and greater access to the region’s capital and technology.

The United States interacts with each of the corners of the Pacific triangle—balancing them off each other, stabilizing them as they compete with each other, and at the same time maintaining a distance of peace between them. As a result, the United States has played the major role in securing peace and stability in the Pacific since 1945, thereby creating the indispensable political foundation for its economic prosperity. But traditional ambitions, geopolitical maneuvering, and colliding interests have created a potentially explosive mix. If the United States remains engaged, it will increase the likelihood that a Pacific century will be a pacific century. Without a major U.S. role, it could become a century of conflict.

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Japan has arrived as a world power, but it is still searching for its proper role. Because of the memories of its aggression and brutal occupation policies during World War II, the key to a wider role remains its links with the United States. Yet at a time when our political cooperation could ease Japan’s emergence on the world scene, our economic disagreements threaten to break the relationship apart.

In 1990, a headline in a major U.S. newspaper trumpeted, “Japan Takes Lead Role on World Stage.” The growth of the Japanese economic powerhouse—whose share of world industrial output increased from 2.5 percent in 1913 to 5 percent in 1938 to 10 percent in 1990—fueled the belief that while Japan lost World War II militarily, it would now prevail over its former foes economically. From 1950 to 1973, Japan’s real annual growth rate averaged 10 percent, while the size of its GNP rose from one-twentieth of the U.S. economy in 1950 to over one-half in 1991. Japan has become the second-largest economy in the world, the largest creditor, and the second-largest exporter of manufactured goods. Its per capita income of $25,000 in 1991 was highest among major industrial countries. It has the ten largest banks in the world and spends more on capital investment than America. After the United States, it is the second-largest contributor to the IMF and the U.N. budget. In 1991, Japanese capital financed one-third of the U.S. federal budget deficit. According to some estimates, Japan could exceed the United States in absolute economic output early in the next century.

As the only major country with a stable democratic system along the Pacific rim and as our only major regional ally since the signing of the original U.S.-Japan Mutual Security Treaty in 1951, Japan’s importance to the United States extends far beyond simple economic cooperation. The potential achievements of a cooperative relationship are enormous. Together we can use our influence to stem the global tide of protectionism and to keep world markets open. We can also manage refugee flows, curb illegal drug trafficking, and develop programs to address global environmental problems. There is, however, no guarantee of success. Because of our economic tensions, we must renew our relationship or risk losing it.

Since 1945, the United States has dominated its relationship with Japan. Defeated in World War II, occupied until 1952, and dependent on America for security even today, Tokyo played a subordinate role. U.S. officials drafted Japan’s constitution, including the clause stipulating that “the Japanese people forever renounce war as a sovereign right of the nation.” The war-renunciation clause became the keystone of Japanese strategic planning and forced Tokyo to depend on the United States for its security.

As the Soviet economy and empire collapsed, the foundation of the U.S.-Japanese relationship began to weaken. Many Americans argued that the United States should no longer foot the bill for Japan’s defense, especially because this in effect subsidized Tokyo economically. At the same time, many Japanese believed that their need for the U.S. security guarantee had diminished and therefore they no longer needed to exercise restraint in the economic competition between the two countries. Before the waning of the cold war, security concerns tempered this competition. Now, with those restraints weakened, economic concerns have supplanted security issues.

Some U.S. analysts now look at security problems through an economic lens. They argue that the 1 percent of Japan’s GNP spent on defense has been totally inadequate and that the United States should lean on Japan to increase sharply its military budget and to assume more of the burden for its own security. They fail to realize, however, that to insist that the Japanese develop military forces beyond those necessary to meet the limited goals of territorial self-defense and sealane security is counterproductive strategically and unrealistic politically.

A resurgent Japanese military would cause great regional apprehensions. Historical memories from World War II have not vanished. Despite forty-five years of peaceful policies, the fear in Asia of Japan as a major military power dwarfs European concerns about a united Germany. Any plan for Japan to develop offensive capabilities would meet with strong opposition from Koreans, Chinese, Taiwanese, Malaysians, Filipinos, and Indonesians, all of whom suffered under Japanese occupation during World War II. Instead of enhancing regional security, a Japanese arms buildup would complicate defense cooperation and trigger higher military spending throughout the region.

Internal as well as external fears of Japanese militarism inhibit Japan’s defense role. Many Japanese are afraid that the same tendencies that drove Imperial Japan into World War II now lie dormant but could easily be awakened. They fear a replay of the 1930s, when Japan followed up its economic penetration of the region with its military invasion. While they do not believe the Japanese people are innately militaristic, they do fear that a strong military establishment could come to dominate their foreign policy. And they know that their hard-won working relationships with their Asian neighbors would be jeopardized the moment Japan assumed a higher military profile.

Japan’s critics overlook the major progress Tokyo has made in providing for its own security. It has increased its support for U.S. forces stationed in Japan to cover 50 percent of their total costs. It has undertaken a sustained military modernization program to develop forces to defend its own territory and to protect one thousand miles of vital sea-lanes. Moreover, with the size of Japan’s economy, the 1 percent of GNP Tokyo allocates to defense approaches in absolute terms the military budgets of Germany, Britain, and France, even though their military establishments receive a higher proportion of their GNPs.

Iraq’s invasion of Kuwait in August 1990 presented a classic example of the Japanese dilemma. Tokyo, which imports 70 percent of its oil from Persian Gulf countries, could not mobilize itself politically to make a meaningful contribution to protect its vital interests in Operation Desert Shield/Storm. Despite its $30-billion defense budget and its 250,000-man Self-Defense Forces, Japanese soldiers—who have not gone abroad even as part of a U.N. or multilateral peacekeeping force—never left their barracks. Instead, Tokyo contributed by reluctantly reaching into its wallet.

After sharp criticism of its first offer of a $1-billion contribution in September 1990, Japanese politicians desperately searched for a new policy consistent with international demands and domestic apprehensions. Some proposed a “Peace Cooperation Corps” consisting of troops who would broadly support U.N. goals and work on humanitarian programs but who would remain unarmed and would not participate specifically in the mission of collective self-defense. One legislator demanded that soldiers resign from the Self-Defense Forces before participating in such a corps. When this idea suffered an agonizing death in a prolonged and confused debate in the Japanese Diet, Tokyo offered to toss an additional $l-billion contribution into the pot in December 1990, which most observers derided as paltry. After sustained diplomatic arm-twisting from the United States, Japan finally committed $11 billion in financial support and managed to deploy a small unarmed medical unit and—after the fighting—four minesweepers.

Japan was paralyzed by its debate about what to do, when to do it, and how much to give. Its factional political system failed to produce a timely decision on an issue that involved its vital interests and that required an immediate response. Tokyo lacked the national will to act when it mattered. When the Japanese did finally act, they did so hesitantly and equivocally, dodging greater responsibilities through legalistic pretexts based on tortured readings of its constitutional provisions. Most significant, the Persian Gulf War demonstrated that Japan simply cannot step up to the military responsibilities inherent in any wider regional role.

Instead of browbeating Japan to increase its military budget, the United States should work toward increasing Tokyo’s geopolitical role in five ways:

Enhance cooperative development of defense-related technologies. The link between Japan’s technological advancements and U.S. military development should be strengthened. Both countries would benefit from the integration of Japanese research in lasers, computers, sensors, and space technology into U.S. weapons research. At a minimum, we must prevent rising protectionist sentiments from stifling technological cooperation. At the same time, we should seek to develop major joint projects targeted at high-tech defense requirements, especially SDI-related programs.

Increase Japanese economic aid to strategic countries. To compensate for its low level of defense spending, Japan should allocate substantially more resources to helping those developing countries in which the West has a strategic stake. Already Tokyo’s foreign aid budget of over $15 billion exceeds that of the United States. But Japanese aid policies have been deeply flawed. Since most of its money has been tied to the purchase of Japanese goods, these programs have sought to advance Japan’s unilateral economic objectives more than our mutual security interests. As one Southeast Asian official observed to me in 1985, “When the Japanese provide foreign aid, they are like semiconductors. They take everything in and give nothing in return.”

In addition, Japan’s aid has not been channeled sufficiently to strategic countries, such as Egypt or the East European democracies. While Japanese military policies will be debated and possibly changed in the future, Japanese economic strength is a reality today and should be strategically targeted. We should not ask the Japanese to be philanthropists or to flip open their checkbook to fund every faddish idea from Washington. Instead, we should ask that they use their enormous economic power to serve our interests as well as theirs.

Provide funds to facilitate solutions of regional conflicts. Japan lacks the political muscle to help resolve the world’s difficult regional conflicts, such as the Arab-Israeli dispute or the wars in Afghanistan, Cambodia, and Central America. It should stand ready, however, to provide the financial support needed for the internationally supervised elections, multilateral peacekeeping forces, economic compensation, or follow-up aid packages often mandated as part of wider settlements.

Subsidize U.S.-led efforts to develop security arrangements for the Persian Gulf. In view of Japan’s dependence on Persian Gulf oil, it should provide economic assistance to help the United States and other Western powers preposition supplies and develop the infrastructure to guarantee the region’s security from Iraq and other potential aggressors. Domestic constraints prevent Japan from taking a more ambitious role. But we are entitled to expect financial support for these collaborative Western security efforts.

Provide economic aid to the democratic republics of the former Soviet Union as part of a comprehensive geopolitical accommodation. In stark contrast to the U.S. return of Okinawa to Japan in 1971, Soviet governments refused to return the four Japanese islands seized by Stalin in 1945. With non-communist governments now in power in the newly independent Soviet republics, Japan should be able to negotiate a return of the islands and lay the groundwork for economic aid to reformist former Soviet republics, provided that the new governments adopt viable free-market reforms.

The worst move the United States could make would be to withdraw from its forward bases along the Pacific rim. If we cast aside our security alliance with Japan—which has served as an anchor of stability in the region—Tokyo will confront one nuclear superpower, Moscow, and another aspiring nuclear superpower, Beijing, a few miles off its shores. Without credible U.S. security guarantees, Japan would have two grim options. First, it could develop its own nuclear forces. Second, it could strike a deal—trading economic support for military protection—with either of the other two corners of the Pacific triangle. While Japan would be reluctant to move in either of these directions, it will have little choice if abandoned by the United States.

The greatest threat to the U.S.-Japanese relationship, however, lies not in security disputes but in economic antagonisms. Many Americans decry the specter of the Japanese “buying up America.” The Japanese, they suspect, are turning America into an economic colony. Yet despite their acquisition of highly visible assets—Universal Pictures, Rockefeller Center, and even Michael Jackson’s $1-billion contract with Sony—Japanese-owned firms and assets account for only 17 percent of foreign investments in the United States, while those of Great Britain represent 30 percent. Ironically, many who strongly support U.S. investment abroad have xenophobically denounced businessmen who happen to be Japanese and who simply wish to invest in America.

The trade imbalance between our countries is the crux of the problem. The U.S. trade deficit with Japan was $46 billion in 1985, $55 billion in 1986, $60 billion in 1987, and $65 billion in 1990. The most important causes of the imbalance—exchange rates, budget deficits, economic cycles, varied growth rates, and domestic savings and investment levels—have been lost in the emotional melee of finger-pointing on both sides of the Pacific.

Japan’s critics point out that Tokyo has exploited its low defense spending to enhance its competitiveness unfairly. In addition, they contend, the Japanese have made a fetish out of keeping foreign goods out of their markets. Japan outlaws some potential imports such as certain fruits and vegetables, inflicts astronomical duties on other goods such as telecommunications and medical equipment, turns a blind eye as domestic cartels vanquish international competitors, and sabotages some imports with red tape. When U.S. pressure builds up, the Japanese do not address our concerns but rather engage, as one critic put it, in an ingenious export shell game, shipping products to the U.S. market not from factories in Japan but from Japanese-owned facilities in such countries as Thailand. As sociologist Daniel Bell noted in a paraphrase of Clausewitz, “Economics is a continuation of war by other means.”

America’s critics blame the federal deficit and lagging competitiveness for the trade gap. Japan produces top-quality goods, they argue, while America turns out junk. Japan has a strong work ethic, while Americans are lazy. Japanese save, while Americans spend. Japan’s economy grows by leaps and bounds, while America’s grows by inches. Energy wasted demanding more open markets in Japan, they conclude, would be more productively used in undertaking needed structural adjustments in the United States, particularly decreasing the federal deficit, increasing the private savings rate, and ending the obsession in capital markets with shortterm returns.

While those who coined the term Japan, Inc. exaggerate, some legitimate concerns exist about Japanese trade practices. Japan’s government and business firms often work together so closely that they become virtually indistinguishable. Large industrial groups connected through interlocking directorates, shareholdings, and cartel membership and backed by guidance from government bureaucrats make the Japanese market a political as well as an economic battlefield. Many retail outlets, for example, are not independent but locked into subcontracts and controlled by dealer associations that give the most powerful manufacturers political control over the market. Monopolies, price-fixing, and other predatory economic tactics rule the intertwining business and political spheres. And both officials and manufacturers have a pernicious vested interest in maintaining this unfair system.

These individual power clusters operate internationally as well. The Ministry of Finance coordinates the important international moves of banks, security houses, and insurance firms. By contrast, rather than working as a partner of major U.S. multinational corporations or at least pursuing a policy of benign neglect, the U.S. government often acts as an antagonist.

Instead of complaining about an “economic evil empire,” we must begin with the recognition that legitimate reasons exist for the trade deficit. Japan, for example, must generate a dollar trade surplus to pay for its huge oil-import bill. Moreover, Japan’s tremendous economic success represents an easy scapegoat for American politicians seeking to deflect attention from our own economic problems. First, the combination of a high federal deficit and a low domestic savings rate requires capital imports, which, in turn, are reflected in a trade deficit in goods and services. Second, many U.S. companies lack the long-term horizons needed to cultivate the Japanese markets. Third, since 95 percent of Japan’s young people but only 75 percent of America’s graduate from high school, we have failed to invest sufficiently in our human capital. Some studies have pointed out that even if Japan eliminated all its import barriers, the U.S. trade deficit would drop by only $5–8 billion. They suggest that primarily the fault is ours, not theirs.

At the same time, we should not overlook Japan’s economic weaknesses because of its great strengths. Japan’s population is growing increasingly older. Today, 11 percent of the population is aged sixty-five or over. By 2025, that figure will rise to over 25 percent. More people will be going into retirement than entering the labor force. This employee vacuum must be filled if Japan is to sustain its economic growth. Because much of the generation under the age of twenty-five grew up relatively wealthy, however, they tend to leave jobs they do not like, to marry later in life, and to have fewer children. They reject the grueling work ethic of their elders, opting to spend ninety hours a week in recreation rather than in the workplace.

Women account for 40 percent of Japan’s work force, but their talents are left largely untapped. Today, most Japanese women are channeled into traditionally “female” jobs, such as elevator hostesses and receptionists. Some Japanese firms require their female employees to wear uniforms, obey evening curfews, and live in company dormitories. Women are seldom appointed to high-level positions, with only 1 percent of women in the work force involved in management. Even when a woman holds a relatively prestigious position, she is expected to cater to her male counterparts by serving tea and cleaning the office.

Such subservience perpetuates the glass ceiling that blocks the professional and social advancement of Japanese women. While attitudes are slowly changing, women are strongly pressured to limit themselves to staying home and raising children, which the government encourages through $6,700 grants for women to have a third child. One edge we have over Japan is that we are far ahead in providing equal opportunities for women. Japan’s economy would soar to even greater heights if women’s capabilities and talents were unleashed by following our example.

The U.S.-Japanese relationship can only be saved if both sides make concessions. The United States can begin by reducing the federal deficit and improving its competitiveness. We should not fear but rather learn from competition. The Japanese can learn from us, and we can learn from them. We should reverse the trend toward retaliatory protectionism because trade barriers always backfire by triggering ever-escalating countermeasures. Broad-based trade retaliation leads to economic isolation. We should pursue carrot-and-stick policies vis-à-vis Japan in coordination with our European allies at the GATT talks and at the annual economic summits. Only as a last resort should we employ selective retaliation if the Japanese refuse to abandon clear and identifiable unfair trade practices.

Meanwhile, Japan must reduce its tariff and nontariff trade barriers. We should insist on structural reforms in the Japanese economic system that will eliminate monopolistic and anticompetitive practices of individual firms and cartels. If the Japanese want access to our markets, we must have access to theirs. Japan has already begun to open up its rice markets, which were traditionally closed to all imports. While such steps slowly build confidence between our two countries, they must be rapidly accelerated in order to prevent U.S.-Japanese economic competition from escalating into a trade war.

Despite forty-five years of close cooperation as allies, cultural barriers and suspicions compounded by economic antagonisms have fueled “Japan bashing” in the United States and “America bashing” in Japan. On both sides, this stems from the changing dynamics of our relationship: Japan no longer accepts America’s tutelage, and America no longer accepts Japan’s free ride. As these two great powers search for a new foundation for their alliance, special interests in both countries will seek to turn this friction into an explosion that would serve neither of our long-term interests. Because our natural economic competition spurs greater growth for both countries, we must not allow those who wish to inflame national passions to prevail.

These obstacles cannot be overcome easily, but can be reduced and eventually dismantled only if we curb needless rhetorical attacks and gradually cultivate mutual confidence. Because of the lack of a common heritage and social roots—best typified by America’s exultation of and Japan’s suppression of individualism—a lack of understanding often leads to mutual incomprehension, which, in turn, creates deep distrust. Despite the many Americans of Japanese descent and the many diverse ties between our two countries, we are still very different peoples. In fact, the greatest cultural link between the two countries is a common love of baseball.

Yet we share values and interests that naturally pull us together. We both believe in democratic government and free-market economics. We both have a major stake in the survival and expansion of global free trade. We both want to prevent international instability and to develop initiatives to manage environmental problems. We both are fiercely competitive and committed to excellence. Those Americans who feel most threatened by Japanese investments—and whose anxieties are mirrored and exaggerated by their representatives in Congress—work primarily in industries such as automaking, electronics, and textiles that have been most hurt by Japanese imports. Elsewhere, local and state officials compete eagerly for Japanese investment. Polls measuring U.S. attitudes toward other countries reveal that Americans associate the Japanese with qualities they apply to themselves: hardworking, creative, competitive, and peaceful.

While we should recognize our cultural and economic differences, we must find a way to work with them. Cultural barriers should be leveled, but not the cultures themselves. We should not try to be alike. We should respect and learn from our differences. Americans should continue to enjoy sushi, and the Japanese should continue to visit the Tokyo Disney World. Also, the political demands of U.S. and Japanese special interests should be kept in perspective. To allow differences over such issues to poison our relationship would be unworthy of the world’s two strongest economic powers. Instead of wasting time chastising each other and instituting self-defeating policies, we must cooperate with each other constructively, maturely, and responsibly. America needs Japan, and Japan needs America. If we contribute from our strengths, our relationship will be even more complementary and mutually reinforcing. Working against each other will weaken us both. Working together we can ensure that the twenty-first century will be not only a century of peace for the Pacific but also a century of the greatest prosperity the world has ever known.

A greater global role for Japan is inevitable. Singapore’s former prime minister, Lee Kuan Yew, foresaw this development twenty-five years ago, long before the Japanese economic miracle was recognized worldwide. He told me, “The Japanese inevitably will again play a major role in the world. They are a great people. They cannot and should not be satisfied with a world role that limits them to making better transistor radios and sewing machines, and teaching other Asians how to grow rice.” The open-ended Japanese debate during the Persian Gulf War was the first tenuous step for Japan toward playing that major role. The next steps will come more easily and quickly. The United States at this time has a major opportunity to work with Japan as it redefines its national purpose internationally. If we seize the moment, our renewed relationship could be a powerful force in solving the problems of today and tomorrow.

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China—whose 1.1 billion people represent one-fifth of the world’s population—has not only become a key political player but could also become a major global economic power in the coming decades. As one of the corners in the Pacific triangle, China is a voice in the world that cannot be ignored and a force in the world that cannot be isolated. Exactly twenty years ago, we opened the door to China. In the next twenty years, we must keep the door open as China secures its place in and integrates itself into world affairs.

China’s emergence as a global heavyweight is inevitable. With a significant nuclear capability and the largest conventional army in the world, it could become a military superpower within decades. Its population has increased by more than 200 million since 1978, a figure only slightly smaller than the entire population of the United States. If its per capita income were to rise to half of Hong Kong’s—a feasible objective over the next fifty years—its GNP would be $5.1 trillion higher than today, an increase about equal in size to the current U.S. economy. If its economic reforms continue, the creative enterprise of its people could make China not only the world’s most populous but also the world’s richest nation in the twenty-first century.

To understand where we should take the U.S.-Chinese relationship, we must understand where we have been. For a generation after the Communist revolution in 1949, the two countries squared off against each other in angry confrontation. While the United States recognized the Republic of China on Taiwan as the country’s sole legitimate government, the Communist Chinese became the junior partner in a close alliance with the Soviet Union under Stalin and Khrushchev. While the United States provided aid and troops to prevent Communist victories in Korea and South Vietnam, the Communist Chinese sacrificed tens of thousands of soldiers—including Mao Zedong’s only son—to support the aggression of North Korea and provided indispensable economic and military assistance to the aggressors in North Vietnam.

Despite these profound differences, I had decided before the 1968 presidential election that the time had come for a rapprochement with the People’s Republic of China. I did so not because I had changed my views about the Communist regime but because its leaders were in the process of changing their foreign policies. From 1959 to 1963, the Sino-Soviet bloc disintegrated over ideological disputes about whose brand of communism was purest and over geopolitical conflicts about whether China would move from junior to full partner in the alliance. As a result of the split with Moscow, China found itself isolated and surrounded by hostile powers by the late 1960s:

—To the northeast, Japan possessed minimal military forces but posed an enormous potential challenge because of its economic might.

—To the south, India had the world’s second-largest population, had an active program to develop nuclear weapons, had crossed swords with China in a series of border clashes, and had the capacity to become a dangerous threat with Soviet support.

—To the north, the Soviet Union had strategic forces capable of knocking out China’s nuclear forces in a surgical first strike, had deployed more than forty fully modernized divisions on the border, and had engaged in armed clashes over disputed territories along the Sino-Soviet frontier.

—Across the Pacific, the United States represented the Communist regime’s most deadly ideological enemy but was the only major Pacific power that had no designs, present or future, on China.

This geopolitical isolation forced Communist China’s leaders not only to look to themselves rather than to rely on foreign aid to foster economic development at home but also to retrench from their adventurist policies abroad. After I took office in 1969, I probed their intentions, concluded that this represented a genuine sea change in foreign policy, and decided that it was time to end our mutual enmity. On February 27, 1972, I signed the Shanghai Communiqué in Beijing, which was the culmination of three years of behind-the-scenes negotiations and which set the stage for the eventual restoration of full diplomatic relations in 1979.

Foreign policy analysts have since speculated that the primary motivation behind our diplomatic overtures was a desire to enlist China’s help in ending the Vietnam War or to recruit Beijing as a counterweight to Moscow in Asia. Both were important reasons for my initiative. The primary reason I changed our policy toward China, however, was that China was changing its policies toward the world. Even if there had been no war in Vietnam or no Soviet threat, it was vital for the United States to end China’s isolation. As I observed in an article in Foreign Affairs in 1967, “Taking the long view, we simply cannot afford to leave China forever outside the family of nations, there to nurture its fantasies, cherish its hates, and threaten its neighbors.”

As a consequence partly of our initiative, China slowly awakened to the modern world, gradually moving away from the nightmares of the Cultural Revolution, and began to look to the West for solutions to its economic problems. Our rapprochement opened the door for China to the world community, and it opened the eyes of the Chinese to the world.

When Deng Xiaoping took power in 1977, he launched an ambitious economic reform program. He decollectivized agriculture, granting 750 million farmers twenty-year leases on their land and freeing them not only to decide what, when, and how to produce but also to receive the returns from their own labor. He allowed private firms to compete with state-owned enterprises in cities. His protégés, Hu Yaobang and Zhao Ziyang, took these reforms even further after 1984. They opened “special economic zones” with free-market institutions in China’s coastal provinces, thereby unleashing the talents of the Chinese people and attracting massive foreign investment. Deng and his pro-reform lieutenants cast aside ideological rigidity in favor of economic progress. As he once remarked, “It does not matter what color the cat is as long as it catches mice.”

The results were stunning. While Soviet per capita income has declined after seven years of Gorbachev’s reforms, Deng’s initiatives doubled China’s rural incomes in six years and its per capita income in ten years. The growth rate in agricultural output quadrupled, from a 2 percent average annual increase during 1958-1978 to 8 percent during 1979–1984. China today produces enough to feed its 1.1 billion people with some left over for export. The Soviet Union, with over twice the territory of China, has to import food for a population one-fourth the size of China’s. The share of industrial output produced by state-owned enterprises declined from 80 percent in the late 1970s to 50 percent in 1991, thus channeling resources into the highly productive private sector. If these reforms remain in place for a generation, China will become a major economic power and bring one-fifth of mankind out of poverty and into the global middle class—in spite of, not because of, its Communist government.

As China broadened its contacts with the world economy, these ties transformed Chinese society. After 1972, basic goods and conveniences of modern life—televisions, washing machines, refrigerators, sewing machines, and bicycles—became widely available. More important, people who had been locked into their towns and provinces began to broaden their horizons. They took advantage of their new job mobility and of the easing of residency restrictions. They were exposed to the world through greater freedom for travel and through television coverage of events abroad. They began to express themselves more freely as the state retreated from efforts to police the thoughts of its citizens. More than two hundred thousand students traveled abroad to study and brought back with them the Western ideas of human rights and democratic government.

While calm on the surface, pro-democracy political currents ran deep within Chinese society. Those ideas were openly advocated by Beijing students in pro-reform posters pasted on the so-called Democracy Wall in 1978 and later in large-scale demonstrations in 1986. Communist officials—including Hu and Zhao—began to speak of the need to match economic change with political reforms. The globalization of the Chinese economy, the communications revolution, and the increase in international exchange of ideas and people broke the hold of the Communist ideology on China’s society.

The old regime and these new ideas clashed at Tiananmen Square in June 1989. For more than six weeks, over 1 million students and workers engaged in peaceful demonstrations—triggered by Hu’s death—not to overthrow the state, but to engage officials in a dialogue on the need for political reform. Their calls were met not with reason and understanding but with tanks and bullets. An estimated 1,300 demonstrators were killed and 10,000 wounded in the one-sided battle. Another 10,000 were taken into custody, most of whom were sentenced to prison or to hard labor on state work farms and some of whom were executed. Nineteen eighty-nine was a year of triumph for the 90 million people of Eastern Europe, with rule by law replacing rule by terror. It was a year of tragedy for the 1.1 billion people of China, as high hopes for political reforms were dashed by the harsh realities of martial law.

The global political effect of Tiananmen Square was magnified by the fact that unlike the killing of peaceful demonstrators in Lithuania in 1990 by the Soviet Black Berets, the massacre in China took place under the microscope of live international television. Although not the most brutal event in Chinese history—more than 5 million Chinese were slaughtered during and after the 1949 revolution and more than 1 million were killed and 100 million brutally persecuted during the Cultural Revolution—the cold-blooded killings in Tiananmen Square were undoubtedly the most widely witnessed. The images of brave pro-democracy demonstrators standing up to army tanks were beamed into millions of homes and seared into the memories of America and the world. The excessive use of lethal force, the show trials and cruel sentences meted out to demonstrators, the Orwellian lies and disinformation disseminated by Communist officials, and the callous refusal of the regime to express any regret for its actions squandered the goodwill China had built up since the U.S.-Chinese rapprochement in 1972.

The Beijing regime’s brutal actions deserved the universal condemnation they received. President Bush’s actions—an arms sales cutoff, a suspension of most senior-level discussions, an extension of visas for Chinese citizens studying in the United States, and an offer of humanitarian assistance for victims of the violence—represented a proper, measured response. But the additional sanctions advocated by administration critics, including even a total economic boycott, would have been not only useless but also counterproductive.

Our objective must be to keep the process of reforms alive until the current hard-line leadership passes from the scene. This might not be the most emotionally satisfying course of action, but it is the most sound strategically. And it also holds the greatest promise of success. No sanctions, however draconian, will induce Beijing’s leaders to bow to the demands of foreign powers with respect to China’s domestic affairs. It would be futile to try to extract a formal recantation through external coercion. Instead, the challenge for those who support political liberalization in China is to develop the U.S.-Chinese relationship in ways that foster conditions conducive to peaceful internal change.

Too much is at stake in our relationship to substitute emotionalism for foreign policy. China is one of the world’s five major geopolitical power centers. It is a nuclear power. It continues to be a key player in the crucial regional conflicts in Afghanistan, Cambodia, and the Middle East and the Persian Gulf. It exercises a veto over any North Korean actions against South Korea. Taiwan’s interests and Hong Kong’s political and economic future are best served by close ties between their friends in the West and Beijing. For example, the fact that the PRC must choose between using force to conquer Taiwan and forfeiting its relationship with the United States is the best guarantee of Taipei’s security. The United States and China also share common interests on a wide range of bilateral issues, such as intelligence cooperation, trade, and cultural exchange. It will be impossible to deal with environmental problems on a global level without the cooperation of those who rule one-fifth of all the people in the world. Those who call for total economic sanctions as a response to Chinese human rights violations are like surgeons who would perform a delicate operation with a butcher knife instead of a scalpel.

Moreover, as a permanent member of the U.N. Security Council, China has veto power over resolutions authorizing actions to block or reverse aggression. While Gorbachev was widely praised for his support of the U.N. resolutions against Iraq, too little credit has been given to China for abstaining from using the veto. If the Bush administration had alienated and isolated China, we would have had no influence with China on those resolutions or any other critical matters before the U.N. Security Council.

To determine the proper course, Americans must take the long view. Today, China has arrived at a critical moment in its evolution. Its leaders must ask themselves three questions. Will they replace the bold economic reforms Deng initiated fifteen years ago with the old-style Communist policies that almost suffocated China previously? Will they forfeit China’s potential greatness and consign their nation to the backwater of oppression and stagnation? Will they make common cause with the unrepentant Communist leaders of Cuba, Vietnam, and North Korea or join countries from Mongolia to Albania in the search for ways to introduce needed political reforms?

Economically, China has moved halfway to a free-market system. It now has two economies—one private and one state-owned—locked in mortal competition. The state sector, inefficient and unimaginative, depends on the graces of government leaders to survive. The private sector, productive and creative, is sustained by the process of economic reforms, the initiative and talents of individual Chinese, and the links between China and the world economy. Since Deng launched his reforms, these two sectors—and the millions of bureaucrats and entrepreneurs whose interests are inextricably intertwined with them—have been circling each other warily. While each side has experienced progress and setbacks over time, this battle is far from settled.

Economic reforms, thrown into reverse gear after Tiananmen Square, are getting back on track. At first, Communist hard-liners, by imposing strict austerity on the private sector, tried to restore the dominance of state-owned enterprises. Available capital went to the state sector. Price controls were imposed. Controls over foreign trade were recentralized. As a result, economic growth plummeted from an annual average of 11 percent during 1983-1989 to 3.6 percent in 1991. Soon, however, the hard-liners were forced into making concessions to China’s private sector. The spirit of free enterprise refused to die. Local, provincial, and even some national officials—all of whom had increased their power as a result of Deng’s decentralization of economic power—rejected the new restrictions. In addition, hard-liners had to face the fact that workers had adopted the ethos of the free market and that the nation had become a consumer society. Because of the free-market reforms, the economic train left the station. To maintain stability, the hard-liners had to temper their assault on the reforms.

Politically, China’s human rights situation continues to be abysmal. In contrast to the dramatic democratic reforms in the former Soviet Union, China has come under the rule of neo-Stalinists. Imprisoned demonstrators—many held without charges and without hope of release—have received no amnesties. Many prisoners work in forced labor camps for substandard wages or none at all. Propaganda campaigns against “spiritual pollution” from the West and in favor of communism dominate Chinese news media. Censors monitor all publications. Intellectual exchange has been stifled. While the noose of martial law has been loosened, it still rings the neck of Chinese society.

This does not mean that the hard-liners have totally consolidated their grip on power. The drama in Tiananmen Square—where the demonstrations lasted more than six weeks before the crackdown—had been protracted because even the Communist leadership, particularly in the Central Committee, had split down the middle over how to respond. Those who had opposed the use of lethal force have not been totally vanquished. For every Li Peng—the most hated man in China—who wants to maintain totalitarian control over Chinese society there is still another Zhao Ziyang who wants to begin the process of political liberalization.

The current leadership in China is split into three generational levels. On top are the hard-liners, led by Deng Xiaoping. Mostly octogenarians, they led the original revolution and still serve as the ideological anchors of Chinese communism. The second level is China’s current leadership. These men—mainly in their sixties and including Li Peng and Jiang Zemin—take a hard line on ideological issues and control the instruments of power. The third level holds the future of China. This group of younger, local and provincial leaders is more pragmatic. By setting aside ideology, they want to bring China into the world and prosperity to China. Though the hard-liners hold the upper hand today, the moment of truth will come when these two forces struggle for power after Deng passes from the scene.

Internationally, China must choose between playing a responsible role in the international community and pursuing a narrow agenda that will alienate its friends and end in self-defeating isolation. Its leaders have sold arms to the repressive regime in Myanmar. They have continued to provide arms and supplies to the Khmer Rouge, who slaughtered 2 million Cambodians during their three-year rule in the 1970s. They have not only refused to join international conventions to control the spread of ballistic missiles but have also sold M-9 missiles to Syria—thereby enabling Damascus to target every major city in Israel—and M-11 missiles to Pakistan, as well as the CSS-2 medium-range ballistic missile to Saudi Arabia. In addition, they have assisted Pakistan’s nuclear program and built a reactor in Algeria that could be used to develop nuclear weapons. As the self-appointed leaders of the underdeveloped world, Chinese officials claim such actions are within their prerogatives, but they will be ousted from the inner circle of major powers if they continue to engage in them.

In order to influence China’s evolution toward political and economic progress, the United States should work along four fronts:

Increase U.S. economic engagement in China. We should not stand idly by as the future of China’s dual economy hangs in the balance. Examples of state-imposed economic irrationality still abound in China. Today, state-owned or state-regulated enterprises produce more than two thousand brands of cigarettes, while private firms are permitted only thirteen. Battles between the center and provinces and localities over fiscal policy result in arbitrary taxation. Local governments strike deals with the provinces about how much they will hand over, and in turn the provinces make deals with the center, which results in wildly inconsistent payments, particularly between centrally planned and more market-oriented regions. In an isolated China, stop-and-go cycles of reform and retrenchment will enable the state sector to consolidate its position. If we remain engaged in China, we can play a critical role in helping the private economy gradually eclipse the state sector.

In this respect, the most counterproductive thing we could do would be to revoke China’s most-favored-nation trade status. Despite its elitist tone, MFN status is a routine international allowance conferred by the United States on all but a few hostile international outlaws such as North Korea, Vietnam, and Libya. Since the 1980 ratification of the Sino-American trade agreement, the President must certify annually that China—as a nonmarket economy—fulfills legal requirements on immigration practices and human rights. Under MFN status, Chinese goods can compete in the U.S. market under the same terms as those of any other country. Without it, China would face punitive tariffs that would undercut its exports and halt some altogether.

Many human rights advocates argue that this should be the price we exact for Tiananmen Square. But the United States cannot effect positive change by ruining China’s economy. The withdrawal of MFN status would most hurt not those in power but rather those who depend on the freemarket sector. China’s transition toward a market economy has made steady progress, though with some digressions. Foreign trade and investment have been the driving forces behind the growth of the private sector. If the United States revoked MFN status, tariffs would skyrocket on the goods such as textiles, shoes, and toys that are primarily produced by private enterprises. Coastal provinces, such as Guangdong near Hong Kong and Fukien near Taiwan, that have served as the beachhead for free-market economics would suffer the worst blow. Higher tariffs would send Guangdong’s 65 million people—who represent only 6 percent of China’s population but who produce one-third of the country’s exports—into an economic nosedive.

A revocation of MFN status would devastate Hong Kong, a conduit for over 70 percent of China’s exports. Skyrocketing tariff rates would cause up to a 50 percent drop in these exports, costing Hong Kong thousands of jobs and 2.5 percent of its GNP. To accelerate China’s evolution toward a market economy, we must do nothing that would jeopardize Hong Kong’s role as a model for the mainland, particularly in light of the scheduled termination of British control in 1997. Once withdrawn, MFN status cannot easily be reissued. Since political pressures would mount to keep the sanctions in place until all human rights issues were resolved, they would become an open-ended policy. In the meantime, the sanctions would inflict irreparable damage to the economy of Hong Kong.

Repeal of MFN status for China would actually help the Chinese hard-liners turn the clock back on the economic revolution started by Deng. Many whose power depends on the state sector would like to see the free-market experiment collapse, particularly if the West unwittingly conspired in destroying private and semiprivate firms. In addition to hurting American investors and trade companies, denying MFN status would undercut the political positions of the pro-reform elements in the Chinese government and the Communist party, whose rise to power represents the sine qua non of political reform. In trying to punish China’s hard-line leaders, we would punish the Chinese people more. Instead of helping the cause of human rights, we would hurt it. We must face up to the fact that there would have been no demonstrations in Tiananmen Square in 1989 had we not opened the door to China in 1972. It would be a tragic mistake to close that door now.

This does not mean that we should ignore unfair Chinese trade practices or reject any use of our economic power in our relationship with China. Beijing’s estimated $15 billion trade surplus with the United States in 1991—which was second in the world only to Japan’s—stemmed in large part from prohibitive trade barriers. Eighty consumer products cannot be imported at all. Others, such as automobiles, motorcycles, and appliances, face astronomical tariffs and bureaucratic red tape. Auto importers, for example, must provide two free samples, pay about $40,000 for “testing,” and subsidize a trip by Chinese officials to inspect the factories where the cars are built. In addition, U.S. companies lose about $400 million each year in copyright and patent royalties for such products as software because China fails to protect intellectual property rights.

Our response, however, should not be across-the-board tariff increases but rather more discriminating tactics such as blocking China’s entry into GATT or cutting back China’s export quota under the International Multifibre Agreement of 1974, which regulates all textile imports into the United States. If we want to have an impact on the changes occurring in China, we should not pull the plug on trade. Increasing economic progress will bring progress on human rights and civil liberties.

Foster peaceful political change. Some human rights advocates argue that the United States should adopt a tougher policy toward China to punish its leaders for the massacre in Tiananmen Square. While we should strongly condemn China’s human rights abuses in all appropriate forums, we must recognize that our only viable strategy to promote political reform—continued economic and political contact—will work only in the longer term. If we adopt either policy extreme—handling Chinese leaders with kid gloves or striking them with an iron fist—we will fail. Though we might be frustrated with the slow pace of change, economic reform without political reform is ultimately unsustainable, as the cases of South Korea and Taiwan demonstrated.

Our moral outrage over Tiananmen Square is not a policy. The question we face is whether any of our interests—not only national security but also human rights—would be advanced by isolating China and backing its leaders into a xenophobic corner. They would not. A quarantined China may make us feel better temporarily, but it would do nothing for the people suffering in China, whom we are ostensibly trying to help. If we isolate China, the psychological damage to those pushing for greater reform within China would be irreparable.

Moreover, sustained pressure works. Progress will not come instantly or easily. But China has already taken several significant though inadequate steps. Some political dissidents, including Fang Lizhi, have been released, and many have received far lighter sentences than they would have without American leaders lodging public and private complaints and private human rights organizations watching over China’s track record. While we lack the power to make Beijing capitulate on every case, we have the leverage to extract incremental concessions. If we use our ultimate weapon—total economic sanctions—we will squander our greatest asset for only marginal returns. Sanctions held in reserve are more powerful than sanctions put in place.

Chinese hard-liners have accused the United States of conspiring to subvert their rule and promote democracy through “peaceful evolution.” In response, they seek to close the door to the outside world. They might even welcome political, if not economic, isolation. They thrive on isolation because it means guaranteed and unquestioned power for them. They know that before our opening in 1972, there was no reform whatsoever, economic or political. They recognize that contact with the West stimulates pressures for political reforms that threaten their power. Rather than playing into their hands, we should promote peaceful change, just as we do in other countries around the world.

First, we should resume the high-level dialogue between China and the United States. The fact that we are meeting is not as important as what we say during the sessions. Legislative-branch leaders and executive-branch officials should go to China. Tough language on human rights and political reform should always be included in their talking points. In particular, we must strongly condemn the abuse of political prisoners in forced labor programs. The Chinese will not welcome their remarks, but the hard-liners must understand that the way they treat their own people is a legitimate international concern. We should not facilely judge China by the American standard of democracy, but its current human rights violations are beyond the pale. At the same time, we should not suspend our relationship because of the human rights issue. If we had always refused to deal with leaders who violated human rights, there would have been no opening to China in 1972.

Second, we should increase, not decrease, cultural and educational exchange programs with China. Contact with the West has been a major impetus for peaceful change. Without these programs, the ideas of inalienable rights and popular self-government that fueled the democracy movement would have remained largely unknown in China. Although the Tiananmen Square demonstrations overlapped with Gorbachev’s visit to Beijing, his reforms were not their inspiration. It was not accidental that the symbol the Chinese students and workers chose for their cause strikingly resembled our Statue of Liberty.

Third, we should open up two new international broadcasting stations—Radio Free China and Radio Free Tibet—to provide these nations with independent information and commentary. The repression at Tiananmen Square dealt a serious but not fatal blow to the pro-democracy movement. It has been forced to lie dormant until a future moment of opportunity. As the revolutions in Eastern Europe proved, however, that moment will eventually come. In the meantime, we can assist the forces of freedom best through broadcasts of news and information, not just about the world at large, but particularly about the internal situation in China. It is significant, incidentally, that during the coup attempt in the Soviet Union broadcasts by Radio Liberty provided important information about developments to the people who played a role in mobilizing resistance to it. Because the Voice of America is part of the U.S. government and because its charter limits its programs to warmed-over international news and trivial rock-and-roll shows, the new station for China must be an independent organization patterned on Radio Free Europe and Radio Liberty.

The people of Tibet represent a separate case. Conquered by the Chinese in 1950, occupied brutally by troops who killed thousands, desecrated local cultural and religious sites, and denied reasonable demands for autonomy, Tibetans have elicited much sympathy but little support from the outside world. The outrage over the brutal killings of peaceful demonstrators in Lhasa in March 1989 quickly faded after the massacres in Beijing in June. While there is a limit to what we can do, we should do more than we have done. In addition to raising the issue of Tibet in bilateral talks, we should establish Radio Free Tibet so that its people, though isolated, will no longer feel abandoned.

Make China pay a price for geopolitical irresponsibility. The United States must apply discriminating pressure on China to alter those foreign policies that threaten our interests. Until its recent decision to sign the Nuclear Nonproliferation Treaty, China acted as the developing world’s nuclear door-to-door salesman. China’s announcement is an encouraging first step, but we must watch its actions as well as its words. If Beijing fails to curtail its sales of not only nuclear technologies but also ballistic missiles, we should take actions against them through multilateral organizations and inflict costs for such irresponsibility by placing embargoes on the high-tech items China wants to import.

At the same time, we should not overreact and should provide rewards for changes in Chinese policy. If we isolate China economically, politically, or diplomatically, Beijing will have no incentive to curtail its destabilizing foreign policies in Cambodia and elsewhere. On the contrary, that might even create greater incentives for China to seek export earnings through irresponsible weapons sales. If China uses its leverage to rein in North Korea’s nuclear aspirations—which represent a menace in East Asia comparable to those of Saddam Hussein in the Middle East—we should reward Beijing by loosening access to the high-tech exports China needs.

Enhance Taiwan’s international political standing. Since 1979, the United States has maintained only informal relations with the government in Taipei through the U.S. Institute in Taiwan, an organization officially separate from but fully funded and staffed by the State Department. In the Shanghai Communiqué of 1972, we recognized the fact that both Beijing and Taipei viewed Taiwan as part of China but unequivocally expressed our support for a peaceful settlement of the unification issue. While we should not alter the fundamental pillars of our policy, we should consider certain steps that will raise Taiwan’s international standing. For example, Taiwan’s application for membership in GATT should be approved based on its formidable economic achievements, not on the status of Beijing’s application. Since Hong Kong already belongs to GATT, the free-market and democratizing Chinese regime on Taiwan should no longer be denied membership.

To assume its rightful place in the world, China must modernize. It cannot succeed without contact with the countries of the West, but its success depends ultimately on the Chinese people themselves. We should provide moral and material support to those who favor economic and political reform, but we must not try to force through changes before China itself is ready to make them work. Our two countries have very different political systems, economies, cultures, and even national interests. China will reform, but change must come from the Chinese, in their own way, according to their own traditions, and at their own pace. This change will be brought about by the two-thirds of China’s population who were born after the 1949 revolution. They have no memories of warlords, foreign exploitation, wartime occupation, or civil war. Instead, they will be influenced by the success not only of the West but also of their neighbors in Taiwan and Hong Kong. At this defining moment, America should not walk away.

After forty years of competing for top billing among the major powers in the world Communist movement, China finds itself starring in a one-man show. The fall of Communist systems around the world has raised the hopes of the Chinese people and the fears of the Chinese leadership. In the August 1991 revolution, the Chinese people witnessed the overthrow of the world’s first Communist government. The Chinese leaders interpreted the same event as the consequence of Moscow’s fatally flawed policy. Gorbachev allowed political liberalization but stumbled in economic reform. Deng promoted economic reform but stifled political change. With the demise of Soviet communism, the Chinese hard-liners may escalate their repression and retreat further into isolation. It therefore becomes doubly important that the United States and the West maintain economic contacts with Chinese society in order to nurture the growth of peaceful change.

It is imperative that we work with China as an equal partner rather than work against China as a bitter enemy. To restore the momentum to our crucial bilateral relationship requires skillful statesmanship by leaders on both sides. Despite Tiananmen Square, the United States should reestablish a working relationship in order to move forward in all areas of common interest. Until China redresses the worst of its human rights violations, however, our two governments can be partners but they cannot be friends. While we cannot yet be friends, we cannot afford to be enemies. We must avoid the animosity and isolation of the first twenty years of our relationship, which produced two Asian wars that cost both our nations dearly. But the burden for resurrecting the close cooperation we had before June 1989 lies in Beijing, not Washington.

The Great Wall of China is one of the Seven Wonders of the World. While it is difficult enough to be heard when you are inside the wall, it is impossible to be heard when you are on the outside. Cooperation might work only slowly in bringing about change, but isolation would not work at all. In the long run, China will become part of the great changes that have swept Communist regimes from power in Eastern Europe, the Soviet Union, and the underdeveloped world. It will not be able to cling to the failed revolution of communism if it continues to have contacts with the new revolution of freedom. Because of the communications revolution, instead of going through or burrowing under the Great Wall, ideas will travel into China over the Great Wall—and no ideological SDI exists to shoot them down.

The Chinese are a great people with an incredibly rich cultural heritage. When Europe was mired in the Dark Ages, China was the most advanced nation in the world. In the eighteenth century, Voltaire called it “the finest, the most ancient, the most extensive, the most populous and well-regulated kingdom on earth.” We need only see the economic miracles that Chinese people have achieved in Hong Kong, Taiwan, Singapore, and in their overseas communities all over the world to appreciate the enormous potential of the over 1 billion people in China itself once their energies are unleashed from the dead hand of Communist economic and political repression.

Almost two centuries ago, Napoleon observed, “China? There lies a sleeping giant. Let him sleep! For when he wakes, he will move the world.” The giant is awake. Which way he moves the world will primarily depend on the Chinese people but will also depend on us. To isolate China now would be a historical tragedy of inestimable magnitude.

•  •  •

With the world’s attention riveted on Soviet actions in Europe, Moscow’s policies along the Pacific rim have traditionally been overlooked. A longtime expansionist power in the region—the Russian flag flew over settlements in Alaska in 1784 and California in 1811—the Kremlin never slackened its eastern push into the Pacific. As a Eurasian power, it has treated Europe as its most visible front, but Asia has always been an equally vital one.

Even with the rise of a noncommunist government in Moscow, the prospects for a rapid improvement in Soviet relations with other members of the Pacific triangle are limited. Before August 1991, the Soviet Union and China were divided by ideological differences. Today, they still stand on opposite sides of an ideological chasm. Japan, wary of the uncertain political situation in Moscow and adamant about the return of the Northern Territories, wants to keep Moscow at arm’s length at this time. Both China and Japan have known the Kremlin as the seat of power of not only the Soviet Union but also the Russian Empire. They respect—and fear—the potential influence Russian nationalism can have on Moscow’s foreign policy. And they know that in the postcommunist Soviet Union, this traditional nationalism could eventually come to the fore.

Zhou Enlai remarked to me in 1972 that Moscow seeks “to fish in troubled waters.” With its political turbulence, the Pacific has always been a rich fishing ground. After expanding its territorial control across Eurasia to the Pacific three centuries ago, Russia clashed with the other two principal regional powers. It participated in the European division of China into spheres of influence. It engaged in a fierce rivalry with Japan, which culminated in the Russo-Japanese War of 1904, a conflict settled through the mediation of the United States under President Theodore Roosevelt. In the postwar period, not only did Moscow fail to sign a peace treaty with Japan to end World War II, but the Sino-Soviet bloc collapsed amid mutual recrimination, with Brezhnev at one point even toying with the idea of a first-strike attack on Beijing’s nuclear forces.

When Gorbachev came to power, he cast his line into the politics of the Pacific. The partnership between Japan and the United States, united by a security treaty but divided by economic bickering, had an uncertain future. China and the United States, brought together by the Soviet threat and the Chinese need for modernization but driven apart by China’s human rights record, had clouded the prospects for their long-term relationship. In addition, Indochina and the Korean peninsula continued to be hotbeds of great-power rivalries, while the large-scale presence of U.S. and Soviet naval forces added an explosive element to the region.

Until the revolutionary events that brought noncommunist governments to power in the Soviet Union on August 24, 1991, Gorbachev’s approach to the Pacific involved a mix of “old thinking” and “new thinking.” His principal goal—to increase Moscow’s presence in the short term in order to set the stage for regional preeminence in the long term—dovetailed with traditional Soviet policy. But he developed a three-tiered strategy far more subtle and effective than the heavy-handed saber rattling of his predecessors. A military buildup that earned the Kremlin a voice in Pacific affairs, a political “peace offensive” that opened doors long closed to its diplomats, and an economic opening that sought to capitalize on the region’s dynamism dealt Gorbachev a hand in a geopolitical game in which he had little to offer but much to gain.

While he did not want increased tensions in the region, he did seek a decreased U.S. presence. He wanted to break out of the Soviet Union’s traditional political isolation and embark on an active engagement in the Pacific. He wanted to establish beachheads diplomatically and economically that would not only help Moscow solve its domestic crisis but would also enable him to expand the Soviet sphere of influence along the Pacific rim.

Military power was Gorbachev’s most concrete lever of influence in the Pacific. Without it, the other members of the Pacific triangle would not have taken the Soviet Union seriously. Because of this power, however, they could not have afforded to ignore Moscow’s concerns. This leverage was earned by a comprehensive military buildup larger in many ways than Soviet efforts in Europe:

—It has doubled its deployments in the Far East since 1970 to a total of fifty-five divisions—which account for 43 percent of its ground troops east of the Ural Mountains.

—It has quadrupled its combat aircraft in the region, with its deployments accounting for 54 percent of its tactical aircraft east of the Urals and including its most advanced Backfire long-range bombers and MiG-31 fighter-bombers.

—It has developed a vast military infrastructure—bases, airfields, supply depots, roads, and railroads—in some of the world’s most inhospitable terrain to support the 500,000 troops in active units in the area.

—It has modernized its Far Eastern ground forces with equipment withdrawn from Eastern Europe and areas west of the Urals.

—It has redeployed 120,000 troops removed from Eastern Europe to the Sino-Soviet border, negating the effects of its earlier withdrawals in the late 1980s.

—It has built up the Soviet Pacific Fleet—particularly its 110-strong nuclear attack and ballistic-missile submarine force—in an effort to counter the maritime power of the United States.

—It has brought its total ICBM force in the Far Eastern military districts to 493, adding 85 missiles in 1990 and 1991 and thereby enabling its planners to cover all Pacific targets assigned to SS-20 missiles before they were destroyed under the INF treaty.

—It trimmed its permanent naval deployments at Cam Ranh Bay and aircraft at Da Nang in Vietnam in the late 1980s, but Moscow’s military presence in Indochina vastly exceeded its deployments in the area even during the Vietnam War.

At a time when lessening East-West tensions prompted the United States to reduce its forces in the Pacific, the Soviet Union’s peaked in terms of numbers and capabilities. This did not mean that Moscow intended to launch a Pacific blitzkrieg. But it did mean that its efforts to advance its political and economic presence in the region were built upon the rock-hard foundation of military power.

Gorbachev’s political “peace offensive” was the main axis of his strategy in the Pacific. Unlike his predecessors from Stalin through Chernenko, he knew that overt threats and bullying would win little ground among the region’s major powers. Instead, he borrowed successful lessons from his diplomacy in Europe. Soviet officials called for the development of “an Asian common home” and “a single Eurasian area of stability and security.” Both concepts would have excluded the United States. By making political inroads now, Gorbachev wanted to tap the Pacific rim’s dynamic economy to save his Communist system. His subtle tactics—which sought to address China’s and Japan’s demands in form but to hold back in substance—were designed to parlay diplomatic initiatives into political gains.

The centerpiece of his diplomatic offensive was the rapprochement with China in 1989. For forty years, the relationship with China served as the driving force behind Soviet policy in East Asia. Ideological and geopolitical competition between the two major Communist powers spawned diplomatic maneuvering and even military clashes between them. When Gorbachev realized the depth of the Soviet internal crisis, he concluded that he could no longer afford the Sino-Soviet enmity. Both powers buried the ideological hatchet, accepting each other’s brand of socialism as legitimate interpretations of the Marxist-Leninist canons, and began diplomatic exchanges to bridge the key issues dividing them.

Most important, Gorbachev yielded on Deng’s “three conditions” for normalization of relations—a reduction in Soviet forces on the Sino-Soviet border, a Soviet withdrawal from Afghanistan, and a Vietnamese withdrawal from Cambodia. But he did so in measured and qualified steps. Soviet force levels still remained much higher along the Chinese border after the withdrawals than before the Soviet regional buildup began in the 1970s. Gorbachev kept a significant number of “advisers” in Afghanistan and continued to keep the Kabul regime in power through massive military and economic aid. Despite Hanoi’s pullout from Cambodia and the 1989 Sino-Soviet agreement on a process to end the Indochina conflict, the Vietnamese-backed Hun Sen government continued to impede a final peace settlement. While Gorbachev got his half of the bargain up front, the Chinese have had to work to collect on theirs.

Gorbachev sought to employ the same formula—concessions in form but not in substance—to the third corner of the Pacific triangle, Japan. He knew that Moscow could not be a credible Pacific power without a cooperative relationship with Japan. In order to win normal relations with and massive economic aid from Tokyo, he tantalized the Japanese with rumors of Soviet flexibility on the crucial issue of the four islands seized by the Soviet Union in the last days of World War II. He floated trial balloons calling for a swap of territory for billions in aid, hoping to crown his visit to Japan with a major political breakthrough. But the Soviet concessions actually put on the table, such as easing visa requirements for Japanese visiting some of the islands, left Tokyo cold. Gorbachev best encapsulated his bottom line when he remarked in September 1990 that the Soviet Union had “no land to spare” for Japan.

His economic opening to the Pacific was the element of his policy that Gorbachev most needed but for which he had the least to offer. Although Sino-Soviet trade has doubled over three years and totaled $4.5 billion in 1991, it lags far behind the $18 billion in U.S.-Chinese trade. Even though Moscow and Beijing have reached several long-term trade agreements, their trade will not exceed modest levels in the near future, particularly because much of it must occur through barter agreements. For Gorbachev, however, Japan represented the real catch. On his state visit in March 1991, Tokyo refused to rise to his bait. Genuine opportunities for investment would have hooked the Japanese, but Gorbachev had been fishing for aid, not trade.

Gorbachev played a skillful diplomatic game in Asia. While enhancing Soviet relations with South Korea—moving from no ties to full diplomatic relations in only three years—he continued to back North Korea, though slapping its leader on the wrist for its nuclear program. While Soviet trade with South Korea will rise from $85 million in 1985 to an estimated $1 billion in 1995, Moscow continued to provide $1 billion in aid to North Korea and to equip the 1.1 million troops in its armed forces with Soviet weapons.

Gorbachev’s strategy was to use his military, political, and economic policies to supplant the United States as the principal power along the Pacific rim. We should seek to make the new noncommunist leadership in the Russian republic a partner in resolving the issues on which Gorbachev would accept only a partial accommodation. Unburdened by the totalitarian baggage of the past, the new noncommunist leaders should be more willing to demilitarize the Sino-Soviet border, to phase down Soviet naval deployments in the Pacific, to accept a political settlement in Afghanistan based on elections, to cut off the Communist regimes in Vietnam and North Korea from military and economic aid, and to return the Northern Territories to Japan.

With modernist, democratic leaders instead of insular, Communist despots, Russia can begin to make a constructive contribution to Pacific security. But the United States cannot assume that this process will occur in a fortnight. The nations of the Pacific triangle harbor deep national suspicions of each other. Unlike Americans, the Russians have traditionally had great difficulties relating to China and Japan, not only because of their political differences, but also because of their clashing cultures and centuries of geopolitical antagonism. A closed and parochial society for much of this century, Russia has a strong streak of xenophobia that will influence its Pacific policies even in the postcommunist period. Because the new leaders in Moscow have ceased being Communists does not mean that they have ceased being Russians.

China, Japan, and the smaller countries in the region want a continuing, strong U.S. military presence in the Pacific. Current U.S. ten-year defense plans—which foresee a 12 percent cut in Pacific troop deployments in the first phase alone—must not reduce our forces to the point at which we would lack the forward-based infrastructure needed for a major intervention into the region. The 16 percent of U.S. forces stationed in the Pacific are stretched thin already. Cuts proportional to those made in our European forces would seriously weaken our ability to deter countries that might harbor ambitions of dominating the region through military coercion or intimidation.

Compared to Europe, our deployments in the Pacific are not great. But they make an enormous contribution to regional stability. Japan, South Korea, Taiwan, China, Australia, New Zealand, and the countries of the Association of Southeast Asian Nations spend a total of over $50 billion a year on defense, a figure that will rise to $120 billion by the year 2000. To cap this growth, the United States should maintain a high profile in the region, keeping both its naval forces in the South Pacific and its ground forces in South Korea and Japan. In addition, it should work with friendly countries, such as Singapore, that will allow an increased U.S. presence through short-term rotation of aircraft at their air bases and ship maintenance at their naval yards. While these measures might pack little military punch, their symbolic value is vital to keeping potential escalations of arms spending in check.

Our military presence must be sufficient to prevent a security vacuum from developing in the Pacific. Over the last forty-five years, U.S. security guarantees have enabled the countries of East Asia to develop politically and economically, and our own standard of living has benefited significantly as a result. Other countries might be able to match our economic, political, or military power. But unlike the three members of the Pacific triangle, the United States has no history of hegemonic aspirations. We may think of China’s, Japan’s, and even Russia’s imperialism as ancient history, but in the region they are as fresh as the morning’s news.

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Although we must avoid pretensions of acting as the prime mover in the geopolitics of the Pacific rim, we have a unique role to play. Only the United States has the credibility to maintain the balance of power in the region, an essential precondition for Pacific prosperity.

The conflicts between the powers of the Pacific triangle did not begin with the cold war and will not end with the end of the cold war. As a nation, Americans have difficulty grasping the depth of historical antagonisms between other nations. But these intractable conflicts have dominated the politics of the Pacific triangle for decades. The record of the rivalry between Japan and Russia reaches back far beyond the postwar period. The centuries-old, visceral antipathy between Russia and China and between Japan and China cannot be overcome by a cleverly worded communiqué. Though a more democratic and less aggressive Russia should be able to tamp down the most acute conflicts, it would be foolhardy to assume that all the great rivalries between Pacific nations that predated the Communist era will remain dormant.

Japan, a democratic ally and a technological power capable of building nuclear weapons, must remain our intimate geopolitical partner, regardless of our commercial disputes. The new governments in the Kremlin and the Russian republic have created the possibility of closer economic and political relations with Tokyo, once the Northern Territories are returned to Japan, but these would be short-lived in the absence of an active U.S engagement in the Pacific. Without a security link to the United States, Tokyo might temporarily strike a security deal with Moscow but would inevitably develop its own nuclear weapons, thereby rekindling its historical antagonisms with Russia and China.

Just as Japan is a political ally but an economic competitor, China is a potential strategic partner despite its totally unacceptable violations of human rights. A stable and modernizing China is vital to Pacific security. We cannot ignore China’s internal repression, but it should not be ostracized or endlessly harangued. Besides the United States, no great power—neither Japan, Russia, nor any country in Europe—can foster peaceful change in China. While we may have to work with repugnant hard-line leaders in the short term, a continuing engagement with China will serve our interests and those of the Chinese people in the long term.

Most important, as a result of the dramatic changes in the Soviet Union, a window of opportunity has opened to explore the possibility of what Gorbachev might have called a “common transpacific home.” We should recognize that Russia, like the United States, has a proper role to play and legitimate interests to protect in Pacific affairs. But before we can welcome even the new Russian leaders as constructive geopolitical partners, they must first check their guns at the door.

A continued U.S. presence in Europe is important, but a continued U.S. role in the Pacific is indispensable. Without the United States, the Pacific triangle will be like a three-legged stool: unstable and potentially dangerous. The competition among Japan, China, and Russia would be unbridled, with each driven to seek preeminence in the region. The United States must serve as a stabilizer—the fourth leg of the stool—in order to advance the interests of all East Asian nations. Whether or not East-West relations continue to improve, America’s role as regional balancer, honest broker, and security guarantor in the Pacific will only increase in importance.