4. The World

CHAPTER 4

The World

A power without power will be bullied.

—General Jiang Youshu, November 11, 1982

“If China is too accommodating to foreigners, it creates a negative reaction in China, and that may slow down reform.” In China we need to consider the political system, the role of parliament, the kind of decision-making process. We understand your system has problems that affect your policy toward us, “but the same is true for China—not because of bilateral problems but domestic problems.”

—High-ranking Chinese economic official, November 1, 1994

“This crisis [the Asian financial crisis] compelled us to rethink global integration. It is more than trade; it is investment, then stocks and bonds. So global integration is going from tangible integration, trade and production, to intangible integration, including information and financial system integration. Free capital flows are like Prometheus’s fire—it is warmth but also a source of death. In the past ten years, network computers have democratized boundaries.”

—Wang Xuebing, president and vice-chairman, Bank of China, July 2, 1998 (convicted of corruption in 2003)

“China doesn’t want to establish a new world order; it wants to get stronger in the existent world order. All powers have a stake in the world order.”

—Senior Foreign Ministry official, November 23, 2002

“I think the biggest change has been that at the start of reform leaders had seen the world as the inside [of China] and the outside [beyond China]. Now, in many respects, they, Hu Jintao, see there is no distinction—the inside and the outside are one, interconnected, and mutually influencing.”

—Senior foreign policy think tank leader, June 3, 2010

“The twenty-first century is immensely different. Old ways won’t work in the new century.”

—State Councilor Dai Bingguo, June 26, 2011

Currently four principal forces shape Chinese views toward, and actions in, the world: domestic politics and other internal constraints; global interdependence; realist foreign policy thinking; and technology-driven action-reaction dynamics. Domestic politics and big-power considerations have been central in shaping Beijing’s behavior since 1977, while the forces of interdependence and the imperatives of technological-driven change that elicit actions and reactions have been newer developments. Domestic politics is pivotal because leaders must survive the riptides of developments at home if they are to act abroad. Interdependence alters the home players, their relative political heft, and cost-benefit calculations in domestic politics. Of course the interplay of domestic politics and international interdependence does not make China remarkable.

However, the PRC’s global behavior is distinctive in its utter pragmatism, or what I call the situational ethics with which these contending impulses are balanced as Chinese leaders decide how to act internationally. Americans generally describe the making of their foreign policy as a ceaseless quest to balance America’s interests with its values—security, material, and power needs against more intractable ideas of “right” and “wrong.” Americans often (hopefully) assert that to serve their values is to pursue their interests. This attraction of “values”—many Chinese would say “ideology”—has its origins in America the immigrant nation, to which successive waves of displaced persons and those simply seeking a better life have come to escape autocrats, material deprivation, discrimination, and chaos. Given its heterogeneous character, the United States has been held together by shared ideals and law, not any common place of origin, ethnicity, or religion. Once in their adopted country, immigrants often have felt obliged to attempt to bring the blessings of liberty, opportunity, and human rights to their brethren left behind in the “old country.” There is, therefore, an intrinsically interventionist quality to U.S. foreign policy, with the strength of this impulse varying as the burdens of prior efforts become more or less distant in the collective consciousness. Interventionist and isolationist impulses coexist in the American foreign policy psyche. To the Chinese, however, the interventionist impulse of America is of greater ongoing concern than the isolationist tendency. One senior Chinese intelligence official observed that American interventionist thinking was like having a preference for “surgery” rather than for noninvasive medical procedures.1

The intellectual and cultural roots of Chinese foreign policy lie in Confucian and Taoist thought, a long history, China’s self-perception in relation to its neighbors, and its unique physical and demographic landscape.² China’s foreign policy emerges from a matrix in which China is connected to the world, with particular attention given the nation’s periphery—everything is interconnected.³ China’s foreign policy view is pragmatic and seeks to maximize benefits in an ever changing yet interconnected global environment. It is not a view grounded in absolute values—it is situational ethics on a global scale. This vantage point is the international politics version of Deng Xiaoping’s domestic policy of “crossing the river by feeling for stones” (mozhe shitou guo he). This perspective is not a “you are your brother’s keeper” vision of international politics. In a 1973 conversation with a U.S. Treasury delegation, Vice-Minister of Foreign Affairs (later foreign minister) Qiao Guanhua recounted that he had spoken with Senate Majority Leader Mike Mansfield about possible U.S. troop withdrawals from Europe (which Mansfield favored and Beijing then opposed, wishing to keep Moscow threatened on two fronts), concluding about the senator: “He is a good person but very idealistic and highly moral.” Qiao was not being laudatory.⁴

China’s foreign policy is rarely conducted using the vocabulary of moral absolutes and dwells instead on principles such as “mutual benefit,” “mutual respect,” and “noninterference”—phrases with deep resonance in China given the intervention it has endured in its modern and more distant history. Chinese talk about process much more frequently than they talk about the absolute morality or immorality of outcomes. In stark contrast, Americans often employ the vocabulary of moral absolutes when speaking of outcomes—“universal values.” How China acts globally depends on context and its own interests.

In a September 2, 1986, interview of Deng Xiaoping by Mike Wallace of CBS News, Wallace observed, “It seems that Chinese relations with capitalist America are better than Chinese relations with the Soviet Communists.” Deng’s response is instructive for understanding Beijing’s foreign policy framework: “China does not regard social systems as a criterion in its approach to problems. The relations between China and the United States are determined in the context of their specific conditions, and so are the relations between China and the Soviet Union.”5 For Deng, Beijing’s respective relations with Washington and Moscow were about China’s interests, not the normative merits of the two superpowers’ systems, how they treated their people, or which values they nominally espoused.

In this chapter we examine how the four drivers of Chinese foreign policy have played out in the post-Mao era and what can be expected in the future. Which impulse(s) will predominate in coming decades?

DOMESTIC POLITICS AS A DRIVER OF CHINESE FOREIGN POLICY

Today, PRC analysts and policy makers freely admit that domestic politics clearly shapes China’s external policies and behavior. This has not always been the case. Before and early on in the reform era, Chinese leaders, fearing that outside forces would exploit or manipulate internal discord, would never have acknowledged that domestic politics shaped foreign policy. The accepted rhetoric was that 960 million (at that time) Chinese people had one national interest—“The Chinese people stand shoulder to shoulder.” PRC interlocutors embedded policy in a grand strategic framework, describing foreign policy not as a domestic political outcome but as a strategic necessity imposed on it by the external world, requiring a reaction guided by ideology. The party tightly held the foreign policy reins.

In a moment of candor in October 1971, Henry Kissinger told Premier Zhou Enlai how domestic opponents in the United States sought to frustrate President Nixon’s planned China trip for the following February, saying, “These groups have mounted campaigns against the President’s acceptance of your invitation. . . . Even within the bureaucracy some of the established forms [of opposition] continue.” Premier Zhou responded, “Also such things like that in China. . . . So we think bureaucracy cannot only be found in the State Department; it can also be found in the Foreign Ministry.” To which Kissinger rejoined: “My secret dream is to do to the State Department what the Prime Minister did to his office—reduce it to three [people].”6

The fact that domestic populist and bureaucratic politics (as well as underlying economic and social conditions) influence China’s foreign policies in many ways is a contention that no credible person in China any longer disputes. Economic circumstances sculpt foreign policy directly by providing the material resources upon which action depends and indirectly by affecting popular opinions concerning national capacities and priorities. Since 1977, China has become economically stronger and more capable, and this is reflected in the nation’s growing sense of its own capabilities and subsequent assertiveness.⁷ Similarly, China’s ongoing social and economic development has empowered new groups inside and outside the bureaucracy and has disadvantaged others, thereby changing the entire framework of domestic interests. As seen in chapter 2, China’s national leaders have become weaker in the face of growing societal and bureaucratic pluralization, perhaps the most significant fact of the new political era. Similarly, Chinese Foreign Ministry and central trade bureaucracies are less able to manage the nation’s multitude of external connections, and territorial administrations and nonstate economic entities have been relatively empowered. Just as China’s “supreme leaders” have loomed progressively less large as the reform era has unfolded, so too have China’s central foreign policy leaders become less dominant.

Within Chinese society, rural perspectives have declined and urban, more internationalist (and nationalist) views have risen in salience. In one striking set of statistics, one sees the multifaceted effects of urbanization. In 2012, when a sample of urban and rural Chinese was asked whether they “like American ideas about democracy,” 60 percent of the urbanites said they did while only 43 percent of rural dwellers gave the same response.⁸ Urbanization, the rise of a middle class, and coastal development have empowered economic interests and underscored the importance of interdependence. The Chinese populace has also come to see the PRC as more empowered in the global power hierarchy and hence has become more demanding of leaders who often are viewed as excessively deferential to foreign demands—“public opinion” has become a fashionable explanation for policies. As Premier Li Peng said when explaining why he would not capitulate to American demands to improve human rights in exchange for continuation of normal trading relations with Washington in 1993: “But I don’t think I can report what you told me to the Chinese people via television, because they would say that the Chinese premier is making China’s policy based on the American president, and they would overthrow me.”9

Bureaucratic struggles, turf battles, and normal organizational change and evolution, along with the personalities of various officeholders, also affect China’s foreign policy. Today’s PRC governmental organization chart differs substantially from its 1977 analogue, with the current structure embedding functional and geographic interests that were unrepresented, underrepresented, or simply nonexistent at the time of Mao’s death. For example, in 1980 China’s Foreign Ministry had no equivalent of the Arms Control and Disarmament Agency, and, unsurprisingly, these types of interests were not effectively represented in the bureaucracy; today these concerns are built into the structure of the ministry.¹⁰ Similarly, at the onset of the reform era the Foreign Ministry had no unit responsible for protecting citizens overseas, a function that became essential once China had businesspersons, contract workers, students, and tourists living and traveling around the world in great numbers. Conversely, many of the economic ministries of the planned economy that existed at the onset of reform have simply been abolished or relocated on the organizational map, with many becoming more autonomous economic, semi-market-oriented actors at home and abroad. Many of these corporations and industrial sectors are substantially controlled or influenced by politically well-connected extended families born of the party and the revolution.¹¹ Former premier Li Peng and his family, for instance, are nearly synonymous with electric power. Chinese corporations abroad create problems by fighting among each other in foreign markets—“China and its banks are growing out of the posture of China Inc.”¹²

In terms of territorial administrations, at the end of the 1970s, once a few special economic zones were created, other territorial administrations began to push for their own access to the outside world under favorable terms and free of Foreign Ministry constraints or the limitations imposed by central trade and economic bureaucracies. A continual feature of the reform era has been the attempt of the Foreign Ministry system in Beijing to maintain its control over external relations, and the countervailing attempt by other bureaucracies, localities, and other economic, educational, and cultural entities to break free of the traditional monopoly.

Also germane to the connection between domestic and foreign policy is elite succession. Succession has changed the dominant individuals shaping policy, as occurred with Mao’s death and Deng Xiaoping’s ascendancy at the start of reform. Similarly, the shift from Jiang Zemin to Hu Jintao in 2002 was more critical than often realized, since a leader with a high commitment to the United States-China relationship was succeeded by one with less connection to Washington. In short, in China as elsewhere, domestic politics is the soil in which the plant of foreign policy grows. The domestic ebb and flow of money, people, bureaucracies, and the reigning ideas of any given era all affect foreign policy.

Personality, Position, and Power Shape Foreign Policy

Jiang Zemin’s abrupt and unanticipated rise to power in mid-1989 in the wake of the Tiananmen debacle illustrates the many domestic forces shaping foreign policy in China today. For his debut on the national stage, Jiang was in a weak position—China was isolated internationally; the older, nominally retired elite was divided but still powerful and lurked ominously off center stage; and the younger members of the elite were weak, divided, and traumatized by the Tiananmen violence. Jiang was chosen precisely because he was weak, initially, and therefore unthreatening. It took Jiang time to get his hands on the levers of foreign and domestic policy power, as he had to gradually consolidate his position. In foreign policy, he was constrained by Premier Li Peng, who held the chairmanship of the critical coordinating body—the Leading Small Group on Foreign Affairs—until about 1998, leaving Jiang with imperfect control over external policy prior to that.13

In this setting, Jiang Zemin wanted to respond strongly to the United States’ May 1995 announcement that Washington would grant a visa to Taiwan president Lee Teng-hui to visit the United States the following month. This was because the preceding January he had made what he thought was a conciliatory policy statement on Taiwan (“Jiang’s Eight Points,” or Jiang Ba Dian).14 Lee’s announced trip was a perceived slap in Jiang’s face, with Jiang’s calls for more cross-Strait cooperation effectively rebuffed by Taipei’s show of assertiveness. Compounding that sting, the Chinese leadership had thought it had an understanding with the Clinton administration that a visa would not be issued to Lee. In the end, Lee’s trip to Cornell University set off protracted Chinese reactions, including the temporary withdrawal of Beijing’s ambassador to Washington, Li Daoyu, in mid-June, and missile firings (with dummy warheads) off the northern and southern shores of Taiwan in July 1995 and again in March 1996, just prior to the island’s presidential elections.

What requires explanation is that President Jiang wanted to respond immediately to the Lee situation in June 1995 but that the reaction was delayed by domestic considerations. President Lee Teng-hui delivered his speech at Cornell on June 9, but the first salvo of missile firings did not start until July 21, followed by a second salvo about eight months later. Why the delay? A senior PRC foreign policy analyst explained:

In 1995, you remember that after Lee Teng-hui was given a visa there was an announcement by the Foreign Ministry that the day he [President Lee] took off for [from] Taiwan something big would happen. But on the day Lee took off, the Foreign Ministry spokesman in effect backed off, the reason being that no decision had been made. At that point, Jiang actually had his own desire, to respond in a strong fashion, but he did not yet have the power of unilateral leader to decide rapidly. Jiang Zemin simply did not have the political capital to decide alone; he had to build a consensus and this took time. So while some in the military did want to take a hard line—one suggested firing missiles the day Lee took off for the United States to force Lee to turn his plane around and return to Taiwan!—Jiang wanted a strong response too, though perhaps not that strong. The Foreign Ministry spokesman had to back down because the center was unable to decide what to do for some period of time, and Jiang had to build a consensus without the power to make a more unilateral decision at that time. Further, Jiang at that time would not have wanted to decide unilaterally because had he “decided wrong” he would have given a weapon to opponents. . . . He wanted a collective decision so as to avoid subsequent blame, if it was to be assigned.¹⁵

The need to build consensus also is seen in Beijing’s other crisis behavior with Washington. At critical foreign policy moments Jiang Zemin was unwilling to receive a call from President Clinton until he knew he was on solid ground with his colleagues. One PLA officer explained, “‘Until there is leadership agreement, no one dares to pick up the phone and risk leadership.’”16

The role of personality, individual interest, conflicting bureaucratic responsibilities, and domestic politics is also clear in Beijing’s policy toward Hong Kong in the wake of June 4, 1989, and in the run-up to the reversion of the British colony to mainland sovereignty on July 1, 1997. From 1983 until early 1990, China’s ranking representative in British Hong Kong was the director of the Xinhua News Agency, Xu Jiatun. Xinhua News Agency constituted a shadowy, parallel administration to the British colonial government. Xu Jiatun was well liked locally, he was seen as relatively open and as someone who was mindful of Hong Kong people’s concerns and interests and tried to convey them to Beijing in an effort to smooth the path to reversion. However, Vice-Foreign Minister Zhou Nan and Director Lu Ping of the Hong Kong and Macau Affairs Office back in Beijing were not particularly appreciative of Xu’s approach in Hong Kong.

The violence of June 4, 1989, in Beijing, and the unrest elsewhere in China greatly unsettled the already nervous Hong Kong people, raising for them the question of what reversion to mainland sovereignty in mid-1997 would mean for their freedom and their bank accounts. Many in Britain and America were likewise concerned—not least the U.S. Congress. In this context Director Xu consented to meet with Professor A. Doak Barnett and me in September 1989 while the colony was still reeling from the globally televised violence in Beijing. In that meeting, Xu did not abandon or directly criticize Beijing’s line (indeed he defended “the necessity” of the crackdown), but he nonetheless argued that part of the key to stability in Hong Kong was reform’s continuation in China—that what Beijing did internally would have great bearing on attitudes in Hong Kong and that most Hong Kong people were not anti-China. Xu said: “Three factors in Hong Kong are key: stability in China; open door and reform; and cooperation with the United Kingdom.”¹⁷ In short, Xu was arguing that the problem was not in Hong Kong but in Beijing—not exactly in line with Lu Ping and Zhou Nan, who told the journalist David Gergen more than a year later, “Prosperity and stability in Hong Kong largely depend on close cooperation between China and Britain during the latter half and that is where we are now.”¹⁸

Such contradictory comments give a hint of the behind-the-scenes infighting over the issue of how to deal with the people of Hong Kong that was taking place in the wake of the June 4, 1989, violence. Xu wanted to adopt a relatively open, interactive style and get out among Hong Kong’s people. He was telling Beijing that it needed to reassure people in Hong Kong and around the world by continuing reform and opening, and he was warning his bosses back in the capital that the status quo of local relations was not good. Back in Beijing, as Xu recounted in later writings, Vice-Minister Zhou Nan and Director Lu Ping were advocating a less open approach vis-à-vis Hong Kong while reassuring their superiors in Beijing that all was going fine down south—happy talk.19 Other leaders in Hong Kong were clear in their views of Lu Ping and the office he ran. In 1992, Governor Chris Patten commented, “‘Lu Ping is just an operator.’ . . . They don’t know much about Hong Kong—they are conservative.”²⁰

To make matters worse for Xu, he was closely associated with now fallen former general secretary Zhao Ziyang, who had parted ways with Deng Xiaoping over how to handle the June 4 turbulence, among other things.²¹ Within two months of our meeting with Xu in late 1989, Zhou Nan had set up a committee to investigate Xu, and in January 1990 Zhou himself was appointed director of the Hong Kong Branch of Xinhua News Agency, replacing Xu. Apparently sensing that he might be arrested, in early May 1990 Xu fled to America.

Unsurprisingly, in the wake of Zhou Nan’s assumption of the Xinhua directorship in Hong Kong, negotiations with the British became more contentious. Zhou Nan’s inclinations were more muscular, he was more responsive to Beijing’s tougher attitudes, and his defeat of Xu reinforced directions that help account for the acrimony of the next period of Sino-British relations and friction with the local population in Hong Kong. Zhou Nan, one British governor of Hong Kong told me, loved jumping out in front of the British governor if they were in proximity to one another—staying a few steps ahead of the colonialists, as any good nationalist would.²²

Public Opinion

In this digitally interconnected world, public opinion in China, as elsewhere, can become mobilized and metamorphose into assertive nationalism before the political elite has time for any thoughtful reaction. A good example of such mobilization can be found in the May 7, 1999, NATO-led (U.S.) accidental bombing of the Chinese embassy in Belgrade that killed three and wounded twenty Chinese and was followed by the emotion-laden homecoming of the dead and wounded.

Large and violent demonstrations against the U.S. embassy in Beijing and other U.S. counselor facilities in the PRC followed the bombing, along with U.S. explanations of what happened and why—“a grave mistake and tragedy that occurred as a result of a series of failures in U.S. intelligence and targeting procedures.” The demonstrations continued, and Washington’s explanations were considered inadequate, insincere, and incredible by most Chinese—giving rise to four core PRC demands: “apology,” “conclusions,” “punishment,” and “compensation.”23 The entire episode dragged on for months, leaving the scar of deep distrust in both countries from which the relationship had not fully recovered more than a decade later. Why did this episode last so long? What accounts for its dynamics?

At the time China’s leaders needed a compelling explanation for how the bombing had happened so that their people could feel that the regime stood for their national interests, dignity, and justice. The explanation offered by the United States, however, simply was not credible to the average Chinese person,²⁴ and therefore the CCP leadership could not accept what its own people would categorically reject. Shortly after the bombing, a Chinese vice-minister expressed the general frustration and anger, saying that PRC citizens believed Americans were more concerned with Bill Clinton’s peccadilloes with Monica Lewinsky than with the death of Chinese at U.S. hands.²⁵ U.S. undersecretary of state Thomas Pickering personally delivered Washington’s official explanation one month after the incident. A Chinese interlocutor explained how the U.S. explanation was viewed: “Actually, the Pickering report [given to the Chinese some days before] hasn’t offended any U.S. department, but it offended the Chinese because they think it is too far from the truth. The [Pickering] report mentions three maps. . . . Pickering mentioned a dozen such mistakes, a probability of one in a million. It is hard to accept such an explanation.”²⁶

From the vantage point of 2013, I have yet to find a Chinese person who believes the tragic incident was accidental. The point here, however, is not to discuss how the misadventure happened, how the crisis was managed, or what lessons in crisis management might be drawn—this largely has been done in an excellent edited volume by Michael Swaine and Zhang Tuosheng.²⁷ Our current purpose is to understand how domestic constraints shaped Chinese leadership behavior in the bombing’s aftermath.

Once public opinion is aroused, this provides an opening for various Chinese bureaucracies to promote their interests and to express shared outrage. The military and propaganda apparatuses were quick to see such an opportunity with the bombing incident, and of course the most ungenerous interpretation of U.S. motives was fully consistent with their organizational cultures. The military saw an opportunity to advance its budgetary and other organizational interests. As to the propaganda apparatus, it is one of the least progressive gears of the Chinese bureaucratic machine, and it saw its chance to whip up nationalism, which it did with substantial television time devoted to the incident. As one senior military person put it to me shortly after the event, “‘The world’s two worst propaganda machines, China’s and CNN, play off each other.’”28

In this context, Jiang Zemin and the Chinese civilian leadership sought to understand what had happened; manage domestic bureaucratic politics; manage student outrage (by selectively letting student demonstrators into the embassy quarter but keeping the numbers manageable); and minimize damage to China’s long-range interests by maintaining minimum communication with the United States. Initially, there was lack of Chinese leadership consensus about what course to take, accounting for lack of responsiveness to President Clinton’s efforts to speak directly to President Jiang in the tragedy’s immediate aftermath. Even domestically Jiang seemed to be keeping a low profile; one popular joke about his seeming absence was: “Chinese police stations received missing-person reports on Jiang [Zemin] and Zhu [Rongji].”²⁹

Sometimes public opinion in China has become an independent force that Chinese leaders can, at best, benignly manage. At other times, the center may believe it advantageous to arouse popular indignation—always running the risk that, once aroused, popular passion could veer in antigovernment directions. Within the government, different bureaucracies use public opinion to legitimate their own policy proclivities and interests, making it hard to reach consensus—sometimes “the center” is not of one mind. The strategy Beijing adopted to deal with this NATO bombing crisis was to minimally communicate with the Americans while making demands for satisfaction, to permit controlled demonstrations, and to let time heal the situation. It wasn’t simple or pretty, but U.S.-China relations lived to see another day.

Economic Forces

Premier Zhu Rongji’s visit to the United States in early April 1999 offers a good example of domestic economic constraints on foreign policy. There was hope in China’s upper leadership that this U.S. trip might close a deal with Washington on Beijing’s entry into the WTO, after well over a decade of negotiations. One think tank analyst delineates how Chinese domestic politics had gotten in the way of this deal for so long:

Three periods on WTO [accession negotiations]. If not for Tiananmen, we would have been in. In 1992/1993, China could have joined WTO but the [Chinese] auto industry implored [that China not join]. This time, 1997/1998, also [the] internal factor played a big role—for example, the SOEs and the workers. Demonstrations and hunger strikes. Students are manageable, but workers are even more difficult to manage. “Everyone knows that if China opens up most SOEs are finished.” Zhu Rongji said, “Three people are doing one job; one is doing, one is watching, and one is making trouble.” Zhu went to inspect SOEs in Manchuria in 1998 and said this (a couple of months ago).30

In the lead-up to Zhu’s 1999 mission to the United States, President Jiang Zemin and Zhu worked together to override vociferous popular and elite opposition and put together what they viewed as a workable offer to Washington concerning WTO entry terms. There had been three meetings of the Standing Committee of the Politburo and full Politburo to decide whether Zhu should even go to the United States and related issues.³¹ Once Premier Zhu arrived in Washington, however, it became clear that, fearing adverse labor union and congressional reaction, President Bill Clinton was unable to promptly accept the offered terms. The United States was constrained by domestic politics as well! To make matters worse for Zhu and Jiang, the Clinton administration went on to make Beijing’s offered concessions public.

Premier Zhu returned to Beijing amid a hail of criticism from PRC interest groups arguing that he had offered Washington far too much. This was an outcome Zhu had been greatly concerned about prior to his U.S. trip, telling members of Congress visiting Beijing: “I can tell you they [my domestic critics] won’t accuse Mrs. Barshefsky [the U.S. trade representative] of trading principles. Chinese people will accuse Zhu Rongji [me] of trading principles.”³²

To make matters worse, this was not a time any Chinese leader would have wanted to appear excessively pliable in the face of Western demands widely perceived in China to be unreasonable. Jiang Zemin and Zhu Rongji were well down the track of what would become a layoff of more than twenty-five million state-owned enterprise (and other) workers,³³ a consequence of restructuring the Chinese economy to make it more competitive ahead of WTO accession and the ensuing global competition it would bring. There were legions of unhappy, unemployed workers and fearful managers throughout the PRC. There were also upcoming meetings of the NPC, and top party officials feared that voting at the NPC might publicly reflect the dissatisfaction.34 Consequently, Jiang and Zhu had to let things cool down for several months (as did Bill Clinton in Washington), with the two sides finally reaching agreement in November 1999. China entered the WTO at the end of 2001.

Thus far we have presented economic considerations as a constraining influence on Chinese external behavior—but the quest by domestic groups for economic opportunity can also influence the face China presents to the world. A core feature of Deng’s reforms was to provide economic incentives to increasing numbers of actors, even those who were somewhat removed from direct state control. Since the state’s capacity to regulate these actors has not kept up with the global reach of their activities, one finds Chinese entities (whether corporations, individual or collective entrepreneurs, or local governments) promoting their parochial interests on a global basis, sometimes at the nation’s expense. Answering questions such as what constitutes “China” as an international actor and “who speaks for China” are becoming complicated by economic decentralization in the absence of a rule of law and well-developed regulatory institutions.

The above examples illustrate the multiple ways domestic considerations affect foreign policy in China—bureaucratic politics, mobilized citizens, economic constraints or economic opportunities, and the need for relevant international partners to simultaneously be in a permissive domestic environment. Domestic considerations, however, are not the only factors shaping foreign policy: interdependence, while not entirely distinct from domestic politics, is a growing force, inasmuch as it reshapes the domestic playing field, its actors, and their incentives.

INTERDEPENDENCE AND FOREIGN POLICY

Globalization and interdependence have altered the way China’s leaders and its citizens view the world. The PRC’s stake in a stable global economy became obvious to many of its citizens as the global financial crisis of 2008 unfolded, with one very senior Chinese bank official explaining to American visitors: “The real thing that is hurting us is the Western recession. Trade is 79 percent of our GDP—38 percent is exports, and of this, 18 percent is exports to the U.S. and 20 percent to Europe. In 2007, there was 11 percent growth (2.7 percent of this was from net exports). Now export growth has got us [down] to 9 percent.”35

Globalization and interdependence have altered domestic politics by creating linkages that make China more reliant on the world for food, energy, and export markets. And this reliance and interconnectedness are not just an urban phenomenon; farmers are exporting significantly, so they too have interests beyond China’s borders. As the mayor of Zhangzhou City (Fujian) said to visiting American foundation leaders in 1993, “We export a lot of mushrooms to the United States. . . . We export thirty thousand tons of mushrooms to the United States. Now we export asparagus, clothes, and shoes to the U.S. market. We have two cities that want to have relations [with us]—Cedar Rapids [Iowa] and Salinas [California].”³⁶ For much of China’s citizenry in 2013, international markets are a fact of life, with around ninety million employed in export manufacturing and total employment in export production (including agriculture and services) at one hundred million—about one in eight working Chinese.³⁷ Officials at both the local and central government levels rely significantly on revenues from customs duties, on taxes derivative of foreign participation in the Chinese economy, and on revenues from China’s domestically owned export-oriented enterprises. Local leaders are quick to acknowledge this powerful interdependence—Shanghai’s mayor Xu Kuangdi noted that in 1998 one-third of Shanghai’s GDP came from foreign-invested enterprises.³⁸ Beijing may be about high politics, said one think tanker, but Shanghai is “‘most concerned’” about “‘executive jets.’”³⁹ Globalization creates new constituencies even before taking into account the corrupt links abroad that enrich officials with gatekeeping functions throughout the system.

Interdependence is not just about money and employment; it also is about acquisition of technology and know-how from abroad that will enhance national capability to continue to move up the value-added chain—a key to China’s future. Interdependence does not make international conflict impossible, and indeed it can create conditions that make conflict even more destructive should it occur, but it does provide incentives to keep conflict with major partners manageable.

There is the thinnest of lines between interdependence and dependence. At the onset of the reform era Chinese leaders wanted to avoid dependence rather than to achieve whatever the gains of interdependence and comparative advantage might be. “Self-reliance,” the mantra of the 1960s and much of the 1970s, was the shibboleth that Deng shattered with his “open policy.” The real fears of dependence centered on the economic and military realms. In the security domain, Mao Zedong (as well as Deng in the early reform period) was scarred from interactions with Moscow in the 1950s and 1960s, convinced that the USSR had sought to make China a security vassal. Vice-Foreign Minister Qiao Guanhua explained this to visitors in 1973: “Khrushchev also held strategic products—the atom bomb—therefore thinking he could strangle China. In 1957 they said they would cooperate with us, producing a bomb, but in 1959 they tore up the contract. But he [Khrushchev] spoke directly to the Chinese people saying, ‘You are so poor you don’t even have trousers to wear and you think you can produce a bomb.’ He said this in 1960, and the day after his downfall in 1964 we exploded the bomb.”40

In the economic realm, from the 1950s until the early 1970s Washington and its allies placed an embargo on the PRC. After this period of enforced self-reliance, there remained in the early years of reform (and to some extent even today) a fear of dependence and a belief that it was foolhardy to depend on others. In 1973 Michael Blumenthal asked Vice-Foreign Minister Qiao, “To what extent does self-reliance influence trade?” Qiao’s instructive reply was “The main things [will be produced] ourselves—grain, you [America] produce a lot of grain, but if China stops producing for one year could you supply us?”⁴¹ Of course, the fact that the United States used food as a weapon only reinforced PRC determination not to become nutritionally dependent at that time. A measure of how attitudes have changed is clear in PRC Ministry of Agriculture statistics and an explanation from the PRC’s Development Research Center in 2012: “Along with the rising trade volumes, there has also been a growing trade deficit in the agricultural sector. In 2011, the agricultural trade deficit rose 47.4 percent to $34 billion, whereas in 2004, China was still an agricultural net exporter. . . . China is already the world’s largest importer of soybean and cotton and has become the largest agricultural export market for the U.S. since 2010.”⁴²

One of the clearest expressions of this Chinese strand of thinking on interdependence was provided by a person knowledgeable about how Jiang Zemin was briefed prior to his 1997 trip to America. The Chinese president was searching for a positive way to intellectually frame his U.S. trip, and he decided to make the argument that economic, security, and political interdependence provided the compelling rationale for cooperative U.S.-China relations. The conversation Jiang had with his advisers is recounted below:

In 1997 in preparing for his trip to the United States . . . Jiang Zemin asked . . . formally what ought to be his strategic view for his trip to the United States. . . . [The person responded that] his trip’s strategic viewpoint should be built around the notion of common interests. Jiang asked what they were. . . . The five common interests were (1) the avoidance of conflict; (2) neither side can do without the other in the economic realm; (3) both sides need a stabilized Asia in both the security realm and the economic stabilization realm [the person had in mind the Asian financial crisis at this point]; (4) transnational issues, but of course at this time antiterrorism was not so serious, rather drugs, human smuggling, and environmental protection; and (5) our leaders’ personal interests in both countries. With respect to this latter point, what . . . [this person said] means is, “If a leader deals with it [the bilateral relationship] well, they will be great leaders.”43

This same respondent said that despite the many subsequent issues that negatively affected bilateral US-PRC relations since that briefing to Jiang in 1997 and his trip to the United States (the 1999 NATO/US bombing of the Chinese embassy in Belgrade, 1999 moves by Taiwan president Lee Teng-hui toward what was perceived in Beijing as separation, the 2000 election on Taiwan of independence-minded Chen Shui-bian as president, and the 2001 US-PRC military aircraft collision near Hainan Island), interdependence was still a reality: “‘We have experienced so many shocks, but these points [the five mentioned in the quotation above] still are there after all. . . . They are becoming more important than five years ago.’”⁴⁴

Turning to the era of Hu Jintao, one of his very senior foreign policy advisers argued that economic interdependence is stronger glue for bilateral relations than a common strategic enemy such as “the bear to the North” during the 1970s and early 1980s or counterterrorism in the post-9/11 era. He continued:

Take all this, it would give us a solid foundation for U.S.-China relations. The volume of trade between our two countries is very big. So “I believe the very development of China provides opportunity for the United States and development of the United States provides China opportunities. Our relationship should not be based on external factors. So our relations today are much stronger than in the 1970s and 1980s. Because back in the 1970s/1980s we had very little to give you [the United States]—poor/backward. But in the past twenty years, its [China’s] road has implications, but in a phrase, the road we are taking is integration into the world, not separation, and this is win-win for our two countries.”⁴⁵

Notably, at the opening of the new millennium, China became a major exporter of capital—gaining an ever growing stake in the stability of the entire international economic system, not to mention in the prosperity of the United States (with over half of the PRC’s foreign exchange reserves denominated in U.S. dollars). This was signaled to me in a 2002 meeting with then minister of finance Xiang Huaicheng, as recounted in my notes: “‘You know, China is now the number one foreign purchaser of U.S. Treasury notes. . . . We have a current holding of U.S. Treasury notes of $80.9 billion [outstanding]. Further, this is not all the U.S. financial instruments China holds.’ He noted that they also have corporate bonds and the bonds of localities and municipalities in the United States. The current outstanding total of all these financial instruments is $150 billion. ‘So, you can see we have a great deal in common.’”46

With such a proportion of its assets denominated in dollars, China has a strong interest in not having the U.S. dollar continually depreciating. As one of China’s chief economists explained to members of the U.S. Congress, “Your biggest problem is the fiscal deficit—your dollar will go down and down. If your dollar drops, it costs people [China] who hold reserves in dollars.”⁴⁷

Fast-forward about a decade to 2011: with the United States alarmed by its weakening international credit rating, and its fiscal and credit health in serious jeopardy (with China the single biggest foreign holder of U.S. Treasury and agency debt), Vice President Joseph Biden felt compelled to reassure a Chinese audience he was addressing about the security of China’s massive U.S. dollar-denominated asset holdings: “You’re safe. Please understand that no-one cares more about this than we do, since Americans own 87 percent of all our financial assets.”⁴⁸ Similarly, on her first trip to Asia as secretary of state in February 2009, shortly after the fall 2008 collapse of Lehman Brothers, Hillary Clinton said to a Beijing audience, “By continuing to support American Treasury instruments the Chinese are recognizing our interconnection. We are truly going to rise or fall together.”⁴⁹

Finally, in addition to the obvious economic interdependence, there is certainly political interdependence, as Jiang Zemin’s advisers pointed out to him in his briefing for his 1997 trip to the United States: “‘If a leader deals with it [the bilateral relationship,] well, they will be great leaders.’”⁵⁰ If political leaders in two highly interdependent states cannot deal effectively with one another and their common problems, they both run the risk of being defined as ineffective by their own constituents. During the Cold War, the litmus test for any U.S. presidential candidate was “Can he deal effectively with Moscow?” At this point in world affairs, a similar test must be administered to the custodians of the U.S.-China relationship in Beijing and Washington, respectively: “Can he or she effectively deal with Beijing/Washington?”

Despite the emphasis here on the binding qualities of interdependence, it is not an unalloyed contributor to cooperation. China’s going global has increased its points of contact and interests around the world. With contact comes friction. With interests come desires to protect them. Thus increased interdependence is an impulse that tends to promote more cooperative behavior, but it also generates friction.

THE REALIST IMPULSE

Power and Interest

Considerations of power and interest are never far from the thinking of Chinese foreign policy practitioners and citizens alike. Weak states have less say than strong ones, or, as General Jiang Youshu put it at the beginning of this chapter, “A power without power will be bullied.” In talking about why the Taiwan issue is so hard to resolve, President Jiang Zemin put it in very straightforward terms: “Why is a solution so elusive? I was thinking and wondered if I should share my frank thoughts with you before this meeting. I think of an analogy. Taiwan has a population of 20 million, and us, 1.2 billion. Though Taiwan sees itself as rich, but the mainland is bigger. Like a skinny and a fat person. I weigh over eighty kilos. Well, if we have a fight, it won’t be a problem for me to win, but if a big guy stands by him and says, ‘Don’t fight,’ I will think for a while.”51

With respect to interest, General Zhang Wannian put it succinctly: “I suggest that both sides [the United States and China] proceed from the big picture—not seek small interests at the expense of larger interests.”⁵²

Balance and stability are core interests in the realms of Chinese domestic governance and foreign policy, and for good reason—when balance and stability are lost in a society of such demographic and geographic scale, or in such a fractured region as Asia, it becomes exceedingly difficult to restore equilibrium. The cascading ramifications of instability in such circumstances can be huge and unpredictable. The cultivation of balance and stability in both domestic and foreign policy is a major aspect of leading China and has been for thousands of years. Maintaining macrostability requires Beijing to keep adjusting its specific microrelationships. In April 1991, Foreign Minister Qian Qichen told journalist David Gergen, as the USSR was rapidly declining and the United States was approaching its unipolar moment, “No one in the world wants to see one center [the United States]. Nor do I believe it is possible.”53 In the Chinese worldview, there is an expectation of fluidity and constantly shifting alignments. Shortly after the Soviet Union collapsed, Foreign Minister Qian Qichen predicted that its demise would create conditions for more conflict between Washington and its Cold War–era allies in Europe and Japan: “With the old enemy gone, conflict with [your] allies will increase.”⁵⁴

Power is central to maintaining stability and balance, not to mention achieving dominance or hegemony. The acquisition of power is the absolute precondition for survival, a lesson learned repeatedly throughout Chinese history. Invasion by the Mongols resulted in the establishment of the Yuan dynasty (1279–1368); invasion by the Manchus resulted in the founding of the Qing dynasty (1644–1911); Japan’s invasion and occupation of China in the 1930s and 1940s led to unspeakable consequences. This history—along with the record of encroachment by the West in the nineteenth and twentieth centuries—was a harsh teacher. Many late nineteenth-century and early twentieth-century Chinese scholars and modernizers simply defined China’s national task as becoming “rich and powerful” (fu qiang guojia). In twenty-first-century China an analytic industry of considerable size is devoted to measuring the nation’s growing power in relationship to its chief comparators, the United States, Japan, India, Europe, and Russia.⁵⁵ Chinese leaders and citizens alike see China as moving up the global power hierarchy and are very interested in accurately measuring that progression. However, while most Chinese citizens feel pride and empowerment in their progress toward modernization, they also know that their country has a long way to go and that the progress to date is fragile—a realization that has hit with renewed force after the initial exuberance in the wake of American difficulties and China’s continued but slower rate of growth following the global financial crisis. In 2009, 41 percent of Chinese saw their country as the world’s leading economic power—by 2012, this had declined to 29 percent.⁵⁶

Mao Zedong had power and balance at the forefront of his foreign policy thinking: in 1949 allying with the Soviet Union to offset a dynamic and threatening America, then strategically reversing himself in the early 1970s to effectively ally with a Vietnam-exhausted United States in the face of a more assertive Soviet Union. As Zhou Enlai put it to Michael Blumenthal in 1973:

We should take lessons from history. The British Empire ruled the world for more than 300 years. During World War II, Churchill told Roosevelt he would not dissolve the British Empire, but actually he did. That is the way of the world. . . . After World War II, the United States was quite overweening. As President Nixon pointed out in July, 1971, in Kansas City, to correspondents: Whenever there is trouble America just sends in troops and/or money. But America has taken care of too many world affairs. He spoke the truth. The prestige of the United States is at an undreamed of low. The United States contributed to the anti-Fascist war; that is an eternal and cannot be wiped out. The same is true of the contribution of the USSR during World War II. The people of the world are grateful to the two countries. But since the United States has overextended itself, it is impossible for it to return to its isolationist position.57

In 1982, Mao’s successors, Deng Xiaoping and Hu Yaobang, once again modified the PRC’s alignment in the Sino-Soviet–United States triangle, this time to a more equidistant position. They saw a Soviet Union of waning strength as an offset to Reagan’s more assertive America—Beijing’s “independent foreign policy” was born. It is remarkable how rapidly China moved to this more equidistant policy, which was quite clear in Zhao Ziyang’s words to a group of American governors in 1983: “Very straightforward, but not too pleasant for you to hear. The threat to China’s security comes from the United States.”⁵⁸ Later, in the era of President Xi Jinping, one of Xi’s first moves to respond to the U.S. “pivot” to Asia announced in late 2011 was to improve relations with Moscow, which was also estranged from Washington. Xi’s first trip abroad after becoming senior leader in late 2012 included Russia. The message? China has geostrategic options.

The proclivity toward balance and stability is evident not only on the grand strategic chessboard but also at China’s periphery.

Southeast Asia

The degree to which equilibrium, balance, and stability dominate Chinese thinking never was clearer to me than in Beijing’s decision to support the bloody Khmer Rouge regime in Cambodia from 1975 to 1979—a policy commitment that spanned the Mao Zedong/Deng Xiaoping divide. These two very different leaders came to essentially the same policy: support Pol Pot and his regime in order to keep Phnom Penh from falling under Hanoi’s sway and to keep Vietnam pinned down and distracted. While Americans visiting Chinese leaders at that time sought to encourage Deng Xiaoping to withdraw support from Pol Pot’s genocidal regime, China’s long-standing policy to limit Hanoi’s domination of its neighbors could not be changed through reference to humanitarian concerns. If supporting Pol Pot was the price of containing Hanoi’s ambitions, this was a price Beijing was willing to pay. In a June 22, 1979, conversation between Chen Muhua, vice-premier and minister of economic relations with foreign countries, and Joseph Califano, visiting U.S. cabinet secretary, Chen basically said: “If the Cambodian people have to pay for China’s interests, so be it.” In a conversation with Deng Xiaoping at about the same time, Deng made it clear that what bothered him was not the massacre of the Cambodian people by their own government but the fact that Vietnam’s invasion of Cambodia had created a regional (indeed global) refugee crisis.

The reason for the creation of the refugees is mainly the attack by Vietnam on Cambodia. But before that, and of course I am not going to comment on the policies of the Pol Pot group when it was in power, and to be frank we didn’t agree with some of those policies. To be frank, some of the policies weren’t popular. But at the time there were no refugees. . . . The cause of the exodus and a big number of refugees has to a certain extent been the result of the policies followed by Pol Pot. But the direct reason is the aggression of the Vietnamese troops against Cambodia, so the genuine settlement requires wholehearted assistance to give moral, material, and political help to the Cambodians, to force Vietnam to withdraw, and only after that will the problem be settled.59

Of course, giving “wholehearted assistance” to the Cambodians meant helping Pol Pot, despite his appalling human rights record. Also of great concern to Beijing was what it saw as Moscow’s growing influence in Hanoi. As Vice-Premier and Foreign Minister Huang Hua put it to an American group in 1980, “So anyone trying to harm Democratic Kampuchean forces [Pol Pot] is only helping the Soviet Union.”⁶⁰

The tendency of Beijing to try to limit Hanoi by building support among regional neighbors was again clear in 2012. In July of that year Beijing induced Cambodia at a foreign ministers’ meeting of the Association of Southeast Asian Nations (ASEAN) to frustrate through parliamentary maneuver other ASEAN members from adopting a concluding joint communiqué. The proposed communiqué would have addressed South China Sea disputes that the PRC wanted left unmentioned.

Central and South Asia

In Central Asia, there is an ongoing effort to balance Russian, Indian, and, since 9/11, American influence in the region. China’s relations with Pakistan to offset India’s power on the subcontinent demonstrate the balancing game in its clearest form. Also instructive are China’s relations with Kazakhstan and China’s leading role in the Shanghai Cooperation Organization (SCO). While America seems devoted to changing the world, China, as a rule, strives for balance, albeit a dynamic and ever-changing balance with few or no permanent friends or enemies.

North Korea

Turning to Beijing’s attitudes toward and interactions with the North Korean (DPRK) regime, the PRC applies pressure to its wayward neighbor only when the DPRK’s international behavior affects the PRC’s international interests and Beijing is reasonably certain such pressure will not create instability that could spill into China. As one of China’s senior intelligence officials explained: “‘The first Chinese interest is a non-nuclear Korea. When the foreign minister of the ROK was in Beijing, he [NPC head Wu Bangguo] said he had three nightmares: (1) a nuclear DPRK; (2) war; and (3) DPRK collapse. So our national interest is to avoid all three. Kim’s personality or ideology has nothing to do with us!’”61

China sees its main challenges with respect to the DPRK as maintaining complex balances and stability between North and South Korea, not promoting the welfare of Pyongyang’s subjects (despite famines and human rights abuses); maintaining balance among the major powers entrenched on or near the peninsula (Japan, Russia, China, and the United States); and maintaining balance and stability along its own border with North Korea, where its northeastern provinces have important economic and border security interests. Yanbian Autonomous Zhou in Jilin Province, for example, has 70 percent of its trade with the DPRK,⁶² not to mention a large population of ethnic Koreans with relatives across the border in the floundering North. Stability in the DPRK matters to the PRC, as the then vice-chairman of the Central Military Commission Zhang Wannian put it to former defense secretary James Schlesinger, “Any measures that contribute to stability are welcome.”⁶³ Moving forward in time, Beijing joined with other U.N. Security Council members to sanction Pyongyang for a nuclear test in early 2013 (Pyongyang’s third), but it supported only limited sanctions and even those only when it was reasonably sure that the added pressure would not destabilize the North Korean regime.

The Taiwan Strait

Though it is appropriate to emphasize the role of both foreign and domestic balance and stability in Chinese thinking, PRC leaders want to produce change from time to time. With respect to the Taiwan Strait, for example, Beijing remains committed to maintaining balance in the short and medium runs while tipping the balance in China’s favor over the longer term. The problem from Beijing’s strategic point of view is how to deter dangerous, secessionist moves on the island in the short and medium runs while simultaneously weakening U.S. resolve to intervene on Taipei’s behalf. With a longer time horizon in mind, Beijing pushes for a fundamental change in the Taiwan-mainland relationship, counting on a steady shift in the balance of cross-Strait economic, cultural, and military power to work its magic. In 2002, one well-placed senior Chinese scholar put it to me this way:

They [Chinese leaders] are all realists, they believe in military power, and all [of them] will think it [Chinese military power] is inadequate. In ten years [it is] unlikely to have the force to do it, take Taiwan over; after ten years [the situation] is murky. This [ten years] is the best time for Taiwan to go independent. In ten years we’ll have enough strength to deter the United States in the Strait—[in] ten years we’ll have [a stronger] air force, cruise missiles, a bigger strategic force, more warheads, including short-range missiles. If we devote 25 percent of our public military budget to these four items [above], U.S. intervention is not an option. Even if we attack without provocation, [it would be] tough for the United States to intervene. But we are not working on it at this pace. Once we have the capability, we should not have a first strike. Taiwan will become more careful as they know the U.S. might not be able to help. This [right now] is a dangerous time—[we are] getting the capability but [we] don’t [yet] have it. Taiwan may move first.64

Evolving Realist Views

There has been some evolution of realist views and attitudes in China, with the gradual appearance of serious discussion among intellectuals about the degree to which “universal values” (not Western values) should guide China’s definition of its interests and foreign policy.⁶⁵ These discussions, however, have not yet achieved a critical number of adherents among the PRC’s decision makers. If an area of proposed big-power intervention is distant from China’s immediate periphery, and the United Nations and/or a regional organization is calling for outside intervention (as was the case in 2011 with respect to Libya), under limited conditions Beijing may accede to a more interventionist, “universal values” approach, preferably not requiring any tangible PRC commitment of resources beyond diplomatic acquiescence. On the other hand, because the Libyan operation of NATO expanded from the responsibility to protect civilians into a regime change operation, when an analogous situation arose in Syria the following year Beijing adamantly opposed going down the interventionist road (as did Moscow).

Chinese who hold a strong realist, big-power orientation and articulate it with great passion also recognize the constraining impact of the domestic agenda. “‘As long as China [faces] domestic challenges, [it] won’t fight, and as it gets stronger, the U.S. [will become] more reluctant to fight.’”66

This brings us to a fundamental problem in the thinking of Chinese realists—they underestimate the resilience of the American system. Many focus on the technological power of the West, particularly the United States, rather than the power in its ideological, political, or cultural institutions, though in a fascinating poll of Chinese citizens’ views in 2012 the Pew Global Attitudes Project found that 52 percent of surveyed Chinese “like” American ideas about democracy.⁶⁷ Nonetheless, the still apparent tendency to downplay the centrality of social/value systems is reminiscent of an older strand of late nineteenth- and early twentieth-century thinking that postulated “Chinese thinking for essence and Western thinking for use” (ti yong). In mid-1979, in a remarkable moment of introspection with China’s party vice-chairman Li Xiannian as the “Democracy Wall movement” was being torn down, Li made an observation that apparently had been nagging at him—“It is very strange that in Western countries science and technology are very developed but religion is so important.”⁶⁸ Reformers and some realists influenced by interdependence in the new millennium are coming to see that national power has its origins in a complex fabric of political and social institutions, patterns of thought, and values. Innovation springs from societies organized to foster it. The problem is that to be at the forefront of innovation and technology central to national power, leaders must embrace a fluid and dynamic (open) society that ultimately threatens their grip on concentrated power.

ACTION-REACTION DYNAMICS

Beyond domestic politics, interdependence, big-power politics, and realist foreign policy thinking as drivers of China’s international behavior, another factor is gaining prominence in China’s interaction with the United States and its neighbors—an action-reaction dynamic driven by technological change. One nation’s military-related technological advance, or even the possibility of advance, can constitute an actual or perceived threat to another state, which in turn develops what it views as offsetting, defensively inspired capabilities, thereby eliciting additional technological countermeasures by the first party. This process can create an endless upward spiral of capabilities that produces more cost and less security for everyone. An example of this dynamic involves China’s 2007 successful test of an antisatellite (ASAT) weapon (which created substantial and dangerous space debris that disabled a Russian satellite in January 2013), the early 2008 U.S. use of an antisatellite weapon to destroy an aging satellite (in what many suspect was a reaction to the PRC test), and a rejoinder by the director of China’s Institute of Space Law, Li Juqian: “Judging by the current development of U.S. ASAT weapons, missiles, high-energy laser weapons, particle beam weapons, microwave weapons and micro-satellites are all effective ways to destroy a satellite. They might also be the methods that China adopts.”69

In the Chinese language the concept of maodun (矛盾 “contradiction”) very aptly captures this process in the two ideographs that make up the word—“sword” (矛 mao) and “shield” (盾 dun). The sword and the shield each have their distinct primary purpose: usually the sword is offensive and the shield defensive (though each can be used in contrary ways when necessary: a sword can block an offensive thrust and a shield can be used to smash an adversary). The user of either the sword or the shield may have defensive motivations, but the opponent fears the other’s offensive potential. Military development is thus a continual race between the sword and the shield, with eternal ambiguity as to how each may be used—feeding the distrust and innovation of the rival. As one Chinese general put it to visiting Americans in mid-2011, “‘For China [there is] no other way but to follow the tide of military development.’”⁷⁰

This dynamic is well under way in the U.S.-China relationship. Beijing understands this dynamic and its perils but, like security establishments elsewhere, is disinclined to assume the risks of not responding to the technological gains (or even possible gains) of other states. There is a long list of examples where this technological competition can be seen unfolding, including

•Mobile platforms to ensure the survivability of China’s strategic nuclear retaliatory force

•Submarine warfare—China is developing and deploying quieter submarines

•Anti–ballistic missile defenses and penetration aids—the development of dummy warheads and multiple warheads on missiles

•Stealth technology

•Antisatellite capabilities

•Innovative missile capability to degrade U.S. aircraft carrier advantages

•China’s move into space

•Cyber-warfare and intelligence capabilities

In each realm, America has existing and developing capabilities that China has sought to address or neutralize, so a dynamic of technological competition has set in between Beijing and Washington—which is sometimes reflected in the behavior of some of China’s neighbors as well. Professor Sun Zhe of Tsinghua University put the Chinese perception in terms that mirror how many Americans see their situation: “We need to be able to defend ourselves, and our main threat, I’m afraid, comes from the United States.”71

The thinking in China to which this action-reaction dynamic gives rise is illustrated by one of the PRC’s foremost strategic analysts. In this quote he was responding to a question about how Beijing thinks about ensuring the security of its nuclear retaliatory force as Washington develops and deploys anti–ballistic missile (ABM) capabilities and transfers some of this capacity to U.S. friends and allies in Asia and elsewhere.

What number of warheads does China need? It depends on how much [U.S. missile] defense we have [to deal with]. The U.S. earmarked four hundred to five hundred strategic weapons for China without missile defense. So it depends on what we [China] assume the survival rate [of Chinese missiles will be]. Then [we have to consider] what it takes to deter [the United States]. All these assumptions are superficial. . . . If the U.S. builds a space-based program, then we go for submarines. However, the U.S. may not build the antimissile system because the president changes, technical problems, and it will take a long time to deploy the system in any case. But we will go more mobile, MIRV [multi-independently targetable reentry vehicles], more survivable platforms, greater numbers, countermeasures, and penetration aids and decoys. So they [U.S. military planners after dialogue with China] can watch us and not feel surprised. We are not sitting idle. We are smarter [than to just get in a shouting match with Washington]; we don’t want a rhetorical war. We don’t need to stop the U.S. from enhancing its security, we only need to offset the bad parts for us.⁷²

The United States has employed much the same logic in determining its program of strategic development. In June 2012, China launched its Shenzhou 9 manned space capsule with a three-person team aboard (carrying China’s first woman into space) to link up with an orbiting module, Tiangong 1. The mission succeeded in docking twice, once robotically and once manually, thereafter returning safely to Earth. The year before, Beijing had unveiled plans to accomplish a manned lunar landing by 2020, and “its space agency has publicly suggested establishing a ‘base on the moon as we did in the South Pole and the North Pole.’” One U.S. reaction has been to call for action to prevent a lunar land grab by Beijing, pointing to such a potential development as a “game-changer for international security.”73

This dynamic of endless reaction and counteraction can be controlled only through greater mutual transparency; dialogue on intentions and capabilities between militaries and their national command authorities; mutual restraints agreed upon in negotiations; and cooperation. The United States and China are not close to seriously following this path, though there was a strategic component to Sino-American discussions in the first Obama administration as an add-on to the Strategic and Economic Dialogue; this process was continued as the second Obama administration began. It is ironic that Washington cooperated more with Moscow on space initiatives at the height of the Cold War than is possible with China under current U.S. law and political constraints.

So how has the Chinese worldview changed and how has it remained the same as the reform era has unfolded?

In terms of change, China has become a much more complex and pluralized actor, speaking with many, sometimes contradictory, voices. Though one should avoid exaggeration, China has also moved from being a relatively weak, inward-focused, and continent-bound nation to being a major international player with coercive, economic, and ideational power exerted not only regionally but globally. China’s people and its leaders now feel empowered to be full and equal participants in regional and world affairs. Beijing is increasingly comfortable with the institutions of the global economic order—wanting to boost its influence within them—and uncomfortable with the U.S.-led security order, founded as it is on bilateral and multilateral alliances of which China is not a part. The United Nations–led security institutions are much more congenial to Beijing.

What has remained relatively unchanged is the Chinese foreign policy tradition of realist thinking, situational ethics, and a deeply embedded sensitivity to being “bullied.” Thus productively managing U.S.-China relations is possible, but it will not be simple; it will be made more complicated by a Chinese leadership that pays increasing attention to deeply embedded nationalism and public opinion.

The four contending forces shaping Chinese foreign policy discussed above lie in uneasy juxtaposition. Domestic politics can be a force pushing for either cooperation or conflict, depending on the context. Often, however, domestic politics in one country feeds caution and anxiety among outsiders, and when domestic politics feeds nationalism the ensuing sense of national empowerment can be problematic. Interdependence is a growing reality, and as China’s economy and society continue to become more interconnected with the world, domestic politics is itself changed. While interdependence should moderate international conflict, it does not inoculate against it. In the aggregate, interdependence boosts the costs of conflict and therefore reduces its likelihood.

To wade into more pessimistic waters, nation-states feel compelled to constantly assess the power, intentions, and capabilities of other key actors; all these assessments are subject to misjudgment. Concern with the distribution of power among states and its uses breeds wariness that is exacerbated when there is a new, dynamic, and very large entrant into the front ranks. For example, in 2011, Vice-Minister of Foreign Affairs Mme. Fu Ying made clear a widely shared perception in her country that power among nations “is [in] a process of diffusion. It used to be within the Western world, but now it is also diffusing to a wider world.”74 In turn, all these assessments are made more subject to error by technological developments that relentlessly jeopardize the capacity of each state to protect itself.

In short, there are reasons for both hope and concern about the character of China’s future global interactions. Interdependence and an imperative to focus on domestic needs will create incentives for cooperation for a long time. On the other hand, nationalism and the action-reaction cycle generally will not be constructive. How these contending forces are managed by the leadership of the United States and China will go a considerable distance in defining the character of the twenty-first century. There is a struggle for the soul of Chinese foreign policy between the realities of interdependence and the impulses of assertive nationalism.