CHAPTER 7

Negotiation Chinese Style

You all understand China, but your new leaders don’t [meaning the incoming Reagan administration]. It seems they do not regard China as a sovereign country. This represents a holdover of imperialism. It is out of step with the times. We should establish equal relations between two independent sovereign countries which respect each other. It is ridiculous to regard interference in China’s internal affairs as their right. It is a political short sight. They aren’t looking at it from the overall situation.

—Vice-Premier and Foreign Minister Huang Hua, November 20, 1980

We will have $350 to $400 billion in imports in this five-year plan [1991–95], so I am sure the United States will regard China’s potential highly. For example, we have ordered twenty aircraft from Boeing and twelve from Airbus this year. President Clinton says his first priority is the economic revitalization of the American economy. If he misses out on the Chinese market, it won’t help his efforts to revive the economy. So please convey this message when you return.

—Premier Li Peng, in talking about President Clinton’s threat to not extend most-favored-nation tariff treatment to China, April 3, 1993, Beijing

[Interviewee]: “Taiwan must be resolved this century. We negotiated land borders because we were weak, but if [we are] stronger in the future [we] may not need to negotiate in the South China Sea.”

[Lampton]: But you negotiated with Burma and Vietnam and they were weak, so it suggests that China made equitable arrangements even when it was stronger. And China recently concluded a border agreement with Russia when it [Russia] was weaker, and it appears to have been an equitable solution.

[Interviewee]: “They [the deals with Russia] were concluded while Russia was weak. By yielding to Burma we got an ally to confront India. We don’t want to push now on the South China Sea and have them oppose us on the Taiwan [issue].”

—Senior Chinese scholar, 2002

In this day and age China’s comprehensive national strength is much greater, Beijing’s negotiating resources and ploys are more robust, and the interlocutors with which the PRC must deal are far more numerous and varied than when Deng Xiaoping returned to the stage in mid-1977. More than thirty years ago, at the beginning of the reform era, China negotiated from a position of weakness—principally for more resources in order to modernize, to enhance its security, and to enter the principal organizations and regimes of international life from which it was absent. In the twenty-first century, China is now negotiating not only to obtain the resources it requires to further modernize and achieve middle-income status but also to deploy its growing resources and to protect its growing global interests.

Negotiation and diplomacy are related tools of statecraft by which one party induces the other to make decisions and reach agreements consistent with its preferences. Threats, inducements, and intellectual persuasion are the instruments used by Chinese negotiators—indeed, all negotiators. The skillful practitioner achieves optimal results with the least expenditure of power resources. Negotiation and diplomacy can be the means to achieve limited or expansive aims and to avoid conflict and war—or to prepare for it, sometimes providing partial insight into the opponent’s intentions and capabilities. Negotiations can also be theater directed at outside audiences. As Zhou Enlai said in December 1946 of the then ongoing talks with Chiang Kai-shek’s Kuomintang, “We turned the negotiations into a means of educating the people.”1

Negotiation or bargaining is a central feature of Chinese governance and the policy-making process, as explained in chapter 3. How the PRC negotiates with foreigners is the topic of this chapter. As Henry Kissinger observes in his book On China, Mao Zedong, during his long rule of the PRC, dealt himself and China into the big-power game with a very weak hand—playing one superpower off against the other for nearly three decades.2 “Mao,” Kissinger tells us, “was able to draw on a long tradition in Chinese statecraft of accomplishing long-term goals from a position of relative weakness.”³

Just how much attention the Chinese pay to the art of playing a weak hand was driven home to me in a conversation with a senior Chinese business leader about North Korea’s modus operandi. Why, I asked, did China continue to send food and other material aid to a regime that repeatedly harmed China’s interests? The more Pyongyang hurt Beijing, the more aid the Kim dynasty seemingly expected and often received. The Democratic People’s Republic of Korea (DPRK) must have some pretty good negotiators, I observed. With a mix of admiration for the strategy he described, and frustration given its consequences for China, he explained that Kim Jong-Il, in fact, blackmailed Beijing: “‘We can either send the food to North Korea or they will send the refugees to us—either way, we feed them. It is more convenient to feed them in North Korea than in China.’” Further, he added, “‘Kim Jong-Il is not even grateful for the food. His view is that North Korea is the front line against the Americans and that North Korea serves China’s interests by keeping the Americans away from the Chinese border. So China should pay for this service—it is not a favor Beijing does for Pyongyang.’”⁴

THE CHINESE APPROACH TO NEGOTIATION

Negotiation is a central feature of Chinese domestic and international behavior and is core to Chinese thinking. Whether in a domestic or international context, individuals, groups, organizations, and nations are intertwined in a complex web of interdependencies and relationships. One entity’s actions affect many others. The Chinese are so attuned to networks and relationships that there is a specific vocabulary for this realm of human endeavor: guanxi (relationships); lingdao guanxi (leader relationships); yewu guanxi (professional or consultative relationships); guanxiwang (network of relationships); and guanxixue (the study of relationships). This brings us back to Joseph Needham’s concept that Chinese thinking is “organismic,” a cognitive approach in which thinking is not linear but premised on interconnection and mutual influence. For Chinese, networks exist in an ever changing environment in which the needs, capabilities, and intentions of all parties are in constant flux. Given the “situational ethics” calculus described in chapter 4, as the relative resources of parties wax and wane, as circumstances evolve, and/or as China’s needs and interests change, relationships must be constantly adjusted. Such adjustment can occur through physical struggle or through explicit or tacit negotiation, with negotiated adjustment generally preferable to open conflict.

This emphasis on relationships, flexibility, and adjustment accounts for the ritual surrounding the start of every meeting with Chinese counterparts, namely a description of the character of the parties’ relationship and its history—are you an “old friend,” a “partner,” an “adversary”? In foreign affairs, a conversation often starts with each party sharing its strategic perspectives—who is gaining in influence, who is losing it, what are the macrotrends and the broader context for the relationship? The character of the two parties’ relationship directly affects the objectives of a negotiation, the calculations of costs and benefits, and the tools employed. If you are an “old friend,” such status obligates you to be solicitous of Chinese interests. If you have been an adversary, you should prove your sincerity. The Chinese are far more process oriented than Americans, who tend to be more outcomes oriented. As an adviser to China’s senior leaders aptly put it:

Define the relationship. Are we friends? If we are friends, if you say you have concerns [about the sale of weapons-related things to, say, Pakistan], then I should say, sure we are friends, I will sell, yes, but I will sell less, and you should compromise too. The American way is to define interests, and then we’ll define our relationship. We don’t really look at an issue from the viewpoint of interest [e.g., proliferation]—our first concern is the relationship. We [Chinese] should define our interests more. You should pay more attention to relationships and we should pay more attention to interests.5

At the outset of a negotiation, the Chinese side may have several objectives, not all of which necessarily easily coexist with one another or are in a clear order of preference. The objective is often indeterminate, with the Chinese party seeking to obtain the optimal combination of outcomes given the varied possibilities that emerge in the course of the negotiations themselves. Americans often enter discussions with a clearer objective, thereafter judging their success or failure by the degree to which this objective is achieved. Lucian Pye attributed the absence of clear Chinese goals when negotiating to the following: “Once the Chinese have achieved their general principles, it is often hard to discern precisely what they are after because of their use of ploys, tactics, and gamesmanship, often of a subtle nature, but frequently crude and transparent.”6 I attribute the lack of clarity of objective(s) to (1) the search for the best deal after all possible permutations of gains and losses have been explored and considered, and (2) the need for the Chinese side to bargain among itself first, before accepting the final deal. Often the Chinese discover what they want in the course of negotiation. A good example of this process is given by a Chinese general who tried to explain China’s varied objectives and negotiating posture concerning nuclear weapons programs in North Korea:

[In dealing with the North Korea issue, we have] three principles: stability, nonproliferation, and cooperation with the U.S., but sometimes these are hard to balance, so China is cautious, prudent. We make it clear that we won’t accept the DPRK with nukes, but on the other hand we want stability, and probably the United States and other powers too. Also, China wants stable and cooperative relations with the U.S. So we want to say, “The thinking of people in China and the West is different. You go from the concrete to strategy; we from strategy to the concrete. We always say, China, the city, the street, the number, but you do the opposite; number, street, city, state, and country.”⁷

In the Chinese approach to negotiation, the power equation between parties is critical. At any moment, a specific relationship is characterized by a particular distribution of benefits and deprivations that reflects the comprehensive power balance among the parties. For Chinese, there is every expectation that as the power balance shifts the distribution of benefits and deprivations will adjust accordingly. A strong China should get a better deal than a weak China. A strong America needs to make fewer concessions than a weaker one. This is why Chinese postglobal financial crisis perceptions of American decline are so important and have ramifications throughout the relationship.

The broad and dramatic increase of China’s comprehensive national power has been notable since 1977, whether in terms of coercive, economic, or ideational strength, though core elements of soft power are anemic⁸—What does China stand for in the realm of values that is globally attractive? What is “brand China” that will attract others? From the 1840s on, when China was weak and emasculated—a consequence of both its own inner decay and the rising industrial and military power of the West and Japan—its negotiating leverage was greatly diminished compared to what it had been historically, at the zeniths of the great dynasties. In the late twentieth century and into the new millennium, however, with mounting national strength, PRC leaders and citizens believe the time has come to renegotiate arrangements that were made when China was in a weak position (e.g., Hong Kong and Macau have already been brought under the wing of the PRC, and the process is under way with respect to Taiwan, at least in terms of economic integration). This likely is part of the dynamic of more assertive PRC claims in the South and East China Seas in the new millennium, though part also is a reaction to the activities of others.

A parallel Chinese objective is to make sure that China occupies its “rightful place” in global institutions that were formed and grew after World War II and during the Cold War, when China was much weaker and comparatively isolated. Incursions such as sending uninvited warships and reconnaissance vessels up to the PRC’s Twelve-Mile Limit had to be accepted when China was weak (and the range of its shore batteries limited). Today Beijing is not so pliant or so poorly armed. China will not necessarily use force to effect these changes, but there will be continual negotiations with Beijing to see how old arrangements can be adjusted in light of this new power equation. This is an era bound to involve frictions, and, if these are not managed carefully, dangers lie ahead. The PRC leaders or populace could misjudge what their new power entitles them to, and the major post–World War II powers and those under the U.S. security umbrella could overestimate their capacities. The possibility of miscalculation is inherent in this situation.

In prior scholarly analyses of the Chinese communist negotiating modus operandi, a reified, timeless quality creeps into exposition—it can seem as if nothing about negotiating with Chinese has changed for decades, indeed centuries. Though evocative, this is not entirely true. When Deng reappeared on stage in mid-1977, there were few channels through which the outside world had authoritative contact with PRC organizations and citizens, in any domain. Every interaction was funneled through a minuscule number of government choke points: in commerce there were about a dozen foreign trade corporations, a ministry, and the Guangzhou Trade Fair; in education and culture, there were the Ministries of Education and Culture; and most other contacts were mediated through the foreign affairs bureaucracies in “units” or territorial administrations, all ultimately connected to the Foreign Ministry. By way of contrast, in the second decade of the new millennium, the number of Chinese entities with whom one negotiates is almost infinite. The PRC is far more permeable and pluralistic than it used to be; consequently, the negotiating problem, and the opportunities, are not entirely the same. For the non-Chinese party to the negotiation, for example, there are now opportunities to play localities off each other, local administrations off the central state apparatus, private entities off each other, and the private sector off the public sector. The central state and the party try to reduce these opportunities, but it is increasingly difficult the more permeable China becomes.

In 1977, the Communist Party maintained a unified message in single negotiations and across negotiations, to a remarkable degree. Now the diversity of messages, points of view, and interests being promoted in China has burgeoned, reflecting the expanding pluralism of bureaucracy and society that has been one recurring theme of this volume. As we emphasize the continuities of Chinese negotiation thinking and practice, therefore, we must keep in mind that today there are a far greater number of more diverse negotiating parties than ever before in China’s long history.

It is of considerable importance, therefore, how China negotiates using all its instruments of comprehensive national power. Much has been written on the Chinese art of negotiation, most notably by Lucian Pye, Carolyn Blackman, Richard Solomon, and Kenneth Young.9 Preceding their work and dating back to the early days of the Nixon administration, the U.S. Congress and executive branch devoted considerable effort to understanding Chinese negotiation approaches. This early work, given political leadership by Senator Henry M. Jackson, drew upon writings about England’s early interactions with China in the 1830s, protracted negotiations with Beijing during the Korean War, and more recent negotiating experience.¹⁰ Work by Fred Ikle summarized what had been learned about communist negotiating styles from dealing with both Moscow and Beijing.¹¹ The general orientation of all this work was that there was a Chinese (communist) style of negotiation and that America’s diplomats had best be prepared for it. My purpose here is not to recapitulate their work but rather to examine how Chinese leaders have used negotiation to pursue state interests in the era of reform and to assess how, as China’s power has grown, its approaches have evolved. Below we examine reform-era negotiating practices from a number of angles.

PREPARING FOR NEGOTIATION

Chinese negotiators do their homework. In every interaction, they have a command of the prior negotiating record that usually matches, and often exceeds, the knowledge of those across the table. In the U.S. political system, with its election-driven personnel turnover that penetrates down many layers in governmental bureaucracies, and with the defensive removal of many relevant executive branch records when one political party assumes power from the other in a transition, each new U.S. administration only gradually discovers what happened on its predecessor’s watch. This reality contrasts with the promotion practices in the Chinese bureaucracy, which produce negotiators who spend most of their career in the same general bureaucratic silo. The American party to a negotiation is often disadvantaged by the Chinese side’s level of preparation and continuity. Chinese negotiators also work to create a psychological setting that works to their advantage, and they do so by first learning as much as they can about the individuals with whom they are dealing—knowledge that becomes evident in the course of the interaction.

Chinese interlocutors pay attention to defining at least three key aspects of the negotiating context: the moral matrix for discussions; the power relationship between or among the parties; and the arena in which negotiation occurs.

Setting the Moral Matrix

The moral matrix involves the creation of a sense that the Chinese side is morally upright and united, that Beijing occupies the principled high ground, and that, therefore, moral rectitude requires any opposing party to concede, or at least compromise.

This emphasis in Chinese thinking was first given expression by Sun Tzu when, in talking of the tools of war, he said: “The first of these factors is moral influence. . . . By moral influence I mean that which causes the people to be in harmony with their leaders, so that they will accompany them in life and unto death without fear of mortal peril.”12 Yan Xuetong, a Tsinghua University international relations specialist, goes back to the pre-Qin era (prior to 221 BCE) in his recent work, arguing that Chinese thinking with respect to dealing with outsiders has always emphasized the independent power conferred by moral superiority.¹³

The underlying moral dimension that a Chinese negotiating team chooses to emphasize changes depending on the issue and the power relationships of the parties involved. In the 1970s, for example, with the Cultural Revolution decade still under way, America and China cautiously approached each other on the long road to normalization while Japan and the United States were allies. Initially, Beijing sought to drive a wedge between the two allies by emphasizing the discordance that Washington’s support for Japanese defense capability presented in the face of past Japanese World War II atrocities and its presumed future aggressive inclinations. In an August 1971 conversation with American scholars, Premier Zhou Enlai and Yao Wenyuan argued that it was a moral imperative to rein in the militarization of Japan. The underlying argument was an attempt to put Washington (and more particularly the anti–Vietnam War students with whom they were conversing) on the ethical defensive regarding the U.S. alliance with Japan.

Yao Wenyuan: “The revival of Japanese militarism is being fostered single-handedly by U.S. imperialism. President Nixon also admitted this point in his public statements saying that they are fostering their former enemies. . . .”

Zhou Enlai: “Yes, it is a fact that Japanese militarism is being revived because the Japanese economy is developing in a lop-sided way. They lack resources, they must import their natural resources and for markets too they depend on foreign countries. And after the war they were not burdened by paying reparations, and also for quite some time they spent very little on armaments. There is one characteristic of the development of their economy, that is, they made a fortune on wars fought by others, that is, the war of aggression against Korea and the war of aggression against Vietnam. . . . And so this lop-sided development of Japan, what will issue from it? She needs to carry out an economic expansion abroad. Otherwise, she cannot maintain her economy.”14

Then, in the late 1970s, consistent with the “situational ethics” approach described in chapter 4, as China became more concerned about the Soviet Union and as Washington and Beijing moved toward normalization, Sino-American-Japanese military cooperation to offset Soviet expansionism became the new moral imperative. As President Jimmy Carter put it, “As our ties with the Chinese were strengthened, their concerns about a possible Japanese threat diminished, and they began to urge that Japan’s defense capability be improved.”¹⁵ Chinese interlocutors did a moral about-face—suddenly Tokyo and Washington were not doing enough to oppose the “Soviet bear.”

Setting the moral matrix can also apply to functional policy realms. Take the Copenhagen Conference on global climate change in December 2009, for instance. By trying to establish the ethical baseline for decision, Beijing sought to incline whatever eventual agreement there might be in the direction of its interests. The PRC argued that justice required the United States and other early industrializers to take greater responsibility, and assume greater burdens, in addressing the climate change issue in the twenty-first century because they had depleted the atmosphere’s absorptive capacity with their emissions of greenhouse gases in the nineteenth and twentieth centuries. Basically, justice should not require the same burdens on today’s poor, yet-to-industrialize countries as would be placed on those who had gotten rich by earlier environmental depredations.16 In March 2009, China’s ambassador to the climate change talks, Yu Qingtai, stated that there were different interpretations of responsibilities for “past problems they [the United States] [had] caused.” “I expect harsh exchanges,” he said of the United States and China at the Copenhagen Conference coming up at the end of that year.¹⁷ Further, it was an issue of justice as to how contributors to the problem of climate change were defined—was per capita CO₂ emission the fair yardstick (in which case the United States had more than three times the Chinese emissions per capita in 2008), or was the absolute volume of CO₂ emission the just and appropriate standard (in which case China already had passed the United States)? Thus China frequently raises issues of justice, fairness, and equal treatment and uses them as instruments of global politics. Such discussions set the table for negotiation.

Defining the Power Relationship

Early on in a negotiation with a Chinese counterpart, one of the things that occurs is either an explicit or an implied definition of the power relationship (or trends in that relationship) existing between the two parties. A celebrated case of this was seen in Hanoi in July 2010 at the Regional Forum of the Association of Southeast Asian Nations (ASEAN), at which the Chinese foreign minister told the Singaporean foreign minister George Yeo that China was big and Singapore small and they would be well-advised not to forget it. Chinese negotiators are highly attuned to the strength of the other side’s domestic and foreign affairs circumstances, believing that diminishing or fragmenting an opponent’s domestic or international support can promote China’s interests. “Sometimes” Sun Tzu said, “drive a wedge between a sovereign and his ministers; on other occasions separate his allies from him. Make them mutually suspicious so that they drift apart. Then you can plot against them.”¹⁸ In any case, the firmness of the interlocutor’s domestic and foreign support is a key piece of information, as is Beijing’s overall assessment of the adversary’s comprehensive national power.

The Chinese use four power positions to portray themselves in the realm of international negotiations: (1) the stronger position, giving the other side little leverage to extract much, or playing the role of a solicitously helpful stronger partner; (2) the posture of the needy, weaker party, in which case the other “stronger” party has an obligation to help or rectify past injustice; (3) the posture that its power is growing, so that arriving at a deal earlier will be more advantageous to the other party than waiting (this scenario is a growing subtext in cross-Taiwan Strait interaction); (4) the posture that the two parties need each other reciprocally, requiring the flexibility and accommodation of both.

One approach to defining the power equation is to define a common opponent or problem, point out that the interlocutor’s strength is insufficient to address that challenge alone, and suggest that under appropriate conditions China can cooperate to address that problem. Part of creating “appropriate conditions” is that the interlocutor must adjust policies in other domains salient to Beijing. In 2005, a very senior Ministry of Foreign Affairs official put it candidly in the context of being asked to boost pressure on North Korea to achieve nonproliferation objectives of great moment to Washington: “‘China is ready to work with the U.S. for a peaceful, non-nuclear [Korean] peninsula. We want you to care as much about Taiwan as you want us to care about Korea.’”19 On the same topic, a PRC university-based strategic analyst more recently put it even more bluntly: “‘We hope that North Korea presents a threat to the United States and South Korea—this is in our interest. Only when we have stabilized the Taiwan Strait, then we abandon North Korea. North Korea knows this and knows now is their last chance to get nukes.’”²⁰

Indeed, this strategy of identifying a common challenge and dangling possible Chinese cooperation as an inducement for progress on another issue was part of the logic that led to the normalization of relations between Beijing and Washington in the 1970s. In the second half of the 1970s, when Soviet power appeared to be growing unabated and Washington was not outwardly proceeding toward normalization with the PRC, Beijing told other countries that the United States was a declining power and needed Chinese cooperation to effectively oppose Moscow, the true threat to the West. In Foreign Minister Huang Hua’s fall 1977 words:

The world today is more tense and less relaxed than it was fifteen years ago. Why is this? It is because of the intensified rivalry between the USSR and the U.S. One can talk about a world climate and focus on food or human rights, but the real problem of “climate” is the position of the United States, which is one of steadily declining military power. The United States over the last fifteen years has been going down in relative power. At the end of World War II the United States was supreme, but now that is no longer the case. In 1970 President Nixon said that the United States did not enjoy its previous status.

. . . The USSR, however, is unprecedentedly strong today, especially militarily. It is now successfully contending with the U.S. as it makes large appropriations for war preparations. Hua Guofeng has said that the U.S. has a defensive concern in protecting its interest while the USSR wants to attack. This is an objective fact which all people in the world recognize.21

In the new millennium, pointing out that Washington needs Beijing’s help with Pyongyang, in stabilizing the global economy, or dealing with transnational issues such as climate change or infectious diseases, is de rigueur for Beijing. In the wake of the global economic crisis marked by the collapse of Lehman Brothers in late 2008, the Chinese debated among themselves the degree to which the United States was on the decline and the opportunities this might afford the PRC. The debate lasted in the media and Chinese society until at least 2012, at which time America’s economy started growing again and the Chinese economic expansion slowed, forcing a recalibration of just how fast the United States was being eclipsed by a rising China. Indeed, a Pew poll released in late 2012 showed a 12-point drop in the percentage of Chinese seeing the PRC’s economy as the world’s “leading economic power” between the spring of 2009 and the spring of 2012.²²

In negotiations, sometimes acknowledging its own weakness better serves Beijing’s purposes. In the fifteen-year-long marathon negotiations with the United States and the GATT/WTO over accession to the global trade body (concluding with PRC entry in 2001), China argued that because of its still notable economic infirmities it merited “developing country” status that would entitle it to less onerous entry conditions than those imposed on more developed economies. Similarly, pleading lack of diplomatic clout can be a way to sidestep inconvenient demands. Beijing frequently argues that it lacks influence with countries that Washington wants Beijing to pressure—North Vietnam in the 1970s, North Korea in the 1990s and the new millennium, and Iran with respect to its presumed nuclear weapons program from 2000 on.

Sometimes China’s incapacity is genuine. From Deng Xiaoping’s earliest interaction with World Bank president Robert McNamara in April 1980, he used the PRC’s genuine underdevelopment as a principal argument for early and massive World Bank engagement with China. McNamara was struck by Deng’s open exposition on his country’s disabilities, as recounted in chapter 1. I do not know whether Deng also knew that McNamara had been in China in World War II. The former defense secretary and the World Bank leader seemed to find redemption from his prosecution of the war in Vietnam by subsequently participating constructively in international development work generally, and especially in China, where he had positive World War II memories. Similarly, President Jimmy Carter, who was in Qingdao briefly in 1949 as a naval officer, was deeply affected by what he saw firsthand in the war-torn country—obvious weakness and great potential simultaneously. The combination of early exposure to a weak and war-torn China and a sense of moral obligation (from a strong Christian upbringing) can be a factor shaping negotiations; the Chinese often have played their cards well. Carter recounts: “Once when we were discussing the Far East, I remarked that the people of our country had a deep and natural affection for the people of China. When most of the group laughed, I was perplexed and a little embarrassed. It took me a few moments to realize that not everyone had looked upon Christian missionaries in China as the ultimate heroes and had not, as youngsters, contributed a penny or a nickel each week, year after year, toward schools and hospitals for little Chinese children.”23

Akin to the “China is a developing country” line of argument is the “China is precariously weak” argument, which translates to “Pushing excessively for reform may destabilize everything, to the detriment of Chinese and foreigners alike.” Vice-Premier Li Lanqing put it succinctly enough—“The development of China’s economy will be important to world peace. Look at Yugoslavia. We don’t want more Yugoslavias. Were we to fail we could bring trouble one hundred times that of Yugoslavia.”²⁴ A very senior foreign affairs official used the same approach when speaking to American foreign policy journal editors in the late 1990s, saying, “Some talk of a China threat. Starving Chinese are a threat! North Korea doesn’t have a big population and it wants assistance, but the international community cannot satisfy their requests. ‘So, you can imagine if China were plunged into crisis—a real China threat.’”²⁵

In short, how the power equation is framed at the outset of a negotiation is key. Sometimes one encounters the strong, united China; at other times it is China that needs assistance and to which one has an obligation to help by virtue of past injustice or benevolence. At still other times, China and the interlocutors may address a common problem as equals—a problem of a magnitude that neither can resolve alone but that both can manage together. How the power relationship is framed at the outset of the interaction can signal a great deal about possible scenarios and outcomes.

Specifying the Negotiation Arena

A third dimension of the context to which the Chinese attach great importance is the character of the arena in which negotiation is to occur. When specifying the arena, there are at least two aspects Beijing considers most conducive to achieving its objectives: setting the physical and psychological stage and defining the parties at the table.

There is a showmanship dimension to negotiations with Chinese. Usually the leader with whom one is dealing has obviously given forethought to where the meeting will occur—preferring the PRC as a rule. The actual location is usually grand in scale, opulent in detail, and extremely ordered with a kind of grace that envelops the visitor—elegantly tailored and coiffed tea ladies serve the visitors amid the wafting scent of jasmine. The decor of the room often seems selected to reinforce the message to be conveyed—discussing Taiwan in the Taiwan Room of the Great Hall of the People, for example. Leaders point to the paintings and murals on the walls to make points, such as referring to mountain scenes when urging the other side to “take a long-term strategic perspective” and to view things from lofty heights. The seemingly minimal security (though it is in fact pervasive) as you enter the leadership compound and approach the PRC leader with very little hint of security conveys absolute confidence. A meeting with China’s president in the pavilion on Yingtai Island in Zhongnanhai in the middle of Beijing involves your driving a curved road to the elevated traditional building, with the president appearing like an apparition to greet you, an effect that goes some distance in conveying a clear sense of order, control, dominance, hierarchy, and, indeed, majesty that serves their purposes—perhaps to awe the visitor before discussions begin. For the Chinese, where you meet and what message is conveyed by the physical environment are part of setting the stage.

A second aspect of establishing the psychological setting that closely relates to the first is that against the background of splendor, indulgence, and hospitality there is an explicit or implicit expectation that such treatment calls for reciprocation, or at least deference, on the part of the visitor. As President Jiang Zemin put it to one senior group of American visitors that met with him on that island in Zhongnanhai, “There is a saying of Mencius: since you have come from afar, you must have brought benefits to my country.”26 My introductory comments in my record of the meeting describe the impact of the physical setting: “President Jiang greeted us, emperor-like, at the front door—all in all, an ethereal physical context for the meeting.”²⁷

While the physical and psychological setting created by Chinese for meetings is distinctive, Beijing’s preference to deal with weaker parties bilaterally and stronger parties multilaterally is not unique. China decries “internationalization” of the South China Sea issue, for instance, wishing to avoid a multilateral negotiation involving ASEAN (or any substantial subset of the group), much less an enlarged negotiation that might include “outside” powers. Dealing with individual small countries on its periphery one at a time, and thus isolating one claimant from the others, is far preferable from Beijing’s perspective. Unsurprisingly, China’s small neighbors prefer the opposite. Hanoi is very clear about this with respect to South China Sea claims. One senior member of Vietnam’s National Assembly told me: “‘China will try to go bilateral as much as possible.’”²⁸

When the PRC wishes to constrain an equal or stronger power, however, then multilateral organizations may well serve Beijing’s interests. For example, Beijing has joined with more than thirty countries (including India, Russia, and the United States) to oppose the European Union’s effort to charge a carbon tax on airlines using EU airports, scheduled to start on January 1, 2012.²⁹ Beijing’s expressed preference is to use the International Civil Aviation Organization (ICAO) to set whatever rules may eventually be adopted with respect to aircraft carbon emissions, rather than to have a regional organization of which it is not a member impose a standard. Incidentally, Beijing has consistently opposed granting membership or observer status in the ICAO to Taipei. In this example, we see Beijing’s use of isolation from multilateral organizations as a way to apply pressure on Taiwan to adhere to Beijing’s One China Principle.

A number of multilateral international organizations have decision rules that obscure accountability and give great weight to minorities, which is very helpful to the PRC when it is trying to stop international action while avoiding blame for the resulting stasis. In 2012, for instance, the UN Conference on the Arms Trade Treaty was convened in July in New York. One country could block any agreement that might be made. In this case, China, Russia, and the United States all found it expedient to indefinitely postpone agreement. Similarly, as of July 2012, Beijing joined the Russians three times in vetoing various UN Security Council measures promoted by the United States, Europe, and others to try to put pressure on Syrian president Assad to stop killing his own people. In these organizations the PRC can stop, stall, sidetrack, or water down proposals to the point that it can sign on without major damage to its core interests and can often barely leave diplomatic fingerprints. In fairness, these same strategies also are employed by other big powers, not least the United States. One of the most notable changes in Chinese behavior in the new millennium has been its increasing willingness to more strongly assert its interests by using its capacity to block actions in the U.N. Security Council, even at the cost of considerable international criticism.

DEBATE

In thinking about the Chinese style of argumentation, the very first need is to get the vocabulary straight—there are “basic principles” (jiben yuanze), “policy” (zhengce), “goals” (mudi), and “proposals” (jianyi). Principles are presumably unwavering and non-negotiable; policies and goals can shift according to circumstances; and proposals are flexible, transient, and malleable, as long as they are relatively consistent with the principles involved. Of course, which “principle” is summoned to the debate can change. In general, the Chinese prefer to obtain agreement on broad principles before getting to a discussion of the more flexible elements of policies, goals, and proposals. A principal PRC official in Taiwan affairs put it this way with respect to the Taiwan issue in 2005: “‘One China’ is a basic principle, and we can’t retreat, and firmly peaceful reunification is a goal, and we will try our best, but whether it is realized depends not only on us—Taiwan too—it is a policy, not a principle. ‘One Country, Two Systems’ is not a principle or a policy, it is a proposal. This can be discussed, [the PRC] won’t force [Taiwan] to accept it. If Taiwan feels it is not good, it can suggest ‘One Country, Three Systems,’ or others.”30

A recurring device in Chinese negotiating strategy is to anchor talks in the principle of respecting the differences among social and political systems. This strategy includes invoking respect for the more closed aspects of the Chinese political structure when the issue involves outside access to the PRC system, and simultaneously taking full advantage of the comparatively permeable and transparent nature of many external systems to maximize Chinese gains. The facade of equality is maintained because one standard is applied across the board—treating each system with equal respect, on its own terms. The outcomes, however, are unequal because the possibilities to exploit each system are radically different. The issue of “transparency” is a good example. With the U.S. freedom-of-information system and its open ethos, China (particularly the military) has less incentive to reciprocally provide information. As one senior Chinese academic put it: “The U.S. has the Freedom of Information Act. ‘China gets a free lunch.’”31

The United States ran into this problem in the earliest days of the student exchange program, one of Deng Xiaoping’s very first bilateral initiatives after his 1977 return. The number of U.S.-bound Chinese students grew much more rapidly than the number of Americans going to the mainland (for reasons beyond relative population size differences, disparate levels of education development, and the dearth of Chinese language-capable U.S. students). Moreover, research areas (both geographic and disciplinary) in the PRC were greatly limited for U.S. scholars, while Chinese students had access to almost every disciplinary field and physical location in America. A summarization of my rough field notes of a mid-1979 discussion between Fang Yi, Chinese minister of the State Scientific and Technological Commission, and Joseph Califano, U.S. secretary of Health, Education, and Welfare, explains that Beijing wanted China’s Education Ministry to tightly control which Americans went where in China for what educational and research purposes, while PRC authorities wanted to deal individually with U.S. universities to maximize access and financial aid for Chinese students with a minimum of Washington oversight. Beijing wanted the benefits of centralism which its own system conferred on it when dealing with Americans, and the benefits of the U.S. federal, decentralized system when the issue was Chinese students going to America. President Carter and Secretary Califano were, I believe, very wise in accepting this inequality, but it was an inequality, except in the sense that each side was equally respecting the character of the other.³²

Asking that a partner in debate respect the character of the Chinese system assumes other forms as well. It is common for Beijing to say that it agrees with the broad objectives of an interlocutor demanding change in China but to go on and explain that implementation of the desired policy is very complex and may require more time or may simply prove infeasible because of the complexities involved. For example, since the 1980s Washington has been pushing Beijing to control exports of dual-use technology and weapons to Iran, and in the second decade of the new millennium it wants the PRC’s help with even more comprehensive and tighter sanctions. One senior PRC foreign affairs official explained the difficulties of doing everything Washington wanted:

“Both are a priority, oil and nonproliferation. We have to have a balance in these things.” We need to take all these entities and interests into account. Can we control these entities [the multitude of Chinese foreign policy actors]? We have export control, quite good and there is cooperation with the U.S., and we have an improving ability to implement. We sometimes worry whether these [Chinese] companies will have consequences for sanctions and they have a sense of risk. And we need to get provinces to implement. [They are] doing secret business with some countries. When we find companies doing business against UNSC [UN Security Council] sanctions.33

Over the reform era, Chinese interlocutors have increasingly invoked “public opinion” as a constraint on their latitude, as explained in chapter 4. The clincher rebuttal to a foreign demand is some version of “The Chinese people, all 1.3 billion of them, would dislodge leaders who agreed to that!” Defense Minister Chi Haotian explained why no Chinese leader could countenance Taiwan independence:

As you know, my friends, in accordance with history, the 1895 Treaty of Shimonoseki, Taiwan was ceded to Japan. To us this is a national disgrace. At that time the whole people of China depended on Li Hongzhang [senior tutor to the heir apparent, senior grand secretary of state, minister superintendent of trade for the northern ports of China, viceroy of the province of Chili, and earl of the first rank, who negotiated the treaty,] and as a matter of fact Li Hongzhang is a disgraced name to the Chinese people. In 1945, [Taiwan] returned to the motherland. We can’t allow Taiwan independence.³⁴

Another device in the Chinese negotiation toolkit is to inoculate the Chinese side against threats by asserting that the threatening party (or third parties valued to the threatening party) will be hurt more grievously by the imposition of a threat than China. Good examples include post–June 4, 1989, attempts (particularly during the first Clinton administration) to hold the annual renewal of what was then called most-favored-nation (MFN) tariff treatment (it is now called Normal Trade Relations, or NTR) hostage to “whether China makes significant progress in improving its human rights record.”³⁵ A key line of Chinese argumentation throughout the decade or so of trench warfare on this issue was that imposition of the threat not only would hurt U.S. economic interests, but also would hurt societies like Hong Kong and Taiwan—places the United States viewed as ideological or economic friends.36 In 1991, vice-foreign minister and Xinhua director in Hong Kong Zhou Nan told the journalist David Gergen, “If MFN is rescinded, China will suffer but it will still survive. Hong Kong will be hurt even more.”³⁷ A little more than two years later, Premier Li Peng spoke more bluntly: “Let me ask, if China’s MFN status is revoked, who will lose the most? Surely the United States will not suffer the most because China’s share of your trade is not that large. China will suffer, but not the most. We are not like Russia where people are suffering. We aren’t begging for food. Hong Kong will suffer the most; the entrepot trade has given Hong Kong great opportunity for trade and profit. If you have any doubts, go ask the American consul general in Hong Kong. See if he agrees with my assessment.”³⁸

The tactic of arguing that unwelcome U.S. actions will hurt the ones Washington most cares about also applies to domestic constituencies within China itself. In a 1991 conversation with Foreign Minister Qian Qichen, he explained how the imposition of economic sanctions against the PRC would not particularly hurt state-owned enterprises (SOEs)—arms of the state that were the presumed target of U.S. economic reprisal for human rights abuses—but would hurt town and village enterprises (TVEs), which constituted the more nearly private, entrepreneurial, individual sector of the Chinese economy. This was the sector of the Chinese economy that Americans would want to nurture in most situations.³⁹ Likewise, Mayor Han Yulin of Zhangzhou City in Fujian argued that the imposition of U.S. economic sanctions would harm TVEs, foreign-invested enterprises, and wholly owned foreign enterprises in his city: “You are frank and enthusiastic, but you [Americans in general] have a defect. You make decisions rashly. The June Fourth incident [happened], then you put on sanctions [on China]. You should investigate things. All this affected TVEs, JVs, wholly owned enterprises. Americans don’t want this, so listen to my suggestions and opinions. Second, the U.S. needs rapid economic growth; we are a 1.2 billion market. The U.S. ought not leave China. We buy Boeing aircraft, advanced equipment, [export] cheap goods.”⁴⁰

Similarly, from the beginning of reform until the present day, U.S. universities have found it difficult to deny access to increasingly large numbers of Chinese students and scholars coming to their campuses in order to persuade PRC authorities to stop blacklisting high-profile U.S. scholars (generally from the very same campuses that are accepting large numbers of PRC students and researchers). Why? In part, because the victims would be Chinese citizens who bear no responsibility for the offending policy and whom U.S. policy makers generally wish to assist. Of course, the quality of Chinese students, the tuition revenues they provide, and the central importance that PRC students play in many U.S. graduate programs are also critical considerations. Yet the essential issue remains—Chinese scholars have largely unfettered access to America, while U.S. scholars face more obstacles going to the PRC, even conceding enormous improvements in the situation since 1978. This has the patina of equality because each party is showing equal respect for the distinct qualities of the other’s system, but things do not necessarily balance out.

LINKAGE

Beijing has been increasingly using “linkage” as a tactic against opponents—withholding cooperation on items important to the other side in order to push the opponent in the desired direction on another issue. The use of this tactic comes from China’s increasing importance across an ever broader array of key global issues, and the growing need for Beijing’s cooperation in their resolution or management. PRC Admiral Yang Yi explained the phenomenon subtly, but unmistakably, in 2010: “In America, there are some people who remark that China has previously tolerated U.S. sales of arms to Taiwan and ask why China is reacting so intensely this time. The reason for the Chinese reaction is that the Sino-U.S. relationship has grown beyond the bilateral domains and categories that were traditionally important and has become the kind of global partnership that responds to every kind of challenge. If one side lacks sincerity, then how will the other side retort?”41

“Retorts” may be seen in Beijing’s policies toward North Korea, Iran, and Syria, and in many other behaviors. Basically, cooperation on pressuring North Korea (or Iran or Syria) may depend on Washington’s policy toward Taiwan. Similarly in the wake of the U.S. rebalancing (“the pivot”) policy of late 2011 and thereafter, the Chinese (quite predictably) may be inclined to be less cooperative on some third issues that Washington finds important.

Linkage, though decried by Beijing when Washington seeks to employ it (as it did in the first Clinton administration), is often used by China in the economic realm. The Chinese point to conflicts of interest between America and its allies, or to commercial competitors of U.S. companies—Japan, Germany, or Airbus. American negotiators often hear that if they adopt policies contrary to China’s interests in one area, U.S. firms will suffer while firms in Japan, Germany, and elsewhere will simply pick up the slack. Foreign Minister Qian Qichen explained to journalist and presidential advisor David Gergen: “Japan has many advantages [over the United States in dealing with the PRC]; nearer and better understanding of China. Japan provided us credits and loans; America also has conditions in its favor, but also domestic obstacles [meaning Congress, in part]. I believe it is not in the interest of the United States to resort to economic and trade means to pressure [others]. The U.S. stopped its grain exports to the Soviet Union, but it was American farmers who suffered.”42

Sometimes this message is most effectively articulated by Chinese who have close and trusting relationships with the opposing side, as was the case in 1992 when a Chinese educational leader with a longtime American connection warned a visiting U.S. delegation that “most-favored-nation [tariff treatment] is not a favor just for China but also benefits this whole region and the United States. We hear daily of Japanese dominance and Germany, they’d welcome a U.S. so distanced from the Chinese market.”⁴³

In the 2010–13 period, Beijing sometimes practiced “linkage,” without even announcing the policy, permitting action to do the talking. In late 2010 Beijing seemingly impeded the flow of strategic materials (rare earths) to Japan in retaliation for a maritime incident.⁴⁴ In 2012, it curtailed imports of Philippine bananas in retaliation for another maritime incident.⁴⁵ And in the wake of greatly heightened tensions over the Diaoyu/Senkaku Islands between Beijing and Tokyo in 2012–13, Chinese imports of Japanese products dropped, falling 14.5 percent in the single month of November 2012.⁴⁶ The China that decried economic linkage as practiced by Washington in the 1990s appears to be an ardent practitioner of the policy in the new millennium.

For Beijing, as Washington found out in its ill-fated efforts to tie the conferral of MFN status to Beijing’s domestic human rights practices, linkage has a number of downsides. By taking a conflict in one zone and expanding it to another, other parties not directly involved are inevitably hurt, becoming collateral damage. Punishing Japan by slowing rare earth exports, for example, frightened the rest of the world about China’s reliability as a strategic materials supplier. Immediately the world system began to adjust by seeking out and developing new, more reliable suppliers. In addition, enlarging the zone of conflict led to the loss of previously sympathetic constituencies in both the target country and the collateral damage areas. Finally, if Beijing punishes a supplier of components that it needs to manufacture its own exports, Chinese profits and employment levels are damaged by the PRC’s own retaliation. Beijing is not oblivious to these realities.

An approach related to linkage is for the Chinese to try to induce the other side to reconsider the interests that might be served by accommodation. For instance, a point of contention with Beijing since June 4, 1989, has been Washington’s prohibition against military sales and its restrictions on “dual-use” sales to Beijing. A particular sore point has been the Black Hawk helicopter that the United States sold China in the mid-1980s but since June 4, 1989, has refused to sell spare parts for, even to ensure airworthiness. Beyond Beijing’s argument that America’s allies (including Israel) manage to transfer technology to the PRC and thereby benefit because the Americans have unilaterally withdrawn from the China market, I was struck by the viewpoint of one ranking Chinese military officer. He argued that resuming dual-use technology sales to the PLA would provide Washington avenues of vision into China’s technological development and that the PLA would become more dependent on the United States:

Regarding technology exports. Would you welcome this thinking? If such technology is used by the PLA is it necessarily bad for the U.S.? “It is inconceivable that the U.S. and China should be at war with each other. Think of the vastness of the PLA as a market. If you would loosen up on technology to the PLA that doesn’t bear on U.S. security, it would increase confidence. Take the Black Hawk helicopter—we need them at high elevations. For example, the Wenchuan earthquake, but the U.S. refused to provide parts [for the helicopters long ago sold to China prior to 1989]. Maybe our American friends need to think about technological cooperation with the PLA that could increase leverage over the PLA. You need to think about this.”47

Last, when an incipient coalition is forming that needs China’s cooperation on an issue—as in the stalled Doha Round of WTO talks in 2005, or intervention in Iraq in 2003, or Libya in 2011—and Beijing is either lukewarm or hesitant about having to take a stand, the PRC will simply wait to see what happens. In many situations, the PRC states something to the effect of “China will not stand in the way of a consensus reached by others, but Beijing will not take the lead in reaching that consensus.” Beijing thereby avoids making enemies in what may prove to be a futile effort to reach a deal and leaves itself room to “sell” its support to the highest bidder in the end game.

This is what Beijing did in 1990 when it waited until the last possible moment before committing not to veto UN Resolution 678 authorizing the First Gulf War. In the negotiations immediately preceding that vote, the PRC extracted a Washington, D.C., visit for Foreign Minister Qian Qichen (which took place in March 1991), thereby breaking the post–June 4, 1989, ban on high-level official exchanges that Washington had imposed as reprisal for the June 4 violence. As President Bush Sr. and Brent Scowcroft later recounted concerning the run-up to the November UN resolution vote, Secretary of State James Baker was working to obtain Chinese support, or at least acquiescence for, UN Resolution 678. Qian “was noncommittal about backing the resolution and wanted something in return. He tried to get Baker to promise that either he or the President would visit Beijing. . . . Qian and Baker apparently agreed that Qian would come to Washington after the vote, to see the President if they gave a ‘yes’ vote and Baker if it was an abstention.”48 The Chinese abstained and Qian nonetheless saw the president early the following year after the Chinese ambassador in Washington called Scowcroft at 3:00 one morning to inform him that Minister Qian would cancel his trip if he didn’t see the president.⁴⁹ It was a matter of face.

That the Chinese place great importance on “face” is a cliché. Nonetheless, they sometimes bet so much of their own face on an outcome—often for symbolism that will play well back home—that for the interlocutor to thwart a negotiation would produce consequences disproportionate to what seems at stake. In a game of chicken, the one who throws the steering wheel out the window first is likely to win. Often Beijing throws the steering wheel out the window over what seem to outsiders to be trivial issues. This suggests one of two things—either the issues are not trivial or this modus operandi is a Chinese tool of negotiation.

TOOLS

Effectively negotiating with the PRC requires understanding how Chinese view the relationship between coercive power (force) and softer power (persuasion). One high-level PRC central government official explained his view of hard and soft power and Deng Xiaoping’s two-fisted negotiation style:

“We are mobilizing hard and soft power. Soft power often is spontaneous, but hard power should be guided by the government. At some times it may be hard to balance the two types, but for those countries that have hard power, they may overemphasize and vice versa, and the danger is empty talk and no action, so we need a balance between the two.” . . . If you use soft power to resolve problems, it is better not to use hard power. The late Deng Xiaoping said once in analogy, “The right hand prepares to negotiate, the left hand to use force. But usually your right hand is stronger than the left hand.”50

Words are used by the Chinese as a tool of negotiation. While Chinese interlocutors are capable of occupying time with either “short introductions” (jiandan jieshao), long explications of well-known facts, lengthy orations on the merits of China’s positions, or the deficiencies of the other side’s actions or stand, when they are serious about achieving an outcome from an interchange, they can listen attentively and be parsimonious. As one of China’s premier diplomats in the 1970s and 1980s, Vice-Foreign Minister Zhang Wenjin, put it in a conversation with Ambassador Seignious of the Arms Control and Disarmament Agency in January 1980: “I intend to listen more than speak.”⁵¹

For Americans, nature abhors a vacuum—which they often proceed to fill with conversation. For the Chinese side, this American proclivity toward chatter has its value—revealing motivations, supplying information, possibly revealing divergences of interest on the interlocutor’s side, and giving the Chinese side an understanding of the possible outcomes of a negotiation. Negotiations in China almost always open with some version of the following statement: “Our guests have come from afar. It is Chinese custom to invite the guest to speak first.” Interestingly, in negotiations that occur outside China, the opening gambit is quite similar in intent: “You are the host and we have come from afar to hear your views.” In either case, Americans are usually happy to express their views first, often at length.

However, this is not to say that Chinese leaders do not enjoy talking; Chinese leaders vary greatly in their volubility. Jiang Zemin was loquacious, while Li Peng and Hu Jintao were more taciturn. Deng Xiaoping could be nearly monosyllabic but was always to the point. And, when the Chinese are dealing with a familiar interlocutor and have a clear objective, they may seize the initiative, seeking to set the agenda and make proposals.

There is also the art of what is not said or written. This art was practiced in virtuoso form in the 1972 Shanghai Communiqué in order to avoid overspecifying the “One China” concept—“The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position.” Along similar lines, in a 2008 conversation a very senior leader on Taiwan explained how Beijing and Taipei had decided to initiate cross-Strait charter flights and dealt with an issue that came up with the signing of the final agreement. The problem involved how each party wanted to write the date because Taipei (the Republic of China, or ROC) dates things from the 1911 revolution, whereas the PRC uses conventional Western dating. The PRC would not sign a document using the ROC dating system, and Taipei would not sign a document with only a Western date on it. This very senior Taiwan official explained the resolution. “When we reached agreement on charter [flight] agreements, the most difficult part was how to date the documents—the ninety-seventh year of the ROC. Both sides left blank the date and put it in later. So we were able to work around [the problem]. ‘Chinese wisdom and a masterpiece of ambiguity.’”52

Another tool of Chinese negotiation is to try to divide, discredit, shame, intimidate, or upon occasion praise specific members of the interlocutor’s team. If the Chinese perceive that there is a range of views among the opposing team, they sometimes seek to discredit the most vulnerable (usually lower-ranking) member of the opposing team, often by asserting that he or she “does not know China very well.” The hope is that culling the weakest in the herd will inhibit others from expressing similar views and dampen nonconforming views on both the Chinese and foreign sides. A memorable instance of this occurred in Beijing when a senior PLA general took offense at an American scholar’s remarks in the presence of senior U.S. defense leaders and gave him a tongue-lashing, seeking to tarnish his credentials in the eyes of his own countrymen:

“Your [XX, U.S. scholar] assertion that China is in an arms race—not true! [bu dui]—twenty-six SU-27s, but no arms race. The idea that sovereignty is outdated is wrong! It cannot be violated by anyone—wrong! [bu dui]. It is rudeness to say our concept of sovereignty is outdated. This is hegemonistic. You don’t understand China!” . . . Do you [XX, U.S. scholar] recognize Taiwan as a part of China? I am shocked, really shocked, about this. We cannot have repression under the pretext of stability. China emphasizes democracy. People should be involved in politics. There are 2,900 people’s representatives in the National People’s Congress—every nationality, representatives from the agriculture sector, every sector; this is a broad representation from all walks of life. How can it be said the PRC is not for democracy? I am shocked about the allegation. Political reform, I am shocked—[you] said political reform is behind economic reform. You should not point your finger at China. I am really shocked by all these allegations, so I asked for the chance to air my views. I would like to say I am really shocked—respect facts. What are the motives, if we don’t respect the facts? . . . [XX, U.S. scholar] does not know well China, and fabrications.⁵³

Another tool in the shaming repertoire is to throw interlocutors off balance by attributing sufficiently malicious motives so that they then feel compelled to reassure the Chinese side of their sincerity and goodwill. In 2011 discussions with a very senior PRC foreign policy leader, for instance, I was struck that the U.S. party’s expressed desire for stability on the Korean peninsula elicited the following rejoinder: “‘Scholars in China are asking, Does the United States want tension on the peninsula because it serves U.S. interests?’”54

A reverse gambit, using praise, is for the Chinese side to make reference to people who “know China well,” hoping that praise will elicit more thinking in that direction and turn the presumably erudite member of the opposing delegation into an even more effusive “friend.” Yet another variant is to praise some uninvolved third party and to invoke his or her wisdom as a model for those present to emulate. In a meeting between NPC chairman Wu Bangguo and two members of the U.S. Congress in 2007, Wu used a combination approach, solicitously telling the congressmen: “In December I met Bill Gates and sat next to him for an hour and he said many members of Congress do not have much knowledge of China and he has less knowledge of China than I have of the U.S. You play an important role.”⁵⁵

In preceding chapters we have identified areas in which striking and important changes have occurred in the era of reform in China—the increase in comprehensive national strength, the rise of interdependence, less dominant leadership, and a more pluralized and empowered society notable among them. In the realm of negotiation, however, we have seen great continuity. What has changed, however, in negotiation with China is that the outside world now finds itself negotiating across a much wider range of topics, with a broader range of Chinese interlocutors who possess more resources—knowledge, information, and economic wherewithal—and who have a far more diversified set of interests than forty years ago. Considerably more emphasis is placed on soft power and the PRC’s economic capacity than has ever been the case in modern times. In the twenty-first century the Chinese bring two more balanced and powerful “fists” to their negotiations with the external world than they did when Deng came to power in 1977.

Whether in diplomatic, commercial, or other settings, Chinese are extremely attuned to power relationships, both the current power relationship and the interlocutor’s future power prospects. That is why the United States cannot be indifferent to a Chinese perception of American decline and why achieving a trajectory of growth in U.S. comprehensive national power is so important to healthy and balanced U.S.-China relations. At any given moment, depending on the context, China may pay particular attention to the coercive, economic, or ideational dimensions of another country’s strength, but the economic trends are key because economic strength is convertible to other forms of power. One senior PRC professor put it as follows in the wake of the collapse of Lehman Brothers in fall 2008: “There is more realism, a new balance of power with the United States. The GDP of China is $4 trillion—the U.S. is $14 trillion. Now only 3.5 times [China’s]. ‘China enjoys a better bargaining position.’”56 Another PRC strategic analyst explained it as follows: “The CCP doesn’t think that the U.S. is reliable but needs to cooperate with the U.S. and tolerates weapons sales [to Taiwan], but it wants to change the status quo in twenty years; our GDP will be bigger, more influence, then the status quo would be changed.”⁵⁷

This chapter also highlights the degree to which China’s increased power has moved it from being a negotiator that emphasized its weakness in many contexts and utilized the sense of obligation stemming from past mistreatment, to being a nearly equal negotiating partner that takes pride in its current interests and capabilities as well as its future potential. At the outset of reform, China was negotiating to get into the international system or to avoid being isolated within it. Now the issue is the size and potency of China’s role in that system—with Beijing trying to increase its leverage without becoming overstretched by the resulting responsibilities it incurs. The key to China’s comprehensive national power, its internal cohesion, its persuasive capabilities abroad, and its negotiating leverage is economic power. Sustained, rapid economic growth is not everything, but it is a great deal, and it cannot be taken for granted in the period ahead. Indeed, we can expect China’s growth rate to fall over time, while remaining relatively high by the standards of developed countries for at least a decade or two longer.