China Policy for the 1980s

For nearly a decade, perhaps the single most successful foreign policy the United States has pursued has been our new relationship with the People's Republic of China. As former Secretary of State Henry Kissinger's memoirs make clear, President Richard M. Nixon and China's leaders took bold advantage of their common adversarial relationship with the Soviet Union and terminated the Sino-American enmity which had so damaged our countries in the previous two decades. The Nixon Administration fashioned a bipartisan China policy which, despite occasional lapses, has been carefully pursued ever since.

Particularly since the formal establishment of diplomatic relations on January 1, 1979, our two nations have energetically created the framework for a mutually beneficial strategic, economic, scientific, cultural, and diplomatic relationship. Strategically, particularly in the wake of the Soviet invasion of Afghanistan, each nation now appears to be genuinely taking into account the views of the other, so that, when possible, our separate actions will be mutually reinforcing.

In economics, not only have claims-assets, trade, aviation, maritime, and textile agreements been signed, but the Joint Sino-American Economic Commission has now had its first meeting. Jointly headed by a Chinese Vice Premier with leadership responsibilities for economic affairs and the U.S. Secretary of the Treasury, it will meet periodically to devote high-level attention to emerging economic issues of mutual concern.

In the scientific domain a similar Joint Sino-American Scientific Commission, chaired jointly by the President's Adviser for Scientific Affairs and by the head of the People's Republic of China's (P.R.C.) State Scientific and Technological Commission, meets annually to survey our burgeoning official scientific exchanges. Almost every agency in the U.S. government has begun to develop constructive relations with its Chinese counterpart. No less than 16 agreements have now been signed involving scientific cooperation. Culturally, the International Communications Agency and the Ministry of Culture have established the basis for expanding cultural contact. And, commencing with Secretary of Defense Harold Brown's visit to China in January 1980, a series of visits between our military establishments has begun to break down the suspicion and ignorance that two decades of confrontation had produced.

The private sector mirrors developments in the public sector. To cite a few examples, two-way trade for 1980 totaled nearly $4 billion, a doubling of the 1979 total. China has become one of our largest purchasers of agricultural commodities, and the United States is now China's third largest trading partner, after Japan and Hong Kong. Whereas in late 1978 few P.R.C. citizens were on American campuses, now there are over 5,000 Chinese visiting scholars and students. Indeed, the range of private activities has grown beyond the capacity of the three organizations which the U.S. government endorsed in 1971-72 to the Chinese as capable of managing unofficial relations in specific areas: the National Council on U.S.-China Trade for business; the Committee on Scholarly Communications with the People's Republic of China for academic exchanges; and the National Committee on U.S.-China Relations for cultural exchanges. Today, leading foundations, corporations, church organizations, universities, travel agencies, and so on have established their own direct ties with the Chinese. Given China's isolation of the 1960s and early 1970s, its suspicion of the outside world, and the two decades of Sino-American hostility, the extent and rapidity of change is striking.

But how tangible and enduring are these developments? Do they echo Soviet-American détente of the early 1970s or earlier eras of Sino-American amity, both of which proved ephemeral? In spite of what has transpired, there remains a fragility to Sino-American relations, attributable to several sources.

Part of the difficulty stems from the rapid growth itself. Many thoughtful Americans are hesitant to go further out of concern that the United States is acquiring a major new partner in world affairs-some would claim an ally-without adequate forethought as to the long-term implications. In a sense, our China policy until the establishment of diplomatic relations in 1979 was the product of a carefully charted road map as to how and why China policy could serve our national interests. The subsequent two years saw the completion of the normalization process. Now, the question that confronts the United States is precisely to what use we wish to put our new relationship, and the Chinese appear to be in a similar stock-taking mood.

Another source of the tentativeness is perceptual. Each side fears that the other is not fully committed to a long-term relationship, that the other is motivated by tactical considerations, and that the other is biding its time to improve relations with the Soviet Union. Moreover, in both nations the new relationship is susceptible to political challenge. Beijing's opening to America has not been uniformly accepted in China, either out of concern for the disruptive effects an American involvement in China's development would have ideologically and socially, or out of doubts about the security benefits to be derived from an American connection. Nor has the China opening elicited universal support in the United States. Witness the widespread complaints about a China "tilt." And although the Taiwan issue was subtly handled in the Shanghai Communiqué and in the normalization agreement, some leaders on both sides seem reluctant to accommodate the needs of the other on this delicate and sensitive matter.

But perhaps the greatest reason for the fragility is the uncertainty on both sides as to precisely what the relationship is to entail and what its limits are to be. The relationship needs to be defined in positive terms that will be found credible and acceptable. The Soviets consider, or profess to consider, the relationship provocative not because of its current substance, but because they fear it may become an aggressive anti-Soviet alliance. Our friends and allies, particularly Japan and the five members of ASEAN (The Association of Southeast Asian Nations) wonder how far we intend to go with China and what the implications will be for them.

It is not credible to say we will continue the relationship at its present level, because, clearly, it is likely to continue to grow. One of the key tasks, then, must be to define and put in place a China policy which the public and Congress can support and which our friends and allies will recognize as contributing to overall stability and to their security. In addition, sufficient substance must be given to the relationship so that all our NATO allies, the ASEAN nations, and India accept it as a major, irreversible, and positive (or, in the case of the U.S.S.R., minimally threatening) element of world affairs.

II

Three questions immediately pose themselves. What kind of relationship is China capable of and willing to develop? What precisely is the American interest and what principles must guide our policy to achieve our interests? And what are the major issues we now must face to achieve our objectives?

An intimate link exists between the Chinese domestic scene and China's ability to sustain an opening to the United States, and China's leaders confront numerous impediments to fostering a substantive relationship. China suffers from a severe shortage of trained manpower capable of dealing with Americans. The Cultural Revolution's disruption of the educational system, coupled with the prior political persecution of many who had exposure to the West, means that the Chinese who have the requisite linguistic skills and cultural and scientific backgrounds are frequently in their sixties and seventies. (There is, of course, a similar severe paucity of talent in the United States of people sufficiently familiar with Chinese contemporary society and proficient in the language.) Scientifically, the Chinese capacity to absorb foreign technology is limited. Bureaucratically, China's America specialists are overburdened with receiving visitors, handling correspondence, designing exchange programs, training a younger generation, touring or studying in the United States, and continuing their ongoing administrative, research, or teaching activities. The situation has reached such serious proportions that higher level officials have placed travel and other restrictions on their activities to ensure that enough America experts are on hand for substantive work at any one moment in time.

Nor does the bureaucratic structure of China facilitate expanded contacts with the outside world. Coordination among different organizations is notoriously difficult to achieve, and frequently requires passing the issue up the hierarchy until the chains of command intersect, which all too often only occurs at the vice premier level. Even then, implementation of a State Council injunction can be lethargic. In addition, ministries, provinces or corporations, all of which have strongly circumscribed authority, have exhibited a tendency in dealing with American corporations or educational institutions to commit themselves to courses of action prior to ascertaining whether organizations with a veto power over the action will go along. Agreements are apparently reached only to discover some other base has to be touched.

Such problems must be viewed against the bigger picture of our common security interests with China. Nonetheless the building of strong governmental relations depends upon the accumulation of countless links between our private sector and Chinese organizations. And it seems as if Chinese bureaucratic practices are going to pose some major obstacles in pursuit of this goal.1

Another limitation is the shortage in foreign exchange. The Chinese cannot financially afford at this juncture the level of contact they desire. For understandable reasons, the Chinese tend to squeeze as much technological information out of American companies as possible without any major compensation offered. Students on Chinese government stipend in the United States live on near-subsistence budgets. To circumvent foreign exchange problems as much as possible, the Chinese seek offset arrangements in all sectors. In scholarly exchanges, they desire to absorb in-country expenses of American visitors, and to have the U.S. agency absorb expenses of Chinese in America. In business deals, the Chinese seek barter, shared production, and other similar arrangements.

Finally, the Chinese military capacity is limited and basically defensive in nature. Even though China has the world's third largest defense budget and is currently developing an Intercontinental Ballistic Missile (ICBM) capability, the country does not have power to project far beyond its borders for sustained periods of time. In a military sense, China remains more a regional than a global power, though to be sure its immense size means that the uses it makes of its regional power may have global significance.

The U.S. government, in sum, must bear in mind the limited manpower, attitudinal, structural, financial, and military capabilities of the Chinese as it seeks expanded Sino-American relations. At the same time, Washington must recognize the enormity of the task which China's leaders have undertaken since Mao Zedong's death in 1976 to set their nation more firmly on the path of economic development.

In 1977-78, an excessively optimistic leadership felt that the rapid development of a modern, industrial infrastructure-steel mills, railroads, coal mines, oil wells, refineries, electronics-would ensure sustained growth. By mid-1979, a sobered leadership had concluded that before this infrastructure could successfully be put in place, at least three years would have to be devoted to institutional reforms, and to correcting such problems in the economy as inadequate energy supplies and transportation facilities. And by late 1980, an even more sobered leadership announced that the process of institutional reform would take longer than initially anticipated.

To tick off the envisioned reforms is to realize why the readjustments require a protracted period of time to achieve them:

-The percentage of national income to be reinvested is to drop from a high of 38 percent in 1978 to about 25 percent in the mid-1980s. China cannot afford the purchase of foreign weaponry in the quantities needed to equip its forces from these sources, nor are its defense industries presently capable of absorbing Western state-of-the-art production technology.

-The Chinese Communist Party is to lose some of its day-to-day immersion in the administration of government and of the economy, yielding to technically proficient managers.

-Invigoration of representative institutions is contemplated as a check on bureaucratism.

-Profits are to be used in evaluating management performance, and bonuses are to be used to reward productivity.

-Statutes are being promulgated in a number of areas to introduce regularity and predictability to Chinese life. Criminal, marriage, and tax laws are but three examples of the unprecedented effort since 1949 to introduce a fuller legal system to China.

-The price structure is to be revamped, though the criteria for resetting prices remain to be settled. In any case, the marketplace is to have an increased role in allocation of resources.

Whereas in 1977-78 the thought had been to recover from the disasters of the Cultural Revolution by returning to the political and economic system of the mid-1950s and early 1960s, the objective has become the creation of a new system for China, still socialist, but incorporating changes that in some ways may go beyond the innovations of Hungary and Yugoslavia.

Such a restructuring inevitably involves a massive redistribution of power and authority. To be sure, there are a lot of winners. The science bureaucracy, including the Chinese Academy of Sciences and the Chinese Academy of Social Sciences, now plays a crucial role in the policy process. Provincial and municipal level officials in Guangdong, Fujian, Tianjin, and Shanghai have increased authority to deal directly with foreigners and derive revenue from external trade. Localities with favorable climate and soil can expand their acreage devoted to more lucrative cash crops (cotton, sugar cane, tobacco, rapeseed, and so on); they can reduce the acreage devoted to grain, contrary to what Beijing previously required in order for them to be self-sufficient in cereals. Intellectuals, officials purged during the Cultural Revolution and before, and those with relatives abroad no longer are politically persecuted.

But at the same time, there are losers. Many who rose to power during the Cultural Revolution-and over half of all Party members were recruited after 1966-are now politically suspect. The army gives evidence of friction with the civilian power structure over the low priority given to military modernization and over the loss of power which the military had acquired during the Cultural Revolution. Two of the core bureaucracies of Mao's political system, the public security apparatus and the propaganda apparatus, find themselves with more circumscribed roles. And the police are accused of committing many atrocities toward the end of the Cultural Revolution. The Ministry of Metallurgy and the machine-tool building industries have received criticism for mismanagement, and their investment funds have been cut back. Military industries are under order to increase their production for the civilian sector. Adding to the potential instability is the ubiquitous dynamic of the development process itself: population increase, unemployed urban youth, and rising expectations for an improved standard of living.

The net effect is that the bold policy initiatives pursued since 1977 have created a disparate range of possible opponents. Barring a catalytic event that could bring an unholy alliance together, there is no reason at this point to believe these separate elements can combine to reverse course. For one thing, Deng Xiaoping appears to have made progress in bringing together a leadership committed to the new course. As a result, delay, foot-dragging, and sabotage will be the main techniques of opposition. Yet the regime does face a delicate passage from a Soviet to a market socialist system, and the transition requires not only political acumen but increased productivity. An improved standard of living and enhanced national security will be necessary to keep the reforms on track. Should these reforms come under political challenge or eventually not produce the promised results, their foreign policy corollaries of increased trade and openness to the outside world will also become vulnerable.

The considerations we have just outlined do not imply that the Chinese are likely to abandon their effort to improve Sino-American relations. On the contrary, the Chinese quest for foreign technology and capital and the continued Soviet military buildup along the Sino-Soviet border are likely to continue to propel the Chinese in America's direction. But there are constraints and an element of tenuousness in the process.

Another point also needs to be made. Whether China continues to approach the United States in a constructive spirit, as is likely for the immediate future, or relapses to a more isolationist frame of mind, China will increasingly affect our national existence. Barring collapse of the Chinese political system, an unlikely prospect, China is going to acquire increasing military strength and very gradually gain a capacity to project its might well beyond its borders. Its expanding economy will have a significant impact on world energy, food, textile, and metal supplies. In sum, for the remainder of the century a central issue on the American foreign policy agenda will be how to respond to the entry of China as an active nation on the world scene. There is no alternative but to continue to respond to this challenge in a positive frame of mind and to shape the relationship in as constructive a fashion as possible.

III

In the 1980s, however, the handling of the American side of Sino-American relations will be a task qualitatively different from what it was during the normalization process. In a sense the easy part has been done; the more difficult part awaits us. Meticulous management of the relationship will be required if its full potential is to be realized.

Above all, the United States must maintain a well-defined sense of its interests and weigh each step forward in this light. As a corollary, we should not delude ourselves that we are building "friendly" relations with China, though on occasion it may be necessary to describe our relations in that way. Friendship implies a warmth and affection that China's leaders do not feel toward us as a nation. Self-interest, not sentiment, motivates them.

Moreover, they will use our expressions of friendship against us, indicating that since we think of them as friends, we should treat them as such. Excessive professions of our friendship will imply to the Chinese a greater sense of American obligation and beneficence toward them than we are prepared to offer. Failure to deliver will then lead to Chinese accusations of betrayal and hypocrisy. Of course, within a national framework of self-interest, individual friendships can flourish.

Our self-interest dictates that we eschew seeking an alliance with China. The United States is entering an era in world affairs which requires a degree of diplomatic agility and suppleness which additions to our existing alliance system would impair. Nor does China seek an alliance with us. Moreover, we do have potential conflicts of interest in Korea, Taiwan, and Southeast Asia. But our two nations can cooperate extensively and share an interest in each other's security without developing the automatic obligation that an alliance would entail. Washington has sought, and should continue to seek, meaningful consultation with China on world affairs, explicit understandings about how each of us will act on those issues where our interests converge, collaboration in the maintenance of regional stability, and constructive relations in bilateral affairs.

For China to play a responsible international role, it must remain a unified and independent country capable of deterring any who might seek to impose their will upon it. China contributes to the global equilibrium simply by governing its huge mass effectively and thereby removing itself as a potential focal point of great power competition. A weak or divided China would become a source of international instability, as it was from the 1860s to the 1940s.

We also have an interest in Chinese participation in all international organizations and in various multilateral arms control and disarmament negotiations. Many of the issues which transcend national boundaries-population control, food supply, energy supply, nuclear nonproliferation, protection of the environment, arms control, underground nuclear testing, use of the sea-cannot be adequately addressed without constructive Chinese involvement. While the past few years have seen positive developments in several of these fields, energetic efforts will have to be made to elicit Chinese understanding and cooperation in all these areas.

Certain developments would not be helpful to American interests. Significantly heightened Sino-Soviet tensions, for example, would bring with them greater risk of Sino-Soviet conflict, provide more opportunity for North Korea to play off Beijing against Moscow, and complicate our arms control negotiations with the Soviets. Chinese development of an ICBM has at least ambivalent implications for us, complicating Soviet defense planning on the one hand but potentially threatening us and our East Asian allies on the other. In either case, arms control agreements with Moscow would become more difficult. And while we seek a secure China, our interests would not be served were China to enhance its security by undue exacerbation of Soviet-American tensions.

Our East Asian regional interests with respect to China are more tangible. Chinese support of the Japanese-American alliance, the keystone to East Asian peace, is essential. We can legitimately expect Beijing to contribute to the maintenance of stability on the Korean peninsula. In particular, Chinese participation in four-power talks about the future of Korea is a desirable goal. As was stated in the Shanghai Communiqué and reiterated in our recognition communiqué, we have an interest in the peaceful resolution of the Taiwan issue by the Chinese themselves. In Southeast Asia, our interests are served by a China that contributes to the emergence of independent nations not threatening to their neighbors, especially in the Indochina peninsula. Chinese assistance in a timely and appropriate solution to the Kampuchean situation will be important for continued Sino-American cooperation in Southeast Asia.

Bilaterally, it is in our interest that American firms win a fair share of the gradually growing China market. Over the next five years, a number of major capital projects are likely to be undertaken: petroleum exploration and development, coal and non-ferrous metal mines, a nuclear power plant, communication satellite and ground stations, and commercial jet transport, to name a few. Our government should work cooperatively with American business and with the Chinese, as the French, Germans and Japanese do, so that American firms can compete effectively for the China market.

Our interest is also served by our natural scientists, social scientists, and humanists improving their understanding of China through extended research in the P.R.C. If other countries are using political means to direct Chinese purchases their way, Washington should be equally vigorous. Should American scholars or journalists encounter major obstacles in doing research in or reporting from the P.R.C. while Chinese scholars and journalists enjoy nearly unlimited access to our society, Washington must be willing to redress the balance.

To be an attractive partner in bilateral relations, China's modernization effort must be successful. It is in our interest that China remain basically self-sufficient in agriculture and be able to pay for its food purchases. In recent years China has been purchasing roughly 10 percent of the wheat that is traded internationally and about 35 percent of the fertilizer purchased by all developing countries. Were an impoverished China to suffer severe agricultural setbacks and become a major claimant on charitable food supplies, the implications for emergency food relief programs and potentially for refugee agencies would be staggering. Not only is the success of the agricultural modernization program important, but so too is the potential for China's emergence as a significant supplier of fossil fuels and non-ferrous metals to world markets. And to attain all of these goals requires the training of an adequate manpower base in the natural and social sciences.

In this regard, our concerns with respect to China are similar to our interests in other developing countries. Whether they meet the basic aspirations of their people for an improved livelihood and whether they are reliable trading partners will decisively shape whether we live in a stable world in the years ahead. That is why Chinese accession to the World Bank, to the International Monetary Fund, and other international financial institutions was so much in our interest. The United States has seen China since 1971 almost exclusively in the East-West or balance-of-power context. While that perception is valid, our interests with China fall into the North-South context as well. Hence, the eloquent statement by former Secretary of State Cyrus Vance at Harvard in June that our national interests demand an expanded effort to foster economic growth among the less-developed countries applies to China as well.

IV

Beyond the question of our interests, a number of other management issues confront us. The quest for reciprocity is high on the list. The United States enjoys considerable advantage in wealth, level of technology, and military might, while the richness of China's cultural heritage is unique. Achieving immediate reciprocity in each facet of the relationship seems to be an impossible goal.

The United States should seek overall symmetry, rather than a specific balance in each dimension of the relationship. For instance, we currently enjoy a trade balance in our favor, while the flow of technology is in China's favor. The pursuit of reciprocity must not be mindless. Yet the problem of reciprocity remains, and it is intensified because the Chinese definition of reciprocity differs from ours. To the Chinese, reciprocity is achieved when they treat Americans in China as they handle other foreigners and when Chinese are accorded the same privileges in the United States as those obtained by other aliens from non-hostile countries. But in practice this results in American diplomats facing severe travel restrictions and inadequate living arrangements and our scholars being denied many research opportunities-while Chinese diplomats enjoy free travel and their scholars have wide access to university libraries. The American definition of reciprocity, of course, is different: Americans should be treated in China as Chinese are treated in America. Many negotiations, including those for consular and civil aviation agreements, have encountered great difficulties in attaining mutually satisfactory reciprocal arrangements, and the China desk at the State Department deserves praise for the extent of reciprocity achieved to date.

To the extent we are successful in obtaining reciprocity in our sense of the word, we may create new problems within China. Private Americans seek travel rights, access to information, and so on that their Chinese colleagues are denied in their own society. These privileges, reminiscent of treaty port rights of an earlier day, easily reawaken anti-foreign feelings. Or we obtain agreements that are more favorable than those the Chinese have reached with other countries, whose representatives then complain to their hosts about the favoritism Americans receive. These considerations mean that even when pressing for reciprocity, the United States must remain sensitive to Chinese pride and the Chinese people's determination to retain their sovereignty.

Another precondition for a successful relationship must be to try to keep Chinese expectations realistic. To repeat, Sino-American relations cannot be nurtured through rhetoric that engenders temporary good feeling but which we do not intend to live up to. The Chinese have a tendency either to allow their expectations to soar or, more likely, to feign high expectations in order to force greater performance from their partner. With some exceptions from 1971 on, the American record has been good, but as we extend the relationship to the military sphere, it may prove tempting to suggest that the relationship will extend to areas we subsequently may not reach. The same thing holds true for funding commitments that foundations, corporations, or universities may be contemplating. Establishing the credibility of the American word, in short, will remain a central task in the foreseeable future, and this requires neither arousing Chinese expectations nor failing to deliver on previous commitments.

At the same time, we must keep our own expectations about China realistic. The definition of American interests outlined above sets forth important but limited objectives. We have not projected a large market for American commodities. We have expressed no hopes for major Chinese assistance in directly countering Soviet influence in the Middle East, Africa, and Latin America. Similarly, no advantage was perceived in transferring state-of-the-art technology which the Chinese would find difficult to absorb. The Chinese are unlikely to be able to contribute more than they already do to the maintenance of a global balance of power, though it is important that they sustain their role. At best, therefore, we should consider Chinese military capability a supplement to, and not a substitute for, the American military presence in the Western Pacific. The burden of maintaining stability in Northeast Asia cannot be shifted from our shoulders. Indeed, it is a key part of the counterweight we offer to the Soviets which makes us attractive to the Chinese.

A realistic sense of the potential and limits of our China connection should enable us to eschew the temptation to serve as a fount of wisdom for China. In childhood, Chinese acquire the habit of learning through emulation of models. To search for role models is a deeply ingrained habit. As Sino-American relations flourish, the Chinese will be tempted to cast us in some respects as a model worthy of imitation, be it in how to conduct elections or to run a university or to undertake a census. The Chinese are well aware of the flattery that results from such emulation, and many Americans are all too prepared to gratify themselves in this way. After all, in an era filled with self-doubts and foreign rejections of us, it is nice to find someone who thinks we still merit study.

The danger is that the emulative effort will fail, and that the Chinese will attribute the failure not to their own incompetence in implementation but to the inadequacies of the model. Be it the advice offered on factory management or cost accounting or a tax code or how to run an airline-all activities in which Americans are presently engaged-the Chinese must be discouraged from simply borrowing from another culture and encouraged to build upon indigenous practices. We have encountered the same issue countless times in other developing countries, and we should seek to avoid mistakes we have made so often in the past.

Finally, we must not permit our China relationship to accrue to the benefit of a limited sector of the Chinese society or depend on the political welfare of a few leaders. It is important to extend the benefits of the American tie from the coastal regions to the interior, and to seek contacts with a wide range of Chinese leaders, not only in Beijing but in the provinces. Vice President Mondale's visit to Xian and Defense Secretary Harold Brown's visit to Wuhan, both cities in the interior, and the designation of Wuhan, Chengdu, and Shengyang as the locales of our additional consulates are part of this broader purpose. So too is the effort to establish contacts with China's military bureaucracy, for until Secretary Brown's trip its exclusion from the Sino-American relationship meant we had not yet reached one of the most important organizations in Chinese society.

It is fascinating to observe how such diverse institutions as government agencies, foundations, business corporations, universities, and news media are already encountering the set of challenges we have just outlined. As long as the strategic setting is unchanged and the official relationship remains positive, the shaping of Sino-American relations is now shared by the public and the private realms. Whether the relationship proceeds with a keen sense of the American interest, whether symmetry is achieved, whether expectations are kept realistic and American credibility established, and whether the relationship becomes broadly based in China will be determined largely by the literally hundreds of decisions which the public and private sectors make on these issues.

V

The American government faces other, very difficult issues in the conduct of China policy. As Washington gropes toward a coherent strategy toward the Soviet Union following Afghanistan, it must decide how to integrate our China and Soviet policies. Washington's preference since 1971 has been to improve relations with both China and the Soviet Union simultaneously. In reality, of course, our relations with Beijing have become closer than with Moscow. Rather than imagery of a China "tilt," however, it is more accurate to note that both China and the United States are eager to move forward, while our Soviet relations have deteriorated in the face of Soviet assertiveness from Ethiopia to Afghanistan to Indochina. To retard development of Sino-American relations because Soviet-American relations have soured would be to punish Beijing for Moscow's aggression.

Nor should our policy be captive to such ill-defined concepts as triangles, evenhandedness, and balance. Recalling the evolution of our policy on this issue is worthwhile. Through the Kennedy and Johnson eras, China was seen as a more dangerous long-term adversary of the United States than the U.S.S.R. At that time, we enforced an embargo on U.S. trade with China and in the multilateral Coordinating Committee (COCOM) were unwilling to license third-country sales of high technology to China that we allowed for export to the U.S.S.R. The Nixon Administration abolished the China differential, claiming we should treat Moscow and Beijing in an "evenhanded" manner in exports. Soon, evenhandedness was extended to apply to our overall approach to the two communist states. That is, what we would do for one we would do for the other.

During the first year of the Carter Administration, evenhandedness gradually gave way to "balance." The concept of evenhandedness was found to be too mechanical and confining. For example, working-level bureaucrats in export controls interpreted the term evenhandedness to mean that an item licensed for Beijing would have to be licensed for Moscow. The different technological levels and differing capacities of the two countries to divert an item from military to civilian use could not be taken into account. This was too rigid a doctrine. The Administration came to recognize that the way in which we sought to improve relations with the two would have to take into account the differences between the two countries and the threats they posed to us.

Even the concept of "balance" was stretched when the Administration moved ahead in the summer of 1979 with most-favored-nation treatment for China without seeking to extend it to the U.S.S.R., though it was then still hoped that MFN status for the Soviet Union could be placed on the congressional agenda in the near future. The imbalance on MFN was seen as something that would be of limited duration. But Afghanistan dashed these hopes.

There is an even more fundamental reason for not seeking equidistance in a triangular relationship among Beijing, Moscow, and Washington. As Assistant Secretary for East Asian Affairs Richard Holbrooke noted in his June 1980 speech on China policy, the concept of a "strategic triangle" is somewhat misplaced. As we have already noted, Chinese military might generally, and nuclear capability specifically, do not begin to approximate Moscow's or our own. In terms of capacity to assume global responsibilities, China is not in the same league as the United States, the U.S.S.R., or even Western Europe and Japan. In the military-security realm, China currently does not pose the imminent threat to us that Moscow does. We do not have the same pervasive conflicts of interest with Beijing that we have with Moscow. If we are to treat China for what it is, a regional power and a major developing country, a balanced policy toward China and the Soviet Union-implying a desire for equidistance-makes little sense.

However, even as we reject the idea of balance as a single controlling guideline, we must recognize that our relations with the two are interrelated, and we must consider how our relations with one affect the other. This does not mean one relationship should be made subservient or hostage to the other. Rather, we must neither deal with China in ways that unnecessarily provoke Moscow nor move toward Moscow in ways that needlessly damage our China connection. We must recognize that certain necessary actions toward one may so harm our interests vis-à-vis the other that we would wish to undertake compensatory moves.

The actual integration of our Chinese and Soviet policies must occur on a day-to-day basis, and the best that can be done is to distill some principles from the foregoing discussion to guide our policy:

-First, we must continually reiterate that we seek not an alliance with China but expanded consultations, cooperation, and collaboration where our interests converge.

-Second, we must not employ our China relationship tactically against the Soviet Union. Any commitments we might undertake to China, such as willingness to make military equipment sales, cannot be retracted when Soviet-American relations improve. Nor should we consider extending our ties with China as a means of punishing Soviet transgressions elsewhere unless the new steps stand on their own merits.

-Third, we must not manipulate China and the Soviet Union against each other. Our interests would not be served by greatly lessened or heightened Sino-Soviet tension, and in any case, our ability to affect Sino-Soviet relations is marginal.

-Fourth and relatedly, as we develop our relations with China, we must not provoke that which we seek to deter. We should not develop our relations with China in ways that might inadvertently provoke Soviet aggression against China.

-Fifth, we must take adequate account of the "China factor" in our arms control discussions with Moscow. To limit the arms race in Western Europe, for example, only to see the Soviets redeploy these arms to Siberia, means we would be expecting China to bear the cost for increased stability in Europe, and this it may not be willing to do, unless we offset the burden in other ways.

-Sixth, we must exercise discipline in comments about China. In speeches and in off-the-cuff and background remarks we must avoid needlessly provoking the Soviets and confirming journalistic suspicions we are "China-card playing."

Our entire posture, in short, must give credibility to the proposition that we are determined to build a long-term relationship with China not in order to tactically threaten any third power but out of a straightforward recognition that our interests in a more stable balance of power will thereby be served.

VI

Cultivation of our security relations with China, development of our economic relations, and maintenance of unofficial relations with Taiwan within the framework of the recognition agreement with the P.R.C. are three issues which will confront Sino-American relations for the foreseeable future. In all these areas, the task in the months ahead is not so much to chart new ground as to ensure that existing arrangements reach their full potential. Pursuit of existing policies seems the appropriate course.

In the military realm, in order to help remedy destabilizing deficiencies in the Chinese defense posture, the United States has agreed to sell the Chinese dual-use technology with military applications, and military support equipment-radar, communications gear, transport equipment-but not weapons. So far, no deals have been consummated in either the military support equipment field or high-level technology intended for military use.

The advisability of selling weapons to China has been widely debated in the press and the Congress. Four schools of thought can be discerned. First are those who are strongly opposed, because of adverse Soviet and allied reactions. Others are basically opposed, but could see merit in marginal adjustments to the existing guidelines in order to permit transfers of less sophisticated technologies that would enable the Chinese to make more efficient use of their current defense capabilities. A third group believes in constraining sales, but argues that our interests would be better served by permitting the case-by-case application of our general policy on arms transfers, and the considerable economic and technological barriers, substantially to limit transfers of arms, rather than relying on our current political strictures. Finally, others support sales in order to help stabilize the Sino-Soviet military balance or to respond to Soviet intervention elsewhere.

To an extent, the whole issue has been distorted, because all sides agree that the Chinese cannot afford purchases on a scale that would significantly alter the Sino-Soviet military balance. It therefore appears that no immediate change in policy need be made until the Chinese have consummated some transactions within the current guidelines and provided us a better sense of the efficacy of these sales. Furthermore, a decision on significantly expanding the guidelines to include weapons would require a thorough study of all related factors, including the firmness of the Chinese commitment to maintain stability in East and Southeast Asia.

In the economic realm, the United States has agreed to provide credit to the P.R.C. through the Export-Import Bank and the World Bank. It is not unrealistic to believe that credit extension through these institutions could total as much as $5 billion by the mid- to late 1980s. Loan opportunities for worthy development projects are likely to exceed that figure. Moreover, the Chinese will be pressing for concessional interest rates from the International Development Association and for development assistance from U.N. agencies. They may even become interested in U.S. Agency for International Development involvement in China. And the 16 science and cultural exchange programs-particularly the student-exchange program-are seriously underfunded, particularly in light of their likely benefit to the United States.

Given the pressure to balance the federal budget and rising congressional resistance to the international financial institutions, the opportunity does not occur in the most propitious circumstances. Moreover, unless significantly expanded, international financial institutions' funding for China could come at the cost of other developing countries, which would not be in our interest. Yet the U.S. government, particularly the Office of Management and Budget, has yet to accept the budgetary implications of our new relationship with China. In fact, this, and not weapons sales, may be the single greatest challenge to expanding our relations with China at present. Development of an Administration position and close consultations with the Congress will be required in order to ensure that the government's funding ability matches our interests in the Chinese modernization program and in U.S. business capturing a fair share in the China market.

Finally, Sino-American relations could once again be shattered over the Taiwan issue. Due to certain American campaign rhetoric, Beijing is going to be watching the United States vigilantly to see whether we abide by our recognition agreements. As the negotiating record makes clear, the U.S. relationship with Taiwan cannot be made official without gravely damaging U.S.-P.R.C. relations.

Other pitfalls could await us. Beijing-Taipei relations are not our affair as long as they are handled peacefully. Hence, we should avoid succumbing to pressures to become a middleman in Beijing's search for an accommodation with Taipei, but we should not discourage Taipei from engaging in contacts with the mainland.

Weapons sales to Taiwan must also be carefully handled. Such sales are required in order to sustain a military balance in the region. The quantity and quality must deter Beijing from military adventure while not reaching levels that would encourage Taiwan to provoke tensions in the Taiwan Strait for its purposes. With the reduced level of tension in the Strait and with China's evident problems in constructing a new-generation jet fighter, no immediate reason appears to exist to decide on the sale of an improved version of the F-5E to Taiwan. In short, the Taiwan relationship is going well, and while the new Administration may feel pressure to introduce changes, any alteration could risk the delicate arrangements which normalization achieved.

VII

In sum, China should continue to occupy a central position in U.S. foreign policy for the foreseeable future. With the normalization process completed, we can begin to treat China for what it is-a basically non-hostile, genuinely independent, developing, regional communist power. We share many interests, and China is not a security threat to us.

To be sure, our relations will encounter moments of tension and upon occasion we may be on opposite sides of particular issues. But normalization has yielded a historic opportunity to build an extensive, substantial relationship with China. The interests at stake demand that we allocate the necessary resources to meet the challenge.

1 For example, an agreement between an American consortium and the appropriate central ministries to construct an international trade center in Beijing encountered the recalcitrance of the Beijing municipal authorities to provide the land and infrastructure support under city control at reasonable cost. The U.S. government has yet to obtain a permanent consulate in Guangzhou or a site for an enlarged Embassy in Beijing. Some American universities that have offered awards to Chinese students find the scholarship winners unable to obtain visas from Public Security officials, despite the endorsement of their universities.

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