American Power & The Rise of China -
Presentation in Washington DC Dec 2005, Center For China US Cooperation, University of Denver

Americans, I've heard it said, have long been enthralled by China. Brooks Adams loved China. So did Henry Luce, who was born there to Presbyterian missionaries. This country has sent countless missionaries to China, in fact, whether they were wanted there or not. Then, in the 1950s, State Department careers were ruined over the question, "Who lost China?" as if it were ours to lose.

Currently I wouldn't say that the people of China are obsessed with the United States, but there is a high interest in this country. At the three conferences held by the University of Denver's Center for China-United States Cooperation, I found a marked difference in attitude toward the U.S. among participants from China from one meeting to the next.

Our first conference was held in Vail, Colorado, in November 2003. It was about eight months after the U.S. had launched the war in Iraq with spectacular success, at least in the months of March and April. That would change soon enough, but then, participants from China were quite concerned about American power and the uses to which it was being put in the world. There was a real effort to reassure Americans about the peaceful rise of China. "China is a poor nation," said one participant. "China could never challenge the United States."

It was a problematic moment in which to launch Tom Farer's idea of a new international structure for the new century in which the major powers might work together systematically to enhance the health, security and prosperity of the planet. The issues could hardly have been more urgent. September 11 was only two years behind us, the SARS epidemic had prevented our gathering in Beijing as originally planned, and Washington had rushed into its second war in seventeen months without support for the second encounter from the UN Security Council. Preemption was the order of the hour, and nobody knew what might come next.

While Chinese participants in Vail certainly favored a return to the spirit of multilateralism, they were unsure how reliable a partner the United States would be. They too, no doubt, had read Charles Krauthammer's observation that the alternative to American hegemony was not a tidy, eighteenth century, balance-of-power world with the United States, the European Union, Russia and China maintaining a sane and stable peace. The alternative to hegemony, he said, was chaos. They too understood the admonition of William Kristol and Robert Kagan that Americans must make their hegemony last as long as possible. And they were not unaware of John Miersheimer's proposal that Washington try to slow the growth of China. But if Tom Farer's new condominium of nations could calm the apprehensions of the U.S. military, curb protectionist tendencies in the U.S. Congress, and temper desires among some in the administration to contain China, then they certainly were willing to listen.

Especially they felt compelled to ensure understanding among the Americans of China's strong feelings about Taiwan. They were far from happy that Taiwanese President Chen Shui-bian was promoting an updated constitution almost certainly intended as a prelude to independence. Nor were they pleased by the development of medium-range missiles in Taiwan or the alacrity with which the Pentagon approved weapons sales to Chen's government, sales that have not yet taken place because some in Teipei's main opposition party think the price is too high. Some in Vail believed that high officials at the Pentagon were encouraging Chen Shui-bian, overriding the restraint of the State department which remained mindful of the one-China policy.

And our diplomacy was none too acceptable. Therese Shaheen, chair of the American Institute in Taiwan, a semi-government agency that conducts U.S. relations there, said the United States does not support independence for Taiwan, but does not oppose it either.

Jia Quingguo of Peking University and I talked a lot about this, and he made it undeniably clear that China would use force to prevent independence coming to the island. He further said plainly that if the Bush administration wanted help from China on North Korea, it would have to deliver on Taiwan.

President Bush came to understand this. Though he earlier had vowed to do whatever it takes to defend Taiwan, he changed to a different approach when Chinese Premier Wen Jiabao visited Washington that December. Then Bush made a point of saying plainly that he wanted no change in the status quo in East Asia. Members of the State Department were quick to echo this sentiment. In October, 2004, Secretary of State Colin Powell traveled to Beijing, just as we were wrapping up our second conference and delighted the Chinese when he told a television interviewer that Taiwan was not sovereign.

What he was playing for, I suspect, was further effort by China in the nuclear problems of North Korea. The Chinese government already had assembled three meetings in Beijing of six nations--North and South Korea, Russia, Japan and the U.S. to deal with Pyongyang's nuclear program. But the talks had gone nowhere and North Korean President Kim Jong-il was refusing to return to the table. Nor did he return until August of this year, when a possible agreement began to emerge.

But all that lay ahead in the fall of 2004, when our second conference gathered at Peking University in Beijing, hosted by Professor Jia Qingguo. By then, feeling toward the United States among Chinese participants had changed completely. This became especially clear afterwards when Sam Zhao led a few of us through a series of meetings with leaders of various institutes associated with agencies of government--intelligence, the military, the Communist Party, and so on. I found them uniformly delighted with the Bush administration. One military leader, Gen. Yang Yi, said that Sino-U.S. relations were the best they've been since 1972, when Mao Zedong and Zhou Enlai joined with Richard Nixon and Henry Kissinger to achieve the great opening between their two countries.

The reason they were so pleased, interestingly, was Iraq. They believed that Bush was so distracted by the war in Iraq he didn't have time to hound China about human rights, trade or the environment. They were relieved that the presidential campaign was well underway with no criticism of China. What they feared, of course, was that when the Iraqi threat abated, the China issue would move back to the fore. Iraq is still a big problem in Washington, of course, but the China issue has returned. Complaints overflowing in Congress, the Treasury, the Pentagon and the trade rep's office. Issues ranged from revaluation of Chinese currency and military spending in China to the flood of Chinese textiles that deluged the country this year after quotas were lifted on January 1st.

In Beijing we picked up our talk of Taiwan where we had left off in Vail a year before. Gen. Yang Yi, the military leader I mentioned earlier, cited suspicion among people he knew that the U.S. might not want China and Taiwan to reach a peaceful accommodation. Indeed, the U.S. might be using Taiwan to absorb volumes of Chinese effort and energy that otherwise could go into productive modernization of the country. He also suggested that the U.S. was playing a two-faced game, publicly supporting the one-China policy and opposing independence for Taiwan, yet sending Taiwan substantial military assistance, both hardware and software.

I want to add at this point that I am heavily indebted to Banning Garrett of the Atlantic Council and the excellent notes he took at the conference last year in Beijing and this year in Berlin. In many instances I will be quoting him directly.

But back to Beijing and our session on Taiwan. It was generally assumed that most people in Taiwan want to preserve the status quo, just as George Bush does. Most want to preserve de facto independence. But China feels a deep inhibition when it comes to any gesture toward Taiwan, including allowing Teipei the position of observer at the World Health Organization which certainly seemed not only appropriate but necessary after the SARS crisis of 2003. However, Chinese leaders worried that Chen Shui-bian would take this opportunity and parlay it into other roles in other global settings. This makes confidence-building measures of any kind look alarmingly risky in Beijing.

Gen. Yang Yi pointed out that China had given up the idea of conquering Taiwan. Now all Beijing leaders want to do, he said, is ward off independence. Otherwise, he added, Chen Shui-bian would do everything he could to move incrementally in that direction. To accomplish maximum deterrence, he noted, China was training enough troops to occupy every inch of the island. This they hoped would cause Chen Shui-bian to think again about any foolishness.

When one American observed that twenty or thirty years of dominance by the independence-minded Democratic Progressive Party would create a Taiwan that never could be reunited with the Mainland. Another member of our group asked what Chen Shui-bian could do to reassure China that this was not the case, that he was willing to embrace serious talks, that he was not trying rule out reunification forever. Yang Yi replied, "The best is to keep silent and do nothing." No doubt that's true. And Chen Shui-bian has said quite a lot.

One participant from China stressed that if Taiwan declared independence, any government in Beijing would fall. That's how strongly the Chinese people feel about the issue. Banning Garrett added that for the United States, Taiwan is a matter of credibility and commitment to alliances. For China Taiwan is a question of sovereignty. I also heard an official with the National Security Council in Teipei say that if Chen Shui-bian moved toward independence, this could have repercussions in Tibet, or Xinjiang province or Inner Mongolia. Also, he added, leaders in Beijing cannot risk a truly independent Taiwan joining forces with Japan to deny China access to the Taiwan Strait. The Taiwan Strait is essential to China's trade with the Middle East.

Our session on Taiwan last year closed with this unhappy assessment from a Chinese voice at the table: "We are not sure of the deterability of Taiwan."

As for North Korea, it's important to note that the American idea of Kim Jong-il as crazy has no resonance in Asia. Most Asians see Kim Jong-il as rational in the face he shows to the world though monstrous within his own country. Also, economic reform along the lines of Chinese capitalism would be out of the question. North Korea would collapse under the strain of keeping pace with reform in China.

But what about those reforms in China? What about revaluation of the rinminbi? Chuck Schumer of New York and Lindsay Graham of South Carolina called for it in the U.S. Senate. They threatened to slap a 27.5 percent tariff on Chinese imports if something wasn't done by October. Secretary of Treasury John Snow echoed this deadline. Something was done--in July--but not much. Leaders in Beijing revalued the yuan by two percent. Instead of being pegged at 8.2 to the dollar it shifted to 8.1 to the dollar. Nor was it any longer pegged to the dollar. Instead it was allowed to float within a narrow band of .3 percent against a basket of currencies including the dollar, the euro, the yen and the Korean won.

But this was not nearly enough to have any impact on the American trade deficit with China. Some say that would take a 15-to-40 percent revaluation. Now Schumer and Graham's bill may well come to a vote before the end of the year, and Secretary Snow was in Beijing in October urging another revaluation before the president's visit in November. He further emphasized that China should allow financial services in the country so the Chinese people could borrow more and spend more on their own products, thus generating their own growth from within.  Tom Palley was saying the same thing at our conference a year ago. He added that strong unions are essential to higher wages which are essential to more purchasing power among a broader range of people which is central to internal growth.

A big issue at that second conference was Japan, and the discourse ranged from hot to boiling over. The problem, of course, was the visits of high Japanese officials, including the prime minister, to Yasukuni shrine. Professor Zhang Ruizhuang called it "a slap in the face of China" since war criminals are commemorated there.  Professor Onuma Yasuaki of Japan replied that yes, war criminals are honored there, but that is not the reason politicians flock to Yasukuni. They go there to pray for three million war dead. Zhang responded with the suggestion that the names of war criminals be stripped from the shrine. He added that Germany has done a good job of facing the horror of its history. Japan has not. Yasuaki rejoined that the Japanese were exhausted by their often repeated apologies to China and South Korea.

But he added that the Japanese people know that China will be a superpower in the twenty-first century, and Japan's hour of glory is over. China will surpass Japan as an economic power.  Then, he said, he hopes the Chinese will overcome their excessive sense of victimization and show toward Japan the generosity that Beijing displayed after World War II when Mao agreed to normalize the situation without reparations.

Of course there was the question of oil. Energy is to our own time what territory was to the nineteenth century. You can never get enough of it, because control of energy, like control of territory, means a great deal to a nation's power position in the world. The matter was put plainly at the conference by a Russian named Sergei Medvedev who observed that the globalization embraced by Clinton in the 1990s has collapsed, and what we have now is fear-based, oil-based societies. The new context for Sino-American relations, he said, is not about networks and economics but security and resources.

That turned out to be a prelude to one of the major matters discussed at the third conference, this October in Berlin. I want to mention that at this gathering I found participants from China neither distressed by the United States nor particularly pleased. Mainly they were quick to counter any fault Americans might want to find with them. Human rights? One professor responded that he would be open to discussing it, but please be specific. What violations were to be considered? China's consumption of energy? No need to worry. Given renewable energy sources and greater energy efficiency, this will not be the problem in twenty years that some foresee today. Democracy? The Communist Party and the political system will change. So the West should not worry so much about democracy in China. Has China's galloping consumption driven up oil prices? Not at all. That was caused by oil companies that failed to invest in sufficient production. What about oil deals with Iran or Sudan, two states with extraordinarily bad reputations? The reply: That's business and we shouldn't mix business and politics. Moreover it's inappropriate to bring that up here.

Mainly, I sensed a quiet confidence in our counterparts from China. They had found a future in which they could believe. They showed no worry about their enormous need for energy that lies ahead.

Sam Zhao presented an excellent paper that laid out the dimensions of the situation. In 2002 China imported 30 percent of the oil it consumed. That has gone up since then and may well now be near the 40 percent imported by the U.S. This is a great reversal for China. Twenty years ago China was the largest oil exporter in East Asia. Now it is the second largest importer in the world. Last year it accounted for 41 percent of global increase in demand for energy.

China is not interested in buying oil on the open market. Instead it wants to control production. It wants to control resources. Before the latest Persian Gulf war, it had an interest in some major fields in Iraq. But that opportunity came to an end when the fighting began. Now China is trying to make up for losses in the Middle East by sealing oil deals in Africa, Latin America and neighboring Asian nations. It has a $70 billion arrangement in Iran, as I mentioned earlier, and an exploration agreement with Venezuela. It does oil business in Sudan and Libya. In addition China is pursuing nuclear energy and hydrogen powered fuel cells and coal gasification. It also is making a serious effort at conservation, and that includes steep taxes on sport utility vehicles.

But more will be needed, according to Liz Economy of the Council on Foreign Relations. She pointed out that China has had access to clean coal technology for fifteen years but has not used it. This is critical since three-quarters of China's energy comes from coal which is dangerously polluting. China has good energy laws on the books, she said, but factories are one-third to one-tenth as efficient as in Japan. Only fifteen percent of buildings in Shanghai meet regulations. China, she summed up, needs vast increases in energy efficiency.

Friedemann Muller, an energy expert from Berlin, stressed the importance of formulating rules of the game for energy and, especially, for the shipping of oil from the Middle East. He noted that China is especially vulnerable in the Strait of Malacca and the Strait of Hormuz. China has not been interested in a multilateral approach, and the U.S. has dealt with the issue only bilaterally. This, said Muller, will soon be seen to be a mistake.

The question is this: Is China building up its capacity to defend its sea lines of communication? What about the seaports in Myanmar and Pakistan? Michael Swaine of the Carnegie Endowment for International Peace cast doubt on this possibility. The only country that could challenge China's sea lines of communication, he said, is the United States, and it would be incredibly expensive to take on the U.S. Navy with an outcome far from certain. What China is trying to do, he explained, is be sure it can control the approach to its coastline from the sea. This means that the U.S. could only try to blockade the Chinese coast, not stop every ship going to China.

This last conference, in Berlin, dealt with the European Union as well as China and the United States. So we returned again and again to international law. Yuan Jian, an analyst, made the point on many minds that the war in Iraq was undermining international law, but Fraser Cameron, another analyst, stressed that if the use of force works, the world will support it. If the U.S. had found weapons of mass destruction and created a stable government in Baghdad, there would have been approval all around.

Tom Farer noted that a case could be made that the war in Iraq does fall within international law. That's why, he said. President Bush has used the language of war, and called it the War on Terror. It means he has enhanced power. He can hold prisoners until the conflict is over without trial, though there have been some legal questions about that at Guantanamo. He can attack the enemy any time, any place.

What is needed now, it was agreed, is to shore up the idea of international law and explore ways in which the three powers at this conference might work together more effectively. The U.S., of course, does not want to be constrained. China does not want to be contained. And the European Union wants to pursue the imperatives of its own internal situation.

Bates Gill of the Center for Strategic and International Studies, emphasized that new trilateral institutions are not likely now, but there are multilateral institutions, such as the U.N. Security Council, the World Bank and non-proliferation agencies in which the three could pursue common interests. And Professor Zhuang Jianzhong made a point of adding that they should put common interests ahead of common values. Tom Farer urged that we go beyond merely incremental moves to a bolder approach. At least hold that vision ever in mind, he said, and it will influence the quality of our incrementalism.

It is curious that Onuma Yasuaki observed that the heightened sense of insecurity among Americans after September 11th looked ridiculous to the rest of the world, and Jean-Pierre Cabestan, from a French research center, said much the same thing about China, which seems strikingly insecure despite its undeniable rise. This seems to have aroused belligerence in Washington and a quest for harmony in Beijing. Indeed, echoing Bob Zoellick, Banning Garrett pointed out that China is not the old Soviet Union. China is not seeking to spread anti-American ideologies. It is not trying to struggle against democracy around the globe. Or oppose capitalism or overturn the international system.

Li Xiguang of Tsinghua University, said that what China needs is a new ideology. It said it should lie closer to globalization than to nationalism. This put me in mind of John F. Kennedy, who said that his ideology was no ideology. His ideology was problem solving. He foretold the rise of the brilliant technocrat in government. Then came Margaret Thatcher and Ronald Reagan to insist on ideological underpinnings for their regimes.

As I look at American ideology today, gazing beyond the passions of the right wing, I see what many others see--American exceptionalism, the idea of America as a saving nation. As I look at the European Union, I see what Robert Kagan saw--also a sense of exceptionalism. For all its setbacks last summer, with the defeat of the constitutional treaty in France and the Netherlands and the blow-up of the budget, the EU is still a magnificent experiment and surely a beacon to other nations. When I look at China, I think I see there too a sort of exceptionalism, the idea of China as a saving culture.

What lies before us now is the urgent necessity of finding a way to bring these great powers, all three a little self-conscious, all a little self-important, together in a harmonizing mission that will enhance the well-being of the whole. I believe that the conclusion of these three conferences, so ably assembled by Tom Farer, Sam Zhao and Tim Sisk, is that it can be done.