STRENGTH THROUGH COOPERATION
         Military Forces in the  Asia-Pacific Region

CHINA AND THE 21ST CENTURY  
         Scott M. Leeb  

China is not a status quo power: it seeks a greater role for itself in world affairs and it does not fully accept the legitimacy of the present international order.¹

If one is to accept the above statement, prima facie, then one must also accept that China's current behavior is a reflection of its broad movement in one of two directions: China acting as a responsible power, benign, cooperative and a promoter of mutually beneficial regionwide activities, or China acting as a regional hegemonic power, bold, aggressive and an executor of its influence through coercive measures, if necessary.  While it is clear that China seeks greater assertiveness and influence as a regional power, the route it will follow to achieve its foreign policy objectives remains unclear. 

Over the past decade China has developed and refined a series of policy levers that now give it the capability to act as a regional hegemonic power.  Furthermore, these levers will be available and employable for at least the next decade.  In this environment of uncertainty, there are several U.S. policy initiatives that should be pursued to ensure Chinese actions do not have a deleterious effect on regional stability.

A brief overview of the literature on China's future aspirations reveals the arguments for and against viewing China as a threat to regional stability.  The mechanism that has facilitated China's ability to assert a greater role for itself in world affairs has been its phenomenal economic performance over the past two decades.  A look at the Deng Xiaoping era (1978-97) shows a continued growth rate of 6 to 9  percent per annum in the near future.  China has three basic levers at its disposal to assert its power.  It can use diplomatic finesse, economic suasion, or, as a last resort, military force to achieve its goals.  Each of these must be examined within the framework of its relevance for the future.  There are a number of potential pitfalls that could prevent China from achieving its goals.  Four of these-latent political instability in the post-Deng era, increasing regionalism leading to a fragmented state, unsound fiscal and monetary policy, and environmental degradation are reviewed in this paper.   Several policy prescriptions designed to foster improved relations with China, regardless of its future status as a responsible power or regional hegemonic power, are also discussed.  

Although there are a number of factors that could derail the Chinese economy (discussed below), it appears that policies developed in the post‑Mao period should insure, at the very least, continued moderate economic growth.  This is not to say that China will not go through boom‑bust cycles,⁹ but sound economic policies are likely to militate against sharp cyclical swings.  Strong political commitment helps buttress these policies.  In his assessment of China's prospects for sustained economic growth, Nicholas Lardy compares China's economic growth to that of the other high-performance "Asian miracle economies" and determines that China has a "reasonable prospect" of sustaining growth rates of 6 percent per year.  He goes on to note that if certain monetary, fiscal, and related measures are implemented successfully, Chinese growth until the turn of the century could reach 9 percent per year.¹⁰  It is interesting to note that of the seven measures that he lists, all of them are integral elements of the "Outline of the Ninth Five‑Year Plan For National Economic and Social Development and the Long‑Term Target for the Year 2010 of the People's Republic of China," which was released in early 1996.¹¹  Although merely pledging to follow a strategy does not guarantee successful implementation, it does indicate Chinese leadership sensitivity to some of the most salient economic problems it faces.

In addition to the microeconomic changes, there have been macroeconomic changes that augur continued economic growth.  President Jiang Zemin, Deng Xiaoping's hand-picked successor, has established a three-goal blueprint for Chinese economic development for the next millennium.  The first goal is the completion of a shift from a Marxist economy to a market economy.  This will involve an overhaul of the elephantine state owned enterprises with the objective of optimizing results through the reorganization of state-owned assets and reform of small enterprise.  This will occur with minimal political interference.  Powerful results have already been achieved through reorganization, mergers, and bankruptcies.  Jiang realized that economic modernization required attacking the SOEs, a tricky proposition given the fact that these organizations serve as welfare agencies for millions.  Simultaneous reform and reorganization of both large and small enterprises have also resulted in the development of economies of scale.

The second goal is to move away from meeting numerical targets.  Emphasis is instead placed on productivity and more efficient investment based on market signals rather than state-dictated output levels.  Laws of supply and demand are replacing bureaucratic fiat as the governing principle of the workplace.  Creativity and incentives, two concepts that are anathema to orthodox socialism, are slowly being introduced into business enterprises.  In addition, power is being devolved from political officials to business managers.  The final goal is the movement away from the rule by man to the rule by law.  Solid progress can be made only when decisions are based on rules and regulations rather than the capriciousness of man.  In the past, bureaucrats could hide behind the facade of a rigid, over centralized political system with amorphous rules and regulations.  In the early 1990s efforts were made to change the system from one characterized by ad hoc decisionmaking to one in which decisionmaking was derived from a code of laws and procedures.  The growth in influence and power of the National People's Congress, with its enhanced mandate to supervise and enforce the constitution, illustrates this phenomenon.  

Levers of Power  

Chinese strategists believe national strength will principally be a function of economic rather than military power.  Therefore, China's economic development is of paramount importance.  Even military goals are subordinated to economic priorities.  At the 14th Party Congress of the Chinese Communist Party (CCP) in 1992, Jiang Zemin called for the PLA to "consciously subordinate itself to the overall interests of national economic development."¹²  Economic growth over the past two decades has provided China with the ability to assert a greater role for itself in world affairs.  If China seeks to translate its growing economic power in to a more aggressive position in the region, it will have three levers at its disposal to accomplish this task.  

Diplomatic Finesse

China's number one national priority is economic reform and modernization.  Achieving this objective requires a peaceful international environment.  One method China employs to secure an environment favorable to its economic development is diplomatic finesse.  During most of the Cold War, Chinese diplomatic overtures were made within the context of the U.S.-PRC-USSR "strategic triangle."  Diplomacy was seen as a zero-sum game.  In the mid-1980s this began to change.¹³  With the decline of the threat of the USSR, China could afford to take a much more pragmatic approach.  Ideology became less and less a governing principle of diplomacy.  Foreign relations moved away from an action-reaction superpower dynamic toward a more holistic approach designed to safeguard international peace, security and stability.

Establishing good relations with its neighbors has been a long-standing tenet of Chinese foreign policy.  In the 1950s, China expounded the Five Principles of Peaceful Coexistence, which still serve as the guiding criteria for China to develop and maintain friendly relations with all countries.  The principles call for mutual respect for sovereignty, mutual nonaggression, equality and mutual benefit, noninterference in another's internal affairs, and peaceful coexistence.  In 1992, the 12th National Party Congress of the CCP made the diplomatic principle of developing friendly and good neighborly relations with surrounding countries part of the party constitution.¹⁴

The need for and the utility of diplomacy were made starkly clear in the aftermath of the Tiananmen Square incident.  The United States attempted to isolate China and brand it a pariah state.  In response, China vigorously pursued partner status, seeking to economically engage countries as a counterweight to U.S. segregation efforts.  This resulted in increasing levels of trade with Asia; in 1992 alone, full diplomatic relations with 15 countries were established.¹⁵  This diplomatic offensive served partially to negate the baneful effects of the U.S.-led sanctions. While this approach was unable to help in improving relations with the United States, it reinforced within Beijing leadership the notion of diplomacy as a viable tool to promote policy objectives.   

While the use of diplomacy to achieve national goals can refer to a wide range of activities, in recent years Chinese efforts have increasingly focused on travel diplomacy as the tool to best further its interests. Travel diplomacy is a multimedia public relations effort in which Beijing lobbies foreign governments and attempts to manipulate the international media.  It represents a sophisticated, multifaceted, and concerted international effort to gain support for the Chinese agenda from other nations (regardless of their size, stage of development, ideology, or geographic location).  The agenda consists of an assortment of foreign policy objectives such as countering Taiwan's internationalist diplomatic efforts, securing border agreements with neighbors, enhancing Chinese prestige abroad, countering claims of a growing "Chinese threat," and promoting economic ties.  In what China sees as a multipolar world where U.S. influence is increasingly challenged, travel diplomacy represents a logical approach to achieving state objectives.¹⁶

Travel diplomacy manifests itself in different forms in different countries.  In the United States, for example, until recently China employed a number of lobbying firms to look after its interests in Washington.  It has also supported the U.S.-China lobby (funded by Fortune 500 companies with strong business interests in China), which gave roughly $20 million in campaign contributions in 1996.  Some activities, however, bordered on the illegal; evidence was uncovered that representatives of the Chinese Government sought to direct contributions from foreign sources to the Democratic National Committee before the 1996 U.S. presidential campaign.¹⁷  In other countries, the Beijing leadership has directly funded political parties or enlisted the support of powerful leaders in business or government who are sympathetic toward Chinese interests (usually ethnic Chinese living abroad).  Regardless of the approach taken, the overall goal remains constant: promotion of Chinese interests abroad.

In support of travel diplomacy, top Chinese leaders- President Jiang Zemin, Premier Li Peng, Chairman of the Standing Committee of the National People's Congress Qiao Shi, and Chairman of the Chinese People's Consultative Conference Li Ruihuan-visited 36 countries, and more than 40 heads of foreign states and governments visited China in 1996.  Trips abroad by Chinese leaders included Jiang Zemin to Europe and central Asia (Spain, Norway, Romania, Uzbekistan, Kyrgyzstan, and Kazakhstan in June and July), South and Southeast Asia (Philippines, India, Pakistan, and Nepal in November and December), and Africa (Kenya, Ethiopia, Egypt, Mali, Namibia, and Zimbabwe in May), the first time a top Chinese leader has been to Africa since 1949.  Travel diplomacy has been used not just at the state-to-state level, but also at the party-to-party level.  In 1996, the CCP received 101 delegations from 57 countries and in return sent 42 delegations to 50 countries.  The CCP, while maintaining ties with over 300 political parties and organizations in over 130 countries, also established new links with a number of parties.¹⁸

The fruits of these efforts can already be seen.  Since late 1996, China has concluded security agreements with six of its neighbors-Myanmar, India, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan.  These agreements have helped promote an international environment conducive to China's economic modernization and reform efforts.  A plethora of trade agreements, cooperative ventures, and information exchanges was concluded, all in the wake of high-level visits.  In addition, the goodwill engendered by Chinese travel diplomacy will help facilitate Chinese attempts to promote its own agenda, especially on contentious issues such as Taiwan independence, alleged human rights abuses, and World Trade Organization (WTO) entry.  

Diplomatic finesse in the 1990s has also required flexibility to deal with a highly fluid international environment.  Nowhere is this more evident than in China's relations with ASEAN.¹⁹ China has long eschewed multilateral negotiations, commitments, and arrangements.  It has instead opted for a bilateral approach, because this provides maximum flexibility and independence of action.  However, in an effort to strengthen its good relations with ASEAN, China has in the past several years shown a willingness, albeit somewhat reluctantly, to engage in multilateral dialogue.  In November 1991, China joined APEC, perhaps the region's most important consultative association.  Also in that year, China's Foreign Minister Qian Qichen attended a meeting of the ASEAN states for the first time.  China's pledge to support efforts aimed at enhancing security cooperation in the Asia-Pacific has resulted in its annual participation in ARF.²⁰

What has perhaps created the greatest impetus for China to move away from its time honored preference for bilateral approaches has been the growing perception of a "China threat."  China's economic growth and military modernization have fueled fears about its objectives and intentions in the region, although China has consistently denied that it is pursuing hegemony in the region.  To quell these fears, China has made a strong effort to demonstrate its benign intentions.  When the subject of establishing a regional security mechanism arose in the early 1990s, China could ill afford not to take part.  " primary goal of China's policy toward ASEAN has been to promote confidence and regional awareness.  This is best accomplished by China involving itself in the various multilateral fora that exist.

These extensive Chinese diplomatic efforts resulted in China officially becoming a dialogue partner with ASEAN in July 1996 (this is the same status that the United States holds).  Since that time, China has further pursued cementing ties with ASEAN.  In late February 1997, China and ASEAN agreed to increase their dialogue and cooperation.  Five organizations were established to accomplish this: the ASEAN-China Joint Cooperation Committee (AJCC), which serves as the coordinating body and umbrella organization for all the ground-level ASEAN-China dialogue; the ASEAN-China Senior Officials Political Consultations; the ASEAN-China Joint Committee on Economic Trade Cooperation; the ASEAN-China Joint Committee on Science and Technology;  and the ASEAN Committee in Beijing.

The goal of the AJCC is to establish strong economic ties between ASEAN and China.  It was started with $700,000 in seed money provided by China.  Although the AJCC has a fairly limited role as a coordinating body, it approved in principle three joint ventures as well as a  personnel exchange and a workshop on economic and trade cooperation.  These meetings are conducted at the Vice Foreign Ministerial level.  Eventually the goal is to extend talks between the two beyond economic cooperation and trading relations.²¹

This flurry of Chinese-ASEAN activity is not meant to imply that Beijing has abandoned direct state-to-state relations as the cornerstone of its foreign policy.  In the last 4 years, each of the heads of state, government, and military of the ASEAN countries has visited Beijing.  China's President Jiang Zemin and Premier Li Peng have also toured Southeast Asia.²²  This balanced diplomatic approach, utilizing both bilateral and multilateral statecraft, has resulted in remarkable success for China in achieving its goal of consolidating relations with the ASEAN states.  Both bilateral and multilateral diplomatic approaches, viewed within the framework of China's long-term goals and the post-Cold War international environment, are likely to continue to be emphasized in the near future.  In addition, diplomacy, because it represents a tractable, cost-effective, and nonconfrontational approach to attaining foreign-policy objectives, will likely become an increasingly appealing policy option for Beijing.  

Economic Suasion

The use of economic suasion as a tool to assert influence is a relatively new phenomenon.  Although Chinese attempts at economic suasion can be traced back to 1957,²³ these early efforts failed because at the time China lacked the economic clout needed to guarantee their successful implementation.  China remained a dormant player in the world economy until the 1980s.  As its economy grew during this decade, China became more integrated into the world economic system, joining such organizations as the World Bank, the International Monetary Fund (IMF), and the regionally focused Asian Development Bank (ADB).  China's participation in nongovernment and inter-government organizations soared during this period.²⁴  As China became one of the world's largest exporters and importers, its ability to exert influence through economic means grew exponentially.  Parallel with these developments was the growing recognition that for China to be a future power, its strength would be a function of economic force as much as, if not more than, military force.  Thus, by the start of the 1990s, exerting influence through economic means became not only a viable, but also a preferred method for attaining national objectives.  Making economic suasion an even more enticing policy option is China's relative immunity to economic coercion, due primarily to its large size and relatively self-contained economy.²⁵  The U.S. decision to delink Most Favored Nation status from the question of human rights can be seen as tacit recognition of this fact.

The utility of economic suasion as a tool of statecraft is evident in China's relations with the central Asian republics.²⁶  The collapse of the Soviet Union and the subsequent creation of three new states along China's northwest border have resulted in some complex problems that are not readily resolved.  China has one of the world's largest Muslim populationsC20 million-more than in Libya, Syria, or Iraq.  The majority of PRC Muslims live in the Xinjiang Uigur Autonomous Region, one of several areas where Muslims have been granted nominal self-rule.  There areas are concentrated in the northern and northwest regions bordering Mongolia, the three Central Asian republics of Kazakhstan, Kyrgyzstan, Tajikistan, Pakistan and Afghanistan. Muslim minorities account for approximately 60 percent of these areas' population of 16 million.  (Muslims constitute only 2 percent of the overall population.) Most of China's oil reserves and nuclear power resources (including Lop Nur, China's only nuclear test site), as well as large gas, iron, and coal deposits, are located in Xinjiang.  The region constitutes about 5 percent of the population, yet over 15 percent of the landmass.²⁷

In addition to being geostrategically well situated, the Muslim minority maintain close ties with their Islamic brethren in Central Asia and the Middle East.  Both regions figure prominently in Beijing's security calculations.  China is keenly aware of the importance that foreign Islamic governments and their people place on China's treatment of its Muslim minority.  Recent riots involving Uighurs and Chinese authorities in Xinjiang, a remote and desolate area in China's northwest corner, illustrate this fact.  These clashes had repercussions throughout the Islamic world- from flag burning outside the Beijing consulate in Ankara, to government demands in Riyadh to pay closer attention to violations of religious freedoms, to protests on the streets of Almaty.   

Quite simply, China cannot afford to alienate its Middle East trading partners-all of them Islamic states with the exception of Israel-which represent an important economic bloc.  In the wake of the Western trade embargo in 1989 in response to the Tiananmen Square incident, the countries of the Middle East became more valuable trading partners.  Whereas in the past China exported mostly tea and foodstuffs, now apparel, textiles, footwear, leather goods, ceramics, and labor are all finding their way to the Middle East.  In addition, the Middle East provides a good market for low to medium technology, a tough sell in the developed world.  Increased trade resulted in an average rise in exports to the Middle East by more than 20 percent per year from 1990-95.  While the level of export to the Middle East remains constant at about 2 percent of total export, this figure does not include arms sales to the region, a growth industry not easy to quantify.  One of China's largest market for arms exports is the Middle East.²⁸

The Middle East is also important to China because of its oil reserves.  In 1993, China became an oil importer for the first time in 25 years.  China must make significant new oil discoveries if it is to maintain its economic momentum and avoid becoming heavily dependent on oil imports.  With most of the world's excess oil capacity located in Persian Gulf countries, this region is likely to become China's main source of imports.  Slaking China's thirst for oil will become increasingly difficult.  As China continues to modernize, overall energy consumption will rise.  Recent estimates state that China's net external requirements will rise from the current 600,000 barrels per day to nearly 3 million by the year 2010.  This total would represent nearly half of Saudi Arabia's current daily production.²⁹

Central Asia is also important to China because of its energy resources.  Of principal significance is Kazakhstan, with reserves of more than 15 million barrels of oil and 86 trillion cubic feet of gas.  This has earned the largest and second-most populous Central Asian country the moniker "the new Kuwait."  Most of the oil is located at the Tengiz oil field (the largest oil discovery in the world since the 1970s), which sits astride the Caspian Sea.  China has been negotiating with Kazakhstan for several years to develop a trans-Kazakh pipeline, but no deal has yet been reached.  The harsh terrain and the cost of maintaining a several-thousand-mile pipeline militate against an agreement being signed.  As for the other Central Asian countries, Turkmenistan and Uzbekistan have between them 2.5 billion barrels of oil and 160 trillion cubic feet of gas.  In addition, scattered throughout the region are large gold, precious metal, and strategic mineral mines.  

Unfortunately, China does not have a domestic solution to its energy problems.  Most of its current production is from mature oil fields in the northeast.  These fields have reached maximum production rates and are declining.  There are two other potential sources for future oil production, but neither of these is a likely solution to China's energy shortages.  One is to attempt to extract resources from the massive and remote Tarim Basin, which is bordered by mountains on three sides and located in extremely inhospitable terrain.  Reaching these oil reserves would require drilling some of the deepest wells in the world and is probably not economically feasible.  Exploration of the resource-rich South China Sea is another possibility.  Extracting sizable resources from here-possession of which is contested in part or whole by China, Taiwan, Malaysia, Vietnam, the Philippines, and Brunei- is probably not politically feasible.  In addition, even if the Tarim Basin and South China Sea fields were fully developed, they would be insufficient to keep up with rapidly rising domestic consumption levels.³⁰

Further complicating Chinese relations with the Middle East and the Central Asian republics is the rise of ethno-nationalism, fueled by a resurgent, militant Islam.  China fears that Islamic groups promoting the creation of an Islamic republic, which would be composed of the Turkic peoples of Central Asia (who comprise the majority of the population) and Chinese Uighurs (also of Turkic descent), will have a destabilizing effect on China's northwest provinces.  A relatively porous border, intensified by China's desire to promote economic development and reinvigorate the ancient Silk Route as a main artery for trade and commerce, has brought Chinese people in the region into close contact with ethnic kinsmen who are enjoying the fruits of independence and, in some cases, greater financial prosperity.  If China's minorities are looking for a model for political independence, they need not look farther than their former Soviet Union neighbors.  Conditions such as these are ripe for separatist activity, especially in light of the restive mood of some minority groups.  Rioting in 1997, involving 1,000 Muslim separatists in Yilin, Xinjiang Province, is only the most recent incident in a long series of clashes between the minority Han Chinese and the mostly Muslim majority.³¹

China must follow a dual-track approach in handling this sensitive problem.  Beijing needs to implement policies toward its ethnic minorities, convincing them that the benefits of cooperation will outweigh the advantage of resistance to the government.  To achieve this goal, Chinese authorities have permitted limited religious freedom, promoted economic development, and endorsed the assertion of ethnic minority identity.  Beijing needs to strengthen relations with the Central Asian republics in hopes that these countries cooperate with the Chinese Government in discouraging separatism in China's adjoining provinces.  To persuade the Central Asian republics to help in this effort, China has offered economic inducements.  Beijing leadership hopes that economic incentives supersede any pan-Islamic ambitions and support for them that the leadership of the Central Asian states might endorse.  Economic inducements have included cheap labor, consumer goods, and weaponry.  Numerous agreements with the Central Asian republics have also been signed in the fields of construction, petroleum, metallurgy, textiles, and electronics.³²  In line with its goal of creating a peaceful international environment and recognizing the dire economic situation of the Central Asian republics at the time of their independence, it is only logical that China has attempted to capitalize on the situation by pursuing an agenda of economic cooperation with these states.

Indicative of this approach was Premier Li Peng's 10-day tour of the Central Asian republics in April 1994.  While the heads of the Central Asian republics had all traveled to Beijing, this was the most senior official Chinese visitor to the region.³³  To illustrate the economic emphasis Beijing placed on this visit, a delegation of leading Chinese business executives traveled with Li Peng.  Designed to boost bilateral trade and economic cooperation, this trip marked the first time that a delegation of businessmen accompanied a top government official on a trip abroad.³⁴  During Premier Li's trip, numerous agreements were signed promoting bilateral cooperation.  President Jiang Zemin's visit to Uzbekistan, Kyrgzystan, and Kazakhstan in early July 1996, during which time 18 agreements were signed, further cemented relations.  The success of these trips, and the overall success of the "Central Asian strategy," illustrate the efficacy of economic suasion as a viable tool of Chinese statecraft.  As the economy grows and import and export levels rise, China will undoubtedly utilize more frequently economic suasion to attain its foreign policy objectives.  

The Military

As China's economic strength increases, one of the major beneficiaries of this growing prosperity will be the PLA.  For the past decade, China has been engaged in a sustained effort to modernize its military forces.  In 1995, the Chinese Government appropriated $7.5 billion (63 billion yuan) for defense.  In 1996, the total was $8.66 billion.  The figures released at the Fifth Session of the Eighth National People's Congress show a 12.7 percent growth to $9.7 billion for 1997; 1996 marked the eighth straight year of nominal double-digit increases in Chinese military spending.  The military budget doubled between 1989 and 1994 and has nearly tripled since the early 1980s.³⁵

For the past decade, the PLA has been modernizing its forces with the goal of building a power-projection capability intended to safeguard Beijing's interests.  This effort has focused principally on the PLA transforming itself from a Maoist guerrilla fighting force to a modern force capable of conducting a range of operations across a broad spectrum of conflict scenarios.  To accomplish this mission, a highly mobile force capable of conducting all-weather, day/night joint operations is needed.

What has worried the world community most is why China is assembling this force.  There is no identifiable immediate threat.  Chinese leaders have repeatedly claimed that the threat to China's security is lower now than at any time in this century, so why build this force?  There are two reasons.  First, the buildup is the natural byproduct of an expanding economy that can afford to invest capital in defense.  Large growth over the past 15 years has provided Beijing with increased resources which it can devote to defense programs.  Second, PLA strategists have identified a number of security concerns in the near to midterm time frame-growing Taiwan assertiveness, increasing tensions on the Korean peninsula and continuing friction in the South China Sea.  These potential problems could be handled more sufficiently and efficiently with an improved military capability.³⁶

Prior to 1985, Chinese military strategy was premised on the belief of an inevitable protracted ground war with the Soviet Union.  However, a number of factors convinced Chinese analysts that war was no longer imminent: the lessening of tensions and the emerging détente between the United States and USSR, the Reagan-era defense buildup, the emergence of Gorbachev's "New Thinking," and the poor performance of the Soviet military in Afghanistan.  The Iran‑Iraq conflict, as well as conflict in Afghanistan, Lebanon, and Kuwait showed the Chinese that war was not obsolete, just of a wholly different nature.  Analysis of contemporary warfare has convinced PLA strategists that future wars will likely be short, intense, and local.  Thus, the late 1980s were characterized by doctrine and force structure developments aimed at fighting "limited warfare."  The 1991 Persian Gulf War caused Chinese strategists to realize the importance of high technology and its place on the modern battlefield.³⁷

By the time of the Gorbachev-Deng summit in 1989, a number of military reforms designed to fulfill the requirements of the new strategic doctrine had already been implemented.  China needed a force that could quickly and effectively respond to crisis along its periphery.  It needed to move away from the "People's War" doctrine-emphasizing protraction, mobilization, and attrition-toward a doctrine emphasizing speed, mobility, and lethality.  In response to this requirement, in the second half of the 1980s the PLA cut one million personnel, reduced the number of military regions from eleven to seven, and restructured the 36 PLA army corps into combined-arms group armies.  In addition, professionalization of the PLA was increased with the institution of higher education requirements for officers and new cadre regulation and training reform.  The ultimate goal is the creation of a professional officer corps with more than 90 percent of the personnel having college or advanced technical education.³⁸

The decade-long reexamination of military strategy has resulted in the doctrinal requirement for the PLA to be capable of fighting "local wars under high technology conditions."³⁹  Execution of this doctrine requires quick-reaction forces capable of striking outside of China's borders.  The doctrine envisions principally small-scale regional conflicts along the Chinese periphery.  As Chinese strategy focuses on wars in the next century, it is clear that conflict along the periphery will primarily involve naval, naval-air, and air assets.  Not surprisingly, the importance of ground forces has been deemphasized and the majority of force modernization efforts has been directed at the navy and air force programs.  In addition, research and development in high technology fields have been emphasized.⁴⁰

The PLA modernization effort has been helped by an infusion of advanced weapons and technology over the past several years.  The principal supplier has been Russia, primarily because the Russian defense industry cannot survive on domestic procurements.  Other reasons include the privatization of defense industry sectors that allow them greater degrees of autonomy (the freedom to negotiate their own deals with prospective buyers) and an increasing convergence of foreign policy interests between the two countries.  Arms acquired from Russia include SA‑10 surface‑to‑air missiles, Kilo‑class submarines, Mi-17 helicopters, Il-28 bombers, Il-76 transport planes, SU‑27 fighter aircraft, Type 72 battle tanks and advanced air-to-air missiles.  China has also received hardware and technology from the United States, France, Germany, Great Britain, Italy, and Israel.⁴¹  As evident from the list of equipment received, the central focus of Chinese arms procurement from Russia has been on air force and naval weapons systems.  The comprehensive modernization effort in these two services is designed to provide a longer range power projection capability for the PLA.  

The People's Liberation Army Air Force (PLAAF) has traditionally been the weakest element of the PLA.  Long seen as a support element for the ground forces, the PLAAF is moving toward a new role as an offensive strike force.  The purchase of SU-27 aircraft in the early 1990s represents the initial step toward achieving this goal.  China now has a total of 72 SU-27s, one of the most modern, capable, interceptor/air superiority fighter aircraft in the world.  These aircraft will primarily be used as interceptors, although they can be used in a ground attack role.  The SU-27 will serve as an interim solution until China upgrades its existing attack, bomber, and fighter force (A‑5, B‑6, F‑7, F‑8) and introduces its next generation fighter (F‑10, based on the U.S. F‑16 with avionics upgrades from Israel,  likely to be produced sometime after the year 2000).  The PLA is developing an air‑to‑air refueling capability, an airborne warning and control system (AWACS) capability, a helicopter fleet, and a long‑range transport capability.  These developments, when they reach fruition next century, will give China an increased power projection capability and allow it more effectively to execute the "local wars" doctrine.⁴²

Like the PLAAF, the People's Liberation Army Navy (PLAN) has principally been viewed as a support element for the ground forces.  Although in 1981 China had the world's third-largest navy, it was capable of little more than coastal defense (brown- water fleet).  The PLAN lacked even rudimentary surface-to-surface missile protection for its ships.  Fifteen years later, China still has the third-largest fleet in the world, but now it is capable of conducting both offensive and defensive operations in its coastal waters (green-water fleet).  China also now has a credible sea-skimming, surface-to-surface missile capability.  China is currently pursuing the capability to conduct open-ocean operations (blue-water fleet), although Chinese officials have acknowledged that this capability will not likely exist until the middle of the next century.  Since the beginning of the decade, the Chinese have introduced a new generation of destroyers (Luhu class) and guided missile frigates (Jiangwei class) into the inventory.  These are armed with increasingly sophisticated surface‑to‑surface missiles (SSMs), surface-to‑air missiles (SAMs) and advanced radar and electronic warfare capabilities.⁴³

Perhaps the most disturbing element of PLAN modernization effort is the PLAN submarine force.  In late 1994, Russia sold China four Kilo‑class submarines (two of which have already been delivered). The capabilities of this submarine are a vast improvement to the aging Romeo- and Ming‑class submarines, which currently dominate the PLAN inventory.  Kilo-class submarines are diesel powered and have a 6,000-nautical-mile range.  They are equipped with advanced weapons and a modern fire control system.  In 1994, China introduced the Song‑class diesel attack submarines, which will eventually replace the Ming and Romeo coastal patrol submarines.  The Kilo- and Song-class submarines would be ideal for conducting operations in the South China Sea and assisting in any type of naval blockade against Taiwan-two potential capabilities that have alarmed countries in the region.⁴⁴

While China's military modernization has been impressive and appears to provide the Beijing leadership with a formidable force to further its foreign policy interests, there are a number of important caveats that need to be issued.  First, it is necessary to put in perspective the time frame under consideration. China has a very ambitious modernization program.  It is clearly in its incipient stages.  As it now stands there is a huge gap between doctrinal desires and actual PLA capabilities. There will be a lengthy and perhaps painful process ahead as the PLA transforms itself into a modern military capable of fighting "local wars under high technology conditions."  The emerging operational requirements for force projection will not likely be fully met until at least 2010.  

Economic reform, decentralization and disparate regional growth rates have led some to argue that China in the future will be highly fragmented.⁵¹  In the extreme, this could lead to social chaos and the collapse of the Communist system.  While this scenario has some adherents, it overlooks some fundamental truths about China.  First, China has an extremely homogenous population.  This has resulted in a common language, history, and culture.  Ninety-three percent of the people living in China are of Han nationality, while the other 7 percent of the population is composed of over 50 ethnic groups.⁵²  Thus, deep societal fissures are unlikely to occur.  Second, China has devoted considerable resources to guard against fragmentation.  Through a policy of forced population migration, China is making efforts to ensure that regions with large ethnic minorities (primarily in the northwest, but also in the southwest) will be increasingly Han-dominated.  It has also attempted to rotate regional government, military, and party leaders out of area in an effort to ensure that they do not build powerful support bases that could potentially threaten central rule.  Third, Chinese central government influence over regional affairs has traditionally been weak.  The central government has always granted a great deal of autonomy to the regions,  yet this weak control should not be misinterpreted as presaging fragmentation.  In spite of numerous insurrections and invasions, for the past 500 years China has remained largely unified.  Since China was first unified in 221 B.C., the concept of the unity of China has remained deeply ingrained in the Chinese mind.

Economy Overheating

Chinese economic policy is not without problems.  Lack of fiscal and monetary discipline, lack of currency stability, and inflation hovering in the double digits are all potential bottlenecks.⁵³  In addition, there have been derivative problems from the phenomenal economic growth.  Corruption in major cities is rampant, and the disparate growth between the coastal regions and the interior has created a steady flow of workers migrating to the cities.  The surplus rural population's movement to the city has created a "floating population" of 10 to 80 million people that is putting a severe strain on city infrastructure.⁵⁴  To tackle these problems the leadership has followed a slow but steady course.  Instead of pursuing a market-oriented economy in a single "great leap forward," it has instead pursued a strategy of caution, epitomized by Deng Xiaoping's oft-repeated phrase "crossing the river by feeling the stones."  This has permitted the Chinese leadership the luxury of tinkering with goals and objectives, but not sacrificing economic vision or overcommiting resources.  One noted success of this strategy is the reigning in of a spiraling inflation rate.  In 1994, the inflation rate reached a post-revolutionary high of 24 percent.  Through a series of draconian macroeconomic control measures, the rate was lowered to 6 percent in 1996.⁵⁵  Keeping inflation under control without dragging the economy into a recession is not easy-the United States had great difficulty accomplishing this task in the late 1970s.  Over the past 15 years, China has continuously exhibited remarkable resiliency in overcoming economic problems and proceeding with the liberalization and reform processes.

Environmental Degradation

China is faced with some of the worst environmental degradation in the world.  The Chinese National Environmental Protection Agency has estimated that the reparation cost for environmental problems (acid rain, air pollution, untreated water) constitutes 15 percent of the GNP, and this figure is likely to rise in the future.  Some have even argued that environmental pressures in China may cause the country's fragmentation.  Shanghai and Beijing are two of the five worst cities in the world for carbon dioxide emissions.  Eighty-two percent of China's major rivers are polluted to some degree, at a time when large increases in population and economic output have greatly expanded nationwide water needs.  In addition, China does not have a substantial capacity to deal with these challenges.  China has little hope to expand irrigated and arable land to feed its population, which is growing at 17 million per year.⁵⁶

Clearly, China has sacrificed the environment in its pursuit of economic growth and modernization.  Its rapid industrial development has resulted in large-scale environmental pollution.  Luckily, recent events indicate that China is coming to grips with this problem.  At the National People's Congress (NPC) in March 1996, both Premier Li Peng and Qiao Shi, Chairman of the NPC, emphasized environmental protection as a key issue and that economic growth should not occur at the expense of the environment.⁵⁷  In addition, the "Outline of the Ninth 5- Year Plan," which sets forth goals, main tasks, important principles, and policies for the next 15 years, also sets target rates for industrial, farmland, and water pollution.  Overall, the goal is that by the year 2000, environmental pollution and ecological damage will be "basically brought under control." More recently, China has agreed to adopt international environmental standards as outlined by the International Standardization Organization.  The new standards, effective

April 1, are aimed at supporting environmental protection and the prevention and reduction of pollution. ⁵⁸  This move further represents proof of China's efforts to bring its environmental degradation problems within internationally accepted threshold levels.

Policy Prescriptions

What emerges from the picture outlined above is an economically vibrant China with an increased set of levers at its disposal to support its expanding interests.  To help insure that China's future actions do not adversely affect stability in the Asia-Pacific region, there are five policy initiatives the United States should pursue. 

Appreciation of the moment.  It is important to remember that China is undergoing a profound transformation.  Since the 1950s, China has consistently portrayed itself as a member and a leader of the developing world, championing the causes of other Third World nations in international fora.  China has always viewed the developing nations as a major force in international affairs.  Its agenda in the past included support for revolutionary movements, opposition to superpower hegemony, and a stress on collective self-reliance.  Now it seems that China is uncomfortable with its role as a developing country.  It wants to be considered a great power.  This has resulted in China suffering from the psychosis of multiple-personality disorder: because of its tremendous size, population, natural resources, and military strength, it has been treated as a major global power, yet its poor economic condition and technical backwardness indicate that it be considered a developing country.  China has trouble finding a suitable and comfortable niche for itself in the constellation of nation-states.  It was last a great power over a century ago.  It is unfamiliar with the current geopolitical terrain, a multipolar, interdependent, global community. 

The Chinese Communist Party, which has ruled China since its founding in 1949, is slowly becoming a bankrupt entity.  The ideology that has been a cornerstone of the state for the past five decades is under attack.  Rising income levels brought on by a rapidly expanding economy have created expectations that have outstripped the reforms designed to satisfy them.  Pressure for social, cultural, and political pluralism continues to mount.  These events seem to portend a likely sociopolitical earthquake, rocking the very foundation of the Chinese state.  The consequences of these events are unimaginable.  Washington needs to be sensitive to this process of transformation and understand the ramifications of potential outcomes, some of which might be inimical to U.S. interests.

Greater understanding.  There needs to be a greater understanding of China.  This begins with recognition of the simple fact that China is a rising power, a major regional power on the cusp of becoming a world power.  China is the one power with the potential to contend with the United States for the mantle of leadership in the 21st century.  As Napoleon noted two centuries ago, "There [China] lies a sleeping giant.  Let her sleep.  For when she wakes, she will shake the world."  As China arises from her slumber, it is a foolhardy and counterproductive approach to attempt to isolate her.  Cold War biases need to be shed.  A policy of containment worked with the old Soviet Union because it isolated itself from the world economy and democratic societies.  China's approach has been to embrace rather than abnegate engagement with the world.  The world is also no longer seen as a macroclash between two competing systems.  "Socialism with Chinese characteristics" represents an alternative to, not a competitor against, the Western liberal democratic model.

The cornerstone of any policy with China will rely on proper communication.  This requires a careful understanding that Chinese activities are shaped by a different geostrategic situation, history, collection of political beliefs and military experiences than those of other nations.  In crafting a China policy, it is important that China be treated as a partner.  China craves respect from the international community.  This desire stems from two sources: China's historic superiority complex, and the residual feelings from the "century of humiliation" (1840s-1940s) that China suffered at the hands of the Western powers.  China believes that it should receive preferential treatment for past exploitation and that this past ignominy cannot be rectified until the great powers in the West give China the respect that it feels it is due.  For centuries the Chinese empire enjoyed basically unchallenged greatness and self-sufficiency.  China saw itself as the center of culture and civilization, a view reflected in the notion of the Middle Kingdom (Zhongguo, the Chinese word for China).  This concept of Sinocentrism can be seen in China's relations with other states.  For nearly two millennia (until the late 1800s), a tributary system existed in which foreign emissaries would kowtow before the emperor and present him with gifts in recognition of China's paramount status.

By the middle of the 19th century, the Chinese empire had begun a century-long, steady decline.  For a country with such a rich heritage, the movement from great power to "semicolonial" status, in which foreign powers increasingly encroached on Chinese territory, was especially painful.  Perhaps the most humiliating aspect of the "century of shame" was China's military defeats-the disgrace at the hands of the British in the Opium Wars of 1839-42, followed by the defeat by the Japanese Navy in 1894-95 and culminating in the atrocities suffered at the hands of the Japanese Army from 1937 to 1945.  The military, the principal guarantor of stability in dynastic China, was rendered impotent.

The most dangerous trend in modern China-the rise of nationalism-is rooted in China's long and rich historical tradition.  Beijing leaders, in an effort to bolster regime legitimacy, have increasingly turned toward nationalist rhetoric to strengthen their position.  The mission of returning China to its proper place as a great power and the successful resolution of irredentist claims have become the sine qua non of Chinese foreign policy.  This reveals a weak state and a potentially dangerous situation: if support for the regime continues to erode or if China perceives its interests as being threatened, the leadership might feel compelled to take a more assertive or even aggressive posture.  The future direction of the U.S.-Japan alliance, U.S. military force levels in east Asia, and U.S. ties with ASEAN will all be important barometers for China to gauge its level of security.  If China decides to foment nationalistic sentiment, they have a convenient target-the United States.  America's continuing vilification of China on a host of issues only encourages increasing nationalist fervor. 

Treating China as an intractable foe could become self-fulfilling.  China feels both pride and insecurity, wanting international power and respect but unsure how to get it.  Modern China is like Wilhemine Germany-seeking a "place in the sun" but not understanding what it means or how to get there.  Much like China suffered a century of humiliation at the hands of rapacious foreigners prior to the founding of the modern state, so too, did Germany lay weak and fractionated prior to the establishment of a unified Germany in 1871.  Germany's efforts to assume the mantle of a great power in Europe, through cleverly exploiting and fostering rivalries among the other European powers and, failing that, use of bullying tactics, led to resentment among the other nations of Europe.  There are many parallels between late 18th century Germany and late 19th century China.  Like Germany, China has a dynamic economy, increasing military strength, and a rising ambition.  Ultimately, it was Germany's realpolitik approach to foreign affairs that played a major role in convulsing Europe in war in 1914.  Having seen the results of Germany's attempts at achieving great power status, it is important that the United States engage and assist China during this fragile growth period to avoid a repeat of history.

A coherent strategy.  It is important that the United States develop a coherent strategy concerning China.  Principally, this involves determining what would be the most preferable China end state.  Some wish to see a healthy and wealthy China as a force for stability.  The dynamism of the region requires a strong and cooperative China to work with other actors in the region to promote prosperity and peace.  Others wish to see a permanently emasculated China, capable of defending itself and engaging in limited power projection, but otherwise not playing a major role in Asia‑Pacific affairs.  In this scenario, the Chinese economy stalls, but political control remains rigid.  Still others would like to see the authoritarian rule collapse (in a "managed" fashion) and a proto‑democracy emerge.  Proponents of this type of China argue that a prospering economy under authoritarian rule sets a bad, and potentially destabilizing, precedence.  Each preferred end state has a discreet set of solution parameters, and it is not until the United States decides what type of future it envisions for China can it begin to craft a "China policy."⁵⁹

Strengthening of ties.  Bilateral and multilateral dialogue should be pursued across a broad sociopolitical, economic and military spectrum.  The goal of this approach is to encourage Chinese interdependence with the rest of the region.  Since China's decision almost 20 years ago to seek prosperity through economic reform, China has undergone profound social, economic, and political changes.  For China to prosper, it has to open its economy and social system to outside influences.  This has entailed surrendering a degree of autonomy over its economic, social, and foreign policy.  Gerald Segal has argued that modern countries seeking great power status have needed to adapt to the current world system, one characterized by liberalism, capitalism, and democratic ideals.  He further argues that China will also adapt because it, too, seeks great power status.⁶⁰  Clearly China will resist these constraints of adaptation because they are fundamentally changing the nature of China.  The task for the United States and other nations is to make this multidimensional transition as smooth as possible.

By promoting dialogue and interdependence with China, regional awareness and confidence are increased.  This can best be accomplished through greater CBSMs.  Although no one expects China to publish a robust defense "white paper," CBSMs could be put in place to reduce misperceptions and suspicions.  CBSMs are political/ military actions taken to lessen existing tensions by making objectives more open and explicit.  Their goals are to create a peaceful environment pinned on the belief that common security can best be attained through collaboration with adversaries rather than by generating insecurity in them.  CBSMs cover a wide spectrum of activities, from simple exchanges of information through establishing procedures for crisis management to prenotification of troop deployment and military exercises.  U.S. encouragement of China to take part in CBSMs will serve to help decrease suspicions of a "China threat."  The United States should also actively promote CBSMs as a low-cost means of helping maintain peace and stability in the region.

Maintenance of a forward presence.  The United States must continue to maintain a significant forward presence in the region and support the U.S.‑Japan security alliance.  The April 1996 U.S.­-Japan regional security declaration, with the twin goals of reaffirming U.S. commitment of 100,000 troops to the region and an expanded role for Japan in regional security, is an extremely positive development.⁶¹  But this is not enough. The United States has security arrangements with four other nations in the region: Australia, the Republic of Korea, the Philippines, and Thailand.  Reaffirmation of these ties will emphasize the degree to which U.S. presence serves common interests.  Two Sino-Russian joint statements, issued following Boris Yeltsin's trip to Beijing and Li Peng's visit to Moscow, call for a "strategic partnership" between the two nations based on equality, trust, and mutual cooperation.  These statements underscore China's active efforts to improve its security environment in Asia.⁶² The United States can ill afford not to pursue similar efforts.

No one knows for sure what guise Chinese power will assume in the future: will China be a responsible power or a regional hegemonic power? A decade ago, China had limited resources it could use to achieve its foreign policy objectives.  Now China has an array of policy levers at its disposal-diplomatic, economic, and military-to accomplish this task.  China clearly seeks a greater role for itself in world affairs.  Because it is unclear how China will attempt to achieve its objectives, the United States should implement the above- mentioned policy initiatives because they represent the best opportunity for the United States to ensure that Chinese actions do not have a destabilizing effect on the Asia-Pacific region.

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Notes