There is a paradox at the heart of Sino-US relations: as Professor Yan Xuetong has written, they are inherently unstable; yet the structure in which their relations is cast is very stable indeed. They are stable in the sense that the United States as the world’s pre-eminent power has weighed heavily on the affairs of China since at least the proclamation of the Republic in 1911. They are unstable in the sense that they tend to swing between the extremes of what has been called America’s love affair with China, to enmity expressed in the harshest of terms by both sides. The roots of China’s present foreign policy are no exception. They may be traced to Mao Tse Tung’s legacy: the Great Helmsan bequeathed his heirs both the 1972 alliance with the United States, and his thinking about international relations, whereby the world is conceived as an arena of relentless conflict. Coming to terms with US primacy has entailed the development of a “grand strategy”  for China,–one that reconciles the regime’s priority to development, defence of sovereignty, accommodation with neighbours, and partnership in world affairs with the US as China’s vital but not sole partner. Yet it has also involved the development of a comprehensive and determined challenge to the US position in world affairs whether as a cultural friend, a business partner, a political competitor or as a military adversary.
The following sections chart the background to Sino-US relations, prior to the Mao-Nixon meeting of early 1972; the last twenty years of the communist system; and the geopolitics of the first decade of the post-cold war world-years which set the scene for the dual development of China in the WTO, and of China as America’s rival for leadership in the world. This will be the substance of Chapter Four.
China at war.
One date stands out in the history of Sino-US relations: in 1899, the US Secretary of State John Hay’s sent his Open Door Note to the European powers, proposing to keep the China market open to trade with all countries on an equal footing. The policy won support of all the rivals. But it created long-lasting resentment among Chinese patriots because their government had not been consulted. Deng Xiao-ping’s Open Door initiative in 1978 to welcome foreign businesses that wanted to invest in the country was of a different order: this time, it was the Chinese government which took the initiative, setting in motion the transformation of China and of the world.
The US interest in China has always been a mixture of motives: by the 1930s, American missionaries had created sixteen higher educational institutions, which were then nationalized when the Communists took power in 1949. Their idea had been initially to convert China to Christianity. Over time, experience told them that the Chinese were much more interested in the learning they transmitted, than in the religion they sought to promote. In the words of Madeline Y. Hsu, “The possibility of collaboration and mutual benefit between Americans and educated Chinese had long co-existed with the more visible threat posed by the masses of (immigrant) Chinese laborers poised to overwhelm the United States and its young democracy. Across the mid-twentieth century, Americans came to realize that educated Chinese could not only build a stronger China, but also contribute significantly to empowering the United States.”
Sir John Keswick, President of the Sino-British Trade Council, speaking at the time of President Nixon’s January 1972 visit to Beijing, described the US as having an enduring love affair with China. In Chungking -the capital of Nationalist China during the world war, Keswick explained, “You had on the one hand Roosevelt, madly enthusiastic about China and madly generous to her, and on the other Chiang Kai-shek and Madame Chiang, wooing the Americans as hard as they could for the benefit of their country. Marshall Sidwell, Wedermeyer and other American generals, too, were madly in love with China. There were also influential characters, such as the great publisher Henry Luce, the son of a missionary…Roosevelt himself came from a family whose background was in the Boston China trade of the early nineteenth century. All of this made for a sustained sentimental approach, so much so that I often thought of China of that date as being like a mistress to the Americans”.
The love affair took shape as a deepening US commitment to the modernization of China, and to its territorial integrity. US public opinion opposed Japan’s invasion of Manchuria in 1931, and -despite the US policy of neutrality- aid began to flow in quantities after the Japan attack on Shanghai in 1937. US military and financial backing to the Nationalists in Chungking then redoubled after the Japanese attack on Pearl Harbour, and the formal US declaration of war on Japan in December 1941. Madame Chiang-Kai-shek addressed the US Congress and toured the country to rally support. Congress amended the Chinese Exclusion Act, prohibiting all immigration of Chinese labourers. Direct racial barriers were later abolished, notably in the 1965 Immigration and Nationality Act. Roosevelt moved to end the unequal treaties from the 1840s, opened contacts with the Communists, opposed to Chiang-Kai-shek, and at the end of the war, secured China’s rank as a permanent member of the UN Security Council. Chinese statistics record the war as causing 35 million civilian and military, astronomical destruction of property,  and 95 million refugees. The memory of the war remains a central consideration in relations between Beijing and Tokyo.
With the war’s end, hostilities between the Nationalists and Communists resumed. During the war, Stalin had ordered Mao to co-operate with the Nationalists in fighting the Japanese. But the rivals for power in China resumed their civil war as soon as the Japanese surrendered. President Truman dispatched General George Marshall to China to mediate between the warring factions, but the effort failed. In secret hearings to Congress in early 1948, Marshall, by then Secretary of State, testified that the Nationalists could not possibly win, and that it would be unwise for the US to become involved in the civil war.  Stalin was equally cautious, and ordered Mao to come to terms with the Nationalists. Mao refused. Marshall’s successor as Secretary of State, Dean Acheson, thought that the best of a bad set of options was for the US to come to terms with Mao’s victory, in the longer-term hope of driving a wedge between Stalin and Mao. Acheson suggested as much in his August 1949 China White Paper, a compilation of official documents to defend the administration’s record and argue that there was little that the United States could have done to prevent Communist victory. But the public was not listening. “Who Lost China?” became the angry cry in response to the news of the fall of the Kuomintang government, widely viewed as a geopolitical disaster allowing for the formation of a Sino-Soviet bloc capable of dominating Asia. Mao proclaimed the founding of the People’s Republic of China on October 1, 1949.
It was against this backdrop that Nationalist forces under Chiang Kai-shek withdrew to the island of Taiwan, off the coast of the province of Fujian, and the United States began sending weapons and advisers to the French in Vietnam. In the winter of 1949, Mao embarked on a two-month visit to the Soviet Union to establish a diplomatic alliance with Stalin. Tensions were high. The Soviet Union previously had signed a treaty with the regime of Chiang Kai-shek, and Stalin felt Mao could threaten his domination of worldwide communism. Nevertheless, the two countries signed a formal alliance on February 14, 1950. The Sino-Soviet treaty of friendship, alliance and mutual assistance, included the declaration of a military alliance against Japan and its allies. When North Korea invaded the south to end the country’s division, Beijing and Moscow were both drawn into the conflict. The US rode in under the aegis of the United Nations, and in September 1951, signed a peace and security treaty with Japan. Notwithstanding the Truman administration’s determination to forge a “great crescent” of containment that stretched from Japan to the Indian subcontinent, reaction to Communist victory in China gave rise in US domestic politics to the prominence of Senator Joe McCarthy, and his campaign to unearth communist spy rings in high places in the US administration. The US-Japan peace Treaty of 1951 helped to cement an enduring security structure in North East Asia. US predominance in the Asia Pacific region has since provided the overarching presence of Asia’s security system.
In the first decade to 1960, China “leant to the Soviet side” in the cold war. But Dean Acheson’s idea that it would be possible for US diplomacy to drive a wedge between China and the USSR was not defunct. In 1960, China split with the Soviet Union. Ever wary of his neighbours’ motives, Mao resented Moscow’s claim to leadership in the communist movement, feared its efforts to seek accommodation with the US, notably over nuclear weapons, and berated the Soviet Union for reducing support for revolution in developing countries. As Stuart Schram, Mao’ biographer records Mao saying in 1962, “in 1945, Stalin wanted to prevent China from making revolution, saying that we should not have a civil war and should cooperate with Chiang Kai-shek, otherwise the Chinese nation would perish. But we did not do what he said. The revolution was victorious. After the victory of the revolution he [Stalin] next suspected China of being a Yugoslavia, and that I would become a second Tito. »
Mao was taking orders from no-one. Dispute over its Himalayan frontiers with India escalated into armed conflict in 1962, when the People’s Liberation Army (PLA) inflicted severe losses on badly equipped Indian forces. As China became engulfed in Mao’s Cultural Revolution, China’s leaders became anxious about the Soviet military build-up along the disputed Sino-Soviet 7,000 kilometre frontier. Meanwhile, the two communist powers entered as competing rivals into the Indochina war, but as support waxed in the US to bring the boys home from Vietnam, Mao’s enthusiasm waned for US retrenchment from the Asian mainland. A serious Sino-Soviet clash on the Ussuri river in 1969—the first armed conflict between two nuclear powers—served to underline the danger to China of not “leaning to one side”.
Towards a unipolar world.
Richard Nixon’s Presidency of 1969 to 1972 marked the confirmation of the US as the world’s prime power. This was not the way it was seen at the time: the US historiography of the Vietnam war is replete with references to US relative decline, the corruption of its institutions and the demoralization of its armed forces. Ex post, though, it is clear that the Soviet Union was no match in the competition for economic leadership; Europe remained divided, and at best a loose confederation of autonomous national states; China remained an economic backwater, and India or Brazil were hobbled by their internal defects. Despite its travails, the US reigned with no competitor in sight.  On world markets, the dollar became the world’s prime currency. The US was dominant in Europe, and Asia, and the indispensable partner for all parties in the Mid-East and the Gulf. For Mao, the purpose of closer relations with the US was to counter Soviet ambitions in Asia, and win access to US military technologies.
A major portent of future developments came in October 1971, when the US acquiesced in a UN vote to grant Beijing the China seat at the UN, previously held by the Nationalists. Subsequently, the parameters of US-Chinese relations were set out in three key documents. In addition, the US Congress passed the Taiwan Relations Act in April 1979, replacing the 1954 Defence Treaty.
The first, and most important communiqué, was signed by Mao and Nixon in February 1972. The Shanghai Communiqué acknowledged “the position on both sides of the Taiwan Straits that there is One China, of which Taiwan is a part. The US also affirmed interest in the “peaceful settlement of the Taiwan question by the Chinese themselves”. 
The second communiqué came in the wake of Deng’s meeting with President Carter at the White House. In the Normalization Communiqué of January 1979, the US government confirmed the One China policy, but broke formal relations with Taiwan. The text stated that the US would maintain “cultural, commercial, and other unofficial relations with the people of Taiwan.”
The White House decision to sever diplomatic ties with the Nationalists prompted a backlash in Congress, which passed the Taiwan Relations Act. The Act stipulated that US policy considers any effort to determine Taiwan’s future by “other than peaceful means” would be a “matter of grave concern to the United States”. The US would continue to supply “arms of a defensive character” to Taiwan, while maintaining US capacity to resist any mainland efforts to coerce the island into changing its economic and social system. “The preservation and enhancement of the human rights of all the people on Taiwan are hereby reaffirmed as objectives of the United States.”
The third communiqué came in August 1982. The two sides set forth the principles governing sales of US arms to Taiwan. In the PRC interpretation, the communiqué obliges the US to cap the quality of weapons and progressively reduce the quantity it sells. President Reagan’s interpretation of the communiqué was that it maintained a balance across the Taiwan Straits and created a stable context for continued close US-Taiwan relations.
In April 1984, Reagan made a six-day visit to China — the first by a US President since the resumption of diplomatic relations. In his speeches, the President repeatedly referred to US values of freedom and democracy,–a precedent followed by his successors – while highlighting common interests in trade and anti-Soviet strategy. As Reagan put it on his return from China, the Chinese “weren’t really Communists at all”. Then in December, the UK and China issued a joint declaration, stipulating the return of Hong Kong to Chinese sovereignty as of July 1997. It was agreed, in accordance with the “One Country, Two Systems” principle, that Hong Kong’s capitalist system and way of life would remain unchanged for 50 years thereafter.
The five following years may be seen in retrospect as halcyon days for China’s relations with the western powers. Control over China policy flowed back to the White House and away from Congress. The US won a partner to help contain the Soviet Union around Asia, while China understood that a continued US military presence in North-East Asia acted in restraint of Japanese ambitions. Both sides shared intelligence. The PLA purchased US weapons and technology, and co-operation was intensified on satellite development. Trade boomed, with the US becoming one of the leading foreign investors in China. Over 40,000 Chinese students in the 1980s attended US universities. Not least, the relationship helped build China’s credentials as a reliable partner on the world stage. China established bilateral diplomatic relations with nearly all states, joined international organizations, became an honorary member of NATO and signed on to dozens of non-governmental organizations. When in 1986, China applied for membership in the GATT, – the General Agreement on Tariffs and Trade, – the ancestor of the World Trade Organisation, the UK on China’s accord, announced that Hong Kong was a separate customs territory under the GATT, a status short of statehood. Taiwan requested a similar status, in order to avoid tensions with the mainland. Meanwhile, China participated in the Uruguay Round as an observer, in other words as an informal participant. With such favourable political winds blowing, China’s own economic reforms opened a vista on the country’s eventual reunification. If all Chinese territories came to apply similar rules, powerful forces would be set in train promoting convergence on shared norms of market-democracy.(extracts from my coronavirus blog)
The post-1991 global context facing China.
Deng’s decision in June 1989 to crush the students demonstrating in Tiananmen Square pricked the dream of convergence. Deng reiterated the Communist party’s sole hold on power, arguing that if elections were to be held, the country would be plunged into civil war. The acceleration of German unity in the autumn of 1989, followed by the collapse of the party-states in central and south-eastern Europe, culminated for the Chinese leadership in the frightening spectacle in December of the bloody demise of President Ceausescu and his wife—close allies of Beijing. Deng Xiaoping outlined his key principles for handing China’s foreign policy in a statement that became known as the 24-character policy. “Observe developments soberly, maintain our position, meet challenges calmly, hide our capacities and bide our time, remain free of ambition, never claim leadership”. The advice ran like a central thread through China’s foreign policy style in the early post cold war years. The 24-character policy yielded its fruits at the end of the decade with a crucial reformulation of Chinese foreign policy which opened the doors to China’s membership of the WTO. The rest of this chapter covers these events, and sets the zscene for China’s entry, and the economic and military consequences which flowed from the decision.
The events of 1989 gave the Chinese leadership much to worry about. The global constellation of forces was without precedent. Measured in terms of traditional power resources—population and territory, the US has no equal. Decades of heavy investments across the board in new technologies gave the US a commanding lead in hi-tech warfare, and in hi-tech exports. Its military budget was larger than all other powers combined. America’s primacy stretched across all measures of economic power resources. After decades of stellar economic performances, the US share of world income stood at 28% in the 2000s. In terms of ease of doing business, the US ranked third among all countries in the world, preceded only by New Zealand and Singapore. Its share of outward foreign investment stock was just one indicator of the range and scope of America’s “extra-territorial empire”. The dollar reigned supreme. US corporations were prime players in the world energy industry. The United States was the hub of a global network of multilateral and bilateral alliances. Its corporations and research laboratories were prime sites for the discoveries that drove forward the new technologies. It held 191 of the world’s top universities. The major international institutions such as the UN, and its family of organisations are imbued, at least by their intellectual origins, with the liberal vision, which inspired the foundations of the US. The US, in short, was “bound to lead”..
Nor did world politics offer the Chinese leadership much comfort. The tremors from the Soviet Union’s impending collapse radiated into the Mid-East, where Saddam Hussein’s launched his harebrained invasion of Kuwait in August 1990. In a stunning demonstration of US technological superiority, the coalition forces assembled by President Bush, crushed Iraq’s armed forces within twenty-four hours. The Desert Storm campaign in January 1991 marked the bankruptcy of Soviet military doctrine and technology as inherited from the second world war. As a Rand Corporation report stated, “The Gulf War demonstrated that the application of high-tech in the military has given weapons an unprecedented degree of precision and power, heightening the suddenness, three-dimensionality, mobility, rapidity and depth of modern warfare”. For China, -whose army used military equipment similar to the Iraqi army- this spelt maximum vulnerability of PLA weapons, and the urgent need to review strategic concepts.
The regime’s propensity to paranoia in international relations was reinforced by the USSR’s political implosion in December 1991. On the one hand, Soviet troop withdrawal from Indochina and Afghanistan ended the Chinese leadership’s nightmare of encirclement by an expansionist continental great power, opening the way to greatly improved relations with the new Russia, and with the successor states of Central Asia.  On the other hand, the USSR’s disappearance left a US, triumphant from victory in the cold war, as the world’s sole great power. In expectation of being able to counterbalance the US hegemon, Beijing and Moscow began to build “partnership” relations, declared mutual support against separatist movements in Taiwan and Chechnya, signed agreements on space cooperation, proposed economic co-operation and found common cause in opposition to US human rights diplomacy. In April 1996, at the height of a major Taiwan Straits crisis, the two heads of state declared “ a strategic partnership for the 21st century”, and in the coming two years succeeded in settling most remaining boundary disputes.
There could be no disguising the fact that differences between mainland China and the US over politics were more salient, now that the purpose of the alliance to contain the common threat had disappeared. In a much cited Defence Department planning guidance document, published just after the Soviet Union’s final demise in December 1991, it was suggested that US policy must establish “a new order that holds the promise of convincing potential competitors that they need not aspire to a greater role or pursue a more aggressive posture to protect their legitimate interests”.  The new order was to be achieved by “the spread of democratic forms of government and open economic systems”. China was an obvious target. Congress was irate over the regime’s treatment of the students in June 1989 and China’s exports with the US were growing apace. The incoming administration of President Clinton placed China in its human rights dog house, opposed its bid to host the Olympics 2000, criticised China over Tibet, and kept high-level contacts to a minimum.
Relations with southern neighbours were scarcely better. Since the early 1990s at the latest, the PLA had given priority to the new concept of sea as national territory, Hai yang guo tu guan. With its 18,000 km coastline, China claims sovereignty over the South China Sea, also claimed by Taiwan, Vietnam, the Philippines, Malaysia and Brunei, as well as over 6000 islands and three million square kilometers of territorial waters. It has grabbed reefs in the Spratly island archipelago, and put down markers for the Natuna gas fields off the coast of Indonesia. At stake are the potential oil and natural gas reserves and the vast fisheries of the region. The result has been predictable: scared neighbours, like the Philippines or even Vietnam, have turned anew to Washington for help, either to equip their armed forces to help promote business. Anti-US sentiments, inherited from the Vietnam war or in the case of the Philippines, from US support for the Marcos dictatorship, have been toned down. As China makes its presence increasingly felt across the southern seas, this pattern is likely to be repeated, as the maritime states beg the US to stay as the local policeman.
Compounding the regime’s propensity to paranoia in international affairs was the development of the democracy movement in Taiwan. The Taiwan democracy movement, which had been taking shape since the mid-1970s, received a powerful impetus from the June 1989 tragedy on Tiananmen Square, and the Soviet Union’s collapse. A prime political demand was an end to the ruling Kuomintang’s reunification policy. This inflamed opinion in the mainland party-state, which broke off relations with Taiwan in June 1995, following the State Department’s decision in May to concede to overwhelming Congressional pressure to grant Taiwan’s President Lee Teng-hui a visa to deliver a speech on “Taiwan’s Democratisation Experience” to his alma mater, Cornell University. A furious Beijing, resorted to military intimidation in an effort to influence the outcomes of the forthcoming presidential elections in Taiwan, and in its first White Paper of November 1995, called for the creation of an ultramodern, hi-tech military force capable of winning a regional war, including one fought over Taiwan. The PRC subsequently conducted military exercises, and missile firing tests off the Taiwan coast in March 1996 to coincide with the elections there.
The result was the contrary to that intended. The US deployed two aircraft carriers in the Taiwan Straits; Beijing’s sabre-rattling induced the Taiwanese electorate to increase their vote for Lee Teng-Hui; the US increased its U.S. arms sales to Taiwan, complicating US relations with the mainland;  and military ties between the US and Japan were strengthened. In short, China’s threats to Taiwan strengthened the US-led alliance system, directed at containing China.
Threatening changes in the geostrategic context of China.
The Taiwan Straits crisis of 1995-96 proved a watershed for Chinese foreign policy. China had two options: either it would continue to consider the external world as an arena of conflict, filled with hostile powers; or it would learn to live more easily in an interdependent world, characterised by co-operation as well as conflict. The immediate conditions for a Chinese apprenticeship in the politics of interdependence did not look encouraging.
In the course of 1998, China’s geo-strategic context took a sudden lurch for the worse. In May, the Indian and Pakistani governments exploded their nuclear devices. India’s decision to go public on its nuclear capability was explained by Prime Minister Vajpayee as India’s response to the threat from China. Chinese firms had supplied Pakistan with nuclear materials and expertise and provided critical assistance in the construction of Pakistan’s nuclear facilities. Then in August, North Korea launched its ballistic missile, the Taepo Dong 1, over Japan, causing acute anxiety there. The missile’s firing raised eyebrows in Beijing since the potential range also reached deep into mainland China; and it caused concern in the US, as the missile turned out to have a third stage, implying that Pyongyang had the potential to develop intercontinental range delivery systems(see Map above. Source: Department of Defence, Threat and Response, January 2001, p12).
The incident transformed the security situation in North East Asia, already in flux in the Korean peninsula. North Korea had lost its protector, the Soviet Union; its economy had shrunk by two thirds as Soviet subsidies were withdrawn; an un-quantified number of its citizens—perhaps up to three millions—had starved to death. South Korea, by contrast, towered over its northern neighbour. Close to collapse, the regime’s behaviour grew ever more unpredictable.
Korea is traditionally referred to as “China’s lips”, due to the peninsula’s proximity to Beijing—China’s metaphorical head—and to China’s sensitivity to events there. Not surprisingly, China prefers continuation of the status quo on the peninsula, despite Korean public opinion’s preference for unification. The demise of one of the handful of Marxist-Leninist states remaining in the world would serve as a reminder abroad and at home that China’s political system was an anachronism. A united Korea might stimulate a separatist movement among the majority population of Koreans living in China’s Yanban Autonomous Region, along the Yalu river frontier. Worse still, China, the US, Japan and Russia on past experience would compete for influence with a view to pulling the peninsula into their own sphere of interest. That spelt the risk of war with the prospect of bringing US troops much closer to China’s borders.
China’s position on the future of the Korean peninsula remains murky. China prefers the status quo in the peninsula, expresses concern a North Korean regime, armed with nuclear weapons, but appears to tolerate its erratic behavior.  By contrast, Pyongyang–North Korea’s scruffy capital—sees staying in business and aquiring a nuclear weapon as two sides of the same coin. Going nuclear is an attractive option for a small, impoverished country. It can blackmail the whole region by the threat of going nuclear, and hold it population as hostage, bargaining food and energy supplies and funds against promises not to further develop nuclear capabilities. This tactic succeeded in the 1994 negotiations with the US, but the regime did not abandon nuclear weapons for all that. The danger for Beijing was that a North Korean nuclear capability, along with a missile delivery system, was sure to act as a catalyst in Japan’s re-thinking about its own security policies in a post-cold war world. When in July 2006, North Korea fired two rounds of missile tests, including two long-range Taopo-dong 2 missiles, Japanese self-defence forces were placed on high alert, while China’s diplomats called for all parties to show restraint. Prevarication, in other words, was no longer a viable policy.
A further fallout from the August 1998 Taepo-dong incident was the US decision to invest in a National Missile Defense (NMD) against a threat of a limited strategic ballistic missile attack by “rogue” nations. From Beijing’s perspective, and in the abstractions of nuclear calculus, development of NMD would give the US a first strike capability against China, whereby the US could deliver a devastating blow from behind a protective missile shield, then dictate conditions. Stated in this way, the US decision to develop missile defence was a bid for global supremacy—a theme with some currency in the regime. Regime suspicions about US intent was compounded by the US offer of theatre missile (TMD) capabilities to Tokyo, Taipei and Seoul. The offer threatened to cement US alliances in North East Asia and to lessen Beijing’s leverage over Taiwan. It also arguably infringed the One China policy, as Taiwan would receive technology transfers, not available to the mainland.
In effect, US policy towards Taiwan places both China and the US in a dilemma: on the one hand, the US offer in effect says to Beijing: “Look, if you were democratic, we wouldn’t be talking about missile defence. You’d be one of us.” Beijing is clearly nervous that TMD strengthens the independence movement in Taiwan, associated with the political fortunes of the (DPP). Taiwan is a show-case to illustrate that Chinese can prosper under a democratic regime. Hence, Beijing’s bouts of anxiety over the party’s victories in the presidential elections of 2000 and of 2004. Were Taiwan to unilaterally declare its independence, the US would face a choice between backing Taipei at the cost of relations with the mainland, or of backing Beijing at the cost of its global reputation as a reliable ally. There could scarcely be a more divisive choice in US domestic politics. As long as the nature of the PRC regime remained contentious in US public opinion, Taiwan could be relied on to be always at hand to poison US-mainland relations.
On the other hand, US interest in sustaining working relations with Beijing indicates to the pro-independence lobby in Taiwan that being “one of us” is not a sufficient condition for prior alliance. Arguably, US vital national interests are not at stake in a clash with China over Taiwan. Such uncertainties about US prior loyalties prompted Taipei in December, 2001, to pass a Referendum Law, which provides a legal basis for a popular vote on a single issue. The law is hedged by conditions that make it difficult to call a referendum on issues relating to Taiwan’s sovereignty and independent status. But to avoid any misapprehensions, Beijing authorised senior officers in December 2003, to state in public that China would go to war over any step towards Taiwan independence regardless of the diplomatic, economic or business costs to China. Concurrently, Beijing embarked, with some success, on a charm offensive against public opinion in Taiwan by encouraging inward investment, granting trade concessions and university scholarships , and inviting opposition party leaders to visit the mainland. The Chinese civil war was far from over.
Meanwhile, Tokyo’s misgivings about its security in a post-cold war North East Asia had been fuelled by China’s firing of missiles in the Taiwan Straits crisis of 1995-96. This resulted in a renewal in 1996-97 to of the 1951 security arrangements, and their extension to allow for deeper US-Japanese maritime co-operation in the Taiwan Straits. As the 1998 China Defence White Paper stated: “Hegemonism and power politics remain the main source of threats to world peace and stability; the cold war mentality and its influence still have currency, and the enlargement of military alliances have added factors of instability to international security”. In addition, naval clashes multiplied over maritime boundaries, while China and Japan entered a competitive drive between for raw materials. Anti-Japanese sentiments in China were fuelled by the Japan Ministry of Education’s downplaying of the country’s wartime record in school history books, as well as by the regular visits of Joichuro Koizumi, Japan’s Prime Minister from 2001-2006, to the Yasukini shrine, the symbol of Japanese militarism .
Under his Premiership, Japan moved to closer co-operation with the US over nuclear defence and announced deployment of missile defence systems. In 2006, an official document outlining Japan’s defence and securities policies for the coming decade identified China as a threat. Concurrently, a joint US and Japanese statement declared a strategic interest in Taiwan—a step interpreted in Beijing as an intervention in China’s sovereign affairs.As noted in China’s 2006 Defence White Paper, “The United States and Japan are strengthening their military alliance in pursuit of operational integration”. Anti-Japanese riots, in part stimulated by the CCP, but also fostered by independent internet operators, broke out across China. It was clear to Beijing that Japan’s leadership was becoming more assertive, as evidenced in the more open discussions in Tokyo about the pros and cons of Japan acquiring its own nuclear weapons capability.
As if this were not sufficient bad news, China’s hardliners were confirmed in their worst views of the US’ determined bid for absolute supremacy by the Clinton administration’s decision to enlarge the boundaries of NATO to the frontiers of Russia- a key development as we shall see for Sino-Russian relations- and related events in the Balkans. In March-June 1999, NATO launched its bombing campaign over Kosovo. The NATO forces suffered no combat casualties, and Belgrade capitulated. China which was not a belligerant had its Belgrade embassy destroyed on May 8, when cruise missiles thoroughly destroyed the building and killed three Chinese citizens. The Chinese public was outraged , and a frightened Chinese regime released a torrent of anti-US commentaries in the media. One article accused the US of seeking to become “Lord Of the Earth”, and compared US aggression in the Balkans to that of Nazi Germany.  A few weeks after the Kosovo bombing, the election of the new President of Taiwan, Chen-Shui-bian,–who defeated the ruling party, the KMT, after five decades in power on the island– indicated a further consolidation of the democracy movement in Taiwan, and a renewed threat to the One China policy.
NATO’s Kosovo campaign hurt in other ways. What was the value of a permanent seat on the UN Security Council if the NATO allies chose to become the world’s policeman without so much as a nod in the direction of the UN? At least, the US had observed diplomatic niceties during the the Gulf War in 1991. President George Bush, one of the intimates of the 1972-1989 executive-to-executive relations between Beijing and Washington, had taken extensive pains to have China abstain in the UN Security Council vote on taking military action against Iraq. But in 1999, there were no such niceties. The NATO allies, convinced of the righteousness of their cause, attacked a sovereign country without seeking prior authorization from the UN Security Council. They acted within NATO rights according to the UN Charter, but clearly their claim to have the right to intervene in the internal affairs of states was a doctrine which the western powers could apply against China over its activities in Tibet or Xinjiang. As one Chinese commentator argued, the US now applied a doctrine of pre-emptive strike to countries of which it disapproved.
That seemed confirmed by the election of George W. Bush to the US Presidency in 2000. As Beijing was all too aware, many senior members of the new administration took hard line positions towards China. The new administration announced the US abrogation of key arms control agreements, went ahead on promoting ballistic missile defence, and labelled China a “strategic competitor”. “A stable and powerful China”, a Department of Defence strategy review stated, “will be constantly challenging the status quo in East Asia. An unstable and relative[ly] weak China could be dangerous because its leaders might try to bolster their power with foreign military adventurism.”  The incident in April 2001 when a US reconnaissance plan was forced to land on Hainan island after it had collided with a Chinese fighter indicated that tensions in the relationship might intensify. That month, Bush stated that he would do “whatever it takes” to defend Taiwan against Chinese mainland threats to reunify the island, and he later authorised the sale to Taipei of a large arms package deal. For all the atmospherics of improved Washington-Beijing relations over international terrorism, following the terror attacks on New York and Washington on September 11, both sides remained wary of the other.
Not the least of Beijing’s concerns was the unpredictability of the US-led war on international terrorism; the duration, scale and scope of the military campaign in Afghanisatan and then in Iraq in 2002-2003, and Washington’s longer term intent. Once again, the PLA witnessed the awesome way in which the US-led coalition vanquished an enfeebled Iraqi force, but this time lightening victory was accompanied by an extension of the US military presence in Central Asia, alongside the on-going redeployment of US forces away from Europe to the Asia Pacific and the Indian Ocean. Beijing saw Washington extend its old alliances based on Japan, South east Asia and Australia to a key new alliance with India, underscoring the US intent to encircle China in order to contain its future expansion as a world power. Equally disquieting was Moscow’s readiness to acquiesce in the US presence, rather than to join in an alliance of the weak with India and China to counter-balance an overmighty US.
China’s neighbours and soft power: a new strategy.
The challenge facing the Chinese leadership in the late 1990s was to craft an approach that enabled China to develop during an era of US dominance, when the US and its Asian allies had the ability to frustrate China’s efforts. Too much conflict with neighbours would run contrary to the leadership’s priority to development at home, and to cultivate a reputation as a responsible power in the global system. But too much accommodation to western preferences would not be compatible with Chinese sensibilities in defence of China’s sovereignty—a defence on which the leadership remained adamant, not least out of awareness that Chinese public opinion held the regime accountable to the nation on sovereignty issues.
The alternative to the PLA’s conspiratorial view of international affairs began to emerge in the early 1990s, as the regime embraced multilateral diplomacy, and expanded its bilateral relations, notably with the post-Soviet states. This required the elaboration of a national security concept that recognised US primacy and incorporated economic and political relations into a comprehensive foreign policy style. As Chinese analysts concluded at the time of the 1996 Taiwan Straits crisis– “the superpower is more super, and the many powers are less great”. In internal regime debates, the prevalent view was challenged of the US as uniformly malevolent in intent towards China.
One advance sign of the shift in policy style was the rise to national power from his Shanghai base of future President Zhang Zemin. Under his supervision, policy planners and academics began quietly to amend the country’s security strategy. This went along with growing prominence in policy of the Foreign Ministry under the authority of the Central Foreign Affairs “Leading Small Group”, headed by a senior Politburo member, and since 1997 by Presidents Jiang Zemin and Hu Jintao. Underpinning this change was a diversification of sources of information and analyses about foreign policy, from the foreign ministry, think tanks and policy institutes, and a more lively debate in the press. By the first decade of the new millennium, China maintained 143 bilateral embassies, while receiving 130 resident foreign missions in Beijing, Its three key multilateral missions are the WTO, located in Geneva; the United Nations in New York; and the International Atomic Energy Agency Secretariat (IAEA), headquartered in Vienna. In June 2003, Hu Jintao became the first Chinese leader to attend a meeting of the G-8 summit of leading economic powers.
Another sign was the reticence of China’s neighbours to join western powers in criticising China over the Tiananmen incident of June 1989. Japan’s Emperor, Akihito, visited China in 1992, symbolising Japan’s initial quest for a new foreign policy after the cold war. In the summer of 1992, the member states of ASEAN—the Association of South East Asian Nations, founded in 1965 to counter communism—launched the Asian Free Trade Area (AFTA), with a commitment to abolish tariffs and non-tariff barriers by 2008. China, Russia, Japan and the US were invited. The US made its own proposal for a new multilateral body, the Asia Pacific Economic Cooperation (APEC)—a grouping which includes China, Taiwan, Hong Kong and Singapore. Seoul–concerned about the situation in North Korea-exchanged ambassadors with Beijing in August 1992, ended diplomatic relations with Taiwan, and opened the way for investment in China by the large Korean chaebol. Seoul turned down the US invitation in the late 1990s to be included in its missile defence plans, to which China was opposed.
Meanwhile, reformers in the party-state welcomed resumption in February 1992 of China’s accession negotiations to join the General Agreement on Tariffs and Trade (the GATT)—the international club where trade matters are bartered. Negotiations which had opened in 1986 had been interrupted by the western response to the Tiananmen incident. The timing coincided with Deng’s famous southern tour, where he enunciated the idea that it was not only a capitalist country that could develop a market economy. The 14th Party Congress in October duly committed China to “faster and bolder” economic reforms in the direction of a “socialist market economy”, involving price de-regulation, the marketisation of state enterprises and the promotion of foreign direct investment. That month, China’s leadership signed a memorandum of understanding with the outgoing Bush administration to accelerate market opening. China also used its allies in the GATT to ensure that the Taiwan working party was formed on the principle that “all contracting parties acknowledge the view that there is only one China”, and that “Chinese Taipei, as a separate customs union, should not accede to the GATT before the People’s Republic of China”.
The Taiwan factor provided a prime incentive for the new policy orientation.  In the light of the rapid development of the independence movement in Taiwan, it became evident that the mainland had to develop a much more sophisticated set of policies towards Taipei, if the One China policy was to be preserved. Taipei was seeking to upgrade the island’s profile as an international player, among other reasons to prevent Taiwan becoming a hostage to US-China trade battles. The US refused China developing country status because of its high level of manufacturing exports, derived in large part from assembly operations mounted via Hong Kong by Taiwanese businesses on the mainland. Matters were made worse as far as the US Congress was concerned by Beijing’s decision in 1994 to devalue the currency, the yuan, by 400%, prompting a rapid surge in the trade surplus with the US, the EU and Japan. In addition, Congress was exercised by US reports that Taiwan businesses on the mainland were engaged in intellectual property theft, and patent infringement. Finally, the US Congress gave the green light to the WTO, which opened for business on January 1, 1995.
A caravan of forces were thus converging on Chinese party-state politics inducing the leadership to move away from its inherited suspicion of multilateral institutions as US inspired clubs. These changes may be grouped in terms of changes in regime leadership personnel; the return of Hong Kong and then of Macao to Chinese sovereignty; and a very altered outlook for the Asia-Pacific economy.
- Paramount leader Deng Xiaoping died in February 1997, at the age of 92, followed by a smooth handover in power to the new leadership. In September, the 15th Party Congress confirmed the party-state’s commitment, adumbrated first in 1993, to market reform. In March, 1998, Premier Li Peng, who had openly opposed WTO accession talks, was replaced by Zhu Rongji, the former mayor of Shanghai. Zhu Rongji considered globalisation to be unstoppable, and that China had either to join or get left behind. The new Premier accelerated the pace of economic policy reforms, and championed China’s accession to the WTO.
- On June 30, 1997, Hong Kong reverted to Chinese sovereignty, providing a window on the South China Seas, a free port with very high standards of administration, a predictable legal system, guaranteed property rights, a highly educated population, a civil society enjoying free flow of information, per capita incomes 30 times that of the mainland, and a Monetary Authority with $60 billion in reserves. Hong Kong was already a participant in the WTO. It enjoyed large trade surpluses with the US. In February 1998, the US concluded the trade accord with the WTO on Taiwan’s eventual entry. Greater China’s unity seemed tantalisingly close, but also still distant as a prospect.
- The Asian financial crash began in June 1997 in Thailand, spread to Taiwan, Korea, and Indonesia, and then around the world and back. China experienced a slowdown in growth, a fall-off in inward investment, and a decline in exports. This clearly indicated that the world market was China’s main motor for growth, and the heart of that motor was ticking in the US and the EU. In January 1998, at the height of the 1997-98 Asian-Pacific financial crash, President Clinton proposed a “new round of global trade negotiations”. The EU and Japan chimed in, as did thirteen medium sized countries with a similar proposal in a joint statement, signed that year in Hong Kong.
Beijing had anticipated its expanding influence in the southern Asia-Pacific. As of 1995, Chinese diplomats began to hold annual meetings with ASEAN officials. Two years later, China helped initiate the “ASEAN+3” mechanism, a series of annual meetings held among the ASEAN 10 members states and China, Japan and South Korea. To this was added the ASEAN+1 meetings between ASEAN and China, usually chaired by the Chinese premier. A more extensive mainland presence accentuated the diplomatic competition between China, Japan and Taiwan. China, for instance, initiated its own meetings with the Pacific islands, to counter Taiwan’s presence, and opposed Japan’s proposal for an Asian Monetary Fund to counter currency instability. When the Asian financial storm broke in late 1997, it offered $1 billion to strengthen currency support in the area. In May 2000, China, with Japan, South Korea and ASEAN member states set up a currency swap and repurchase system between central banks to reduce the region’s vulnerability to shifts in currency valuations on global markets. In October 2001, Shanghai played host to the 20 heads of state and government of APEC member states, the most important such international gathering ever to be held on Chinese soil.
China’s alternative vision for international relations was presented in September 1997 by Foreign Minister Qian Qichen. At the time, it was understood as likely to withstand the test of time for decades to come. The new security concept was formulated in direct response to the renewal of the US-Japan security arrangements, the expansion of NATO, and the US redeployment of forces after the end of the cold war. The venue selected to announce the new concept was the ASEAN Regional Forum (ARF) – which significantly includes Japan and other states in the region. The venue symbolized the new security concept, the aim of which was to develop the comprehensive strength of China. The novelty was to incorporate economic security within a broader and sustainable concept of national security. At the end of that month, Japan’s Prime Minister Hashimoto visited China when, the two sides reached the China-Japan bilateral accord in the WTO negotiations on market access for goods.
“The meeting of the 21 ARF participants, the Foreign Minister stated, is not to defuse a common threat, but rather to achieve a common goal, that is regional peace and stability. This is where the common interests of all of us lie. Therefore we should discard the Cold-War mentality and work for the common goal.” The new international situation, he went on, has called for a new security concept. “Security should be based neither on military-build-up nor on military alliance, but rather, it should be grounded in mutual trust and common interests”. The means to achieve this was through partnerships involving the development of friendly and stable state-to-state relations based on a muting of differences about domestic politics; on the principle of equality among states; on sustained economic development leading to an increase in interdependence; on the settlement of disputes through peaceful means; on the organisation of regular official visits and summit meetings between top govt leaders. Regional security, in short, requires dialogue and cooperation in multilateral institutions such as ASEAN and ARF.
The shift in US-China relations away from confrontation to mutual engagement was marked by President Jiang Zemin’s October 1997 visit to Washington D.C. There, President Clinton expressed the US policy of engagement in a White House speech. Emphasising the benefits for the US of working closely with China in confronting the many challenges facing the countries of the Asia-Pacific, the President insisted that China was being drawn into “the institutions and arrangements that are setting the ground rules for the 21st century—the security partnerships, the open trade arrangements, the arms control regime, the multinational coalitions against terrorism, crime and drugs, the commitments to preserve the environment and to uphold human rights”. “This, he said, is our best hope, to secure our own interest and values and to advance China’s in the historic transformation that began 25 years ago, when China reopened to the world”. A pragmatic policy of engagement, he concluded, “of expanding our areas of co-operation with China while confronting our differences openly and respectfully”… is much better than a policy of confrontation, predicated on the belief that China’s institutions do not evolve. Seeking to confront and contain China before it becomes too strong is “unworkable, counterproductive, and potentially dangerous”. Congress was won round to a less confrontational stance, but required the Secretary of Defence to report yearly on China’s military. Negotiations on China’s access to the World Trade Organisation(WTO)—the institutional successor to the GATT—were given the green light.
President Clinton visited China in June 1998 for a ten-day trip, and delighted the leadership with his Three Noes statement: No to Taiwanese independence; No to “One China, One Taiwan”; No Taiwanese entry to international organisations where statehood is required for membership. Taiwan eyes were not asmile. On the other hand, the US-Taiwan talks had been concluded in February, paving the way for WTO entry. US “engagement” with China is clearly conducted on the assumption that the Greater China of mainland+Taiwan+Hong Kong+overseas Chinese in the Asia Pacific is already a virtual reality. With Macao back under Chinese sovereignty in 1999, Greater China would dispose of four seats in the WTO.
China’s new foreign policy concept thus involved full participation in international organisations, adherence to international norms of diplomatic intercourse, and democratisation of international relations as the banner behind which China’s staked its claim for leadership in world affairs. This was one component of China’s diplomatic style which differed from that of the US, which the regime has equated with old world practices of power politics and privilege. Another differentiating factor in the style of Chinese from western diplomacy is the preference to mute criticism of domestic political regimes. This contrasts with the western view, expressed by the EU Commission, where the emphasis is on global convergence of domestic norms. The EU strategy is to engage with China in order to accelerate China’s “transition to an open society based on the rule of law and the respect for human rights”. We shall revisit these differences between the western powers about equality in international relations and the regime’s political evolution.
As far as international affairs are concerned, the softer approach inherent to China’s new concept for security policy conformed to Beijings’ preference to mimimise the costs of its emergence as a de facto great power. Creating well-disposed nations around its borders was clearly a less expensive way to manage China’s rise to prominence than to trigger a counterbalancing reaction among frightened neighbours.  To this end, China’s diplomatic practice at the turn of the millennium converged on the ideals and the practice of other states. Widely recognised norms such as the peaceful settlement of disputes, the promotion of cultural or economic exchanges and international co-operation to combat the new security challenges of terror and crime became embedded in Chinese diplomacy. China ibecame the largest supplier of personnel to UN peacekeeping operations, an active participant in arms control diplomacy, actively promoted “strategic partnerships” with its neighbours, and settled over three quarters of its 23 territorial disputes with neighbours. In October 2003, President Hu Jintao signed up to ASEAN’s Treaty of Amity and Commerce, committing China to peaceful settlement of disputes on maritime frontiers, and adhered to ASEAN’s free trade objective for the region by 2020. It hosted the Asia-Pacific Space Co-operation Organisation (APSCO) in Beijing and signed agreements to promote the peaceful use of outer space. China cooperated with neighbouring states on transnational security issues, such as environmental pollution, immigration, or drugs,  and played a lead role in staging the six power talks on North Korea. Such initiatives carried the promise of supplying the kernel for an Asia-wide security regime.
The dominant tone of US-China relations under the two administrations of George Bush II was set by the overarching significance bestowed by the White House on the “war on terror”. The September 11 attacks on New York and Washington DC, gave the Chinese leadership the opportunity to ally with the US on a key plank of the administration’s foreign policy. China’s reward came when the White House in the dying months of 2001 waived any further objections to China’s entry to the WTO. In summer 2002, Foreign Minister Qian Qichen stated that China’s policy was for cooperation with the US to take precedence over competition, and that national economic development was more important than the pursuit of reunification with Taiwan. China refrained from opposing US policy on Afghanistan and Iraq as strongly as France and Russia. In turn, the US dropped sponsorship in the UN Commission on Human Rights in Geneva of a resolution condemning China about alleged abuses.
Convergence between US and Chinese security policies was particularly noticeable over de-nuclearisation of the Korean peninsula, on the strengthening of non-proliferation policies, and on Taiwan, where President Bush publicly stated his opposition to President Chen Shiu-ban regarding a unilateral declaration of Taiwanese independence. In a note congratulating George Bush on his re-election to the Presidency, President Hu Jintao defined the essence of the relationship with the US: “Both China and the United States are great countries and share a wide range of common interests and basis for cooperation”. In his speech to the United Nations General Assembly on September 15, 2005, Hu Jintao went on to express the gist of China’s new security policy. China’s policy was to promote a “harmonious”, multipolar world cooperating together in the UN.
To summarise, Sino-US relations over the nine decades between Sun Yat-sen’s declaration of the first Republic, and the opening of the new millennium remained, in Professor Yan Xuetong’s description “unstable” -blown hither and thither by events. On the other hand, the permanent factor in the relationship has been that the US remains at the centre of the security structure for Asia Pacific. This structure of formal and less formal arrangements has allowed for strategic stability of the region, and thereby facilitated economic development of the whole region. China has benefitted, and inserted itself into the structure without being included in the formal US alliance network. When it has challenged the alliances on which the security of Asia-Pacific states is based, neighbours relations with the US are re-inforced, often at China’s expense. That was the lesson learnt by the Chinese leadership from the set backs of the early 1990s, and the Taiwan Straits incidents of 1995-96. So China offered partnerships directed against no third party. In this way, the US became the un-avoidable but not sole partner for all states across maritime Asia. China emerged as a prime Asian power, and joined with the states and peoples of the region to keep the US Gulliver bound down there. To address neighbours’ fears of China’s own rise to power, the PRC leadership talked peace and development, and diluted China’s preponderance in the broader Asian region by joining multilateral clubs. These in turn provided further means to challenge US leadership. As in much else, China’s transformation involved its following the US example in developing “soft power” instruments, while continuing to invest in “hard power” military capabilities.  The limits to this ambiguous policy of partnership and rivalry began to become evident in the first decade of the new millennium.
Despite the leadership’s occasional rhetoric, power play never ceased to characterise relations between China and the US. Following the end of the cold war, the US alliance system has been strengthened, and re-cast in North-East Asia, as well as in South-East Asia and into the Indian Ocean. This is no accident, given the US policy to hedge against China as a possible longer-term threat to US interests. China has increased its military outlays, modernised the armed forces, invested in developing space capabilities, and sketched ambitions for an ocean-going navy. Serious tensions do exist over Taiwan, Japan, nuclear weapons, and over maritime boundaries. On the other hand, all countries in the region prefer a stable US-China relationship. China has reached out to neighbours with a view to pursuing its priority interest in establishing a favourable international environment for its own development. As Jiang Zemin stated: “As countries increase their interdependency and common ground on security, it has become difficult for any single country to realize its security objective by itself alone. Only by strengthening international cooperation can we effectively deal with the security challenge world-wide and realize universal and sustained security”.  China’s neighbours reciprocated to ensure against China’s isolation, and to bind it into the network of relationships and exchanges across the region, pointing the way to a more inclusive security structure for Asia.
As China embraced multilateral diplomacy, the US under the Bush administrations accentuated the trend to unilateral policies, observable in the 1970s in economic policy– and then, in China’s view—extended into the security field. The tradition in Chinese foreign policy of paranoia about US hegemonial ambitions seemed corroborated by the long series of US actions spanning the years between two Iraq wars in 1991 and in 2003, and by the constant drum beat in Washington D.C. about the “China threat”. Yet the dominant strand in China’s foreign policy at the opening of the new millennium was to maintain the status quo by seeking stable relations with the US, as the world’s greatest power. This involved China’s pro-active embrace of transnational forces and multilateral institutions as allies in “democratizing” international relations. Globalization was China’s tool to constrain US primacy.
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