A summit meeting between China's President Jiang Zemin and President George Bush has been scheduled for late October in Crawford, Texas. What is on the minds of China's leaders as they prepare for that meeting, and how could Sino-American relations be affected? To gain insight into this question, I visited China late this past summer to interview about twenty Chinese leaders, officials, and intellectuals in Beijing and Shanghai. These individuals included officers occupying the senior-most levels of China's Pentagon, distinguished past envoys to the great powers and international organizations, and the leaders of China's foremost foreign policy think tanks and university research institutes. Moreover, these conversations took place as the annual confab of China's political elite at the North China beach resort of Beidaihe was breaking up, energizing discussion at home and abroad about the next generation of China's leadership and the future direction of the country.

There is a debate going on in military and foreign policy circles in China as to whether or not China's strategic circumstance has seriously worsened or, on the contrary, actually has improved in the year following September 11. An important view, often voiced by some in the military establishment, though not the prevailing perspective of China's current foreign policy makers, is that China's strategic position has deteriorated--the People's Republic of China is now encircled by American troops in Central Asia, Japan, and Korea. Further, proponents of this view note that Beijing's ties with Russia and Pakistan (envisioned as a way to counterbalance American influence) have been somewhat diluted by Moscow's and Islamabad's improved relations with Washington. American military spending and modernization are moving ahead rapidly, while Japan has used the war against terror as an opportunity to become a more "normal country" in security terms, moving away from its "peace constitution" by sending its naval forces to the Arabian Gulf.

The mainstream, diplomatic view, however, is quite different. The "war on terror" offers China a strategic "breathing space" and the possibility for increased cooperation with the United States. If, prior to the terrorist attacks in New York and Washington, the United States (as evidenced in the September 2001 Quadrennial Defense Review Report) tended to paint the PRC as one of the major strategic problems facing the United States and its allies, since September 11, most Americans perceive the premier national security threat to be emanating from terror networks with global reach and Middle Eastern sources (Al-Qaeda and Iraq). Moreover, the mere fact that the United States is deeply engaged in the Middle East and Central Asia on a protracted basis and is preoccupied with homeland defense means that, in any event, it is less capable of acting on its "China threat" impulses. According to this view, China is no longer the focus of American strategic anxiety. "The American plate is already full enough, without China as a strategic problem", was the way it was put to me.

This is one reason (among many) why China, while it will not actively support American military action against Iraq, will also not act alone to prevent it. Some analysts in the PRC can see an Iraqi quagmire for the United States turned to China's advantage. Moreover, Beijing does not wish to be isolated on this issue, left holding the bag opposing the United States while Moscow makes a deal with Washington as occurred in the Kosovo War in 1999. Consequently, the PRC will not single-handedly seek to obstruct the United States' effort to have the United Nations Security Council authorize (or acquiesce to) the use of force. However, if one or more of the other permanent members of the Security Council take a strong line against American intervention in Iraq, Beijing might join them.

The Chinese elite sees the strategic "breathing space" as an opportunity to address serious domestic challenges. A May 31, 2002 speech by Jiang Zemin indicated that the attention of the country is best focused on internal development. "It's the economy, stupid!"--and maintaining social stability--are the governing rules of thumb in Beijing. The PRC's leadership will go quite far to avoid being distracted by "peripheral" (read external) problems. I hasten to add, however, that there also is an increasing recognition (particularly in Shanghai, China's financial capital, and in non-military circles) that a well-performing American economy is in China's interests. A Middle Eastern quagmire may not be good for the American economy, thus negatively impacting the global economic system and China's own economic modernization. In short, the dominant impulse is to welcome the shift in American threat perception to the Middle East and counter-terrorism, but coupled with the hope that a long-term conflict that could have negative ramifications for the economy does not break out.

Having said this, China's focus on domestic issues does not mean that Washington should conclude that there are no limits to how far Beijing can be pushed, particularly on Taiwan. Nevertheless, the Chinese are becoming progressively more confident that the process of economic and cultural integration across the Taiwan Strait is providing a positive dynamic for eventual reunification (of some sort), and therefore have pulled back from earlier threats to establish a specific timetable for negotiations between Beijing and Taipei. However, the PRC will continue to upgrade its military options.

The PRC leadership has also recognized that Taiwan President Chen Shui-bian's efforts to push the Bush Administration to permit a trip to Washington, and his August 3, 2002 remarks to the effect that there is a country on each side of the Taiwan Strait (yibian, yiguo), may be eroding the Taiwan leader's support within at least some quarters of the Bush Administration. While Beijing would have liked Washington to publicly rebuke President Chen for his August 3^rd remarks, the Chinese seemed reassured by the forceful (even if non-public) response that the Bush Administration conveyed to Taipei. This response reaffirmed America's One China Policy, admonishing Chen on the need to avoid provocation across the Taiwan Strait and not to blindside Washington. As strong believers in strategic imperatives, the Chinese have concluded that Washington wants to prevent Taiwan from creating difficulties in East Asia while the United States is preoccupied with the higher strategic priority of the war against terror in the Middle East, Central Asia and elsewhere.

Beijing wishes to make the late-October summit with George Bush in Crawford a success and is therefore likely to make relatively forthcoming moves on the counter-proliferation front. Indeed, these began in mid-August with China's announcement that it was issuing the long-delayed regulations pertaining to the control of missile-related technology, a delay that was souring an important dimension of U.S.-China relations. From my interviews I had the strong impression that many, but not all, members of Chinese officialdom have concluded that playing the "proliferation card" to express dissatisfaction with American policy, particularly with respect to Washington's Taiwan policy, is a losing proposition.

Against the background of these broad conclusions from my interviews in the PRC, President Bush should consider making several adjustments to his administration's China policies. Most fundamentally, he needs to articulate the policy himself and designate a clear spokesman within the administration for China issues. In this regard, the National Security Council needs to play a stronger role in bringing order and consistency to the President's China policy. This task would be facilitated by a presidential address on China policy in connection with the upcoming Bush-Jiang summit.

More specifically, the Bush Administration should quit pursuing the self-contradictory policy of asking for Beijing's cooperation on American security priorities at the same time that it challenges China on its primary security concern-Taiwan. It is neither consistent with Taiwan's security interests, nor consistent with Washington's strategic interests, to continue pushing the envelope on Taiwan policy. (1)

The administration should explicitly say that growing cross-Strait economic and cultural interaction is a positive, stabilizing development between Taiwan and the mainland and that Americans hope to see more of it. The United States should return to the formulation of American policy advanced by Secretary of State George Shultz in March 1987, when he said that the purpose of American policy in the Taiwan area was to "foster an environment" in which increasing cross-Strait exchange and a "continuing, evolutionary process" would eventually lead to a peaceful resolution of cross-Strait frictions. Moreover, the administration should encourage American companies with interests in both Taiwan and the mainland to take part in cross-Strait interaction.

In the context of the upcoming Bush-Jiang summit, the two sides should give further impetus to the restoration of the military-to-military ties curtailed after last year's collision of a Chinese fighter with an American EP-3 aircraft. President Bush needs, once again, to make his intentions clear to the Pentagon. Increased reciprocity in military-to-military exchanges (particularly with respect to China's military hardware) is one important goal, but it is not the only, or even the most important, objective. Understanding the worldview, analytic framework, and doctrine of the People's Liberation Army ought to be the principal American objective in military-to-military exchanges.

Thinking more broadly, interaction with China's military leadership is only part of a larger challenge of engaging with China's new "Fourth and Fifth Generations" of civilian leadership--especially as the first cadres of Western-trained and educated Chinese move into middle and senior positions of authority. The administration needs a coherent strategy in this regard.