Those who place a distinct emphasis on hard power fall into the category identified by Michel Oksenberg and Elizabeth Economy as "confrontationalists"--those who see the future relationship with Beijing in conflict-laden terms, who presume that China's gains in power necessarily will come at U.S. expense and therefore assert that America's interest lies in increasing its own capacities and retarding the degree to which China moves up the power hierarchy. "Integrationists" generally align with those Oksenberg and Economy called "accommodationalists"--those who do not see international relations as a zero-sum game, who believe in the utility of dialogue and who believe that nations, especially rising powers, can be "socialized" into constructive habits of behavior. The fact that these two schools of thinking have been in long-term equilibrium accounts for the durability of the "balance and integrate policy" of hedged integration. What are the dimensions along which analysts and policymakers in the United States differ?

Confrontationalists see history as an unfolding, ever-changing contest for power--with power most often thought of as hard power (military strength and other forms of coercion, from sanctions to isolation). Confrontationalists suspect that the currently weaker party will observe the strictures of international institutions, norms and regimes only so long as that actor gains an advantage by so doing. When the weaker becomes strong, its adherence to institutions, norms and regimes will diminish in favor of unilateralism. So, as John Mearsheimer sees it, the international system is characterized by the struggle between aspiring, rising powers and the current hegemon bent on maintaining dominance.

Integrationists see technological and economic interdependence creating ever more delicate international systems that function best with increasing levels of cooperation. They emphasize the utility of soft power as an often more effective means to win compliance than coercion and believe that a hegemonic system is inherently unstable because it fosters bandwagoning against the dominant power. They are strong believers in the evolutionary nature of history. To take one example, they would take the view that economic development creates a middle class; middle classes tend to provide a foundation for democracy; and a world comprised of democracies would be less prone to war.

American confrontationalists differ on the question of whether U.S. dominance is good for the entire international system or just for the United States; they disagree as to whether the current weakness of other potential rivals is long-lasting (meaning conflict can be postponed) or whether "the others" are as weak now as they ever are going to be (meaning that it is better confrontation come earlier than later). American integrationists believe that by pursuing more inclusive policies they can reduce anger directed at the hegemon, and they tend to have less confidence in predictions about other states' relative strengths or weaknesses vis-Ã -vis the United States.

The shift from the weak-China paradigm toward the strong-China paradigm empowers the confrontationalists. This threatens to change the appropriately balanced U.S. policy toward China of the last seven administrations. And this concerns many in Asia; one senior former diplomat in Singapore told me frankly: "Rising China is better than a crashing China, one that collapses around us. You [America] are going to screw up the rise of China. We want America to stay in the region, of course, but to play a constructive role."

Both the strong- and weak-China paradigms capture important, but partial, elements of reality. A realistic and constructive U.S. policy has to take both into account, and the policy of hedged integration has served America and the world well. The first part of wisdom, however, is to recognize that in important respects China is a competitor. The reality is that China is an increasingly able competitor on the global playing field that America did so much to build. For its part, Beijing should not view this candid recognition of China's impact as simply a continuation of a past history of "containment" and "victimization." The things that unsettle people are those phenomena that are big, rapidly changing and non-transparent--China is all three.

China as Competitor

The building blocks of national power and competitiveness are national investment and savings, education, health, energy, and sound, legitimate governance. Though China has significant problems in each area, it is doing comparatively well in the first three--but less well in the last two. Where China does well, China's competitors, including the United States, must improve their performance.

In 2003, China had an investment-to-GDP ratio between 32 and 42 percent. Looking at domestic savings alone, the IMF says that China's gross national savings rate that year was more than 47 percent. This makes continued high economic growth very likely, even if, given China's inefficient financial system, much of this investment is wasted.

China's performance contrasts sharply with America's; in 2003 the net savings rate here was between 1 and 2 percent, the lowest in American history. The United States cannot long compete effectively when it borrows for current consumption while China invests using its own savings. America must rebalance its saving, investment and consumption priorities. If we do, Beijing's competition will have done us a big favor. Such action would help Washington resolve our twin budgetary and trade deficits. But, of course, it often is easier to blame others than to require painful changes of our own people.

Examine the second building block: education. U.S. higher education is excellent. Nonetheless, considering its low current income levels, and the many severe education problems in China's rural areas, China has enrolled 93 percent of its relevant age group in primary school; the percentage of secondary school-age children enrolled rose by over one-third from 1990â€"91 to 2002â€"03; and the percentage of China's population in tertiary education has more than quadrupled since 1991â€"92. Many people say China is attracting foreign manufacturing investment because of cheap labor. In fact, the attraction is the combination of relatively inexpensive and relatively skilled labor.

Take as an example a field highly germane to economic modernization: engineering. In 2002, China and the United States granted approximately equal numbers of graduate-level engineering degrees, though China granted almost 3.5 times as many undergraduate engineering degrees. Moreover, entering class sizes in engineering schools in China are growing rapidly. Looking ahead, China will have enormous and growing human resources in technology. The National Science Foundation predicts that by 2010 China could well be turning out about four times as many engineering doctorates as the United States. Having said all this, however, Americans should not create an eight-foot giant. China's science and technology community still suffers from rigid planning, lack of protection of intellectual property rights and underinvestment in basic research.

Go to most U.S. graduate schools in the hard sciences and you will see highly capable students from China in profusion. And while the number of Americans studying in China is in the low thousands each year, China for a long time has had about 60,000 students matriculated at American institutions of higher learning studying science and technology, as well as business, economics and international affairs. China is turning out language-proficient, culturally adept, and scientifically and technically capable people at home and abroad in ever greater numbers. Americans must do the same thing.

Public health is a third building block. There are millions of people in China with virtually no medical care, the system is vulnerable to infectious diseases, and maladies once at low levels are increasing in incidence--not to mention a looming HIV/AIDS catastrophe and the threat of new influenza strains. Nonetheless, China had a life expectancy in 2002 of 71 years, which compares favorably with America's 77 years. And yet, in 2002, China only consumed about 5.8 percent of its still modest GNP on health expenditures while America consumed 14.6 percent; by 2004, this U.S. figure had risen to 15.4 percent, and the rate projected for 2014 is a whopping 18 percent. For the United States to remain competitive, it must control health expenditures. Germany, France and the UK each have longer life expectancy than the United States, and they have about half the per capita health costs of America, according to OECD data.

This brings us to energy policy, about which little need be said, other than that America needs to reduce its reliance on imported oil from unstable regions. Whichever nation first escapes the energy trap will achieve economic dominance for the next era. China is rapidly becoming energy-import dependent, accounting for Beijing's near obsession with securing sources of energy supply, irrespective of the attributes of the supplying regimes. This obsession helps account for Beijing's commitment to expanding its blue-water navy and its drive to acquire petroleum reserves abroad. Energy is one of the principal Achilles' heels of China.

Concisely, as China enters the global marketplace, it has competitive advantages that will force Americans and others to think about fundamental systems in their own nations. This requires change. Change is painful, and in this process hostility and blame for the unsettled conditions can easily be directed abroad. Challenges and the resulting insecurities empower confrontationalists. Most observers of China's development, particularly confrontationalists, point to the fact that Beijing's official, non-inflation-adjusted, year-end defense budget has increased in the double-digit range every year from 1990 through 2004. Most outside estimates place China's current military expenditures in a league with Russia, Japan and the United Kingdom--but double-digit growth projected into an indefinite future becomes a cause for vigilance. And, of course, China's modest revaluation of July will mean that China's defense expenditures, when expressed in U.S. dollars, will appear higher still. China also has an active space program, the dimensions of which would surprise most Americans, and its emphasis is on modernizing air, missile and naval forces, as well as enhancing cyberspace, communication, guidance and reconnaissance capabilities. The Department of Defense and the intelligence agencies profess to be puzzled by the rate of China's gains. On June 4, Secretary Rumsfeld told an audience in Singapore:

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