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U.S. Asia (and China) Policy Reconceived

U.S. Asia (and China) Policy Reconceived

Mini Teaser: True realism about Asia transcends the Bush Administration's narrow focus on geopolitics and China.

by Author(s): George J. GilboyEric Heginbotham

SEEN historically, American grand strategy has tended to be both Eurocentric and oriented toward meeting military threats. Both characteristics are easily understood. It was only for fear of war coming to North America from the Old World, or actually during wartime in the 20th century, that the United States developed strategies for specific regions of the world. Not only was Europe the main source of such concern, but cultural contiguity and a good bit of history, going back to the origins of the American polity, gave Europe pride of place in American thinking. Even today we have an easier confidence in our ability to understand the major factors at play in Europe than we do with regard to Asia. As a result, America's Asia policy seems conceptually less mature and, in practical terms, more fragmented, with individual countries or particular functional issues like trade or weapons proliferation tending to drive policy as a whole.

The Clinton Administration's Asia policy exemplified the fragmented approach. In its early years, the administration tried to recast relations with nearly every major country in the region, aggressively pursuing a broad array of issues from human rights to strategic trade--frequently without establishing priorities. It subsequently narrowed its Asia policy focus mostly to China, but the U.S.-China relationship was itself blown by the prevailing winds of discrete issues as they arose. The Bush Administration, pre-September 11, developed a more focused approach--but it was wrongly focused. Given the rising influence of the Defense Department and other national security organizations on foreign policy, and the prevalence of structural realist ideas among civilian practitioners, the United States is perhaps prone to define its international interests in narrow military terms. The Bush Administration has reinforced these trends: prior to September 11, 2001, the United States pursued a neo-Bismarckian Asia strategy aimed at isolating China. Not surprisingly, the administration's initiative to revive the U.S.-Japanese partnership and to improve relations with India both emphasized military initiatives. The expression of support for Taiwan, too, came in the coin of arms sales and declarations to "do what it takes" to protect the island from Chinese use of force. Since September 11, U.S. Asia policy has become an adjunct to America's war on terrorism, but the essential elements of the pre-September 11 approach remain.1

An Asia policy that focuses exclusively on political-military issues--particularly in terms centered overwhelmingly on China--is flawed. America needs an Asia policy that is conceptually the reverse of what is developing today: rather than focus on military issues alone, it needs to be connected as well to political and economic realities. Rather than focus on a potential great power in the making, China, it needs to pay more attention to the wider Asian context--one that is generating underappreciated opportunities to influence political outcomes, as well as creating non-traditional security challenges. As China contemplates political reform in response to the vast social and economic changes underway there, the health and increasing stability of market economies and democratic regimes elsewhere in Asia will have a profound impact on its direction. Thus, the quality of U.S. relations with Japan, Korea, India, the Philippines, Indonesia and other Asian states will strongly affect China's diplomatic and military options.

A wise U.S. Asia policy would therefore concentrate on bolstering the most prominent and generally positive feature of the region's current political landscape: the transition of the majority of Asian states toward political pluralism and market economics. There have been unprecedented gains for economic and political liberalism since the end of the Cold War, but rapid domestic change combined with global economic integration can be profoundly disruptive. Many Asian states are now finely poised between progressive stability and widespread unrest. While preventing all forms of unrest is impossible, and while some upheaval is often an unavoidable by-product of social and economic progress, there is nothing inevitable about failed states, collapsing societies and large-scale communal violence during periods of transition. America has a huge stake in ensuring the maximum feasible number of positive Asian outcomes, and U.S. policy choices can make a difference.

America's interest in sustainable progress toward liberal institutions in Asia is not merely ideological. Increased economic and political liberalization makes America more prosperous and secure. It gives all Asian states a greater stake in the evolving global system, which is one that favors America's values and interests. A U.S. Asia policy that fails to support these developments--or worse, that inadvertently undermines them--could turn the Asian democratic "Third Wave" of the 1980s and 1990s into an anti-liberal riptide in the first decades of the 21st century.

That is why America's security interests in Asia are best served by a broad policy of strategic engagement that emphasizes two goals: consolidating the political and economic liberalization of late 20th century Asia; and cautiously promoting further victories for liberalism in key transition states while guarding against fragmentation and collapse. Such a policy would of necessity accord non-military means pride of place. Its strategic nature nevertheless derives from its ends (to promote American security); its means (the flexible but steady employment of America's comprehensive power); and its pragmatism (a commitment to deal with states that cannot yet meet all the demands of Western idealists from either the Left or the Right). We now turn to the Asian realities that should shape a new American regional strategy, after which we elaborate the elements of a policy of strategic engagement.

Asian Realities

ASIAN STATES are undergoing a fundamental shift toward economic and political liberalism. Although the absolute balance of power between state and society differs greatly from case to case, the reforms that are taking place in every state in the region are causing a dramatic relative strengthening of society in each of them.

The last 16 years have produced five new democratic governments in East Asia: the Philippines (1986), South Korea (1987-88), Thailand (1988), Taiwan (1996), and Indonesia (1999). While national elections in these countries provide dramatic proof of progress, those elections are best understood as the culmination of a transformation process one or more decades in the making. In other words, Asia's new democracies were liberalizing before they were liberal.

In some cases, the leaders of Asia's authoritarian states have themselves initiated liberalizing reforms. General Prem Tinsulanonda in Thailand (prime minister from 1980-88) and General Roh Tae Woo in South Korea (president from 1988-93) both presided over civil and political institution building, eventually ceding power to civilian officials. In Taiwan, strongman Chiang Ching-kuo (prime minister 1972-78, president 1978-88) acquiesced to legislative and institutional reforms that eventually facilitated direct national elections called by Lee Teng-hui in 1996. Even where rulers have been intent on maintaining power rather than laying the groundwork for transition, the rationalization of authority in response to economic reform and global integration has created multiple power centers that weaken authoritarian rule. Most importantly, the increasing prosperity that once legitimated authoritarian rule has created new social classes with an interest in political representation and the means to demand it. Even many of Asia's remaining authoritarian states, such as China, Malaysia and Singapore, have opened their trade, investment and financial markets, strengthened their legal systems, and relaxed some restrictions on the press and social organization.

The progress of liberalism, however, has not been linear in any of these states. In many states--including Indonesia, the Philippines, Malaysia and China--bitter and often violent ethnic and religious rivalries further complicate the task. Thus the fundamentally liberal transformations in Asia--liberal here understood in its socio-economic sense--have brought new opportunities and freedoms for most, but they have also created new vulnerabilities for many individuals as well as the state. The transition process therefore remains exposed to multiple threats: social instability caused by economic dislocation, opposition from entrenched elites, political gridlock, and shocks from increased exposure to volatile global markets.

All of this puts at risk recent gains for economic openness, rule of law, and participatory politics. A 1991 coup d'etat in Thailand, for example, temporarily restored military rule. Prime Minister Mahathir Mohammed reasserted personal control over Malaysian politics in 1998, arranging the imprisonment of his chief political rival and cracking down on the media in the process. Even in those states that have made the transition to democracy, weak political and civil institutions make the task of consolidating reform more difficult. The ambiguity of new constitutional arrangements; the absence of effective civilian control over powerful militaries; the lack of recognized and accepted precedents; a penchant for scandal-mongering rather than healthy opposition; widespread corruption; and the immaturity of political parties and legal institutions--all have contributed to extended periods of political gridlock in several transitional states. In 2001, elected leaders in both Indonesia (Abdurrahman Wahid) and the Philippines (Joseph Estrada) were forced from office after investigations into official corruption. In both cases, constitutional issues were ambiguous and the military played a major role in deciding the outcomes, leaving bitter feelings among many supporters of the ousted presidents. In Thailand, Senate elections in 2000 were complicated by allegations of vote buying and took four rounds and five months before being resolved. In Taiwan, President Chen Shui-bian operated under the threat of impeachment during late 2000 and early 2001. In South Korea, the chief opposition party, the Grand National Party, boycotted parliament several times in 2000 and 2001. In one case (mid-2000), it remained out for several months, delaying or blocking the passage of more than one hundred bills.

Conservative military actors still play a powerful role in some of these states, and are occasionally willing to exploit both social unrest and government weakness for self-serving ends. Opposition from the Thai army (including a public relations effort conducted through army-owned radio stations) has helped block adoption of a system of elections for provincial governors, who are currently appointed by the interior ministry. The army has also resisted civilian efforts to gain greater control over key military appointments and the allocation of Thailand's military budgets among the services (which currently gives the army significantly more money than the other services put together). In Indonesia, the military has stonewalled efforts to phase out its territorial commands, where its units remain involved in local politics. Many Indonesians, too, suspect some elements of the army (especially its Special Forces) of selectively destabilizing the provinces in order to influence specific political decisions.

Global economic integration has brought many benefits for Asia, but it has also introduced a greater degree of dependence on volatile global markets. The 1997-98 Asian financial crisis was only the latest and largest in a series of destabilizing waves of job creation and job destruction, capital influx and capital flight, and shifting balances of wealth and power. Personal wealth proved acutely vulnerable to exchange rate fluctuations, which cut overnight the purchasing power of savings and incomes by as much as half. And capital flight led to increased unemployment and the disruption of integrated regional production networks.

These difficulties ensure that even where economic and political liberalization in Asia has been successful, it has also been painful. Though the long-term trends clearly show progress, in many individual cases there remains a substantial risk of reversal. Nowhere is this more evident than in China.

SOME AMERICAN officials see China as the great exception in liberalizing Asia and as the nation most likely to challenge American interests there. Certainly China's size and potential power make it a unique concern. A closer look, however, reveals a nation that remains focused on its daunting domestic agenda. China is neither as powerful nor as threatening as some believe. In many respects, its dilemma resembles that of other Asian states that preceded it on the path to liberalization.

China is in the midst of a momentous domestic transformation. Two decades of economic dynamism and political stasis have produced deep and pervasive inequality dislocation and conflict in Chinese society. A 2001 study by the prestigious Chinese Academy of Social Sciences found that both China's index of social order (including crime and corruption) and index of social stability (including inflation, unemployment and income disparities) have steadily declined since reforms began--and that decline has accelerated dramatically in the 1990s. 2 The political status quo is unsustainable.

While the regime's first priority remains self-preservation, momentum is gathering for political reform. In a recent survey of "rising star" Communist Party cadres performed by the elite Central Party School, political reform ranked as the most important reform agenda item--more important than state enterprise reform, employment policy, income disparities and taxation.3 In August 2001, the current leadership re-oriented fundamental tenets of Communist Party ideology in ways that could ease the party's peaceful evolution to a social democratic party.4 Beijing has also revised China's constitution to protect private firms, placing them on the same legal basis as state-owned enterprises. Other key elements of state-society relations are under review: scholars and political leaders are discussing rural reform, including the strengthening of village autonomy through greater accountability of local officials as well as greater land and tax reform. Even the structure of government and politics at the national level is now openly debated. Over the past year, official delegations--including several of the top two dozen elite leaders--have been dispatched to study the transition of east-central European socialist parties to social democratic ones. The party has also analyzed the causes of regime collapse; one high-profile study concludes that Moscow's failure to reform its own Communist Party and state-society relationship was a key factor in the collapse of the Soviet Union.

None of this holds out the prospect for a sudden shift to democracy, or even the rapid rise of civil society as it is understood in the West. Indeed, while Beijing has moderated its policy toward street protests, especially by laid-off workers, it remains determined to coerce and jail the leaders of any organized opposition. Nevertheless, the legal and institutional reforms underway (and those being considered) offer the potential for greater conciliation between the state and Chinese society. They are designed to gradually open the party to greater input from social groups. If sustained, such actions could constitute the first steps along China's path to join the Third Wave.

Should these measures succeed, the potential payoff for Asia and America will be enormous. Political reform will promote domestic stability and guarantee the gains of twenty years of economic progress in China. A deepening of Chinese reforms will also help expand the zone of liberal trade and investment in Asia. For example, a recent Japanese Ministry of Economy, Trade and Industry document referred to China's successful use of foreign direct investment in calling for the further opening of Japan's own markets.5 In addition, the editors of Japan's foremost journal of international politics, Chuo Koron, recently noted that Chinese reform and economic performance should spur Japan's own much needed reforms.6 If political reforms falter or fail, however, the result will be economic crisis and social turmoil--perhaps even the collapse of the Chinese regime. In such case, both Asia and America could face unprecedented challenges, not least the further proliferation of weapons of mass destruction, border and ethnic conflicts, massive waves of refugees and increased environmental damage.

The United States has a clear interest in the success of political reform in China. U.S. policy cannot directly guarantee that success, but it can help. By reinforcing the economic, political and social transformations underway throughout the region, U.S. policy can yoke the great forces of Asia's liberal transformation to the task of ensuring that key non-democratic states such as China do join the Third Wave.

Along with encouraging liberal reform, the United States must also maintain military supremacy and the forward deployment of its forces in Asia. There is no contradiction between maintaining American power and supporting Chinese reform. But military activities should not sacrifice America's strategic interests for tactical advantage. Deployments should be calculated to maximize regional stability while minimizing the potential for undermining the domestic position of Asian reformers. Fortunately, Asian regional developments themselves are consonant with this task.

IN THE EARLY 1990s, many analysts saw East Asia as an area ripe for international instability. Rivalries and tensions were projected to rise as the economic power and military capabilities of major Asian states increased, especially in the absence of regional cooperative institutions.7 Many of these arguments were logically reasoned and rightly served to draw America's attention to the importance of maintaining a presence in Asia. But Asian politics have belied the most pessimistic predictions. Excepting the Cold War legacies of confrontation across the Taiwan Straits and on the Korean peninsula, Asian international relations have proven remarkably stable. Certainly there are conflicts; but even the complex disputes in the South China Sea and the Sea of Japan never became as intense as was predicted in the immediate aftermath of the Cold War. By the end of the 1990s, the importance of these conflicts was decreasing, not increasing.

This is because Asia's liberal transformations have had important implications for regional politics. Nearly all Asian states are intently focused on their own domestic economic and political problems. To the extent that they consider external relations, they look to political economic variables that might be leveraged to mitigate domestic challenges. Taken together, these two circumstances suggest that most Asian states are at least open to, if not in active pursuit of, greater institutionalized economic cooperation. When matched with the concomitant strengthening of liberal political and legal institutions, such cooperation can lead to a dampening of political-military conflict, and possibly to a self-sustaining momentum for even deeper economic and political reforms within states across the region.

The evidence for this proposition is already apparent. Indeed, the focus on domestic reform has moderated the regional foreign policies of those states that have liberalized their economies without yet having made the transition to democracy (including China) as well as the true Third Wave democracies. The inward focus of all East Asian states is reflected in regional military spending trends: although greater wealth has meant greater potential military purchasing power, defense spending as a percentage of GDP in Asia, including China, has declined from 4.3 percent in 1980 to 2.9 percent in 1990, to 2.7 percent in 1999.8

Though recent attention has been focused on the high-profile accessions of China and Taiwan to the WTO, the development of ASEAN+3 (the ASEAN states plus China, Japan and South Korea) provides perhaps the best example of domestic needs driving regional cooperation. The first ad hoc prime ministers' meeting was called in 1997 by the ASEAN states, primarily to discuss ways of dealing with the Asian financial crisis. The following year, the ASEAN+3 states agreed to hold annual meetings. In 1999, the group expanded its discussions to include other economic, social, political and security issues and at the year 2000 meeting began discussions on an Asian Free Trade Agreement (AFTA).

ASEAN+3 remains a relatively underdeveloped organization, but it has already helped to shift each member's perception of its national interests and sparked increased subregional cooperation as a consequence. In November 2001, China, Japan and Korea agreed to annual trilateral meetings between their economic ministers, in addition to their meetings within the larger ASEAN+3 framework. China recently announced a ten-year plan with ASEAN to create the world's largest free trade bloc; Japan countered with a ten-year plan to create an even larger free trade bloc that would include ASEAN+3, Australia and New Zealand.

The economic and political promise of cooperation between East Asian states has already helped to relax the regional security environment. Sino-Japanese relations are a case in point. In 1998, the two countries conducted a path-breaking exchange of defense minister visits and agreed to maintain annual visits by their heads of state. Those visits, and the diplomatic activity that precedes them, have allowed China and Japan to address issues of concern to each, helping to prevent relatively minor problems from spiraling into larger ones. One example concerns the Spratly Islands and the South China Sea. In 2000, as economic relations between China and the ASEAN states were being strengthened, China agreed for the first time to multilateral negotiations over a South China Sea maritime code of conduct. Both Chinese and ASEAN participants have already agreed to exercise restraint in the area until a formal code of conduct is approved.

Strategic Engagement and American Interests

THE Asian realities described above have had a profound impact on American interests. U.S. trade with Asia more than doubled during the 1990s, from about $400 billion in 1993 to just over $800 billion in 2000. In the mid-1990s the Asian region passed Europe as America's largest regional trading partner. U.S. businesses have flocked to Asia as well. Total accumulated stocks of U.S. foreign direct investment in Asia rose from $78 billion in 1993 to $186 billion in 1999. But American interests are not limited to the economic sphere. The spread of democracy to some states--and the continued liberalization of state-society relations in others--is a victory for core American principles. To the extent that they have been consolidated, political reforms in South Korea, Thailand and Taiwan have strengthened America's relationships in the region, even as they have stabilized those societies and made them more capable partners and allies. And since liberalization tends to dampen regional security competition, it reduces the prospects for threats to American security emerging from Asia. 9

However, the United States is now increasingly distant from important new Asian security and economic developments. Washington has yet to respond to the rise of ASEAN+3, let alone the dramatic proposals for regional free trade agreements that have emanated from it. Overall, the construction of liberal Asian institutions is a net gain for the United States, but today these institutions are emerging without any significant U.S. participation and wholly outside of U.S. influence. Yet there are some who would advise the current administration to continue down the path of a narrow track strategy focused on identifying and isolating one military threat. The neo-Bismarckian ideology reaches an extreme in a proposal by John Mearsheimer that the United States should not only encircle China with adversarial political-military alliances, but also attempt to reverse the process of liberalization and global integration with China because that liberalization is supporting rapid Chinese economic growth.10

A neo-Bismarckian U.S. strategy cannot succeed. Such a policy could not guarantee that China's economy would not grow, but it would guarantee China's enmity. It would at the same time jeopardize America's standing as the leader of political and economic liberalism in the world, even to the point of unraveling America's existing Asian coalitions by removing the underlying basis for extended political, economic and security cooperation. America has built strong alliances and great victories through benign leadership based on liberal principles that promote peace and prosperity for all. The commitment to these principles has also guaranteed bipartisan domestic support for U.S. foreign policy, allowing the United States to concentrate its enormous power and wide-ranging capabilities. Pursuing a narrow, military-dominated, one-threat-at-a-time strategy will leave America isolated abroad and divided at home.

America's Asia policy should be based instead on a more subtle political realism, one that recognizes that economic, political' and moral power is not only the basis for military strength, but can frequently be employed independently of, and with greater effect than, military power. This is well within the realist tradition. E.H. Carr's well-known critique of political idealism was matched by an equally trenchant critique of an impoverished realism, a realism without sustainable political and moral foundations. 11 A more nuanced realism that can accommodate a comprehensive understanding of American power and interests should be our guide.

Such a nuanced realism would recognize that political-economic engagement is one of the most effective weapons the United States can deploy in the struggle for prosperity and security. The advance of market economics sweeps anciens regimes before it. 12 Economic integration will not guarantee political convergence, but it makes it much more difficult for authoritarian regimes to survive.

Yet although unleashing the gales of creative destruction through global economic integration can destroy America's enemies, it can also disrupt our friends as easily as strengthen them. American policy can mitigate that disruption by strengthening liberal political and social institutions through structured, focused cooperation between American law enforcement, intelligence, military, regulatory, financial, industrial, labor, and civil organizations and their local and regional Asian counterparts.

To succeed, a policy of strategic engagement must be comprehensive in means, focused in ends, and pragmatic in application. Strategic engagement will employ comprehensive American capabilities across a range of issues, not just political-military coalition building. It would positively influence and engage transition states, not isolate them, even as it hedges against potential threats that may emanate from them. In contrast to the "engagement policy" of the Clinton Administration, it would recognize the limits and the destabilizing effects of global economic integration, and be explicitly tied to American political and security interests.

Strategic engagement should focus on states according to their potential to threaten American interests. Threats to American security are diverse and do not emanate only from a potential "peer competitor." This was true before September 11, 2001; it has been starkly obvious since. But since American resources are finite, policymakers must establish criteria for deciding where those resources should be committed. We suggest a focus on those states that, first, because of their size and power, will have a particularly large impact on surrounding states; second, will be likely to fragment in the event of failure; and third, are likely--because of geography or the possession of weapons of mass destruction--to pose a serious threat to U.S. security interests. States such as China and Indonesia hold the potential to generate much greater threats to American security than Thailand or Vietnam.

Finally, strategic engagement must be pragmatic in implementation, squarely founded upon political realism. This, too, contrasts with recent American foreign policy. Liberal idealists have been unable to accept that the process of transformation in key transition states will be long, tumultuous and subject to reversal. Dealing effectively with states undergoing these transformations requires the United States to engage closely with regimes that still display authoritarian characteristics. On the other hand, many self-described realists cannot seem to accept that some states are neither allies nor enemies, and that several important Asian states, not least Indonesia and China, are "works in progress." A truly realistic policy must deal with all actors, must expect detours and breakdowns along the path to Third Wave status, and must plan for such contingencies.

WE SUGGEST five operating guidelines for a U.S. strategic engagement policy in Asia. First, America should restore the role of the State Department in U.S. foreign policy. In recent years, State has lost influence over foreign policy to the Defense Department and the National Security Council, which are--and should be, each in their own way--focused on political-military issues. The foreign policy budget administered by State has gone from 4 percent of the Federal budget in the 1960s to 1 percent today. In an age of economic globalization and complex, non-traditional political and economic threats, the United States needs a superior and well-funded diplomatic corps, with the authority to coordinate the full range of American capabilities and apply them across a wide range of international issues. This requires a sizable and sustained increase in American overseas development assistance, to be administered by the political, economic and area experts trained for this job. American commitments to multilateral regional institutions in Asia, such as the Asian Development Bank, should be increased, as well.

Second, the United States can help Asian states strengthen the institutions that support liberalizing markets and politics. The Federal Reserve Bank and the Securities and Exchange Commission, for example, have worked with Chinese officials to develop central banking and financial regulation institutions. Americans have also helped set up the local asset management companies that will take over China's non-performing loans. Pragmatic Asian engagements such as these can be strengthened to include developing legal institutions, industrial organization and small business support groups, consumer and industrial credit institutions, and even support for officials and institutions currently looking for ways to develop parliamentary reform. The U.S. government need not undertake all of these activities directly--indeed, in some cases programs will be more effective if it does not. But the United States can make money available to private sector and academic institutions on both sides of the Pacific that wish to enga ge in institution building. There is no reason that re-inforcing liberal institutions should not enjoy bipartisan political support. Although it was the Clinton Administration that attempted to use American non-governmental organizations to build liberal institutions in Asia (only to run afoul of opposition in Congress), the original campaign to build "the infrastructure of democracy" began in the Reagan Administration in 1982.

Third, the United States should intensify, not reduce, military-to-military contact, including officer exchanges and regularized military communication with key nations, including China. But military ties should not be the central focus of America's relationship with any country in Asia. And exchanges should be structured to reinforce the position of technical officers and central military authorities vis-a-vis line officers (who, in many Asian states, represent the greatest threat to liberal consolidation). If designed properly, these exchanges can support the process of professionalizing Asian militaries, remind potential adversaries of America's enormous lead in relative military capabilities, and reduce the image of a threatening America. All of this can help curb the tendency of Asian reactionaries, whether of the authoritarian conservative or the communist sort, to advocate confrontation.

Fourth, the United States should support the development of regional trade and political institutions. It must ensure, however, that these groups develop in ways that are consistent with long-term American interests. America's inflexible stance on some multilateral financial issues has given rise to proposals for alternative regional economic institutions, several of which seek to fend off American participation and influence. Washington must recognize that there is a free market for ideas on economic organization in Asia, and if the United States does not compete in this market for ideas and institutions, it cannot win. Using its voice in APEC more flexibly and creatively is one way to proceed. Tacit cooperation may also be a useful strategy at times. For example, engaging China through Asian economic institutions shuch as ASEAN+3 and the Asian Development Bank serves to "de-Americanize" the image of market economics and liberalization, and makes these ideas more palatable in some Asian environments.

Fifth, American security policy in Asia should also be re-balanced. Security policy should revive inclusive, multilateral means as the norm; unilateral action should be reserved as a last resort. The United States can pursue more than one multilateral track at a time, and it can build flexible coalitions to pursue common interests on a case by case basis. Washington must recognize that most states in Asia have their own concepts of security; at least some of these views must be accommodated for coalition building to work. For example, although Japan appears unwilling to play a full partnership role in American political-military strategies, Tokyo has proved willing and able to help integrate China into liberal regional institutions, including trade groupings and security dialogues.

MUCH HAS BEEN gained in Asia's liberal transformation. Peace, prosperity and democracy have all increased. Yet throughout Asia, liberal trends that support American interests are unconsolidated and often fragile. Threats to these achievements are multiple and complex, and America must recast its engagement with Asia in a broadly pragmatic mold in order to meet them. Such a policy will enhance America's short-term military security, but more importantly, it will promote a self-sustaining cycle of liberalization in Asia, thus furthering the prospects for long-term prosperity and peace in the region.

1 This continuity is illustrated by two recent government reports that emphasize the potential military and economic "threat" from China. See U.S. Department of Defense, Annual Report on the Military Power of the People's Republic of China, Washington, DC, July 12, 2002; and U.S.-China Security Review Commission, Annual Report to Congress: The National Security Implications of the Economic Relationship Between the United States and China, Washington, DC, July 15, 2002.

2Zhu Qingfang, "Gaige Kaifang Yilai (1979-1999) Shehui Fingji Xietiao De Zonghe Pingjia" ("Comprehensive Appraisal of Socio-Economic Adjustment in the Reform Period, 1979-1999"), in Ru Xin et al., Shehui Lanpi Shu: 2001 Zhongguo Shehui Xingshi Fenxi Yu Yuce (2001 Social Blue Book: Analysis and Forecast of China's Social Conditions) (Beijing: Social Sciences Documentation Publishing House, 2001).

3Xie Zhiqiang, "Dang Zheng Lingdao Ganbu Dui 2001-2002 Nian Shehui Xingshi De Fiben Kanfa" ("Government Cadres' Basic Outlook on Social Conditions, 2001-2002"), in Xin et al., Shenhui Lanpi Shu (2002 edition).

4 President Jiang Zemin announced that the "Party must change with the times"--yu shi ju jin. The call to strengthen intra-party democracy and recast state-society relations--even while preserving one-party rule--is reinforced by a report from the powerful Communist Party Organization Department, "Zhongguo Diaocha Baogao 2000-2001: Xin Xingshi Xia Renmin Neibu Maodun Yanjiu", ("China Investigation Report 2000-2001: Research on Contradictions Among the People Under New Conditions") (Beijing: Central Compilation and Translation Press, 2001)

5Ministry of Economy, Trade and Industry, White Paper on International Trade 2001: External Economic Policy Challenges in the 21st Century, May 18, 2001.

6"Chugoku no Bokko", ("The Rise of China"), Chuo Koron (Febrary 2002); Shiraishi Takashi and Otsuji Yoshihiro, "Nihon-ASEAN no Kakudai SC wo Teisho Suru" ("Supporting an Expanded FTA Between Japan and ASEAN"), Chuo Koron (February 2002).

7Aaron L. Friedberg, "Ripe for Rivalry: Prospects for Peace in a Multipolar Asia", International Security (Winter 1993/1994); Richard K. Betts, "Wealth, Power and Instability: East Asia and the United States after the Cold War", International Security (Winter 1993/1994), pp. 34-77; Kent E. Calder, Asia's Deadly Triangle: How Arms, Energy and Growth Threaten to Destabilize Asia-Pacific (London: Nicholas Breeley Publishing, 1996).

8Average defense spending for the ten largest economies in the East Asian region. Source: The Military Balance (IISS, various years).

9An important critique of the "democratic peace" argument shows that under certain conditions, states are more likely to become involved in conflict during the transition to democracy. See Edward D. Mansfield and Jack Snyder, "Democratization and the Danger of War", International Security (Summer 1995). Yet this same critique finds that the most dangerous situation occurs when a democratic transition fails. The United States can hardly tell Asian nations not to democratize; rather, it should seek to consolidate these transitions.

10John J. Mearsheimer, "The Future of the American Pacifier", Foreign Affairs (September/October 2001).

11See E.H. Carr, The Twenty Years' Crisis: An Introduction to the Study of International Relations (London: Macmillan, 1939), and J.D.B. Miller, "E.H. Carr: The Realist's Realist", The National Interest (Fall 1991).

12Today's foreign-policy makers would do well to recall the scale and ferocity of these transitions as they were played out in Europe. See Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon Press, 1944); and Barrington Moore, Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World (Boston: Beacon Press, 1967).

George Gilboy and Eric Heginbotham are doctoral candidates in the political science department at the Massachusetts Institute of Technology.

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