Off-Center on the Middle Kingdom; Review of Richard Bernstein's and Ross H. Munro's The Coming Conflict with China

Off-Center on the Middle Kingdom; Review of Richard Bernstein's and Ross H. Munro's The Coming Conflict with China

Mini Teaser: Bernstein and Munro reject the view that Sino-American relations are fundamentally sound because China is weak, needs us as a trading partner, and relies on the United States to hold back Japan.

by Author(s): Henry S. Rowen

Off-Center on the Middle Kingdom; Review of Richard Bernstein's and Ross H. Munro's The Coming Conflict with China (New York, Alfred A. Knopf, 1997)
Henry S. Rowen

The view that China presents a large threat to American interests has suddenly emerged onto the public scene. The most interesting--albeit flawed--work advancing the argument is a book by Richard Bernstein and Ross H. Munro. Most striking is their report that in 1994 the Communist Party declared the United States to be a "hegemonist" power; that is, an enemy of China. Beijing no longer sees American power in Asia as beneficial. Three events were crucial to the shift: America is seen as having been indirectly behind the student actions in Tiananmen Square; the fall of the Soviet Union both freed China strategically and showed that softness would be fatal to the Party; and the display of American prowess in the Gulf War inspired a drive for military modernization. Against the long background of humiliation by foreign imperialists, anti-Americanism has become a matter of national dignity.

Bernstein and Munro reject the view that Sino-American relations are fundamentally sound because China is weak, needs us as a trading partner, and relies on the United States to hold back Japan. We do have common interests, notably in trade, but the Party needs to be able to blame outsiders, especially the United States, for its problems: slowed growth, corruption, a renewed freedom movement. Its goals are to replace the United States as the preeminent power in Asia, to prevent the United States and Japan from creating a "contain China" front, and to control "essential sea lanes." But, say Bernstein and Munro, China is not expansionist; communism is dead and it does not seek to spread its way of life; it simply wants Asian countries to take China's interests into prime consideration. And while it transfers weapons and nuclear technology to states with goals inimical to those of the United States and who share this grievance at U.S. global dominance, China seeks not global dominance but limits on the aspirations and power of the United States as hegemon.

Bernstein and Munro assert that in a few years China will have the world's largest economy. Although it is not threatened by any neighbor, it has moved into the disputed South China Sea and caused a crisis in March 1996 by shooting missiles close to Taiwan. Its military spending is large and growing rapidly. If China continues to be aggressive and the United States naive, there could be war, with Taiwan being the most likely "flashpoint." The Sino-American understanding, that there is one China but that unification must be peaceful, is eroding. A Taiwanese declaration of independence could lead to a Chinese attack; if so, warn the authors, "the United States would have little choice except to intervene and to put American forces at risk."

Unlike many of those who consider China an enemy--the editors of The New Republic and The Weekly Standard, for example--Bernstein and Munro concede that China's is no longer a totalitarian society. Currently, its people have many economic freedoms but no civil liberties, the judiciary is not independent, and all publications and associations are controlled. But the authors maintain that China's future path is not determined. The view that prosperity will lead it to become more democratic and moderate in behavior might eventually be correct, but this is a political culture with no sense of limited government, protection of individual rights, or independence for the judiciary and media. It has always been ruled by self-selected cliques that operate in secret. Bernstein and Munro think China is more likely to be an aggressive, corporatist, militarized, nationalist, quasi-fascist state, in which families of political leaders control both politics and state corporations.

In the face of this probable Chinese future, the authors describe America's China policy as "amateurish, fumbling and inconsistent." Clinton's threat to use economic sanctions unless China stopped its human rights abuses led to our humiliation. Faced with intense lobbying by American firms (supported by prominent former U.S. officials), Clinton de-linked MFN status from the treatment of political dissent, and was promptly rewarded with new Chinese suppressions. The United States, say the authors, "speaks loudly but carries a small stick."

Bernstein and Munro are also troubled by the nature of U.S.-Chinese economic relations. The large bilateral trade deficit is the product of a mercantilist, export-focused Chinese strategy modeled on that of Japan, which targets high technology industries through a system of subsidies and high barriers to imports; that is why "the deficit is harmful to the American economy." American firms also have to transfer technology as part of the price of doing business in China while branches of the Chinese army buy American firms to use as conduits for still more technology.

They claim that the Chinese goal for Japan is its permanent subordination. While fostering anti-Japanese sentiments, Beijing envisions Japan's security being "guaranteed" by China, Russia, and the United States, thereby committing it "forever" to a pacifist-neutralist status.

The authors argue that the view that there are only two policy options with respect to China--"engagement" versus "containment"--is wrong. The first implies making concessions no matter how badly China behaves, while the second means a permanent distrust that is unwarranted. Instead, we should work toward a balance of power that prevents China from becoming a hostile regional hegemon. That requires a strong American presence in Asia. We should also stop worrying about a re-armed Japan; a weak Japan is a greater danger. Another American aim, argue Bernstein and Munro, should be a more democratic and internationally responsible China. The trade imbalance should be rectified by requiring China to import more from us, and it should not be allowed to enter the World Trade Organization as a developing country. And the U.S. government should support organizations promoting human rights there because "taking positions on human rights and taking some sensible measures to advance them is America's way of keeping faith with its democratic ideals and its commitment to open societies."

Our interest is in cordial relations with a democratic China. The most dangerous period is immediately before us when China is still governed by the old generation of communists while a new, more open-minded and tolerant generation is waiting to take over.

Bernstein and Munro have performed a useful service in calling attention not only to the rising power of China but also to its xenophobic, anti-American rhetoric--although they exaggerate the extent to which the Chinese government regards the United States as "the enemy", a possibility that is still under debate in Beijing. It is beyond doubt that China poses several problems to its neighbors and to the United States as the main stabilizing force in the area. Clearly, missile firings and weapons transfers show that more than rhetoric is involved. Still, there is a glaring inconsistency in the authors' argument. They are right to insist that China will almost certainly become a great power, and merely having that power will be enough to command respect and deference, especially from neighbors. But Bernstein and Munro do not distinguish sharply enough between that prospect and what China will do with its power. East Asia will become a vast zone of peace and prosperity if China uses its power benignly, and there is nothing anti-American about that. The authors are not pessimistic on this score, for they see China as content within its borders, but if they are wrong and China behaves aggressively, then a defensive coalition could emerge that might include Japan, Southeast Asia, Russia, India, or the United States. It is China's call.

The potential role of India is--mistakenly--ignored by Bernstein and Munro. India is shedding its socialist mentality and institutions, albeit slowly and painfully. If it stays on course, by the middle of the next century India's economy will be perhaps one-third to one-half that of China's in size. China will not be the only large power in continental Asia.
Could Japan become permanently neutralized with a rising China as a neighbor? After all, just because China desires a permanently subordinated Japan does not mean that it can have what it wishes. The Japanese have prospered through a low international political profile, U.S. protection, and a focus on commerce. One alternative for the future is an armed, non-allied Japan; but although formidable, it would have difficulty competing with an increasingly powerful China. Another option would be for Japan to join with that power, but any such alliance would likely be unstable. A more realistic alternative is for it to remain allied with the United States. Because there are grounds for optimism about China's transformation into a politically democratic state (more than Bernstein and Munro present)--and therefore one that is less likely to be aggressive--such an alliance should not be aimed at containing China but should be seen as an insurance policy designed to help keep the peace. It would meet Bernstein and Munro's criterion for a balance of power. A true alliance with the United States entails a basic change in Japan's foreign posture, but decisions on fundamentals take a long time in that country and the outcome is uncertain.

While Bernstein and Munro's treatment of Japan's need to change its foreign policy is adequate, their economics are primitive. They buy the line that America's trade deficit with China is the result of a nefarious, scheming government, a view identical to that advanced by some political scientists, but few economists, about Japan. Actually, China's situation and strategy differ from Japan's; in particular, China imports capital while Japan exports it, and, unlike Japan, China encourages foreign direct investment.

As one learns in Econ 101, a key determinant of overall trade is the balance between domestic savings and domestic investment, whereas bilateral trade is largely determined by the prices and quality of goods demanded and offered--and not necessarily by trade barriers. The United States saves much less than it invests (hence our overall trade deficit), while China is nearly in overall balance. In 1995, the United States had substantial trade deficits not only with China and Japan but also with Europe, Canada, and Mexico. The deficit incurred with China--plus Hong Kong--was about $23 billion rather than the $30 billion that Bernstein and Munro report, but the more important point is the essential irrelevance of any bilateral balance. From China we bought lots of shoes, toys, and textiles; if Americans hadn't bought such products from China they would have bought them from places such as Indonesia or Bangladesh. And the authors' assertion that Chinese exports are "high tech" is valid only if one conflates toaster ovens with computers.

So what's the problem? Perhaps the Chinese government is blocking American imports; if so, China is the loser. This isn't happening very much with capital goods, whose purchases are largely controlled by foreign investors. In general, too, Beijing's ability to control imports is hampered by its weak authority over the provinces and by massive smuggling. In short, the Sino-American bilateral trade balance reflects market behavior far more than official manipulation.

As to Bernstein and Munro's view of the importance of a strong American presence in East Asia, that is wholly justified. But where can we locate? We are practically out of Southeast Asia. Australia is far away. When a unified Korea arrives and even if--despite almost certain Chinese opposition--it wants an American presence on its territory, it is not clear that we should stay. Helping to maintain stability in Northeast Asia is a plausible reason for such a presence, but is it a good enough reason? If not, Japan becomes the key to the future of U.S. military power in Asia; but the U.S. presence in Okinawa is shrinking and will have to come down some more. Clearly, then, much hangs on what the Japanese decide about their own future strategic role.

As for other Sino-American interests being fundamentally in opposition, China is on a path to becoming at least as dependent on the flow of Persian Gulf oil as are Americans and Europeans, a prospect that suggests a common interest in open sea lanes. China also has problems with Muslims in Xinjiang. In short, selling advanced weapons to countries threatening oil supplies or run by Islamic radicals might not have an enduring appeal in Beijing.
The United States and China do have opposing interests on Taiwan. Here the need is for patience on all sides because time favors a peaceful resolution. China's military capacity against Taiwan, now low, will grow but it has far to go to become truly formidable. Time is also likely to see large and positive political changes in China. In the meantime the United States needs to shield Taiwan, but on the condition that it forgo de jure independence, for that would mean endless conflict with China.

A crucial omission in The Coming Conflict With China is its neglect of internal developments. There is only the briefest mention that elections are held in villages and that a struggle for the rule of law is underway. The authors' claim that access to information is tightly controlled is in error; controls have been largely overtaken by the progress of information technology. A recent example: the government has dropped most of last year's bans on access to internet media sites. To maintain that China is headed toward democracy is not to argue that organized opposition will soon be tolerated. But China is not yet a great power either. Both developments are prospects. By the time that China has the world's largest economy--toward the middle of the next century--it may well have been the world's largest democracy for several decades.

This hugely important omission is reminiscent of that of the Sovietologists who were inattentive to the rot inside the Russian system. In China, it is not rot but the development of good institutions that is being ignored. The prospect of a quasi-fascist party arising in China is not bright. A coming conflict with China cannot be ruled out, but the case presented is weak. This "conflict" is found more in the authors' rhetoric than their argument.

Essay Types: Book Review