MOST FAVORED NATION — OR MOST APPEASED?

Incoherence on China is not unique to Bill Clinton’s foreign policy. It has been a problem for politicians of both parties since the late 1980s. The collapse of the Soviet Union and its Communist empire swept away the original foundation on which the Sino-American rapprochement was built in the early 1970s. America’s interests and priorities have shifted as policymakers must now grapple with how to manage a world in which the United States is the sole superpower. At the same time, China’s place in the constellation of global powers has shifted; from its position as the weakest side of the Sino-Soviet- American triangle as recently as 10 years ago, China seems poised over the coming decade to become the principal challenger to American dominance of the world order.

The lack of clarity and resolve in American policy toward China today is due to the failure of policymakers to recognize these changes and reorient American strategy to deal with them. The result has been worse than incoherence. American policies these days are starting to look a lot like the kind of appeasement that eventually leads to disaster.

Twenty-five years ago, the logic of the U.S.-China relationship was clear. At a time when American power seemed in Vietnam-saturated decline, Richard Nixon and Henry Kissinger were searching for quick and easy ways of redressing the increasingly unfavorable U.S.-Soviet balance while shoring up Nixon’s political standing at home. Playing the “China card” looked like a brilliant strategic gambit, a simple matter, as Kissinger recalled in his memoirs, of “[aligning] oneself with the weaker of two antagonistic partners, because this acted as a restraint on the stronger.” Kissinger did not share the view of State Department Sinophiles that good relations with China were a worthy end in themselves; he considered them a means to the end of shaping Soviet behavior and inducing Soviet leaders to accept the outstretched hand of detente. Indeed, as former Kissinger aide Peter W. Rodman has noted, the real purpose of “triangular diplomacy” was not to forge a permanent strategic partnership with China against Russia but “to secure better relations with both.”

The shift to a more enduring strategic partnership with China came during the Carter administration under the direction of national security adviser Zbigniew Brzezinski. Alarmed at the Soviet Union’s increasing adventurousness in the Third World from Africa to Southeast Asia, Brzezinski sought to involve the Chinese more directly on the U.S. side in the worldwide anti- Soviet struggle. Kissinger aimed at playing both Communist giants against each other, but Brzezinski in 1978 traveled to Beijing to tell Deng Xiaoping that the United States had “made up its mind” and had chosen China. The price the Carter administration willingly paid for this new strategic partnership was the completion of the process of normalization Nixon had begun, including the revocation of U.S. recognition of Taiwan. In American foreign policy circles, Brzezinski’s actions firmly established the still-extant bipartisan consensus on the overriding strategic importance of U.S.-Chinese relations. The world of the 1970s looked very different from today’s, however. The West was suffering from a paralyzing loss of confidence in its institutions and its liberal values. Communism still seemed to many around the world, and even to some in the United States, a viable if not superior alternative to capitalism. The great, resurgent successes of liberal capitalism — the Reagan boom here, the rise of the economic “tigers” in East Asia — lay in the future. The policymakers of the 1970s could not even have begun to imagine the worldwide democratic revolution that began in the 1980s in Latin America and Asia and then spread to Central and Eastern Europe and Russia. Instead, the United States was surrounded by dictatorships in its own hemisphere and maintained supportive relations with them and many others around the world.

In such a world, the strategic value of American rapprochement and then partnership with a Communist China seemed to outweigh the sacrifice of American ideals such a relationship required. Churchill had been willing to ” sup with the devil” in order to defeat Hitler; few questioned the logic of closer U.S.-Chinese ties in a world where democracy and capitalism seemed to be imperiled by an expanding Soviet empire. In a world filled with dictatorships of both the left- and right-wing varieties, moreover, few believed the United States could afford to be picky about how its allies governed themselves.

Which is not to say that everyone in the United States was enthusiastic about the new partnership with Communist China. Conservative Republicans, including the old “China Lobby” with its bitter memories of 1949 and the ” betrayal” of Chiang Kaishek, opposed some elements of the new course — especially when it was conducted by the Democratic administration of Jimmy Carter. Thus Robert Dole, although a devoted supporter of Nixon, vigorously opposed Carter’s normalization of relations with China at the end of 1978. After normal ties were established, as Jim Mann of the Los Angeles Times has recently noted, Dole called on the White House to invite the president of Taiwan to Washington. From the floor of the Senate in 1979, he insisted that the Taiwan Relations Act must not leave America’s old ally undefended against aggression by America’s new ally. And when Carter proposed extending most- favored-nation status to China in 1980, Dole led the opposition and introduced legislation denying it to any nation that, like China, had not yet signed the nuclear nonproliferation treaty.

Despite these efforts by its Republican allies, however, the authoritarian regime in Taiwan had a diffcult time winning much support in the United States. The dominant view of American policymakers in both parties was that holding the prized China card was essential to America’s strategic well- beingand that other issues — like sentimental ties to Taiwan, like the sharp ideological differences between China and the United States — had to be set aside.

The resurgence of American power and will under Ronald Reagan ought to have changed this and many other calculations. And to some extent during the 1980s, it did. Reagan, who had achieved preeminence in the Republican party partly by leading a crusade against the Nixon-Kissinger foreign policy, did not share Kissinger’s and Brzezinski’s strong attachment to the China card. Reagan himself was a longtime supporter of Taiwan, and as Peter Rodman points out, in the Reagan administration “even the younger officials making Asia policy . . . thought that the Nixon, Ford, and Carter administrations had all gone overboard in their sentimentality about China.”

There was also strategic logic to the Reagan administration’s de-emphasis of the relationship with China. At a time when Reagan was determined to challenge the Soviets directly on all fronts, both militarily and ideologically, a China policy born in a time of strategic weakness was less compelling. Reagan simply didn’t believe he needed China as much as Nixon and Carter had.

The worldwide ideological offensive that Reagan launched at the start of his second year in office, moreover, could not fail to affect the nature of relations between the United States and China. By the mid-1980s, much of the world appeared to be moving steadily in the direction of liberal economics and liberal government. The dire circumstances that had given birth to the U. S.-China strategic partnership in the 1970s were rapidly giving way in the 1980s to a new international situation that required a recalculation of the value of close ties between the two global powers.

Finally, the beginning of the collapse of the Soviet empire in 1989 and the emergence of the United States as the world’s dominant military, economic, cultural, and ideological power utterly shattered the original rationale for Sino-American partnership. In the post-Cold War era it was ludicrous to speak of playing the China card, as Kissinger had, to convince Moscow to embrace detente; or as Brzezinski had, to combat Soviet aggression in the Third World. It was no longer possible to describe U.S.-China relations as “aligning oneself with the weaker of two antagonistic partners,” given the Soviet Union’s free fall and China’s explosive economic growth.

China itself had appeared to be part of the global trend toward freedom throughout the 1980s. The “Four Modernizations” begun under the leadership of Deng Xiaoping in the late 1970s helped produce the Chinese economic miracle we know today. A Chinese “democracy movement” soon emerged, calling for a ” Fifth Modernization,” free elections, and in some instances openly praising American-style democracy. Though it was subject to government harassment, the existence of the democracy movement suggested to many American observers that political reform in China was the inevitable next step after Deng’s economic reforms.

The massacre at Tiananmen Square in 1989 and the subsequent suppression of dissidents, which continues to this day, dashed these hopes. It could hardly have been better timed to force the United States to reconsider the unpleasant bargain it had made with its conscience in the 1970s. At the same time the old strategic rationale for the U.S.-China partnership was vanishing, the Chinese government cast a bright light on the acute ideological differences between the two countries. Indeed, after Tiananmen, China emerged as the most powerful opponent of American liberal principles in the world.

In the ensuing years, China would significantly increase its military spending, even as both Soviet and American defense spending declined, and with the clear aim of using its growing military power to enhance its influence abroad. The fruits of these efforts have been apparent in recent years, as China, in the words of Sen. John McCain, has increasingly been ” displaying very aggressive behavior” — in the South China Sea, against a newly democratic Taiwan, and in a growing propensity to make arms sales to many of the world’s rogue states.

Under these new circumstances, it would seem to make little sense to continue pursuing the old Cold War policies toward China. Yet remarkably, that is just what the Bush administration tried to do after 1989, and what the purveyors of the bipartisan consensus, including most recently the Clinton administration, have been trying to do ever since. Even after the Cold War, the United States maintained “overriding strategic interests in engaging China,” former secretary of state James Baker declares in his memoirs, but nowhere does he explain exactly what those “overriding strategic interests” are.

In fact, the most common explanations of the strategic importance of the U. S.-China relationship today are fraught with contradictions. American business leaders, and their supporters in the administration and Congress, constantly point to China’s potentially vast market for American goods. But it is striking how unimpressive the economic numbers really are. Last year, American merchandise exports to China amounted to $ 12 billion, about 2 percent of overall exports. By comparison, American exports to Taiwan, with a population one-sixtieth as large as the mainland’s, were $ 19 billion. Meanwhile, China has amassed a $ 34 billion trade surplus with the United States, enough to send Patrick Buchanan into fits of protectionist hysteria. Well might the boosters of the U.S.-China trade relationship insist, like Rep. Toby Roth, that “the key is not where China is today. What is important is where China is headed.” But how impressive does the future look? Roth boasts that “in just 15 years, China will be our 13th largest export market.” Now there’s a strategic imperative!

In the late 19th century, many American businessmen succumbed to what some historians now call “the myth of the China market.” The businessmen, the politicians, and the policymakers of the day could see only the unimaginable bounty that lay in the future of such a populous country — even though earnings in the near-term proved minuscule and businesses had to suffer losses in an effort to wheedle their way into the good graces of the Chinese powers that controlled foreign trade. A full century later, the bounty is still elusive, but the myth is just as potent.

And today’s proponents of the China trade on strategic grounds have adopted another 19th-century nostrum as well: the conviction that increasing trade is the solvent for all the problems of mankind. Nations that trade with one another, the theory goes, will not let clashing strategic interests get in the way of making a buck. After all, Rep. Roth insists, “Economic strength, not military might, determines the world’s great powers today.” In testimony before Congress recently, Clinton administration official Stuart Eizenstar defended the renewal of most-favored-nation status for China on the grounds that the “commercial relationship provides one of the strongest foundations for our engagement.” Argues undersecretary of state Peter Tarnoff: “Our economic and commercial relations increase China’s stake in cooperating with us and in complying with international norms.” Robert Dole, once the mainland’s foe, now agrees: In a May 9 speech, he argued that “extension of most-favored-nation status [is] the best way to promote our long-term interests in China. . . . In China, continuing trade offers the prospect of continuing change.”

Is that true? Few Republicans and conservatives would say that trade will reform Castro’s Cuba. Nor would they be likely to forget that during the Cold War, the Jackson-Vanik restrictions on trade with the Soviet Union did not prevent political liberalization. On the contrary, the denial of most-favored- nation status to the Soviets may have encouraged reform by forcing the Communist leaders in Moscow to undertake political liberalization as the prerequisite for economic growth.

The view that economics is paramount while military, strategic, and political issues are of declining importance — so-called Manchester liberalism — was rampant in the 19th and early 20th centuries, right up until the outbreak of World War I. It is as dangerous a misconception today as it was then. Nevertheless, this assumption now lies at the heart of American China policy. We need to engage so we can trade, say the businessmen; yes, say the China experts, and we need to trade so we can engage.

In their search for a new rationale for preserving a close relationship between the United States and China, the adherents of today’s bipartisan consensus have had to employ such logic constantly. Indeed, the logic of the U.S.-China relationship today has turned in on itself. In the 1970s, the case for strategic partnership with China was that it was necessary to meet the threat posed by the Soviet Union. Today, it seems, strategic partnership with China is necessary to meet the threat posed by China. Secretary of State Warren Christopher put the case best in his speech on May 17. He noted the ” importance of China to our future security and well-being.” And what, in addition to the lure of the market, is that importance? The answer is that ” China can tip the balance in Asia between stability and conflict.” In other words, we need a good relationship with China because China is dangerous. Or as Eizenstat put it, “It is when China’s policies are the most diffcult that engagement becomes the most essential.”

It’s a nice racket the Chinese have going. By the current circular logic of American policy, the more trouble the Chinese make — whether in Taiwan, or on trade, or in the South China Sea, or in weapons sales to rogue states — the harder the United States has to work to “engage.” There is no dispute on this point now between the leading figures of both parties. Henry Kissinger, in an op-ed piece a few weeks ago, declared that “after Chinese leaders had been pilloried and threatened with sanctions for years,” what was needed now was “a serious strategic and political dialogue, . . . a sustained effort to define a common assessment of the future of Asia.” Christopher soon after announced his intention to “develop a more regular dialogue between our two countries.” The idea is that regular consultations will “facilitate a candid exchange of views, provide a more effective means for managing specific problems, and allow us to approach individual issues within the broader strategic framework of our overall relationship.”

We may be forgiven for doubting whether such candid talks will make a big difference. After all, it’s not as if efforts at assiduous diplomacy haven’t been tried. After the massacre in Tiananmen Square in 1989, President Bush and his secretary of state saw their main task as protecting the important strategic relationship with China from American outrage at Beijing’s massive abuse of individual rights. According to Baker, President Bush’s first reaction upon hearing of the assault at Tiananmen was: “It’s going to be diffcult to manage this problem.” And indeed it was, as Baker’s memoirs amply demonstrate. Baker employed precisely the negotiating style that the China experts insist is the only kind capable of producing results — quiet negotiations, no public threats, none of the “spasmodic harassment” Kissinger finds so detrimental, and constant attention to the fact that, as Baker writes, “face is unusually important to [the Chinese], so an interlocutor must negotiate a delicate balance that nudges them toward a preferred course without embarrassing them in the process.” Despite all this subtle diplomacy, the Chinese gave Baker absolutely nothing for his troubles. Chinese officials, Baker recalls, “had no compunction about asking for American concessions while simultaneously ignoring my request for ‘visible and positive Chinese steps’ to make it easier to allay congressional and public anger with Beijing. ” Throughout the four years of the Bush administration, Baker acknowledges, ” the Chinese relationship essentially treaded water.”

Under present policies, in the years to come the United States will continue to tread water, or worse. The truth is, our posture today is, simply, plain old appeasement. One bit of proof is that we are not supposed even to use the word “containment” to describe our policy toward China lest we suggest to the Chinese that in some way we may consider them adversaries. The United States “should not, and will not, adopt a policy of containment towards China,” declares Undersecretary Tarnoff. Why not? Because “we would gain nothing and risk much if China were to become isolated and unstable.” In other words, even if it were necessary to contain China, it would be too dangerous to attempt the task. This is Kissinger’s view, as well. Any attempt to pursue a policy of “containment” of China, Kissinger has argued, is ” reckless” and a “pipe dream.”

Such a skittish approach to another world power might be forgivable if our own nation were weak. But the same people who fear a policy of “containment” often boast that China needs the United States more than the United States needs China. In a trade war, for instance, Eizenstat argues that “China has a lot more to lose than we do.” Like that $ 34 billion trade surplus, for instance. According to Baker, the Chinese “need our help to sustain their economic growth.” And Baker, who got nowhere in four years of subtle diplomacy with Beijing, even believes that the Chinese understand toughness: ” Strength inevitably irritates the Chinese, but they understand it. And the absence of resolve in dealing with them can lead to serious miscalculation on their part.”

And yet “the absence of resolve” would seem to be the best characterization of the policy that the Bush administration and now the Clinton administration have chosen to pursue toward China. When Baker negotiated with the Chinese during the Bush years, he always went out of his way to make clear that the Bush administration was entirely “committed to maintaining the relationship,” that it was always “seeking ways to reconcile our estrangement.” Little wonder that, according to Baker, the Chinese “seemed utterly oblivious to our concerns.” It is axiomatic that if the United States enters all negotiations with China with the mutual understanding that ultimately American leaders will not allow an estrangement in the relationship, then the Chinese will win in most of the negotiations.

In every relationship between nations there is a horse and a rider, Bismarck once noted, and one should endeavor to be the rider. American policy toward China today almost guarantees that we will be the horse.

How can the United States restore the resolve that James Baker believes is so essential to effective dealings with China? This week Congress is debating and voting on the renewal of most-favored-nation status for China. It will surely pass, and perhaps it ought to. The fate of U.S.-China relations should not rest on this relatively narrow issue. The problem with our China policy goes deeper than simple trade rules. Dealing with an increasingly powerful and ambitious China over the coming years will require a strong and determined America willing either to engage or to contain China, depending on Chinese behavior.

Still, most-favored-nation status has become a symbol of China’s whip hand over us. Our unwillingness to pay what is still a relatively small economic price in terms of lost trade opportunities; our fear that any crisis in U.S.- Chinese relations that might result from denial of most-favored-nation status is too dangerous to risk; our concern that in any confrontation it is we, not they, who will be most likely to blink — these are all sizable cracks in our armor the Chinese can exploit, have exploited, and, indeed, are exploiting.

Thus one can only conclude that before we can conduct a successful strategy of compelling China to “play by the rules of the international system,” in the words of Bob Dole, we will have to break our addiction to the China- market myth. And that can only come about if policymakers, economists, and businessmen begin to look at the hard truth and stop allowing their dreams of a gold rush to outweigh more vital concerns — not only America’s strategic interests, but the basic liberties of more than a billion people living beneath the yoke.

By Robert Kagan