Beijing's Balancing Act

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Beijing's Balancing ActAuthor(s): Edmund LeeSource: Foreign Policy, No. 51 (Summer, 1983), pp. 27-46Published by: Washingtonpost.Newsweek Interactive, LLCStable URL: http://www.jstor.org/stable/1148500 .

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BEIJING'S BALANCING ACT

by Edmund Lee

During the past eight months, the foreign policy of the People's Republic of China

(PRC) has changed significantly. A limited relaxation of tensions between the USSR and the PRC has begun: Both sides have repeat- edly announced their willingness to normal- ize relations, and they have gradually ex-

panded joint cultural, educational, and scientific research programs as well as economic ties. Politically, both sides have al-

ready started to negotiate a reduction of their military forces along the Sino-Soviet and Sino-Mongolian borders-one of three

preconditions that Beijing put forward for normalization of relations with Moscow. Some pro-Soviet East European countries, such as East Germany and Hungary, have also improved relations with the PRC.

So far, little has been said about restoring party-to-party relations between Beijing and Moscow. However, Georges Marchais, general secretary of the French Communist Party, the most pro-Moscow Communist party in Western Europe, made a very successful trip to Beijing in October 1982, during which he re-established his party's ties with the Chinese Communist Party (CCp) after a 17-year suspension. More

important, at the 12th Congress of the ccP in September 1982, General Secretary Hu Yaobang devoted five paragraphs of his report to a discussion of the "principles of relationship among Communist or working- class parties in the world." This was the first time that a top leader had addressed that topic at a CCP national congress since the split with Moscow and the CCP's withdrawal from the international communist movement.

EDMUND LEE-this is a pseudonym-is a scholar from the People's Republic of China specializing in Far Eastern politics. His article represents a rare, unofficial Chinese view of Chinese foreign policy.

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Not since 1971, however, have Sino- American relations been as troubled as they are today. During the past two years, Wash- ington and Beijing have clashed time and again over Taiwan. After 10 months of difficult negotiations, the second Sino- American communique was signed in Au- gust 1982, but neither Washington nor Beijing seems satisfied with the document. In addition, Taipei has criticized Washing- ton's new concessions that future American weapons sales to Taiwan will not exceed the 1979 level in either quantity or quality and that the United States will eventually end all arms sales to Taipei. Sino-American military cooperation seems increasingly unlikely, at least under the Reagan administration.

Sino-American trade has increased rapid- ly, and the United States is now China's third largest trading partner. However, recent trade disputes suggest that this

growth has peaked. In Beijing and other Chinese cities, American scholars and students have begun to complain that they are not allowed real contact with the Chinese people. And during the last two years, new regulations have made it much more difficult for Chinese students and scholars to go abroad to study.

However, it would be a mistake to attrib- ute these changes in Chinese foreign policy solely, or even primarily, to Sino-American disputes aggravated by the Reagan administration's Taiwan policy or to Moscow's desires to improve Sino-Soviet ties. Power- ful forces inside China are moving Beijing to discuss seriously an independent foreign policy, neither pro-Washington nor pro- Moscow. And this is the general course Chinese foreign policy is likely to follow in the years ahead.

Changes Since Mao 's Death

The international environment and reac- tions from other governments to China's international actions help determine its foreign policy. But more important influences are domestic economic and political developments, primarily because the coun-

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Lee

try still faces political instability and some serious economic problems.

Three basic domestic developments ex-

plain why the Beijing government has effectively reduced relations with the West, especially the United States, and has slowly and carefully relaxed tensions with the USSR. First is the conservative political trend of recent years. Institutionally, a

Soviet-type political and economic system has been rebuilt; bureaucratic control over

public life has been strengthened again; and a conservative faction within the government, which supports neo-Stalinist policies, has improved its position.

Second, despite the Beijing government's desire for more Western economic assistance and trade, it does not want to depend on the West. At the same time, the government understands that it cannot expect to receive more foreign investment unless it makes some clear progress toward political stability. This attitude reinforces the conservative domestic trend.

Third, the government understands that unless tensions with Moscow are relaxed, it will not be possible to create the relatively peaceful Asian environment that China needs to implement its long-term four modernizations strategy, a program to upgrade its agriculture, military, science, and technology. In addition, it is neither necessary nor possible for the government to continue using the Soviet Union as a scapegoat to help maintain domestic control of the population, as was done before Mao Zedong's death. In part, this new attitude reflects the political situation in the country, which is now more stable. In addition, the Chinese people no longer believe in the Soviet

bugaboo--people either have tired of almost all propaganda coming from the government or have realized that a militant policy toward the Soviet Union will not benefit them.

Since Mao's death in 1976, the PRC's political leadership has split into three factions: the reform group led by Deng Xiaoping, Chen Yun, and Hu Yaobang; the Maoist group led by Hua Guofeng, the

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former chairman of the CCP; and the conservative group led by Ye Jianying and Li Xiannian, two members of the CCP Stand- ing Committee, who are supported by many high- and middle-level military and Party bureaucrats. During the second half of 1978 and the first half of 1979, the reform group, with the assistance of the conservatives, defeated the Maoist group and tried to carry out a series of new programs.

However, both economic and political reforms in post-Mao China were more talked about than actually acted upon. With only a few exceptions, such as agriculture and foreign trade, where some reforms continue, the newest policies issued by the reform group were neither successfully implemented nor long-lived. Its political policies and its economic reform failed to support each other.

Like what is called the Prague Spring of 1968, the Beijing Spring was short-lived. The Third Plenary Session of the CCP 11th Central Committee in December 1978 marked a turning point. With the Maoist group crippled by the reform-conservative alliance, the reform group, under new pressure from the conservatives, began to em- phasize political stability.

Meanwhile, the reform group itself was not taking a firm stand either politically or theoretically. The reformers, for example, never undertook a thorough criticism of Maoism. As a result, the youth and profes- sional sectors of the population, dissatisfied with their low living standard, the country's rigid bureaucracy, and the perceived lack of freedom, banded together to form the Democracy Movement and tried to criticize the system as a whole. Subsequent- ly, many private antisystem opinions appeared on the big-character posters; some mass rallies and discussions were held; small groups of dissidents were organized; and even a few political demonstrations were staged-all going beyond what the system officially permitted.

In fact, the Democracy Movement actually challenged the whole political system and the Party and state bureaucrats in the

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Lee

conservative camp who controlled it. And the movement strongly influenced the youth and the intelligentsia, who had been deeply disturbed by the 10-year-long political upheaval of the Cultural Revolution and by the new information from the outside world that streamed into China after Mao's death. But the conservatives quickly re- gained control of the situation. The political system began to be reconstructed according to the post-Stalin Soviet-type model.

Relaxing Sino-Soviet Tensions

From 1980 to 1982, both Beijing and Moscow found that mutual hostility is largely unnecessary and that limited relaxation will benefit both sides strategically. Since Mao's death, the Soviets have ex- pressed, both publicly and privately, their willingness to settle their dispute with China and to relax Sino-Soviet tensions. Some in the Kremlin seem to recognize that China's new generation of leaders is deter- mined to rebuild a Soviet-type system and view this decision as the basis of a Sino- Soviet reconciliation. However, the Krem- lin has strongly attacked China's foreign policy whenever Beijing has appeared ready both to form an anti-Soviet united front and to begin programs of military cooperation with the United States, Japan, and Western Europe.

Moscow has also maintained political and military pressure on Beijing by enlarging its Pacific Ocean fleet, expanding nuclear attack forces in the Far East, increasing military aid to Vietnam, and invading Af- ghanistan. Nevertheless, the Kremlin understands quite well that putting too much pressure on Beijing will push China closer to the West. Moreover, some Chinese ob- servers argue that Asia is a low foreign- policy priority for the Kremlin. Relaxing tensions with the PRC is regarded by some Chinese analysts as an integral part of the Soviet global strategy of competing with the West for resources and political influence.

Yet the Kremlin no longer seems to fear that Sino-American cooperation will change the Sino-Soviet strategic balance. It doubts

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that China will ever receive the $40-60 billion in Western military assistance that the U.S. Defense Department estimates China will need to threaten the Soviet Union seriously.

In fact, for Beijing the real question is whether or not it even needs to look for such aid. No doubt, the USSR's conventional and nuclear forces are much stronger than China's. But if Moscow really intends to attack China, it would almost certainly rely on a nuclear strike. Unless the Soviets succeeded in destroying the entire Chinese deterrent, Beijing would probably retaliate before conventional Soviet forces could destroy or capture its nuclear bases, which are located close to the Sino-Soviet and Sino-Mongolian borders. Moscow faces two other very tough questions as well: Would the Soviet people consider it politically, ideologically, and psychologically acceptable to launch such an attack on China, which is still viewed as a socialist country and which is unlikely to attack the Soviet Union first? And if such a nuclear war were started, how would Moscow end it?

Moreover, Moscow could not possibly attack China's territory without affecting Japan, South Korea, members of ASEAN (Association of South East Asian Nations), and even the eastern Pacific. Nor would the United States, Japan, and Western Europe maintain their neutrality until Moscow completed its operation in China.

In addition, soon after Mao's death, Mos- cow realized that Beijing no longer poses an ideological challenge. Nor does Moscow seem to consider Sino-American political and military cooperation unbreakable. And Beijing, in turn, now understands that Moscow's increased military activities in Asia are aimed not primarily at the PRC but directly at the United States and its Asian allies and, indirectly, at Western Europe.

The Soviet intervention in Afghanistan poses a stronger threat to China, especially to its northwestern and western border regions, where Beijing has experienced some trouble with national minorities. Nev- ertheless, Beijing currently considers the

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Soviets' main strategic goal in invading Afghanistan as a threat to the Middle East and the Persian Gulf. In Southeast Asia unless Vietnam acts rashly, the Beijing government will not be excessively worried about Vietnam's Moscow-backed campaign for regional hegemony. Hanoi is not strong enough yet to threaten Beijing militarily. More important, Beijing does not appear to believe that the Moscow-Hanoi alliance is unbreakable, partly because China also has experience in trying to work with the strongly nationalistic Vietnamese and partly because the Sino-Soviet relationship is much more important to Moscow than the friendship with Vietnam.

U.S. Options Four basic factors explain recent changes

in the Sino-American relationship. First, the Reagan administration is less interested in strategic cooperation with Beijing than was the Carter administration. Second, relaxation of Sino-Soviet tensions makes Beij- ing less dependent economically on the West. Third, there is an opening because Chinese and Soviet interests are more com- patible than Soviet and American interests. Fourth, Beijing is very worried about the influence of Western ideas and values on its younger generation.

Before Ronald Reagan was elected, many American scholars and policy makers, no- tably former President Richard Nixon and Henry Kissinger, his secretary of state, agreed on the following points: Sino-Soviet reconciliation or even a relaxation of tension was unlikely in the foreseeable future because of their many geopolitical, ideological, and territorial disputes. Militarily, the Soviet Union's clear-cut superiority would force Beijing to look for help from the West, mainly from the United States. Addition- ally, specialists believed that unless Beijing obtained assistance from the West, its four modernizations plan would be impossible to fulfill. Therefore, Washington seemed to have three options: Do everything Beijing wanted, do nothing, or do something to help Beijing protect itself.

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But what if Sino-Soviet relations did improve? A partial Sino-Soviet accommodation would permit Moscow either to trans- fer some of its military forces from the Sino- Soviet and Sino-Mongolian borders to its European borders or to redeploy its military resources in the Far East against the United States and its Asian allies. Washing- ton would either have to bolster its military forces in the western Pacific region or have to push Japan to speed up its self-defense program. However, Japan is unlikely to respond, leaving the United States in a serious security bind unless the political situation in the Far East and in the world undergoes tremendous change.

Beijing is hard at work improving its nuclear attack force, which can already reach most of Soviet territory. Neverthe- less, neither Beijing's nuclear capability nor its conventional forces seems likely to be a real threat to Moscow now or in the foreseeable future.

Moreover, the recent Soviet-American competition in the western Pacific region overshadows current Sino-Soviet disputes. Not only has Moscow markedly expanded its Pacific fleet, but it is also seriously talking about moving some of its theater nuclear missiles from the western Ural Mountains to the Far East. The Soviet Pacific fleet has also been permitted to use some Vietnamese harbors, thereby increasing its ability to compete with the U.S. Seventh Fleet and eventually threaten the defense and supply lines of the United States and its allies.

More important, Moscow's strategy toward the western Pacific fits in well with its global strategy of forcing Washington to increase its resources in northeastern Asia, threatening ASEAN, and supporting its ef- fort in Afghanistan and its aims in the Mid- dle East through its operations in the Indian Ocean.

So far, little has been heard from Wash- ington about the possibility of reorganizing and strengthening its forces to help offset an improvement in Sino-Soviet relations. However, the United States and its allies

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Lee

will be forced to confront this possibility in the near future.

It is not even clear that questions of relative military strength need to influence Beijing and Moscow as they formulate

policies toward each other. While Beijing and Moscow have quarreled over many issues since the PRC's establishment in 1949, it was only when Maoism finally emerged in its most extreme form and when China was caught up in the Cultural Revolution that these differences produced military confrontation and that the military balance assumed great importance. Since Mao's death and especially since the Sino-Yugo- slav reconciliation in May 1978, the ideological and domestic policy differences between Beijing and Moscow have faded. Yet the U.S.-Soviet conflict in this region is

very likely to become even more intense, especially in the area of naval power. And

Japan will eventually enter the struggle to reach a balance of power in the Far East.

Powerful forces inside China are

moving Beijing to discuss seriously an independent foreign policy, neither pro-Washington nor pro- Moscow.

China's new posture also stems from the realization that Washington will never give Beijing enough military aid to resist an attack from Moscow. Token military aid given primarily for symbolic purposes will only be viewed by Beijing as a bargaining chip against Moscow, a view borne out by China's evident decision to stop talking about an anti-Soviet united front, to begin its criticism of Japan's rearmament and the revival of Japanese militarism, and to speed up the process of Sino-Soviet accommodation.

From his speeches during the 1980 campaign, Reagan did not appear to care much about these issues. Since he became president, Reagan has shown the world the importance of ideology-anticommun-

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ism-in his foreign policy. He has empha- sized the need to respond vigorously to Moscow's challenges everywhere in the world. He has strongly supported Ameri- ca's old friends, such as South Korea, South Africa, Israel, and Taiwan.

But ideology alone cannot serve as the basis for contemporary foreign-policy mak- ing. Discovering what else lies behind Reag- an's global strategy, if he has one, is not

easy. His China policy still seems to be based upon the old arguments that accommodation between Beijing and Moscow is virtually impossible and that Beijing needs Washington politically, economically, and militarily. He appears unable to imagine dealing with Beijing on any level beyond squabbling over the issue of Taiwan. And he does not seem to have a clear picture in his mind of how to preserve U.S. long-term strategic interests in a period of improving Sino-Soviet relations and changes in the balance of power in the Far East and around the world.

During the Carter administration, Congress passed the Taiwan Relations Act of 1979, and the U.S. government increased its sales of weapons to Taiwan. However, Beijing did not energetically oppose these actions because its leaders were still anxious to keep the normalization of relations with Washington on track, to accelerate Sino- American political and military cooperation, and to expand economic and cultural ties with Washington. Taiwan turned into a major bone of contention only when both Beijing and Washington began to change their policies toward each other.

Chinese leaders believe that Reagan is trying to play a Taiwan card. Beijing has done everything possible to try to negotiate with Taipei, from the nine-point proposal to the letter from People's National Congress Vice Chairman Liao Chengzhi to Taiwan's President Chiang Chingkuo. But Beijing's first priority is to avoid losing face in this dispute. For in a general domestic crisis, the army-backed conservative group will undoubtedly use the Taiwan issue to attack those who promoted the peaceful

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Lee

resolution of the reunification problem, namely, Deng Xiaoping.

The Path to Reconciliation

The advantages and drawbacks of China's major policy options toward the USSR and the United States suggest that the PRC will continue its limited and gradual movement toward Moscow and away from Washing- ton.

China's options for dealing with the USSR consist of continuing tensions, moving toward reconciliation, or initiating a limited relaxation of tensions. The first course would carry major disadvantages. China would probably be able to maintain and expand its economic and cultural ties with the West. But it would not be able to cut its defense budget. And high levels of defense spending would continue to conflict with the country's strategy of the four modernizations. Indeed, the Chinese leadership would find it both ideologically and politically difficult to balance the domestic policy of rebuilding a Soviet-type centralized political and economic system with the pursuit of a strong anti-Soviet foreign policy.

Further, although the PRC would receive some military and economic aid from the United States, it would have to increase military deployments on its northern and southern borders to meet renewed Soviet and Vietnamese military challenges. Beijing would also have to become more dependent upon the West, especially the United States, which would then enjoy a stronger negotiating position with both Moscow and Beijing. And China would still have no assurance of how the United States would respond in the event of a Soviet attack. In view of these factors and the conservative faction's enduring suspicion of the capitalist West, Beijing seems unlikely to place great trust in Washington in the near future.

Finally, the anti-Soviet course would re- quire Beijing to support Washington's plan for rearming Japan, which in the long run would be quite dangerous to PRC security.

Broad reconciliation with Moscow, the second course, would create significant

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problems, too. The PRC would receive some economic and military assistance from Mos- cow but would pay dearly. Not only would Moscow insist that China sacrifice its independence in return for peace, but Beijing would also suffer a cutback in its economic ties with the West.

Of course, Beijing would feel far more secure if Moscow reduced its military forces on the Sino-Soviet borders or restricted their use to threats and operations against the United States and its Asian allies. However, the United States would then have little choice but to increase military aid to these allies and to encourage the rapid rearmament of Japan. In addition, a new military alliance involving the United States, Japan, South Korea, Taiwan, and ASEAN would be created. These developments would increase international tensions everywhere, could easily create a new cold war in the Far East, and would certainly make it more difficult for Beijing to settle the Taiwan problem peacefully. In the worst case, China might be forced into a confrontation like the Korean War, which would certainly destroy the four modernizations plan and any chance of securing peace in Asia.

The PRC will continue its limited and gradual movement toward Mos- cow and away from Washington.

A reconciliation with Moscow would enable Beijing to make some new friends among pro-Moscow Third World countries. But the PRC would lose influence over more neutral developing countries and forfeit all claims to an independent posture.

The policy of reconciliation with Moscow would politically and ideologically promote the Sovietization of China's social system. But educated youth and professionals would oppose any new policy that would increase China's dependence on Moscow. In their eyes the Kremlin is a symbol of oppression, totalitarianism, and bureaucracy. More sig-

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Lee

nificant, it seems unlikely that Sovietization and even economic aid from Moscow will

help the PRC solve its economic problems. If China's economy continues to worsen, the government could confront the kind of domestic opposition faced by the Hungar- ian government in the mid-1950s and by the Polish government today.

What of Beijing's third option-reaching a limited accommodation with Moscow, sacrificing military cooperation with the West, but at the same time preserving good political and economic relations with the West, particularly the United States? Mos- cow would welcome any degree of relaxation with Beijing, for that would represent a political and psychological gain with regard to the West. And the Soviet Union probably would gradually reduce its military forces along the Sino-Soviet and Sino-Mongolian borders if China did the same, ending Beijing's need for Western military support. Nor would Beijing have to acquiesce in, or encourage, Japan's rearmament. Given U.S. insistence on higher Japanese defense spending, this issue will probably turn into one of the major Sino-American disagree- ments in Asian security affairs.

Further, the PRC would not have to worry any longer about a Soviet military attack and thus would be able to reduce inherently unproductive military spending. China would also be able to strengthen its

position in dealing with Vietnam. Without political, economic, and military support from Moscow, Hanoi could not exercise its power in Southeast Asia. It seems doubtful that Moscow would completely cut off aid to Vietnam after a relaxation with Beijing. But it seems reasonable to assume that Moscow would reduce such aid and ask Hanoi to adopt less aggressive policies. As a result, the PRC could more successfully cooperate with ASEAN in resisting Hanoi's hegemonistic ambitions and might even find a solution for the Cambodia issue. Beijing would not expect Moscow's withdrawal from Afghanistan, because of Af- ghanistan's great importance for Moscow's strategy toward the Middle East and south-

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ern Asia, and because a Soviet withdrawal could be attributed to a failure of nerve in the Kremlin. However, Beijing and Mos- cow could compromise on the reduction of Soviet political and military pressure along China's politically unstable northwest regions and against Pakistan-a very important ally of both Beijing and Washington.

The PRC would be able to improve its ties with radical Third World countries without jeopardizing its relations with more conservative states. This limited relaxation would also benefit the four modernizations policy and enable China to cut military spending and expand its trade with the Soviet bloc. Moreover, a relatively peaceful Asia-especially in the ASEAN countries, where many ethnic Chinese now live-would be very helpful to Beijing both in expanding its trade and in encouraging capital investment. Yet limited accommodation with the Soviets would not seriously jeopardize Bei- jing's improved economic relations with the West.

Both politically and ideologically, this middle policy would probably be acceptable within China, if it were limited and effected slowly. The younger generation and professionals would not see improved relations with Moscow as a threat to China's ties with other parts of the world or as a portent of a permanent Soviet-style future. Accommo- dation would also benefit the powerful Party bureaucrats by stabilizing both political and economic conditions in the country.

A New Image

Meanwhile, Beijing seems to have the following policy options toward the United States: to downgrade relations because of the issue of Taiwan; to depend more heavily upon Washington's help in opposing Mos- cow's expansionism; or to break a little with Washington but still continue some kind of cooperation, especially in the area of Asian security.

The first option could be expected to help the Beijing government appease the country's nationalist feelings. However, China would lose negotiating leverage with Mos-

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cow. Tensions in Asia would grow again. As a result, Japan's rearmament would be accelerated, and a military alliance of the United States, South Korea, Japan, Taiwan, and ASEAN might emerge. Washington might encourage Taiwan to pursue legal independence from the PRC. And China would lose the opportunity to benefit from economic cooperation with the West. Therefore, the Chinese government would be unlikely to choose this option unless forced to do so.

Dependence on Washington would permit Beijing to receive U.S. military and economic aid. But a strong Chinese move toward closer relations with the United States while the PRC remains militarily weak would allow Washington to use its China card against Moscow and give it the

upper hand in the Taiwan dispute. This situation would not only be politically and ideologically unacceptable to the Beijing government, but very dangerous as well, for

Washington could still sell out China's interests. Meanwhile, Beijing would be faced with a strong reaction from Moscow. The Kremlin, for example, could encourage Hanoi to increase its military activities near China's southern border, in the South Chi- na Sea-where the discovery of abundant oil resources has been reported-and in Indochina. Moscow might also intensify its own military pressure along the Sino-Soviet and Sino-Mongolian borders, deepen its involvement in Afghanistan, or threaten Pakistan.

Of course, increasing economic ties with the West would help the Chinese economy. Nevertheless, Beijing would have some trouble in reconciling institutional Sovieti- zation at home with a close alliance with the democratic West. Under certain conditions this tension could lead to a political crisis. The middle approach would mitigate most of these problems.

The issue of Taiwan is the final factor that might tilt China's foreign policy to the advantage of one of the superpowers. Nev- ertheless, it seems unlikely to be settled in the near future. After Mao's death, Beijing's

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policy toward Taiwan underwent some

important changes. Beijing changed its policy objective from the liberation of Taiwan to peaceful reunification with Taiwan. The PRC seems unlikely to try to solve the Taiwan issue by force unless Taiwan expe- riences internal upheaval or attempts to become an independent country by reject- ing its status as a part of China.

In the second Sino-American communi-

que, signed in August 1982, Beijing reaf- firmed its policy of reunifying Taiwan by peaceful means. The PRC has actively ex- pressed its willingness to talk with the

Kuomintang (KMT), the ruling party in

Taipei, and also has stated that Taiwan can maintain its own social and economic system and armed forces after reunification. The island would be treated as a special administrative region. Beijing has encour-

aged trade as well as expanded communica- tion with Taiwan. Publications in Beijing have even begun to discuss the economic success Taiwan has achieved over the past 30 years.

Beijing would have some trouble in

reconciling institutional Sovietiza- tion at home with a close alliance with the democratic West.

Several factors account for these changes. After more than three decades of separa- tion, the PRC has begun to realize that Taiwan poses little political, ideological, or military threat. Beijing seems also to have learned that liberating Taiwan militarily would destroy the international environment needed for the four modernizations program. Washington's continued support of Taiwan gives Beijing pause. Moreover, the PRC seems to recognize that Taiwan has done a good job in building its economy during the past 30 years. Finally, China seems to be very worried about the political future of Taiwan after Chiang Chingkuo passes from the scene.

However, the Taiwanese regime's reac-

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tion to Beijing's new policy has been hos- tile. After 30 years of stability and remarkable economic growth, Taipei finds it difficult to respond to Beijing's offer of peaceful reunification. Taiwan also has its own troubles. It is still a single-party political system. Yet after years of prosperity, a business class has emerged that would like to participate in the political decision mak- ing within the KMT. Further, Taiwan's population is divided between the minority mainlanders, who continue to control the political system, and the native Taiwanese, who have shared in Taiwan's economic miracle but who have been virtually exclud- ed from political power.

Also, some older people born on the mainland long to return. This desire has grown since Mao's death. They hope ar- dently for reunification of Taiwan and the PRC in the near future, demonstrating that traditional Chinese cultural, historical, and family influences are still much stronger than official propaganda. However, the KMT will be reluctant to let down its guard and undermine the hard-line anticommun- ism that has furnished the party with its main excuse for tight control over the island.

Despite 30 years' remarkable growth, some economic challenges have emerged for Taiwan since the end of 1979. Taiwan's uncertain political future, for example, has already prompted local businessmen to channel some investment overseas. Further, the island has few natural resources, especially oil. But Taiwan's biggest economic challenge has been structural. Dependent like Japan on exports, the island must make a difficult transition from a labor-intensive to a capital- and technology-intensive industrial base to continue competing successfully in world markets. Until this process is completed, Taiwan's products will continue to be challenged by industrialized countries, such as Japan and the United States, which are still more competitive in high technology industries, and by other newly industrialized and developing countries, such as South Korea, Hong Kong, and Thailand,

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whose labor costs are cheaper. Further, Taiwan's exports are currently being hurt by the world recession.

These social and economic problems shed much light on the biggest short-term ob- stacle Taipei has placed in the way of improved Sino-American relations: its insistence on buying advanced weapons such as the FX jet fighter (a less sophisticated export model of the F-16 or F-5G intercep- tor) from the United States. Does Taipei really worry about a possible attack or invasion from the PRC? Does anyone really think strong military support from Wash- ington is the only reason why Beijing has not attacked Taiwan? Can the FX possibly change the military balance on either side of the strait?

/71 Mo

Thomas Reed

These questions are not very difficult to answer, but the responses are hard for some to accept. Actually, it is no secret that since Mao's death Beijing really has not wanted to attack Taiwan. Beijing's top priorities are securing a peaceful international environment, at least in Asia, and expanding economic ties with both its neighbors and the

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West to help solve economic problems. An attack on Taiwan would ruin everything. And a war would destroy Chinese industry located in the coastal provinces-including Shanghai-which represent more than 60

per cent of the PRC's industrial capacity. Moreover, the primary concerns of the

younger generation in the PRC are improving its poor living conditions and obtain-

ing greater freedoms. These interests will not be served by war.

Obtaining advanced weapons from Wash-

ington is important for Taipei for political and psychological reasons alone. Taiwan's leaders rely on the weapons to maintain economic and political stability, not to

change the military balance between the two societies. Yet any dramatic improvement in Taipei's military capability would

prompt a swift reaction from Beijing- greater defense spending, the redeployment of forces from the northern border to the southeastern coast, and a greatly accelerated reconciliation with the Soviet Union.

In addition, is Washington really likely to

encourage reunification? The answer seems to be, "No." Modern military technology and strategy have made Taiwan's position less and less vital to America's global strategy. Nevertheless, the island would remain a

strategic prize in the event of a U.S.-Soviet naval confrontation in the western Pacific or a second war in Korea.

Any American administration would also experience great difficulty in totally with- drawing its support from Taipei, which is strongly supported by many conservative American politicians. And if the United States did abandon Taiwan, what would be the impact on Japan, on South Korea, and on ASEAN countries? Would these countries re-evaluate both their security ties with Washington and their defense strategies? How would the consequences of these steps in turn affect the U.S. defense strategy in the western Pacific and around the world? So far, no satisfactory answer to these questions has been provided. However, it seems likely that the United States and the countries of the region would have to

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completely re-examine their foreign and defense policies, and that the U.S. position and popularity in Asia would be substan- tially weakened.

For all the attention it has received, the Taiwan issue probably will not be settled in the near future. All that is certain is that Taiwan's future will be influenced deci- sively by forces outside the direct control of

existing governments, by internal political and economic developments in both Chi- nese regimes, and by changes in the power balance in the Far East.

China still faces monumental domestic difficulties. The struggle to raise the living standard of 1 billion people is far from over. Despite impressive gains, the staggering task of modernizing China's economy is still largely in its infancy. And Chinese politics are still shaken by the aftershocks of the Cultural Revolution. The magnitude of these problems and forces shows why, bar- ring reckless behavior, present and future American handling of the Taiwan issue will only be one factor behind changes in Chi- nese foreign policy.

Yet while American policy makers have little influence over Chinese foreign policy, Beijing's new profile is not directed specifi- cally against the United States. China has not joined the Soviet camp. Beijing will continue to look out for its own interests first. Although the PRC's accommodation with the Soviets represents a net loss for

Washington in the short run, in the long run it may force American officials to develop more realistic-and more du- rable-ideas about how U.S. and Chinese interests can be made to dovetail in the years ahead.

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Documents

Beijing's Balancing Act