Pacific Council and RAND Report Urges Restraint In U.S. Rhetoric Toward China

Report Calls for a U.S.-China Policy Based on Realistic Assessment of the

Chinese Condition

Oct 23, 1997, 01:00 ET from Pacific Council on International Policy

    LOS ANGELES, Oct. 23 /PRNewswire/ -- Calling the need of "getting China
 right" a "deadly serious matter," a report issued by the Pacific Council on
 International Policy and RAND's Center for Asia-Pacific Policy urges ambitious
 American politicians to place China off-limits as a subject of demagoguery.
 The plea is contained in "The Chinese Future," a policy paper that provides an
 up-to-date discussion of China's rapidly transforming political, military,
 economic and social dynamics.
     The authors warn that U.S. leverage over China is limited and that U.S.
 policy must be based on balanced and realistic assessments of China's internal
 conditions.  The authors conclude that the U.S. can elicit cooperation from
 Chinese leaders on a limited number of carefully selected issues.  Common
 interests will emerge as China becomes interested in global markets and as
 each nation faces the challenges of governing in a new era of rapid
 technological growth and demographic change.
     The report cautions policymakers about adopting delusions of rapid
 democratization or aggressive military expansion, and warns against
 unwarranted expectations by the U.S. business community of access to markets.
 Further, the U.S. should harbor no illusions about the Chinese government's
 resolve to deter Taiwanese or Tibetan independence, China's historic
 sensitivities toward the west and Japan must also be taken into consideration
 when developing today's China policy.
     These are the conclusions drawn by the authors from the deliberations of a
 72-member study group composed of business executives, lawyers, journalists
 and academicians from the Western United States and led by the Pacific Council
 and RAND's Center for Asia-Pacific Policy.  The report was authored by China
 experts Dr. Michel C. Oksenberg, senior fellow and professor of political
 science at Stanford University's Asia-Pacific Research Center and former
 senior staff member of the National Security Council; Dr. Michael D. Swaine,
 senior political scientist in international studies at RAND and research
 director of the RAND Center for Asia-Pacific Policy; and Dr. Daniel C. Lynch,
 assistant professor of international relations at the University of Southern
 California.  The study group was chaired by Gareth C.C. Chang, president,
 Hughes International and senior vice president, Hughes Electronics.
     China's Sweeping Transformation
     Based on more than 32 hours of study and discussion, the authors of the
 report conclude that China policy must be made in the context of four major
 transformations, which are carrying that country into uncharted waters:
     * China is changing from an agricultural to an industrial economy and from
 a rural to an urban society.  For the past 20 years, the economy of a nation
 of 1.3 billion people has grown 10 percent a year.  Every year, one percent of
 the population -- 12 to 13 million people -- has shifted from agricultural to
 non-agricultural employment.
     * China is shifting from a planned, command economy to a heavily regulated
 market economy and from a Leninist political system to some form of
 authoritarian or possibly democratic system.
     * Rapid economic growth is giving rise to a large and growing middle class
 with high expectations for a rising standard of living.  Rising disposable
 incomes of millions of Chinese will have ramifications for the global economy,
 while, politically, the new middle class is increasingly armed with
 information and the communications tools to analyze the political scene and
 pursue new political roles.
     * China is completing a critical generational transition.  Following a
 generation of communist revolutionaries, the successor generation has been
 educated as engineers and technicians and steeped in the mores of Chinese
 bureaucracy.  Today's leaders are more pragmatic and less ideological.
     Daunting Problems Face China's Leaders
     China's rulers must govern in the face of daunting problems:
     * The nation is geographically and culturally diverse with a history of
 disunity and civil war.  China's leaders today cannot assume the country will
 remain united.
     * Seven levels of government separate the rulers from the populace, with
 authority in many key aspects of the economy and society now dispersed to
 local leaders.  The bureaucracy is vast and data is often lost between the
 layers of government.  There are enormous challenges in ruling 31 provinces,
 160 prefectures, 2,500 counties and cities, nearly 100,000 townships and urban
 wards, and over a million rural villages.
     * China must feed nearly five times the population of the U.S. on 60
 percent of America's cultivated acreage.  The population continues to grow,
 with 15 million additional laborers entering the workforce annually.
     * The leaders must respond to rising expectations for improved wages and
 living conditions, greater geographic and social mobility, and increased
 opportunity to participate in the decisions that affect peoples' lives.
     * Severe environmental problems pose serious health problems and constrain
 economic growth.
     * Problems are posed by an aging population, and by the need to import
 technology, equipment, petroleum and agricultural commodities, all required to
 sustain the growth rate and meet popular aspirations.
     * An immediate challenge to the current leadership is managing the
 transfer of the wasteful state-owned enterprises to private ownership.
     Policy Implications
     U.S.-China policy should take into consideration these factors.  Among the
 report's findings:
     * The Chinese future is open and uncertain.  China should not be seen as
 an enemy or as a sure partner that will pose no threat in the future.
     * China's future path will be determined by its own internal
 considerations.  American leverage is important, but limited, in the short
 run, China's leaders will respond to domestic political and economic
     * The U.S. should not develop an exaggerated sense of its own importance
 in Chinese eyes.  If Chinese leaders do not respond to U.S. demands and
 urgings, it may be because of domestic considerations hidden from American
     * Because of China's uncertainty, U.S. policy must be flexible and nimble.
 Policy must not be tied to the fate of any particular Chinese leader.
 Setbacks and reversals to American policy should be expected.
     * American policy should not be rooted in the expectation that China can
 or will soon become a democracy.  A commitment by China's leaders to
 instituting gradual democratization is the best the U.S. can realistically
 expect, and that commitment has yet to be credibly voiced.  Even if there were
 a rapid move toward democratization, the U.S. must recognize the underpinnings
 of stability -- the rule of law, a competitive party system and a culture of
 tolerance and trust -- are lacking.
     * One of the biggest impediments to sustained economic growth is China's
 inadequate institutions:  weak banking and revenue systems; overlapping and
 ill-defined governmental jurisdictions; a weak legal system; and a weak civil
 service system.
     * The U.S. must recognize the Chinese government's deep and enduring
 resolve not to permit Taiwanese or Tibetan independence.  The U.S. should
 harbor no illusion that the Taiwan issue is not potentially explosive and
 could involve the risk of war.
     * The Chinese government is not fully in control of the society; the
 central government is not always in control of the regional and local
 authorities.  The leadership fears the consequences of losing control could be
 disintegration on the scale of the Soviet Union.
     * China's economy will continue to grow, but will possess major
 vulnerabilities.  The U.S. government should not arouse unwarranted
 expectations among the American business community.
     The 660-member Pacific Council on International Policy promotes the
 exchange of ideas on international issues, fosters public understanding of
 global trends and enhances international communication on economic, social and
 political questions.  Founded in 1995 in cooperation with the Council on
 Foreign Relations and headquartered on the campus of the University of
 Southern California, the Pacific Council is an independent, non-partisan
 organization.  Members of the Pacific Council are leaders and decision makers
 from business, labor, politics and government, religion, the media, law and
 other professions and are drawn principally from the Western United States.
     The RAND Center for Asia-Pacific Policy (CAPP) is a non-profit, non-
 partisan, multidisciplinary research center within RAND.  Its mission is to
 provide decision makers with objective, cutting-edge research that aids in the
 formulation of effective policies for the Asia-Pacific region.  The Center's
 research falls into the areas of international security, international
 political economy and human capital issues.

SOURCE Pacific Council on International Policy