The Dragon Dance: U.S.-China Security Cooperation - James M. Acton

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The Dragon Dance: U.S.-China Security Cooperation

By: James M. Acton Thursday, November 29, 2012 2

China’s nuclear modernization concerns the United States and its Asian allies, but Washington has largely failed to engage Beijing effectively on nuclear strategy. The failure stems at least in part from China’s view that engagement narrowly focused on nuclear issues is a losing proposition. To make progress in his second term, President Obama should offer a broader vision for strategic cooperation that includes reducing nuclear risks by restraining competition in the conventional realm.

James M. Acton

Senior Associate
Nuclear Policy Program

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Over the last ten or fifteen years, the possibility of a conflict with China has become an ever more important focus of U.S. defense planning. With long-running wars in Afghanistan and Iraq, preparing for such a contingency has not always been the highest-profile item on the Pentagon’s agenda. But, the Obama administration’s “pivot” to Asia is clear evidence of where it believes the risk of interstate warfare, defined in terms of both likelihood and consequence, is greatest.
Sino-American military competition primarily plays out in the conventional domain, and escalation to nuclear use in a U.S.-Chinese conflict is thankfully much less likely than it was during the U.S.-Soviet standoff. Yet both Washington and Beijing still plan for a nuclear war—the ultimate in low-probability, high-consequence catastrophes. For this reason more than any other, the administration of Barack Obama, like the George W. Bush administration before it, has sought to manage the risk by engaging China in a strategic dialogue. The administration is virtually certain to continue these efforts in Obama’s second term.
Certainly, the Obama administration is also driven in part by a desire to create political and security conditions that would enable deep reductions in nuclear weapons, eventually leading to their abolition. One of these conditions is the integration of China’s nuclear arsenal into an arms control framework. However, other reasons to engage China on nuclear deterrence command broader political support. China is slowly expanding and modernizing its nuclear forces, sparking concern in both the United States and among Washington’s Asian allies, most notably Japan. These concerns are exacerbated by Beijing’s refusal to provide information about the size and structure of its arsenal. As long as these trends continue, all U.S. administrations—Democratic and Republican—are likely to try to press Beijing to be more transparent and to explain its motivations and intentions for modernization.

The Obama administration’s “pivot” to Asia is clear evidence of where it believes the risk of interstate warfare is greatest.

As part of this modernization, China is in the process of deploying road-mobile missiles and developing submarine-launched ones to replace its older silo-based weapons, thereby significantly enhancing the survivability of its nuclear forces. It is also developing technologies to defeat U.S. ballistic missile defenses in an attempt to ensure that, should these missiles ever be used, their warheads would reach their targets.
China is also slowly expanding its nuclear forces. In 2002, the U.S. Department of Defense estimated that China had twenty intercontinental ballistic missiles (ICBMs) capable of reaching the continental United States,¹ and in 2010, a report placed that number between 30 and 35.² In addition, China is developing the capability to place multiple warheads on a single missile. If Beijing deployed this technology, it could rapidly expand its nuclear forces, but there is no evidence it has yet done so.
So far, U.S. efforts to engage China on nuclear strategy have had limited success. Part of the reason may be that, given the United States’ huge qualitative and quantitative advantages in nuclear forces, China appears to view engagement narrowly focused on nuclear issues as a zero-sum game that it will likely lose. Strategic cooperation might appear more obviously mutually beneficial if it were based on a broader strategy of reducing nuclear risks by restraining competition in the conventional realm. Of course, there is a real possibility that an ambitious U.S. proposal to expand cooperation would be rebuffed by China. But, if Beijing does engage, the United States and China could make real progress toward managing a genuinely existential threat to both of them.

A Decade of Limited Progress

American efforts to engage China—at both the official and nongovernmental levels—have often attempted to separate nuclear deterrence from the rest of the bilateral relationship. The aim has been to discuss it either completely by itself or, occasionally, alongside other “strategic” issues, such as cybersecurity, space weapons, and missile defense. Most obviously, U.S. officials believe—and regularly and publicly exhort Beijing to understand—that greater transparency about China’s nuclear arsenal would, on its own, help stabilize the two states’ nuclear relationship.
This belief has influenced the way Washington has attempted to engage Beijing in private. The Bush administration sought a dialogue with China focused solely on nuclear strategy. Only one round of this dialogue was ever conducted, and that was in April 2008. The Obama administration’s efforts appear to have been somewhat broader but are still tightly focused compared to the full range of issues in the bilateral military relationship. Specifically, the United States and China held two rounds of a “strategic security dialogue” in May 2011 and May 2012. Very little information about the discussions is available, but the meetings seem to have originated with a suggestion made in January 2011 by Secretary of Defense Robert Gates to his counterpart, General Liang Guanglie, that the two states should engage on “nuclear, missile defense, space, and cyber issues.” Whatever its agenda, the absence of information about this dialogue suggests it is at a fairly nascent stage.

Strategic cooperation might appear more obviously mutually beneficial if it were based on a broader strategy of reducing nuclear risks by restraining competition in the conventional realm.

At a marginally more advanced stage is a dialogue between the five nuclear-weapon states recognized by the Nuclear Non-Proliferation Treaty, including both China and the United States. Formally, this dialogue is focused on topics covered by the treaty (disarmament, nonproliferation, and nuclear energy), not bilateral U.S.-Chinese strategic issues. But, China has agreed to lead work on a glossary of nuclear terminology, which could help promote understanding during future bilateral discussions on nuclear deterrence.
In short, a decade’s worth of U.S. efforts to engage China on nuclear deterrence has led to three rounds of intermittent dialogue and a commitment to develop a glossary: hardly impressive progress. Rightly or wrongly, China apparently does not share the U.S. belief that narrowly focused engagement on nuclear issues would be mutually beneficial.
Why China has been reluctant to engage on nuclear issues is a matter for legitimate debate. Virtually all Chinese and many American analysts—particularly those who have studied Chinese documents—believe that Beijing’s policy is driven, to a significant degree, by a perceived threat from the United States. They argue that Beijing is genuinely concerned that, in a deep crisis, the United States might attempt to eliminate China’s nuclear arsenal with a preemptive “first strike” and that greater transparency could further undermine the survivability of its nuclear forces. In 2003, for instance, Chinese analyst Li Bin wrote that:
The survivability of [China’s] current ICBM force . . . relies on ambiguity surrounding numbers. Because China will not confirm or deny reports on the number of its ICBMs, other states cannot have confidence in any estimates. An attacker considering launching a first strike against China would be uncertain of China’s retaliatory capacity. This is how China’s nuclear deterrent works today.³
By contrast, other U.S. analysts believe that China’s opacity and its modernization program are geared toward unilateral gain. They worry Beijing has concluded that a more robust Chinese nuclear arsenal would deter the United States from intervening in a regional conflict, thus undermining U.S. defense commitments in East Asia.
While less discussed, it is also possible that internal considerations, not just external ones, shape Chinese policy significantly. After all, U.S. and Soviet/Russian nuclear weapons decisions—particularly over procurement—were not based solely (or perhaps even mostly) on cold-blooded cost-benefit calculations. They were shaped by bureaucratic and political factors. The administration of John F. Kennedy, for example, increased defense spending, which included the construction of more nuclear weapons, to stimulate the U.S. economy. Meanwhile, according to an authoritative study of Soviet nuclear policy based on interviews with senior decisionmakers conducted just after the collapse of communism, Soviet acquisitions policy was largely driven by the defense-industrial sector’s use of “its political clout to deliver more weapons than the armed services asked for and even to build new weapon systems that the operational military did not want.”⁴ While the specific internal factors at play in China may be rather different, there is little reason to suppose that they are absent.
Whatever the reason for China’s recalcitrance, there are advantages to presenting Beijing with an agenda for strategic cooperation that is more attractive than the one currently on offer. If China’s policy is defensively orientated, it might respond positively to a proposed agenda that is more obviously mutually beneficial. If engagement is currently being stymied by internal factors, a more attractive agenda might motivate it to overcome political or bureaucratic roadblocks. By contrast, Beijing’s refusal to engage with a more attractive offer would provide some evidence that Chinese policy is offensively orientated, which would be a potentially valuable insight—although such evidence, it must be recognized, would hardly be conclusive.

The Inseparability of Nuclear and Conventional Security Dynamics

Conventional weapons that are not usually deemed “strategic” can be inextricably linked to nuclear dynamics. At the most general level, the overall state of the conventional balance can significantly affect nuclear doctrine. Many nuclear-armed states facing a conventionally stronger adversary—including the United States during the Cold War and Russia and Pakistan today—have openly advertised their nuclear weapons as an offset for their weakness.
China has been an exception in this regard because it has pledged not to use nuclear weapons first, although there is a debate within the United States about the credibility of this commitment. In particular, some analysts believe that China would resort to the use of nuclear weapons to avoid defeat in a major conventional war. This debate aside, however, it is possible that if China fails in its current efforts to close the United States’ conventional advantage in the western Pacific, it may openly place a greater emphasis on nuclear weapons. Conversely, if China succeeds in gaining a meaningful conventional advantage, the United States might revert to a much greater role for nuclear weapons in fulfilling defense commitments to its allies.
Beyond these high-level dynamics, there are some much more direct—and pernicious—linkages between conventional and nuclear weapons in the U.S.-Chinese relationship. There is a vigorous conventional competition in the western Pacific, with the United States seeking to retain the ability to project power throughout the region and China seeking to deny it the ability to do so. In turn, Chinese efforts to deter and defeat U.S. power-projection capabilities are leading the United States to develop “strategic conventional” capabilities, which Beijing argues are forcing it to expand and modernize its nuclear forces.
To be concrete, China is developing both anti-satellite weapons and anti-access/area-denial capabilities. By using the former to destroy American communications, guidance, and reconnaissance satellites, China might hope to deny or impede the United States’ ability to project power. Chinese anti-access/area-denial capabilities are designed to hinder U.S. access to the western Pacific and its freedom of movement within the region. The highest-profile Chinese system designed to contribute to these operations is an anti-ship ballistic missile, the DF-21D. Chinese military writings suggest that its primary target would be U.S. aircraft carriers.
Both anti-satellite weapons and anti-access/area-denial capabilities constitute important arguments within the United States for developing long-range, very fast conventional weapons in a program known as Conventional Prompt Global Strike (CPGS). Two commanders of U.S. Strategic Command have, in public testimony before Congress, stated that CPGS weapons could be used to prevent further attacks in the event that China destroys a U.S. satellite. Meanwhile, the 2010 Quadrennial Defense Review lists experimenting “with conventional prompt global strike prototypes” among its efforts to develop long-range strike capabilities to combat anti-access/area-denial threats.
Whether Chinese defense strategists concerned with “counterintervention” (as they term anti-access/area-denial operations) view CPGS as a particular threat is unclear. However, Chinese officials and analysts working on nuclear deterrence issues have expressed deep worries about the effect that CPGS could have on the survivability of China’s nuclear arsenal. In fact, Chinese concerns about the effect of advanced conventional capabilities on the nuclear balance may be more acute than more documented concerns about ballistic missile defense.⁵

Chinese concerns about the effect of advanced conventional capabilities on the nuclear balance may be more acute than more documented concerns about ballistic missile defense.

Moreover, U.S. missile defense deployments in East Asia are driven, at least in part, by Chinese conventional regional ballistic missiles, which include not only the DF-21D but also land-attack weapons that could be used to target U.S. and allied assets in Taiwan, Japan, and Guam. In public, U.S. officials have stressed the threat from North Korea in justifying recent plans to expand missile defenses in the region. Yet, the presence of missile defense assets in Taiwan is clear evidence that missiles from North Korea are not the only ones that the United States seeks to defeat. Indeed, in an oblique reference to a conflict with China, Secretary of Defense Leon Panetta has acknowledged that missile defense is designed to help “forward-deployed U.S. forces.”

Chinese analysts and officials certainly assume this to be the case. Li Bin, for example, has argued that the locations of planned U.S. radar installments provide evidence that Chinese ballistic missiles are targets for American defenses.⁶ However, Chinese concerns are not limited to the impact that these defenses may have on its arsenal of regional missiles. Beijing is also concerned that U.S. defenses could eventually be able to counter intercontinental ballistic missiles armed with nuclear warheads, thus undermining China’s nuclear deterrent. There is little doubt that this concern partly motivates well-connected Chinese analysts’ criticism of U.S. plans to expand missile defenses in East Asia.

The Security Dilemma

These dynamics may be manifestations of a burgeoning “security dilemma.” A security dilemma is created when a state procures weapons for defensive purposes, inducing an adversary, who fears the buildup might be offensively oriented, to do likewise. The adversary’s buildup can, in turn, spark a countervailing reaction in the first state, resulting in an arms race.
Almost by definition, it is impossible for a state with a security dilemma to definitively identify it as such at the time. Washington cannot know for sure that China’s nuclear modernization or lack of transparency is a defensive reaction to a perceived first strike threat from the United States. For that matter, Beijing cannot be certain that U.S. strategic conventional weapons programs, not to mention the pivot, are defensively oriented and geared toward preventing China from using force to change the status quo. But it is clear that the United States and China have a shared interest in creating a process that will allow each to test the other’s intentions. Such cooperation could help mitigate the security dilemma, if indeed there is one.
For its part, Beijing would benefit from calming the U.S. security concerns that are helping to drive American programs that it finds threatening—including CPGS and ballistic missile defense. Because these programs might be catalyzing Chinese modernization efforts and precluding transparency, Washington has an interest in easing Chinese concerns.

It is clear that the United States and China have a shared interest in creating a process that will allow each to test the other’s intentions.

These negative feedback loops are already creating friction in the extremely complex U.S.-China relationship. If left unchecked, they could create a qualitative or quantitative nuclear arms race. The U.S. Congress has already held hearings on—and expressed concern about—China’s nuclear modernization program. If this program continues unabated it could become a powerful domestic argument in the United States for the development of new nuclear warheads (if for no other reason than to symbolize that the United States still takes nuclear deterrence seriously). China’s modernization program is also creating concern that it seeks numerical parity with the United States and Russia, complicating further U.S.-Russian arms control—something that China certainly benefits from, even if it is not a party to any agreement. Both Beijing and Washington have a mutual interest in preventing these outcomes, the latter for reasons of cost if nothing else given the state of the U.S. budget.

Broadening the Agenda

A broadened agenda for U.S.-China strategic cooperation that includes the conventional domain should be viewed by leaders in both states as attractive. The basic principle of turning a perceived zero-sum game into a mutually beneficial one by linking issues is common to all areas of negotiation, from labor relations to nuclear arms control. That said, addressing the whole range of interlinked military issues in the U.S.-Chinese relationship is truly daunting—impossibly so for the time being.
Over the long term, it might be possible—through treaty or restraint—to develop a durable balance of conventional forces so that each state is confident in its ability to protect its vital interests without nuclear weapons. But profound political change will be needed to achieve such an outcome, much like in Europe toward the very end of the Cold War. NATO and the Warsaw Pact were only able to negotiate limits on conventional forces that effectively precluded the possibility of a surprise attack by either party after Moscow had started the process of internal reform that led to a thawing of the Cold War (and, ultimately, the Soviet Union’s demise). Today, realistically speaking, the United State and China should identify more modest steps that could help mitigate some of the most risky interactions between conventional and nuclear weapons.
For example, while the linkage between Chinese anti-access/area-denial capabilities, particularly the DF-21D anti-ship ballistic missile, and the U.S. CPGS program could produce a potentially destabilizing buildup cycle, it could also be leveraged to enable strategic cooperation. The two states could inform one another about the number of weapons they intend to procure and deploy each year for, say, the next five years. A data exchange like this could help mitigate tendencies to base procurement on worst-case intelligence assessments.
Chinese involvement in this kind of transparency arrangement would not be as unprecedented as widely believed. In 1997, for instance, China, Russia, and three Central Asian Republics negotiated an agreement on conventional force limitations near their borders. This extremely long and detailed document (it runs to over 17,000 words in English) contains extensive provisions for data exchange and demonstrates that Beijing will agree to transparency measures if it views them to be in its interests.
Much more ambitiously, the United States and China could enact a ban on the encryption of diagnostic data, known as telemetry, transmitted during tests of agreed-upon long-range high-precision conventional weapons (such as the DF-21D and a U.S. CPGS system) to allow for more accurate capability assessments. Clearly, such a ban would require a substantial degree of trust to be built first and so cannot be a short-term ambition. But, the U.S.-Soviet agreement to ban telemetry encryption as part of the 1991 Strategic Arms Reduction Treaty (START) demonstrates that, over time, confidence building on the necessary scale is possible.
One particular advantage of broadening the scope of strategic cooperation to include conventional forces is that it becomes possible to pair roughly symmetric capabilities. China’s nuclear arsenal is much smaller and less sophisticated than that of the United States, complicating efforts to persuade Beijing that it is in China’s interest to become more transparent. By contrast, while the DF-21D is less sophisticated than any of the systems being developed under the CPGS program, it is at a significantly more advanced stage of development. This rough symmetry makes confidence-building measures involving these capabilities more obviously beneficial to both parties.
Other linkages—such as the connection between Chinese regional ballistic missiles and U.S. regional missile defenses—could also be exploited for strategic cooperation. Crucially, however, a necessary prerequisite to any progress in this direction is an official Sino-American dialogue broad enough to encompass all the relevant strategic interactions. The existing strategic security dialogue, while a step in the right direction, probably does not go far enough. While it appears to include nuclear weapons, missile defense, and space, it leaves out a number of critical pieces of the puzzle in the form of conventional U.S. power-projection capabilities and various Chinese efforts to defeat them.
Analysts and some government officials (particularly in Russia) have recently discussed bringing China into negotiations toward a multilateral arms control treaty. While this is a desirable long-term goal (that discussions among nuclear-armed states at both an official and unofficial level can advance), it is also a premature one. For multilateral arms control to have any chance of success, the dynamics that are driving Chinese modernization must be addressed. To the extent that these dynamics are related to Sino-U.S. strategic competition they must be addressed bilaterally.
Moreover, there are still large quantitative and qualitative gaps between U.S. and Chinese nuclear forces. For example, while China has 30 to 35 missiles, each armed with a single warhead, capable of reaching the United States according to the most recent detailed estimate from Department of Defense, the United States has over 1,000 deployed warheads capable of reaching China. Efforts by the United States in cooperation with Russia are needed to close this gap before China can reasonably participate in the negotiation of a limitations treaty.
The asymmetry between U.S. and Chinese nuclear forces also argues strongly against attempting to import the Cold War arms control framework wholesale into the U.S.-China relationship. While U.S.-Soviet and U.S.-Russian treaties can provide useful ideas, such as the ban on telemetry encryption, the United States needs to take a novel approach to have a reasonable chance of receiving the reassurance it wants about China’s modernization.

Prospects for Success

It would be naïve to believe that expanding the scope or depth of strategic cooperation between the United States and China would be anything other than extremely difficult. While there is a compelling case to be made that expanded cooperation would be mutually beneficial, there is also the potential for significant resistance. Within the United States and among its allies, there would unquestionably be opposition to any form of cooperation that requires the United States to provide China with valuable information about U.S. plans and programs—even though China would be required to provide equally valuable information in return. Indeed, confidence-building measures that connect, for instance, Chinese regional ballistic missiles to U.S. regional missile defenses would probably be harder to “sell” than confidence-building measures purely within the nuclear realm. There is also absolutely no guarantee that Beijing will agree to participate; it might doubt U.S. sincerity, be unable to circumvent domestic obstacles, or, conceivably, view cooperation as fundamentally undesirable.

The potential benefits of trying to start wide-ranging strategic cooperation with China dwarf the downside risks.

That said, the potential benefits of trying to start wide-ranging strategic cooperation with China dwarf the downside risks. Strategic competition between the United States and China is not only expensive but adds friction to the bilateral relationship—a relationship that simultaneously holds more promise and carries more risk than any other. If strategic cooperation does nothing more than curb some pernicious aspects of this competition it would be worthwhile. If it catalyzes a co-evolutionary process in which deep cooperation builds strategic trust and strategic trust enables deeper cooperation, it could usher in a sea change.

¹ Department of Defense, “Annual Report on the Military Power of the People’s Republic of China,” 2002, www.defense.gov/news/Jul2002/d20020712china.pdf, 27.
² Department of Defense, “Military and Security Development Involving the People’s Republic of China,” 2010, www.defense.gov/pubs/pdfs/2010_cmpr_final.pdf, 66. If weapons capable of reaching Alaska are included, the number rose from about 30 in 2002 to between 45 and 65 in 2010.
³ Li Bin, “China and Nuclear Transparency,” in Transparency in Nuclear Warheads and Materials: The Political and Technical Dimensions, edited by Nicholas Zarimpas (Oxford: Oxford University Press for SIPRI, 2003), 55.
⁴ John G. Hines, Ellis M. Mishulovich, and John F. Shull, Soviet Intentions 1965–1985, Volume I, An Analytical Comparison of U.S.–Soviet Assessments During the Cold War (McLean, Va.: BDM Federal, 1995), 24–25, available from www.gwu.edu/~nsarchiv/nukevault/ebb285.
⁵ Lora Saalman, China and the U.S. Nuclear Posture Review, Carnegie Paper (Beijing: Carnegie-Tsinghua Center for Global Policy, 2011), http://carnegieendowment.org/files/china_posture_review.pdf, 9.
⁶ Li Bin, “China and the New U.S. Missile Defense in East Asia,” Proliferation Analysis, Carnegie Endowment for International Peace, September 6, 2012, http://carnegieendowment.org/2012/09/06/china-and-new-u.s.-missile-defense-in-east-asia/drth.

308) Power in East Asia - A FPRI report

Foreign Policy Research Institute
Over 50 Years of Ideas in Service to Our Nation
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POWER IN EAST ASIA: A CONFERENCE REPORT
By Jacques deLisle, rapporteur

Jacques deLisle is Director of FPRI’s Asia Program and the Stephen A. Cozen Professor of Law and Director of the Center for East Asian Studies at the University of Pennsylvania.

On January 25, 2010, FPRI held a conference, co-sponsored with the Reserve Officers Association, examining power in East Asia and shifts in its distribution and meaning. This report summarizes that conference. Conference papers will appear in Orbis. Video of the conference is available at: http://www.fpri.org/research/asia/powereastasia/

Who has power, how much and what kind have become pressing questions for foreign policy in and toward East Asia. The relative importance of various types of power—hard, soft, smart and perhaps others—and the relationships among them have become significant concerns among international relations scholars and foreign policymakers. Perceptions of a relative decline in U.S. power and a precipitous fall in the U.S.’s international image have prompted debates a bout their implications for the U.S.’s long-term role and influence in East Asia and the prospects for Obama administration moves that some characterize as re-engagement with the region and that seek to rebuild the U.S.’s stature and reputation. China’s sustained rapid economic growth has been underwriting an ambitious increase in military capabilities. The PRC’s economic success and Chinese diplomatic initiatives that have combined a “charm offensive” with sharp opposition to U.S. and European “interference” in the sovereign affairs of other states have prompted claims—albeit much-disputed ones—that China enjoys formidable soft power.
Assessments of how much clout Japan holds as the region’s third-greatest power and how it will wield its influence have been complicated by Japan’s ongoing economic difficulties and the advent of a Democratic Party of Japan-led government. Still-unresolved issues in security relations with the U.S., chronic crises over North Korea’s weapons programs, and perennial questions about the limits imposed by the pacifist provision in Japan’s constitution add to the uncertainty.
For East Asia’s smaller actors, including the two Koreas, Mongolia and Taiwan, power and foreign policy involve other, distinctive challenges. Constrained by their comparatively modest power resources, they face difficulties and opportunities in cultivating alternative sources of security and influence while maneuvering within space created by rivalry and stability among greater powers.

RISING CHINA AND IMPLICATIONS FOR THE U.S. AND EAST ASIA
Robert Ross (Boston College) argued that, while three decades of double-digit growth have sharply increased China’s economic power and military capability, China’s ascension in East Asia and China’s accretion of influence—relative to the U.S.— has been uneven across the region. China’s gains have been greatest on the Korean peninsula. By the beginning of the 1990s, the collapse of the Soviet Union and China’s expanding economic and military resources transformed North Korea into a secure Chinese buffer state, as well as an often-troubling dependency. Over a longer period, Chinese power and influence over South Korea has developed through: burgeoning trade and investment relations; professionalization and other major improvements in PLA ground forces; and Seoul’s adjustment to greater prospects for Korean unification and its transformative implications for China-Korea relations. Among the visible indications are South Korea’s backing down in a potential trade war with China in 2000 and, more significantly, Seoul’s shift toward a North Korea policy and security policy more generally (including U.S. troop deployment levels) that depart from prior patterns of one-sided alliance and cooperation with the United States. China’s relative rise has compelled South Korea to accommodate China’s interest in avoiding threats to its security form great power capabilities on the peninsula. Seoul also increasingly seeks security through good relations with China. Still, South Korea will remain a U.S. security partner, limiting China’s gains.
China made substantial gains in cross-Strait relations during the 2000s. This reflected the mainland’s absolute and relative rise as a trade and investment partner for Taiwan. That trend was enhanced by Beijing’s ability to use its international economic and political clout to limit Taiwan’s cultivation of — and Taiwan’s enjoyment of reliable support from — other economic partners. It also reflects a long-growing shift in the military balance, born of PRC missile deployments targeting Taiwan, broader PLA modernization and the U.S.’s declining ability to protect the island from a devastating initial Chinese assault. Among the reflections of these changes are: the Ma Ying-jeou administration’s pursuit of a free trade area-like agreement with Beijing; Taiwan’s declining interest in purchasing weapons systems from the U.S.; Taiwan’s shift to an asymmetric strategy of defense (eschewing the increasingly futile attempt to meet rising PLA capabilities); and the political demise of Taiwan’s independence movement.
Yet, more than on the Korean peninsula, across the Taiwan Strait, China’s gains remain limited. Although China’s overwhelming economic leverage may provide a partial substitute, China’s ability to coerce Taiwan through military threat is still comparatively modest because an air and sea assault on Taiwan would be extremely difficult and likely would bring a very costly conflict with the United States. Beijing’s increased leverage has moved Taiwan toward a policy of greater accommodation (giving Beijing greater confidence and, in turn, patience in pursuit of its reunification agenda), Taiwan remains -- and will remain—committed to buying arms from the U.S. and preserving U.S. security support.
In maritime East Asia, China’s rise has been more limited and more lop-sidedly economic. For Japan and the ASEAN states, China fast-growing and geographically proximate economy has meant a vast increase in the importance of China, relative to the U.S., as a trade and investment partner. The ASEAN-China Free Trade Agreement and talk of an East Asian free trade area reflect and reinforce these trends. On the military side, China has enjoyed no such ascension.
Although the PLA has developed greater capacity to deny access to, and inflict damage on, U.S. forces, China is still far short of the force projection capability needed to erode U.S. military preeminence in maritime East Asia.
Japan and several states in Southeast Asia have been increasing cooperation or consolidating security relations with the U.S. even as their economic entanglement with China has spiraled upward.

Commentators Drew Thompson (Nixon Center) and Robert Sutter (Georgetown) and panel chair Jacques deLisle (FPRI/University of Pennsylvania) agreed with much of Ross’s analysis but argued that Ross’s account was overly deterministic and could overestimate China’s power and influence. First, China’s economic strength may be less than it appears.
Although China seems to have weathered the global economic crisis well (so well that its apparent success has fueled new self-confidence and assertiveness in Beijing’s foreign policy), potentially serious weaknesses persist in China’s economy and growth model. China’s trade relations with East Asia have grown rapidly, but they remain a relatively small percentage of most regional states’ trade. For many of these states, the focus is exports, including relatively high-end goods, the markets for which are concentrated in the U.S., Europe and other developed economies. Much of China’s export juggernaut relies on products that are assembled from imported components. Thus, raw trade numbers may overstate China’s trade prowess and the political influence it creates. Wary of dependence that breeds vulnerability, many East Asian states pursue trade diversification and balancing strategies, as illustrated by Korea’s and Taiwan’s pursuit of free trade agreements with the United States. China’s international investment relations remain dominated by inbound investments while many of its outbound investments focus on natural resources. The influence afforded by outbound investment in higher value-added industries and less enclave-like sectors—characteristic of U.S. and Japanese investment in East Asia — is accordingly lacking for China. Panelists differed about the credibility of potential Chinese threats to hold foreign investment hostage and the leverage such threats could generate.
Some argued that China’s investment policies and practices manifested and supported Beijing’s interests in not disrupting international economic relations and the status quo. Some added that China’s outbound investment has been a mixed blessing for Beijing’s foreign policy.
It has produced: popular resentment in host countries; conflicts between the regime’s agenda and large Chinese state-linked enterprises’ interests abroad; and the diplomatic headaches that come with new vulnerability for Chinese nationals and assets overseas.
Second, some participants cautioned against overestimating China’s military capability. They pointed to the PLA’s relative technological backwardness (despite impressive recent gains) and persisting ambiguities in Chinese civil-military relations that may limit the leadership’s ability to make effective use of China’s augmented hard power.
Third, panelists argued that politics, policy choices and political will matter more than Ross’s capability-focused and generally zero-sum account allowed. Chinese policy’s emphasis on domestic stability and economic development limits China’s use of its power to challenge the United States. China’s increased capacity, including naval power, was partly compatible with U.S. interests in sharing burdens of addressing natural disasters, piracy and other problems.
U.S. accommodation of China was partly a matter of policy choice, and not simply an inexorable power shift. This could see significant reversal if Beijing proved uncooperative in dealing with issues ranging from North Korea to the global economy to climate change. The U.S.’s ability to counterbalance China’s rise has improved with recent shifts in U.S. foreign policy that have reemphasized comprehensive and positive relations with other states in the region.
Although China has shown impressive and improving diplomatic skills, mistrust of Beijing’s aims, China’s increasingly aggressive nationalism, persisting territorial disputes and questions left over from the region’s bloody recent history limit China’s potential for regional influence.
East Asian states—in which governments enjoy considerable autonomy from society–have much policy discretion, and inclination, to balance or hedge against a rising China (and not just to bandwagon with it), or to improve relations simultaneously with both the U.S. and China. These tendencies are reinforced in many of these states by electorates who are wary of China’s rise and its implications.
Regional governments seek a stable external environment that they know remains dependent on a robust U.S. economic and military presence. Ross countered that an analysis of power in East Asia must remain focused on relative capacity, and thus was appropriately zero-sum, because political intentions were often opaque and always vulnerable to change.

JAPAN: A PROBLEMATIC FASCINATION WITH SOFT POWER
Thomas Berger (Boston University) argued that Japanese foreign policy has been fascinated with soft power, with mixed and increasingly troubled results. This focus is hardly surprising, given the limits on Japanese military power that have been an enduring legacy of the Second World War and the relatively robust soft power resources that Japan has enjoyed in recent decades. The idea of soft power in Japanese foreign policy has made a virtue of necessity, providing a rationale for Japan’s inability or unwillingness to devote more resources to developing hard power.
It neatly dovetailed with prevalent notions in Japan of “comprehensive national power” and “Japan as a trading power.” It seized upon the “soft power” concept that Joseph Nye formulated to influence U.S. foreign policy debates and that gained salience for Japan as Nye took a role in Clinton administration policy toward Japan and the region.
Berger concluded that, while soft power is a flawed concept, Japanese foreign policy’s use of it did enjoy successes. Those, however, have been limited and more recently, Japan’s soft power resources have seriously declined. Berger assessed three aspects: First, Japan’s economic success and the economic model that seemed to underpin it were long major sources of soft power, eliciting admiration and emulation throughout the region.
This power waned in the 1990s and beyond as Japan’s share of the regional economy, trade and outbound investment fell sharply and as the Asian Financial Crisis and the Japanese economy’s lost decade tarnished the Japan-based East Asian Model. Declining Japanese development assistance and increasingly prosperous regional states’ lessened dependence on Japanese development assistance further eroded Tokyo’s capabilities.
Although the Hatoyama government has favored soft power and, rapprochement with China and creating an East Asia Community, prospects for success are diminished by Japan’s decline.
Second, and looking to European examples, Japan has engaged international institutions as an arena where states’ interests can be reshaped as well as reflected and where soft power can be generated and deployed.
Post-Cold War developments in East Asia have offered increased hope for such an approach, with the relative flourishing of APEC, various ASEAN-plus groupings, the ASEAN Regional Forum and a prospective East Asian Community.
There is significant support in Japan for a policy of building regional institutions. Yet, the contrasts with Europe are daunting and discouraging: East Asian elites and publics remain more post-colonial, more nationalistic, more protective of sovereignty, more committed to norms of non-interference and less post-Westphalian; the East Asian region is more internally diverse culturally, economically and politically; and East Asian institution-building has been more multi-cephalic, lacking the European Union’s and European Community’s Franco-German anchor internally and clear pro-U.S. and anti-Soviet alliance structure externally.
Third, Japan’s broader national image in East Asia has been a significant source of both soft power and trouble. At first, in the Meiji era, Japan emerged as an envied and imitated model of material and popular culture and Asian modernity. The pattern continued into Japan’s imperial period when Japan embraced a “civilizing mission” toward other peoples in Asia. But other aspects of Japanese imperial rule in Northeast Asia and Japanese actions in East and Southeast Asia during the Second World War severely damaged this soft power, creating “history problems” that still plague Japanese foreign policy and fostering congenitally anti-Japanese nationalism in Korea and China. The Postwar period brought a partial recovery as Japan redefined its image as a “peace nation,” a democracy and a newly pacifist victim of the horrors of nuclear warfare. While this recasting worked well in Japanese domestic politics and boosted Japan’s stature in the West, it worked less well in East Asia, where diverse and formidable obstacles loomed: states’ strategic calculations often weighed against close association with Japan; democratization in Korea, Taiwan and elsewhere closed the soft power gap and sometimes reinvigorated anti-Japanese nationalism; receptivity to emergent international human rights norms legitimated East Asians’ calls for revisiting the history question; and deepening regional economic integration gave new force to demands for reparations for Japan’s past wrongs.
Berger concluded that it is sensible for Japan to continue to promote and deploy soft power, but that Japanese policymakers must take care not to overestimate its impact and to address liabilities (including the history questions and neighboring states’ nationalism) that remain large and intractable impediments. U.S. policy similarly should not overestimate the likely consequences of Japan’s recent fascination with an East Asian community and rapprochement with China. While those pursuits might produce striking symbolic moments (such as a visit by Japanese Prime Minister Hatoyama to Nanjing or, more incongruously, Chinese President Hu Jintao to Hiroshima), the challenges for U.S. policy were just as likely to come from failures, as from success, of any Japanese attempt to turn more to Asia.
U.S. policy must also cope with the fact of Japan’s continuing belief in the efficacy and importance of soft power. Long-running predictions that Japan is reluctantly becoming realist in its approach to foreign policy have proved exaggerated. They have been dealt a further setback with the DPJ’s ascension to power (the significance of which has been widely overstated) and the broader democratization of foreign policymaking in a society that is sympathetic to soft power views.
Michael Auslin (American Enterprise Institute) argued that Japan’s soft power and its utility in foreign policy are very limited. Japan’s formidable—but declining—economic prowess translated poorly into usable influence. Japan’s participation in numerous international institutions had not conferred a leadership role in those institutions, which lacked the stature and significance of their European counterparts and which served more to restrain than to enable relatively powerful states in the region.
In the nineteenth and early twentieth centuries, the status and influence of Japanese high culture arguably enhanced Japan’s power, but that did little to win converts to Japan’s aims during the Second World War and the postwar impact of Japanese popular culture has done little to help Japan pursue its foreign policy aims. A policy of creating soft power was even more difficult than a policy of using soft power. Japanese belief in its efficacy has been declining since its heyday in the 1990s.

Paul Giarra (Global Strategies and Transformation) saw soft power as an important element in Japan’s international stature and the U.S.-Japan alliance, but he focused on dangers posed by inadequate attention to hard power issues by both partners. Japan’s preference for soft power approaches and constitutional and broader political constraints impose significant limits on Japan’s development of military capabilities and missions, but those restrictions are not immutable. U.S. policy increasingly has fallen short in ways that undermine the effectiveness of the bilateral alliance that is vital for the regional security infrastructure. Washington has failed to articulate a strategic vision to guide the alliance, relying on empty platitudes (for example, that the U.S.-Japan alliance is “the most important” in East Asia), focusing on small issues (such as the controversy over relocating U.S. forces stationed at Futenma Base in Okinawa), and underemphasizing the mundane but vital issues of cooperation, experience and trust at operational and interagency levels. Giarra expressed confidence that if and when Washington turned to the task of formulating a strategic approach, it would choose an appropriate one that Tokyo would support. Several panelists agreed that hope for more effective bilateral security cooperation stemmed mostly from hard power factors: the deterrent power of Japan’s substantial and high-tech (albeit nonnuclear) military capabilities; Japan’s strategic location (along with other U.S. friends in the region) astride the routes of potential Chinese expansion that could threaten U.S. interests; and the alliance-reinforcing power of North Korean threats and longer term challenges posed by China.

SMALLER STATES: FINDING ROOM FOR MANEUVER AND CULTIVATING ALTERNATIVE SOURCES OF POWER
David Kang (University of Southern California) Alan Wachman (Fletcher School, Tufts University) and commentators Nancy Bernkopf Tucker (Georgetown University) and Katy Kondgan Oh (Institute for Defense Analyses) addressed the constraints, opportunities and strategies of smaller states in East Asia.
Participants generally agreed the use of military force was unlikely, even in long-standing potential flashpoints such as the Taiwan Strait and the Korean Peninsula, but that traditional forms of power remained important features in East Asian international relations. Smaller states in the region must operate in the shadow of the U.S., China and, in some cases, Japan and Russia. But they do not live entirely in a Thucydidean world where the weak suffer what they must while the strong do what they can. The distribution of power, alignments and conflicts of interest, and relations among the region’s greater powers give smaller states some security and room for maneuver. They have protected their autonomy and enhanced their influence by exploiting this room for maneuver.
They have coped with a rising China through expanding economic ties, accommodating China’s security interests and hedging against Chinese power through maintaining or strengthening security and “values” ties with the United States. They have cultivated, with varying success, non-traditional types of power.
On the Korean peninsula, the interests and agendas of the U.S., China and, to some extent, Japan have created a security environment that generally supports a tense status quo or, at least, resists sudden, radical changes in the existing order. Within this context, Kang argued, South Korea has derived, and sought to develop, “international social status” as a source of power. Generally underappreciated in international relations discourse, this type of power is complex and difficult to cultivate.
Compared to other, more conventional forms of power, it is more purely given by other actors in the international system, is inherently hierarchical, and is especially dependent on a state’s ability to articulate its claim to such power. South Korea has been strikingly focused on its international social status, as is reflected in near-obsessive discussions of its “national brand,” zeal for public diplomacy and cultural ambassadors, and concern over image-damaging embarrassments (such as globally televised fistfights erupting in the legislature).
Such concerns are superficial reflections of South Korea’s more diffuse anxiety about its international social status and where it fits in East Asia’s frustratingly unsettled status hierarchy.
South Korea’s quest for international social status and its articulation of a claim to high status have had mixed records. South Korea has tapped into and benefited from its successes as a market economy, consolidated democracy, and, recently, cooperator on climate change issues. In more hard power-related aspects of international social status, however, South Korean conceptions have vacillated among “balancing power,” “middle power” and “leader on on-security issues.”
International social status questions also have pervaded and complicated key bilateral relationships. Controversies over U.S. military deployment and command cooperation, U.S. slowness in passing the Korea-U.S. Free Trade Agreement, and Washington’s and Seoul’s sometimes differing approaches to the North Korean problem all have implications—often rankling ones—for South Korea’s status vis-à-vis the United States.
In dealing with Japan, genuine desires for a fresh start have foundered on the history question and unresolved territorial claims. Both are largely questions about who can claim the higher status: the conflict is over which side’s version of the story will be the mutually accepted one. Rapidly growing economic and social ties with China (including students studying abroad) have complicated South Korea’s quest for status, shifting Korean perspectives somewhat from the U.S. and toward China. This has eroded somewhat the alignment with the U.S. that has been South Korea’s principal claim to status (particularly its association with global market democracy norms).
For North Korea, a fundamental goal has been international social status in the minimal form of acceptance as a nation state (with the greater claim to security and a right to survival such status implies). Many of North Korea’s outlandish or provocative actions reflect this quest for status: museums that display artifacts memorializing other states’ acceptance of North Korea’s state status; ceremonies that with great pomp and cost assert or reflect such claims; and the conviction and sentencing of two U.S. journalists for entering North Korea illegally. The last of these implicitly asserted North Korea’s claim to be a state with borders to be respected like those of other states and with sovereign authority to adopt and apply rules to punish those who enter without permission. Efforts to cast former President Clinton’s trip to secure their release as a near-head-of-state visit showed the same mentality. This quest for status has been so important for North Korea that Pyongyang has been willing to incur significant economic costs of isolation, painful to its impoverished economy, in order to make its points about status.
Oh was skeptical about whether international social status was a measurable or coherent concept, and whether national brand or image or culture meaningfully enhanced South Korea’s international security and influence. She argued for a sharper distinction between the types of status the two Koreas sought, concluding that the North’s quest for survival was fundamentally different from the South’s quest for some form of regional leadership role greater than the one its economic or military power would confer.
Wachman analyzed Mongolia’s ability to maintain autonomy despite its seemingly dire position as a small state surrounded by two great powers. Mongolia has benefited from factors beyond its control, including the space created by the distribution of power among China, Russia and the U.S. in its immediate region, the relatively good and stable relations among those three great powers during the Post-Cold War period, and the significant difficulty—also evident elsewhere in East Asia—that China faces in using its expanded economic power to political ends.
Mongolia’s success also comes from its own wise policy. It has managed through careful diplomacy to keep both of its giant neighbors reasonably content. More strikingly, it has balanced both by making the United States a “third neighbor.” Mongolia has achieved this, and improved its stature, by stressing its commitment to and realization of widely shared democratic values and by becoming an active, cooperative participant in the international system.
Several participants, including Wachman, Tucker and deLisle, pointed to a broadly similar pattern for Taiwan. Despite its vulnerable location close to a great power that seeks to reassert sovereignty over the island, Taiwan has enjoyed relatively high levels of security and autonomy. It has benefited from a hard power balance between China and the U.S. that has not yet shifted decisively against the U.S. and from Japan’s stake—episodically and unevenly articulated—in supporting the status quo.
Taiwan also has benefited from generally positive and stable U.S.-China relations over three decades. (Tellingly, moments of relatively high friction in U.S.-China relations generally have not been good for Taiwan.) Taiwan’s success has depended on finding a shifting middle path between acquiescing in Beijing’s pressure for closer integration and asserting independence to an extent that crosses Beijing’s red line. (Significantly, the most dangerous moments for Taiwan have come when Beijing has seen, or claimed, that Taiwan has approached that line.) Taiwan’s success has been no less dependent on its democratic transformation, which has become a principal basis for U.S. support and a key point of contrast with the mainland. (Conversely, periodic signs of weakness or instability in Taiwan’s democratic institutions and processes have weakened Taiwan’s security.) Finally, because of Beijing’s sovereignty claims, Taiwan has had to focus on asserting state or state-like status—a quest for formal stature and acceptance that, among other entities in the region, only North Korea has had to undertake.

Tucker addressed threats to this status quo, including: concern in Taiwan that the U.S. might acquiesce in its Finlandization as China rises; belief or speculation in China that the U.S. is in decline and thus decreasingly able and willing to support the status quo; the risk of significantly rising friction in U.S.-PRC relations, particularly over the issue of arms sales to Taiwan; and Taiwan’s declining ability (or skill) in influencing U.S. policy toward Taiwan and China. Tucker then assessed the implications, especially for U.S. interests, of a fundamental shift in Taiwan’s status toward reintegration with the mainland. On the positive side, the risk of military conflict between two nuclear-armed great powers would decline.
A perennial source of tension in U.S.-China relations would be greatly reduced. Chinese nationalism, long fueled by the Taiwan issue, might become less virulent. U.S. security policy and commitments in the region could focus on other challenges. U.S. relations with allies and others in the region could improve with the easing of fears of a U.S.-China conflict and related hard choices and threatened interests for regional states. A more closely integrated Taiwan could be a stronger catalyst for democratic and liberalizing change inside China, which generally would serve U.S. aims and interests.
On the other hand, likely negative consequences of China’s gaining control, significant dominion, or much greater influence over Taiwan are serious. U.S.-Taiwan security cooperation would decline sharply, whether because the U.S. (and perhaps Taiwan) would see cooperation as no longer necessary given a radical reduction in the risk of a cross-Strait clash, or because the U.S. would see continued cooperation as too risky given the prospect that military technology and other secrets would pass to China.
The U.S. would lose the strategic and intelligence gathering advantages that Taiwan has provided against the main potential rival in the region. China would be able to redirect military resources that would no longer be needed for a Taiwan scenario, and could redeploy them in ways adverse to U.S. strategic interests. Greater economic integration of Taiwan could further enhance China’s economic power and the resources available for building military capabilities. Fundamental changes in the cross-Strait status quo, without force and with U.S. acquiescence, would accelerate China’s rising confidence, and arrogance, in foreign policy and would sew doubts among the U.S.’s East Asian allies and friends, perhaps even driving Japan to develop nuclear arms. Such developments could lead to miscalculation and increased regional instability. Prospects for vibrant and stable liberal democracy would dim in Taiwan, whether due to PRC pressure, Taiwanese self-censorship, or increased polarization of Taiwanese politics. Such developments also could have an adverse effect on democracy elsewhere in the region.
Kurt Campbell (Assistant Secretary of State for East Asian and Pacific Affairs) delivered an off-the-record keynote address on current U.S. policy toward East Asia.

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