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China: How Do You Handle A Waking Dragon?

International Business: CHINA


In recent months, China has stridently reasserted its claim to the entire South China Sea, sold sensitive missile technology to Pakistan and Iran, arrested U.S. human-rights activist Harry Wu, and fired six missiles into waters north of Taiwan. Yet when U.S. Secretary of State Warren M. Christopher and officials of 18 Pacific Rim nations met in late July to discuss security concerns, there were few unkind words for Beijing. Indeed, in speech after speech at the opulent hilltop estate of Brunei's Prince Mohamed Bolkiah, foreign ministers took turns lauding Beijing's statesmanship.

But appearances are deceiving. Anxiety is deepening in Washington and in the capitals of China's neighbors over how to deal with the temperamental emerging superpower. As China's economic and military might grow, most countries regard good relations as essential. How, then, to deal with its belligerent behavior? Washington's approach has been confrontational. Southeast Asia has preferred quiet diplomacy.

DEAF EARS. At the Brunei meeting, it seemed clear that neither style is accomplishing much. China softened its rhetoric and said it is willing to negotiate over resources in disputed seas. But spokesman Shen Guofang reiterated that "on the question of sovereignty, China doesn't make any concessions."

Comments like that are slowly forcing the outside world to realize that "containing" China, as advocated by some U.S. conservatives, won't be easy. As its economy continues to grow at a 10% clip, China's elderly hard-line leaders are pressing their regional goals with greater confidence. At the same time, they worry that jealous foreigners, led by the U.S., are plotting to undermine China's emergence. That fear was reinforced by the June visit to the U.S. by Taiwan President Lee Teng-hui.

Thus, while Christopher raised such issues as missile-technology sales and human rights with Chinese Foreign Minister Qian Qichen, says a senior U.S. official, "the focus was on the fundamentals of the relationship." In an attempt at damage control, Christopher reiterating that America recognizes China's sovereignty over Taiwan. And though he suggested that China's detention of Wu ruled out a meeting between Bill Clinton and Chinese President Jiang Zemin in New York this fall, he discussed the possibility of a summit at November's Asia-Pacific Economic Cooperation forum in Osaka. Yet before Christopher even left Asia, Beijing announced that it was expelling two U.S. military officials for alleged spying.

Americans aren't the only ones groping for a China strategy. Southeast Asians have quietly negotiated one-on-one with Beijing over competing claims to islands in the Spratly chains. But a wake-up call came when the Chinese navy in April erected structures on Mischief Reef, off the Philippine coast. The Philippines retook control, prompting furious threats from Beijing. Soon afterward, China also issued a map indicating that it owned the Natuna Islands, nearly 2,000 miles from the mainland and the site of Indonesia's $35 billion natural-gas project involving Enron Corp. Says Ronald N. Montaperto, senior fellow at the Institute for National Strategic Studies in Washington: "The Southeast Asians were forced to confront the fact that China won't be as accommodating as they thought."

TARNISHED TRADE? At Brunei, the six Association of Southeast Asian Nations (ASEAN) countries did succeed, for the first time, in getting China to discuss the issue with the entire group, undercutting its strategy to keep its neighbors from uniting. That may be a sign that Beijing fears it will hurt key economic ties unless it backs off. "China is having a difficult time trying to straddle the contradiction between its military goals and its long-term economic goals," says Douglas Paal, president of Washington's Asia Pacific Policy Center.

But over the long term, the issue can't help but reemerge. At the rate China is adding jet fighters, battleships, and missiles, within a decade, it should be able to seize and hold distant islands. Until then, expect China's foreign-policy stance to continue to alternate from "hard to soft to hard to soft," says analyst Montaperto. "When the Chinese can assert their will, they will do so."

As Southeast Asian leaders realize this, they are quietly urging the U.S. to become more visibly involved in South China Sea disputes. Taiwan and Japan also want the U.S. to deter China without appearing to be part of an anti-Chinese conspiracy. But given the get-tough climate in Washington, a strident U.S. response could actually raise the risk of driving China deeper into its fear of encirclement.By Bruce Einhorn in Brunei and Pete Engardio in New York, with Dexter Roberts in Beijing.

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