US policy toward China: national security perspective

Assistant to the President for National Security Affairs

POLICY MEMORANDUM

President Barack Obama

National Security Advisor

Policy toward People's Republic of China

Strategic Recommendations:

Promote increased bilateral trade with China through the GATT/WTO framework.

Aggressively pursue engagement with China across the entire spectrum of international relations to improve human rights practices while simultaneously developing additional trade networks.

Pressure China to restrain North Korea, especially during the imminent change in regime leadership.

Adopt a "wait-and-see" approach to the Taiwan problem for the short-term while encouraging additional and ongoing negotiations between the Taiwanese and Chinese leadership concerning viable -- and peaceful -- alternatives for the future; this approach would require continuing but increasingly restricted arms and military technology sales to Taiwan consistent with stated U.S. policy.

Continue to pursue strengthening of economic and security relations with countries on the periphery of China.

6. Provide technical assistance and expertise in Chinese political reform efforts.

7. Promote cultural, economic and military dialogues between China and the U.S.

8. Identify additional value-added opportunities for American exports.

9. Pursue reduction of agricultural subsidies and trade protections used by China to improve access to Chinese markets.

10. Pursue collaborative alternative energy research programs that will become essential in the future as China's growing energy demands rival energy use in the United States.

In sum, the United States should identify ways to increase engagement and cooperation with China while maintaining a pragmatic recognition of the country's potential military might. These recommendations are also congruent with the best interests of both countries. China is increasingly important to the United States, and the United States is increasingly important to China. The United States and China must find ways to manage their differences and to collaborate and these issues are discussed further below.

Economic Aspects, Including Bilateral Trade and Multilateral Issues:

From a strictly pragmatic perspective and irrespective of any human rights considerations otherwise, the 1,330,141,295 people of China represent a vitally important market for U.S. goods and services currently and the potential for additional growth is readily apparent. For example, although the United States is China's largest export partner at 20.03%, China is only America's fourth largest import partner at just 7.66% (China, 2010). Consumers in China's rapidly growing middle class will likely want and need American products and services provided they are perceived as being of equal or superior quality and are competitive in price. The economic playing field is being leveled every day as average GDP in China continues to outpace growth in the United States; at some point, the playing field will be level and then perhaps even swing in China's favor, fulfilling the prediction of this era being "The Century of Asia" with China in the lead. China's economic growth, though, has been due in part to overly restrictive trade practices that placed American producers at a disadvantage. Although China membership in the World Trade Organization in 2001 was viewed as a new opportunity to forge improved bilateral trade, to date, the WTO has been unable to provide a mutually acceptable compromise to Chinese agricultural subsidies and protections that would benefit American producers (Cappling & Higgott, 2009). Nevertheless, the WTO remains a useful forum in which to resolve conflicts with China without threatening its sovereignty (Conti, 2008).

Furthermore, the WTO, together with the various regulatory provisions contained in the General Agreement on Tariffs and Trade (GATT), represent the best available approach for improving bilateral trade while simultaneously promoting improved human rights practices. In this regard, Supnik (2009) concurs and emphasizes that, "The international trade regime, which, unlike investment law, has an institutional backbone through the World Trade Organization (WTO), accommodates some state regulatory activity through a series of General Exceptions included in the GATT" (p. 343). Besides the GATT, other regulatory venues for promoting bilateral trade that is in the best interest of the U.S. include the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Investment Measures (TRIMs) (Supnik, 2009). Within this complex framework, there are General Exceptions to the GATT that ensure China's sovereignty will not be threatened but will rather simply feel obligated to improve human rights practices as a condition of furthering improved bilateral relations (Supnik, 2009).

The Taiwan Problem:

This is by far one of the most challenging problems affecting Sino-American relations today. Indeed, the never-never land in which Taiwan exists can only be rationalized in terms of the delicate balance that exists between Taiwan, China and the United States. As you know, prior to 1972, Taiwan enjoyed official recognition by the United States to the exclusion of the People's Republic; however, following President Nixon's visit to China in 1972, all of this changed and the official U.S. position then acknowledged that Taiwan was part of China. Much like the Palestinian-Israeli conflict, there have been few signs that Taiwan or China is willing to concede so much as an inch of bargaining leverage and both sides continue to pursue militarization regimens to upgrade their armed forces, in some cases with the assistance of the United States.

The 1979 Taiwan Relations Act provides some quasi-official mechanisms for ongoing U.S. relations with Taiwan, but it and the proclamation by President George W. Bush in 2001 to defend Taiwan also continue to obligate the U.S. To respond militarily to any hostile attempts by the People's Republic of China to forcibly retake Taiwan, an alternative that China has not officially ruled out. Nevertheless, increasing trade between Taiwan and China has created a new paradigm for this complex relationship that may provide the opportunity for comprises in the future. Finally, although it is unlikely that Taiwan and China will come to blows over their differences, the possibility exists nevertheless and the U.S. must be prepared to respond in some fashion that is consistent with its stated policies in this regard, which may also involve the use of military force. These dire outcomes would clearly be detrimental trilaterally, and it is reasonable to suggest that there is too much at stake for this eventuality to occur.

Human Rights and Democratization in China:

Engagement represents the most viable alternative to help ensure further improvements in human rights policies and practices in China. The United States desperately needs the enormous market that China represents, and the relations between the two countries have become inextricably interrelated and mutually beneficial in recent years. The "Old Guard" who represented the hard-line "Long March" mentality who have held the helm of the Chinese leadership for decades are increasingly being replaced by younger leaders who subscribe to additional market reforms and who may be more willing to accede to demands on the part of the international community in conjunction with the United States to improve their human rights record simply as a cost of doing business with the West.