Ceos Vs. Hawks - U.S relations with China and Taiwan - Statistical Data Included

Chief Executive, The, Oct, 2001 by David E. Sanger

U.S. corporations generate [dollar]7.2 billion in revenues from China, but Beijing-bound President Bush faces conservatives seeking to tilt support toward Taiwan.

As President Bush travels to China this month, his first trip there since he visited as a graduate student a quarter-century ago, his second most challenging task will be striking the, right tone with President Jiang Zemin and the rest of Beijing s leadership. His far bigger challenge is at home, where must begin to bridge a huge rift within the Republican party over how to deal with China, a divide that pits the pro-engagement business community against conservatives who seek to contain China's power, and tilt American support strongly toward Taiwan.

Reconciling those two extremes is not easy, as Bush has discovered. In the last few months he has move from a tough line against Beijing's leaders during the spy plane incident to a noticeably softer one.

Other presidents, from Richard Nixon to Bill Clinton, also have been forced to back off their harsh campaign rhetoric once they faced the realities of dealing with the world's most populous nation.

For Bush, straddling the engagement camp and the containment camp will prove difficult. Whichever way he leans, he is bound to anger one of his core constituencies. The business community that contributed heavily to his campaign desperately wants China's delayed entry into the World Trade Organization to happen this year, so that the long, slogging process of opening China's markets for banking, insurance, autos, and information technology can begin.

But every time the Chinese authorities detain another scholar, or torture another Falun Gong member, or aim another missile at Taiwan, it strengthens the hard-liners who argue that Bill Clinton ignored a growing threat to American security.

Both sides have their advocates inside the Bush Administration. Hawks have settled largely at the Pentagon, where they argue that America's war-fighting strategies must be focused on keeping China from displacing the United States as the Pacific's military power. While no one will say so publicly, that is one rationale for President Bush's missile defense program: It does not have the capability to suppress Russia's huge nuclear arsenal, but it might help contain China's minimal one.

The doves, with a few exceptions, surround Colin Powell at the State Department. They inherited Clinton's engagement policy, which makes the case that a China economically linked to the world will begin to move toward Western legal procedures, human rights standards, and, eventually, democratic values. Clinton acknowledged, in his administration's closing days, that evidence was still slim. But, he said, "if we treat China as an enemy, it will certainly become one."

Bush himself has zigged and zagged between the two groups. During the campaign and since, he has said he wants to engage China and see it enter the W.T.O. But throughout the campaign he also called China a "strategic competitor" that must be dealt with firmly. He repeated that point in the spring, when he briefly appeared to back a new policy tilting toward Taiwan. Then he backed off, deciding to sell Taiwan a raft of sophisticated weapons, but not the high-tech destroyers that Taipei desperately wanted to counter China's short-range missiles aimed at the island.

Over the summer, the Bush Administration softened its position further. It dropped objections to granting China the 2008 Olympics. Then, during Powell's trip to Beijing to pave the way for Bush's visit, the phrase "strategic competitor" was banned from State Department lexicon.

So far the Chinese have responded well. President Jiang Zemin, in an interview with New York Times editors and correspondents in August, made it clear that he would do everything to make the trip a success, even brushing aside suggestions that Bush is more interested in deals with Russia's Vladimir Putin than with China's leaders. "I don't feel at all a sense of being left out," he argued. He invoked the power of family relationships crucial in Chinese culture, saying that "although I have not met personally President George W. Bush, I have met many times with his parents, George Bush Sr. and his wife." He talked in July with the younger Bush, he said, and "although it was not a videophone where I could see his facial expression, from his voice I could feel that he was a president we can do business with."

That is exactly the phrase the business community has been straining to hear. They have repeatedly told the administration that Washington and Beijing have to get on an even keel to avoid the periodic crises that make investing in China so perilous. As one chief executive of a major firm doing business there said to me recently, "No matter how tempting the market, it's difficult to make big investments when the political climate is so heated."

There is little question that Bush will try to use his trip to improve the relationship, putting the spy plane collision behind him and saying relatively little about human rights. "The Chinese are in a friendlier mood now, after the Olympic decision, than I have seen them in years," one outside foreign policy adviser to Bush said recently. "If ever there was a moment to get the relationship onto some solid ground, this trip is it."