Key Points

• Despite a 17.7% rise in its defense budget in 2001 and recent arms purchases, China’s military capabilities remain limited and will be limited for some time to come.
• China is reacting to what it sees as a much more aggressive foreign policy from the United States. The Chinese view themselves as being threatened. Bullying China is counterproductive and fuels mutual misperceptions.
• There is a danger that the U. S. and China could easily stumble into a confrontation that neither wants.

Given the atmosphere of suspicion and distrust that so often characterizes U.S.-China relations, it is vitally important that Chinese foreign policy and military capabilities be calmly and carefully assessed. Unfortunately, images of China as a potential threat tend to dominate in public discussions of China policy. Negative images of China stem in part from memories of the Tiananmen massacre that still loom large in the minds of most Americans. The alleged spy scandals and accusations of theft of American nuclear secrets are also factors. China is widely seen as taking a hard line in its relations with the U.S. on such issues as human rights and arms sales. Although Chinese military capabilities have improved recently, these advances are modest, and China will remain a weak military power for a long time.

Despite the worst-case scenario painted by the Cox report two years ago, China remains a small nuclear power with only minor capabilities. There is no evidence that it has tested—let alone integrated—any stolen American technology into its nuclear forces. China has only about 20 Inter-Continental Ballistic Missiles (ICBMs)—each armed with only a single warhead—that can reach the continental United States, and its one nuclear-powered ballistic missile submarine has apparently been nonoperational for several years.

In recent years China has purchased a variety of weapons systems from the Russians. Representing a significant improvement over most Chinese equipment, these weapons include advanced SU-27 fighters and SU-30 ground attack aircraft, S-300 SAM antiship missiles, Kilo-class submarines, and Sovremenny-class destroyers. China has also introduced new weapons systems of its own design, including tanks, short-range ballistic missiles, and the Song-class submarine.

China, however, continues to rely on outdated technology to equip most of its armed forces. The SU-27s and SU-30s are China’s first fifth-generation, modernized combat aircraft. But most of the Chinese Air Force’s combat aircraft are obsolete. China has about 30 SU-30s but relies on over 1,500 J-6 and Q-5 ground attack planes and some 700 J-7s. These designs date back to the early 1950s and 60s. Although older planes are being phased out, it will be more than a decade before China’s Air Force reaches the current technological level of Taiwan’s combat aircraft.

The bulk of China’s armored forces still features tanks based on Soviet designs from the 1950s. The Sovremenny-class destroyers are designed to attack American aircraft carriers and are far more advanced than anything else in the Chinese Navy. China has only two such destroyers, and the rest of its navy remains technologically backward.

China is at least two decades away from being able to deploy a fully functional carrier with aircraft. The new Kilo and Song submarines are indeed a significant improvement for the Chinese Navy, but it will be years before China finishes replacing its older, less advanced submarines. Moreover, the Chinese armed forces continue to suffer from significant deficiencies in training and recruitment standards. The Chinese have yet to conduct a full-scale combined arms training exercise that would allow them to fully integrate the new weapons systems that they have acquired. Although worrisome, the 17.7% increase in China’s 2001 defense budget is more of a political signal to the U.S. and Taiwan than an indication of substantially improving Chinese military capabilities.

Except for a brief skirmish with Vietnam over a disputed South China Sea islet in 1988, China has not resorted to the use of force since its disastrous attack on Vietnam in 1979. By and large, China has acted as a satisfied power, having increased economic ties with all its neighbors and negotiated border agreements with most neighboring countries. Only in the case of Taiwan is there a real danger of conflict. Beijing has been quite clear that it is willing to use force if Taiwan declares its independence. However, China lacks the amphibious assault capabilities it would need to land a sufficient force on Taiwan (where there are only a few, easily defended places to land troops). Taiwan’s Air Force is far smaller but much more modern than China’s.

China could place a naval blockade on Taiwan or use its growing arsenal of missiles to try to coerce Taiwan into surrendering, but neither approach would guarantee success. Although China’s M-9 and M-11 missiles look threatening, they lack the precision needed to knock out all of Taiwan’s defenses, and China’s submarine force is still in the early stages of modernization. A military and economic siege would take months to succeed. The cost to China itself would be immense, and the U.S. would have plenty of time to consider how to react. In sum, impressions of the Chinese threat are exaggerated, with respect to both China’s capabilities and its intentions.

Problems with Current U.S. Policy

Key Problems

• Washington is moving away from its policy of deliberate ambiguity toward Taiwan’s defenses. This limits future U.S. options and increases the possibility that the United States and China will stumble into a crisis.
• U.S. perceptions tend to exaggerate the extent of Chinese capabilities.
• U.S. policy on TMD and NMD has the potential to be destabilizing.

The main problem with current China policy is the growing tendency in the U.S. to overestimate Chinese military capabilities and China’s potential threat to U.S. national security. Current plans to proceed with National Missile Defense (NMD) and Theater Missile Defense (TMD) systems are largely based on this overestimation of the China threat.

Given that NMD currently enjoys a fair amount of support on both sides of the aisle in Congress, it is likely to be implemented in some form. The Bush administration contends that the capabilities of NMD will be sufficient to provide protection from “rogue” states but modest enough to not threaten the Russians and Chinese. From the Chinese perspective, however, NMD represents a substantial threat to its national security. Chinese officials argue that Washington has greatly exaggerated the rogue state threat, and there is widespread suspicion that NMD’s real objective is to neutralize China’s nuclear deterrence capability.

Indeed, the proposed NMD system would be more than adequate to eliminate any deterrence credibility from China’s meager ICBM force. This would leave China without any second-strike capability in the event of a confrontation with the United States. If the U.S. proceeds with NMD, then China will likely decide to improve its own nuclear capabilities. One option for China would be to increase its arsenal of missiles in an attempt to overwhelm any missile defense the Americans build. China could also upgrade its missiles with multiple-entry warheads, thereby increasing the number of warheads aimed at the United States. It might even do both. However, any plan by China to increase the size or capability of its nuclear forces would likely also increase sentiment among U.S. policymakers that China is indeed a potential threat to America’s security. Thus, the deployment of NMD could easily trigger a series of events that would trap the U.S. and China in a classic security dilemma of mutual misperceptions.

Extending a missile shield to Japan and Taiwan may also be destabilizing. Washington regards TMD as necessary in northeast Asia to defend Japan (and U.S. forces stationed there) against a North Korean missile threat. A TMD system could also help Taiwan resist a potential attack from China. (See Missile Defense and China by Wade Huntley and Robert Brown, FPIF, January 2001.) Beijing, which sees TMD as a threat to its territorial integrity, argues that such a system would encourage Taiwanese independence and otherwise foster the political separation of Taiwan from mainland China. China’s most obvious response would be to increase the number of its battlefield missiles, so it could overwhelm any Taiwanese missile defense system. Less obvious to many American observers is that China is also concerned about TMD in Japan. Within China’s military, TMD is seen as a potential first step in the remilitarization of Japan. Far from creating greater stability in the region, TMD systems in East Asia may set off an arms race.

Arms sales to Taiwan also remain problematic. The Taiwan Relations Act (TRA) commits the U.S. to offer arms for Taiwan’s self-defense. Over the past decade the U.S. has sold Taiwan 126 F-16s as well as Patriot antimissile systems, eight Knox-class frigates, seven Perry-class frigates, M-60A3 tanks, and electronic equipment. Combined with arms purchases from France, these sales have substantially improved Taiwan’s defense capabilities. The Taiwanese government is currently seeking further arms purchases from the U.S., including four Aegis-class destroyers, designed to provide air defense for Taiwan’s Navy. Other items reportedly on the list include submarine hunting aircraft, missiles, AIM-120 air-to-air missiles, ship-to-ship missiles, antiaircraft missiles, and submarines.

The Aegis-class destroyers have come to assume enormous symbolic value as a litmus test of the degree of U.S. political support for Taiwan. From both the Chinese and Taiwanese perspectives, any sale of Aegis destroyers would signal that the United States is moving closer to a de facto military alliance with Taiwan, rendering Washington a potential enemy in Beijing’s eyes. Ironically, for all the controversy over the proposed sale, the Aegis is not necessarily the best military choice for Taiwan. These ships will do little to counter China’s newer submarines, which represent Taiwan’s primary threat. Taiwan would be better off buying antisubmarine weapons, which are also less politically offensive to Beijing.

Worst-case scenarios and ideological considerations are pushing the U.S. in the direction of providing Taiwan with more than is necessary for its defense. This creates a negative reaction in China and reinforces Beijing’s perception of the U.S. as a potential enemy. China, in turn, is taking a more hard-line stance toward the U.S.—thereby confirming Washington’s suspicions of Beijing.

Washington is also moving away from its traditional policy of deliberate ambiguity toward a more clear-cut commitment to Taiwan’s defense in advance of any actual crisis. This limits future U.S. options and increases the possibility that the United States and China will stumble into a crisis that neither country wants or desires. This is especially worrisome in light of renewed congressional pressure to end or sharply curtail military exchanges between the U.S. and China. These exchanges have come under criticism, because they are perceived by some as rewarding China, despite its bad human rights record, and because the exchanges have not produced as many positive results as had been hoped. However, mutual misperceptions about military capabilities and intent are most likely to occur in the absence of communication. The April 2001 spy plane controversy, for example, was aggravated by a lack of trust on both sides. If the Bush administration decides to end the exchange program, there is a risk of fostering even greater mistrust between the two powers and increasing the chance of more dangerous incidents in the future.

Toward a New Foreign Policy

Key Recommendations

• The United States needs to be more aware of how its activities are perceived by the Chinese and must avoid treating China with disrespect.
• Washington should maintain exchanges between Chinese and U.S. armed forces and should support other confidence building measures.
• Washington must maintain a better balance of relations with all Asian nations and not let concerns over Taiwan outweigh other interests.

The Bush administration should carefully reconsider its policy on NMD and TMD. Of the two, TMD is more threatening to the Chinese. Recent statements by Chinese officials reiterate their opposition to NMD but indicate a willingness to negotiate over NMD deployment. The Bush administration should take advantage of this cooperative diplomacy to build mutual understanding of each country’s security concerns. The administration’s missile defense policy should be flexible enough to take into account Chinese (and Russian) concerns about the impact of NMD. In the past, China has demonstrated a relatively positive attitude toward arms agreements in which it has been a negotiating partner. But when it believes that Washington is imposing its own policies through such agreements, Beijing has been less cooperative. Pressuring Beijing to accept NMD may be counterproductive; China may retaliate by building more ICBMs and by selling sensitive technology to other countries.

The U.S. must seriously reconsider its plans to extend TMD to Taiwan and should explore alternative ways of enhancing Taiwan’s security. A less threatening way to improve Taiwan’s defense against missile attacks would be to modernize and improve the survivability of Taiwan’s C4I (command, control, communication, computer, and information) capabilities. The use of more advanced technology and the hardening of existing antimissile sites would limit the impact of a Chinese missile attack while avoiding the difficult diplomatic and security issues raised by TMD.

Rather than being driven by ideological concerns or emotional political reactions, arms sales to Taiwan should be based on carefully considered military criteria. Unfortunately, support for the sale of Aegis destroyers has more to do with anti-China and pro-Taiwan sentiment than with the actual defense benefits of these controversial ships. A better balance needs to be struck between considering Chinese sensibilities and honoring commitments to meet Taiwan’s legitimate defense needs under the Taiwan Relations Act.

With respect to cross-strait tensions, the U.S. should not commit itself to one course of action in advance of any crisis. In the event of a confrontation between China and Taiwan, Washington will have adequate time to examine its options, given China’s modest military capacity and the delayed impact of a possible Chinese blockade of Taiwan. It must also be remembered that Taiwan is capable of defending itself in the short run, perhaps even in the long run.

When dealing with Beijing, Washington must also evaluate the multitude of U.S. national interests and security concerns in Asia. America’s China policy should be driven neither by developments in Taiwanese domestic politics nor by ideological debate within the United States. The new administration should carefully develop a good pool of advisers on China who can anticipate Beijing’s reaction to new U.S. policies. Most importantly, the U.S. should consult closely with Japan, South Korea, and ASEAN (Association of Southeast Asian Nations) in developing a balanced China policy. Many Asian countries have misgivings about Chinese military spending, but they also wish to see a constructive relationship between China and the United States.

Adopting a strategy of containing China would be a mistake. China is not a dissatisfied rising power that wants to use force to reshape Asia. It is a relatively satisfied power that wants to be respected and consulted about issues that concern it. Consulting with China as a regional power and showing concerns for Chinese sensibilities are not the same as appeasement. Respect and consultation help avoid misperceptions and unnecessary confrontation. The U.S. and China do not always have the same security goals, nor should they. It is important, however, for each to take the other’s concerns into consideration. The U.S. should avoid bullying tactics or dictating to the Chinese. These are usually counterproductive and will likely encourage Beijing to increase military spending and develop military ties with other countries to the long-term detriment of the United States. The Russians and Chinese are by no means in an anti-U.S. alliance, but their increasing cooperation is a reaction to what they see as a high-handed and aggressive U.S. foreign policy.

Military exchanges will not resolve all differences between the U.S. and China on security issues, but they do provide an important means of communication. These and other confidence building measures should be retained as part of the new administration’s overall China policy.